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TMI Blog2011 (7) TMI 525X X X X Extracts X X X X X X X X Extracts X X X X ..... e assessee had failed to explain and conceded the undisclosed income in the assessment proceedings, would be a ground for imposing penalty under Sec.271(1)(c). In view of the provisions of explanation 1(d) to 271 it is clear that it satisfactory explanation is offered, it is always open for the AO to refrain from imposing any penalty under the said section. In the present case, having regard to the fact that assessee had conceded for accepting the order of the Assessing Officer which was based upon the submission made by the assessee since he could not secure the creditor, he conceded for addition of the undisclosed credit and also the explanation that there was no intention to avoid payment of tax which has been accepted concurrently by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The assessee is an excise contractor and filed this return of income for the assessment year 1997-98 admitting an income of Rs.6,68,050/- on 31.10.1997. The return was taken up for scrutiny by issue of notice under Sec. 143(2) dt. 5.10.1998. Notice under Sec.142(1) was also issued calling for books of accounts etc. The assessment was completed under Sec.143(3) on 21.03.2000 on an income of Rs.20,68,050/- adding unproved credits in the assessee's books of accounts to the tune of Rs.14 lakhs. During the assessment proceedings penalty proceedings under Sec.271(1)(c) were initiated for concealing income and furnishing of false/inaccurate particulars. 3. In response to the notice, the assessee appeared and offered explanation submitting ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he penalty by the appellate authority, was justified and accordingly dismissed the appeal filed by the Revenue. 5. We have heard the learned counsel appearing for the appellants and the learned counsel appearing for the respondent. 6. The learned counsel appearing for the appellants submitted that in view Explanation 1 to Sec.271(1)(c) once it is found that a false statement was made in the return without showing the credit and the explanation in respect of the undisclosed credit which was found to be false, which has been accepted by the assessee and further denial of the explanation offered by the assessee, would not in any way absolve the assessee of liability to pay penalty in view of explanation to (1)(d) of Sec.271 of the Act. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Hon'ble Supreme Court in the case of Commissioner of Income Tax vs. Reliance Petroproducts Pvt. Ltd., reported in (2010) 322 ITR 158 (SC) wherein it is held as follows: "Merely because the assessee had claimed the expenditure, which claim was not accepted or was not acceptable to the Revenue, that by itself would not, in our opinion, attract the penalty under section 271(1)(c). If we accept the contention of the Revenue then in case of every return where the claim made is not accepted by the Assessing Officer of any reason, the assessee will invite penalty under section 271(1)(c). That is clearly not the intendment of the Legislature." 9. We have given careful consideration to the contention of the learned counsel appearing f ..... X X X X Extracts X X X X X X X X Extracts X X X X
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