TMI Blog2016 (10) TMI 364X X X X Extracts X X X X X X X X Extracts X X X X ..... x on all the disclosures made, but in computation this disclosure has not been taken & it is directly credited in the capital account of the assessee. The assessee has co-operated during the survey proceedings as well as in assessment proceedings. The ld. AO had imposed penalty on the basis of finding given for the quantum proceedings in assessment. However, quantum proceedings and penalty proceedings are separate. No investigation or additional evidence had been brought on record to show that assessee has concealed the particulars of income and concealed the income. The AO only imposed the penalty on the basis of returned income. In the case of Suresh Mittal, [2001 (6) TMI 63 - SUPREME Court ] held that no penalty can be imposed if the rev ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e who acted in bonafide manner and by sufficient reasons explain the circumstances leading to mistake, thus the resultant confirmation of penalty at ₹ 14,28,950/- deserves to be deleted. 2. The assessee has filed the return on 30th September, 2009 at ₹ 2,42,212/-. All the grounds of assessee s appeal are revolving around confirming the penalty under section 271(1)(c) at ₹ 14,28,950/-. There was a survey under section 133A of the IT Act on 10.07.2008. The assessee during the year under appeal was having income from wholesale trade of various grades and quality of cloth. During the course of survey proceedings, all statements on behalf of the assessee being an old lady were given by Shri Sanmati Kumar Jain, son of the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al stock found from physical verification was at ₹ 43,41,105/-. Similarly, the assessee after incorporating each and every purchase/sale vouchers and allowing GP rate of 5.51% had worked out the sale at ₹ 45,32,596/- and purchases at ₹ 49,42,082/- upto the date of survey and accordingly the stock as per the books of account was found to be at ₹ 39,61,557/- against excess stock found at ₹ 3,79,548/-. The assessee has failed to justify the excess stock found at her business premises. Accordingly she disclosed the amount of ₹ 3,75,750/- in the capital account furnished with the audit report for which no justification was made by the assessee. This amount also has been surrendered and disclosed in the return ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2.2. Before imposing penalty under section 271(1)(c), the AO gave reasonable opportunity of being heard to the assessee which was availed by the assessee vide letter dated 23.04.2012 which has been reproduced by the AO on pages 1 to 3 of his order. The assessee again furnished the reply on 25.06.2012 and submitted that her appeal before ld. CIT (A)-III, Jaipur is pending. Therefore, she wanted adjournment in her case. After considering the assessee s reply, the AO reiterated the facts which were mentioned in the assessment order as already discussed in the preceding paras. The AO held that assessee had not paid any tax voluntarily. She had admitted various discrepancies during the course of survey and agreed to pay the tax. The assessee can ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... In view of the above discussion, the penalty imposed in respect of undisclosed income of ₹ 43,89,548/- is confirmed. 4. Now the assessee is before us. 4.1. The ld. A/R submitted that the penalty had been levied merely by borrowing the observation and conclusion made in the quantum proceedings and no separate observations had been made in the penalty order as to how the assessee has concealed her income or has furnished inaccurate particulars of income. It is submitted that concealment of income can be alleged only with respect to the disclosure made by the assessee in the return of income meaning thereby that in order to levy penalty of u/s 271(1)(c), it must be established that certain income has not been disclosed in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Devi Somani vs. ITO, Kishangrh in ITA No. 672/JP/2011 wherein it has been held that though surrendered in assessment the assessee can take fresh pleas in the penalty proceedings which by settled law are distinct and separate, which has not been carried out in the case of the assessee by the AO. As the ld. AO gave the findings in the order of penalty u/s 271(1)(c) on the basis of quantum proceedings, it is settled law that quantum proceedings and penalty proceedings are separate for which he relied on the Hon ble Supreme Court decision in the case of Eilly Lilly company, 312 ITR 225 (SC). He further relied on the following decisions and requested to delete the penalty confirmed by ld. CIT (A) :- Jhavar Properties P. Ltd. vs. ACIT 317 I ..... X X X X Extracts X X X X X X X X Extracts X X X X
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