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TMI Blog2012 (9) TMI 442X X X X Extracts X X X X X X X X Extracts X X X X ..... al, C.A. Respondent by : Shri A.K. Sharma, Jr. D.R. ORDER Per Bhavnesh Saini, J.M.: This appeal by the assessee is directed against the order of ld. CIT(A)-I, Agra dated 24.01.2011 for the assessment year 2005-06, challenging the levy of penalty u/s. 271(1)(c) of the IT Act. 2. Briefly, the facts of the case are that the assessee filed return of income at Rs.5,02,190/-. The case was selected for scrutiny. The assessee appeared before the AO in response to statutory notices and filed some details and documents and part of the books were produced, which were test checked by the AO. The assessee is a civil contractor and has shown gross receipts at Rs.1,60,23,545/- and net profit was declared at Rs.5,02,186/-. During the assessment proceedings, the books of account and complete supporting documents were not produced. The assessee vide letter dated 19.12.2007 surrendered Rs.4,00,000/- in addition to the income declared in the return which was further revised to Rs.4,50,000/- and ultimately, Rs.5,00,000/- was surrendered before the AO as additional income with the request that liberal and lenient action may be taken while considering the penal provisions. The AO, th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s of income. He has relied upon the order of ITAT, Jodhpur Bench in the case of Heman Das Korani vs. ITO in ITA No. 563/Jodh/10 dated 13.07.2012 and also submitted that the AO initiated penalty proceedings for filing inaccurate particulars. Therefore, it could not be treated as assessee has concealed the particulars of income. He has also relied upon the order of ITAT Ahmedabad Bench in the case of ACIT vs. Varun Finstock (P) Ltd., 5 ITR (Tribunal) 271, in which it was held that the explanation submitted by the assessee proves that the assessee discharged his onus and has rebutted the presumption available to the Revenue under Explanation-1 to section 271(1)(c) of the Act. Therefore, no penalty is leviable. He has also relied upon the order of ITAT, Agra Bench in the case of M/s. Sarvesh Kumar Sohan Lal vs. DCIT in ITA No. 80/Agra/2011 dated 22.06.2012, in which it was held that when the assessee disclosed all the particulars of income at the assessment stage, therefore, merely on estimate of income, penalty is not leviable. He has submitted that Explanation-1 to section 271(1)(c) is not applicable in the case of the assessee. On the other hand, the ld. DR relied upon the orders of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion 144 of the Act provides about the best judgment assessment made by the AO after taking into account all relevant material, which the AO has gathered after giving opportunity of being heard to the assessee for making the assessment of the total income or loss of the assessee. If in the case of assessee complete books and documents were not produced, the AO should have proceeded to compute the income of the assessee on the basis of best judgment assessment on the material available on record by rejecting the book results u/s. 144 and 145(3) of the IT Act. However, the AO did not resort to the course of action legally provided under law. The AO did not mention anything in the assessment order to indicate how Rs.5,00,000/- were surrendered by the assessee as additional income. AO merely noted that the surrender of Rs.5,00,000/- would cover up possible leakage of revenue in respect of trading and profit loss account. Thus, the AO failed to point out any specific instance as to for which surrender was made by the assessee of additional income. The AO initiated the penalty for filing inaccurate particulars of income, but in the assessment order, the AO failed to point out any spec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he absence of any specific finding of fact recorded in the assessment order, we are of the view that it is not a fit case for levy of penalty u/s. 271(1)(c) on the surrender of additional income as above. Therefore, considering the peculiar facts of the case noted above and in absence of any specific instance of furnishing of inaccurate particulars of income, in order, we are of the view that the penalty is not leviable on such addition. The decision cited by the ld. DR would not support the case of the Revenue on this issue. We therefore, set side the orders of the authorities below for levy of penalty for surrender of Rs.5,00,000/- in view of the facts and circumstances of the case, noted above. Since we have cancelled the substantial penalty, the issue of enhancement of penalty would not be relevant and as such, the plea of the assessee needs no further adjudication. 5. As regards the levy of penalty on the addition of Rs.75,912/-, the AO specifically noted that it was unsecured loan in the name of Shree Ram Investments, for which the assessee has not furnished any explanation, details and evidences. Therefore, same cash credit was treated as bogus liability. The assessee did ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gus, it may still attract penalty provision. The Explanation appended to section 271 (1) (c) of the Act entirely indicate the element of strict liability on the assessee for concealment or for giving inaccurate particulars while filing return. The object behind enactment of section 271 (1) (c) read with the Explanations indicate that the section has been enacted to provide for a remedy for loss of revenue. The penalty under that provision is a civil liability. Willful concealment is not an essential ingredient for attracting civil liability as is the case in the mater of prosecution under section 276C of the Act. 5.1 Hon ble Allahabad High Court in the case of Som Engineering Corporation vs. CIT 277 ITR 92 (All) held Held, that the Explanation to section 271(1)(c) of the Incometax Act, 1961, was clearly attracted in the present case inasmuch as the assessed income was more than 80 per cent. of the returned income, being Rs.1,63,850 as against the returned income of Rs.71,870. The onus was on the assessee which it had failed to discharge as no explanation whatsoever was given by it before the Assessing Officer. Moreover, the Tribunal had recorded a clear finding that by ..... X X X X Extracts X X X X X X X X Extracts X X X X
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