2015 (12) TMI 1592

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....ductions. The net payment received by the assessee was Rs. 1,17,99,993/-. The Assessing officer framed the assessment u/s 144 of the Act. The Assessing officer after rejecting the books of account adopted the net profit rate of 8% determining income in the hands of the assessee which was approved by the CIT(A). The assessee preferred second appeal before the Tribunal and the Tribunal vide its order dated 27.11.2008 in ITA No. 434/Chd/2008 reduced the net profit rate to 5.5%. The Revenue challenged the order of the Tribunal before the Hon'ble Jurisdictional High Court and the Hon'ble High Court vide its order dated 4.4.2011 set aside the order of the Tribunal, observing as under:- "7. A simple reading of the aforesaid finding clearly shows that the Tribunal had reduced the net profit rate to 5% on the premises that counsel for both the parties had agreed for the same. However, a copy of the order of the Tribunal dated 11.2.2011 has been produced wherein the department had filed MA Nos. 117 & 118/Chd/2009 in ITA Nos. 433 and 434/Chd/2008 bringing the fact to the notice of the Tribunal that the departmental representative had never agreed for the concession as recorde....

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....e the income in the hands of the assessee by applying the suitable net profit rate. The Tribunal in the first round had applied the net profit rate of 5% which has not been accepted by the Hon'ble Punjab & Haryana High Court in assessee's own case and the matter has been remitted back to the file of the Tribunal to adjudicate the issue. 13. In the totality of the facts and circumstances, we are of the view that the net profit rate of 7% be applied to determine the income in the hands of the assessee. Accordingly, we direct he Assessing Officer to re-determine the income chargeable to tax in the hands of the assessee by applying the net profit rate of 7%. The grounds of appeal raised by the assessee are thus partly allowed. 14. The facts and issue in ITA No. 434/Chd/2008 are identical to the facts and issue in ITA No. 433/Chd/2008 and our decision in ITA No. 433/Chd/2008 shall apply mutatis mutandis to ITA No. 434/Chd/2008 also." 3. In the instant case, the Assessing officer initiated penalty proceedings u/s 271(1)(c) of the Act and imposed a penalty of Rs. 6,21,515/- and Ld. CIT(A) vide his order dated 4.3.2008 upheld the order of the Assessing officer ....

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....ection 271(1)(c) of the Act. On this score, the Tribunal cancelled the penalty levied u/s 271(1)(c) of the Act. Shri M.R. Sharma Ld. Counsel for the assessee also relied on the decision of ITAT Chandigarh Bench in the case of ITO v Anil Kaushal [IT Appeal No. 1679 (Chd) of 1993 relating to assessment year 1989-90, wherein the Tribunal cancelled the penalty u/s 271(1)(c) of the Act, observing that levy of penalty u/s 271(1)(c) of the Act in a case where no return is submitted, is not possible. In the said case, the assessee did not submit his return of income and the Assessing officer had not invoked Explanation 3 to section 271(1)(c) of the Act. In the aforesaid mentioned case the assessee was assessed to tax for assessment years 1987-88 & 1988-89 and, as such, did not come within the scope of Explanation 3 to section 271(1)(c) of the Act. The Tribunal observed that there can be concealment only if the return of income was filed and some income was omitted to be disclosed. In the same manner, an inference to furnishing of inaccurate particulars of income, can only be drawn when if the return of income is submitted and not otherwise. Shri M.R. Sharma, Ld. Counsel for the assessee st....

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....wherein the Hon'ble High Court held that when assessment order was made on estimate basis, no penalty for concealment of income can be imposed. The relevant observations of the Hon'ble High Court are as under:- "In order to attract clause (c) of section 271(1) of the Act, it is necessary that there must be concealment by the assessee of the particulars of his income or if he furnishes inaccurate particulars of such income. What is to be seen is whether the assessee in the present case had concealed his income as held by the Assessing Officer and the Tribunal. He had not maintained any accounts and he filed his return of income on estimate basis. The Assessing Officer did not agree with the estimate of the assessee and brought his income to tax by increasing it to Rs. 2,07,500. This, too, was on estimate basis. The Tribunal agreed that the income of the assessee had to be assessed on an estimate of the turnover but was of the view that the estimate as made by the Assessing Officer was highly excessive and it fixed the total income of the assessee at Rs. 1,50,000 for the year under appeal. It is, thus, clear that there was a difference of opinion as regards the estim....