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TMI Blog2019 (5) TMI 345X X X X Extracts X X X X X X X X Extracts X X X X ..... ovided incorrect facts which were marshaled by the A.O. It would show that assessee s disclosure was not voluntary but under compulsion when cornered by the A.O. at the assessment stage. The assessee did not offer any explanation on any of the above issues either at the assessment stage or at the penalty proceedings. Explanation-1 to Section 271(1)(c) is clearly attracted. Had the case would not have been selected for scrutiny assessment, the assessee would not have surrendered the amount in question for the purpose of taxation. The assessee, therefore, had guilty mind and show that assessee concealed the particulars of income from the Revenue Department which invited penalty proceedings under section 271(1)(c) of the I.T. Act, 1961. - Decided against assessee. X X X X Extracts X X X X X X X X Extracts X X X X ..... of the three sundry creditors namely (1) ART N Glass Inc., (2) Critianbas Masi and (3) Syali in a sum of ₹ 1,33,897/-. Assessee did not provide any details to the query of the A.O. and ultimately, surrendered the amount of ₹ 1,33,897/-. The A.O. treated the same as unexplained credit under section 68 of the I.T. Act, 1961 and made the addition. 6. Thus, on all four issues, the A.O. made total addition of ₹ 17,53,697/-. The A.O. initiated the penalty proceedings for concealing the income. The A.O. vide separate Order, initiated the penalty proceedings under section 271(1)(c) of the I.T. Act, 1961. The assessee, in response to the show cause notice submitted that assessee has surrendered and agreed for the above additions at the assessment stage merely to buy peace of mind and to avoid further litigation. The A.O. however, did not accept the explanation of assessee because the assessee surrendered the amount in question of his own and assessee was not forced to surrender the amount. The assessee made the surrender because he was unable to explain the issue and surrender made because the case was selected for scrutiny. Explanation-1 to Section 271(1)(c) of the Act ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e with the Orders of the authorities below and in levying and confirming the penalty under section 271(1)(c) of the I.T. Act, 1961. It is an admitted fact that the case was selected for scrutiny and A.O. raised questionnaire to the assessee and called for the explanation of assessee on all the above four issues. The assessee instead of explaining any of the above issues or to file any documentary evidences in support of the same, surrendered the amounts in question for taxation. It would, therefore, clearly show that assessee made the surrender of the above amounts in question only when A.O. has confronted the assessee with above issues and cornered the assessee at the assessment stage. Thus, the assessee did not make any voluntary surrender of the amounts in question. The above facts clearly show that assessee had concealed the material facts and given incorrect statement of fact in the return of income. The assessee provided incorrect facts which were marshaled by the A.O. It would show that assessee's disclosure was not voluntary but under compulsion when cornered by the A.O. at the assessment stage. The assessee did not offer any explanation on any of the above issues either at ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gh any evidence or material on record, would amount to concealment of income. Penalty to be imposed under section 271(1)(c) of the I.T. Act." 10.3. The Hon'ble Punjab & Haryana High Court in the case of Basant Singh, Prop. Basant General Store vs. CIT [2017] 399 ITR 247 (P&H) held that "when addition was made to the income in quantum assessment, it would invite levy of penalty under section 271(1)(c) of the Act." 10.4. Learned Counsel for the Assessee lastly contended that assessee surrendered the amount in question to buy peace of mind and to avoid further litigation. However, on such explanation assessee would not be absolved from levy of penalty under section 271(1)(c) of the I.T. Act, 1961. The Hon'ble Supreme Court in the case of Mak Data P. Ltd., vs. CIT [2013] 358 ITR 593 held as under: "Voluntary disclosure does not release the assessee from the mischief of penal proceedings. The law does not provide that when an assessee makes a voluntary disclosure of his concealed income, he has to be absolved from penalty. The Assessing Officer should not be carried away by the plea of the assessee such as "voluntary disclosure", "buy peace", "avoid litigati ..... X X X X Extracts X X X X X X X X Extracts X X X X
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