2015 (2) TMI 1106

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....ess of wholesale trading of grains and pulses. Assessee filed its return of income for A.Y. 2003-04 declaring total income at Rs. Nil. The return was initially 2 ITA No 2173/AHD/2010. A.Y. 2003-04 processed u/s. 143(1) on 05.02.2004 resulting to Nil income. Thereafter the assessment was reopened by issuing notice u/s. 148 and thereafter the assessment was framed u/s. 143(3) r.w.s. 147 on 20.12.2006 and the total income was determined at Rs. 26,29,210/- as against the return income of Rs. Nil interalia by making addition on account of unexplained cash credit u/s. 68 of Rs. 26,28,813/-. On the aforesaid addition made u/s. 68, A.O vide penalty order dated 23.03.2009 levied penalty of Rs. 9,66,090/- u/s. 271(1)(c) of the Act. Aggrieved by the o....

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.... the absence of the same, no penalty can be levied u/s. 271(1)(c) and for this proposition he relied on the decision in the case of New Sorathia Engineering Company vs. CIT 282 ITR 642 (Guj.) and the decisionof Ahmedabad Tribunal in the case of Jyoti Ltd. vs. ACIT ITA No. 930 & 931/AHD/2008. The ld. A.R. also placed on record that Annexure-B the details of documentary evidences in respect of sundry creditors which indicated the details of ledger account purchase bills and confirmations that were submitted by the Assessee. He therefore submitted that since the Assessee had furnished the details, the initial burden cast on it was discharged and it was for the A.O to carry out further inquiries based on the details furnished by the Assessee. H....

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....f income meaning thereby that the AO cannot impose penalty in case of an assessee mechanically merely on the ground of addition made over and above the income declared by the Assessee. For levy of penalty there has to be evidence or material to show that the Assessee has deliberately furnished inaccurate particulars of income. It also a settled law that penalty proceedings are entirely distinct from assessment proceedings and howsoever relevant and good the findings in assessment proceedings may be, they are not conclusive as far as penalty proceedings are considered. It is also well settled that the parameters of judging the justification for addition made in assessment case of an assessee is different from the penalty imposed on account o....