TaxTMI 
TaxTMI 
2009 (7) TMI 1307
X X X X Extracts X X X X
X X X X Extracts X X X X
....its are not the deposits received during the year but are the old deposits and they were the transfer from one kind of deposits to the other kind of deposits. The position of the total deposits was explained as under as on 31st March, 2002 and 31st March, 2003 : Sl. No. Kind of deposits 31 -3-2002 31-3-2003 1. Current deposits 11,85,965 2,76,760 2. Fixed deposits 12 months 55,86,117 79,21,422 3. Fixed deposits 66 months 1,52,500 1,73,410 4. Ready payable deposits 17,32,359 86,56,941 83,71,592 Thus it was contended that the assessee has not furnished any inaccurate particulars or concealed the income. The AO did not agree with the assessee but took the view that the assessee has committed default within the meaning of s. 271(1)(c) by furnishing inaccurate particulars of income for ₹ 23,66,343 and levied the penalty of ₹ 7,18,098. 3. When the matter went before the CIT(A), the assessee contended that since the assessed income was at loss, therefore, no penalty should be imposed in view of the decision of the Tribunal, Ahmedabad Special Bench in the case of Asstt. CIT v . Apsara Processors (P ) Ltd. [2005] 92 TTJ (Ahd)(SB) 645. The CIT(A) did not agr....
X X X X Extracts X X X X
X X X X Extracts X X X X
....losed by him, then, the amount added or disallowed in computing the total income of such person as a result thereof shall, for the purposes of cl. (c) of this sub-section be deemed to represent the income in respect of which particulars have been concealed." As per the provisions of s. 271(1)(c) the penalty under this section is leviable if the AO is satisfied in the course of any proceeding under this Act that any person has concealed the particulars of his income or furnished inaccurate particulars of such income. The penalty proceedings and the assessment proceedings both are different. Explanation 1 to s. 271(1)(c) in respect of any fact relating to the computation of total income states that the amount added or disallowed in computing the total income of an assessee shall be deemed to be the income in respect of which particulars have been concealed. This deeming provision for concealment is not absolute one. Explanation 1 to s. 271(1)(c) provides that an amount added or disallowed in computing the total income of a person falling under cl. (A) or (B) of Expln. 1 shall, for the purpose of s. 271(1)( c), be deemed to represent the income in respect of which particulars ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....penalty, two factors must coexist, (i) there must be some material or circumstances leading to the reasonable conclusion that the amount does represent the assessee's income. It is not enough for the purpose of penalty that the amount has been assessed as income, and (ii) the circumstances must show that there was animus, i.e., conscious concealment or act of furnishing of inaccurate particulars on the part of the assessee. Explanation 1 to s. 271(1)(c) has no bearing on factor No. 1 but has a bearing only on factor No. 2. The explanation does not make the assessment order conclusive evidence that the amount assessed was in fact the income of the assessee. No penalty can be imposed if the facts and circumstances are equally consistent with the hypothesis that the amount does not represent concealed income with the hypothesis that it does. If the assessee gives an explanation which is unproved but not disproved, i.e., it is not accepted but circumstances do not lead to the reasonable and positive inference that the assessee's case is false, the explanation cannot help the Department because there will be no material to show that the amount in question was the income of the a....
X X X X Extracts X X X X
X X X X Extracts X X X X
....within the parameters of s. 271(1)(c) along with the Explanations deeming the concealment of income, penalty cannot be imposed. We are of the view that the decision in the case of Dharamendra Textile Processors (supra) will not assist the Revenue. 10. We have also gone through the decision of the Tribunal, Mumbai Bench-A in the case of Asstt. CIT v. VIP Industries Ltd. (ITA No. 4524 (Mum.) of 2006 and ITA No. 4383 (Mum.) of 2006, order dated 20-3-2004) [reported at [2009] 122 TTJ (Mumbai) 289 : [2009 ] 21 DTR ( Mumbai) 153-Ed.] and we find that in that case the Tribunal has discussed the applicability of the decision of the Hon'ble Supreme Court in the case of Dharmendra Textile Processors (supra), in the following manner : "11….. The Hon'ble Supreme Court has not held that in all cases where addition is confirmed, the penalty shall mechanically follow. The ratio decidendi of the judgment is confined to treating the willful concealment as not vital for imposing penalty under s. 271(1)(c). It is austere from the language of s. 271(1)(c) that the penalty is imposable for the concealment of the particulars of income or furnishing of inaccurate particulars of such....