TMI Blog2016 (12) TMI 1290X X X X Extracts X X X X X X X X Extracts X X X X ..... alty in view of Explanation (1) to section 271(1) of the Act can only be imposed where the assessee failed to offer the explanation or offer an explanation which is found by the AO to be false or the assessee offered explanation which is not able to substantiate and not otherwise. In the present case, both these conditions are not existence and we therefore, are not in agreement with the conclusion drawn by the tax authorities. Accordingly, we delete the penalty. - Decided in favour of assessee - I.T.A. No. 4900/Mum/2014 - - - Dated:- 22-12-2016 - Shri Mahavir Singh, JM And Shri Rajesh Kumar, AM Appellant by : Shri Anuj Kishnadwala Respondent by : Smt. Anu K Aggarwal ORDER Per Rajesh Kumar, AM The appeal filed by th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pportunity to the assessee to explain as to why the penalty should not be imposed of ₹ 21,42,785/- an amount of addition sustained by the ld.CIT(A) out of total ₹ 2,14,27,947/- and the AO after considering the reply of the assessee came to the conclusion that the assessee has concealed particulars of income and considering the particulars of income within the meaning of section 271(1) ( c ) read with Explanation (1) to section 271(1)(c) of the Act and levied the penalty of ₹ 7,21,264/- at the rate of 100% of the tax sought to be evaded vide order dated 15.3.2012 passed under section 271(1)( c ) of the Act. Aggrieved by the order of the AO, the assessee preferred an appeal before the ld. CIT(A) who vide para 4.3.7 who also ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... joinder, the fault lays with the assessee and not with the Assessing Officer. It has also been submitted that when the department was in appeal before ITAT, Mumbai, Assessing Officer could have waited till the order of ITAT, Mumbai, however, there is no bar in Income tax Act 1961 to the levy of penalty after the receipt of orders of CIT(A), Mumbai and the Assessing Officers normally wait for the receipt of the orders of the CIT(A) to ensure that assessee gets a fair chance to reasonable opportunity to present its case and explain the facts of the case and that is what had happened in the case. Moreover, even if Assessing Officer had waited till the receipt of ITAT's order, the effect would have been the same and as such the order of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e was searched by the search team and certain loose/unaudited papers were found and the assessment was framed by the AO by making an addition of ₹ 2,14,27,947/- in respect of amount appearing on the said impounded papers. On appeal before the First Appellate Authority, the ld. CIT(A) reduced the addition to 10% of the total addition i.e. ₹ 21,42,795/- on which the AO has levied penalty. Thereafter the assessee filed appeal before FAA and the appeal of the assessee was dismissed by the FAA. The action of the ld. CIT(A) in confirming the penalty which was imposed by the AO by invoking the provision of Explanation (1) to section 271(1)(c) of the Act was totally wrong and without any basis. The assessee has not claimed any false exp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e said addition and thus the addition which survived at FAA level was ₹ 21,47,795/-. We further find that the addition was made by the AO on the basis of impounded documents which contains entries which the assessee could not explain and added the entire amount as appearing in the said loose papers which according to the assessee were working and estimates. The assessee used to claim 90 to 95% expenditure. We are of the opinion that the penalty in view of Explanation (1) to section 271(1) of the Act can only be imposed where the assessee failed to offer the explanation or offer an explanation which is found by the AO to be false or the assessee offered explanation which is not able to substantiate and not otherwise. In the present cas ..... X X X X Extracts X X X X X X X X Extracts X X X X
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