2007 (10) TMI 629

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....one ORDER The following question has been proposed for the admission of this appeal:" Whether the Appellate Tribunal is right in law and on facts in confirming the order passed by the CIT (A) cancelling the penalty levied u/s 271(1)((c) amounting to Rs. 11,37,949/levied by the Assessing Officer in respect of the addition, which stood confirmed?" The issue raised in the question is deal....

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....eof. No doubt, in view of Explanation 1 to Section 271 (1)(c), the onus is on the assessee to offer an explanation in respect of the amount disallowed in computing the income. The assessee has duly filed the explanation vide letter dated 22.3.2006 giving the reasons which is also apparent from para 6 of the penalty order. Once the assessee has offered an explanation, in our opinion, the onus shift....

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....ich the learned AR heavily relied. We find that in this decision it has been specifically held by the Third Member that a plea or claim which is held by the High Court to give rise a substantial question of law, cannot be treated to be frivolous or malafide as to attract the levy of penalty u/s 271 (1) (c). We are of the view that the decision of the Third Member is equally applicable to the facts....