2015 (10) TMI 2498

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....of the case are that the assessee is engaged in the trading business electronic components. The assessment of the assessee was completed u/s. 143(3) at an income of Rs. 3,71,48,560/- as against returned income of Rs. 8,96,782/-, thereby disallowing a sum of Rs. 3,62,49,274/- as bogus transactions of purchases shown by the assessee from nine parties, as the alleged sellers were not traceable. The assessee challenged the order passed u/s. 143(3) in appeal before the ld. CIT(A) and filed various documentary evidence to substantiate the identity of the alleged suppliers, having TIN No., Sales Tax assessments, PAN, ration card, passport, driving license etc. The ld. CIT(A) after considering the submissions of the assessee and the remand report c....

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....is not justified in deleting the penalty imposed by the Assessing Officer for valid reasons. He submitted that the assessee had furnished inaccurate particulars, which resulted into addition and consequential penalty imposed by the Assessing Authority. He, therefore, relied on the penalty order. 5. The ld. AR, on the other hand, vehemently contented that once the addition of Rs. 3,62,49,274/-, made by the AO, on the basis of which he could record his satisfaction of furnishing inaccurate particulars of income, stood deleted by the ld. CIT(A), the original basis of initiation of penalty proceedings stood collapsed and the AO had no jurisdiction to impose penalty on that basis. It was submitted that the Assessing Officer is not competent to ....

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....tage itself in the quantum appeal. The penalty proceedings initiated in the present case are based on the addition made by the ld. CIT(A), that too by estimating the gross profit rate of assessee on the declared sales, which in itself does not confer jurisdiction on the AO to impose penalty for furnishing inaccurate particulars of income. For this proposition, we are supported by the decisions of Hon'ble Allahabad High Court in the cases of CIT vs. Shadiram Balmukand (supra) and CIT vs. Dwarka Prasad Subash Chand(supra) wherein it has been held that the Assessing Officer was seized of the assessment proceedings and it was not during the assessment proceedings that the addition made was discovered. It was also held that the Assessing Officer....