TaxTMI 
TaxTMI 
TaxTMI 
2016 (7) TMI 1049
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....)(c) cannot be levied. 2.1 Whether the Ld CIT(A)-19, New Delhi justified in confirming the concealment penalty in spite of assessee's agreement to an addition of income on estimated basis which was far excessive than actual income earned I remaining funds in Bank account surrendered voluntarily? Penalty for mistake of professional 3. Whether the Ld CIT(A)-19, New Delhi justified in confirming the concealment penalty because of inadvertent mistake of an accountant and disregarding the affidavit filed by the assesee's accountant? Penalty on income calculated on estimated basis 4. Without prejudice to other grounds, whether the Ld CIT(A)-19, New Delhi was justified in confirming the concealment penalty on the income calculated on estimated basis (i.e. where the quantum of exact income is not ascertainable)? Relief Claimed:-that the penalty u/s 271(l)(c) amounting to Rs. 7,13,200/- be deleted." 2. The brief facts of the case are that the assessee is a resident individual and filed his return of income on 25.11.2011 declaring total income of Rs. 14,78,840/-. The assessee is engaged in the business of trading in metal scrap under two entities being, M/s. Gulshan Int....
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....y the income tax department. These were surrendered voluntarily. 7. Ground No.3: Ld. A.R. submitted that in relation to Rock International in para 11 of assessment order, that Ld. A.O. accepted the audited results of said returned income, ergo, addition of Rs. 5,69,710/- was made, being audited net profit as computed by the assessee. 7.1 Ld. A.R. submitted that while filling the Income Tax Return for the A.Y. 2011-12, Assessee's Accountant inadvertently didn't merge the income of M/s. Rock International in Income Tax Return. Ld. A.O. came to know about M/s. Rock International from CIB information. Ld. A.R. submitted that assessee was under bona-fide belief that he had disclosed all his income. Ld. A.R. submitted that assessee is an individual with village background and does not possess sufficient knowledge about Income Tax Returns. Ld. A.R. submitted that assessee reconciled all his financials, bank statements with the help of his counsel. Ld. A.R. submitted that it was at that time, the assessee realized that he didn't disclose the Income of Rs. 5,69,710/- in Income Tax Return. It was also learnt that current account in M/s. Gulshan International was also not consid....
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....ver, the letter submitted by the assessee at the time of assessment proceedings relied upon by the Ld. D.R. show that the bank accounts with HDFC Bank Ltd., ICICI Bank Ltd. and SBI, which have not been included in the Paper Book filed by the assessee before us. He further referred that at page 3 of the assessment order, where the Assessing Officer has disclosed the details revealed by Investigation wing shows that the assessee was maintaining seven bank accounts. As the chart has been reproduced at page 3 of the Assessing Officer's order, the same is not being reproduced herein. 9.2 Ld. D.R. drew our attention to the submissions made by the assessee before the Assessing Officer vide letter dated 13.03.2014, wherein it has been submitted that the accountant forgot to consider one bank account held with ICICI Bank Ltd. in the return of income. 9.3 Ld. D.R. submits that the details submitted by the assessee at the time of assessment proceedings and the detail submitted by the assessee now vis-à-vis documents obtained from the assessment records are contrary with each other. He, thus submitted that the submissions are not bona fide and the assessee has failed to demonstrate th....
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....g a satisfactory explanation to establish the bona fide. 10. We have head rival submissions and perused the material placed before us. The assessee deals in scrap and there are possibilities that the sellers could not be produced for the purpose of establishing sales / purchase of scrap. The main argument of the assessee is this that as sufficient surrender has been made by the assessee suo motu, the penalty proceedings initiated against him should be quashed. Ld. A.R. placed his reliance upon the decision in the case of CIT Vs Reliance petro Products Pvt. Ltd. reported in 322 ITR 158. 10.1 In our opinion, there is a basic fundamental difference between ignorance and bona fide mistake. In the first case, assessee cannot be excluded from the penalty proceedings as there is willful omission on behalf of the assessee in disclosing his true and correct income. Whereas, in the second case, the omission must be become as inadvertence, which can be due to human error. It cannot be ignored that human error must be tested on probabilities. No doubt that the courts are liberal when any bona fide mistake is made, but very harsh when there is a willful omission on behalf of the assessee to m....