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M/s Sheetal Mercantile Pvt. Ltd. Versus DCIT, CIRCLE 8 (1) , CR Building

2016 (7) TMI 606 - ITAT DELHI

Penalty u/s. 271(1)(c) - assessment was made u/s 144 - unaccounted sale consideration - Held that:- We are of the considered view that the assessee has not furnished inaccurate particulars of income and there are no findings of the Assessing Officer and the CIT (Appeals) that the details furnished by the assessee in his return are found to be inaccurate or erroneous or false. Under these circumstances, in our view the penalty in dispute is totally unwarranted and deserve to be deleted. According .....

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y the Ld. CIT(A)-XI, New Delhi relating to Assessment Year 2007-08 on the following grounds:- 1. Learned Commissioner of Income Tax (Appeal) is not justified in law and facts and circumstances of the case in confirming penalty of ₹ 54,615/- without taking into account submissions made with documentary evidence before the AO and the copy of the same was also before CIT(A). 2. Ld. CIT(A) is grossly erred in confirming the addition even without referring the document furnished before her and .....

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3,17,150/- on 8.11.2007. The assessment was completed u/s. 144 vide order dated 30.10.2009 at an income of ₹ 1,66,58,750/- making addition of ₹ 1,37,92,738/- as unaccounted sale consideration and disallowing ₹ 60,000/- on a/c of rebate and discounts and ₹ 1,02,255/- on account of freight and octroi. Penalty proceedings u/s. 271(1)(c) were also initiated in the assessment order itself. But due to the pending appellate proceedings, the penalty proceedings were kept in abeya .....

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he assessee went in further appeal before the ITAT on the above disallowance and the ITAT dismissed the appeal of the assessee. In response to show cause notice u/s. 271(1)(c) dated 4.8.2011, the assessee filed a detailed reply vide letter dated 16.8.2011 through its Counsel. The assessee submitted that it has not made any concealment or furnished inaccurate particulars . Only addition has been confirmed by the CIT(A) is not lead to concealment and on this basis no penalty u/s. 271(1)(c) can be .....

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ide order dated 29.8.2011. 3. Against the above Penalty Order dated 29.8.2011 passed by the Assessing Officer, assessee appealed before the Ld. First Appellate Authority, who vide impugned order dated 05.9.2012 dismissed the appeal of the assessee. 4. Against the above order of the Ld. CIT(A) dated 5.9.2012, assessee is in appeal before the Tribunal. 5. At the time of hearing, Ld. Counsel of the assessee has submitted that in response to show cause notice u/s. 271(1)(c) dated 4.8.2011, the asses .....

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that no satisfaction for concealment was recorded by the AO and the case laws cited by the assessee in the reply has not been discussed at all. Therefore, the amount of ₹ 54,615/- does not attract any penalty. In support of his contention, he relied upon the decision of the Hon ble Apex Court in the case of CIT vs. Reliance Petro Products 322 ITR 158 (SC) and requested that penalty in dispute may be deleted. 6. On the other hand, Ld. DR relied upon the order of the authorities below and re .....

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ate its claims and provide documentary evidence. The assessee only submitted details long after the assessment had been completed. Also the assessee did not contest the findings of the assessment before the Hon'ble ITAT. As per Explanation 1 to section 271(1)(c) of IT Act; where in respect of any facts material to the computation of the total income of any person under this Act,- (A)such person falls to offer; an explanation or offers an explanation which is found by the Assessing Officer or .....

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me in respect of which particulars have been concealed. Thus in re case of the assessee since the assessee failed to offer an explanation it is held that the Explanation 1 to section 271(l)(c) of the Act is squarely attracted and the additions made during the course of assessment in c,pll1puting the income of the assessee shall be deemed to represent the income in respect of which particulars have been concealed. It has been held by the courts that the revenue is not required to establish that t .....

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Sab (1994) 205 ITR 244 and CIT vs. KR Sadayappan (1990) 185 ITR 49, 54. In a recent case, the Supreme Court, in the case of Union of India vs. Dharmendra Textile Processors (306 ITR 277), held that the object behind enactment of section 271(1)(c) read with Explanations indicate that the said section has been enacted to provide for a remedy for loss of revenue and they create the element of strict liability on the assessee for concealment or for giving inaccurate particulars while filing return. .....

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ccurate particulars of his income with a view to wilfully evade taxes. A penalty of ₹ 54,615/- is therefore imposed u/s. 271(1)(c) of the I.T. 8. After perusing the finding of the AO made in his penalty order as well as finding in impugned order of the Ld. CIT(A), we are not in agreement with the finding of the Ld. CIT(A), because the mere fact that an addition is confirmed in quantum proceedings cannot be conclusive of the imposition of penalty. In this regard, we refer the decision of th .....

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ished inaccurate particulars of its income and is liable for penalty u/s 271(1)(c), which did not establish that how the assessee has furnished inaccurate particulars of its income. In our view, as regards the furnishing of inaccurate particulars, no information given in the return was found to be incorrect or inaccurate. We further find that section 271(1)(c) postulates imposition of penalty for furnishing of inaccurate particulars and concealment of income. In this regard, we draw our support .....

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