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TMI Blog2016 (12) TMI 110X X X X Extracts X X X X X X X X Extracts X X X X ..... .s. 274 provides for a reasonable opportunity to be given to the assessee so that he can avail the opportunity to defend himself. Where the penalty proceedings are initiated on a particular footing or charge of concealment of income but final conclusion of levy of penalty is based upon some different footing altogether of concealment of income and also furnishing of inaccurate particulars of income, in that case it can not be presumed that the assessee has been given a reasonable opportunity of being heard before order imposing penalty is passed. In such case the imposition is not justified. Accordingly we set aside the order of CIT(A) and direct the AO to delete the penalty - Decided in favour of assessee - I.T.A. No.5757/Mum/2014 - - - D ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nly. During the assessment proceedings, the AO noted that the assessee has account with HDFC bank was not disclosed in the books of account which has failed to mentioned cash in hand is showing credit balances at many instances. Accordingly made addition of ₹ 4,84,000/- on account of peak of such credit balances and levied penalty of ₹ 1,64,512/- for concealing the income and also furnishing in accurate particulars of income. The matter carried before the First Appellate Authority, who dismissed the appeal of the assessee after considering the submissions which are incorporated at page 4 of the appellate order and relying on the various decisions such as Hon ble Delhi High Court in the case of Zoom Communications P Ltd 327 ITR 5 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... end result i.e withholding a certain portion of the income from returned income. Thus, on a perusal of the section it is apparent that the penal provision will operate when there is a failure to disclose fully or truly all the particulars. In essence, when any fact material to the determination of an item as income or material to the correct computation is not filed or that which is filed is not accurate, then the assessee would be liable to penalty under section 271(1)(c) of the Act. 5.3 In the decision rendered by the Supreme Court in the case of Dharmendra Textile Processors reported at 306 ITR 277, the Apex Court Clarified that mensrea was not required to be proved for levy of penalty but also held that levy of penalty is not auto ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... are not picked up for scrutiny. This would take away the deterrent effect, which these penalty provisions in the Act have. 5.5 In the decision rendered in the case of Bhairav Lal Verma V/s UOI reported at 230 ITR 855, the Hon ble Allahabad High Court while interpreting the work voluntarily given in section 273(A) of the Act, held as under : The position thus settled is that the word voluntarily in Section 273A of the Act means out of free will without any compulsion. Disclosure of concealed income after the Department has seized the incriminating material with regard to the income so disclosed, cannot be voluntary disclosure, because it was made under the constraint of exposure to adverse action by the Department 5.6 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of the assessee. The Revenue is entitled to know the same and if the nature and source of the amount are not explained, it is entitled to draw the inference that the amount represents the assessee's taxable Income. Though this principle was originally confined to the assessment proceedings, the Explanation has extended it to penalty proceedings also, presumably on the assumption that the furnishing of an explanation regarding the nature and source would have compromised the assessee's position. It is the assessee who has received the monies and is in the knowledge of all the facts relevant and material in relation to the receipt. Therefore, it should be in a position to offer an explanation and disclose the material facts regardin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... culars of income whereas the penalty was imposed while framing the order u/s 271(1)(c) of the Act on concealment of income and also for furnishing inaccurate particulars of income. So now the issue is whether the AO can initiate penalty on the charge of furnishing of inaccurate particulars of income and levy on both charges of concealment of income and furnishing of inaccurate particulars of income. According to us there must be a precise charge and imposition of penalty must be on that footing only. In our view , before levying penalty on the assessee, the AO must apprise the assessee of the precise charge levelled against him. He must be told vividly whether he is guilty of concealment of income or for furnishing inaccurate particulars of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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