9911796707
TMI Blog2013 (11) TMI 662X X X X Extracts X X X X X X X X Extracts X X X X ..... come Tax Act. Held that:- ITO has initiated penalty proceedings. The quantum of concealed income was assessed at Rs.36,000/- for the year 1975-76, and Rs.37,000/- for the assessment year 1976-77. During the pendency of penalty proceedings, the assessee filed appeals against the assessment orders, which were allowed, and that the unexplained income was reduced to Rs.18,373/- for the assessment year 1975-76 and Rs.6,140/- for the assessment year 1976-77. When the order under Section 271 (1) (c) of the Income Tax Act, imposing penalty came to be passed, the quantum of income was reduced to below 25,000/-. The AO, therefore did have jurisdiction, to give directions for payment by way of penalty, without the previous approval of the Deputy Co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... th reference to which the I.T.O.has to decide as to whether or not to obtain the approval of the I.A.C. is that which he determines on an assessee and not that which is finally determined as a result of appellate orders? 3 Whether, on the facts and in the circumstances of the case, the Ld. I.T.A.T. was justified in holding that the order of the A.A.C. could not be sustained for the reasons given by him?" 3. The brief facts giving rise to the reference are stated as below:- "3. The respondents -assessee are brothers. They along with their other brothers, namely, Shri Anand Kishore Bhartiya and Shri Aditya Kishore Bhartiya had purchased, property No. 56 Cantt. Kanpur some time in the year 1961. During the year under consideration substa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lty was cancelled by the A.A.C. inter alia, for the reasons that ordinarily penalty cannot be levied on the basis merely of an estimate of cost of construction made by the I.T.O. In that connection, he drew support from the CIT Vs. Mohd. Kunhi 87 I.T.R. 189 and C.I.T. V. Apsara Talkies, 155, I.T.R. 303 Copies of the orders of the Income Tax Officer imposing penalties in the aforesaid cases are annexed herewith as Annexure 'A' and 'A-1' and 'B' and 'B-1' respectively. Copies of the orders of the Ld. A.A.C. Are annexed herewith as Annexures 'C-1' and 'C-2' respectively. 6. Against the aforesaid orders of the learned A.A.C. The Revenue filed appeals before the Tribunal. These apepals were heard along with the appeals filed by the Revenue a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essee to dislodge the presumption of concealment raised against them on account of the difference between the assessee and the returned income in terms of the Explanation to section 271(1)(C). The material already placed on record can, of course, be re-examined with a view to find out whether the assessee's onus can be taken as having been discharged. In the present case, as we have noted above, sufficient opportunity was given to the assessee to explain the difference between the cost of construction as declared in the books and that estimated by the Income tax Officer. After nothing his submissions, the findings of unexplained investment was given. It is true that the quantum of unexplained investment has been reduced by the learned A.A.C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o whether or not he will obtain the approval of the I.A.C. is that which he determines 'on assessment', and not that, which is finally determined as a result of the appellate procedure. The relevant part of the proviso to clause (iii) of sub-section(1) of section 271 reads as below : - "Provided that, if a case falling under clause (c) the amount of income ( as determined by the Assessing Officer on assessment ) in respect of which the particulars have been furnished exceeds a sum of twenty - five thousand reuppes, the Assessing Officer shall not issue any direction for payment by way of penalty without the previous approval of the Deputy Commissioner." The language of the above proviso is clear, and is capable of yielding only one mean ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s of the above flaw in the procedure followed by the I.T.O. His orders accordingly cannot be sustained. They accordingly stand quashed." 4. In the present case, we find that when ITO has initiated penalty proceedings. The quantum of concealed income was assessed at Rs.36,000/- for the year 1975-76, and Rs.37,000/- for the assessment year 1976-77. During the pendency of penalty proceedings, the assessee filed appeals against the assessment orders, which were allowed, and that the unexplained income was reduced to Rs.18,373/- for the assessment year 1975-76 and Rs.6,140/- for the assessment year 1976-77. When the order under Section 271 (1) (c) of the Income Tax Act, imposing penalty came to be passed, the quantum of income was reduced to b ..... X X X X Extracts X X X X X X X X Extracts X X X X
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