2017 (10) TMI 1082

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....stified in upholding the penalty imposed u/s 271(l)(c) of the Income Tax Act. 2. The learned Commissioner of Income Tax (Appeal)-28 Delhi was not justified in upholding the penalty order in spite of the fact that the learned Assessing Officer did not record his satisfaction in the Assessment Order to the effect that the assessee had concealed the particulars of the income. 3. The Appellant craves leave to add, amend or delete any ground of appeal. 4. It is prayed that penalty of Rs. 67,320 be deleted." 2. An application was received on behalf of the Ld. Senior DR stating that the Ld. Senior DR was absent and adjournment was sought by the department on this ground. However, looking into the facts of the case, we....

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.... being given interest on the funds loaned by him. It was submitted that the assessee had received an amount of Rs. 10 lakh from Shri Jolly during the year and Rs. 8 lakh had been accepted by the Ld. CIT (A) and only Rs. 2 lakh had been confirmed and, therefore, there was all the more reason that the penalty imposed should be deleted. 5. We have heard the Ld. AR and have also carefully perused the relevant material placed on record. It is seen that the Ld. CIT (A) has confirmed the addition of Rs. 2 lakh by stating as under:- "An addition of Rs. 2,00,000/- as loan received from Sarabjit Singh Jolly treated by the Assessing Officer as income from undisclosed sources does not appear explained. The Assessing Officer in the remand re....

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....g Officer is not bound to levy penalty automatically simply because the quantum addition has been sustained. Also in case of CIT v. Khoday Eswara (83 ITR 369) (SC), incidentally reported in same ITR Volume, it is held that penalty cannot be levied solely on basis of reasons given in original order of assessment. The Hon'ble Supreme Court has reiterated the law in case of Dilip N. Shroff v. Jt. CIT [2007] 291 ITR 519 by holding in Para 62 that finding in assessment proceedings cannot automatically be adopted in penalty proceedings and the authorities have to consider the matter afresh from different angle. The statute requires a satisfaction on the part of the Assessing Officer. He is required to arrive at a satisfaction so as to show that c....

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....alty proceedings, it is all the more necessary that such further material should also be examined in an attempt to ascertain whether the assessee concealed his income or furnished inaccurate particulars. Thus, under penalty proceedings assessee can discharge his burden by relying on the same material on the basis of which assessment is made by contending that all necessary disclosures were made and that on the basis of material disclosed there cannot be a case of concealment of income or furnishing inaccurate particulars of income. Further if there is any material or additional evidence which was not produced during assessment proceedings same can be produced in penalty proceedings as both assessment and penalty proceedings are distinct and....