TaxTMI 
TaxTMI 
2022 (11) TMI 712
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....issioner of Income Tax (Appeals)-l, Amritsar, has also dismissed the same and upheld the decision made by Assessing Officer. 4. The appellant craves leave to add, alter or amend the grounds of appeal at later stage." 3. None attended on behalf of the assessee. However, considering the small addition of Rs.4,93,984/- made on account of undisclosed income earned without being substantiated, after hearing of the ld. DR, it is decided to hear the appeal. 4. During the course of assessment proceedings, the AO was not satisfied with the explanation of the assessee about the nature and source of cash deposits of Rs. 43,48,500/- with YES bank as the assessee had not maintained any books of accounts. The AO discussed that even no bills or vouchers were produced in support of the purchases and sales and other expenses. Accordingly, AO estimated the turnover of the appellant and assessment was completed by applying NP rate of 8% u/s 44 AD of the Act, on the gross turnover of Rs. 66,76,816/- which came to Rs. 5,34,145/- as against Rs. 1, 82,270/- declared in the original return of income. Accordingly, the impugned penalty of 39,504/- has been levied u/s 271(l)(c) of the Act for furnishin....
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....inion. It is further submitted that cash sums Rs,43,48,500/- deposited in the YES Bank had no bearing on the sales/turnover of the assessee. The account with Yes Bank was used only for transferring cash from 'Amritsar to Raipur to avoid any risk involved in handling of cash. (iii) Upon due consideration, the above explanation cannot be accepted and is rejected. The appellant is engaged in trading in jewellery items and most of the sales were admittedly made in Raipur. A reference to the statement of account of YES Bank shows that most of the cash has been deposited in Raipur and withdrawn through self cheques at Amritsar. Date Narration Debit Credit 28.05.2010 Cash deposit Raipur 5,00,000/- 14.06.2010 Chq withdrawal, Self, Asr 1,00,000/- 08.07.2010 Cash deposited Raipur 5,00,000/- 09.07.2010 Chq withdrawal, Self, Asr 5,00,000/- 10.07.2010 Chq withdrawal, Self, Asr 21,000/- 19.07.2010 Cash deposited, Raipur 49,000/- 27.08.2010 Chq withdrawal. Self, Asr 1,00,000/-....
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.... a difference of opinion between the assessee and the AO. Merely difference of opinion does not construe that the assessee has furnished inaccurate particulars of return. The subject matter is debatable. It is a case of estimation of income where levying penalty u/s 271(1)(c) is not justified. 6. Having heard the ld. additional CIT DR, perusal of record and impugned order, we find that undisputedly, assessee's income has been estimated considering the deposits made in the bank account under section 44 A.D. of the Income Tax Act. In our view, penalty under section 271(1)(c) based on estimation of income is not justified. It was noted that Assessing Officer himself had found that said deposit was not made on a single day and, thus, it could not be said that assessee had failed to furnish complete particulars. Even otherwise, revenue had not come out with clear case of suppression of turnover and, penalty had been imposed merely on basis of enhancement of estimated income where impugned penalty would not sustain. 7. In the case of CIT, Chennai vs. P. Roses, the Hon'ble Madras High Court observed vide para6 and 7 as under:- 6. Though the Assessing Officer invoked penalty under Sect....
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....articulars. The relevant portion of the decision reads as follows:- "7. As against this, the learned counsel appearing on behalf of the respondent pointed out that the language of Section 271(1)(c) had to be strictly construed, this being a taxing statute and more particularly the one providing for penalty. It was pointed out that unless the wording directly covered the assessee and the fact situation herein, there could not be any penalty under the Act. It was pointed out that there was no concealment or any inaccurate particulars regarding the income were submitted in the return. Section 271(1)(c) is as under: 27(1) If the AO or the CIT(A) or the CIT in the course of any proceedings under this Act, is satisfied that any person (c) has concealed the particulars of his income or furnished inaccurate particulars of such income. A glance at this provision would suggest that in order to be covered, there has to be concealment of the particulars of the income of the assessee. Secondly, the assessee must have furnished inaccurate particulars of his income. Present is not the case of concealment of the income. That is not the case of the Revenue either. However, the learned c....
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....Court explained the terms 'concealment of income' and 'furnishing inaccurate particulars'. The Court went on to hold therein that in order to attract the penalty under Section 271(1)(c), mens rea was necessary, as according to the Court, the word inaccurate signified a deliberate act or omission on behalf of the assessee. It went on to hold that clause (iii) of Section 271(1) provided for a discretionary jurisdiction upon the assessing authority, inasmuch as the amount of penalty could not be less than the amount of tax sought to be evaded by reason of such concealment of particulars of income, but it may not exceed three times thereof. It was pointed out that the term 'inaccurate particulars' was not defined anywhere in the Act and, therefore, it was held that furnishing of an assessment of the value of the property may not by itself be furnishing inaccurate particulars. It was further held that the assessee must be found to have failed to prove that his explanation is not only not bona fide but all the facts relating to the same and material to the computation of his income were not disclosed by him. It was then held that the explanation must be preceded b....