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TMI Blog2020 (10) TMI 1152X X X X Extracts X X X X X X X X Extracts X X X X ..... r brevity) Madras 'D' Bench, Chennai in I.T.A.No.566/Mds/2015 for the Assessment Year 2004-05. The appeal was admitted on 05.12.2018 on the following Substantial Questions of Law: "(i) Whether the Appellate Tribunal is correct in law in confirming the levy of penalty u/s 271(1)(c) of the Act even after noticing the explanation offered for the current account balance in the partnership firm which was wrongly rejected based on the invalid survey statement? (ii) Whether the Appellate Tribunal is correct in law in confirming the levy of penalty u/s 271(1)(c) of the Act despite the rejection of explanation offered effectively on the issue relating to the presumption of monies received based on two entries in the impounded note book ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as recorded from the assessee, the Managing Partner. Certain queries were put to the assessee and statement was recorded and relying upon one of the answers given by the assessee that he could not explain the sources of the partners Current Account, the assessment which was completed under Section 143(3) of the Act was reopened by issuance of notice under Section 148 of the Act. The reason for reopening was that the assessee was not able to explain the partners Current Account balance, no explanation for the unexplained credit. The assessee submitted his objections to the reopening. However, the Assessing Officer was not convinced and the assessment was completed under Section 143(3) read with Section 147 of the Act by order dated 16.12.200 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e by the Assessing Officer during the quantum assessment and based upon the statement given by the assessee to the Survey party can solely be a basis for levy of penalty under Section 27(1) (c) of the Act. The said provision would stand attracted, if the Assessing Officer is satisfied that any person has concealed the particulars of the income or furnished inaccurate particulars of such income. Since the reassessment was concluded, after taking note of the statement given by the assessee, the Assessing Officer may have been partially right in issuing show cause notice to initiate penalty proceedings. Nevertheless, penalty proceedings are independent and have to be separately adjudicated by the Assessing Officer and any stand taken by the as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pointed out that during the re-assessment proceedings to a specific query raised to the assessee, the assessee had given a letter dated 16.08.2007. Reading of the said letter, it is seen that the assessee had stated that the firm was reconstituted on 01.11.2003 and at the time of reconstitution, the credit and debit balance of various parties were transferred to the said file and such transferred balances comprising of Rs. 26,82,627/- shown in the Balance Sheet as Current Account on 31.03.2004. If the said letter is taken into consideration, then it goes to show that there was no admission made by the assessee before the Survey party. 8. We find that though such a stand was taken by the assessee, vide letter dated 16.08.2007, the Assessin ..... X X X X Extracts X X X X X X X X Extracts X X X X
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