9911796707
TMI Blog2012 (4) TMI 686X X X X Extracts X X X X X X X X Extracts X X X X ..... ) of the Income-tax Act, 1961 [hereinafter referred to as 'the Act']. 2 The brief facts of the case as per penalty order are as under:- "The assessee has filed his return of income for the A.Y.2000-01 on 30-03-2001 by showing total income of Rs.l,46,860/-. The same was processed u/s.143(1) of the I.T. Act. As there was escapement of income reasons thereof were recorded and statutory notice u/s.148 of the I.T. Act was issued on 07-01-2005 ad served upon the assessee on 7-l-2005.The assessee filed letter dated 31-1-2005 stating to consider the return filed on 30-03-2001 as filed in response to the notice U/s.148 of the Act. The assessee is deriving income from planning drawing income and partnership firm. 2 During the course ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for winch the addition made by this office has got confirmed by the Ld CIT(A)-VI, Surat holding that "It is against all human probabilities that the relatives kept on giving gifts when they were much poorer than the appellant land they gave gift to the assessee, his wife, son and daughter year after year on 71- occasions and of such huge sums as ₹ 37,74,571. In view of these ' reasons, the genuineness of the gifts are not proved and the addition made by the A.O. is confirmed and the ground of appeal are dismissed. Please explain why the addition may not be made in the year under consideration also considering the gift as not genuine." 2 Without prejudiced to the above you are requested to produce the donors as per sc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... waliben during the A.Y. 2002-03 and she could not be produced for reasons of illness- before your Honour on 20.6.2005 in respect of scrutiny case, of V for A.Y. 2002-03. She has confirmed and admitted various year *s gifts vide letter did Nil, copy of Self declaration is enclosed. She is purely an agriculturist. Sales bills were also produced earlier. Other details were given vide submission dtd 18.11.2005. So kindly accept the gift on the principle of Res Judicata as fully explained. Sir, I would like to bring to your kind notice that the gift to relatives are now a days fully allowable as amended by Finance act, 2004. 3 Purshottambhai D.Savani: The assessee has also received gift from the Pursottambha' D.Savani during the A.Y. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y him that during the course of assessment proceedings, in case of the assessee in A.Y.2002-03,it was found that these persons had made gifts to the assessee and during the remand proceedings, all the donors were examined and it was found that though they were close relative of the assessee, their financial capacity was not sound as could be accepted strong enough for making gifts to the assessee and finally the entire gift amount was treated as bogus gift and the same was added to his total income for being taxed. Further, the AO had observed that the same reply had been made by the assessee as was made during the course of assessment proceedings for A.Y.2002-03 and being similar in nature, the Assessing Officer had held that these persons ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uantum of which works out as under:- Total income for which inaccurate Particulars were filed Rs.1,55,000/- Tax sought to be evaded ₹ 39,768/- Minimum penalty leviable @ 100% ₹ 39,768/- M aximum penalty levibale @ 300% Rs.1,19,304/- Against the maximum leviable penalty of Rs.119304/- minimum ₹ 39768/-, I consider it justifiable to levy minimum penalty of ₹ 39,768/- (Rupees Thirty Nine thousand Seven hundred Sixty Eight only)." 3 Aggrieved by the order of the AO, the assessee went in appeal before the learned CIT(A). The learned CIT(A) confirmed the levy of penalty. 4 Further aggrieved, now the assessee is in appeal before us. At the time of hearing before us, the learned counsel for the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under Section 271(1)(c) of the Act. We are unable to sustain the observations of the CIT(A) that the levy of penalty was mandatory and no discretion, is left with the competent authority. In these facts of the case, we hold that it is not a fit case for imposition of penalty under section 271(1)(c) of the Act, which is accordingly cancelled and the grounds of the appeals of the assessee are allowed."
6 In view of above, following the aforesaid order of the Tribunal in the case of Leelaben Labhubhai Lakhani [Group Case] in ITA No.1172 and 1173/Ahd/2009, order dated 02-03- 2012], we delete the penalty.
7 In the result, the appeal is allowed.
Order pronounced in the court today on 11-04-2012 X X X X Extracts X X X X X X X X Extracts X X X X
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