TMI Blog2020 (10) TMI 1152X X X X Extracts X X X X X X X X Extracts X X X X ..... was any material, it is only the firm which is to be assessed and not the appellant/assessee. - It would be too late for the assessee to raise such a contention as the re-assessment proceedings stood concluded as of the year 2008. Nevertheless, if it had been raised at the appropriate time, probably it might have been taken note of by the AO. This is not a case, where the assessee had no explanation to offer and the explanation offered was not tested for its correctness in the proper manner to pave way for levy of penalty. Substantial Questions of Law are answered in favour of the appellant/assessee - T. C. A. No. 630 of 2018 - - - Dated:- 8-10-2020 - THE HONOURABLE MR.JUSTICE T.S.SIVAGNANAM And THE HONOURABLE MRS.JUSTICE V.BHAVANI ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ved with regard to the additions made in the re-assessment order? (iv) Whether the levy of penalty u/s 274 read with section 271(1)(c) of the Act imposed for the assessment year 2004-05 in the order dated 25.06.2009 could be considered as bad in law in view of lack of precise charge in the show cause notice dated 16.12.2008 issued while completing the assessment? 2. The assessee is an individual, was working as a Manager in the firm viz., M/s.Andavar Co (Tyres) till 31.10.2003. The Firm was dissolved and a fresh partnership was drawn on 01.11.2003 and the assessee became the Managing Partner of the said Firm along with four Partners. On 02.11.2003, there was a change of Constitution of the Partnership and three partners retire ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed during the survey operations and therefore, came to the prima facie opinion that it is a fit case for levying penalty. The explanation, which is offered by the assessee before the Assessing Officer, did not convince the Assessing Officer and accordingly, the penalty order was passed on 25.06.2009, levying the minimum penalty of ₹ 9,56,067/-. 3. The assessee preferred appeal to the Commissioner of Income Tax (Appeals) ['CIT(A)' for brevity], Salem. The said appeal was dismissed by order dated 30.12.2014, once again on the ground that during the survey operations, in a statement given by the assessee, he had admitted that he was not aware of the unexplained credits and he had not explained the source of their Partnership C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and consequently, the Assessing Officer was not convinced. However, before the CIT(A), the assessee specifically stated that the figures shown in the books of account and the Balance Sheet of the firm was duly explained by the firm and the Assessing Officer did not consider the said explanation. The CIT(A) has referred and noted this ground, which was not raised by the assessee before Assessing Officer. Nevertheless, the CIT(A) also was guided by the observations in the quantum assessment, the answers to the questions which, the assessee had given during the survey under Section 133A of the Act. When the assessee carried the material on appeal to the Tribunal, once again reiterated the explanation, which was offered and as to how the same ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ee also had an explanation for the unexplained credit on ₹ 5,29,000/- stating that the same was withdrawn from the Partnership Firm on 17.02.2004 and repaid on the same day itself. However, the Assessing Officer has rejected the same and we find that there is no convincing finding rendered by the Assessing Officer to reject the said contention. Thus, considering the totality of the facts and circumstances, we find that this is not a fit case where the Assessing Officer should have impose penalty on the assessee. 9. The learned counsel appearing for the assessee would submit that there is also a defect in the Show cause Notice dated 16.12.2008, while proposing to initiate penalty proceedings under Section 271(1) (c)of the Act. It is ..... X X X X Extracts X X X X X X X X Extracts X X X X
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