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TMI Blog2000 (9) TMI 235X X X X Extracts X X X X X X X X Extracts X X X X ..... ion offered by the assessee in this case was not found satisfactory by the AO and accordingly the AO imposed penalty under s. 271(1)(c) considering that the assessee had concealed the particulars of his income or furnished inaccurate particulars in terms of s. 271(1)(c). The matter was carried before the CIT(A) who confirmed the said penalty. Aggrieved by the same, the assessee is in appeal before us. 2. The learned counsel for the assessee Shri S. Jhanwar submitted that the penalty in this case has been levied under the main s. 271(1)(c) and not under any Explanation thereto. He also submitted that penalty has been levied in this case before the detection of concealment by the Department. He also submitted that the AO has erred in assuming the surrendered amount as concealment without making any further enquiries in the matter. He also submitted that inclusion of amount of creditors in income nowhere proves that it is a concealed income of the assessee and contended that no question of penalty, therefore, arises. He further submitted that as the penalty has been levied under the main provisions of s. 271(1)(c), the burden is on the Department to prove that the assessee has conce ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r submitted that the AO has not made any efforts to show that the disputed amount represented the income of the assessee and that the assessee has consciously concealed the particulars of his income or deliberately furnished inaccurate particulars about the same. He further contended that penalty cannot be levied simply because the additions are sustained in the quantum proceedings. He also submitted that penalty proceedings are quasi criminal and penal in nature and contended that it was necessary for the AO to establish the mens rea on the part of the assessee in such cases before levying the penalty under s. 271(1)(c) especially when the Explanation to s. 271(1)(c) is not invoked. He also submitted that the offer for surrender in the revised return was made by the assessee voluntarily in good faith prior to any detection by the Department as a gesture to avoid probable unending litigation as also in order to buy peace and, therefore, contended that such facts and circumstances do not justify levy of penalty under s. 271(1)(c). 3. The learned Departmental Representative relied on the orders of the authorities below and submitted that the letter of surrender was addressed by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a/c to Nil. All these entries have been reflected in the books of the assessee and there is no dispute about the same. It is also observed that the enquiries initiated by the AO during the course of assessment proceedings regarding the impugned credit entries have not fetched any negative reply. It is also evident from the record that immediately after the filing of the revised return by the assessee, the AO stopped himself from making any further enquiry and finalised the assessment on 27th March, 1991. Subsequently, the proceedings for levy of penalty under s. 271(1)(c) were initiated and after receipt of Tribunal s order, the penalty was imposed under s. 271(1)(c) considering that the assessee had concealed the particulars of his income or furnished inaccurate particulars of such income. It is observed that the assessee surrendered the amount of cash credit in his revised income for avoiding any further litigation as also to buy the peace of mind. It is also observed that the assessee has not accepted that he had deliberately furnished inaccurate particulars or concealed any income, but merely surrendered the amount for which there might be hundred reasons. It is also observed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bserved that penalty in this case has been levied under the substantive provisions of s. 271(1)(c) which cast heavy burden on the Revenue to bring the assessee s case within the mischief of the main provision of s. 271(1)(c) more so when the Explanation to that section has not been invoked. The assessment proceedings and penalty proceedings are two separate and distinct proceedings and the mere fact that certain additions were made in the assessment proceedings on the basis of assessee s declaration/ surrender would not automatically justify the imposition of penalty under s. 271(1)(c). 8. The learned counsel for the assessee has cited various judgments in support of his contentions and after going through the same, we find it worthwhile to quote the relevant portion of some authoritative pronouncements which fit into the facts and circumstances of the case before us. I. Sir Shadilal Sugar General Mills Ltd. Anr. "From the assessee agreeing to additions to his income, it does not follow that the amount agreed to be added was concealed income. There may be a hundred and one reasons for such admission i.e., when the assessee realises the true position, it does not dispute c ..... X X X X Extracts X X X X X X X X Extracts X X X X
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