Subscription   Feedback   New User   Login      
Tax Management India .com
TMI - Tax Management India. Com
Articles Highlights TMI Notes SMS News Newsletters Calendar Imp. Links Database Experts Contact us More....
Extracts
Home List
← Previous Next →

Asstt Commissioner Of Income Tax Versus M/s Balaji Wafers Pvt Ltd

2015 (6) TMI 925 - ITAT AHMEDABAD

Penalty u/s 271(1)(c) - whether penalty cannot be levied in respect of the addition made on estimate basis by applying the gross profit rate? - CIT(A) deleted penalty levy - Held that:- In the instant case, in pursuance to notice under section 148, revised return of income was filed in which entire income was surrendered with an explanation. The revised assessment was regularized by the revenue. AO had failed to take any objection that declaration of income made by assessee in his revised return .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

to avoid hazards of litigation and also to save himself from any penal action. CIT(A) rightly held that Assessing Officer was not justified in levying penalty u/s 271(1)(c) of the Act on the additional income of ₹ 20.00 lacs so disclosed in the return of income furnished in response to notice issued u/s 148 of the Act.

Without prejudice to above, CIT(A) observed that Assessing Officer vide para-5(3) of penalty order had observed that both the ingredients (20,00,000 and ₹ .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

f ₹ 10,90,436/- by applying the profit rate of 8.5% on the unaccounted sales. In appeal, CIT(A) had restricted the profit rate at 6.5%. In appeal before the Tribunal, the profit rate of 6.5% was held reasonable by ITAT, Rajkot. Thus, addition made for ₹ 10,90,436/- by Assessing Officer came to ₹ 3,63,275/- after appellate order of CIT(A) and same had confirmed by Tribunal as stated above. In view of above, CIT(A) justified in deleting penalty of concealment of income on additio .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

for A.Y. 1999-2000 on the following grounds. "1. The learned CIT(A) erred in law and on facts in deleting penalty of ₹ 16,54,292/- levied by the Assessing Officer by holding that penalty cannot be levied in respect of the addition made on estimate basis by applying the gross profit rate. 2. In doing so, the ld. CIT(A) failed to appreciate that where there is a justification for the admission of income, as in the instant case, the burden is on the assessee to prove that there is no con .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

to notice issue u/s. 148 of the Act and on the estimated addition of ₹ 3,63,275/-. The search and survey proceedings were carried out in case of assessee on 27.10.2006. During search, documents indicating unaccounted sales through its network of dealers were found and relevant documents were seized. Seized documents also gave a indication that unaccounted sales were going on over the years including A.Y. 1999-2000. Undisclosed sales pertaining to year under consideration were for ₹ 6 .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

it on suppressed sales was reduced to ₹ 3,63,275/- in second appeal. Penalty proceedings were initiated during the course of re-assessment proceedings. Assessee furnished detailed submission in response to show cause notice of penalty which is reproduced in para 4 of penalty order. The submission of assessee was claimed to be not considered satisfactory by Assessing Officer and he had imposed the penalty of ₹ 16,54,292/- u/s 271(1)(c) of the Act applying the rate of 200% of tax sough .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

deleting penalty of ₹ 16,54,292/- levied by Assessing Officer by holding that penalty cannot be levied in respect of the addition made on estimate basis by applying the gross profit rate. CIT(A) failed to appreciate that where there is justification for admission of income, as in the instant case, the burden is on assessee to prove that there was no concealment and where there is failure in that direction to discharge the burden, penalty is leviable. In the circumstances, CIT(A) ought to h .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ch was later on revised to ₹ 440.00 lacs on adhoc basis for various years vide letter dated 30.01.2006 subject to condition that immunity from penalty proceedings is granted. Assessee specifically mentioned in aforesaid letter that detailed breakup as to yearwise income. Investment/expenses etc. shall be furnished along with returns to be filed in due course. The additional income of ₹ 20.00 lacs declared for the year under consideration was part of total admitted income of ₹ 4 .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

sales from the Additional DIT (Investigation), Rajkot, vide his letter 24.03.2006 and on that basis the Assessing Officer had reopened the case for the AY. 1999-2000 vide notice u/s 148 dated 29.03.2006, which shows that Assessing Officer as only having the details of suppressed sales on the date of initiation of re-assessment proceedings. He was not having the details of undisclosed income embedded in the suppressed sales. Whereas, assessee had disclosed income of ₹ 20.00 lakhs embedded i .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

enalty under section 271(1)(c) upon assessee. However, Commissioner (Appeals) as well as Tribunal deleted penalty by observing that search had merely led to undisclosed income and it would not have been possible for department to assess undisclosed income over all years without assessee's co-operation. This finding of the CIT(A) as well as of the Tribunal was restored by the Hon'ble Supreme Court by setting aside the order of the Hon'ble Karnataka High Court by holding that According .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

of shares to buy peace of mind and to avoid hazards of litigation and also to save himself from any penal action. During course of assessment, the aforesaid explanation given by assessee was neither rejected nor it was held to be mala fide. The Tribunal had recorded a pure finding of fact to the effect that Assessing Officer had not placed on record any material or evidence to discharge his burden of proving concealment. In the assessment order, no such finding had been recorded. Assessing Offi .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

of CIT vs. Suresh Chandra Mittal [2000] 241 ITR 124 wherein similar circumstances, it was held that initial burden lies on revenue to establish that assessee had concealed income and had furnished inaccurate particulars of such income. The burden shifts to assessee only if he fails to offer any explanation for the undisclosed income or offers an explanation which is found to be false by Assessing Officer. In the Instant case, in pursuance to notice under section 148, revised return of income wa .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

aryana High Court as referred to above. In view of discussion, in light of Sudarshan Silks & Sarees (supra) and CIT v. Suresh Chandra Mittal (supra) and CIT vs. Rajiv Garg (supra), CIT(A) rightly held that Assessing Officer was not justified in levying penalty u/s 271(1)(c) of the Act on the additional income of ₹ 20.00 lacs so disclosed in the return of income furnished in response to notice issued u/s 148 of the Act. Without prejudice to above, CIT(A) observed that Assessing Officer .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

 

 

 

 

 

what is new what is new
  ↓     bird's eye view     ↓  


|| Home || Acts and Rules || Notifications || Circulars || Schedules || Tariff || Forms || Case Laws || Manuals ||

|| About us || Contact us || Disclaimer || Terms of Use || Privacy Policy || TMI Database || Members || Site Map ||

© Taxmanagementindia.com [A unit of MS Knowledge Processing Pvt. Ltd.] All rights reserved.

Go to Mobile Version