TaxTMI 
TaxTMI 
2021 (6) TMI 544
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....ee was unable to prove the same. Therefore, the Assessing officer rejected the books of accounts u/s 145(3) of the Act and estimated net profit on percentage basis and calculated the assessed income of Rs. 81,54,518/- . The Assessing officer passed order u/s 271(1)(c) on 29th June,2017 and imposed a penalty of Rs. 5 lakhs which is 100% of the tax evaded. 3. Being aggrieved from the order of the penalty appeal passed by the Assessing officer the assessee filed appeal before the CIT(A) who dismissed the appeal of the assesee. 4. Being aggrieved by the order of the CIT(A) the assessee is in appeal before the Tribunal. 5. The ld.counsel for the assessee submitted that the Assessing officer was not justified in imposing the penalty upon assessee on the estimated additions made by the Assessing officer and he requested for sending the matter back to the file of Assessing officer for re-adjudication. 6. On the other hand, ld.DR relied on the orders of lower authorities. 7. After hearing both sides and perusing orders of the authorities below, we observe that the penalty has been imposed by the Assessing officer on the estimated additions and rejected books of accounts of the assesse....
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....ce in the rates. The Judgment of the Hon'ble Supreme Court in the case of K.P. Varghese v ITO [1981] 131 ITR 597/7 Taxman 13 was relied on in which it was held that it is only the registered value of any property which has to be considered and the onus of establishing that any amount was received over and above the amount declared is always on the Revenue. It was further submitted that addition is merely on the estimate basis so it is not a conclusive evidence to prove that assessee has concealed the particulars of income or filed inaccurate particulars of income. No evidence was found during the course of search for levy of the penalty. It was, therefore, submitted that levy of penalty may also be cancelled. The learned CIT(A) on consideration of the submissions of the assessee, cancelled the penalty under this head also. The findings of the learned CIT(A) in para 8 of the appellate order arc reproduced below : "8. I have considered the facts of the case and the basis of penalty imposed by the AO on the issue. It is a matter of fact that the addition made is purely on estimate basis and nothing had been brought on record by the AO which could be termed as evidence to rejec....
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.... in the case of Rajesh Chawla v. CIT [2006] 154 Taxman 364. (iv) Unreported decision of Hon'ble Punjab & Haryana High Court in the case of Shveta Nanda v. CIT [2011] 336 ITR 298/[2012] 211 Taxman 129 (Mag.)/[2011] 13 taxmann.com 133. As regards the penalty imposed on difference in the valuation of sale of property, the learned Departmental Representative merely relied upon the order of AO. 6. On the other hand, the learned counsel for the assessee reiterated the submissions made before the learned CIT(A) and submitted that surrender letter was filed during the search itself on 10th Aug., 2006 which is already part of the record. The assessee has paid advance tax of Rs. 5 lakhs each on due dates and the same has also been the part of the record and thus assessee paid Rs. 15 lakhs as advance tax on the surrendered income which is also shown in the original return of income filed on 3rd September 2007 under s. 139(1) of the IT Act (paper book-2). Paper book-04 is revised return in which assessee has specifically mentioned the surrender of Rs. 45 lakhs upon which advance tax has also been paid. The cash flow chart and balance sheets were filed before the AO and at the assessm....
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....) Ltd. [2010] 322 ITR 158/189 Taxman 322 held that 'No information given in return found to be incorrect-Making incorrect claim-Does not amount to concealment of "particulars" IT Act, 1961, s. 271(1)(c)\ 8. The learned counsel for the assessee, therefore, submitted that all facts and surrender of the amount were already within the knowledge of the Revenue Department and part of the record and it was also specifically disclosed in the cash flow and balance sheet filed at assessment stage on 16th Dec, 2008, therefore, it is a case of bona fide error and not a case of concealment of income. He has submitted that assessee has surrendered amount during the course of search under s. 132(4) r/w cl. (2) of Expln. 5 to s. 271(1)(c) of the Act which has been accepted, therefore, penalty is not leviable. Learned counsel for the assessee also submitted that none of the judgments cited by the learned Departmental Representative are applicable because in all these cases there was a enquiry by the Department and all the facts were confronted to the assessee and thereafter the assessee made the surrender. Thus, the facts are entirely different. As regards the penalty on sale of property, he ....
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....s also accounted for in the cash flow statement (capital account) and the balance sheet. The assessee, therefore, disclosed all the particulars of the surrender of amount as well at the stage of the assessment. The assessee on realizing the mistake has immediately filed the revised return on 26th Dec, 2008 including the surrender amount of Rs. 45 lakhs in the return of income. Such was an inadvertent mistake on the part of the assessee because the fact of the surrender of Rs. 45 lakhs was already disclosed before the AO prior to the assessment as well as the assessment stage before the AO detected any mistake. Revised return filed by the assessee under s. 139(5) was also valid return of income filed in accordance with law. Thus, it is not a case of detection of anything by the AO prior to filing of the revised return by the assessee. The AO was having all facts and information on record of surrender of Rs. 45 lakhs and payment of tax on the same before filing the original return of income. 9.1 The Hon'ble Madras High Court in the case of CIT v S.I. Paripushpam [2001] 249 ITR 550/118 Taxman 844 held that 'there was no evidence on the basis of which the Department could con....
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....s recorded under s. 132(4) of the Act on the date of search. Therefore, the Tribunal was right in upholding the order of the CIT(A) cancelling the penalty on Rs. 2 lakhs. It had been noticed by the Tribunal that the assessee had disclosed the amount of Rs. 1,25,000 at the time the search party was learning the premises of the assessee. It was further recorded that the time for filing the return of income for the asst. yr. 1989-90 under s. 139(1) had not expired on the date of search and the assessee having disclosed the amount of Rs. 1,25,000 in the return filed for the asst. yr. 1989-90 and paid all taxes could not be held to have concealed the particulars of income which were liable to penalty under s. 271(1)(c). The Tribunal was, thus, right in upholding the cancellation of penalty on this amount as well'. 10. Considering the above discussion and the case laws, it is clear that all the facts of surrendered income and actual surrender of Rs. 45 lakhs and payment of tax thereon were within the knowledge of the Revenue Department and were in fact disclosed by the assessee to the Revenue Department prior to the order sheet dt. 24th Dec, 2008. It appears to be inadvertent mis....