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TMI Blog2018 (1) TMI 454X X X X Extracts X X X X X X X X Extracts X X X X ..... arlier division bench judgement of this Court that rejection of books of account did not automatically lead to the conclusion of concealment or submission of inaccurate particulars of income. - Decided in favour of assessee - Income Tax Appeal No. 82 of 2017 - - - Dated:- 19-12-2017 - Hon'ble Bharati Sapru And Hon'ble Saumitra Dayal Singh, JJ. For the Appellant : C.S.C.,Gaurav Mahajan For the Respondent : Rahul Agarwal ORDER Heard Sri Gaurav Mahajan, learned counsel for the appellant and Sri Rahul Agarwal, learned counsel for the respondent. This appeal has been filed by the revenue under Section 260-A of the Income Tax Act, 1961 (hereinafter referred to as 'the Act') against the order of the Income Tax Appellate Tribunal, Lucknow Bench dated 28.07.2014 arising from the penalty order under Section 271 (1) (c) of the Act for the A.Y. 2009-10. The instant appeal was admitted on the following question of law: Whether the Tribunal erred in deleting the penalty imposed under Section 271(1)(c) of the Act despite the fact that the books of accounts of the assessee were rejected and thereafter, the assessee made the surrender? In brief, th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... her or further finding, either as to the satisfaction of the assessing officer that the assessee had concealed particulars of his income or had furnished inaccurate particulars of income, he proceeded to impose penalty in respect of the income assessed at ₹ 1,00,92,363/-. The assessing officer appears to have only recorded his conclusion based on above inference that it is clearly evident that the assessee had concealed its income and furnished inaccurate particulars of its income. The Commissioner (Appeals) rejected the assessee's appeal against the penalty order. The Tribunal has by the impugned order deleted the penalty. While doing so, the Tribunal has found that there was no material on record to establish how the assessee had concealed its income or how it had furnished inaccurate particulars of income. The said finding has been recorded in the context of the conclusion recorded by the assessing officer as extracted above. Thus, according to the Tribunal, the conclusion recorded by the assessing officer that the assessee had concealed it's income and furnished inaccurate particulars of income was not founded or any reasoning or basis. The Tribunal then foll ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rvey proceedings. In fact neither in the assessment order nor in the penalty order their exists a recital of any fact that may lead to such a conclusion. According to him though the assessing officer rejected the books of account of the assessee but he did not make any addition to the income of the assessee on the basis of any material discovered in the course of survey proceedings. In fact neither any addition was made on that count nor any addition was otherwise made to the income of the assessee. Ultimately, the income was assessed as disclosed in the return filed by the assessee. Also, it has been submitted that to impose a valid penalty under Section 271(1)(c) of the Act, the assessing officer had to be satisfied as to the existence of one of the two conditions i.e. either that the assessee had concealed particulars of it's income or that it had furnished inaccurate particulars of it's income. In the present case he has not recorded his satisfaction as to presence of either of the two pre-conditions. According to learned counsel for the assessee, the assessing officer had in this case recorded a self conflicting finding in so far he has stated that the assessee h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessing officer merely relied on the computation of income made by the assessee in the return itself. In this regard, it is seen in the assessment order itself the assessing authority had also recorded It may be emphasized that nothing incriminating evidencing the unexplained expenses debited in the P L Account during the year under consideration were found during the course of survey operation . Also, it was found that the audited balance sheets filed by the assessee with the banks and the Registrar of Companies tallied with those filed with the return. Thus, the penalty order is silent as to reason/s how the assessing officer had concluded that the assessee had concealed it's income furnished inaccurate particulars of his income. Then, the fact that the assessee had offered to tax (by way of surrender) the income in respect of which penalty had been imposed is, in the facts of th present case, not decisive of the issue whether penalty had been validly imposed. In a given set of facts where some material evidence is unearthed disclosing concealed income or in face of which the particulars of income disclosed by the assessee are declared inaccurate, it may be open ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... case the assessing officer alleged 'concealment' of such particulars it would have to be alleged and established as a fact that the assessee actively did not disclose such particulars. Similarly, in case the assessing officer alleged furnishing of inaccurate particulars of income he would have to establish which particular of income furnished was inaccurate that had a material bearing on determination/assessment of the true income of the assessee. In absence of any factual allegation in that regard it is difficult to sustain the submissions made by learned counsel for the revenue that the assessee had concealed particulars of his income or that he had furnished inaccurate particulars of his income. There can be no presumption as to fact of infraction of law committed by the assessee. Again, though as a possibility, it may not be denied that in a given set of facts the assessing officer may be able to successfully allege and establish that the assessee both 'concealment of particulars of income' and also 'furnished inaccurate particulars of income' but again these are contingencies or fact circumstance that must be alleged and found to be existing, simulta ..... X X X X Extracts X X X X X X X X Extracts X X X X
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