TMI Blog2021 (3) TMI 999X X X X Extracts X X X X X X X X Extracts X X X X ..... espect of unproved liability. In fact, recipient of payment has confirmed rendering of services as well as receipt of money. Therefore, at best, the case can be considered as claim of expenditure with necessary evidence, but unsubstantiated to the satisfaction of the Assessing Officer. It is a well settled principle of law by the decision in the case of CIT Vs.Reliance Petro Products Pvt.Ltd [ 2010 (3) TMI 80 - SUPREME COURT] that mere making of claim which is not sustainable in law by itself would not amount to furnishing inaccurate particulars regarding income of the assessee. Therefore, we are of the considered view that on this addition, penalty u/s.271(1)(c) cannot be levied. Additions made towards unexplained cash credit being unsecured loan taken from Mr. Karur Ramasamy - as the explanation of the assessee before the Assessing Officer that party has confirmed loan given to the assessee. Once the assessee has furnished confirmation letters to prove identity of the parties, then initial burden cast upon the assessee was successfully discharged. No doubt, the Assessing Officer may not accept the explanation furnished by the assessee with regard to source and nature of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rder for levying penalty under sec 271(l) (c) of the act. 4. The Commissioner of Income Tax (Appeals) ought to have appreciated that the Assessing authority having failed to. comply with the provisions of sec 271(1) (c) of the act with regard to initiation of penalty proceedings, the proceedings are vitiated and consequently the penalty order passed was invalid. 5. The Commissioner of Income Tax (Appeals) failed to appreciate the fact that penalty proceedings art independent from that of the Assessment proceedings and ought to have considered submissions of appellant on merits of the mailer based on the facts and circumstances of the case. 6. The Commissioner of Income Tax (Appeals) has erred in not noting that the appellant had neither concealed any income nor furnished inaccurate particulars of income to warrant levy of penalty under the act. The penalty levied ought to be cancelled. 7. The Commissioner of Income Tax (Appeals) ought to have appreciated the fact that mere additions or disallowance made in the assessment proceeding would not automatically result in levy of penalty under sec 271(1) (c) of the act when there was no proof with regard to concealment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ther submitted that, be that as it may, but fact remains that there is inadvertent error in not paying appeal fees before filing the appeal due to mistake of a person, who was handling papers, but there is no willful negligence on the part of the assessee not to file appeal within the time allowed under the Act. Therefore, considering the fact that the assessee has shown interest in filing appeal within the due date specified under the Act, marginal delay of ten days may be condoned in the interest of advancement of substantial justice . 4. The learned DR, on the other hand, fairly agreed that delay may be condoned in the interest of justice. 5. We have heard both the parties and considered petition filed by the assessee for condonation of delay along with reasons given for not filing appeal within due date specified under the Act . Admittedly, the assessee has filed appeal on 08.11.2016, which is well within the due date specified under the Act, but, the Tribunal has not considered appeal filed by assessee on 08.11.2016 for the reason that appeal papers did not have challan for payment of appeal fee and hence, considered the date of filing of appeal when the assessee has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as also received payment in full. But, the Assessing Officer has disregarded all evidences filed by the assessee and has made additions only on the basis of field report received from Inspector of Income Tax, where he has stated that persons have stated that they do not have any outstanding as on 31.3.2012. Similarly, in respect of unsecured loan received from Mr.Karur Ramasamy, the assessee has filed confirmation from parties, but the Assessing Officer has made addition only on the ground that no proper explanation was furnished to explain unsecured loan shown in the name of Mr.Karur Ramasamy. Therefore, when the assessee has furnished necessary evidences in respect of certain payments, merely for the reason that said payment has not been substantiated to the satisfaction of the Assessing Officer, the same cannot be considered as willful attempt made for concealment of particulars of income to evade payment of taxes which warrants penalty u/s. 271(1)(c) of the Act. 8. The Assessing Officer however, was not convinced with the explanation furnished by the assessee and according to him, the assessee has failed to explain outstanding liability shown under the head map drawing charg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at the learned CIT(A) has erred in not appreciating the fact in light of provisions of section 271(1)(c) of the Act before confirming the penalty levied by the Assessing Officer in respect of additions towards unproved liabilities and unexplained cash credit u/s.68 of the Act, because any claim of expenditure which was not substantiated before the Assessing Officer cannot automatically lead to conclusion that assessee has concealed particulars of income or furnished inaccurate particulars of income. The learned AR further submitted that the assessee has filed all evidences in respect of unproved liability towards map drawing charges and further parties to whom payment was made were also confirmed receipt of payment, but only point which was considered by the Assessing Officer is statement of parties regarding date of payment of liability, otherwise all the parties have accepted the fact that they have rendered services to the company and has also received payment in cash. Therefore, when the assessee has filed all those evidences, the Assessing Officer has erred in coming to the conclusion that liability is unproved. Further, when a claim is made towards expenditure with necessary ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Ramasamy u/s.68 of the Act. As regards unproved liability, the only reason given by the Assessing Officer to make addition is that recipient of payment has stated that there is no outstanding as on 31.3.2012, except this, the Assessing Officer has not doubted the fact of rendering services by the parties and payment received against such services. Under these facts, on examining the reasons given by the Assessing Officer for levy of penalty u/s.271(1)(c) of the Act, we find that the reasons given for levy of penalty is not on sound footing, because the sole basis for making addition is report of Inspector of income tax, which was taken during the course of assessment proceedings, which was in the year 2015, whereas, payment against services has been made in the year 2011 and 2012. Therefore, obviously it is very difficult for the recipient of payment to confirm exact date of receipt of money. Therefore, for that reason alone, it cannot be inferred that liability shown in the books of account is unexplained. Moreover, the Assessing Officer has not disputed the fact that the assessee has furnished all evidences in respect of unproved liability. In fact, recipient of payment has conf ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
