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TMI Blog2019 (2) TMI 281X X X X Extracts X X X X X X X X Extracts X X X X ..... o construed strictly and there is no margin of error when penalties are to be levied. Thus, in our considered view penalty on the addition is bad in law and deserves to be deleted. Levy of penalty u/s. 271AAA - Held that:- AR has not been able to show any perversity in the order of Commissioner of Income Tax (Appeals) in partly confirming levy of penalty u/s. 271AAA of the Act. No reason to interfere with the well reasoned order of Commissioner of Income Tax (Appeals). Accordingly, the same is upheld and the appeal of assessee is dismissed. - ITA Nos.1162, 1163 & 1164/PUN/2015 - - - Dated:- 31-1-2019 - Shri R.S. Syal, Vice President And Shri Vikas Awasthy, JM For the Assessee : Shri Sanket Joshi For the Revenue : Shri Sudhendu Das ORDER PER VIKAS AWASTHY, JM : The two appeals in ITA Nos. 1162 1163/PUN/2015 have been filed by the assessee assailing the order of Commissioner of Income Tax (Appeals)-I, Nashik dated 13-05-2014 common order for assessment years 2004-05 and 2005-06 confirming levy of penalty u/s. 271(1)(c) of the Income Tax Act, 1961 (hereinafter referred to as the Act ). ITA No. 1164/PUN/2015 is against the order of Commissioner of Inc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gs u/s. 271(1)(c) and subsequently levying the penalty u/s. 271(1)(c) on the wrong charge of 'concealment of particulars of income' in respect of the additional income declared by the assessee towards amounts reflected in balance sheet as 'advances from customers' of ₹ 7,25,500/- and 'gifts from relatives' of ₹ 3,10,450/- and hence, the penalty order may be declared as bad in law. 4. Shri Sanket Joshi appearing on behalf of the assessee fairly conceded at the outset that the Tribunal has confirmed levy of penalty u/s. 271(1)(c) on similar set of facts on merits in the appeals by Department in ITA Nos. 1251 to 1254/PN/2013 for assessment years 2006-07 to 2009-10 decided on 29-01-2016 qua additional income offered in statement recorded u/s. 132(4) of the Act. The ld. AR submitted that the assessee in present set of appeals has raised additional ground assailing levy of penalty u/s. 271(1)(c) on wrong charge. The ld. AR submitted that the penalty u/s. 271(1)(c) has been levied in respect of amounts reflected in the Balance Sheet as Advances from Customers ₹ 7,25,500/- and Gifts from relatives ₹ 3,10,450/- . Thus, it is not a cas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d for concealment of income. The assessee had disclosed additional income in return of income filed in response to notice u/s. 153A. The said income was never declared by the assessee in the original return, hence it is the case of concealment of income. 7. We have heard the submissions made by representatives of rival sides and have perused the orders of authorities below. The assessee has assailed levy of penalty u/s. 271(1)(c) r.w. Explanation 5A. The ld. AR has admitted that on merits the Tribunal has confirmed levy of penalty in respect of additional income declared in assessment years 2006-07 to 2009-10. 8. The assessee in the present appeal has raised additional ground challenging levy of penalty u/s. 271(1)(c) of the Act on wrong charge of concealment of income . The assessee has questioned the correctness of charge for levy of penalty u/s. 271(1)(c) for the first time before Tribunal by raising additional ground of appeal. The issue raised by assessee by way of additional ground of appeal goes to the root of penalty proceedings and is legal in nature. The facts are already on record, no new appreciation of documents is required. In line with the law laid down b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (supra) has further elaborated the meaning of these two expressions by placing reliance on the decision rendered in the case of Commissioner of Income Tax Vs. Reliance Petroproducts (P.) Ltd. (supra). The findings of the Hon ble High Court are as under : 8. At this juncture it may be apposite to refer to the decision of the Supreme Court in the case of Commissioner of Income Tax v. Reliance Petroproducts Pvt. Ltd., (2010) 322 ITR 158, wherein the court while interpreting the provisions of section 271(1)(c) of the Act, has held that a glance at the said provision would suggest that in order to be covered by it, there has to be concealment of the particulars of the income of the assessee. Secondly, the assessee must have furnished inaccurate particulars of his income. In the facts of that case, the court found that it was not a case of concealment of the particulars of the income, nor was it the case of the revenue either. However, the counsel for the revenue suggested that by making an incorrect claim for the expenditure on interest, the assessee had furnished inaccurate particulars of income. The court observed that it had to only see as to whether in that case, as a matter o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xxxxxxxxxx 12. Where the assessee has completely withheld information about the income generated and there is no mention of such income either in the books or the return of income, such suppression of income would fall within the expression concealment of income . It is not so in the present case. The assessee has made wrongful claim of bogus expenditure, therefore, it would be a case of furnishing of inaccurate particulars of income. Thus, in our considered view the Assessing Officer while recording satisfaction for levying penalty has erred in invoking wrong limb of section 271(1)(c). Consequently, the penalty has been levied under wrong charge for concealment of income. It is a case of furnishing of inaccurate particulars of income and not concealment of income. Since, the penalty u/s. 271(1)(c) has been levied on wrong charge, the same is unsustainable. Accordingly, the impugned order is set aside and the appeal of assessee is allowed. 12. In the present case as has been pointed by the ld. AR the amounts were duly reflected in the Balance Sheet under the head Advances from Customers and Capital Account . This fact has not been disputed by the Revenue. Thus, i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ars of income' in respect of the additional income declared by the assessee towards amounts reflected in balance sheet as 'advances from customers' of ₹ 11,53,000/- and hence, the penalty order may be declared as bad in law. 16. As the facts in assessment years 2004-05 and 2005-06 are similar and levy of penalty has been challenged by raising identical additional ground, the findings given by us while adjudicating the appeal of assessee for assessment year 2004-05 would mutatis mutandis apply to assessment year 2005-06. Accordingly, the appeal of assessee for assessment year 2005-06 is allowed. 17. In the result, the appeal of assessee in ITA No. 1163/PUN/2015 is allowed. ITA No. 1164/PUN/2015 (A.Y. 2010-11) 18. This appeal by the assessee is directed against the order of Commissioner of Income Tax (Appeals)-I Nashik confirming levy of penalty u/s. 271AAA of the Act. The Assessing Officer vide order dated 29-06- 2012 levied penalty of ₹ 1,91,815/- in respect of total undisclosed income of ₹ 19,18,149/-. Against the said order levying penalty u/s. 271AAA, the assessee filed appeal before the Commissioner of Income Tax (Appeals). T ..... X X X X Extracts X X X X X X X X Extracts X X X X
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