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TMI Blog2020 (3) TMI 173X X X X Extracts X X X X X X X X Extracts X X X X ..... rsued the record I find that the addition of Rs. 6,54,000/- made u/s 68, salary payable of Rs. 18,690/- and disallowance out of expenses of Rs. 15,76,981/- was deleted while deciding the quantum appeal. Therefore the question of penalty u/s 271(I)(c) does not survive on above addition. The remaining addition of Rs. 1,10,882/- out of various. expenses. The A/R of the appellant submitted that the disallowance is on estimate basis addition. Thus the penalty u/s 271(1)(c) is not leviable on estimate basis. There is force in the submission of the A/R that the penalty u/s 271(I)(c) is not leviable on estimate addition as decided by various court. Hence the penalty imposed on estimate addition of Rs. 1,10,882/- is cancel. The A/R further argued ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n Rs. 13,000/- which has been sustained by the ld. CIT(A) U/s 68 of the Act in the quantum proceedings. 3. Firstly, regarding the surplus of receipts over the expenditure account, the Assessing Officer has stated in the assessment order that the assessee did not furnish any documentary evidence in support of its claim of exemption U/s 10(23C)(iiiad) of the Act, thereafter, a show cause notice was issued to the assessee as to why the gross receipt should not be taxed as business receipt however, there has been no compliance on part of the assessee. The Assessing officer accordingly held that the claim of exemption U/s 10(23C) of the Act remains unproved and the gross receipts of Rs. 38,45,391/- was treated as business receipt and the surplu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent for levy of penalty and such satisfaction must be arrived at in the course of any proceedings under this Act. Further, reliance was placed on the decision of Hon'ble Punjab & Haryana High Court in case of CIT vs Mohinder Lal 168 ITR 101 and Hon'ble Karnataka High Court decision in case of CIT vs MWP Ltd (ITA no. 332/2007). 6. The ld DR is heard who has relied on the order of the lower authorities. 7. Heard both the parties and pursued the material available on record. In order to appreciate the aforesaid contention so raised by the ld AR, we refer to the assessment order passed by the Assessing officer under section 143(3) r/w 144 dated 24.02.2014 and the contents thereof are reproduced in verbatim as under:- "Return of income in th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... treated as business receipts and 50% expenses is disallowed, out of total expenses claimed of Rs. 33,75,727 ,and added to the income of the society. ADDITION U/S 68 During the year the society has shown Rs. 6,67,000/- as unsecured loan in balance sheet , the society has not submitted any documentary evidence or confirmations of loan ,so same is added to the total receipt of the assess treating them as unexplained cash deposit during the year. Penalty proceeding u/s 271 (c) is also initiated for concealment of income and furnishing of inaccurate of particular. SALARY PAYABLE Society has shown Rs. 18,69,000 as salary payable in balance sheet during the year, 10% of this amount is disallowed and added back to the total income of the so ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the particulars of income or furnished inaccurate particulars of income is the condition precedent for levy of penalty and such satisfaction must be arrived at in the course of the proceedings under this Act. Therefore, in absence of any such satisfaction so recorded by the Assessing officer which can be discernable from the assessment order and even in absence of any direction to initiate the penalty proceedings, wherein deemed satisfaction can be said to be recorded by the Assessing officer, the very initiation of penalty proceedings is vitiated and cannot be sustained in the eyes of law and consequent levy of penalty is hereby set-aside. 9. Regarding levy of penalty on Rs. 13,000/- on amount of unsecured loan which has been sustained U/ ..... X X X X Extracts X X X X X X X X Extracts X X X X
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