2010 (3) TMI 774

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....g to this appeal are that the assessee, who is a film producer, filed his return of income on 30-9-1997 declaring an income of Rs. 31,000 for assessment year 1996-97. Subsequently re-assessment order was passed under section 147/143(3) of the Act on 30-3-2002 whereby income was determined at Rs. 1,11,78,851 by making addition of Rs. 1,06,58,021 on account of unexplained expenditure incurred in connection with marriage of his niece and of Rs. 4,89,830 on account of unexplained expenditure incurred in connection with getting power supply from the Tamil Nadu Electricity Board (TNEB). 3. In first appeal, the quantum addition of Rs. 1,06,58,021 was deleted vide his order dated 21-1-2004, but the addition of Rs. 4,89,830 was upheld and finally....

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.... the amount added or disallowed in computing the total income of such person as a result thereof shall, for the purposes of clause (c) of this sub-section, be deemed to represent the income in respect of which particulars have been concealed." This section is very clear. The presumption is regarding concealment of facts of the given case. But before we do that we may also mention that any addition to declared income would not automatically entail levy of penalty. A penalty under this section is not automatic. The proceedings under section 271(1)(C) of the Act are entirely different to the one of assessment proceedings. The Assessing Officer is bound to show cause the assessee separately for this purpose and after calling for and consider....