TaxTMI 
TaxTMI 
2016 (5) TMI 851
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....g any independent enquiry in penalty proceedings and simply relying upon the conclusion drawn in assessment order thus the penalty deserves to be deleted. 1.3 That the assessee has voluntarily surrendered the income and paid the due tax thereon thus there remained no income on which tax sought to be evaded could be calculated which fact was not appreciated by the Ld. CIT(A)." 2. The sole ground of the appeal is against confirming the penalty of Rs. 15,85,386/- imposed U/s 271(1)(c) of the Income Tax Act, 1961 (in short the Act). In this case, assessment U/s 143(3) of the Act was completed on 21/12/2009 in which addition on account of deposit in the name of various persons were made at Rs. 47.10 lacs U/s 68 of the Act. The penalty proceedings U/s 271(1)(c) has been initiated by the Assessing Officer for concealing and furnishing inaccurate particulars of income. 2.1 The ld Assessing Officer before imposing the penalty U/s 271(1)(c) gave reasonable opportunity of being heard. The assessee replied vide letter dated 12/01/2010, the same has been reproduced by the Assessing Officer on page 6 to 8 of the penalty order and after considering the assessee's reply, the ld Assessing Offi....
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....g the assessment as well as penalty proceedings. Finally be imposed penalty at Rs. 15,85,386/-, which is 100% of tax sought to be evaded on concealed income. 3. Being aggrieved by the order of the Assessing Officer, the assessee carried the matter before the ld CIT(A), who had dismissed the assessee's appeal by observing as under:- "4.20 With reference to penalty proceedings, the following propositions can be laid down on the basis of language of relevant section of the IT Act and decisions of various judicial authorities: (1) Wherever there is a difference between the returned and assessed income, there is an inference of concealment as a rule of law. (2) The responsibility for rebutting such inference is squarely on the tax payer. (3) The assessee is expected to offer an explanation for the difference. Absence of any explanation, by itself, will merit penalty (4) The explanation where offered, should not be found to be false. (5) Merely because the assessee is not able to substantiate his explanation, penalty may not be exigible, if such explanation is bona fide and all the facts relating to the same and material to the computation of his total income have been d....
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....me of various persons as shown under the head Advance from customers in Balance sheet. During the course of assessment proceedings, addresses of customers from whom advances were received were filed as available in the records of the assessee. These advances were received for booking of the vehicles from casual customers and when supplies from company was not made available, advance money were refunded to the customers. Copies of account of subsequent year in which the advances have been squared up were also filed before the ld A.O.. It is further submitted that as per normal practice, the assessee had not taken complete address or contact number from the customers at the time of booking or refund of amount. Majority of all customers were drivers, so they were not having bank accounts thus margin money was received in cash for booking of vehicle and balance amount was expected from financers at the time of delivery. Further, due to delay in supply of vehicle, the advance amount was refunded to the customers. Merely for the reason that notice issued u/s 133 (6) could not be served on the parties due the reason of incomplete addresses and the assessee could not produced these parties....
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....arty i.e. the alleged customers who were non-related to the appellant and they were no more in touch with the assessee at the given point of time. Except the details and addresses as provided by them at the time of booking, no other document or details were available with the assessee , thus the assessee was unable to produce further details and these parties for examinations more particularly the appellant has repaid the advance money long back i.e. in April 2007. The assessee due to the time barring limit was very close do not have sufficient time to produce these parties for verification, therefore in order to avoid prolonged litigation and to buy the peace of mind had accepted the advance money as its income. It is not the case that after in depth examination and cross verification by the assessee the amount was surrendered. Further, if such amount received from these customers is treated as out of undisclosed income of the appellant and the same flown from the assessee as alleged by Ld. AO, in such a case, the Ld. AO has miserably failed to brought on record any evidence or material to establish from what sources the assessee has earned alleged undisclosed income. He relied on....