TMI Blog2015 (3) TMI 316X X X X Extracts X X X X X X X X Extracts X X X X ..... ee’s own case for assessment year 2003-04. - Decided in favour of assessee. Penalty 271(1) (c) - Held that:- For invoking explanation 5 to section 271(1) (c), it is essential that some tangible assets/documents must have been found which would reflect concealed income of the assessee and which have become basis for making addition of concealed income and if the addition is not made on such basis then explanation 5 cannot be invoked. In the present case also, the additional income declared by the assessee is not on the basis of any seized material and therefore, in our considered opinion, the present issue is squarely covered in favour of the assessee by this Tribunal decision in assessee’s own case. Respectfully following the same, we delete the penalty. - Decided in favour of assessee. Penalty u/s 271(1)(b) - Held that:- When the assessee is not complying with the notice u/s 142(1) but assessment order was passed u/s 143(3) and not u/a 144, that meant that subsequent compliance in assessment proceedings was considered good compliance and non compliances earlier were ignored and therefore, levy of penalty u/s 271(1) (b) was not justified - Decided in favour of assessee. Di ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pliance of notices u/s 142(1), subsequent compliances in assessment proceedings were considered as good compliance and default committed earlier was ignored and therefore, levy of penalty u/s 271(1)(b) is not justified.- Decided in favour of assessee. Unaccounted cash credit - Held that:- As per the details available an amount of ₹ 40,000/- was deposited in ICICI bank on 13/06/2007 and another amount of ₹ 19,000/- was deposited in bank on 14/06/2007 and total amount deposited in June was ₹ 59,000/-. As per the chart, showing availability of cash in June 2007, the assessee is showing opening cash balance of ₹ 4.15 lac and closing cash balance of ₹ 3.99 lac after reducing this amount of ₹ 59,000/-. Similarly, an amount of ₹ 25,100/- was deposited in ICICI on 19/07/2007. As per the chart showing availability of cash in July, 2007, there was opening cash of ₹ 3.99 lac and closing balance of ₹ 4.16 lac. In September 2007, cash deposited was ₹ 1.34 lac and as per the chart showing availability of cash in the September 2007, there was opening cash balance of ₹ 4.58 lac and closing balance of ₹ 3.67 lac after reduci ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... issioner of income tax (appeals)-I, Kanpur has erred in not appreciating the facts of the case and submissions of the assessee. 5. Because on facts and in circumstances of the case, submissions before ld. Assessing Officer and ld. CIT(A) statement of facts and grounds of appeal in 1st appeal may be treated as part of these grounds of appeal. 6. Because on facts and in circumstances of the case, impugned order is bad in law as well as facts and appropriate relief deserves to be allowed. 3. Briefly stated, the facts of the case are that the assessee is engaged in the business of pawning and deriving income therefrom. A search seizure operation in the case of Shri Satish Chandra Verma group was carried out on 12/03/99 and the present assessee is wife of Shri Satish Chandra Verma, now deceased. On the basis of documents found during the course of search, action u/s 158BD has been initiated against the assessee. In response to notice u/s 158BD, the assessee filed return of income showing nil undisclosed income against which assessment has been completed at ₹ 2,14,619/- by making three additions. First addition is of ₹ 82,877/- on account of undisclosed peak inves ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Hence, it is seen that the addition upheld by the Tribunal is on estimate basis only and this fact should be kept in mind while deciding the penalty issue. In the light of above facts, we now examine the applicability of the Tribunal decision cited by Learned A.R. of the assessee. In that case, the assessee declared income by applying net profit rate of 4.4%, which was subsequently reduced to 4% by the CIT(A) as well as by the Tribunal. Under these facts, it was held by the Tribunal that since the addition was made on estimate basis, penalty u/s 158BFA(2) is not justified. Since in the present case also, the addition sustained by the Tribunal is on estimate basis alone, this Tribunal decision is squarely applicable in the present case and therefore, following this Tribunal decision, we hold that penalty imposed by the Assessing Officer is not sustainable in the facts of the present case. We, therefore, delete the penalty. 7. In the result, the appeal of the assessee stands allowed. 8. Now we take up the appeal in the case of Shri Paramjeet Singh for assessment year 2002-2003 in I.T.A. No.157/Lkw/2013. In this appeal, the assessee has raised the following grounds: 1. Beca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat as per this Tribunal decision for assessment year 2002-03, the penalty in the present year is not justified. 10. Learned D.R. of the Revenue supported the orders of the authorities below. 