TMI Blog2013 (4) TMI 885X X X X Extracts X X X X X X X X Extracts X X X X ..... he Act and after treating it to be the concealed income or furnishing of inaccurate particulars, the Assessing Officer levied the penalty at `5,00,000/- having computed the tax sought to be evaded at `2,40,000/- against which the appeal was filed before the CIT(A) with the submissions that section 68 is deeming section and explanation given regarding gift may not be to the satisfaction of the Assessing Officer but nothing has been brought on record that the explanations offered by the assessee were false. Therefore, the penalty u/s 271(1)(c) cannot be levied on merits or on deeming provisions of the Act. Out of total gift of `8,00,000/-, a gift of `6,00,000/- was received from NRIs and balance `2,00,000/- was received from father-in-law t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e view taken by the Assessing Officer. In the back drop of these facts, though bringing the amounts to tax as income by invoking the deeming provisions of section 68 would have been valid and justified, no definitive finding can be arrived at to the effect that the amounts treated as income really and certainly represented concealed income so as to entail a penalty u/s 271(1)(c). The provisions of section 68 conferring powers on the AO to deem a credit as income are enabling provisions to bring the credit to tax where there is either a failure on the part of the assessee to offer on explanation, or the explanation, if offered is not to the satisfaction of the AO. However, an addition made on this count would not automatically conclude that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onclusive in the matter of imposition of penalty unless the entirety of circumstances reasonably pointed out to the conclusion that the disputed amount represented income which the assessee concealed or in respect of which he deliberately furnished inaccurate particulars (Dilip N. Shroff Vs. Jt.CIT 291 ITR 519 SC). The Hon'ble High Court of Allahabad in the case of CIT Vs. Mohinder Singh (139 ITR 160) observed that the proceedings for imposition of penalty are quasi criminal nature and that the findings in assessment are not binding in the penalty proceedings. The Hon'ble High court (supra) went on to observe that the amount of income in respect of which particulars have been concealed or inaccurate particulars have been furnis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of penalty. The assessee's explanation might have been unproved or not satisfactory but it has not been disproved or proved to be false and the primary burden in this regard for penalty to be justified was on the revenue. The conditions stipulated in clause (A) to Explanation 1 are thus not found satisfied in this case. The conditions stipulated in clause (B) are also not found satisfied in as much as the explanation is not held to lack bonafide and to suffer from any non disclosure of facts relating to such explanation and material to the computation of the appellant's total income. Thus the stipulations in Explanation 1 to section 271(1)(c) which constitute conditions precedent to statutory tenability of levy of penalty are not ..... X X X X Extracts X X X X X X X X Extracts X X X X
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