TaxTMI 
TaxTMI 
2020 (2) TMI 834
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....f I.T Act 1961 is leviable in the case of appellant a) Since the assessee had neither concealed the income nor furnished inaccurate particulars of income. b) Assessee has voluntarily offered the income and hence the said addition is out of the purview of penal provisions." 2. For appreciation of facts appeal for AY 2010-11 is treated as lead case. 3. The brief facts of the case are that during the assessment, the AO on the basis of AIR information noted that assessee deposited cash in his bank account maintained with HDFC Bank Account Nos.1481000009325 & 1488100000013. The assessing officer noted that assessee has not disclosed the bank statement in the name of Krishna Enterprises, which was his proprietary concern, for taxation. The AO added the peak credit of both the bank accounts to the total income of assessee. The AO added Rs. 12,48,390/- in assessment for AY 2010-11 while passing the assessment order u/s 143(3) r.w.s. 147 dated 19-05-2016. 4. The AO issued show cause notice u/s 274 r.w.s. 271(1)(c) dated 11-11- 2016. In response to the show cause notice, assessee filed his reply dated 25-11-2016 and contended that he has co-operated with the enquir....
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.... addition on maximum peak credit in both the accounts. No appeal was filed by assessee against such addition. The Ld. DR submits that it is a fit case for confirming the penalty order. 7. We have considered the rival submissions of both the parties and have gone through the orders of authorities below. There is no dispute that the AO during the assessment on the basis of AIR information noted that the assessee was maintaining bank accounts with HDFC Bank Ltd in the name of proprietary concern Krishna Enterprises. The income from Krishna Enterprises was not disclosed by assessee in the income offered for taxation. The AO added peak credit of both the bank accounts. The AO while passing the assessment order initiated penalty for concealing the particulars of income and furnishing inaccurate particulars of income. However, while levying the penalty, the AO levied penalty only for concealment of income. 8. The provisions of section 271(1)(c) of the Income-tax Act, is read as under : "271. Failure to furnish returns, comply with notices, concealment of income, etc. - (1) If the AO or the CIT(A) or the Principal CIT or CIT in the course of any proceedings under this Act, i....
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....come in its return or in its books of account. Further, Explanation 1 is a deeming provision and it is applicable only when an amount is added or disallowed in computation of total income which is deemed to represent the income in respect of which particulars have been concealed. Explanation 1 is not applicable in this case for furnishing inaccurate particulars of income. 10. We noted that the AO has initiated penalty proceedings under both the limbs of section 271(1)(c) without specifying , if the assessee has concealed the particulars of income. The penalty ultimately was levied on the assessee for concealing the income by observing that the case of the assessee is covered by the Explanation 1 to section 271(1)(c). The relevant sentence/ concluding part the AO noted "Hence, penalty u/s 271(1)(c) r.w.e.1 of the I.T. Act". The ld CIT(A) while affirming the action of assessing officer took the view that the assessee furnished inaccurate particulars of income. 11. We are of the view that in the case of furnishing inaccurate particulars of income, the onus is on the Revenue to, prove that the assessee had furnished the inaccurate particulars, while in the case of concealment of ....
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....t. We find merit in the aforesaid explanation of the assessee. In fact, in Para-4.3.2 of his order, the learned Commissioner (Appeals) has observed that the explanation offered by the assessee with regard to imposition of penalty has not been found to be false. On a perusal of the audit report, we have also noted that the auditors have not pointed out the omission. Thus, assessee's explanation that non-disclosure of two items of income is on account of omission due to oversight is believable since the auditors have also failed to detect such omission in the audit report. Therefore, in our opinion, the ratio laid down by the Hon'ble Supreme Court in PricewaterhouseCoopers Pvt. Ltd. (supra), clearly applies to the facts of the present case as, in our opinion, it is a bonafide mistake committed by the assessee. The other decision relied upon by the learned Authorised Representative also support such view. That being the case, in our opinion, imposition of penalty under section 271(1)(c) in the present case is not justified. Even otherwise also, the penalty imposed under section 271(1)(c) is not sustainable due to the following reasons:- 7. Perusal of the assessme....