TMI Blog2014 (11) TMI 1099X X X X Extracts X X X X X X X X Extracts X X X X ..... ell as CIT (Appeals) - TAX APPEAL NO.152 OF 2005 - - - Dated:- 3-11-2014 - K.S. JHAVERI AND K.J. THAKER, JJ. K.M. Parikh, Advocate for the Appellant. J.P. Shah and Manish J. Shah, Advocates for the Respondent. JUDGMENT K.J. Thaker, J. By way of this Tax Appeal, the only argument canvassed by learned Counsel for the appellant Mr. K.M. Parikh is that there is concealment of Income by the opponent. Learned Counsel has relied on the ground B. of the Memo of the Appeal which reads as under :- B. That the Hon'ble Tribunal has substantially erred in law and on facts in upholding the order of the Ld. CIT (A) cancelling the penalty of ₹ 4,95,410/- levied u/s.271(1)(c) of the I.T. Act holding that since no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that there is no contention on the part of the assessee that it has not earned income. The only contention is that income is estimated and hence penalty is not leviable. The computation of income has reached finality, according to which the assessee has substantial income chargeable under the Act. The estimate of income was resorted to by the AO only as a last resort after the assessee failed to disclose the income by filing return of the income. Thus, the inaction on the part of the assessee itself is the act of concealment of particulars of income. The word concealment presupposes some act on the part of the assessee. In the present case, the inaction of not filing return of income itself can be considered as act of concealment of parti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... itiated u/s. 271(1)(c) for concealing particulars of income. The assessee preferred appeal before the CIT(A) against the assessment order where the CIT(A) scaled down the income from ₹ 5,52,572/- to ₹ 4,63,653/-. During the penalty proceedings the assessee did not respond to the notice issued. The Assessing Officer levied a penalty of ₹ 4,95,410/-u/s. 271(1)(c) of the I.T. Act being 100% of the Tax sought to be evaded. The assessee preferred appeal before the CIT(A) against penalty so imposed. The CIT(A) deleted penalty on the ground that since the assessee is a regular assessee, explanation (3) to Section 271(1)(c) is not attracted. The concealment of income can be only with reference to return of income filed. In absence ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e date of search i.e. 31.8.84. As this date is prior to 1.10.84, the concept of deemed concealment under explanation 5 of section 271(1)(c) would not be applicable to the appellant. Further explanation 4 is not applicable to the appellant because explanation 3 itself is not applicable. Therefore neither the main section nor the explanation to sections are applicable to the facts of the case. Moreover the entire assessment i.e. the estimation of total income and the estimation of the stocks on the date of search is based on certain assumptions. In fact both the additions are on estimated basis. It is an accepted fact that whenever an addition is made on the basis of estimates, the penalty for concealment is not leviable. Moreover the decisio ..... X X X X Extracts X X X X X X X X Extracts X X X X
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