TMI Blog2021 (2) TMI 1075X X X X Extracts X X X X X X X X Extracts X X X X ..... na fide and inadvertent error. The same can only be described as a human error which we all are prone to make. The assessee could not be held guilty of either furnishing inaccurate particulars or attempting to conceal its income. Therefore, imposition of penalty was unjustified. Salary was credited in the account of Yash Bhatia but was not actually received by him and therefore, it was left to be included in the income by mistake but when such mistake was noticed while preparing the statement of affair, the same was included in the income. Hence, for this reason it cannot be inferred that the assessee has intentionally not declared the salary income in the return of income. - Decided in favour of assessee. - ITA No. 1108/JP/2019 - - - Dated:- 28-1-2021 - Shri Sandeep Gosain, JM And Shri Vikram Singh Yadav, AM For the Assessee : Shri P.C. Parwal (CA) For the Revenue : Smt. Monisha Choudhary (Addl.CIT) ORDER PER: SANDEEP GOSAIN, J.M. This is an appeal filed by the assessee against the order of ld.CIT(A)-2, Udaipur dated 28/06/2019 for the A.Y. 2010-11 in the matter of confirmation of penalty imposed U/s 271(1)(c) of the Income Tax Act, 1961 (in sho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... during search, addition made by the AO is not sustainable in law. Only because addition has been made to the income would not lead to penalty u/s 271(1)(c). Further omission of salary from income declared in the ROI filed u/s 153A was a bonafide mistake. On such bonafide mistake no penalty is leviable. The Ld. CIT(A) rejected the explanation of assessee by relying on the decision of Hon'ble Kerala High Court in case of E.N. Gopakumar where it is held that assessment proceedings generated by the issuance of notice u/s 153A can be concluded against the interest of assessee including making additions even without any incriminating material being available against the assessee in the search u/s 132. He further held that M/s Bhatia Corporation Pvt. Ltd. is a group concern wherein Sh. Prem J. Bhatia and Sh. Ram J. Bhatia are directors. Assessee is the daughter of Sh. Ram J. Bhaita. The assessee not being aware of salary credited to her by such group company is not a credible explanation. Similarly, in case of other group concerns namely M/s Bhatia Infrastructure Pvt. Ltd. and M/s Bhatia Automobiles Pvt. Ltd. wherein also Sh. Prem J. Bhatia and Sh. Ram J. Bhatia are directors, the com ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f account or other documents or transactions represents his income (wholly or in part) for any previous year, which has ended before the date of search and,- (a) where the return of income for such previous year has been furnished before the said date but such income has not been declared therein; or (b) the due date17 for filing the return of income for such previous year has expired but the assessee has not filed the return, then, notwithstanding that such income is declared by him in any return of income furnished on or after the date of search, he shall, for the purposes of imposition of a penalty under clause (c) of sub-section (1) of this section, be deemed to have concealed the particulars of his income or furnished inaccurate particulars of such income. 9. It is a settled legal proposition that penal provisions must be strictly construed and only on satisfaction of conditions specified therein, the penalty can be levied. In the instant case, the assessee has not been found to be recipient of salary income during the course of search. The assessee is an individual deriving salary and interest income and not required to maintain books of account ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessment framed u/s 153A is incorrect. The addition, if any, could have been properly made by invoking the provisions of section 147 of the Act. Therefore, when addition made by the AO is itself illegal bad in law, penalty levied on such addition is also not sustainable. The Ld. CIT(A) rejected this explanation of assessee by relying on the decision of Hon'ble Kerala High Court in case of E.N. Gopakumar. However, in various other cases including the decision of Supreme Court it has been held that invocation of sec. 153A to reopen concluded assessments is not justified in absence of incriminating material found during search. Thus, where two views are possible, the view favoring the assessee has to be adopted as held by Hon'ble Supreme Court in case of CIT Vs. M/s Vegetable Products Ltd. (1973) 88 ITR 192. 9. We further observe that during the course of assessment proceedings u/s 153A when the assessee prepared her statement of affairs it came to her notice that salary of ₹ 1,80,000/-from M/s Bhatia Corporation Pvt. Ltd. which was credited in her account but not actually received was left to be included in the income by mistake. Accordingly, she filed revise ..... X X X X Extracts X X X X X X X X Extracts X X X X
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