AI Drafter 
TaxTMI 
TaxTMI 
2015 (12) TMI 114
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..... ITA No.60 of 2015 has been preferred by the assessee under Section 260A of the Income Tax Act,1961 (in short, "the Act") against the order dated 7.11.2014, Annexure A.17 passed by the Income Tax Appellate Tribunal, Chandigarh bench 'A' Chandigarh in ITA No.737/CHD/2014 for the assessment year 2007-08, claiming following substantial question of law:- "Whether under the facts and circumstances of the case, the action for levy of penalty under section 271(1)(c) is unreasonable on the true and correct interpretation of the decision of CIT vs. Ram Sanehi Gian Chand, (1972) 86 ITR 724 (P&H) on the principle of law qua getting the 'advantage of surrendered amount' credited in books once having fulfilled the test of 'nexus,....
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....led appeal before the Tribunal. Vide order dated 28.9.2011, Annexure A.8, the Tribunal dismissed the appeal. Still not satisfied, the assessee filed appeal in this Court being ITA No.87 of 2012 relying upon judgment of this court in CIT vs. Ram Sanehi Gian Chand, (1972) 86 ITR 724. Thereafter, notice for levy of penalty proceedings was issued on 13.4.2012 to the assessee. The assessee made written submissions. The Assessing Officer vide order dated 16.5.2012, Annexure A.10 imposed penalty of Rs. 6,53,882/-. Aggrieved by the order, the assessee filed appeal before the CIT(A). In the meantime, ITA No.87 of 2012 filed before this court was dismissed vide order dated 1.8.2013, Annexure A.12. The assessee filed appeal before the Apex Court again....
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....learned counsel for the assessee which is available at page 143 of the paper book which reads as under:- To The Joint Commissioner of Income tax, Kurukshetra Range, Kurukshetra Subject: survey under section 133A(1) of IT Act 1961 conducted at M/s Mahavir Trading Company, Kurukshetra on 19.1.2007. Respected Madam, This is in response to the survey conducted at the business premises of M/s Mahavir Trading Company at Kurukshetra on 19.1.2007 and discussed with your goodself. That during the course of survey proceedings certain discrepancies were found in the books of account, loose papers, stock of various products byproducts and various other records and documents. That t....
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.... amount in the P&L account but by showing the sale of opening stock at lower price, the income was again reduced to Rs. 48,054/-. This clearly shows that the amount surrendered was nullified while filing return. However, later on assessee became wise and deposited the amount of Rs. 14 lacs in the bank and before us it was stated that the assessee purchased miscellaneous assets which were later on sold and the amount was deposited in the Bank. There is no evidence to show the existence of any miscellaneous assets therefore explanation given by the assessee is totally false. This is not a case of full disclosure of facts and therefore the ratio laid down in the case of CIT vs. Reliance Petroproducts Pvt. Limited 322 ITR 158 is also not applic....
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....on and when the assessee had paid the tax and the interest thereon, in the absence of any material on record to show the concealment of income, it could not be inferred that the said addition was on account of concealment so as to levy penalty under Section 271(1)(c) of the Act. There is no quarrel with the proposition of law. However, in the present case, the position being different as the appellant while surrendering Rs. 14 lacs had admitted the discrepancies in the books of account, loose papers, documents, stock, by-products etc., he cannot derive any benefit from the said decision. 8. Again in Ram Sanehi Gian Chand's case (supra) on which reliance had been placed by the assessee, it was observed by this Court as under:- "15.....
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....t. It is trite law that the voluntary disclosure does not release the Appellant-assessee from the mischief of penal proceedings. The law does not provide that when an assessee makes a voluntary disclosure of his concealed income, he had to be absolved from penalty. 9. We are of the view that the surrender of income in this case is not voluntary in the sense that the offer of surrender was made in view of detection made by the AO in the search conducted in the sister concern of the assessee. In that situation, it cannot be said that the surrender of income was voluntary. AO during the course of assessment proceedings has noticed that certain documents comprising of share application forms, bank statements, memorandum of association of com....