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TMI Blog2020 (4) TMI 259X X X X Extracts X X X X X X X X Extracts X X X X ..... c) of the I.T. Act, 1961 amounting to Rs. 38,516/-. The action of the ld. CIT(A) is illegal, unjustified, arbitrary and against the facts of the case. Relief may please be granted by quashing the said penalty u/s 271(1)( c).'' 2.1 Brief facts of the case are that the assessee filed its return of income and subsequently assessment u/s 143(3) of the I.T. Act, 1961 was completed and addition was made by the AO on account of interest on FDR of Rs. 1,13,318/-.The said order of the AO was sustained uptill ITAT. Therefore, the penalty proceedings were also initiated and consequently penalty of Rs. 38,516/- was imposed by the AO u/s 271(1)(c) of the Act on account of concealment of income. 2.2 Aggrieved by the order of the AO for imposition of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... alty in the case of concealment of income or furnishing inaccurate particulars of income. 3.6 Hon'ble Supreme Court in the case Hindustan Steel Ltd. v. State of Orissa [1972J 83 ITR 26 (SC) laid down a ratio that penalty should not be imposed merely because it is lawful to do so. The Assessing Officer has to exercise his discretion judiciously. An order imposing penalty for failure to carry out a statutory obligation is the result of a quasi-criminal proceeding, and penalty will not ordinarily be imposed unless the party obliged either acted deliberately in defiance of law or was guilty of conduct contumacious or dishonest. or acted in conscious disregard of its obligation. 3.7. It is submitted that merely because the method of calc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... u/s 143(3) of the IT Act was completed on 28,12.20.11 at total income of Rs. 1,53.08.400A-. w'hile completing the assessment u/S 143(3) following addition was made by the A.0. Interest on EDR: Rs, 1,13,318/- .During the assessment proceedings, on perusal the 26AS statement of the assessee it was found that the assessee had received interest from State Bank Of India amounting of Rs. 6,57,670/- whereas the assessee, in its return of income had declared interest of Rs. 5,44,352/- * Thus the assessee had declared less amount of Rs. 1,13,318/- on interest of Rs. 5,44,352/- . Thus the assessee was asked the difference and the assessee had stated only that it is due to methodology of the interest credit by the Bank. The reply of the assesse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ction 246A, and the commissioner (Appeals) passes the order on or after the 1St day of June, 2003 disposing of such appeal , cm order imposing penalty shall he passed before the expiry of the financial year in which the proceedings, in the course of which action for imposition of penalty has been initiated, are completed, or within one year ,from :the end of the financial year in which the order of the commissioner (appeals) is received by the Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner. whichever is letter: The assessee failed to submit it's reply on merit, that they have not concealed their income. Since the assessee has not submitted any reply on merit of the case therefore, I decide the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d fixed deposit. As per the assessee, this estimation can be at variance with the working of the bank and such variance over the total period of maturity of fixed deposit will ultimately get neutralized. The assessee had been adopting this method of calculation in previous years also and even the auditor of the assessee had never objected. We are of the view that as per facts of the present case since the assessee was maintaining multiple accounts and was estimating the accrual income by way of interest on unmatured Fixed deposit and this estimation can be at variance with the working of the bank and even otherwise such variance over the total period of maturity of fixed deposit will ultimately get neutralized. Therefore, merely because of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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