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TMI Blog2016 (7) TMI 1049X X X X Extracts X X X X X X X X Extracts X X X X ..... has categorically recorded the findings that he was satisfied that the assessee had concealed the true particulars of income and is liable for penalty proceedings u/s 271 read with Section 274 of the Act. Thus no illegality in the department’s initiation of penalty proceedings in the instant case. We, therefore fully agree with the view taken by Ld. CIT(A) and uphold his decision. - Decided against assessee - I.T.A. No.1046/Del/2016 - - - Dated:- 16-6-2016 - SHRI S. V. MEHROTRA, ACCOUNTANT MEMBER AND SMT. BEENA A. PILLAI, JUDICIAL MEMBER For The Appellant : Mr. Kunal Aggarwal, CA For The Respondent : Shri A. K. Saroha, CIT DR ORDER PER BEENA A. PILLAI, JM: The present penalty appeal has been filed by the assessee against the order dated 05.11.2015 passed by Ld. CIT(A) IX, New Delhi for the Assessment Year 2011-12 on the following grounds of appeal: Penalty on estimated basis on Disclosed Credit Transactions: 1. Whether the Ld CIT(A)-19, New Delhi justified in confirming the concealment penalty on the income calculated on estimated basis on the disclosed credit transactions in books of accounts? Penalty on estimated basis on Volunt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Act. The assessee further admitted his mistake of not including the turnover earned from Rock International India. Ld. Assessing Officer observed that the assessee did not furnish the details as required, to substantiate the bona fide mistake of not disclosing the true and correct material in the return of income. Ld. A.O. passed the penalty order by levying penalty of ₹ 7,13,200/-. 3. Aggrieved by this order, assessee preferred appeal before Ld. CIT(A) who confirmed the penalty, as the explanation submitted by the assessee was not satisfactory and that the surrender so made by the assessee was on the basis of information unearthed by the Assessing Officer during the assessment proceedings. He thus confirmed the findings of Ld. Assessing Officer that income has escaped assessment intentionally. 4. Aggrieved by the order of Ld. CIT(A), the assessee is in appeal before us now. 5. Ground No.1: The Ld. A.R. submitted that during scrutiny proceedings, assessee suo moto offered for taxation on estimated basis profit arising from turnover in undisclosed bank account on conditional basis to buy peace and to avoid litigation. 6. Ground No.2: Ld. A.R. tried to put up ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .R. submitted that it was due to accountant's mistake and the accountant has accepted his mistake by filling an affidavit (placed at Pages No.31 32 of this paper book). Ld. CIT (A) however, discredited the Affidavit filed by the accountant by considering it to be not genuine. 8. Ground No.4: Ld. A.R. submitted that Ld. A.O. has calculated the income on estimate basis by applying flat rate of 6% on total credit transactions. He submitted that in total credit transactions, there are some loans and advances cash withdrawals from one bank account and deposited into another bank account, few transactions were in form of advances. By discrediting the above transactions, Ld. AD considered the total credit transaction as turnover and applied the flat rate of profit @6%. Ld. A.R. submitted that assessee had agreed on estimated addition merely to buy peace and to avoid litigation. 8.1 He submitted that the assessing officer has made additions even on disclosed items and the assessee had suo motu made declaration to buy peace from the Revenue authorities. He submitted that the failure to include the income from M/s. Rock International is a bona fide mistake. He thus requested ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... up with some litigation in his family at his native village in U.P. and that the accounts were prepared when he returned. Ld. D.R. submits that it is clear from such statements made by assessee before the Assessing Officer that the bank accounts were not maintained on day to day basis. He submitted that various opportunities were given to the assessee, to submit bank accounts, which have not been fulfilled by the assessee. Ld. D.R. referred to the affidavit submitted by the accountant, Mr. Naeem Ahmed. Ld. D.R. submitted that in the affidavit dated 20.07.2015, there are three bank accounts which have been said to be missed out by the accountant, Mr. Naeem Ahmad. Ld. D.R. submits that the assessee having such a huge turnover, has only one employee being this accountant, Mr. Naeem Ahmed, who has shown his failure before the A.O. at the time of assessment proceedings. Ld. D.R. relied upon the Annexure 3 to the compilation at page 4 filed before us. 9.5 Ld. D.R. submitted that during the assessment proceedings, it was brought to the notice of assessee that income from Rock International (India) has been undisclosed. The Assessing Officer has obtained the details of Rock Internation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... income. Explanation to section 271 resorts presumption of concealment noted by the Assessing Officer who resorts to assess income. The burden is on the assessee to show otherwise by cogent and reliable evidence. When the initial onus placed by the Explanation has been discharged by the assessee, the onus shifts on the Revenue to show that the amount in question constitutes the income and not otherwise. 10.3 In the facts and circumstances of the present case, the assessee has only stated that he has surrendered the additional sum with a view to avoid litigation and to buy peace of mind from the department. Such kind of explanation does not fit into the requirements laid down by Explanation (1) to Section 271(1)(c) of the Act. It is a trait law that voluntary disclosure does not relieve the assessee from the mischief of penal proceedings. The law does not provide that when the assessee makes voluntary disclosure of his concealed income, he can be absolved from penalty. 10.4 We observe that the surrender of income in case of the assessee was not voluntary as the offer of surrender was made in lieu of CIB information made available by the Assessing Officer during the assessment p ..... X X X X Extracts X X X X X X X X Extracts X X X X
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