11. We have considered the rival submissions. The relevant Para from the Tribunal order for assessment year 2003-04 being Para - 5 is available on page 75 of the paper book, which is reproduced below: 5. We have carefully perused the orders of the lower authorities and the judgments referred to by the assessee and we find that undisputedly assessee has made a voluntary surrender during the course of search and returned additional income filed in response to notice under section 153A of the Act and accordingly the tax was also paid. Since the Revenue has not brought out a case to show that the surrender was made when the assessee was cornered by the queries raised by the Revenue authorities. Therefore, we are of the considered view that it was a voluntary surrender made by the assessee at the first instance, therefore, penalty under section 271(1)(c) of the Act should not be levied. We, accordingly, uphold the order of the Ld. CIT(A) deleting the penalty. 12. Since in the present ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t year 2000-2001 and 2004-2005 as reported in ACIT vs. Smt. Surinder Kaur [2009] 31 SOT 23 (Lucknow) (URO). He submitted that the copy of the Tribunal order is available on pages 47 to 53 of the paper book and in particular, our attention was drawn to Para 19 and 20 of the Tribunal decision. 16. Learned D. R. of the Revenue supported the orders of the authorities below. 17. We have considered the rival submissions. We find that in compliance to notice issued by the Assessing Officer u/s 153A, the assessee filed return of income showing income of ₹ 4,03,263/- as against income shown in the original return of income at ₹ 1,88,263/-. As per the assessment order, nothing comes out to show that any incriminating material was found during the course of search or subsequent to search and the assessment was completed by the Assessing Officer on the basis of return filed by the assessee u/s 153A and the additional income declared by the assessee of ₹ 2.15 lac was stated to be on account of expenses left out earlier meaning thereby that expenses were incurred out of undisclosed income. It is not the case of the revenue that any material was found in search showing the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a statement under sub-s. (4) of s. 132 that any money, bullion, jewellery or other valuable article or thing found in his possession or under his control, has been acquired out of his income which has not been disclosed so far in his return of income to be furnished before the expiry of time specified in sub-s. (1) of s. 139, and also specifies in the statement the manner in which such income has been derived and pays the tax, together with interest, if any, in respect of such income. 20. Thus, the first requirement for invoking Expln. 5 is that in a valid search, some tangible assets/documents must have been found which would reflect concealed income of the assessee and which have become basis for making addition of concealed income. It is an admitted position that there has not been any seizure of tangible assets/documents in the search which could be said to be belonging to the assessee. Therefore, it cannot be said that assessee has been found to be the owner of tangible assets and that such tangible assets have been acquired by her by utilizing her undisclosed income earned before the date of search, and also there is no claim by the assessee that she has acquired any suc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessee that the assessee, through his Learned A.R. of the assessee, has appraised the Assessing Officer with the situation that it is not possible to reply all the points of questionnaire within short period of time as it will take time to prepare the case point by point and from the books of account and also that his son is paralyzed and his father was ill who later died on 1st November. He further submitted that the Assessing Officer has not provided the reasonable opportunity to make compliance and therefore, penalty u/s 271(1)(b) of the Act is not justified. He also placed reliance on the Tribunal decision in the case of Akhil Bhartiya Prathmik Shikshak Sangh Bhawan Trust vs. Assistant Director of Income-tax [2008] 115 TTJ 419 (ITAT [Del]) 22. Learned D. R. of the Revenue supported the orders of the authorities below. 23. We have considered the rival submissions. We find that it is noted by the Assessing Officer in the penalty order that notice u/s 142(1) was issued on 12/11/2009 requiring the assessee to furnish in writing and verify in the prescribed manner, the information called for, as per annexure to the notice for the year under consideration. He has also noted th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .00 made on account of expenses on vehicle. 2. Because on facts and in circumstances of the case, ld. Commissioner of income tax (Appeals)-I, Kanpur has erred in confirming the addition of ₹ 2,78,971/- made on account of application of provisions of 50C without appreciating that before making addition legal procedure for referring the property to valuation cell has not been followed. 3. That learned Assessing Officer has erred in not appreciating that when the transfer of property was executed in assessment year 2007-08, no addition in this year could be made. 4. That learned Assessing Officer has erred in ordering that protective addition on account of sale of property be made in assessment year 2007-08. 