TMI Blog2022 (5) TMI 1278X X X X Extracts X X X X X X X X Extracts X X X X ..... s given by the Commissioner in upholding the levy of penalty imposed by the Assessing officer and therefore in the absence of any cogent reason and/or material, we are constrained to dismiss the appeal of the Assessee and to uphold the impugned order - Decided against assessee. - ITA No.4735/DEL/2013 - - - Dated:- 25-5-2022 - Shri Pradip Kumar Kedia, Accountant Member And Shri Narender Kumar Choudhry, Judicial Member For the Appellant : None For the Respondent : Sh. Sanjay Kumar, Sr. DR ORDER PER N.K. CHOUDHRY, JM: The Assessee has preferred the instant appeal against the order dated 13.06.2013 impugned herein passed by the learned Commissioner of Income tax(Appeals), Ghaziabad (in short Commissioner ) for the assessment year 2009-10 u/s 271(1)(c) of the Income Tax Act, 1961 (in short the Act ). 2. Grounds of appeal are as under: 1. Appellant is manufacturing company engaged in the manufacture of wire drawing Machines. 2. The assessment of appellant was completed u/s 143(3) by ITO Ward 1(1) Ghaziabad for the A. Y.2009-10. 3. During assessment proceedings certain additions were made by A.O. and in order to purchase the peace and avoi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the order of penalty u/s section 271(1). 3. In this case, return of income declaring income of Rs. 3,97,998/- was e-filed on 29.9.2009 by the Assessee, which was selected for scrutiny through CASS and the assessment was finalized u/s 143(3) of the Act by determining the income at Rs. 1,22,89,340/- as against the returned income of Rs. 3,97,998/-, by making following additions: i) On account of unverifiable selling expenses 50000 ii) Disallowance of EPF ESIC after due date added u/s 2(24)(x) read with section 36(1)(va) 430065/- iii) Deemed dividend u/s 2(22)(e) 5,12,200/- iv) Bogus creditors 12,97,079/- v) Surrender on account of unverifiable creditors 100,00,000/- 4. On the aforesaid additions, penalty proceedings u/s 271(1)(c) of the Act have also been initiated by the Assessing Office and vide penalty order dated 29.06.2012 u/s 271(1)(c) of the Act imposed the penalty to the tune of Rs. 54,72,620/- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tional surrender with a view to take a chance of lenient view in penalty. 5.4 Conditional agreement/offer during assessment or admission/agreed addition/admitted concealment: Legal Views: There is no principle of universal application that whenever an assessment has been completed by accepting the officer of an assessee, no penalty can be imposed. The department can levy penalty u/s 271 (1)(c) in respect of additional -p le offered by assessee if the explanation offered by assessee for not including such amount in the return is not found acceptable. Commissioner of Income tax v. D.K.B. Co. [20021 (Ker)-243/6l8. The assessee agreed to certain additions proposed to be made by the AO towards bogus hundi credits. It was held that the levy of penalty was justified specially when there was nothing on record to show that the assessee had made it a condition that no penalty should be levied, before agreeing to such additions. Rahman Co. v. Inspecting Assistant Commissioner [1979] (Mad) The assessee failed to produce relevant records and whereabouts of party through whom purchases were allegedly made. The assessee also failed to produce the purchase and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nted his own income, no further evidence would be necessary to show that it was the amount which represented his income and it represented his concealed income. The assessee in the instant case having readily agreed to the inclusion of the amount as his income, the levy of penalty was justified. Western Automobiles (India) v. Commissioner of Income tax [1976] (Bom) The assessee had agreed to treat voluntary contributions made by him to a stock exchange fund, as capital expenditure before the Assessing officer and the revisional authority. There was no evidence to show that he was coerced to agree. The assessee cannot be permitted to go back on his own stand. Mahesh B. Shah v. Assistant Commissioner of Income tax [1998] (Ker) Where there was a claim that the assessment was made on the basis of compromise arrived at between the assessee and the department and there was an understanding that no penalty action would be taken against the assessee. There was nothing on record which could lead to the conclusion that any understanding was given to the respondent that no penal action could be taken. There is no provision in the Act, whereby a compromise assessment could ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cold storage Co. Ltd. (All) 146 ITR 492. Sushil Kumar Sharad Kumar vs. CIT (All) 232 ITR 588 CIT vs. Md. WarasatHussain (Patna) 171 ITR 405 A.M. Shah Co. vs. CIT (Guj) 238 ITR 415 CIT vs. Krishnaswamy and Sons (Mad) 219 ITR 157 CIT vs. Svvarup Cold Storate General Mills (All) 136 ITR 435. CIT vs. Chandra Vilas Hotel (Guj) 291 ITR 202 If the assessment order became final, it was binding on both parties and neither party could seek to reopen it in a penalty proceedings Bharat Rice Mill Vs. CIT (All) 278 ITR 599 S.S. RatanchandBholanathVs. CIT (MP) 210 ITR 682 CIT Vs. Ram NiwasAgarwal (All) 125 ITR 432 Mere offering explanation, is not sufficient Explanation to be substantiated by cogent and reliable evidence. CIT Vs. LalchandTirath Ram (P H) 225 ITR 675 5.4.2 Apart from the above cases, I would also like to place reliance on two recent case laws:- The Delhi High Court said: in the case of morganFinvest Pvt. Ltd. The judgment of the Supreme Court in Reliance Petroproducts (Supra) cited on behalf of the assessee has been explained and distinguished by the Division Bench of this Court in CIT vs. Zoom Communica ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wing false/exaggerated expenses. Therefore in the present case the provisions of section 271(1)( c) of the Act stand attracted. Making of a claim on admitted/disclosed facts is different from filing false/inaccurate particulars. In the present case, the details furnished by the appellant were found to be inaccurate leading to a concealment of income on the part of the appellant. In view of the above, we find no fault with the order of the Tribunal dated 14th May, 2010 upholding penalty under section 271 (1)( c) of the Act upon the appellant 5.5 It is also to be noticed that assessee has not offered any worthwhile explanation, for rebutting the presumption of concealment. Its explanation furnished during penalty proceedings and also now curing appeal, are cursory , locking any depth and substance. As mentioned earlier, no worthwhile new facts and evidence have been brought on record, so as to, show that transactions, even if not confirmed by these parties were genuine/real. Thus, it is a case where virtually no explanation has been offered in penalty proceedings. 5.6 In the following important cases of agreed addition; it was held that Explanation I to Section 271 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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