TMI Blog2017 (1) TMI 740X X X X Extracts X X X X X X X X Extracts X X X X ..... surrender or voluntary disclosure of income. As per the provisions of Explanation 1 to section 271(1)(c) of the Act, the question is whether the assessee has offered any explanation for concealment of income or furnishing of inaccurate particulars of income. In the case own hand we find that the requirement laid down by the Hon’ble Court has been met by the assessee inasmuch as, as observed by the CIT(A), the assessee’s explanation (supra) which appears plausible and which explanation, though brushed aside by the Assessing Officer as an afterthought, has not been brought out or found to be false in respect of furnishing of particulars. We, therefore, uphold this view of the CIT(A) and consequently uphold her order directing the Assessing Officer to delete the penalty levied in the case on hand for assessment year 2009-10 - Decided in favour of assessee - ITA No. 5967/Mum/2014 - - - Dated:- 11-1-2017 - Shri Jason P. Boaz, Accountant Member and Shri Sandeep Gosain , Judicial Member For The Appellant by: Shri Rajesh K. Arvind For The Respondent by: Shri Vimal Punmiya ORDER Per Jason P. Boaz, A.M. This appeal by Revenue is directed against the order of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... purchases were made, the purchases are found to be from non-existent party and therefore the very existence of purchase is negated. After observing that the parties from whom purchases were made were nonexistent, the AO states the purchase parties in question have deposed before Sales Tax authorities that they have neither made any purchase/sales and are simply involved in issuing of bills. In that view of the matter, the AO proceeded to levy penalty of ₹ 14,53,833/- under section 271(1)(c) of the Act @100% of tax sought to be evaded on such purchases amounting to ₹ 47,04,060/-. 2.3 Aggrieved by the order levying penalty of ₹ 14,53,833/- under section 271(1)(c) of the Act for A.Y. 2005-06, the assessee preferred an appeal before the CIT(A)-34, Mumbai. The learned CIT(A) allowed the assessee s appeal and deleted the aforesaid penalty levied under section 271(1)(c) of the Act vide order dated 31,07.2014. 3.1 Revenue, being aggrieved by the order of the CIT(A)-34, Mumbai dated 31.07.2014 deleting the penalty of ₹ 14,53,883/- levied under section 271(1)(c) of the Act for A.Y. 2005-06 has preferred this appeal raising the following grounds: - 1. On th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2005-06. The Ld. Representative for the assessee reiterated the factual submissions and legal propositions put forth by it before the CIT(A) and extracted at para 3.2 at pages 3 to 19 thereof in further written submissions filed before the Bench. In submissions put-forth the Ld. Representative for the assessee, inter-alia, canvassed the following propositions:- (i) When the assessee has voluntarily surrendered income under survey/search proceedings as in the case on hand to avoid litigation or to buy peace, the same cannot be considered as a fit case for levy of penalty under section 271(1)(c) of the Act for concealment of income or furnishing of inaccurate particulars of income. (ii) The non-co-operation of parties should not be made a ground for treating the assessee s case as erroneous, fictitious or concealment, merely because the non-acceptance of other parties to the transactions entered to with the assessee, and should not be the reason behind levy of penalty under section 271(1)(c) of the Act. (iii) Penalty under section 271(1)(c) of the Act not exigible only for the reason that no appeals were filed against the quantum additions, as penalty proceedings are diff ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he para 3.4 3.5 of the penalty order which are as under: 3.4 Thus, from the above extract of stamen recorded of Shri Manoj Sharma, it was seen that the assessee had offered ₹ 47,04,960/ - [ difference between bogus purchases of ₹ 2,15,28,000/- and bogus sales of ₹ 1,68,23,040/-] as 'undisclosed income' for the assessment year under consideration, i.e., A. Y.2010-11. 3.5 Accordingly, the same was added to the total income of the assessee as undisclosed income' offered by the assessee on account of bogus purchases and bogus sales thereof The said undisclosed income 0 ₹ 47,04,960/- was offered by the assessee, as a result of survey action u/s.133A conducted on 08.01.2013 as the business premises of the assessee firm. Addition was made on the basis of income offered by the appellant as undisclosed income on account of the difference of bogus purchase and sales. Penalty was levied by AO on this addition by concluding that income was offered as undisclosed income. But circumstances under which he offered income should not be given as much importance which are required before levy of penalty. The appellant offered income because di ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fore, answered in favour of the assessee and against the Revenue. In present case also appellant offered income because of non-corporation of party and his inability to prove transaction with supporting documents. But does not mean that there is concealment of income. 3.5. I further reply on following decisions for my view that penalty cannot be levied on addition made on agreed basis. a) CIT V/s Suaraj Bhan (2007) 294 ITR 481 (P H HC) b) CIT V/s Suresh Chandra Mittals (2001) 251 ITR 9 (SC) c) CIT vs. Manjunatha Cotton and Ginning Factory (Ker HC) d) Sir Shadi Lal Sugar General Mills Ltd. V/s CIT (1987) 168 ITR 705 (SC) 3.6. In view of the above discussion, In my opinion penalty cannot be levied in present case. Thereby, the assessing officer is directed to delete the penalty u/s 271(1)(c) amounting to ₹ 14,53,833/-. Hence, these ground of appeal is ALLOWED 3.4.2 From a perusal of the finding of the CIT(A) in the impugned order it is seen that the addition of ₹ 47,04,960/-, on the basis of which penalty under section 271(1)(c) of the Act was levied by the Assessing Officer, was on account of undisclosed income on account ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tiated penalty proceedings under section 271(1)(c) of the Act for concealment of particulars of income ( para 6.5 of assessment order). Inviting our attention to the penalty order (para 10) the Ld. Representative for the assessee submitted that the Assessing Officer levied penalty for willfully furnishing inaccurate particulars of income leading to concealment. In these circumstances, it is contended that the penalty levied under section 271(1)(c) of the Act in the case on hand is not sustainable. Even though this legal issue may not have been urged before the authorities below, since the same is a purely legal issue and all facts relating thereto are available on record. The same are admitted for adjudication before us in this appeal in keeping with the decision in the case of the Hon ble Apex Court in NTPC (229 ITR 383)(SC). There is no dispute with regard to the fact that the Assessing Officer initiated penalty proceedings under section 271(1)(c) of the Act in the order of assessment for concealment of particulars of income but however proceeded to levy the said penalty for furnishing of inaccurate particulars of income leading to concealment. We find that an identical ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
