2015 (11) TMI 1739

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....e Assessee under Section 271(1)(c) of the Act on the ground that he had furnished inaccurate particulars thereby concealing his income. 3. By the impugned order, the ITAT upheld the order dated July, 2012 of the Commissioner of Income Tax (Appeals) [CIT (A)] deleting the penalty levied by the AO. 4. The facts in brief are that the assessment for the AY in question was completed on 30th December, 2010 at an income of Rs. 80,55,870/- as against the disclosed income of Rs. 32,00,692/-. This was done by taking the net profit @ 5% of the gross turnover since the Assessee failed to produce the supporting vouchers and bills in respect of the entries in the books of accounts. 5. A perusal of the order dated 30th December, 2010 of the AO re....

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....ttracted Explanation 1 to Section 271 (1) and, therefore, the CIT (A) was not justified in deleting the penalty. 8. On the other hand, learned counsel for the Respondent submitted that neither of the conditions for attracting Explanation 1 to Section 271(1) are fulfilled in the present case. According to him this was not an instance where the Assessee failed to offer an explanation. He submitted that the failure of the Assessee to substantiate the entries by producing vouchers was not intentional but was due to circumstances beyond his control, viz., the misplacing of the vouchers was by the accountant engaged by the Assessee. Learned counsel for the Revenue has countered the submission of the learned counsel for the Respondent and state....

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....iminal proceedings. The law does not provide that making a voluntary surrender of concealed income are not to be absolved from the penalty". 10. In the present case, it is not possible to conclude that there had been any concealment of income as such by the Assessee. Although the assessment order assessed the income by taking the net profit rate @ 5% of the gross turnover, for the same to be considered as concealed income under Section 271(1) (c), either of conditions (A) or (B) of Explanation 1 to Section 271(1) must be fulfilled. In other words, (a) the Assessee must fail to offer an explanation or should offer an explanation which is found to be false or (b) the Assessee should offer an explanation which it is unable to substantiate a....