TMI Blog2021 (9) TMI 1136X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessee being the surrendered made by the assessee. Assessing Officer has very much recorded the satisfaction in the assessment order and stated that the penalty proceedings u/s 271(1)(c) of the Act are initiated as the assessee has concealed the particulars of income. Therefore, to the extent of initiating penalty proceedings as well as levy of penalty proceedings u/s 271(1)(c) of the Act against addition based on the surrendered of the income by the assessee being accommodation entries of share application money there is no failure on the part of the Assessing Officer to make assessee known about the default of the assessee and charge for which the penalty was proposed to be levied. Addition by disallowing the claim of property tax - This was addition made by the Assessing Officer by disallowing the claim of expenditure and therefore this addition does not fall in the category of concealment of the particulars of income. The assessee is having show room on lease and for which the assessee is paying rent of ₹ 1 lakhs per month as well as the property tax. Therefore, even if the claim of the property tax is disallowed by the Assessing Officer, the same cannot be held ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e notice as well as in the penalty order. 4. The Ld. AR of the assessee has submitted that the Assessing Officer while issuing the show-cause notice has not specified whether the penalty is proposed to be levy for furnishing of inaccurate particulars of income or for concealment of particulars of income. He has referred to showcause notice issued by the Assessing Officer dated 30.03.2016 and submitted that the Assessing Officer has not specified the charge for which the penalty was proposed to be levied. The AR has further submitted that even the penalty was imposed by the Assessing Officer while passing the order u/s 271(1)(c) of the Act for both the charges i.e. furnishing of inaccurate particulars of income or concealment of income. Thus, the Assessing Officer was not certain even at the time of levying the penalty as what default the assessee has committed for which the penalty was imposed. The Ld. AR has submitted that the initiation of the penalty proceedings u/s 271(1)(c) is illegal and bad in law, consequently, the penalty order u/s 271(1)(c) of the Act is liable to be quashed. In support of his contention, he has relied upon the Third Member decision of the Amritsar Ben ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Assessing Officer has initiated penalty on definite charge. He has referred to the assessment order and submitted that the Assessing Officer has made two additions while framing the assessment and initiated the penalty proceedings u/s 271(1)(c) of the Act for each addition for specific charge of concealment. In support of his contention he has referred to para 11 and 12 of the assessment order. He has further submitted that the Ld. CIT(A) has confirmed the penalty levied u/s 271(1)(c) of the Act by holding that the assessee has concealed the particulars of its income. He has referred to para 5.3 of the Ld. CIT(A) and submitted that the once the order of the Assessing Officer passed u/s 271(1)(c) is merged with the order of the Ld. CIT(A), then the finding of the Ld. CIT(A) holding that the assessee has concealed the particulars of income satisfy the requirement of levy of penalty for a definite charge. 6. In rejoinder of the Ld. AR of the assessee has submitted that Ld. CIT(A) cannot substitute the order of the Assessing Officer so far as the charge for which the penalty was levied u/s 271(1)(c) of the Act. 7. We have considered the rival submissions as well as the releva ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... te particulars of income and the finding in the penalty order for levying the penalty on the other limb is also bad in law. Therefore, the Assessing Officer has to give a definite finding about the default/guilty of the assessee attracting the penalty u/s 271(1)(c) of the Act while passing the penalty order. 8. In the case, in hand, the assessee filed the return of income on 28.09.2013 declaring total income of ₹ 48,66,590/-. Thereafter, a survey operation u/s 133A of the Act was carried out at the business premises of the assessee on 19.12.2013 by the Investigation Wing-1(1) of the Department. A survey was also conducted in case of 3 other companies of this group including the assessee company. During the post survey proceedings, the assessee in its statement dated 27.12.2013 surrendered an income of ₹ 50 Lakhs for the Assessment Year under consideration. This income was surrendered by the assessee on account of peak credit on share application money received as accommodation entries for this year. The Assessing Officer proposed to make addition of ₹ 50 Lakhs to which the assessee has agreed. Consequently, the Assessing Officer made the addition of ₹ 50 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the time when the assessee surrendered this amount in the statement recorded during the post search enquiry. Therefore, this addition does not fall in the category where the Assessing Officer has made addition based on some enquiry or his decision but this addition was made on the basis of surrendered made by the assessee. Accordingly, the default and the charge for which the penalty was proposed to be levied was very much in the knowledge of the assessee being the surrendered made by the assessee. Further, the Assessing Officer has very much recorded the satisfaction in the assessment order and stated that the penalty proceedings u/s 271(1)(c) of the Act are initiated as the assessee has concealed the particulars of income. Therefore, to the extent of initiating penalty proceedings as well as levy of penalty proceedings u/s 271(1)(c) of the Act against addition of ₹ 50 Lakhs based on the surrendered of the income by the assessee being accommodation entries of share application money there is no failure on the part of the Assessing Officer to make assessee known about the default of the assessee and charge for which the penalty was proposed to be levied. Accordingly, to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (c) of the Act is not justified. The Ld. AR has thus submitted that the surrender was made by the assessee just to buy peace of mind and to avoid the litigation, the same would not attract the penalty proceedings u/s 271(1)(c) of the Act. 13. On the other hand, the Ld. DR has relied upon the orders of the authorities below and submitted that but for the survey proceedings, the assessee would not have surrendered this income of ₹ 50 Lakhs for the year under consideration. Therefore, it is not voluntarily surrender made by the assessee but the surrender was made because of the enquiry conducted by the Investigation Wing during survey proceedings. 14. We have considered the rival submission as well as the material available on record. The assessee has not disputed the fact that a survey was conducted post filing of return of income and during the enquiry conducted by the Investigation Wing, the assessee surrendered the income on account of share application money being accommodation entries out of which ₹ 50 Lakhs was surrendered for the year under consideration. The said addition of ₹ 50 Lakhs made by the Assessing Officer out of the surrendered made by the as ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
