TaxTMI 
TaxTMI 
2009 (4) TMI 154
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....The assessee is an individual carrying on business of trading in Iron and Steel as also job work of decoiling of iron and steel to two of his proprietary concerns viz., M/s Kamal Steel Corporation and M/s Modern Steel Enterprises. For the assessment year 2003-2004, the return of income was filed on 31.10.2003 on a total income of Rs.12,93,439/- which return was taken up for scrutiny assessment and it was finalised under section 143(3) of the Act on 10.03.2006. While so doing, the Assessing Officer made an addition of Rs.34,51,447/- for the aggregate of sundry creditors appearing in the books of the assessee on the ground that in the course of assessment proceedings the assessee had filed a letter dated 02.02.2006 explaining the sundry credi....
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....er contended that some of the creditors were paid in subsequent years and balance amount of Rs.34,51,447/- was offered to taxation. The Assessing Officer added the same amount and initiated penalty proceedings under Section 271(1)(c) after giving due opportunity to the proceedings. The Tribunal after hearing the parties has ultimately held that the approach of the assessee cannot be legally sustainable and the levy of penalty under Section 271(1)(c) is in accordance with the statutory provision. (v) The correctness of the same is canvassed before us in this appeal by formulating the following questions of law:- "(1)Whether the Appellate Tribunal is correct in law in sustaining the levy of penalty u/s 271(1)(c) of the Act on the reject....
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.... from the records that the assessee took one stand before the assessing officer and totally a different stand before the Commissioner of Income Tax (Appeals), the first appellate authority. But the assessee could not substantiate either of the stands in as much as the plea before the assessing officer about the offering of additional income voluntarily is believed in view of the fact that only on scrutiny of the assessment and query from the department, the assessee had come forward to offer remission of liability. 5. Even as regards the plea taken before the first appellate authority that the remission was on account of defective goods, the assessee did not substantiate by adducing necessary evidence or materials with regard to the natu....
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....he assessee had concealed the income or furnished inaccurate particulars and on that basis the penalty levied was deleted". 6. Recently, the apex Court has considered section 271(1)(c) of the Act on a reference made, wherein the ratio laid down in Dhilip N. Shroff vs. Joint CIT reported in [2007] 291 ITR 519 (SC), was doubted. The three Judge Bench of the apex Court in the case of Union of India vs. Dharmendra Textiles Processors [2008] 306 ITR 277, has clearly enunciated that, in order to invoke Section 271(1)(c) of the Income Tax Act, the existence of dishonest intention and deliberate failure to give correct particulars is not necessary. The Supreme Court has held that the explanation appended to Section 271(1)(c) of the Income Tax Ac....