TaxTMI 
TaxTMI 
2011 (11) TMI 460
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....ction 158BFA(2) of the Income- tax Act, 1961, in respect of addition of Rs. 3 lakhs towards unaccounted investment directed by the Appellate Tribunal in quan- tum appeal ? (B) Whether, on the facts and in the circumstances of the case, the Income-tax Appellate Tribunal was right in law in confirming the penalty levied under section 158BFA(2) of the Income-tax Act, 1961, when the addition of Rs. 3 lakhs as unaccounted investment was admitted by the authorised representative of the appellant to buy peace ? (C) Whether, on the facts and in the circumstances of the case, the order passed under section 158BFA(2) of the Income-tax Act, 1961, was valid in the absence of any substantive provision to levy penalty in respect of un....
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....and above what was declared by the assessee in the return. 5. On the basis of such addition confirmed by the Tribunal, the Commis- sioner of Income-tax (Appeals) passed the final order of penalty under sec- tion 158BFA of the Act on October 29, 2009. He imposed minimum penalty of 100 per cent. as provided under section 158BFA of the Act. 6. Once again, the assessee approached the Tribunal against the order of penalty. The Tribunal confirmed the order of penalty and rejected the assessee's appeal. The Tribunal made following observations : "10. Having heard both the sides, we have carefully gone through the order of authorities below. It is pertinent to note that sales of Rs.4,23,20,387 was not recorded in the b....
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....t. With regard to the contention of the assessee that the assessee has correctly disclosed the total sales, we may point out that the assessee has not disclosed the initial invest- ment as undisclosed income. Therefore, the correct income of the assessee cannot be computed without making the addition on account of cost incurred by the assessee in making initial investment for procuring mithai outside the books of account. If the contention of the assessee that the cost of production is also recorded in the books of account, in that event, in quantum appeal, the appellate authority could have confirmed the entire addition. On addition, which is made on estimate basis also, the penalty for concealment is leviable. In support of this, reliance....
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.... proceedings were initiated in the case of the assessee- firm. The assessee made certain disclosure of income for the block period, which income was hitherto not offered to tax. While framing the assess- ment, certain further additions were made by the Assessing Officer. Portion of additions were confirmed by the Tribunal. The Tribunal confirmed the additional income of Rs. 3 lakhs over and above what was disclosed by the assessee. It was on this basis, therefore, the Assessing Officer ultimately imposed penalty under section 158BFA(2) of the Act. Section 158BFA(2) of the Act reads as under : 9. "158BFA. Levy of interest and penalty in certain cases.- . . . (2)The Assessing Officer or the Commissioner (Appeals), in the c....
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.... respect of the undisclosed income determined by the Assessing Officer under clause (c) of section 158BC of the Act is envisaged. The first proviso to sub-section (2) of section 158BFA, however, provides that no order imposing penalty shall be made if the conditions (i) to (iv) therein are satisfied. In essence, no penalty would be imposed if the assessee furnishes return of income ; pays or offers tax by way of adjustment on such income ; produces evidence of tax having been paid along with the return and also does not dispute by filing appeal against that portion of assessment which he has shown in his return. By a further proviso, however, it is clarified that such exclusion will not be available where the undisclosed income deter- mined....
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.... the Tribunal over and above the income declared by the assessee for the block period in question. The Assessing Officer, therefore, imposed penalty which was confined to such addition. We do not find the Assessing Officer committed any error in imposing such penalty or the Tribunal in confirming the same. 14. The decision of this court in the case of Lakhdhir Lalji [1972] 85 ITR 77 (Guj) was rendered in the background of the provisions contained in sec- tion 271(1)(c) of the Act. The penalty was imposed for furnishing inaccu- rate particulars while the notice stated that the assessee had concealed the income by suppression of sales. It was in this background that this court held that the penalty was wrongly imposed. Such facts do....