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TMI Blog2021 (1) TMI 1000X X X X Extracts X X X X X X X X Extracts X X X X ..... IGH COURT] - Grounds of appeal raised by the revenue are dismissed. - ITA No. 3979/Mum/2019 - - - Dated:- 30-12-2020 - Pavan Kumar Gadale, Member (J) And Manoj Kumar Aggarwal, Member (A) For the Appellant : Gurbinder Singh, DR ORDER Pavan Kumar Gadale, Member (J) The revenue has filed an appeal against the order of Commissioner of Income Tax (Appeals)-20, Mumbai, passed u/s. 271(1)(c) of the Income Tax Act, 1961. 2. The brief facts of the case are that the assessee is engaged in the business of manufacturing of steel. The books of accounts are audited u/s. 44AB of the Act. The return of income was filed on 30.09.2011 with total income of ₹ 5,47,74,130/- and the return of income was processed u/s. 143(1) of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ate particulars and passed order on 29.03.2017. Aggrieved by the order, the assessee has filed an appeal with the Ld. CIT(A), whereas the Ld. CIT(A) considering the submissions of the assessee and the decision of the Hon'ble High Court of Punjab and Haryana and has directed the A.O. to delete the penalty as the income is assessed on the estimated basis and allowed the appeal. Aggrieved by the order, the revenue has filed an appeal with the Tribunal. 3. At the time of hearing none appeared on behalf of the assessee. We heard the submissions of the Ld. DR The grievance of the revenue is that, the CIT(A) has erred in deleting the penalty irrespective of the fact that the assessee has claimed bogus expenditure in the return of income and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... question of law before the Hon'ble Court was whether penalty is attracted under section 271(1)(c) of the Act where income is assessed purely on estimate basis and additions are made in the declared income on that basis. In that case, the Hon'ble High Court of Punjab Haryana held as under: 4. In order to attract Clause (c) of Section 271(1) of the Act, it is necessary that there must be concealment by the assessee of the particulars of his income or if he furnishes inaccurate particulars of such income. What is to be seen is whether the assessee in the present case had concealed his income as held by the Assessing Officer and the Tribunal. He had not maintained any accounts and he filed his return of income on estimate basis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... against the assessee. The assessee had justified his estimate of income on the basis of household expenditure and other investments made during the relevant period. It is not the case of the Revenue that he had, in fact, incurred expenditure in excess of what he had stated. In this view of the matter, it cannot be said that the explanation furnished by the assessee had not been substantiated or that he had failed to prove that such explanation was not bona fide . 5.2 In view of decision of above, the penalty imposed is not sustainable. The A.O's reliance on the decision of the Hon'ble Apex Court in the case of MAK data Pvt. Ltd., Vs. CIT (supra) is misplaced because in this case the disallowance/addition was not based on any co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n if these conditions do not exist in the assessment order passed, at least, a direction to initiate proceedings under Section 271(1)(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 liability is admitted is not automatic. (k) Even if the assessee has not challenged the order of assessment levying tax and interest and has paid tax and interest that by itself would not be sufficient for the authorities either to initiate pena ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... where all the ground mentioned in Section 271 are mentioned would not satisfy requirement of law. (r) The assessee should know the grounds which he has to meet specifically. Otherwise, principles of natural justice is offended. On the basis of such proceedings, no penalty could be imposed to the assessee. (s) Taking up of penalty proceedings on one limb and finding the assessee guilty of another limb is bad in law. (t) The penalty proceedings are distinct from the assessment proceedings. The proceedings for imposition of penalty though emanate from proceedings of assessment, it is independent and separate aspect of the proceedings. (u) The findings recorded in the assessment proceedings insofar as concealment of income ..... X X X X Extracts X X X X X X X X Extracts X X X X
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