S.Badri, Coimbatore V. ITO, Coimbatore

ITA 2607/CHNY/2014

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 9401 (ITAT-CHENNAI)
• Duration Of Justice: 1 year(s) 7 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-05-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 12-04-2016
• Assessment Year: 2009-2010
• Appeal Filed On: 16-10-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: A V SREEKANTH IRS
• Assessee Lawyers: K RAGHU
• Keywords: Source of fund; Revised return
• Section: 6

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, CHENNAI , . ! , '!# BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER AND SHRI G. PAVAN KUMAR, JUDICIAL MEMBER ./ I.T.A. NO. 2607/MDS/2014 ' $ %$ / ASSESSMENT YEAR : 2009-2010 S. BADRI L/H. LATE SMT. S. GOKULAMMAL, 532, VYSIAL STREET, COIMBATORE VS. THE INCOME TAX OFFICER, WARD III(3) COIMBATORE [PAN AAWPG 7891D] ( / APPELLANT) ( /RESPONDENT) &' ( ) / APPELLANT BY : SHRI. K. RAGHU, C.A. *+&' ( ) /RESPONDENT BY : SHRI. A.V. SREEKANTH, IRS, JCIT. ( , / DATE OF HEARING : 12-04-2016 -.% ( , / DATE OF PRONOUNCEMENT : 24-05-2016 / O R D E R PER G. PAVAN KUMAR, JUDICIAL MEMBER : THE APPEAL FILED BY THE ASSESSEE IS DIRECTED AG AINST ORDER OF THE COMMISSIONER OF INCOME-TAX (APPEALS)-I, COIM BATORE IN ITA NO.31/2012-2013, DT 22.08.2014 FOR THE ASSESSMENT Y EAR 2009-2010 PASSED U/S.271(1)(C) AND 250 OF THE INCOME TAX ACT , 1961 (HEREIN AFTER REFERRED TO AS THE ACT). ITA NO.2607/MDS/2014. :- 2 -: 2. THE ASSESSEE HAS RAISED SUBSTANTIVE GROUND THAT COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN C ONFIRMING LEVY OF PENALTY >13,05,300/- U/S.271(1)(C) OF THE ACT WITHO UT APPRECIATING BANK ACCOUNTS AND THE NON DISCLOSURE OF TRANSACTION IN BALANCE SHEET IS NOT WILLFUL AND WONTON. 3. THE BRIEF FACTS OF THE CASE, THE ASSESSEE IS A SENI OR CITIZEN AND FILED HER RETURN OF INCOME FOR THE ASSESSMENT Y EAR 2009-2010 ADMITTING TOTAL INCOME OF >7,42,540/- AND SAME WAS PROCESSED U/S.143(1) OF THE ACT . THE CASE WAS SELECTED FOR S CRUTINY AND NOTICE U/S.143(2) OF THE ACT WAS ISSUED. IN COMPLIANCE TO ABOVE NOTICE, THE LD. AUTHORISED REPRESENTATIVE OF ASSESSEE APPEARED AND FILED DETAILS FOR VERIFICATION. THE LD. ASSESSING OFFICER ALLEGED THAT AS PER THE ANNUAL INFORMATION REPORT (AIR) THE ASSESSEE HAS M ADE CASH DEPOSITS AGGREGATING TO >45,01,000/- WITH THE LAKS HMI VILAS BANK LTD, R.S.PURAM BRANCH, COIMBATORE AND WAS ASKED TO FILE EXPLANATIONS IN THE ASSESSMENT PROCEEDINGS. THE LD. AUTHORISED R EPRESENTATIVE EXPLAINED THAT THE ASSESSEE HAS OMITTED TO ENTER CA SH DEPOSITS IN THE CASH BOOK AND SHE WAS NOT IN A POSITION TO PINPOINT ACCURATELY THE SOURCES AND NATURE OF THE DEPOSITS FURTHER TO BUY P EACE WITH THE DEPARTMENT FILED LETTER DATED 22.11.2011 OFFERING V OLUNTARILY THE ENTIRE DEPOSITS FOR TAXATION AND PAID TAX LIABILIT Y OF >15,00,000/-. THE ITA NO.2607/MDS/2014. :- 3 -: ASSESSING OFFICER COMPLETED THE ASSESSMENT AS UNEXP LAINED INVESTMENTS AND PASSED ORDER U/S.143(3) OF THE ACT DATED 23.11.2011. THE LD. ASSESSING OFFICER ALSO INITIATED PENALTY PR OCEEDINGS BY ISSUE OF NOTICE U/S.274 R.W.S 271(1)(C) OF THE ACT. IN COM PLIANCE TO NOTICE, THE LD. AUTHORISED REPRESENTATIVE OF ASSESSEE APPEARED AND FILED REPLY ON SUBMISSIONS OF THE ASSESSMENT PROCEEDINGS AND ACCE PTANCE OF INCOME VOLUNTARY IN