5. Because on facts and in circumstances of the case, ld. Commissioner of income tax (Appeals)-I, Kanpur has erred in not appreciating the facts of the case and submissions of the assessee. 6. Because on facts and in circumstances of the case, submissions before ld. Assessing Officer and ld. CIT(A), statement of facts and grounds of appeal in 1st appeal may be treated as part of these grounds of appeal. 7. Because on facts and in circumstances of the case, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... missioner of income tax (Appeals)-I, Kanpur has erred in not appreciating the facts of the case and submissions of the assessee. 5. Because on facts and in circumstances of the case, submissions before ld. Assessing Officer and ld. CIT(A), statement of facts and grounds of appeal in 1st appeal may be treated as part of these grounds of appeal. 6. Because on facts and in circumstances of the case, impugned order is bad in law as well as facts and appropriate relief deserves to be allowed. 33. It was submitted by Learned A.R. of the assessee that the gift was received through bank but the same was not accepted for the reason that the donor is not relative of the assessee. He submitted that on this basis, the addition may be justified but penalty is not proper. 34. Learned D. R. of the Revenue supported the orders of the authorities below. 35. We have considered the rival submissions. We are of the considered opinion that for the purpose of imposing penalty u/s 271(1)(c), it is essential that the concealment should be established beyond doubt. In the present case, the addition was made on the basis that the donor is not relative of the assessee but this does not amount to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... memo not accounted for by the assessee. The CIT(A) has also confirmed this addition on this basis alone that the addition is only of 10% of the returned income. This is no basis for confirming an arbitrary addition. Hence, we delete this addition. 41. Regarding the second issue being disallowance of ₹ 26,195/- out of car expenses, we find that it is noted by the Assessing Officer that the assessee has only one car and therefore, personal use cannot be ruled out. He therefore, made disallowance of 1/5th of the expenses. Considering the facts, we do not find any infirmity in the orders of the authorities below on this issue. Hence, we decline to interfere in the order of CIT(A) on this issue. 42. In the result, the appeal of the assessee stands partly allowed. 43. Now we take up the appeal in the case of Shri Kanwar Pal Singh for assessment year 2008-2009 in I.T.A. No.154/Lkw/2013. In this appeal, the assessee has raised the following grounds: 1. Because on facts and in circumstances of the case, ld. Commissioner of income tax (Appeals)-I, Kanpur has erred in confirming penalty of ₹ 10,000.00 imposed u/s 271 (1) (b) of the income tax act, 1961. 2. Because ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... penalty of ₹ 10,000.00 imposed u/s 271 (1) (b) of the income tax act, 1961. 2. Because on facts and in circumstances of the case, ld. Commissioner of income tax (Appeals)-I, Kanpur has erred in holding that there was no reasonable cause for non compliance. 3. Because on facts and in circumstances of the case, ld. Commissioner of income tax (Appeals)-I, Kanpur has erred in not appreciating the facts of the case and submissions of the assessee. 4. Because on facts and in circumstances of the case, submissions before ld. Assessing Officer and ld. CIT(A), statement of facts and grounds of appeal in 1st appeal may be treated as part of these grounds of appeal. 5. Because on facts and in circumstances of the case, impugned order is bad in law as well as facts and appropriate relief deserves to be allowed. 49. It was submitted by Learned A.R. of the assessee that the facts in these appeals are identical to the facts in dispute in appeal of Shri Kunwar Pal Singh for assessment year 2008-09 in I.T.A. No.154/Lkw/2013. In the present cases also, the assessment was completed u/s 143(3) and not u/s 144 of the Act. In the case of Shri Kunwar Pal Singh in I.T.A. No.154/Lk ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8,000/-. He also submitted that on pages 13 14 is a chart showing availability of cash on the date of deposit of cash in bank during financial year 2005-06. He submitted that considering all these facts, the addition is not justified. 53. Learned D. R. of the Revenue supported the orders of the authorities below. 54. We have considered the rival submissions. We find that as per the details available on page No. 17 of the paper book, an amount of ₹ 40,000/- was deposited in ICICI bank on 13/06/2007 and another amount of ₹ 19,000/- was deposited in bank on 14/06/2007 and total amount deposited in June was ₹ 59,000/-. As per the chart, showing availability of cash in June 2007, the assessee is showing opening cash balance of ₹ 4.15 lac and closing cash balance of ₹ 3.99 lac after reducing this amount of ₹ 59,000/-. Similarly, an amount of ₹ 25,100/- was deposited in ICICI on 19/07/2007. As per the chart showing availability of cash in July, 2007, there was opening cash of ₹ 3.99 lac and closing balance of ₹ 4.16 lac. In September 2007, cash deposited was ₹ 1.34 lac and as per the chart showing availability of cash in ..... X X X X Extracts X X X X X X X X Extracts X X X X
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