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TMI Blog2018 (8) TMI 1312X X X X Extracts X X X X X X X X Extracts X X X X ..... sued u/s 274 r.w.s. 271(1)(c) of the Income-tax Act, 1961. 3. The brief facts of the case extracted from ITA No.5106/Mum/2017 for AY 1996-97 are that the assessee company is engaged in the business of trading in iron & steel. A survey action u/s 133(6) of the I.T. Act, 1961 was conducted in the group companies of Anil Exim (Pvt) Ltd and assessee being part of the group was also covered under survey action. During the course of survey, it was noticed that the assessee was involved in hawala transactions, i.e. providing accommodation entries without actual delivery of goods. Therefore the assessment was reopened u/s 147 and accordingly assessment has been completed u/s 143(3) r.w.s. 147 of the I.T. Act, 1961 wherein the income of the assessee was assessed at Rs. 15,40,950 by estimating 1% profit on gross turnover. Aggrieved by the assessment order, assessee carried the matter in appeal before the CIT(A). The Ld.CIT(A) has directed the AO to estimate profit @0.4% of gross turnover. On further appeal, the ITAT has set aside the matter to the AO with a direction to estimate income at 1% of total turnover and allow certain administrative expenses. The AO, while completing the assessment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in turnover in respect of sister concerns which can not 3 be considered in the penalty proceedings. In is pertinent to mention here that trie assessee has never claimed the deduction on account of turnover of sister concerns. The same was first time claimed before the CIT(A) while filing appeal against the assessment order passed U/s 143(3) r.w.s. 254 of the I.T.Act,1961 on 22/12/2009. The Hon'ble CIT(A) duly discussed/considered the claim of the assessee and dismissed the same. * The assessee company could not furnish any evidences of whatsoever to show that there was no concealment of income, sake of argument, even if the claim of assessee regarding ction on account of turnover of the sister concerns is relied upon or considered, it come to conclude that the assessee has concealed the income. The only difference would be amount of concealed income. This clearly shows that the assessee has concealed the income by furnishing inaccurate particulars of income. Without going into the quantum, the assessee company had itself admitted to have earned income in 'hawala' transactions over and above the declared income in the return of income which has also been detected by As ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1(1)(c) of the Act. The relevant portion of the order of the Ld.CIT(A) is extracted below:- 5. I have carefully considered (he facts of the case, findings of the AO in the assessment orders as well as penalty order, submissions of the Ld, AR and material placed on record. From the facts of the case it is noticed that the historical facts of the case have been discussed in detail in the foregoing paras of the appeal order, hence not reproduced to avoid repetition. The appellant is engaged in the business of hawala transactions from a flat no. 204, Quay Street, first floor, Darukhana, Ray Road, Mumbai. In this case a survey action u/s 133A of the Act was carried out. The survey party noticed that the appellant and other associate concerns, operating from the above flat, were providing accommodation entries to various clients, as per their requirement, after charging a nominal commission and accordingly earned the taxable income. In-spitc of having taxable income, the appellant had not declared/offered correctly the same for tax. The Hon'ble ITAT, keeping in mind the facts of the case, submission of the appellant, finding of the AO in the assessment order and that of CIT(A) in t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ries to parties and income from the same had not been declared by the appellant in its return of income for the year under consideration. !i is an admitted fact that the appellant was issuing accommodation bills. Therefore, it cannot be said that the penalty u/s. 27l(l)(c) of the I. T. Act has been imposed in the appellant's case mechanically or only on the basis of addition made in the assessment order. The fad of appellant 's issuing accommodation bills, was found out during the course of survey at the appellant 's premises. 13. As far as the issue of estimation of appellant's income is concerned, it is seen that the same has been done on the basis of the directions of the Hon'ble ITAT, Mumbai, which has been upheld by the Hon'ble ITAT in three rounds of appeals on the same issue. Therefore, in the appellant's case it cannot be said that some wild guess has been made or the income of the appellant has been estimated on some assumption etc. Therefore, the judgments relied upon by the appellant are not applicable in its case as the appellant had not disclosed income from the business of issuing accommodation bills in its return of income for the year under co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... particulars of income. The Ld.AR for the assessee, referring to notice issued u/s 274 r.w.s. 271(1)(c) dated 22-12-2009 submitted that the AO has issued printed form of notice without striking off irrelevant portion in the notice. Therefore, it is a clear case of non application of mind by the AO before initiation of penalty proceedings, therefore, penalty order passed u/s 271(1)(c) in pursuance of a vague notice is bad in law and liable to be quashed. In support of his argument, he relied upon the decision of Hon'ble Supreme Court in the case of SSA Emerald Meadows (2010) 386 ITR 1 (SC). The assessee also relied upon the decision of Hon'ble Bombay High Court in the case of CIT vs Samson Perincherry (2017) 98 CCH 39 and the decision of Hon'ble Karnataka High Court in the case of Manjunatha Cottona & Ginning Factory (2013) 369 ITR 565 (Kar). 7. On the other hand, the Ld.DR strongly supported order of the Ld.CIT(A) and submitted that the assessee has concealed particulars of its income which is evident from the fact that the AO has gathered information about concealment of income in pursuance of survey action conducted u/s 133A where it was noticed that the assessee was involved in ..... 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