TaxTMI 
TaxTMI 
2007 (7) TMI 21
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....oved for the purpose of levying penalty u/s 271(1)(c), when the assessee himself could not prove the same and offered it for assessment only subsequent to the issuance of notice u/s 148?" 2. The facts leading to the above substantial question of law are as under:- 3. The relevant assessment years are 1997-98 and 1998-99 and the corresponding accounting years ended on 31.03.1997 and 31.03.1998, respectively. For the assessment year 1997-98, the assessee filed Return of income on 24.10.1997 admitting a total income of Rs.89,963/-. Later, notice under Section 148 of the Income-tax Act ("Act" in short) was issued to the assessee on 16.03.2004. In response to the notice, the assessee filed Return of income on 18.03.2004 admit....
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....y penalty under Section 271(1)(c). The Assessing Officer rejected the contention and levied a penalty of Rs.41,680/-. Aggrieved by the orders of penalty for both the assessment years, the assessee filed appeals to the Commissioner of Income-tax (Appeals). The C.I.T.(A) dismissed the appeals and confirmed the orders of the Assessing Officer levying penalty under Section 271(1)(c) of the Act. Aggrieved, the assessee filed appeals to the Income-tax Appellate Tribunal ("Tribunal" in short). The Tribunal allowed the appeals filed by the assessee, deleting the penalty. Hence the present tax cases by the Revenue. 4. Learned Standing Counsel appearing for the Revenue submitted that the assessee himself has disclosed ....
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....ngs are certainly relevant and have probative value, but such findings are material alone and may not justify the imposition of penalty if the concealment is not proved by the Assessing Officer. The fact in the penalty order as narrated above is that the penalty was levied only on the reason that the Assessee has considered a particular item of expenditure, sundry credits as income. The actual position in law in that merely because the Assessee has agreed to the assessment, that cannot automatically bring in levy of penalty. If the Assessee offers an explanation, the revenue authorities have to consider the acceptability of the explanation and pass necessary orders. If the explanation is found to be acceptable, notwi....
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....d even as regards the quantum of the penalty there is a discretion. Of greater importance is the necessity for a definite finding that there is concealment, as without such a finding of concealment, there can be no question of imposing any penalty. It was further held that the mere revision of the income to a higher figure by the assessing authority does not automatically warrant an inference of concealment of the expenditure on the construction. The addition to the income of the Assessee based on the report of the valuer was rightly regarded by the Tribunal as being sufficient for recording a finding of concealment of income. Concealment implies some deliberate act on the part of the Assessee in withholding the true facts....
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....cts are identical and it is not known when these credits were introduced, whether in assessment year 1997-98 and 1998-99 or prior to that. Neither the Assessee nor the Department proves anything about the introduction of these credits. From the above reasoning of the Assessing Officer in the penalty order, we are of the view that the concealment was not proved. Hence, the levy of penalty sustained by the C.I.T.(Appeals) is without any reason. In view of this we have no hesitation in deleting the penalty. Accordingly, the orders of the lower authorities are reversed." 6. From a reading of the above, it is clear that the Tribunal has given a clear finding that the concealment has not been proved by the authorities bel....