TMI Blog2017 (9) TMI 580X X X X Extracts X X X X X X X X Extracts X X X X ..... ankar, Sr DR ORDER Per Rajpal Yadav, Judicial Member The assessee and Revenue are in cross appeals against the order of ld. CIT(A)-III, Ahmedabad dated 22.08.2013 passed for Assessment Year 2009-10. 2. The ld. Assessing Officer has imposed a penalty of ₹ 15,00,000/- upon the assessee under Section 271(1)(c) of the Income-tax Act, 1961 (hereinafter referred to as the Act ). The ld. CIT(A) has confirmed the penalty equivalent to the tax sought to be evaded as against the higher penalty imposed by the Assessing Officer. The Revenue is aggrieved with the part deletion of the penalty; whereas, the assessee is aggrieved with the confirmation of the penalty. 3. The brief facts of the case are that the assessee has filed its return of income on 30.09.2009 declaring total loss at Rs.(-) 6,33,138/-. The ld. Assessing Officer has issued ten notices under Section 143(2) and 142(1) of the Act. All these notices remained uncomplied with; hence, the Assessing Officer has passed an assessment order under Section 144 of the Act, according to his best judgment. On an analysis of the details, ld. Assessing Officer found that the assessee did not carry out any specific busines ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is order while taking note of the submissions of the assessee. The ld. CIT(A), in principle, concurred with the Assessing Officer that the assessee deserves to be visited with penalty; but, accepted two alternative contentions namely he directed the Assessing Officer to take the correct figure of estimated income and thereafter calculate the penalty @ 100% of the tax sought to be evaded. The relevant part of the submissions and findings of the ld. CIT(A) read as under:- The A.O. has estimating net income at ₹ 26,35,726/- which after rectification will get reduced to ₹ 19,85,089/-. Therefore it is wrong to observe that the commission income has not been disclosed in its return of income. According to assessee the gross earning is 16,10,850/-whereas it has been estimated at more amount by the A.O. and the estimated amount has been treated as net income. It is not the case that the assessee has received cash commission which has not been accounted for. Even if it is assumed that assessee was providing cheque entries, the income earned by the assessee will be difference of cheque entries received and given and the said income is duly reflected in the accounts of compan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f concealment of any transaction for furnishing of inaccurate particulars. Penalty was deleted by ITAT and the court held that there is no error in the order of the Tribunal. In the case of assessee also income has been estimated on the basis of withdrawals from the bank accounts which cannot be made basis to arrive at income. As this is a case of pure estimation of income, the ratios of above decisions will apply and the penalty levied may kindly be deleted. Kindly consider the appeal of the assessee in its proper perspective and oblige. 6. Copy of submissions of the appellant was also forwarded to the AO and he was asked to furnish his report in the matter. AO furnished report vide his letter No. DClT.CC-2(2)/ Remand Report/Nexus/2013-14 dated 22-08- 2013 in which he stated that I have gone through the submission and the assessee's major contention was regard the rectification pending with this office. The assessee has stated that there is a mistake in computing withdrawals in Account no. 1817 with Vinayak Sahkari Bank Ltd., Kalupur, Ahmedabad. He has stated that as per Para no. 4.2 of assessment order the withdrawals of the said bank has been put at ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s false and which the first person either knows to be false or does not believe to be true, in any books of account or other document relevant to or useful in any proceedings against the first person or the second person under this Act, the first person shall be punishable with rigorous imprisonment for a term which shall not be less than three months but which may extent to [two] years and with fine. 8. Thus it is clear that the intention of the Legislature is that falsification of books of accounts or documents shall be seriously discouraged. It is a fundamental principle of criminal law that any person who aids, abets, counsels, or procure the commission of an offence, is liable to be tried, proceeded against, and punished as a principal offender. This principle applies to summary offences as well as to indictable offences. 9. The appellant by providing accommodation entries to various tax payers is responsible for causing substantial loss of revenue to the exchequer and therefore, he does not deserve any sympathy. I therefore hold that this is a suitable case for levy of penalty u/s. 271(1)(c). The reliance placed by the appellant on various court decisions is of no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he income and/or furnishing inaccurate particulars of income. If in the penalty order the Assessing Officer has conclusively held that the penalty is being imposed either for concealing the income or for furnishing inaccurate particulars of income, then there will not be any procedural irregularities which are fatal to the proceedings itself. 10. We have duly considered the rival contentions and gone through the record carefully. Let us first take the additional ground of appeal raised by the assessee. The copy of the show-cause notice issued under Section 274 r.w.s. 271(1)(c) of the Act is available at page No.1 of the paper-book. The Assessing Officer has given an opportunity to the assessee to submit its explanation as to why the penalty be not imposed upon it under Section 271(1)(c) of the Act. No doubt, the Assessing Officer has not scored the specific charge as to whether the penalty is being intended to initiate for concealment of income or furnishing of inaccurate particulars of income. But it is pertinent to observe that this show-cause notice was not replied by the assessee. The penalty proceedings are ex-parte. We failed to understand that what ambiguity caused in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the opinion that it will have to be said that the assessee had concealed its income and/or that it had furnished inaccurate particulars of such income. It was in this respect the Bench observed that Now the language of and/or may be proper in issuing a notice as to penalty order or framing of charge in a criminal case or a quasi-criminal case, but it was incumbent upon the IAC to come to a positive finding as to whether there was concealment of income by the assessee or whether any inaccurate particulars of such income had been furnished by the assessee. No such clear cut finding was reached by the IAC and, on that ground alone, the order of penalty passed by the IAC was liable to be struck down. 11. Considering the facts and circumstances in the light of above, we do not find any merit in this additional ground of appeal raised by the assessee. 12. So far as the plea that the income of the assessee was estimated and therefore, no penalty should be imposed upon the assessee is concerned, we are of the view that the assessee was not doing any specific business. It was indulged in providing accommodation entries to various tax evaders. Its activity has caused substantia ..... X X X X Extracts X X X X X X X X Extracts X X X X
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