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TMI Blog2017 (5) TMI 574X X X X Extracts X X X X X X X X Extracts X X X X ..... we restore the issue to the file of the AO for considering the submissions of the assessee with regard to the quantum on which the penalty has to be worked out. Therefore, this appeal stands allowed for statistical purposes. - I.T.A. No. 1212-1213/DEL/2012 - - - Dated:- 21-4-2017 - Shri G.D. Agrawal, Hon ble President And Shri Sudhanshu Srivastava, Judicial Member Appellant by : Shri Sanjay Garg, CA Respondent by : Shri A.K. Saroha, CIT DR ORDER Per Sudhanshu Srivastava, JM Both these appeals have been preferred by the assessee. ITA No. 1212/Del/2012 has been filed against the order passed by the Ld. Commissioner of Income Tax (Appeals) XXXIII, New Delhi dated 30/12/2012 wherein the Ld. CIT (Appeals) has confirmed penalty of ₹ 3,65,925/- imposed under section 271 (1) (c) of the Income Tax Act, 1961 (hereinafter called the Act ). The relevant assessment year is 2005-2006. 1.1 ITA No. 1213/DEL/2012 has been filed against the order passed by the Ld. Commissioner of Income Tax (Appeals) XXXIII, New Delhi dated 30/12/2011 confirming imposition of penalty of ₹ 4,55,588/- under section 271 (1) (c) of the Act for assessment year 2006-2007. Both ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... year 2006-2007 are that during the course of survey operation under section 133A of the act, physical stock taking was done and it was found that there was a difference of 18,082 kg in the stock as per books of accounts and the actual stock found in inventory taking during the course of survey operation. As per the AO, the assessee failed to reconcile the difference in stock and had conceded that there was a difference of 17,882 kg in the stock as on the date of survey and the same was offered by the assessee company for tax. The value of stock was worked out at ₹ 13,53,500/- by taking average purchase price of each item and an addition of the amount was made to the income of the assessee company for the year under consideration. Subsequently, penalty proceedings under section 271 (1) (c) of the Act were initiated and the penalty of ₹ 4,55,588/- was imposed. Aggrieved, the assessee preferred an appeal before the Ld. CIT (Appeals) who confirmed the penalty and now the assessee is in appeal before the ITAT and has raised the following grounds of appeal 1. Because the ld. CIT has erred in law and on facts in sustaining the penalty imposed by the Assessing Officer. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t should specifically state the grounds mentioned in section 271 (1) (c), that is whether it is for concealment of income or for furnishing of inaccurate particulars of income. The Ld. Authorised Representative submitted that in the present case, neither in the assessment order nor in the show cause notice issued under section 274, the assessee was made aware as to on what ground were the penalty proceedings initiated or the show cause notice was being issued. It was further submitted that merely because the assessee did not file an appeal, the same cannot be considered as an admittance and, therefore, without showing that the explanation of the assessee was false or not bona fide, no penalty could have been validly imposed in the present case. It was submitted that the provisions of section 68 permitting the assessing officer to treat unexplained cash credit as income were enabling provisions for making certain additions where there was a failure on the part of the assessee to give an explanation or where the explanation was not to the satisfaction of the assessing officer. It was submitted that the addition on this account would not automatically justify the imposition of penalty ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the case of Mak Data Private Limited versus CIT reported in 38 taxman.com 448 has laid down that the AO has to satisfy himself whether the penalty proceedings be initiated or not during the course of assessment proceedings and that the AO is not required to record his satisfaction in a particular manner or to reduce it in writing. The Ld. Departmental Representative further submitted that the Hon ble Supreme Court has further clarified that the AO is not to be carried away by the plea of the assessee like voluntary disclosure , buy peace , avoid litigation , amicable settlement etc to explain its conduct and that the initiation of penalty proceedings is to be made during assessment proceedings and after that it is a matter of judicial proceedings as to whether the case is covered under section 271 (1) (c) are not. The Ld. Departmental Representative submitted that the mention by the AO about the admittance by the assessee for filing inaccurate particulars of income cannot be construed as to mean that the AO had levied penalty for filing inaccurate particulars only. The Ld. Departmental Representative submitted that in light of the judicial precedents and the conduct of the as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the appeal for AY 2005-06 is concerned, it is clear that in the instant case it cannot be said that the assessee had withheld any relevant information regarding the receipts and income from the AO. The amounts added back by the AO were the amounts disclosed by the assessee itself. With regard to the provisions of section 271(1)(c ) of the Act pertaining to penalty, the Hon ble Apex Court has authoritatively laid down that making of a claim by the assessee which is not sustainable will not tantamount to furnishing inaccurate particulars. In CIT vs. Reliance Petroproducts Pvt. Ltd. 322 ITR 158 (SC), the Hon ble Apex Court has held as follows: A glance at this provision would suggest that in order to be covered, there has to be concealment of particulars of the income of the assessee. Secondly, the assessee must have furnished inaccurate particulars of his income. The present is not a case of concealment of income. That is not the case of the Revenue either. However, the Ld. Counsel for the revenue suggested that by making incorrect claim for the expenditure on interest, the assessee has furnished inaccurate particulars of income. As per Law Lexicon, the meaning of the word par ..... X X X X Extracts X X X X X X X X Extracts X X X X
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