AI Drafter 
TaxTMI 
TaxTMI 
2019 (1) TMI 641
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....tion 271(1)(c) of the Act. 3. Brief facts of the case are that the assessee has filed its return of income on 29.9.2009 declaring total income at Rs. 12,11,950/-. It emerges out from the record that on 10.9.2009 a survey under section 133A was carried out at the business premises of the assessee. According to the AO, the assessee has disclosed an amount of Rs. 11.50 lakhs voluntarily towards unaccounted receipts for accounting year 2008-09 in addition to its regular income. The ld.AO further observed that in the return filed on 29.9.2009 for A.Y.2009-10 it had offered Rs. 8.50 lakhs instead of admitted unaccounted receipt of Rs. 11.50 lakhs. Thus, in the opinion of the AO a sum of Rs. 3 lakhs required to be added to the total income. He ....
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....come Tax Act 1961. Issue Notice of Demand and Challan." 4. On appeal, the ld.CIT(A) concurred with the AO, but changed basis for visiting the assessee penalty. The ld.AO has levied penalty for the reasons that the assessee has furnished inaccurate particulars, but the ld.CIT(A) has confirmed the penalty with help of Explanation-1 to Section 271(1)(c). The relevant finding of the ld.CIT(A) is also worth to note. It reads as under: "3.2 I have considered the penalty order assessment order and the submissions made by the appellant. The appellant, during the course of survey, based on the document found, has disclosed unaccounted/undisclosed receipt of Rs. 11,50,000/- not entered in the books of accounts for accounting year 2008-09.....
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....essee has duly provided a note at the end of the return filed by it wherein it has submitted that out of Rs. 11.50 lakhs, Rs. 3.99 lakhs was part of normal profit which has been offered earlier. The assessee has disclosed everything including its account. Revenue has failed to rebut this disclosure and failed to disclose which incorrect fact was furnished by the assessee. In the next fold of contentions, he submitted that penalty has been imposed by the AO on the ground that the assessee has furnished inaccurate particulars; whereas this basis has been changed by the ld.CIT(A) who confirmed the penalty with the help of Explanation 1 to section 271(1)(c). This explanation provides that if an addition is being made to the total income of t....
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....). It is thus ostensible that findings recorded by the CIT(A) show that penalty has been confirmed on a different premise and the original satisfaction for imposition of penalty has been altered or modified by the appellate authority. In such circumstances, where the original basis of imposition of penalty has been altered in a significant way by the first appellate authority, the very basis for sustaining the penalty is rendered nonexistent. Needless to say, the imposition of penalty is solely dependent upon the 'satisfaction' of the AO [unless initiated by CIT(A)] and non-else. The ground for action by AO was allegation of 'concealment'. This ground has been substituted by CIT(A) to 'furnishing inaccurate particulars o....
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.... circumstances referred by the AO is the statement given during the course of survey for harbouring belief that income of Rs. 3.00 lakhs deserves to be assessed in the hands of the assessee, over and above, income disclosed by it. This evidence is an information only, which does not carry evidentiary value, hence, on the basis of this statement, it cannot be concluded that the assessee has furnished inaccurate particulars of income. Apart from above, the assessee has completely disclosed the details along with copies of accounts. It has made a noting in the return of income showing as to how Rs. 3.00 lakh is not to be included in its income. It is a separate matter that such addition has been made, which might have not been changed, but for....