TMI Blog2015 (12) TMI 1610X X X X Extracts X X X X X X X X Extracts X X X X ..... n to declare its true income. The AO, in our view, has recorded a categorical finding that he was satisfied that the assessee had concealed true particulars of income and is liable for penalty proceedings under Section 271(1) (c ). We therefore following the ratio in the case of MAK Data Pvt. Ltd. (2013 (11) TMI 14 - SUPREME COURT ), uphold the view of the Ld.CIT(A) that, in the absence of any explanation in respect of the surrendered income, the first part of clause (A) of Explanation 1 is attracted. - Decided against assessee - I.T.A .No. 6715/Mum/2013 - - - Dated:- 4-12-2015 - SHRI RAJENDRA, ACCOUNTANT MEMBER AND SMT. BEENA PILLAI, JUDICIAL MEMBER For The Appellant : Shri Devendra Jain For The Respondent : Shri R.A. Dyani ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The assessee filed its reply, vide letter dated 20/01/2012, stating that they were not likely to pay to the suppliers of goods (creditors), as issues regarding the quality and delivery of goods was not resolved. The assessee submitted that the amount of ₹ 61,64,239/- was offered as remission of liability u/s 41(1) in order to buy peace and to avoid any punitive action under the I.T. Act. The ld. Assessing Officer after considering the reply stated that in course of the assessment proceedings when the appellant was asked to furnish the confirmation letters from its creditors as the amount has been outstanding for the past few years, only then the appellant submitted that it was not likely to pay then as certain issues were not yet res ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s, it can be said that, the appellant had furnished inaccurate particulars, either deliberately, or as a result of gross negligence, which was not capable of being recorded as an innocent act. The ld. CIT(A) also recorded that the assessee had voluntarily disclosed the amount before the ld. AO, since it could not substantiate or established the existence of the liability with supportive evidences or material. The ld. CIT(A) further records that the explanation offered by the assessee was found to be unsustainable and not bonafide by the ld. AO. The assessee could not even file confirmations from the creditors for the amounts for which the addition u/s 41(1) was made by the ld. AO. The ld. CIT(A), therefore, upheld the levy of penalty u/s 27 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent only to buy peace and to get away with the punitive action under the I.T. Act. The ld.DR relies upon the judgment of the Hon ble Supreme Court in the case of MAK Data Pvt. Ltd. Vs. CIT II reported in (2014) 1 SCC 674. 9. We have heard counsel on either side and perused the judgments relied upon by them. The scope of Explanation 1 to Section 271(1)(c) of the Act, which reads as follows:- Explanation 1 Where in respect of any facts material to the computation of the total income of any person under this Act, -- (A) Such person fails to offer an explanation or offers an explanation which is found by the Assessing Officer or the Commissioner (Appeals) or the Commissioner to be false, or (B) Such person offers an explanatio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oncealed income, he had to be absolved from penalty. We are of the view that, as the assessee has admitted in its written submissions before the authorities below that, there was no likely hood of these payments being made to the suppliers(creditors). The assessee therefore, has surrendered, in view of detection made by the Ld.AO. Had it been the intention of the assessee to make full and true disclosure of its income, it would have filed the return declaring an income inclusive of the amount, which was surrendered later during the course of the assessment proceedings. Consequently, it is clear that the assessee had no intention to declare its true income. The AO, in our view, has recorded a categorical finding that he was satisfied that ..... X X X X Extracts X X X X X X X X Extracts X X X X
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