2017 (3) TMI 1044

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....t "the Act") by the Assessing Officer, which has been confirmed by the learned Commissioner of Income-tax (Appeals). The grounds of appeal raised by the assessee are reproduced as under: i. On the facts and in the circumstances of the case and in law the authorities below erred in holding the assessee guilty of concealing the particulars of income and imposing penalty u/s 271(1)(c) of the Act.] ii. The action being arbitrary, erroneous and unjust must be quashed with directions for appropriate relief. 2. The facts in brief of the case are that in the case of assessee a survey under section 133A of the Act was carried out on 04/03/2010. The survey party found following discrepancies: (i) excessive stock of Rs. 12,00,000/- found p....

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....y proceedings, the assessee submitted: (i) that during the course of survey proceeding, the assessee surrendered a sum of Rs. 60,03,015/- under pressure and to buy peace of mind, however, at the time of filing return of income the excess amount of Rs. 13,83,330/-, which was surrendered on account of loose papers, was not included in the income due to debatable view of inclusion of margin of sales instead of total amount of sales included in the loose papers. (ii) that to buy peace of mind and to avoid further litigation on the issue accepted the addition of Rs. 13,83,330/- during assessment proceeding subject to the condition that no penalty or prosecution proceeding would be initiated against the assessee. 5. The Assessing Officer....

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....hus no penalty could be levied in such circumstances. In the support of the contention, the learned counsel relied on the decision of the Tribunal Amritsar bench in the case of Income Tax Officer Vs. Manjit Singh Baldev Singh Commission Agents reported in (1999) 69 ITD 97 (ASR). He further submitted that the assessee had already explained as why the amount in reference was not included while filing return of income and said explanation was bonafide, no penalty could have been levied by the Assessing Officer. 9. The learned Senior Departmental Representative, on the other hand, relied on the order of the lower authorities. 10. We have heard the rival submissions and perused the relevant material on record. Before us, the learned counse....

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....ot recorded any finding whether the explanation filed by assessee was bonafide or not. In this regard, we would like to extract the relevant Explanation of section 271(1)(c) of the Act as under: "Failure to furnish returns, comply with notices, concealment of income, etc. 271. (1) .................................................................................. Explanation 1.-Where in respect of any facts material to the computation of the total income of any person under this Act,- (A) such person fails to offer an explanation or offers an explanation which is found by the Assessing Officer or the Commissioner (Appeals) or the 48[Principal Commissioner or] Commissioner to be false, or (B) such person offers an explanation w....

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....of margin of sales instead of total amount of sales included in the loose papers. The learned Commissioner of Income-tax (Appeals) has not given any reasoning as to why the said explanation was not bonafide. We also find that out of amount of Rs. 17,99,955/- appearing in loose papers, the assessee already accepted Rs. 4,16,220/- in the return of income filed. 15. Further we find that, in the course of survey action, the survey team found unexplained stock, unexplained cash, unexplained investment in furniture and fixture and unexplained investment in renovation of shop alongwith loose papers indicating sales. In the circumstances, where in the course of search or survey action evidences in respect of source of income and application of i....