9911796707
TMI Blog2022 (12) TMI 878X X X X Extracts X X X X X X X X Extracts X X X X ..... e engaged in the job work of blasting and transportations of stones to its various clients. Further, the assesse had not shown any income by way of hire charges of dumpers while he incurred major expenditure on blasting, drilling and on vehicle hire charges. All these show that the assessee was not involved in the business of running of vehicles on hire. Despite this, the assessee claimed 30% depreciation instead of depreciation @ 15% available to the assessee on dumpers Tata 207 and Truck. Thus, the assessee claimed higher rate of depreciation. Similarly, the assessee claimed higher rate of depreciation on Excavator, Drilling machine and Water tank @ 30% instead of 15% depreciation allowable. Since, the assessee did not engage in the business of running of vehicles on hire, the assessee furnished inaccurate particulars of its income by claiming excessive depreciation aggregating Rs. 22,77,188/ on the above assets. Therefore, the AO initiated penalty proceedings u/s 271(1)(c) on 03.02.2016. Subsequently, a show cause memo was issued to the assessee on 28.07.2016. The assessee has neither complied with the penalty notice u/s 274 r.ws. 271(1) (c) issued on 03.02.2016 nor to the penal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... change after the insertion of Explanation (1) to section 271(1)(c) w.e.f. 01.04.1976. Explanation (1) to section 271(1)(c) raises a presumption that as and when any amount is added or disallowed in computing the total income the same shall be deemed or represent the income in respect of which particulars have been concealed, Further w.e.f. 10.09.1986 amendment has been made in Explanation 1- B to section 271(1)(c). After this amendment further onus has been placed on the assessee to prove that the explanation furnished by him was bonafide. The position now is that unless and until the assessee substantiates the explanation and proves that such an explanation was bonafide the addition made to his income shall deemed to represent the concealed income. On the analysis of the provisions of section 271(1)(c) it is observed that the Explanation 1 to section 271(1) provides for the situation where no explanation for the failure is offered by the assessee or where the explanation that has been offered found to be false or where the assessee is not able to substantiate the explanation offered by him. In all these cases, the amount added or disallowed in computing the total income of such p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he position of law on or after April 1, 1976, it that where in respect of any item of credit. (a) The assessee fails to offer a explanation or (b) the assessee offers an explanation which the taxing officer considers to the false, or (c) the assessee offers an explanation but no material or evidence to substantiate it, he shall be deemed to have concealed such income within the meaning of section271(1)(c). What section 68, 69, 69A, 698 and 69C deem for the purpose of assessment was injected for the purpose of penalty by operation of a deeming proviso A proviso was added to the new Explanation. Il concerns cases where the assessee offers an explanation which he is not able: to substantiate. Consequentially the provisions are intended to save such amount from imposition of penalty although the same had been added to the assessee's income in the assessment If the assessee's explanation is found to bonafide and all the facts relating to the same and material to the computation of his total income have been disclosed by him.'' 3.1.4. The views similar to the above decision of Delhi and Kerala High Courts were expressed by the Allahabad High Court in the case of Sushil Kumar Sh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t figure of total income and determine the sum payable by the assessee or refundable on the basis of such assessment. If the income chargeable to tax has escaped assessment for any assessment year, by reason of omission or failure of the assessee to disclose fully and truly all material facts necessary for his assessment, reassessment proceeding can be initiated as provided under section 147. This again shows that full and true disclosure of income is primary obligation of the assessee. 3.1.6. If a person obliged to furnish the particulars of his income omits to furnish them, he thereby conceals the particulars. The concealment may take various forms. A glaring illustration of concealment would be where the assessee does not disclose or fully disclose in the return the income derived by him which would fall under a particular head, e.G. Income from other sources, while disclosing his income falling under other heads of income prescribed by section 14. To the extent, he does not disclose that income, he conceals the particulars of income. The obligation is not only to disclose particulars of income but to disclose them correctly and completely. If while disclosing the particulars ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ings under section 271(1)(c) in terms of section 271(1)(c). Assessing Officer has to satisfy whether penalty proceedings be initiated or not during course of assessment proceedings and Assessing Officer is not required to record his satisfaction in a particular manner or reduce it into writing" 3.1.7 In view of the above facts and circumstances, it is evident that the appellant had deliberately and intentionally not disclosed the true and correct income and had furnished the inaccurate particulars of income with the intention to evade tax. Hence the AO has rightly imposed the penalty u/s 271(1)(c) of the Act and the imposition of penalty is upheld and grounds of appeal is Dismissed.'' 2.3 During the course of hearing, the Bench noted that the assessee has filed the written submission praying therein as under, to drop penalty proceedings u/s 271(1)(c) of the Act. ''The assessee was engaged in the business of construction activity, to execute above work they have to do some other works such as blasting and drilling to obtain grit and rocks and also taken some machinery or vehicle on rent to complete main construction work timely. Assessee has also separate contract for hiring of ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
