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TMI Blog2016 (1) TMI 404X X X X Extracts X X X X X X X X Extracts X X X X ..... is uncalled for as no specific defect was found while making the addition of ₹ 5,00,000/- This figure was based on the voluntary amount offerto tax to end the prolonged litigation by the assessee and the A.O. has only reproduced the submission of surrender in the penalty order. Hence the penalty imposed on account of concealment of Income and furnishing inaccurate particular u/s 271(1)© is not justified and needs to be deleted. Levy of penalty in this case is not justified. Accordingly, set aside the orders of the authorities below and delete the levy of penalty in dispute as section 271(1)(c) postulates imposition of penalty for furnishing of inaccurate particulars and concealment of income. On the facts and circumstances of this ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... avings bank interest which was not declared by the assessee. AO initiated penalty proceedings u/s 271(1)(c) of the I.T. Act for these additions. During the penalty proceedings it was argued before the Id.AO that to avoid litigation, the assessee has surrendered the amount. AO rejected the explanation of the assessee on the ground that when AO detected the deposit of cash in savings bank account, assessee has declared the income under that head. There was no evidence regarding the sale and purchase of clothes. No receipt book was furnished before the AO. Thereafter, the AO initiated penalty proceedings and imposed the penalty of ₹ 1,58,050/- u/s. 271(1)(c) of the I.T. Act vide order dated 21.6.2011. 3. Against the above Penalty Orde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tails of ₹ 11,01,000/- deposited in IDBI Bank as per AIR whereas she has disclosed the other bank account with Axis bank in which the cash relating to business was deposited. Thus it is very clear that the Axis bank account or cash deposited in this bank was voluntary declare by the assessee and not pointed out/detected by the department as alleged in the penalty order confirmed by the CIT. 5.1 He further contended that during the period under consideration assessee has made sales and purchase of ₹ 26,62,750/- and ₹ 20,67,845/- respectively and thus has earned profit of ₹ 1,38,836/-. The assessee has shown Net Profit more than 5% of the Total turnover as prescribed in Section 44AF and hence was not required to mai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... #8377; 5,00,000/- on agreed basis.as additional income to buy peace with the department and the Id., A.O. accepted the said offer and made addition of ₹ 5,00,000/- only. However the penalty proceeding was still initiated which is uncalled for as no specific defect was found while making the addition of ₹ 5,00,000/- This figure was based on the voluntary amount offerto tax to end the prolonged litigation by the assessee and the A.O. has only reproduced the submission of surrender in the penalty order. Hence the penalty imposed on account of concealment of Income and furnishing inaccurate particular u/s 271(1) is not justified and needs to be deleted. In support of his contention he relied upon the following case laws:- - Devs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... man 183, I find that the Hon ble High Court has followed order of the Hon ble Supreme Court of India in the case of CIT vs. Suresh Chand Mittal, held that where the Department has simply rested on voluntary surrender of the assessee in good faith, the penalty could not be imposed. 7.5 In the case of CIT vs. Punjab Tyres (1986) 162 ITR 517 (MP) it has been held that when a surrender is made to purchase peace or for some other similar reasons, the surrender cannot amount to an admission, constituting evidence of concealment in penalty proceedings. 7.6 In the case of CIT vs. Moti Lal Co. (1990) 184 ITR 288. In this case the assessee has surrender certain credit for inclusion in his total income and had in fact made a disclosure under s ..... X X X X Extracts X X X X X X X X Extracts X X X X
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