TaxTMI 
TaxTMI 
2014 (1) TMI 856
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....g Officer dated 28.06.2011 u/s 271(1)( c) of the Act. 2. The main grounds raised by the assessee read as under:- "1. That having regard to the facts and circumstances of the case, Ld. CIT(A) has erred in law and on facts in confirming the action of Ld. AO in levying penalty of Rs.3,00,000/- and that too without assuming jurisdiction as per law and without considering the facts and circumstances of the case and the impugned penalty order, being illegal and void ab-initio. 2. That having regard to the facts and circumstances of the case, Ld. CIT(A) has erred in law and on facts in confirming the action of Ld. AO in passing the impugned penalty order being contrary to law as the assessment order framed under section 43(3) dated 06-12-....
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....an addition u/s 68 of the Act when the assessee offered this amount to include to its total income and consented to pay the tax. The Assessing Officer also observed that the assessee has shown income of Rs.1 lakh from agricultural activities but the assessee was found to be unable to justify his agricultural activities and the assessee voluntarily preferred to include the same to his total income. The Assessing Officer made two additions as mentioned hereinabove. Subsequently, the Assessing Officer initiated penalty proceedings and imposed penalty of Rs.3 lakh with the following observations and findings:- "4. In response to the penalty notice issued u/s 271(1)(c) of the IT Act, assessee has furnished a written submission stating that - ....
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....nish/produce the same (copy of order sheet as signed by the assessee enclosed herewith). Accordingly, assessee offered to include the cash receipt amounting Rs. 733,000/-in his total income. iv) Regarding genuineness of agricultural income the assessee failed to furnish the documentary evidences viz. detail of crop harvested, expenditure incurred on agricultural activity such as seed & fertilizers purchases vouchers/labour expenses/expenses on tractor used/expenses on transportation of agricultural produce/expenses on irrigation etc, documents in respect of sale of crops. Therefore, it out of place to consider assessee's income from agricultural activities. Therefore, it is further concluded that the assessee has deliberately diverted hi....
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....ted 05.08.2009 in the case of Commissioner of Income Tax vs Upendra V.Mithani. 5. Replying to the above, ld. DR submitted that the Assessing Officer has observed that there was cash receipt amounting to Rs.733,000 found to be unrecorded in the assessee's books of accounts and the Assessing Officer also observed that the assessee has shown his income from agricultural activities at Rs.1 lakh. The DR further submitted before the AO that the assessee miserably failed to explain cash credit and he could not submit necessary evidence and detail in respect of his agricultural activities and the Assessing Officer made additions thereunder on reasonable and justifiable legal grounds. The DR further submitted that when the assessee failed to expl....
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....tive inference that the assessee's case is false, then the penalty is not imposable. In the present case, the assessee voluntarily surrendered before the tax authorities and consented to pay the tax and the explanation of the assessee remained unproved but it cannot be said as disproved. Further in the case of National Textile vs Commissioner of Income Tax(supra), the Hon'ble High Court of Gujarat has held that the provisions of section 68 are enabling provisions for making additions where the assessee fails to give an explanation regarding cash credit or where the explanation is not to the satisfaction of the Assessing Officer. Their Lordships further held that such addition would not automatically justify imposition of penalty u/s 271(1)(....