TMI Blog2015 (9) TMI 1121X X X X Extracts X X X X X X X X Extracts X X X X ..... addition, on the ground that the assessee's explanation was not only bona fide but also substantiated in terms of Explanation (1)(B) of Section 271(1)(iii) of the Act. Hence, the appeal is dismissed. - Decided in favour of assessee. - Tax Case Appeal No. 580 of 2015 - - - Dated:- 12-8-2015 - V. Ramasubramanian And T. Mathivanan, JJ. For the Appellant : Mr. T. Ravikumar JUDGMENT V. Ramasubramanian, J. This appeal is by the Revenue, challenging a common order passed by the Income Tax Appellate Tribunal, Madras, D Bench, on an appeal and a cross appeal. 2. Heard Mr.T.Ravikumar, learned counsel for the appellant. 3. The respondent/Assessee filed its return of income tax for the Assessment year 1998-99 on 30.11.1998 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ee's business premises. 7. As against the order of the Assessing Officer levying a penalty under Section 271(1)(c), the assessee filed an appeal to the Commissioner of Income Tax (Appeals). 8. By an order dated 19.8.2010, the Commissioner of Income Tax (Appeals) allowed the appeal partly. The effect of the said order of the Tribunal was (i) the deletion of the penalty in entirety, in so far as the addition relating to unaccounted lease syndication amount of DLWL Company of ₹ 1,20,00,000/-; and (ii) the reduction of the penalty from 150% to 125% in so far as the other two items of addition are concerned. 9. Aggrieved by the total deletion of penalty in respect of one item, the Revenue filed an appeal in ITA No.1920/Mds/201 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ision of the Supreme Court in Mak Data P.Ltd., v. Commissioner of Income Tax [(2013) 358 ITR 593 (SC)] and contended that even in cases where the assessee pleads voluntary disclosure, amicable settlement etc., to explain its conduct, a presumption of concealment is raised under the Explanation to Section 271(1). Therefore, the only question to be answered is as to whether the assessee offered any explanation for concealment of particulars of income or for furnishing inaccurate particulars. 12. We have carefully considered the above submissions. 13. It is true that under Clause (c) of sub-section (1) of Section 271, the Assessing Officer or Commissioner of Income Tax (Appeals) is entitled, in the course of proceedings under the Act, to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r, in the course of any proceedings under this Act, is satisfied that any person........... Therefore, an element of discretion is conferred upon the Assessing Officer as well as Commissioner of Income Tax (Appeals) under Section 271(1). The discretion conferred is not uncontrolled or unguided. It is guided by certain parameters found in the Explanation (1). 17. Therefore, in an appeal arising under Section 260-A, this Court is concerned only with the question of law as to whether the exercise of discretion by the Assessing Officer or the Commissioner of Income Tax (Appeals) was proper or not. 18. For the deletion of the penalty in entirety in respect of one item of addition, the Commissioner of Income Tax (Appeals) gave cogent a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was properly arrived at. 20. Therefore, our answer to the question of law raised in this appeal would be that when the Commissioner of Income Tax (Appeals) is satisfied, on the basis of clear and cogent reasonings given in his order, not to levy penalty and when the Tribunal finds such satisfaction on the part of the Commissioner of Income Tax (Appeals) to have been correctly arrived at, the orders do not suffer from any error of law. Therefore, we hold that the Commissioner of Income Tax (Appeals) and the Tribunal were right in ordering deletion of penalty in respect of one item of addition, on the ground that the assessee's explanation was not only bona fide but also substantiated in terms of Explanation (1)(B) of Section 271(1)(ii ..... X X X X Extracts X X X X X X X X Extracts X X X X
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