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TMI Blog2017 (5) TMI 1418X X X X Extracts X X X X X X X X Extracts X X X X ..... sessee. In the present case, the assessee has discharged the burden by giving detailed explanation before the AO. The AO simply rejected the explanation without discharging the burden cast upon him, as the assessee has disclosed the particulars of income in the scrutiny assessment.We find that neither the AO nor the CIT(A) has dealt with the issue in correct perspective. Thus we are of the view that the case of the assessee is not a fit case to attract the provisions of section 271(1)(c) - Decided in favour of assessee. - I.T.A. Nos. 1365, 1366 & 1367/HYD/2015 - - - Dated:- 26-5-2017 - SHRI B. RAMAKOTAIAH, ACCOUNTANT MEMBER, AND SHRI V. DURGA RAO, JUDICIAL MEMBER For The Assessee : Shri Mohd. Afzal For The Revenue : Smt. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... While completing the assessment, the AO initiated penalty proceedings u/s 271(1)(c) of the Act on the ground that the assessee has concealed his income or furnished inaccurate particulars of his income and called for explanation from the assessee. In response, the assessee submitted a detailed submission as under: During the course of assessments proceeding, I voluntarily offered for taxation the Peak credit of ₹ 36,90,956/- in the Bank accounts, which was omitted to be shown! declared in the Original Return of Income filed by me. I also offered for taxation Bank interest and other income credited in Bank accounts amounting. to ₹ 82,235/- and ₹ 2,16,730/- respectively for the assessment year 2011-2012. I also submitte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... A), the CIT(A) confirmed the order of the AO by observing that assessee has not disclosed the correct income in the original return of income and also not filed revised return of income. 4. Being aggrieved, the assessee is in appeal before us. 5. Before us, ld. Counsel for the assessee submitted that though the assessee has not disclosed the details of bank accounts in the return of income, he has explained the reasons before the AO, but, the AO simply rejected the explanation offered by the assessee without examining the genuineness of the explanation. He also submitted that it is not a case of the AO that the explanation given by the assessee is neither false nor bonafide and, therefore, submitted that the penalty u/s 271(1)(c) is n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the ground that if the scrutiny assessment is not taken place, the assessee would not have disclosed the details of bank accounts. According to the assessee, it is not a case of the AO that the explanation given by the assessee is neither false nor bonafide and once the details have been disclosed and paid taxes, though no revised return is filed, on technical grounds penalty cannot be levied u/s 271(1)(c) of the Act. In this context, whether the case of the assessee is attracted penalty u/s 271(1)(c) or not, we refer to the following cases, on which reliance placed by the assessee: 6.1 In the case of Manjunatha Cotton Ginning Factory (supra), the Hon ble Karnataka High Court has observed that the condition precedent for levying the pena ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the reasons for non-disclosure at the time of filing of original return of income. In this case, The AO simply rejected the explanation offered by the assessee. However, it is not the case of the AO that explanation offered by the assessee is neither false nor bonafide. The only ground for rejection of explanation by the AO is that disclosure was made by the assessee in the scrutiny assessment proceedings. Therefore, it cannot be presumed that the explanation given by the assessee neither false nor bonafide. Unless the AO specifically mentions that explanation offered by the assessee is false and not bonafide. Therefore, the explanation offered by the assessee is presumed to be a genuine one. In the present case, such observation was not m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... td. (supra) is concerned, the very same judgment has been considered by the Hon ble Madras High Court in the case of CIT Vs. M/s Gem Granites (supra), observed that the Hon ble Supreme Court while considering the Explanation to section 271(1), held that the question would be whether the assessee had offered an explanation for concealment of particulars of income or furnishing inaccurate particulars of income and the Explanation to section 271(1) raises a presumption of concealment, when a difference is noticed by the assessing officer between the reported and assessed income. The burden is then on the assessee to show otherwise, by cogent and reliable evidence and when the initial onus placed by the explanation, has been discharged by the a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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