TaxTMI 
TaxTMI 
2022 (5) TMI 1278
X X X X Extracts X X X X
X X X X Extracts X X X X
....h the understanding the no further penalty will be levied on additions but A.O. has levied penalty u/s 271(1)(c) which was subsequently upheld by CIT (appeals) which is wrong and bad in law . 4. The order of CIT [appeals] was wrong illegal and contrary to the facts of the Case. 5. Ld. CIT [appeals] has not considered facts of the case for levy of penalty of Rs.4208060 /- and rejected the appeal of appellant. 6. A.O. has levied penalty @ 100% of tax sought to be evaded amounting to Rs.5472620 which was reduced to Rs 4208060 U/s 154. 7. As regards the said unexplained expenses of Rs.50000/=, we would like to submit that the details were duly furnished with at the time of assessment proceedings .So this cannot be treated as concealment of income. 8. Regarding advance of Rs. 512200/= from M/s Broadways Machines (P) Ltd we are to submit that advance was taken for supply of machines. Moreover it was duly reflected during the assessment proceedings .So this cannot be treated as concealment of income. 9. Regarding late payment of ESI & PF of Rs. 430065/= we are to submit that the dues could not be deposited due to lack of funds and as s....
X X X X Extracts X X X X
X X X X Extracts X X X X
....r: "5.3 Present Case In this particular case, the material facts regarding various additions, which have been made as bogus for levy' of penalty in this case, are discussed issue wise as here-under:- The adhoc, estimated disallowance of Rs. 50,000/- does not attract penalty, since it is a purely estimated disallowance on the ground of nonavailability of petty vouchers. Disallowance on account of late payment of ESI and PF is purely a legal disallowance, emerging out of full facts disclosed by the assessee itself; so this also does not attract concealment penalty. Regarding advance from M/s Broadway Machines (P) Ltd., the addition is indeed a legal addition u/s 2(22)(e), but I find sufficient force in A.O's argument that assessee was conscious of the facts regarding this transaction, and hence, should have applied provisions of section 2(22)(e) itself. It is also apparent that assessee had taken a chance to hide this taxable deemed income by not showing in the return, and possible escapement from scrutiny of its case, but when A.O. enquired and obtained relevant facts, assessee gave in and agreed for addition by not filing any appeal.....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ng officer levied penalty. Assessee's appeals was dismissed by Commissioner (Appeals) and Tribunal. It was held that there was material for finding that there was concealment of income and penalty levied by the Assessing officer was justified. Beena metals v. Commissioner of Incometax [1998] (Ker) The fact that after the AO detected concealment, the assessee admitted the same, would not absolve him from penalty u/s 271(1)(c) of the Act. Ayyasami Nadar & Bros. v. Commissioner of Income tax [2056] (Mad).The original as well as revised return filed by the assessee did not disclose correct income. The assessee also agreed to huge additions. Imposition of penalty was justified. Commissioner of Income tax v. Balakrishna Textiles [1990] (Mad).During the course of assessment, the assessee himself admitted that he had derived income from the sale of imported cycle parts and the income from the same was not recorded in his books of accounts. The amount was not shown in the return of income. The assessee agreed to the inclusion of this amount in his total income. As the assessee admitted that such amount represented his income, no further evidence was necessary to show that it was th....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ent on behalf of the assessee agreeing for assessment of interest income at 27 per cent for both the assessment years 1997-98 & 1998-99 specifically on condition that no penalty proceedings would be initiated u/s 271( 1)( c) . Hence it was not open to the assessee to appeal against the assessment orders. CIT v.VamadevanBhanu [2011] 330 ITR 559(Ker) The assessee had agreed to addition to income. Penalty for concealment can be levied if assessee offers no satisfactory explanation regarding such. Income. Commissioner of Income tax v. .Jugalkishore Hargopal Das [2000] (Ker) Assessee filed return showing loss, although there was substantial turnover. The books of accounts suffered from various defects and on scrutiny the AO found a number of cash credits. The AO proposed substantial addition and sent draft assessment order u/s 144B. The assessee sent in a letter saying that he was agreeable to the proposed addition as the assessee was not in a position to substantiate the objections against-the draft assessment order. However, it was also submitted that the " penalty may not be levied". The court held that there was no understanding that the penalty w....
X X X X Extracts X X X X
X X X X Extracts X X X X
....particulars relating to the claim were furnished and a claim for relief or allowance was made on that basis, which was not accepted by the assessing officer who did not question the particulars relating to the claim, but merely took a different view on the very same particulars. This is a case where questionable details and particulars relating to the claim were furnished by the assessee and such details were so fundamental to the genuineness and bonafide of the claim that the mere furnishing of those particulars made the claim vulnerable. The Tribunal failed to appreciate the claim of the assessee for what it is. It completely missed the fact that there was no evidence to show that the property was used for the purpose of the assessee's business during the relevant previous year. We find considerable justification for the criticism leveled by the learned Standing Counsel against the decision of the Tribunal to cancel the penalty without meeting any of the findings recorded by the income tax authorities. In the result we answer the substantial question of law in the affirmative, in favour of the revenue and against the assessee ....." (ii) The Bombay High Court said: In th....
X X X X Extracts X X X X
X X X X Extracts X X X X
....levied:- (i) In CIT v. KedarNath Ram Nath (1977) 106 ITR172(All),penalty was levied under the Explanation where addition to income was made by rejection of book profit for want of proper verification. The penalty was cancelled by the Tribunal on the ground that no case has been made out for holding that there was any fraud or gross or willful neglect. The High Court held that the Tribunal had misconceived the real position and that the burden lay on the assessee to prove that there was no gross or willful neglect or fraud on his part. (ii) (a) CIT v. Tikaram& Sons (P) Ltd. 103 Taxation 21 (All): (1992) 193 ITR 120(AI1). (b) The Supreme Court in CIT v. Tikaram& Sons (P) Ltd. (1991) 191 ITR (St.) 306(SC) dismissed an SLP against the above judgment. (iii) It has been held in CIT v. UnidaramTulsidas Panjabi (1993) 204 ITR 675, 683 (Bom) that where the Explanation to section 271(1)(c) applied, the presumption raised by the Explanation can be rebutted only by cogent, reliable and relevant materials. As in this case the explanation submitted by assessee was found by the IAC, Commissioner a well as the Tribunal to be false, the Tribunal was not justified....