2017 (3) TMI 1248

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.... of search, it was noticed that stock worth Rs. 79,000/was shown in excise register, however, as per the books of accounts as on 01/04/1992 it was shown at Rs. 14,758/. There was a difference of Rs. 64,242/in the stock. The statement of the partner of the assessee firm was recorded during the search. The partner explained that the difference in stock was not of the relevant year, but the same pertained to the earlier years. The assessee offered an amount of Rs. 69,000/on account of difference in stock for the assessment year 1992-93, to buy peace. The Assessing Officer, however added a sum of Rs. 69,000/to the returned income of the assessee of the relevant assessment year 1993-94 and also initiated penalty proceedings under section 271(....

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....er of the Commissioner (Appeals) was challenged by the revenue before the Income Tax Appellate Tribunal. The Income Tax Appellate Tribunal, by the order dated 16/11/2000 allowed the appeal of the revenue and set aside the order of the Commissioner (Appeals). The order of the Income Tax Appellate Tribunal is challenged by the assessee in this appeal. 2) Shri Bhattad, the learned counsel for the assessee, submitted that the Assessing Officer could not have levied the penalty on the assessee under section 271(1)(c) of the Act after holding that the assessee had concealed the particulars of income during the relevant assessment year 1993-94. It is submitted that the difference in stock, related to the assessment year 1992-93 as rightly....

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....ot be made applicable to the case in hand. 4. On a reading of the orders of the authorities, we find that the tribunal was not justified in reversing the order of the Commissioner (Appeals). It appears from the facts that are narrated in the orders of the Assessing Officer levying penalty and the Commissioner (Appeals) that during the survey under section 133A of the Act, a physical verification of the stock was made and it was found that there was a difference in stock in the excise register and the books of accounts to the extent of Rs. 64,242/. It was found that the stock as per the books of accounts as on 01/04/1992 was at Rs. 14,758/ whereas the stock shown in the excise register as on 01/04/1992 was to the tune of Rs. 79,000/. ....

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....de the order of the Assessing Officer. It is well settled that when an appellate authority reverses the order of the subordinate authority, it would have to first advert its mind to the reasons which the subordinate authority had recorded in its order that is reversed by the appellate authority. In the instant case, the tribunal committed a serious error in not considering this vital aspect of the matter while deciding the appeal of the revenue. From the facts of the case, it is clear that the difference in stock did not pertain to the relevant assessment year 1993-94 but pertained to the assessment year 1992-93. The Commissioner (Appeals), therefore, rightly held that there was no concealment or suppression of material by the assesse....