TMI Blog2015 (7) TMI 279X X X X Extracts X X X X X X X X Extracts X X X X ..... ations. As seen from the balance sheet, there are many more credits which the AO has accepted as assessee was in a position to furnish the confirmation letters. Just because he could not confirm the two of the credits occurred during the year and two of the credits carried over from earlier year, it cannot be held that assessee's case come under concealment of Income. CIT(A) was correct cancelling the penalty - Decided against revenue. - I.T.A. No. 626/HYD/2013 - - - Dated:- 26-6-2015 - Shri B. Ramakotaiah, J. For the Petitioner : Smt Amisha S. Gupt, DR For the Respondent : Shri A.V. Raghuram, AR ORDER This is Revenue's appeal against the order of the Commissioner of Income Tax (Appeals)-III, Hyderabad dated 13-02-2013, cancelling the penalty imposed u/s. 271(1)(c) of the Income Tax Act [Act]. 2. Briefly stated the facts are that assessee-firm is engaged in the business of manufacture of plastic jars. During assessment proceedings, assessee was not able to produce certain bills and documents as well as reconciliation of various bank statements and confirmations for various outstanding credits. Additions were made on account of estimations and non-pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... other reported in 130 ITR 129, wherein the penalty was cancelled. It was contended that AO simply stated a citation, did not apply his mind while considering the levy of penalty. It was further contended that addition u/s. 68 was made in assessee's case on un-reconciled balance of bank account and for not furnishing of confirmations of Sundry Creditors. Assessee relied on the decision of the Supreme Court in the case of Pricewaterhouse wherein their Lordships has cancelled the penalty u/s. 271(1)(c) holding that for inadvertence, penalty cannot be levied. Assessee further submitted that the balances brought to tax were arising in earlier years and they cannot be considered as income of this year and just to buy the peace, assessee having failed to reconcile the balance /obtain confirmations has accepted for addition. Penalty cannot be levied under facts. 5. Ld.CIT(A) considered the submissions and deleted penalty stating as under: 4. I have seen carefully the facts and evidences and have also gone through the assessment order and the details of additions made in that order. I find that just because certain amounts could not be properly reconciled, the assessing officer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... /-). In addition to the above, AO notes that verification of balances in bank account revealed that difference of ₹ 81,593/- and in the absence of reconciliation between the details furnished and the bank statement, the difference of ₹ 81,593/- was added. Last item was with reference to confirmations from creditors shown in the balance sheet in respect of 'Unsecured Loans' and 'Sundry Creditors'. Out of many items, confirmations could not be produced in respect of 4 items. As seen from the assessment order, nowhere AO has come to a conclusion that assessee has concealed income or furnished inaccurate particulars. This is not a case of furnishing inaccurate particulars as assessee has made claims which are disallowed. 9. The issue is whether mere disallowance of expenditure/ claims and additions made on the basis of un-reconciled amounts or unconfirmed creditors can lead to penalty for concealment of income. I am of the opinion that facts do not indicate that there is any concealment. Assessee has explained during the assessment proceedings as well as during the penalty proceedings that it was not in the business at the time of assessment and was not i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 29] (Allahabad), the provisions of Section 271(1)(c) were interpreted after insertion of Explanation-I. There was a presumption of concealment where returned income was less than 80% of the assessed income in those assessment years of 1975-76 and 1976-77. When there was no valid explanation from assessee under Explanation-I, which was also found to be false, the imposition of penalty was held valid. However, the provisions were amended subsequently and there is no presumption of concealment as was then existing. Moreover, assessee has given a bonafide explanation under Explanation-I which was not proved false. Accordingly, this judgment also does not apply. 13. In the case of CIT Vs. Mangha Ram Om Prakash [276 ITR 362] again the facts indicate that there is no explanation regarding cash credits and the legal presumption that there was concealment where the total income returned by assessee was less than 80% of the assessed income, he shall be deemed to have concealed the particulars of his income. Since, assessee did not offer any explanation, penalty was levied which was upheld. However, in the present case as already stated above, there is no presumption of concealment as the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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