TaxTMI 
TaxTMI 
2011 (3) TMI 902
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....ing with the action of the AO, and thereby upholding the penalty under section 271(1)(c) on the amount of Rs. 25 lacs duly surrendered by the appellant subject to no penalty and accepted as such by the AO without making any enquiry or brining any adverse material on record, hence the penalty so levied under section 271(1)(c) is illegal, arbitrary and uncalled for. 2. That the CIT(A) has erred in upholding the penalty ignoring that the surrender was only to buy peace of mind without going into merits of the case hence the imposition of penalty is against the well-settled law." 3. The only issue raised in the present appeal is against the penalty levied under section 271(1)(c) of the Act. The brief facts of the case are that the assesse....
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....ect of suppressed receipts, agreed to addition of Rs. 25 lacs to the returned income. The AO accordingly rejected the books of account and included the sum of Rs. 25 lacs as income of the assessee. Further disallowance of Rs. 1.35 lacs was made on account of personal use of partners out of various heads of expenditure. The AO also initiated penalty proceedings under section 271(1)(c) of the Act. 4. During the penalty proceedings the contention of the assessee was that it was an agreed surrender on the condition of no penalty and also nothing had been concealed and as such, a request was made to drop the penalty proceedings initialled under section 271(1)(c) of the Act. The AO observed that the surrender of the assessee was not voluntary ....
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....my view the AO has acted judiciously and by following proper procedure stated in the Act hence. I uphold the AO's view point to impose penalty under section 271(1)(c)." 5. The learned Authorised Representative for the assessee drew our attention to the projected P&L a/c found during the course of survey placed at page 48 of the paper book. The learned Authorised Representative further pointed out that from the perusal of the order sheet entries during the assessment proceedings it is apparent that the assessee had agreed to the addition subject to no levy of penalty. Reference was made to p. 47 of the paper book. It was further pointed out that the assessee had furnished an explanation in respect of the said documents found during the co....
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....al trading and P&L a/c was found for the period ending 31st March, 2005 which did not tally with the figures shown in the said account furnished along with the return of income. The assessee when confronted during the assessment proceedings filed an explanation. However, in order to buy peace of mind the assessee surrendered a sum of Rs. 25 lacs as additional income for the year under consideration. The said surrender was made subject to non-levy of penalty for concealment under section 271(1)(c) of the Act. The AO, however, accepting the surrender of Rs. 25 lacs initiated the penalty proceedings under section 271(1)(c) of the Act. The penalty under section 271(1)(c) of the Act was levied on the act of the assessee in surrendering the addit....
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....ther probe into the matter as to whether the income so declared is correct or not and if the assessee himself is volunteering to offer the amount as his income, there is nothing further that is required to be done by the AO..... As to whether the precise tax liability would have crystallized in the amount now determined by the AO is speculative and it could have been either less or more; when the assessee on his own, in the wake of his need for avoiding further probe and scrutiny, offered this amount, it can be reasonably inferred that the assessee is obviously striking a balance to avoid a bigger liability or harsher consequences. Be that as it may, when the assessee had voluntarily offered the amount by way of income, there was nothing fu....