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TMI Blog2022 (3) TMI 667X X X X Extracts X X X X X X X X Extracts X X X X ..... the purpose of levy of penalty. The penalty u/s 271(1)(c) is liveable, if the Assessing Officer is satisfied in the course of any proceedings under this Act that any person has concealed the particulars of his income or furnished inaccurate particulars of such income. In the present case, the AO passed ex-parte order and has levied penalty for concealment of such income or non furnishing of particulars u/s 271(1)(c). Rightly pointing the issue is that the assessee has not replied or non compliances for the notice issued by the AO, where the penalty should be levied u/s 271(1)(b). Commissioner of Income-tax (Appeals) erred in holding that penalty u/s 271(1)(c) is liveable. He erred upholding the order by the AO, Where the assessee made an attempt to explain and submitted detailed written submissions before CIT(A) and produced the evidences of Bank Accounts, Bank certificate and details of cash deposits also.. There is no failure on part of the assessee in explaining the source of cash deposit, the Bank Statement, Bank certificate. There is no finding of the AO based on some contradictory evidence to disapprove that explanation offered by the assessee was false or the assessee was n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... miti Limited is a Co-operative Society is doing business of trading of food grain and fertilizer and of mini banking and is also modal agency for payment under NAREGA, certificate for registration under Co-operative Society and mini bank kept on record. 3.1 Taxable income of Co-operative Society for Assessment Year 2010-11 was below taxable limit therefore it has not filed any return of income of A.Y 2010-11. 3.2 The Sahakari Samiti is engaged in trading of food grain and fertilizers and also doing work of mini bank. The Sahakari Samiti is also nodal agency for payments made under NAREGA. During the F.Y 2009-10 the Sahakari Samiti has received sum of ₹ 1,81,36,602/- from Government for payments to be made to workers under NAREGA, copies of few sanction letters is enclosed here with. For making payments to workers Sahakari Samiti withdraws cash from bank in lumpsum and at the end of day or a period surplus amount, if any, remains with deposited back in Bank account. 3.3 For distributing the sum so received amongst the workers under Narega Scheme, during the F.Y 2009-10 the Sahakari Samiti has withdrawal sum of ₹ 2,24,27,500/- from bank, through its employee Shri Mahav ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t the assessing officer was justified in levying the penalty u/s 271(1)(c) and dismissed the assessee appeal. 7. Aggrieved by the CIT(A) order, the assessee is in appeal before us. Before the CIT (A), the assessee has reiterated that his submissions and which was not taken on record by the CIT (A). before us the Ld AR for assessee submitted a detailed Written submissions dated 18.02.2022 which are as under "1. Background 1.1 The Appellant is a registered Cooperative Society doing business of Mini Banking and trading of food grain and fertilizer and is also Nodal Agency for Payment under NREGA. [Refer page no. 20 and 25 of Paper Book ('PB')] 1.2 With respect to the subject AY the Ld. AO initiated proceedings u/s 147 of the Act and issued notices under section 148 of the Act at the address VPO Panchala via Phagi Jaipur. 1.3 The proceeding was initiated as an information was received by the Ld. AO that cash of INR 12,51,000/- was deposited in the bank account of the Appellant and no return was filed by the Appellant. Therefore the Ld. AO initiated the proceedings to gather the information about the source of such cash deposited in the bank account. [Refer page 2 of Assessment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ge no 1 to 8 and 30 to 33 of PB] 2.3 In the submission filed on 22 July 2021, the Appellant duly explained the source of cash deposit [Refer page no. 3 of PB], the same is summarized as under: - As the appellant is an authorized nodal agency for payment under NREGA, therefore consideration is received from Government for payments to be made to workers under NREGA. For making payments to workers the Sahakari Samiti withdraws cash from bank in lump sum and at the end of day or a period surplus amount if any, remaining is deposited back in the Bank account. - During the year under consideration the Sahakari Samiti has withdrawn sum of INR 2,24,27,500.00/- from bank and deposited back cash of INR 12,51,000.00/- in bank account. All cash deposit is out of surplus withdrawals made from bank. - The excess cash deposited was on the following dates: Date Amount of Cash Deposited Source of cash deposit 02 April 2009 41,000/- Opening cash 22 April 2009 1,00,000/- Cash withdrawn from bank on 13.04.2009 - INR 10,00,000/- 02 July 2009 60,000/- Cash withdrawn from bank on 29.06.2009 - INR 7,00,000/- 01.07.2009 - INR 50,000/- 29 August 2009 50,000/- Cash withdra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sed the order without taking into consideration the written submission, facts, documents and evidences as furnished by appellant during the proceedings." 8. The Ld AR for assessee submitted that all the evidences were furnished by the assessee before the CIT (A)/NFAC relating to deposit of cash. He further submitted that the assessee in his letter dated 22.07.2021 duly explained the source of cash deposit .The Bank statements and Bank certificate which was enclosed in paper book. Further the Ld AR for assessee submitted that the taxable income of co operative Society for Assessment Year 2010-2011was below taxable limit therefore it has not filed any return of income for AY 2010- 2011. Further he submitted that a copy of audited report was provided during the proceedings. 9. The Ld. DR, on the other hand strongly supporting the order of the CIT(A) submitted that there is no merit in arguments taken by the Ld. AR of the assessee and the AO has rightly taken has a fit case for imposition of penalty U/S 271(1)c. 10. We have heard both the parties, perused materials available on record and gone through orders of the authorities below. The Ld AR for assessee submitted documentary evid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d in the case of CIT Ahmadbad Vs Reliance Petroproducts (P) Ltd(2010) 189 Taxman 322 ,which is not applicable to this instant case. 10.5 The learned Commissioner of Income-tax (Appeals) erred in upholding AO order rather it could have remand back to AO for assessing of Income. 10.6 Taking in consideration of the fact and circumstances and evidences furnished by the Ld AR for assessee before us. With careful consideration and perused the documents in Paper book (pages 1 to 37 pages) dated 14.02.2021 and Written submission dated 18.02.2022. There is no failure on part of the assessee in explaining the source of cash deposit, the Bank Statement, Bank certificate 10.7 The learned Commissioner of Income-tax (Appeals) erred in not considering the assessee submission that the quantum appeal is pending before the CIT (A). It is well-settled that assessment proceedings and penalty proceedings are separate and distinct and as held by the Supreme Court in the case of Ananthraman Veera singhaiah & Co.Vs. CIT [1980] 123 ITR 457, the finding in the assessment proceedings cannot be regarded as conclusive for the purposes of the penalty proceedings. It is, therefore, necessary to reappreciate a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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