TMI Blog2012 (5) TMI 707X X X X Extracts X X X X X X X X Extracts X X X X ..... rch and seizure operations conducted in the case of the assesse and other concerns of Sujana Group of Industries. After the search operations, the Assessing Officer had initiated assessment proceedings for the assessment years 2003-04 and 2005-06 by issuing notices u/s 153C of the Act. The Assessing Officer made certain additions while completing the assessment passed u/s 143(3) read with 153C of the Act. The Assessing Officer also initiated penalty proceedings u/s 271(1)(c) of the Act, at the time of completion of assessment. 3. For the A.Y. 2003-04, the Assessing Officer issued a fresh show cause notice to the assessee requesting to explain as to why penalty on the ground of concealment of income should not be levied. In response to sa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ee is liable for penalty on the ground of concealment of income for the said amount he levied a penalty of ₹ 127,95,247/- u/s 271(1)(c) of the Act vide order dated 25.3.2009. Aggrieved the assessee preferred the appeal before the CIT(A). 4. During the hearing of appeal in the written submissions filed by the ld. AR it was submitted that in the meantime the original quantum appeal in the above case for the asst. year 2003-04 has been disposed off by the Hon ble ITAT, Hyderabad Bench, on 28.8.2009 by setting aside the assessment to the file of the assessing officer. He furnished before the CIT(A) a copy of the said order (combined order) of the Hon ble Tribunal in ITA 747 to 750 and 1299/Hyd/2008 for the asst. years 2000-01, 2001-02, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he assessee before the Tribunal. As per para 11 of the said order of the Hon ble Tribunal though the assessee has raised ground against the said disallowance made in assessment if did not press the said ground before the Hon ble Tribunal. Accordingly the said ground was rejected by the Hon ble Tribunal. Under the circumstances it clearly shows that the assessee indirectly admits that it has wilfully made such wrong claim for deduction, From this it thus makes clear that the assessee has concealed its income to the extent of said disallowance of ₹ 508,000/- for the asst. year 2003-04. Therefore the assessee is fully liable for penalty u/s 271(1)(c) against the said amount, Thus the decision of the AO in levying penalty u/s 271(1)(c) on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has wilfully made such wrong claim of deduction. From this, it thus makes clear that the appellant has concealed its income to the extent of above disallowance of ₹ 7,96,737/- for the assessment year 2005-06. Therefore, the appellant is fully liable for penalty u/s 271(1)(c) on the said amount. Thus, the decision of the AO in levying penalty u/s 271(1)(c) on the said amount, is justified, and hence, the same is upheld . Aggrieved, the assessee is in appeal before us. 5. The learned counsel for the assessee Shri Murali Mohan contended that the CIT(A) erred in confirming the order passed by the Assessing Officer wherein with respect to penalty on the disallowance on sale of assets of ₹ 5,08,000/- for the assessment year 20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o furnishing of inaccurate particulars regarding the income of the assessee. 8. In the present case before us, the disallowance made by the Assessing Officer may give rise to suspicion sufficient to make the addition for the purpose of assessment but not sufficient enough to justify levy of penalty u/s 271(1)(c) of the Act. The Assessing Officer should show that the plea of the assessee is false or that the assessee has committed some fraud or gross wilful negligence on his part to bring about concealment of income or furnishing of inaccurate particulars of his income. Penalty cannot be imposed on the ground that the assessee has accepted the addition in quantum appeal for the reasons best known to him. Therefore, penalty levied is he ..... X X X X Extracts X X X X X X X X Extracts X X X X
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