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TMI Blog2015 (6) TMI 925X X X X Extracts X X X X X X X X Extracts X X X X ..... d, CIT(A) rightly observed that case of assessee is squarely covered in case of CIT vs. Rajiv Garg [2008 (7) TMI 363 - PUNJAB AND HARYANA HIGH COURT] wherein it was held that the revised return filed by the assessee was accompanied by a note in which he had submitted that he had surrendered the entire amount of sale proceeds of shares to buy peace of mind and to avoid hazards of litigation and also to save himself from any penal action. CIT(A) rightly held that Assessing Officer was not justified in levying penalty u/s 271(1)(c) of the Act on the additional income of ₹ 20.00 lacs so disclosed in the return of income furnished in response to notice issued u/s 148 of the Act. Without prejudice to above, CIT(A) observed that Assessin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l has been filed by Revenue against the order of Commissioner of Income Tax (Appeals)-IV, Ahmedabad, dated September 14, 2010 for A.Y. 1999-2000 on the following grounds. 1. The learned CIT(A) erred in law and on facts in deleting penalty of ₹ 16,54,292/- levied by the Assessing Officer by holding that penalty cannot be levied in respect of the addition made on estimate basis by applying the gross profit rate. 2. In doing so, the ld. CIT(A) failed to appreciate that where there is a justification for the admission of income, as in the instant case, the burden is on the assessee to prove that there is no concealment and where there is failure in that direction to discharge the burden, penalty is leviable. 3. Therefore on the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ourse of re-assessment proceedings. Assessee furnished detailed submission in response to show cause notice of penalty which is reproduced in para 4 of penalty order. The submission of assessee was claimed to be not considered satisfactory by Assessing Officer and he had imposed the penalty of ₹ 16,54,292/- u/s 271(1)(c) of the Act applying the rate of 200% of tax sought to be evaded. Assessing Officer had also given finding that both the ingredients (Rs. 20,00,000 and ₹ 3,63,275) get merged at the end because the basis of concealment of income was admittedly suppressed sales. 3. Matter was carried before the First Appellate Authority, wherein various contentions were raised and having considered the same, CIT(A) has granted ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . The additional income of ₹ 20.00 lacs declared for the year under consideration was part of total admitted income of ₹ 440.00 lacs. As assessee in return filed in response to notice u/s 148, disclosed the said income. According to assessee, no penalty is leviable in case of assessee because additional income disclosed by assessee in return of income filed u/s H148 was not due to the finding of Assessing Officer in the course of assessment proceedings. We find that assessee had disclosed the income of ₹ 440.00 lacs vide its letter dated 30.01.2006. Assessing Officer had received the intimation of suppressed sales from the Additional DIT (Investigation), Rajkot, vide his letter 24.03.2006 and on that basis the Assessing Of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed. In facts and circumstances, penalty under section 271(1)(c) was not exigible. We also find that Hon'ble Punjab Haryana High Court in case of CIT vs. Rajiv Garg [2009] 313 ITR 256 (P H.) wherein it was held that the revised return filed by the assessee was accompanied by a note in which he had submitted that he had surrendered the entire amount of sale proceeds of shares to buy peace of mind and to avoid hazards of litigation and also to save himself from any penal action. During course of assessment, the aforesaid explanation given by assessee was neither rejected nor it was held to be mala fide. The Tribunal had recorded a pure finding of fact to the effect that Assessing Officer had not placed on record any material or evidence ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... IT(A) rightly observed that case of assessee is squarely coved by the aforesaid decision of Hon'ble Punjab Haryana High Court as referred to above. In view of discussion, in light of Sudarshan Silks Sarees (supra) and CIT v. Suresh Chandra Mittal (supra) and CIT vs. Rajiv Garg (supra), CIT(A) rightly held that Assessing Officer was not justified in levying penalty u/s 271(1)(c) of the Act on the additional income of ₹ 20.00 lacs so disclosed in the return of income furnished in response to notice issued u/s 148 of the Act. Without prejudice to above, CIT(A) observed that Assessing Officer vide para-5(3) of penalty order had observed that both the ingredients (20,00,000 and ₹ 3,63,275) get merged at the end because the ba ..... X X X X Extracts X X X X X X X X Extracts X X X X
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