2012 (2) TMI 211 - AT - Income Tax

Condonation - Dealay of 40 days - According to the assessee, all the income-tax matters were being looked after by a tax practitioner, Sri Uttam Roy, who due to his ill health failed to represent the cases of the assessee before the department during the period from June, 2009 to September, 2010. - Held That - In view of Katiji & Ors.(1987 - TMI - 40082 - SUPREME Court) condonation allowed. Penalty - Discrepancy in Stock of jewellery - Held That - the assessee offered the same for taxation without any protest before the survey party itself. That being the case, there is no mala fide on the part of the assessee and the assessee cooperated with the department by filing the details, names, addresses along with the quantity of goods in respect of karigar s gold and customer s gold lying in the vault of the assessee and, therefore, the bonafide action of the assessee has to be accepted - In view of CIT v/s Reliance petroproducts (2010 -TMI - 75701 - SUPREME COURT), decided in favour of assessee. Receipt on account of extra work - In respect of extra work the term white and cash was written. Admittedly, vide assessee s letter dated 20/4/2009, white indicates cheque receipt and cash indicates cash receipt. - held that - The explanation offered by the assessee is not satisfactory in the eye of law. - Levy of penalty sustained - decided against the assessee.

Summary

Issues:
Condonation of delay in filing appeal, Penalty proceedings under section 271(1)(c) of the Income Tax Act, 1961, Addition of income from Sreeman Guest House, Discrepancy in stock of Sreeman Jewellers, Addition on account of extra work from Sreeman Construction.

Condonation of Delay:
The appeal by the assessee was late by 40 days, and a petition seeking condonation of the delay was filed. The assessee's tax practitioner's ill health was cited as the reason for the delay. The Tribunal, following the Supreme Court's directive to adopt a pragmatic and liberal approach, condoned the delay and admitted the appeal for hearing on merits.

Addition of Income from Sreeman Guest House:
The assessee's explanation for not entering certain expenses in the books was considered. The Tribunal noted that the addition of income did not automatically warrant confirmation of the penalty. Citing a Supreme Court decision, the Tribunal held that there was no deliberate omission or concealment by the assessee, leading to the deletion of the penalty imposed on this account.

Discrepancy in Stock of Sreeman Jewellers:
A discrepancy in the stock of jewellery was found during a survey, and the assessee explained the difference in stock. The Tribunal observed that the assessee cooperated with the department, offered the discrepancy for taxation, and no deliberate intention to conceal income was found. Relying on a Supreme Court decision, the Tribunal deleted the penalty imposed on this account.

Addition on Account of Extra Work from Sreeman Construction:
The Tribunal examined the discrepancy in cash receipts for extra work and the explanation provided by the assessee. It was found that the cash receipt difference was not shown as income by the assessee. The Tribunal held that the penalty was justified as the assessee failed to adequately explain the difference, leading to the sustenance of the penalty imposed on this account.

Conclusion:
The Tribunal partly allowed the appeal, deleting the penalties imposed on the additions of income from Sreeman Guest House and the discrepancy in stock of Sreeman Jewellers while sustaining the penalty on the addition of extra work from Sreeman Construction.