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TMI Blog2018 (6) TMI 1277X X X X Extracts X X X X X X X X Extracts X X X X ..... I G.D. AGRAWAL, HON BLE PRESIDENT AND SHRI KULDIP SINGH, JUDICIAL MEMBER For The Assessee : Sh. Kapil Goel (Adv.) For The Revenue : Sh. B.R. Mishra (Sr. DR) ORDER PER: KULDIP SINGH, JM The Appellant, Mayasheel Construction (hereinafter referred to as the Assessee ) by filing the present appeal, sought to set aside the impugned order dated 29.09.2017 qua Assessment Year 2012-13 passed by Ld. CIT(A) Ghaziabad, deleting the penalty levied under section 271(1)(c) of the Income-tax Act, 1961 (for short the Act ), on the grounds that:- 1. That on the That on the facts and in the circumstances of the case and in law, Ld CIT-A erred in sustaining the penalty u/s 271(l)(c) of the Act amounting to ₹ 68,77,152 as levied by Ld AO, in hands of appellant who is civil contractor, on basis of additions made in assessment order dated 25/03/2015 in turn founded on survey conducted on 11.09.2014 (during the course of ongoing scrutiny proceedings) and where assessee rapidly on 8/10/2014 and 3/12/2014 voluntarily and in good faith suo motto offered for taxation on estimation basis 8% of gross receipts as its income, which declaration of assessee became t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... with Section 271(1)(c) of the Act, but on failure of the assessee to appear, AO proceeded to hold that the assessee has furnished inaccurate particulars of income and thereby levied the penalty to the tune of ₹ 68,77,152/- @ 100%. 3. The Assessee carried the matter before the Ld. CIT(A) by filing the appeal, who has confirmed the penalty levied by AO by dismissing the appeal. Feeling aggrieved the assessee has come up before the Tribunal by way of filing the present appeal. 4. We have heard the Ld. Authorized Representatives of the parties to the appeal, gone through the documents relied upon and order passed by the revenue authorities below in the light of the facts and circumstances of the case. 5. Undisputedly, assessment framed in this case u/s 143(3) of the Act has been accepted by the assessee and has already paid tax together with interest on the assessed income. It is also not in dispute that during the survey proceeding, the assessee has made suo moto surrender without any condition which was also accepted by the AO. It is also not in dispute that the entire addition made in this case is on the basis of estimation of net profit by the AO. 6. The Ld. AR fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in abeyance. Consequently, the penalty proceeding was kept in abeyance. Now, since the decision of the Ld. CIT(A) has been arrived, penalty proceedings cannot be kept in abeyance. However, before passing an order, I would like to give one opportunity of being heard. You are, therefore, requested to attend in person or through authorized representatives in my office 15.02.2017 at 11.30AM and produce evidence in support of your contention. In case you do not wish to avail the opportunity of being heard, your written reply alongwith necessary evidence whatsoever may please be filed by the aforesaid date. In case the aforesaid explanation has already been sent, you are requested to give a copy thereof, which will be deemed proper compliance. Please note that if no compliance is made on the above date or your reply is without evidence, penalty proceedings will be finalized on merits of the case and on the basis of facts available on record. Sd/- ( Meenu Singh Bist) DY. Commissioner of Income Tax Circle-1, Ghaziabad 10. Undisputedly, additions made against the assessee during the quantum proceedings have already been confirmed. It is s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not an essential ingredient for attracting civil liability. d) Existence of conditions stipulated in Section 271(l)(c) is a sine qua non for initiation of penalty proceedings under Section 271. e) The existence of such conditions should be discernible from the Assessment Order or order of the Appellate Authority or Revisional Authority. f) Ever if there is no specific finding regarding the existence of the conditions mentioned in Section 271(l)(c), at least the facts set out in Explanation 1(A) (B) it should be discernible from the said order which would by a legal fiction constitute concealment because of deeming provision. g) Even if these conditions do not exist in the assessment order passed, at least, a direction to initiate proceedings under Section 271(l)(c) is a sine qua non for the Assessment Officer to initiate the proceedings because of the deeming provision contained in Section 1(B). h) The said deeming provisions are not applicable to the orders passed by the Commissioner of Appeals and the Commissioner. i) The imposition of penalty is not automatic. j) Imposition of penalty even if the tax liabil ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... u) The findings recorded in the assessment proceedings in so far as concealment of income and furnishing of incorrect particulars would not operate as res judicata in the penalty proceedings. It is open to the assessee to contest the said proceedings on merits. However, the validity of the assessment or reassessment in pursuance of which penalty is levied, cannot be the subject matter of penalty proceedings. The assessment or reassessment cannot be declared as invalid in the penalty proceedings. 15. So, following the law laid down by Hon ble High Court, we are of the considered view that when the assessee has not been specifically made aware of the charges leveled against him, as to whether there is a concealment of income or furnishing of inaccurate particulars of income on his part, the penalty u/s 271(l)(c) of the Act is not sustainable. The case law relied upon by the Ld. DR is not applicable to the facts and circumstances of this case in the face of the decisions rendered by the Hon ble High Court in Manjunatha Cotton and Ginning Factory Ors. (supra). 16. Next contention raised by Ld. AR for the assessee is that in case of suo moto surren ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... article or thing, therefore, it is for the authorised officer to record the statement in his own way. Therefore, it is not expected from the person to state those things, which are not asked by the authorised officer. During the course of search person is so tortured, harassed and put to a mental agony that he loses his normal mental state Of mind and at that stage it cannot be expected from a person to preempt the statement required to be given in law as a part of his defence. Under s. 132(4}, unless the authorised officer puts a specific question with regard to the manner in which income has been derived, it is not expected from the person to make a statement in this regard and in case in the statement the manner in which income has been derived has not been stated but has been stated subsequently, that amounts to the compliance with Expln. 5(2). In case, there is nothing to the contrary in the statement recorded under s. 132 (4), in the absence of any specific statement about the manner in which such income has been derived, it can be inferred that such undisclosed income was derived from the business which he was carrying on or from other sources. The object of the provision i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sh that the assessee had concealed any particular of his income or had furnished inaccurate particulars of his income. In fact in the instant case as the assessment order itself disclosed, the assessing 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 the present case, not decisive of the issue whether penalty had been validly imposed. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e or it had furnished inaccurate particulars of it's income. In either situation penal provisions would get attracted if there has been a failure of duty, created by the Act or the Rules framed thereunder to fully and truly disclose the particulars of the income. In 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 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 a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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