TaxTMI 
TaxTMI 
2013 (1) TMI 263
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....f these seized documents it was noticed that pages 30-31 of annexure A-1, Party BO-III and at pages 1-9 of Annexure A-25/Party BO-III are the 'expense sheets' containing details of some expenditure incurred during the FY 06-07 and 07-08. It is also noticed from the examination of page 23 of the seized document of Annexure A-3/Party BO-III that it also contains the details of some expenses incurred by Mr.Rajiv Gupta during the FY 2006-07. During the course of assessment proceedings, M/s BPTP Ltd. was issued a detailed questionnaire on 21.8.2009 and was asked to explain the transactions recorded on the aforesaid pages 30-31 of Annexure A-1, page 23 of Annexure A-3 and pages 1-9 of Annexure A 25 and also to produce evidence as to whether the transactions contained in the above documents are accounted for in its books of accounts. 4. In response M/s.BPTP Ltd. vide submissions dated 17/12/2009 explained these documents, the summary of which appears in pages 2 and 3 of the assessement order. The summary of the reply is as follows:- (a) No such expenditure as jotted in pages 30,31 of annexure A-I was incurred by us; (b) The pages do not show that a....
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....er, a letter dt. 24.12.2009 from the assessee company whereby it surrendered an amount of Rs. 80,72,320/- and another amount of Rs. 56,57,400/- for the Assessment Year 2007-08 and Assessment Year 2008-09 respectively on account of the unexplained transactions recorded on the above mentioned seized documents and also submitted copies of tax challans for Rs. 32,14,446/- and Rs. 29,19,689/- both dated 24.12.2009 for the AYs 2007-08 and 2008-09 respectively. Copy of the letter of the assessee dt. 24.12.2009 comprising of 3 pages is made part of this order and is attached as Annexure-BPC to this order." 6. Thereafter the AO rejected the contention of the assessee in the above extracted letter dt.24/12/2009 that no penalty proceedings be initiated. He levied penalty U/s271(1)(c) vide order dt.25/06/2010 after considering the explanation of the assessee. He observed that in the present case the assessee surrendered a sum of Rs.80,72,320/- only after being confronted with seized documents which remained unexplained inspite of sufficient opportunities provided to the assessee. While admitting that the assessee in his initial reply dt.07/12/2009 denied having incurred expenditure, he noted ....
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....hat the ld.CIT(A)-XXXIII, New Delhi erred in confirming the penalty levied of Rs.27,17,143/- under Section 271(1)(c) without taking cognizance of the fact that the declaration of income made by the appellant and his explanation that he had done so to buy peace with the department and to come out of the vexed litigation ought to be treated as bonafide on the facts and circumstances , within the provisions of Explanation to S.271(1)(c) of the Income Tax Act, 1961." 9. The Ld.Counsel for the assessee Mr. V.S.Rastogi reiterated the contentions raised before the CIT(A) and submitted that the assessee in this case not only explained the seized documents but before being confronted with the seized record, the income was offered for taxation, in view of the time barring provisions and with a view to end protracted litigations. He submitted that the offer was given in a spirit of cooperation with the department and to buy peace and to avoid litigation. He relied heavily on the judgment of the Supreme Court in the case of CIT vs. Suresh Chandra Mittal, 251 ITR 9 (SC). The order of CIT(A) was challenged on the following counts:- * "The order of the Commissioner of Income ....
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....CIT 1(2010) 322 ITR 80 (P&H) 11. He reiterated his contention that the case on hand is covered by the judgement of the Hon'ble Supreme Court in CIT vs. Suresh Chandra Mittal, 251 ITR 9 (S.C.). 12. The Ld.D.R.Mr.PirthiLal on the other hand vehemently contradicted the submissions of the assessee's counsel and submitted that this is a case where certain documents were seized during the course of the search and when confronted the assessee has not given any explanation. He submitted that the assessee mainly banked on the proposition that this is a voluntary offer and in such circumstances no penalty can be levied. He argued that such a proposition cannot be entertained on the facts of this case. 13. He relied on the decision of the Mumbai Special Bench of the Tribunal in the case of Harish P Masrowala vs ACIT ITAT Special Bench Mumbai 9 ITR (Trib) 572 for the proposition that penalty is imposable under the main provisions of S.271(1)(c) and that there is no need to refer to any explanation, as the explanations are only to explain the ambiguity in the provisions relating to imposition of penalty. 14. That penalty can be levied when assessee does not furnish any explanation. He relie....
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....evied and upheld by the Ld.CIT(A) for the following reasons:- a) The assessee M/s Business Park Construction Co.Ltd. has at no stage attempted to explain the seized documents. The explanation given by M/s BPTP Ltd. of the seized documents, does not come to the rescue of the assessee. The assessee in this case has not stated that the documents in question does not belong to it. It is not the case of the assessee that entries recorded in these documents are not expenditure incurred by it or that they are dumb documents. All that the asssessee stated is that, it is unable to explain the documents. b) It is well settled that there is no estoppel against law. There is no agreement possible for non levy of penalty. Had the assessee furnished an explanation as regards the seized documents, the question of considering whether such explanation is bonafide or not would arise. In this case the assessee has not attempted to explain any of the seized documents, even during the course of penalty proceedings. c) Heavy reliance has been placed on the decision of Hon'ble Supreme Court in the case of CIT vs. Suresh Chandra Mittal (supra). T....