9911796707
TMI Blog2024 (11) TMI 1112X X X X Extracts X X X X X X X X Extracts X X X X ..... is a confusion in the mind of AO about which limb penalty is to be levied." Brief facts of the case are as under:- 2.1 The assessee filed its return of income for the year under consideration on 30/10/2002. The case was selected for scrutiny and statutory notice under section 142(1) along with 143(2) was issued to the assessee. During the course of assessment proceedings, the Ld.AO noticed that, the assessee had not offered to tax income from stock on hire, accrued but not received. It was noted by the Ld.AO that the assessee had not been booked in the books of account, to the extent of Rs. 18.06 lakhs, resulting in reduction of profit by the said amount. Similarly, the Ld.AO noted that the lease rental to the extent of Rs. 6.54 lakhs ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... /s. 144 r.w.s.254 of the Act and by retaining the same income assessed in the original assessment order. On an appeal before the Ld.CIT(A), the authority confirmed the addition in the quantum proceeding vide order dated 10.02.2011. 2.1.3. On an appeal before this Tribunal, this Tribunal, vide order dated 11/01/2023 confirmed the additions in respect of disallowance of expenses under section 43B of the Act to the extent of Rs. 144.87 crores. The Tribunal confirmed the addition made on account of increase in liability to the extent of Rs. 59.92 crores under section 68 of the Act, as the assessee could only furnish the confirmation letters which could not be verified. 2.2. In the mean while the Ld.AO initiated penalty proceedings u/s. 271(1) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r section 43B do not fall under the category of either "concealment" or "furnishing of inaccurate particulars". 3.1. The Ld.AR referring to the penalty order passed by the assessee, stated that, the penalty was been levied for concealment of the particulars, whereas the Ld.AO initiated the penalty proceedings in the assessment order for both the concealment as well as for furnishing of inaccurate particulars of income. 3.2. In respect of the addition partly confirmed by this Tribunal pertaining to addition of increase in liability, it is the submission of the Ld.AR that, all details were available on record and the disallowance made by the authorities below to the extent it is upheld by this Tribunal cannot be considered under either of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e in respect of the addition made amounting to Rs. 1,39,14,000/- is bad in law. 4.2. We note that the disallowance of expenditure has been confirmed by this Tribunal under section 43B. The assessee had claimed certain expenditure on accrual basis, under a bonafide belief. In so far as the addition of increase in liabilities are concerned, the assessee had furnished confirmations which the Ld.CIT(A) did not verify. The Tribunal partly confirmed the addition under section 68 on this issue. 4.3. At this juncture, we refer to the decision of Hon'ble Karnataka High Court in case of CIT vs. Manjunatha Cotton and Ginning Factory reported in (2013) 359 ITR 565, upheld by Hon'ble Supreme Court in case of Emerald reported in (2016) 73 taxmann.c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d deeming provisions are not applicable to the orders passed by the Commissioner of Appeals and the Commissioner. i) The imposition of penalty is not automatic. j) Imposition of penalty even if the tax liability is admitted is not automatic. k) Even if the assessee has not challenged the order of assessment levying tax and interest and has paid tax and interest that by itself would not be sufficient for the authorities either to initiate penalty proceedings or impose penalty, unless it is discernible from the assessment order that, it is on account of such unearthing or enquiry concluded by authorities it has resulted in payment of such tax or such tax liability came to be admitted and if not it would have escaped from tax net and as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f penalty proceedings on one limb and finding the assessee guilty of another limb is bad in law. t) The penalty proceedings are distinct from the assessment proceedings. The proceedings for imposition of penalty though emanate from proceedings of assessment, it is independent and separate aspect of the proceedings. u) The findings recorded in the assessment proceedings in so far as "concealment of income" and "furnishing of incorrect particulars" would not operate as res judicata in the penalty proceedings. It is open to the assessee to contest the said proceedings on merits. However, the validity of the assessment or reassessment in pursuance of which penalty is levied, cannot be the subject matter of penalty proceedings. The assessmen ..... X X X X Extracts X X X X X X X X Extracts X X X X
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