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TMI Blog2014 (3) TMI 175X X X X Extracts X X X X X X X X Extracts X X X X ..... was found to be false - The ld. CIT(A) also found that the assessee has not filed any satisfactory explanation before him - Therefore, the AO is correct in holding that the assessee has willfully concealed the particulars of his income by not disclosing the fact of maintaining bank account with ICICI Bank - The concept of "reasonable cause" or exception as contended by the assessee has no applicability to the penalty proceedings u/s. 271(1)(c) of the IT Act - The assessee was maintaining unaccounted bank account and made huge cash deposits in the bank account and when the details were called for from the bank, the assessee had to make surrender of such income – Decided against Assessee. Quantum of penalty – Held that:- It may not be a case of levy of maximum penalty or at least 200% penalty - The interest of justice requires that minimum penalty at the rate of 100% may be levied – thus, the quantum of penalty is modified and the AO is directed to levy minimum penalty at the rate of 100% - Decided partly in favour of Assessee. - ITA No. 194/Agra/2013 - - - Dated:- 28-2-2014 - Shri Bhavnesh Saini And Shri Pramod Kumar,JJ. For the Appellant : Shri P. K. Sehgal, Advocate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of credit transactions. Minimum and maximum credit balance was explained. It was explained that funds were deposited in this bank account out of petty savings. It was also stated that to purchase peace of mind and escape from penalty, the assessee disclosed the above bank account and did not object to the addition. The AO, considering the above facts and the material on record found that the assessee has not given source of the bank deposit in this bank account and no reasons have been explained as to why the assessee concealed the bank account with ICICI Bank Ltd. to the revenue department and why income from unaccounted business was not disclosed. The AO made addition of Rs.2,16,736/- on account of peak investment made in the aforesaid bank account and also made addition of Rs.5,36,967/- on account of profit earned from undisclosed business computed by applying profit rate on the total deposits. The AO also noted that during the course of penalty proceedings, enquiry was also made from the bank in respect of debit and credit entries made otherwise than cash deposits/withdrawals. ICICI Bank informed that the assessee has made payments by cheques to various parties. Details of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nk of Bikaner Jaipur. The AO again confronted the details collected from ICICI Bank Ltd. to the assessee through show cause notice and cornered the assessee that the assessee has maintained unaccounted bank account with ICICI Bank Ltd. The assessee on confronting the details and cornered by the AO had no option but to admit the unaccounted bank account with ICICI Bank Ltd. No source of the deposits or why this bank account was concealed from the department was not at all explained at any stage. There is, therefore, no question to disclose unaccounted bank account voluntarily to purchase peace of mind. There is no acceptance by the department that no penalty would be levied. There cannot be estoppel against law because the AO cannot give any assurance not to levy penalty in such circumstances. It may be the submission of the assessee only, therefore, no legal importance can be attached to the submissions of the assessee. Hon'ble Supreme Court in the case of Mak Data P. Ltd. vs. CIT, 358 ITR 593 held that there is no automatic immunity from penalty on voluntary surrender of income. The surrender subject to non-initiation of penalty proceedings and prosecution does not absolve a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... purchase and sale on or before December 6, 2006. On December 6, 2006, the assessee surrendered the entry appearing in his bank account on sale of shares amounting to Rs. 61,35,844 on agreed basis. The Assessing Officer treated the sum of Rs. 61,35,844 as income from undisclosed sources under section 69A of the Income-tax Act, 1961, and also levied penalty. The Commissioner (Appeals) cancelled the penalty and this was confirmed by the Tribunal. On appeal to the High Court: Held, allowing the appeal, that the assessee had concealed the material facts and given incorrect statement of facts in the application and also not provided information required by the Assessing Officer, after receipt of notice. Accordingly the action of the assessee was neither bona fide nor voluntary. The manner in which the assessee had tried to prolong the case before the Assessing Officer by not providing information immediately and by narrating incorrect facts in the letter dated December 6, 2006 showed that the assessee had concealed the income and disclosure was not voluntary but under compulsion being cornered by the Assessing Officer. Penalty had to be imposed. 5.4 Hon'ble Gujrat High Court ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1988, Rs. 54,71,463 was made accompanied by another disclosure of Rs. 54 lakhs in a round figure being divided into three segments of Rs. 18 lakhs each for assessment yean 1986-87, 1987-88 and 1988-89. The revised return declaring a sum of Rs.78,56,613 came about as a consequence of follow-up proceedings undertaken by the Deputy Director of Income-tax in relation to the other three suppliers, viz., SC, NB and NPST. Therefore, the assessee could not be stated to have voluntarily come forward to disclose income which had unintentionally been omitted from the original return of income. The imposition of penalty was valid. 6. Considering the facts of the case in the light of above decision it is clear case of concealment of income because the assessee has concealed the bank account maintained with ICICI Bank Ltd. from the Revenue department. The ld. counsel for the assessee, however, submitted alternatively that even if it is a case of concealment of particulars of income, but as against addition of Rs.5,36,967/-, the addition maintained by the AO on account of gross profit should have been computed by applying net profit rate. In support of his contention, he has relied upon certa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . The AO also held that Explanation 1(A) of section 271(1)(c) is also squarely applicable in the case of assessee and in fact the explanation offered by the assessee was found to be false. The findings of the AO in the quantum and penalty order, thus, clearly reveal that the AO has specifically held that the assessee has willfully concealed the particulars of income and Explanation 1 (A) to section 271(1)(c) squarely applies in the case of assessee. We may note here that Explanation 1(A) to section 271(1)(c) is applicable to concealed income. Therefore, clear cut finding has been given by the AO in the penalty order that the assessee has concealed the particulars of income. The ld. CIT(A) also in para 3.4 of the impugned order found that the assessee has not filed any satisfactory explanation before him. Therefore, he was of the opinion that the AO is correct in holding that the assessee has willfully concealed the particulars of his income by not disclosing the fact of maintaining bank account with ICICI Bank. Therefore, the findings recorded by the AO and the ld. CIT(A) clearly suggest that it is a case of concealment of particulars of income. Therefore, the decision relied upon ..... X X X X Extracts X X X X X X X X Extracts X X X X
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