TaxTMI 
TaxTMI 
2016 (9) TMI 1075
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....unsel also pointed out that the requisite fee had been deposited on 0303-2015 and Form 36 signed on that day ,which was well within the period of limitation. Thus Ld. Counsel requested that the delay in filing the appeal be condoned. Ld.DR did not object to the same. In view of the same we condone the delay in filing of appeal and proceed with adjudicating the same. 3. Brief facts of the case are that the assessee firm is engaged in the business of manufacturing and sale of essential Oil, commercially known as musk attars Heena Special and sales thereof. The firm filed its return declaring 'nil income after claiming deduction under section 801C of the Act (in short 'the Act') at Rs. 1,94,37,600/-. During the course of assessment proceedings, it was noticed by the Assessing Officer while examining the books of accounts that the assessee had shown cash sales. The assessee was asked to justify the cash sales and furnish details of the parties. The reply filed by the assessee was considered and was not found satisfactory, The Assessing Officer stated that the mere fact that VAT was paid on the sales did not establish that the sales were genuine. The AO stated that by paying a me....
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....in the case of Reliance Petroproducts Pvt. Ltd. 322 ITR 158 and argued that merely because the assessee's explanation was not acceptable to the revenue, that by itself would not attract the penalty under section 271(1)(c) of the Act. 5. The ld. CIT(Appeals) did not accept contention of the assessee and on the basis of finding of fact recorded by the authorities below as confirmed by the Tribunal and following the decision of the learned CIT (Appeals) in assessment year 2007-08, came to the conclusion that assessee had furnished inaccurate particulars of income by way of claiming bogus cash sales to the tune of Rs. 1.94 crores and accordingly, confirmed the levy of penalty under section 271(1)(c) of the Act. 6. Before us, the learned counsel for the assessee brought to our notice that penalty levied on identical addition made in the case of the assessee in the preceding year i.e assessment year 2007-08, had been deleted by the Hon'ble ITAT Chandigarh Bench, vide its order in ITA No.1327/Chd/2012 dated 25.8.2015. 7. We have considered the submissions and material available on record. On perusal of the order of the Hon'ble I.T.A.T., Chandigarh Bench in ITA No.1327....
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....assessee maintained complete books of account and the accounts are audited. The assessee produced books of account, purchase bills, sales bills and stock register before the authorities below and disclosed complete facts with regard to the sales made to different parties. Therefore, nothing was concealed to the revenue department in filing of the return as well as at the time of assessment framed by the Assessing Officer. The sale bills were supported by sales tax paid challans and sales tax return filed by the assessee with Commercial Tax Department of Una and as well as shown by the assessee in the books of account have been accepted by the sales tax authorities (VAT authorities). Thus, the sales made by the assessee including the cash sales have been accepted by the sales tax authorities. The authorities below dis-believed the explanation of the assessee with regard to cash sales made to different parties because their complete details are not noted in the bills. It was also noted that since no complete particulars of the purchasers are mentioned in the sale bills, therefore, cash sales are not subjected to verification. This was the sole reason for making the addition as well a....
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....e material on record, therefore, Explanation-I to Section 271(1)(c) of the Act would not apply against the assessee. It is a matter of record also that assessee maintained stock register of the raw material purchased and purchase bills were also produced. The assessee also placed the details of raw material used in the manufacturing of its product, therefore, the same would clearly show that assessee has been able to explain that it is not a fit case of levy of penalty, in the given facts and circumstances of the case. Mere non mention of complete details of purchaser in sale bills would not per-se make out a case of concealment of particulars of income. It is well settled law that penalty is not automatically to be imposed in each and every case. The facts and circumstances of the case shall have to be considered because levy of the penalty is discretionary in nature. The Hon'ble Supreme Court in the case of M/s Rajasthan Spinning & Weaving Mills 2009-TIOL-63-SC held that on every demand, penalty is not automatic. 9. Considering the facts of the case in the light of the above discussion, we are of the view that even if addition on quantum have been sustained, however ....