TMI Blog2020 (4) TMI 259X X X X Extracts X X X X X X X X Extracts X X X X ..... alty. In recognition of this fundamental difference, both proceedings have been kept separate and independent. Provisions of Section 271(1)( c) of the Act give discretionary powers to the authority levying penalty to levy or not levy penalty in the case of concealment of income or furnishing inaccurate particulars of income. Hon'ble Supreme Court in the case of Hindustan Steel Ltd. vs State of Orissa [ 1969 (8) TMI 31 - SUPREME COURT] laid down a ratio that penalty should not be imposed merely because it is lawful to do so. AO has to exercise his discretion judiciously. Merely because of method of calculating the interest income as adopted by the assessee company does not match with that adopted by the AO then in that eventuality no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2.2 Aggrieved by the order of the AO for imposition of penalty, the assessee preferred appeal before the ld. CIT(A) which was dismissed by the ld. CIT(A) for which the assessee is in appeal before us. 2.3 The ld.AR appearing on behalf of the assessee reiterated the same arguments as were raised by him before the ld. CIT(A) and the same are contained in para 2.2 of the ld. CIT(A) s order which is reproduced as under:- 2.2 The relevant extract of the submission of the appellant is as under: The assessee company maintains its accounts on accrual basis. It requires estimating the accrued income by way of interest on unmatured fixed deposit. This estimation can be at variance with the working of the hank. Such variance ov ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of its obligation. 3.7. It is submitted that merely because the method of calculating the interest income as adopted by the assessee company does not match with that adopted by the ld AO and on this account additions are made, then no penalty can he levied. 3.8. Hon'ble Supreme Court the case of Reliance Petro products (P.) Ltd [20.10] 322 ITR 158 (SC) held that ........, 'We do not agree, as the assessed had furnished all the details of its expenditure as well as income in its Return, which details, in themselves., were not found to he inaccurate nor could he viewed as the concealment of income on its part. It was up to the authorities to accept its claim in the Return or not. Merely because the assessee had claime ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nce and the assessee had stated only that it is due to methodology of the interest credit by the Bank. The reply of the assessee was not acceptable and thus it was held that the assessee had declared the less amount of ₹ 1,13,318/- on interest of the Fdr from state Bank Of India and added to total income of the assessee. Since the assessee had concealed its income and furnished inaccurate particulars of such income, penalty proceedings us 271(1)(c)(1)(0 was initiated during assessment proceeding and notice u/s 274 r. w.s. 271(1)(c) of the I.T. Act was issued on 28.12.2011. Aggrieved with the order of the A.0., the assessee preferred appeal before the Id. (IT(A), The Id. CIT(A)-2, Jaipur vide his order in appeal No. 483/.1.1- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n 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 issue of penalty on the basis of merit of the documents available on record. It may he mentioned that as per 26AS the assessee has received interest on hank RDR amounting to ₹ 6,57,670/- whereas the assessee has only shown an amount of ₹ 5,44;352/-, therefore interest amounting to ₹ 1,13,318/- has been less shown. It may he mentioned that the assessee was maintaining its book of accounts on mercantile basis, hence the income which has been accrued during the year was the real income of assessee It is immaterial that the assessee would have disclosed such income in other year. Unde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 method of calculating the interest income as adopted by the assessee company does not match with that adopted by the AO then no penalty can be levied. We are conscious of the fact that law for making addition in quantum proceedings is different from the law for imposing penalty. In recognition of this fundamental difference, both proceedings have been kept separate and independent. Provisions of Section 271(1)( c) of the Act give discretionary powers to the authority levying penalty to levy or not levy penalty in the case of concealment of income or furnishing inaccurate particulars of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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