2016 (9) TMI 1510

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....irming the levy of penalty under section 271(1)(c) of the Income Tax Act, 1961 ["Act" in short]. 2. The appeal of the assessee is found to have been filed late by 92 days. The ld. Counsel for the assessee has filed a petition for condonation of delay in support of an affidavit of the assessee. By referring to the petition filed, the ld. Counsel for the assessee has submitted that the petitioner's C.A. fell ill in the month of January, 2015 and could able to recover from his illness only in the month of May, 2015 and due to this reason, filing of appeal before the Tribunal against the first appellate order was escaped his attention and thereafter, immediately the appeal was filed on 12.05.2015. Therefore, he has pleaded that the delay in f....

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....(3) of the Act on 30.12.2011 by making addition of Rs..60,00,000/- on account of undisclosed investment in property, Rs..54,000/- on account of disallowance on salaries and wages and Rs..3,32,150/- on account of disallowance of expenses incurred on story writing. In view of the above, the Assessing Officer has initiated penalty proceedings under section 271(1)(c) of the Act. 3.1 During the course of penalty proceedings, the assessee has filed his submissions dated 18.06.2012 on 21.06.2012. In his reply, the assessee has submitted that out of the three additions made, the assessee has agreed for the addition made on unexplained investment to the tune of Rs..60 lakhs to have amicably settled with the Department. It was further submitted bef....

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....ection 271(1)(c) of the Act. However, the ld. CIT(A) has observed that the Assessing Officer has included disallowances made on account of salaries and wages of Rs..54,000/- and Rs..3,32,150/- on account of story writing expenses to the undisclosed investment in property of Rs..60 lakhs for levy of penalty which was un justified since it is settled law that merely because assessee raised claims which were eventually disallowed in the instant case, in an adhoc manner by the Assessing Officer does not mean that ingredients of clause (c) to section 271(1) were satisfied so as to justify imposition of penalty. Therefore, by sustaining the penalty levied towards undisclosed investments, the ld. CIT(A) has deleted the penalty levied with regard t....

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....additions made, the assessee has agreed for the addition made on unexplained investment to the tune of Rs..60 lakhs to have amicably settled with the Department. The assessee did not have any credible and cogent explanation for not offering the income in the form of unexplained investment in property before the search operation; he was bound to agree for the quantum addition and not preferred any appeal before the first appellate authority against various additions made by the Assessing Officer. Just because the assessee has agreed for addition of undisclosed investment in property, he cannot be escaped from levy of penalty. Factually, the assessee has no valid reason for concealment and furnishing inaccurate particulars in the belated retu....