TaxTMI 
TaxTMI 
2008 (7) TMI 449
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....ncome of Rs. 40,23,073 for asst. yrs. 1999-2000 to 2001-02. Thus, the difference of these two amounts was determined as undisclosed income of the assessee. This order has not been challenged further by the assessee. 2.1 In the penalty proceedings, it was submitted on merits that the assessee company had not concealed any particulars of income and there is no positive or circumstantial evidence for the same. Since the mens rea was absent in this case, the penalty could not be levied. The AO considered the explanation and pointed out that the provisions contained in s. 158BFA(2) speak only about the excess of undisclosed income determined by the AO over the returned undisclosed income. There is no mention of the word 'concealment'. Therefore, he came to the conclusion that in view of the statutory provision, the penalty was liveable and, accordingly, minimum penalty of Rs. 15,34,375 was levied. 2.2 The levy was contested in appeal before the learned CIT(A). It was pointed out that the income of the assessee was estimated on the basis of the order of the Tribunal. It was not mandatory on the part of the AO to levy the penalty in case assessed undisclosed income exceeded the returned....
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...., the levy of penalty on the assessed undisclosed income was not justified. 3.1 Corning to the legal arguments in respect of non-levy of penalty, reliance was placed on the order of Bangalore Bench of the Tribunal in the case of Smt. Mala Dayanithi vs. Dy. CIT (2005) 92 TTJ (Bang) 270 : (2004) 91 ITD 46 (Bang). The facts of that case were that the addition was made on account of difference in the value of residential house declared by the assessee and estimated by the DVO. The learned CIT(A) held that since assessed undisclosed income was more than the returned undisclosed income, the levy of penalty was mandatory. The Tribunal pointed out that the intention behind affording an opportunity of being heard is that no one should be condemned unheard. Further, if the levy of penalty was mandatory, no useful purpose would be served by granting right to appeal against the levy of the penalty. Therefore, it was held that the assessee has to be heard as to why a particular amount was not disclosed in the return of the block period. If the assessee furnishes a convincing reason, then, the levy of penalty will not be justified. Further, reliance was placed on the order of Kolkata Bench of t....
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....macious conduct on the part of the assessee. In this connection, reliance was placed on the order of Ahmedabad Bench of the Tribunal in the case of Gandhi Service Station vs. Asstt. CIT (2006) 100 TTJ (Ahd) 1143. The Tribunal pointed out that the proceedings under this section are akin to proceedings under s. 271(1)(c) and, therefore, the burden is on the Revenue to prove the factum of concealment. In this connection, reliance was also placed on the order of the Tribunal in the case of Suresh Kumar, in which it was pointed out that the provisions contained in s. 158BFA(2) are similar to the provisions contained in s. 271(1)(c) and, therefore, the cases decided under s. 271(1)(c) will apply mutatis mutandis under s. 158BFA(2). 4. In reply, the learned Departmental Representative pointed out that the order of the Tribunal has become final as the assessee had not filed any appeal in the matter. The assessee was granted an opportunity of being heard by the AO and it was only thereafter that the penalty was levied. The AO has no jurisdiction to rectify the order as his order has merged with the order of the Tribunal, which has become final. Thus, he had no power to rectify the computat....
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....sp; --------------- Rajni Aggarwal NSE Rs. 3,47,684.09 Credit AG & Co. Rs. 20,000 Debit Rs. 3,27,684 --------------- Rs. 1,72,413 Credit --------------- On the back side of this page it is written short-term Profit and loss 1.0 Billing 0.5 w.e.f. 1st Oct., 1998 Page 8-Jitesh Long-term 0.8 Short-term 1% Billing 0.35 On the back side of this page, it is written Mr. Atul Santosh Long-term 1% Short-term loss 0.65% each side 1.25% Billing &nbs....
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....le interested in showing profit or loss not actually suffered by them. The nature of business is such that it is not regular and is carried surreptitiously in an illegal manner. The broker can ask for and charge any rate depending upon the circumstances and the need of the client. Besides, it is not possible for us to close our eyes to the material seized in this case which showed that the assessee had been charging commission at various rates upto 1 per cent in certain cases. We, therefore, hold that rate applied in the case of Shri Manoj Aggarwal could not be applied in this case. 18. We now face the question as to what should be reasonable rate of commission in this case having regard to material available on record. The assessee did not dispute that quantum of turnover for providing the accommodation entries to various clients during the year as computed by the AO at Rs. 1,04,76,94,004 is not correct. The commission stated to have been charged and admitted by the assessee ranged from 0.25 per cent to 0.5 per cent. The rate as evident from the seized material which has been referred to by the lower authorities does reflect that the assessee had charged a rate as high as 1 per c....
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....me @ 0.60 per cent. Therefore, we do not find any merit in the argument of the learned counsel that the turnover was not correctly computed and that the AO did not rectify the computation of undisclosed income in spite of its request in the matter. Insofar as providing copies of bank accounts is concerned, the accounts were opened and operated by the assessee. Though it was the plea of the learned counsel that there were difficulties in obtaining old accounts, but the same is not acceptable in absence of any evidence that it took any steps to obtain the accounts from its bankers. 5.2 Coming to the legal issues, it was fairly conceded by the learned Departmental Representative that the levy of penalty is not automatic or mandatory and that surrounding facts and circumstances have to be taken into account for deciding whether the penalty should be levied or not. However, his case was that the AO had granted an opportunity of being heard to the assessee and levied penalty after considering the order of the Tribunal. The background facts of the case are such that it was a fit case for levy of penalty. The case of the learned counsel was that it is for the Revenue to prove that the ass....
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....uch circumstances, the assessment had to be completed in the manner provided under s. 144, which was done by the AO, the learned CIT(A) and the Hon'ble Tribunal. The facts of the case of Smt. Bitoli Devi are quite distinguishable as she had estimated the income at 3.3 per cent against 4 per cent determined by the learned CIT(A). Thus, it was a case of enhancement of the estimate rather than one of making an estimate on the basis of available facts against the nil income returned by the assessee. The Tribunal relied, inter alia, the decision in the case of Smt. Mala Dayanithi, in which it was held that the assessee had co-operated with the AO in the course of assessment leading to the inference that no fault could be found with her. Such is not the case here. In absence of the possibility of correctly computing the income, the authorities will have no alternative but to estimate the income, which is permitted by the statute. In fact, there is no difference in this matter in an assessment made under s. 143(3) or made in the manner provided under s. 144. In this case, such estimate was also put to test and the order of the Tribunal in this case has become final. The penalty has been l....