TaxTMI 
TaxTMI 
2013 (4) TMI 885
X X X X Extracts X X X X
X X X X Extracts X X X X
....The Assessing Officer accordingly initiated the penalty proceedings u/s 271(1)(c) of the Act and after treating it to be the concealed income or furnishing of inaccurate particulars, the Assessing Officer levied the penalty at `5,00,000/- having computed the tax sought to be evaded at `2,40,000/- against which the appeal was filed before the CIT(A) with the submissions that section 68 is deeming section and explanation given regarding gift may not be to the satisfaction of the Assessing Officer but nothing has been brought on record that the explanations offered by the assessee were false. Therefore, the penalty u/s 271(1)(c) cannot be levied on merits or on deeming provisions of the Act. Out of total gift of `8,00,000/-, a gift....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ossible and had in fact, been drawn by these authorities. It was only the decision of the Tribunal that was finally in consonance with the view taken by the Assessing Officer. In the back drop of these facts, though bringing the amounts to tax as income by invoking the deeming provisions of section 68 would have been valid and justified, no definitive finding can be arrived at to the effect that the amounts treated as income really and certainly represented concealed income so as to entail a penalty u/s 271(1)(c). The provisions of section 68 conferring powers on the AO to deem a credit as income are enabling provisions to bring the credit to tax where there is either a failure on the part of the assessee to offer on explanation, or the exp....
X X X X Extracts X X X X
X X X X Extracts X X X X
....nbsp; CIT(A)-I but was subsequently upheld by the Tribunal. While taxing an amount treating it as income could be justified by invoking the deeming provisions of section 68 it can not be said that the findings in the assessment were conclusive in the matter of imposition of penalty unless the entirety of circumstances reasonably pointed out to the conclusion that the disputed amount represented income which the assessee concealed or in respect of which he deliberately furnished inaccurate particulars (Dilip N. Shroff Vs. Jt.CIT 291 ITR 519 SC). The Hon'ble High Court of Allahabad in the case of CIT Vs. Mohinder Singh (139 ITR 160) observed that the....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... the explanation satisfactory and his view to this-'effect was confirmed by the Tribunal. However, the explanation held not to be satisfactory by the AO in his opinion does not imply that the explanation was found to be false. The test for taxing an amount u/s 68 is obviously different from-that laid down for the purpose of penalty. The assessee's explanation might have been unproved or not satisfactory but it has not been disproved or proved to be false and the primary burden in this regard for penalty to be justified was on the revenue. The conditions stipulated in clause (A) to Explanation 1 are thus not found satisfied in this case. The conditions stipulated in clause (B) are also not found satisfied in as much as the explanatio....