TMI Blog2020 (9) TMI 95X X X X Extracts X X X X X X X X Extracts X X X X ..... income. The authorities have failed to appreciate that the penalty proceeding and the assessment proceeding are distinct and since, the assessee had not commenced the business, therefore, it could not have earned income, which had not been accounted for. Tribunal has failed to take into account the well settled legal principles that mere disbelief of an explanation will not be sufficient to impose penalty. For the aforementioned reasons and in view of well settled legal principles referred to by learned Senior counsel for the assessee, the first substantial question of law is answered in the negative and in favour of the assessee - I.T.A. NO. 375 OF 2013 - - - Dated:- 31-8-2020 - THE HON'BLE MR. JUSTICE ALOK ARADHE And THE HON ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... k to the creditors on the facts and circumstances of the case? (iv) Whether the Tribunal was correct in holding that mere disbelief of an explanation will be sufficient to impose penalty and without independently appreciating the facts justifying imposition of penalty, consequently failed to appreciate the fact that the penalty proceedings are independent of the assessment proceedings when it is settled law that penalty proceedings are not automatic on the facts and circumstances of the case? (v) Without prejudice whether the authorities failed to appreciate that most of the advances have been repaid and evidenced by confirmation in registered sale deeds. Without further prejudice, the Tribunal failed to appreciate that eth amount ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er of Income Tax (Appeals), which was dismissed by an order dated 29.09.2009. The order of the Commissioner of Income Tax (Appeals) was upheld by the Income Tax Appellate Tribunal (hereinafter referred to as 'the Tribunal', for short) vide order dated 29.03.2010. 3. The assessee thereupon approached this court by filing an appeal, which was dismissed by a bench of this court vide order dated 10.07.2012. The assessee thereupon approached the Supreme Court by filing Special Leave Petition, which was dismissed vide order dated 09.11.2012. The Assessing Officer thereafter, passed orders under Section 271(1)(c) of the Act vide order dated 28.03.2011 and 31.03.2011. The assessee being aggrieved, by the aforesaid order filed an appeal b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... alty is illegal. It is also submitted that the issue with regard to validity of the proceeding initiated under Section 271(1)(c) of the Act against the assessee is no longer res integra and is covered by decisions of Supreme Court in 'PCIT VS. DECCAN MINING SYNDICATE PVT. LTD', 262 TAXMAN 305 (SC), 'CIT VS. SSA'S EMERALD MEADOWS', 242 TAXMAN 180 (SC), 'CIT VS. V.S.LAD SONS', SLP (CIVIL) CC 1129/2014 DT.03.03.2014 (SC), 'CIT VS. KURIAN HUSSAIN IBRAHIMJI MITHIBORWALA', 82 ITR 821 (SC) and 'CIT VS. VEERABHADRAPPA SANGAPPA CO.,', SLP(C)NO.13898/2014 DATED 11.07.2016 (SC) and decisions of this court in 'CIT VS. MANJUNATHA COTTON AND GINNING FACTORY', 359 ITR 565 (KAR), 'K.NATARAJAN VS. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e earned income, which had not been accounted for. The Tribunal has failed to take into account the well settled legal principles that mere disbelief of an explanation will not be sufficient to impose penalty. For the aforementioned reasons and in view of well settled legal principles referred to by learned Senior counsel for the assessee, the first substantial question of law is answered in the negative and in favour of the assessee. In view of our answer to the first substantial question of law, the remaining substantial questions of law have remained academic and therefore, it not necessary to answer the same. 7. In view of preceding analysis, the order dated 28.03.2013 passed by the Income Tax Appellate Tribunal to the extent it is a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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