2004 (10) TMI 32

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....under section 271(l)(c) in respect of the estimated addition of Rs. 51,515 for the assessment year 1984-85? (ii) In the facts and circumstances of the case and in the absence of any material disclosing any receipt on account of delivery charges (labour room charges) in addition to what is recorded in the accounts, was the Appellate Tribunal justified in holding that the provisions of Explanation 1 to section 271(1)(c) are attracted and that penalty was leviable by invoking the Explanation? (iii) Whether, on the facts and circumstances of the case, the order of the Appellate Tribunal allowing the departmental appeal is legal, valid and sustainable in law? The facts of the case are as follows: The assessee is the proprietor of a hospital ....

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....no concrete evidence to show that the assessee had in fact earned the income of Rs. 51,515 and in the circumstances, according to the appellate authority, no penalty for concealment was leviable even in respect of the said addition of Rs. 51,515. Against that order, the Department took the matter before the Tribunal and the Tribunal set aside the order passed by the appellate authority and allowed the appeal filed by the Department and sustained the levy of penalty on the amount of Rs. 51,515. The Tribunal stated thus: "Having regard to the rival submissions, we are of the view that the assessee cannot succeed in so far as the penalty relates to the addition of Rs. 51,515. There is of course no merit in the grounds taken before us that th....

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....me with regard to delivery charges. As per section 271(1)(c), penalty can be imposed only if the Assessing Officer is satisfied that any person has concealed the particulars of his income or furnished inaccurate particulars of such income, he may direct that such person shall pay by way of penalty. Explanation 1 to clause (B) says that "such person offers an explanation which he is not able to substantiate and fails to prove that such explanation is bona fide and that all the facts relating to the same and material to the computation of his total income have been disclosed 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 clause (c) of this sub-section, b....