TMI Blog2017 (5) TMI 1209X X X X Extracts X X X X X X X X Extracts X X X X ..... account of such unearthing or enquiry concluded by the authorities. No doubt, the surrender from the assessee has come after detection by the revenue authorities, however, before leaving any penalty, the revenue authorities must put a specific charge on the assessee, which in this case, it has failed to. As assessing officer was not sure whether it is a consequence of furnishing of inaccurate particulars of income or concealment of income, therefore, on conjoint readings of assessment order, show cause notice and penalty order it is apparent that one cannot discern that charge on the assessee is whether furnishing inaccurate particulars of income or of concealment of income. We direct the Ld. assessing officer to delete the penalty under section 271(1)(C) - Decided in favour of assessee. - ITA No. 2526/ Del/2011 - - - Dated:- 19-5-2017 - Shri Bhavnesh Saini Judicial Member And Shri Prashant Maharishi, Accountant Member Assessee by : Sh. Shomil Aggarwal chartered accountant Revenue by : Sh. F R Meena Senior Departmental Representative ORDER Per Prashant Maharishi, A. M. 1. This appeal is filed by assessee against the order of the Commissioner of income ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the bank on the same day at Delhi or Hathras and the deposit of cash was explained out of the cash either available at Delhi or at Hathras. Assessee submitted that it is engaged in the business of purchase and sale of footwear, which is generally sold in retail catering to the need of small towns and villages of Uttar Pradesh, and most of the buyers are not the regular shopkeepers. The amount of cash deposited was also stated to be explained that these are the deposits by the sales man or by the persons to whom sales are made. The Ld. assessing officer did not believe the explanation of the assessee and also assessee vide letter dated 24/12/2009 surrendered a sum of ₹ 15 Lacs being short credits with a view to buy peace and avoid litigation. Further during the course of assessment proceedings, notice under section 133 (6) was issued to one M/s Balaji traders, the party did not confirm the transactions entered into with the assessee and therefore assessee agreed for the addition of this sum of ₹ 1652904/ . Consequently, assessment order under section 143 (3) was passed determining the total income of the assessee of ₹ 1685089/ against the returned income of ₹ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a No. 2 at page No. 6 states that there is a consequence of furnishing inaccurate particulars of income and the assessing officer has levied the penalty holding it to be a concealment of income. vi. He further submitted that merely because one of the customer has not confirmed the transactions made with the appellant company, it doesn t become concealment of income or furnishing of inaccurate particulars because of the reason that the relationship with that party were not so cordial. vii. He further relied upon the decision of the Hon ble Bombay High Court in case of CIT versus Upendra V Mithani ITA No. 1860 of 2009 dated 05/08/2009 to submit that that if the assessee gives an explanation which is unproved but not disproved and if it is not accepted, but the circumstances do not lead to the reasonable and positive inference that the assessee s case is false the penalty cannot be levied. viii. He further referred to the decision of the Hon ble Karnataka High Court in case of AP Shanmugam Raj versus M WP Ltd, 264 CTR 502 (KA R) to state that mere reference of initiation of penalty cannot be held to be proper assumption of jurisdiction for levying penalty. He referred to para ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... laced before us. Hon ble Karnataka High Court in case of CIT versus Manjunatha Cotton and Ginning factory (2013) 359 ITR 565, has held as under:- 63. In the light of what is stated above, what emerges is as under : a) Penalty under section 271(1)(c) is a civil liability. b) Mens rea is not an essential element for imposing penalty for breach of civil obligations or liabilities. c) Willful concealment is not an essential ingredient for attracting civil liability. d) Existence of conditions stipulated in section 271(1)(c) is a sine qua non for initiation of penalty proceedings under section 271. e) The existence of such conditions should be discernible from the assessment order or the order of the appellate authority or the revisional authority. f) Even if there is no specific finding regarding the existence of the conditions mentioned in section 271(1)(c), at least the facts set out in Explanation 1(A) and 1(B) it should be discernible from the said order which would by a legal fiction constitute concealment because of deeming provision. g) Even if these conditions do not exist in the assessment order passed, at least, a direction to initiate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ended. On the basis of such proceedings, no penalty could be imposed to the assessee. s) Taking up of penalty proceedings on one limb and finding the assessee guilty of another limb is bad in law. t) The penalty proceedings are distinct from the assessment proceedings. The proceedings for imposition of penalty though emanate from proceedings of assessment, it is independent and separate aspect of the proceedings. u) The findings recorded in the assessment proceedings in so far as concealment of income and furnishing of incorrect particulars would not operate as res judicata in the penalty proceedings. It is open to the assessee to contest the said proceedings on the merits. However, the validity of the assessment or reassessment in pursuance of which penalty is levied, cannot be the subject matter of penalty proceedings. The assessment or reassessment cannot be declared as invalid in the penalty proceedings. 7. We proceed to examine the whole issue on these principles. We have perused the penalty notice dated 24/12/2009 and we note that Ld. assessing officer has not cancelled any of two options. Therefore, in the show cause notice, the Ld. assessing officer ..... X X X X Extracts X X X X X X X X Extracts X X X X
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