TMI Blog2022 (12) TMI 878X X X X Extracts X X X X X X X X Extracts X X X X ..... f the ld. CIT(A) dated 30-07-2021, National Faceless Appeal Centre, Delhi [ hereinafter referred to as (NFAC) ] for the assessment year 2009-10 wherein the assessee is aggrieved that the order of the ld. CIT(A) is bad in law and not justified in levying penalty us/ 271(1)(c) for Rs.7,74,020/-. 2.1 Brief facts of the case are that assessment in the case was completed us 143(3)/250/147 on 03.01 2016 at an income of Rs.1,30,91.130/- against income of Rs.1,08,13,944/- assessed u/s 143/250 of the 1.T.Act, 1901 During course of assessment proceedings, the AO noticed that though the assessee is stated to be engaged in business activity of contractor ship of JCB machines and dumpers for civil construction work, but actually as per the profit loss account the assessee 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 depreci ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le 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, he assessee did not engage in the business of running of vehicles on hire, the assessee furnished d inaccurate particulars of its income by claiming excessive depreciation aggregating to Rs. 22,77,188/- on the above assets. Had the case has not been scrutinized u/s 143(3) and the same has not been pointed out by the AO during the course of assessment proceedings an amount of Rs. 22,77.188/- would have been escaped from taxation. 3.1.1. The position of law regard to levy of penalty u/s 271(1)c) has undergone a substantial 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). Aft ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Court has further held that after insertion of explanation its earlier decision in the case of Sir Shadi Lal Sugar and General Mills Ltd. Vs. CIT reported in 168 ITR 705 (SC) was no longer applicable. The Kerala High Court at page 244 has observed as under:- The question of onus is of primary and added importance in legal acrimony, In CIT Vs. Anwar Ali (1970) 76 ITR 696, the apex court laid down that, before a person could be visited with a penalty for concealment, etc., the Revenue must prove that the amount in question was the income of the assessee and the he had concealed it with a motive. It was further held that penalty could not be imposed merely because any explanation given by the assessee in regard to the items in question was not believed to the true. The 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 sect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he total income without requiring the presence of the assessee or production by him of any evidence that the return is correct and complete, he is required to issue notice enabling the assessee to produce evidence on which he may rely in support of the return. The total income in such cases of regular assessment is, assessed after hearing the evidence adduced and considering all material gathered by the AO as provided in section 143(3). It, therefore, follows that in the assessment proceedings under section 143, the AO can find out whether the return of income is correct and complete. If he holds that the return of income is not correct or that it is not complete in. respect of the particulars of income which are required to be stated in the return, he will reach the correct 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 tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cular of income, whether the figure is one which is stated independently of anything else that appears in the return or the documents accompanying it or whether it is something derived from other figures elsewhere stated in such return or documents. False result may be produced by the falsity of one or more of the constituent items in the return. The words inaccurate particulars would cover falsity in the final figure as also the constituent elements or items. They simply would mean inaccurate in some specific or definite respect whether in the constituent or subordinate items of income or the end result. In the case of MAK Data (P) Ltd. v. CIT-II (2013) 38 taxmann.com 448 (SC) it was held that. Voluntary disclosure does not release assessee from mischief of penal proceedings 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 intention ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d perused the materials available on record including the written submission of the assessee. In this case, the AO levied the penalty of Rs.7,74,020/- by observing that the assessee understated its income by claiming excessive depreciation on dumpers, tata 207, truck, excavator, drilling machine water Tank and the AO was satisfied that the assessee furnished inaccurate particulars of his income in the return to the extent of Rs.22,77,188/- and it is a fit case for levy of penalty u/s 271(1)(c) of the IT Act, 1961 and accordingly, penalty of Rs.7,74,020 was levied by the AO on the assessee which has been confirmed by the ld. CIT(A) holding that the assessee had deliberately and intentionally not disclosed the true and correct income and had furnished inaccurate particulars of income with the intention to evade tax. Thus the ld. CIT(A) sustained the penalty u/s 271(1)(c) of the Act. The Bench has gone through the entire case of the assessee but found that the assessee could neither substantiate its case nor controvert the findings of the lower authorities. In this situation, we have no other alternative except to concur with the findings of the ld. CIT(A). Thus the appeal of the as ..... X X X X Extracts X X X X X X X X Extracts X X X X
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