Tribunal quashes penalty for lack of evidence, no specific charge. Decision on 12/09/2018.

The Tribunal allowed the appeal of the assessee, challenging the penalty imposed under section 271(1)(c) of the Act. The Tribunal found that there was no specific charge against the assessee for concealment or furnishing inaccurate particulars of income. The additions made by the ld AO were estimated without evidence of defects in the books of account. Consequently, the penalty orders were quashed, emphasizing the disparity between penalty and assessment proceedings. The Tribunal's decision was pronounced on 12/09/2018.

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Issues:
1. Penalty u/s 271(1)(c) of the Act confirmed by the ld CIT(A) partially.
2. Addition of &8377; 2 lac on gross profit and &8377; 829832/- on sundry creditors made by ld AO.
3. Contention of the assessee regarding penalty imposition for inaccurate particulars of income and concealment of income.
4. Rejection of adjournment application by the assessee.
5. Support by ld DR for the orders of the lower authorities.
6. Lack of specific charge against the assessee for penalty u/s 271(1)(c) of the Act.

Detailed Analysis:
1. The appeal was filed against the order of the ld CIT(A) confirming a penalty u/s 271(1)(c) of the Act partially. The main grounds of appeal challenged the penalty order. The assessee, engaged in trading of mobile accessories, disclosed a lower gross profit for the year compared to the previous year. The ld AO made additions on gross profit and sundry creditors, leading to a higher total income determination. The penalty notice was issued, and the appeal before the ld CIT(A) resulted in partial deletion of the additions but confirmation of the penalty.

2. In the penalty proceedings, the assessee argued that the lower gross profit was due to being in the retail business and agreed to an adhoc addition. Regarding the sundry creditors, detailed explanations were provided for the differences found. The ld AO and ld CIT(A) held that the assessee furnished inaccurate particulars of income and concealed income, leading to the penalty imposition, which was contested by the assessee.

3. The application for adjournment by the ill assessee was rejected, and the case was decided on its merits. The ld DR supported the lower authorities' orders. Upon careful consideration, the Tribunal found that no specific satisfaction was recorded by the ld AO regarding concealment or inaccurate particulars of income. The additions were made on an estimated basis, without finding any defects in the books of account. The Tribunal quashed the penalty orders as there was no specific charge against the assessee, emphasizing the distinction between penalty and assessment proceedings.

4. The Tribunal allowed the appeal of the assessee, pronouncing the order on 12/09/2018.

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