2011 (1) TMI 1183

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....the appellant and Adv. Sri. T.M. Sreedharan appearing for the respondent. The assessee was a PWD contractor against whom survey was conducted under section 133A of the Income-tax Act. However, in the course of reassessment proceedings initiated for the assessment year 2005-06, pursuant to the survey, assessee offered an additional income of Rs. 50 lakhs for assessment. Out of Rs.50 lakhs so offered, Rs. 35 lakhs was assessed for 2005-06 and Rs. 15 lakhs assessed for the year 2006-07 which were done in terms of the proposal of the assessee accepted by the Assessing Officer. Even though notice under section 271(1)(c) was issued initiating penalty for the year 2005-06, assessee contended before the officer that since (assessment is on agreed a....

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....no penalty could be initiated under section 271(1)(c) in the case of agreed assessments. We notice from the Tribunal's order that they have extracted the assessee's letter wherein it is clearly stated that assessment initiated based on survey conducted under section 133A was completed on an agreed basis, that is by accepting the additional income of Rs. 50 lakhs offered by the assessee for the two years. Admittedly the Assessing Officer completed the assessment based on the concession made by the assessee. So much so, the fact that assessments completed are agreed assessments or compromise assessments, is not in dispute. The question now to be considered is whether penalty for concealment initiated by the Assessing Officer was rightly dropp....

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.... on evidence collected by him in the course of survey if the assessee had not made any offer for agreed assessment or compromise assessment. So much so, we feel that the officer rightly dropped the penalty proceedings and the Commissioner cannot call such order prejudicial to the interest of the revenue because the order dropping the penalty proceedings has to be evaluated with reference to the additional income assessed by the officer based on offer made by the assessee. Further, we feel after disabling the assessee from filing appeal or challenging an assessment made on agreed basis, the department cannot hold the assessee guilty of concealment. If the Assessing Officer is confident of establishing concealment, then he should sustain asse....