TaxTMI 
TaxTMI 
2021 (5) TMI 437
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....asons, deserves to be condoned so as to make way for the cause of substantial justice. We accordingly hold that assessee's impugned delay of 353 days is neither intentional nor deliberate but due to the circumstances beyond its control. The same stands condoned. Case is now taken up for adjudication on merits. 3. Briefly the facts of the case are that assessee, in the business of wholesale trade in electrical goods in the name of M/s Sri Trinetra Electricals, filed his return of income for the AY 2009-10 on 30/09/2009 declaring a total income of Rs. 3,35,670/-. Subsequently, the case was selected for scrutiny, under CASS. During the course of scrutiny proceedings, the AO notice from the 26AS statement that the assessee had received contract receipts amounting to Rs. 1,88,78,974/-, which was not admitted by him in the P&L Account enclosed to the return of income filed. He, therefore, asked the assessee to furnish the reasons for not reflecting the said receipts as income, against which, the assessee vide letter dated 23/12/2011 submitted its reply, which was extracted by the AO in his order at pages 1 & 2. 3.1 The AO rejected the submissions of the assessee on the ground that ....
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....ing. However, we proceed to decide the appeal after hearing the ld. DR and the facts available on record. 7. After hearing the ld. DR and perusing the material on record as well as the orders of revenue authorities, we do not want to adjudicate the legal ground raised by the assessee as notice issued by the AO u/s 274 rws 271(1)(c) is not filed on record. 7.1 As regards the ground raised on merits, on going through the orders of authorities below, we observe that penalty has been imposed by the AO on the ground of non-disclosure of the contract works and addition made on estimated basis, on which penalty has been imposed by the AO for furnishing of inaccurate particulars of income during the year. Penalty cannot be levied on the estimate addition. "4.1 With regard to the levy of penalty on addition of Rs. 1,38,750, it was submitted that penalty was imposed merely on estimate of income. The AO rejected the assessee's contention on the reason that the plot though had not been sold at the price lower than the price fixed by the revenue authorities, the same was not applicable to the assessee as income from the sale of plot was shown under the head 'business inco....
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.... registered document. The AO rejected the various contentions of the appellant for having sold the plot at price lower than the normally expected price by recording his own conclusions and finally proceeding to make the addition by substituting an estimated sale price as against the price recorded in the registered document which was not below the price fixed by the Revenue authorities. The addition so made got confirmed before the CIT(A) in proceedings under s. 264, but the fact remains that the AO even during the penalty proceedings has merely relied upon the addition made and sustained and not brought any evidence to hold that the plot in question had actually been sold at price other than the registered price. The penalty under s. 271(1)(c) would not be leviable as the assessee had given detailed explanation for charging lower rates and the same have not been controverted by the AO by bringing on record any evidence to show that the reasons/explanation given by the assessee was false or unsubstantiated. The relianced place by the Authorised Representative on the Hon'ble Punjab & Haryana High Court judgment in the case of CIT v. Sangrur Vanaspati Mills Ltd. is perfectly in o....
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....at the assessment stage on 16th Dec, 2008 i.e. before the order sheet dt. 24th Dec, 2008 pointed out by the learned Departmental Representative in which also the assessee has specifically declared the surrendered income of Rs. 45 lakhs. The copy of the same is filed at pp. 6 and 7 of the paper book reflecting surrendered amount of Rs. 45 lakhs. The assessee never retracted from the surrender of Rs. 45 lakhs at any stage. There was no query raised by AO regarding non-inclusion of Rs. 45 lakhs till 16th Dec, 2008 though the proceedings started earlier. From the details filed in balance sheet and cash flow statement on 16th Dec, 2008 (paper books 6 and 7), the AO became aware of the non-inclusion of the amount of Rs. 45 lakhs in computation of income and on that basis only he raised the query on 24th Dec, 2008 as to how this amount has been accounted for in the return. Thus, AO was aware of the surrender of the amount and from the advance tax already paid by the assessee were neither the assessee nor the AO could notice the inadvertent error, therefore, everything was part of the record, therefore, there was no concealment on the part of the assessee at any point of time. It ....
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.... the penalty on sale of property, he has submitted that merely because the sale rate was enhanced by the AO as against the sale deed is no ground to prove that assessee has concealed the particulars of income or filed inaccurate particulars of income. 9.We have heard the rival submissions and considered the material available on records It is not disputed that assessee has made surrender of Rs. 45 lakhs during the course of search on 10th Aug., 2006 itself and surrender was within the knowledge of the Revenue Department. The assessee never retracted from the surrender so made during the course of search. The assessee also made such surrender while his statement was recorded during search under s. 132(4) of the IT Act. The assessee in pursuance of his surrender also deposited the advance tax of Rs. 15 lakhs in three instalments of Rs. 5 lakhs each on 14th Sept., 2006, 12th. Dec. 2006 and 15th March, 2007. Thus, all facts were disclosed to the Revenue Department in pursuance to the surrender of Rs. 45 lakhs that assessee made during the course of search. The assessment year under appeal is 2007-08 and the due date of filing of return under s. 139(1) did not expire on the dat....
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.... evidence on the basis of which the Department could contend that the assessee had fraudulently or wilfully or negligently concealed the income. The assessee's agreeing to the addition of the amount by itself did not establish fraud or wilful neglect without something more. Hence the Tribunal was justified in cancelling the penalty levied under s. 271(1)(c) of the IT Act, 1961.' 9.2 The Hon'ble Gujarat High Court in the case of CIT v. Union Electric Corpn. [2006] 281 ITR 266 held that 'penalty was imposed on the assessee in the asst. yr. 1981-82. The Tribunal after hearing the parties came to the conclusion that the debt entry was a solitary instance in which the cost of wires was shown as "consumable stores" and the assessee failed to recover the same from the sister concern. The assessee had come forward with a request to disallow the same on account of apparent mistake and the request was made by the assessee during the course of assessment proceedings before the AO had detected this fact. The Tribunal, therefore, held that the bona fides of the assessee were evident and in such case imposition of penalty was not warranted. On a reference : ....
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....the assessee to the Revenue Department prior to the order sheet dt. 24th Dec, 2008. It appears to be inadvertent mistake on the part of the assessee in not mentioning Rs. 45 lakhs in the original return of income, therefore, the decision in the case of Price Waterhouse Coopers (P) Ltd. (supra) delivered by Hon'ble Supreme Court squarely applied in favour of the assessee. The assessee thus would be entitled for benefit of Expln. 5(2) to s. 271(1)(c) of the IT Act. The decisions cited by learned Departmental Representative are, therefore, clearly distinguishable on facts because the AO did not detect anything on or before 24th Dec, 2008 because every fact was disclosed to the Revenue Department and within the knowledge of AO. In view of the above discussion, we do not find any infirmity in the order of learned CIT(A) and delete the penalty with regard to the surrender of Rs. 45 lakhs. 10.1 As regards the levy of penalty on account of sale of property at Rahon Road, Ludhiana, the main reason for levy of penalty was that assessee disclosed lower rates of plots but the same was not supported by any reasons by the AO for taking higher valuation. The learned Departmental Repr....