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TMI Blog2016 (2) TMI 237X X X X Extracts X X X X X X X X Extracts X X X X ..... gust, 2009, but the Assessing Officer chose to bring to tax in the assessment year 2008-09, which is on the basis of the admission by the assessee under S.1342(4). In view of these facts of the case, we do not see any reason to disturb the findings of the learned CIT(A) for both the years. - Decided against revenue - ITA No.1119/Hyd/14, ITA No.1120/Hyd/14 - - - Dated:- 6-1-2016 - SMT. P.MADHAVI DEVI, JUDICIAL MEMBER AND SHRI B.RAMAKOTAIAH, ACCOUNTANT MEMBER For The Appellant : Shri Kurmi Naidu DR For The Respondent : Shri S.Rama Rao ORDER Per B.Ramakotaiah, Accountant Member: These two appeals are filed by the Revenue and they are directed against separate orders of the Commissioner of Incometax( Appeals) I, Hyderabad, both dated 26.3.2014 for the assessment years 2007-08 and 2008-09. 2. The common issue involved in these appeals relates to penalties levied by the Assessing Officer under S.271(1)(c) of the Act for the assessment years 2007-08 and 2008-09, which have been deleted by the CIT(A). It is the contention of the Revenue that the penalties imposed by the Assessing Officer are based on the loose papers seized and the CIT(A) was not justified i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssee offered the amount to tax under S.132(4) and the provisions of Explanation 5A to S.271(1)(c) are to applicable to the assessee. Assessee also submitted that income admitted in the course of proceedings under S.153A cannot be the only basis for considering the concealment penalty, as these proceedings are entirely independent of general assessment proceedings and relied on various case-law as discussed by the CIT(A) in paras 5.6 and 5.7 of the impugned order for assessment year 2007-08. For assessment year 2008-09, it was also submitted that loose papers do not contain any date or any details and the transactions therein do not reflect any money given or received back. It was further submitted that there is no link with any of the investments in properties or earning of income by the assessee. However, in order to settle the matter, assessee offered the amount to tax. Just because an amount was offered to tax by the assessee, the same is not sufficient for levy of penalty for concealment. The learned CIT(A) considered the submissions, examined the facts and deleted the impugned penalties for both the years, stating as under- Assessment year 2007-08 06.0 The assessm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion of the property took place and no part of investment was made during this year. However, it is noted that the AO has relied on the seized material pages 60 to 85 of annexure-A/AVGR/Res/02 which are only sale deed dt.18-5-2006. Even if we consider penalty to be imposed, it has to be done only in the year in which the appellant has concealed the particulars of his income or furnished inaccurate particulars of such income and as noted above, there was no undisclosed income invested in the property at Hyderguda during the year under consideration. 06.2 It has been held by various judicial authorities that since assessment proceedings and penalty proceedings are separate and distinct, the finding in the assessment proceedings cannot be regarded as conclusive for the 'purposes of penalty proceedings and cannot be taken as- conclusive for the purpose of holding assessee liable for concealment and imposing penalty u/s. 271(1)(c) of IT, Act, In the present case, the appellant disclosed additional income of Rs.l-crore for Asst. years 2007-08 and 2008-09 and paid taxes thereon. In this context, I would like to refer to the observations made by the Horr'ble jurisdictional Tr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er the AO had the clinching evidence of concealment then the offer may not have been accepted and the same should have been proceeded on the basis of material available on record. The lower authorities relied oh proceedings before assessing. officer for levying the penalty. The same do not constitute admission for the purpose of levying penalty. The addition made on the basis of more; or less on the offer made by the assessee and the AO not brought enough incriminating material for concealment and there is no material for establishing the concealment independently in the given facts and circumstances of the penalty is not leviable and the same is deleted. Therefore, if there is a case where the Assessing Officer has clinching evidence for concealment or any incriminating material to establish concealment independently, then there is no question of exercising discretion as to the levy of penalty. The Assessing Officer has the discretion to levy penalty and levy of penalty is not automatic and it should not be imposed merely because it is lawful to do so. But in the present case, the appellant came forward to offer additional income on account of investment made in the earlie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g penalty, it is essential to establish that the appellant concealed the particulars of income or filed inaccurate particulars. Addition made or income offered to buy peace on account of scribbling which cannot be attributable to any assessment year or to any person cannot be a basis for levy of penalty. In view of the above, the penalty levied by the assessing officer is not justified and accordingly, the same is ordered to be deleted. 5. Aggrieved by the action of the learned CIT(A) in cancelling the impugned penalties for both the years, Revenue is in appeal before us. 6. Considering the rival contentions and perusing the details placed on record, we are of the opinion that the Revenue has not made out any strong case for levy of concealment. In fact, as stated by the learned CIT(A), there was no evidence of investment in respect of assessment years, which could have been brought to tax as income of the year. The assessee has admitted income on his own and filed the returns in the course of proceedings under S.153A. That alone cannot be a basis for levy of penalty, unless there is evidence or nexus with the concealed income as stated by the CIT(A). The amount of ₹ ..... X X X X Extracts X X X X X X X X Extracts X X X X
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