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TMI Blog2015 (5) TMI 2X X X X Extracts X X X X X X X X Extracts X X X X ..... deleting the penalty imposed u/s.158BFA(2) of the IT Act, 1961. Decided in favour of the respondent-assessee. - TAX APPEAL NO. 232 OF 2007 WITH TAX APPEAL NO. 234 OF 2007 - - - Dated:- 23-12-2014 - K.S. JHAVERI AND K.J. THAKER, JJ. For The Appellant : Mr. K.M. Parikh, Advocate For The Respondent : Mr. B.S. Soparkar and Mrs. Swati Soparkar, Advocate JUDGMENT (PER : HONOURABLE MR.JUSTICE K.J.THAKER) 1. Since, the issue involved in both the appeals is common, they are heard together and disposed off by this common judgment. 2. By way of these appeals, the appellant-Revenue has felt aggrieved by the order of the ITAT, Ahmedabad Bench 'A' (for short, 'the Tribunal'), Dated : 14.06.2006, rendered in IT(SS)A. Nos. 32 15/Ahd/2006 for Block Assessment from 01.04.1996 to 02.07.2002 and by the dismissal of the appeal filed by the Revenue, challenging the order of the learned CIT(A) and allowing the assessee's appeal. 3. At the time of admission, this Court framed following question of law for consideration in both appeals; Whether the ITAT was right in law and on facts in deleting the penalty of ₹ 12,83,290/imposed u/s.158BFA ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rred in law and on facts in deleting the penalty of ₹ 12,83,290/- imposed u/s. 158BFA(2) of the Act, more particularly, when the assessee has failed to pay the tax in its entirety on the undisclosed income. It is submitted that the AO had levied penalty of ₹ 12,83,290/- u/s. 158BFA(2) of the Act as the assessee had failed to pay the tax on the undisclosed income fully. The assessee had failed to pay the tax on the undisclosed income fully. The assessee had paid tax only of ₹ 7,36,000/- as against ₹ 12,83,293/- on undisclosed income of ₹ 20,36,971/- in the block return. The AO, therefore, levied the penalty of ₹ 12,83,290/-u/s.158BFA(2). The first appellate authority has restricted the quantum of penalty to ₹ 5,47,290/-allowing the assessee a relief of ₹ 7,36,000/- on account of part payment of tax. Against the order of the CIT(A), the Revenue as well as the assessee preferred appeal before the Tribunal. The Tribunal held that the assessee had paid the balance tax along with interest after the block assessment voluntarily without agitating by way of further proceedings. Considering the above facts, the Tribunal observed it was not a ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ribunal, while considering the penalty proceedings could not have overruled the previous findings which had attained finality. 13.2 Penalty corresponding to addition of ₹ 17.22 lacs was deleted on the ground that the assessee had demonstrated that there was estimation of additions and that therefore, no penalty could be levied. Here again, we are of the opinion that the Tribunal interfered with the penalty on the ground which was not permissible. Additions made on the basis of estimation may be one of the grounds on which discretion not to impose penalty may be exercised. However, in absence of any requirement to prove concealment or furnishing of inaccurate particulars found in Section 271 [1](c) of the Act cannot form the sole basis to delete penalty imposed by the Assessing Officer and confirmed by Commissioner [Appeals]. 14. We are, therefore, of the opinion that the Tribunal committed a grave error in interfering with the penalties imposed by the Assessing Officer and confirmed by the CIT [A] on the grounds mentioned in the order. In other words, exercise of discretion by the Tribunal cannot be sustained. We are, therefore, inclined to set aside the Tribunal's ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... her held that penalty under section 158BFA are akin to section 271(1)(c) of the Act and in sum and substance the department has to prove the factum of concealment. It will be relevant to reproduce the following observations of Co-ordinate Bench in the case of Gandhi Service Station (supra) 6. We have heard rival submission and perused material available on record. We shall up merits of the case first. It emerges from the record that rough casebook found at the residential premises of the said AN was tallied with regular books of account maintained by the assessee-firm at the time of search. Subsequently, assessee produced its regular books of account before DDI in which some insertions, corrections were there, apropos which, explanation of the partner is that petrol pump was at village and cash was carried to Surat which was deposited in the bank by the partners together with loans. Accountant was not aware of these loans and wrote books accordingly. When the assessee came to know about these discrepancies, necessary entries were corrected in the cashbook in place of writing new sets of books. One of the reasons may be perhaps, that regular books of accounts were subject matter ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t applicability of provisions of s.158BA(1). The other case laws relied upon by ld.AR also supports the above conclusion of Co-ordinate Bench. In the aforementioned decision, one of us (i.e. A.M.) is a party. Therefore, following the above decision, we find that it is not a case where department has proved the factum of concealment. Therefore, we hold that penalty cannot be levied under the facts of present case. We may mention here that there is no force in the arguments of ld. DR that as that as taxes were not paid in their entirety, the present case should be considered on different footing from the cases relied upon by ld.AR for the reason that in view of peculiar circumstances of present case the taxes have been paid by the assessee along with interest voluntarily without agitating the same by way of further proceedings. Therefore, we accept the appeal filed by the appeal filed by the assessee and delete the penalty in its entirety.' 13. From the record, it is clear that in the present case, the assessee had paid ₹ 7,36,000/- earlier, which was nearly 60 per cent of the total demand, i.e. ₹ 12,83,293/-, made by the Revenue, whereas, later on the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X
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