GOOD FAITH BY THE ASSESSEE AND PAID TA X LIABILITY >15,00,000/- BEFORE COMPLETION OF ASSESSMENT. THE L D. AUTHORISED REPRESENTATIVE SUBMISSIONS REFERRED AT PAGE 3 OF TH E ORDER EXPLAINING THE ABOVE REASONS FOR OMISSION TO DISCLOSE IN THE BALANCE SHEET WAS NOT WANTON ACT NOR WILLFUL ACT AND SUPPORTED THE C ONTENTIONS WITH JUDICIAL DECISIONS AS UNDER:- THE ASSESSEE'S AR, IN RESPONSE TO THE PENALTY PROCEEDINGS INITIATED UNDER THE ABOVE MENTIONED PROVISIONS OF THE ACT, HAS FILED A REPLY DATED 28.0 3.2012 STATING THAT THE ASSESSEE HAS VOLUNTARILY DISCLOSED THE INCOME WHICH OUGHT TO HAVE BEEN ADMITTED IN THE ORI GINAL RETURN OF INCOME FILED BEFORE DETECTION BY THE DEPA RTMENT AND THAT SHE HAS ALSO AGREED TO THE ADDITION OF .45,01,000/- BY HERSELF. HE ALSO REPLIED THAT AS THE ASSESSEE HERSELF MADE THE DISCLOSURE OF THE UNACCOU NTED INCOME FOR ASSESSMENT AT THE TIME OF SCRUTINY PROCEEDINGS BEFORE DETECTION BY THE DEPARTMENT, SHE CANNOT BE TREATED AS AN ASSESSEE WHO HAS CONCEALED PARTICULARS OF INCOME OR FURNISHED INACCURATE PARTI CULARS OF SUCH INCOME. HE ALSO REPLIED THAT THE ASSESSEE H AS NOT CONCEALED HER INCOME OR FURNISHED INACCURATE PARTIC ULARS OF HER INCOME. ITA NO.2607/MDS/2014. :- 4 -: HE PRAYED THAT THE PENALTY PROCEEDINGS INITIATED UN DER THE SAID PROVISIONS OF THE ACT MAY BE DROPPED IN VI EW OF THE DECISIONS OF THE HON 'BLE HIGH COURT, MADRAS IN THE CASE OF CIT VS. S.I.PARIPUSHPAM REPORTED IN 249 ITR 550 AND THE HON'BLE HIGH COURT, DELHI IN THE CASE OF CI T VS. KOHINOOR IMPEX PVT LTD. REPORTED IN 270 ITR 381. TH E AR HAS ALSO STATED IN THE REPLY THAT THE TAX DUES ON T HE ADDITION MADE BY THE AO HAVE BEEN FULLY PAID, ACCEP TING THE ADDITIONS. AS THERE WAS A CHANGE IN INCUMBENT, THE CASE WAS ON CE AGAIN POSTED FOR HEARING AND THE AR, IN RESPONSE, APPEARED ON 21.05.2012 AND REITERATED THE SAME WHAT WAS STATED IN HIS REPLY DATED ABOVE. A SHORT ADJOURNMENT WAS SOUGHT BY HIM TO SUBMIT A DETAILED REPLY ON THE PENALTY PROCEEDINGS. ACCORDINGLY, THE CASE POSTED FOR HEARING TO 29.05.2012. HOWEVER, THE ASSESSEE OR HER AR HAS NOT APPEARED BEFORE THIS OFF ICE FOR SUBMISSION OF REPLY AS PROMISED. THE REPLY FILED BY THE ASSESSEE'S AR WAS PERUSED AN D HIS ORAL SUBMISSIONS WERE CONSIDERED. THE AR'S CONTENTION IS THAT THE ASSESSEE HAS VOLUNTARILY OFF ERED THE INCOME OF RS. 45,01 ,000/- FOR ASSESSMENT BEFORE DETECTION BY THE DEPARTMENT AND THAT THE AO HAS MAD E THE ADDITION ON AGREED BASIS. THE SUBMISSIONS MADE BY THE AR ARE NOT ACCEPTABLE. AS ALREADY STATED, THE ASSESSEE FILED HER ORIGINAL RETURN OF INCOME FOR TH E ASSESSMENT YEAR UNDER CONSIDERATION ON 29.07.2009 A ND SCRUTINY NOTICE IN HER CASE WAS ISSUED ON 30.08.201 0. THE PERIOD BETWEEN THE DATES MENTIONED ABOVE, THE ASSESSEE HAD CHOSEN NOT TO FILE ANY REVISED RETURN OF INCOME ADMITTING THE INCOME OMITTED IN THE ORIGINAL RETURN OF INCOME TILED. THE ASSESSEE HAD DISCLOSED ALL HER BANK ACCOUNTS HELD DURING THE FINANCIAL YEAR 20 08-09 ITA NO.2607/MDS/2014. :- 5 -: ALONG WITH THE DETAILS OF BALANCE AT HER CREDIT AS ON 31.03.2009 IN HER REGULAR BOOKS OF ACCOUNT EXCEPT T HE SAVINGS BANK ACCOUNT HELD BY HER WITH LAKSHMI VILAS BANK. ON A PERUSAL OF THE STATEMENT OF ACCOUNT OF THE ASSESSEE'S SAVINGS BANK ACCOUNT WITH THE SAID BANK, IT IS SEEN THAT A TOTAL CASH DEPOSIT OF RS. 45,01,0001- HAS BEEN MADE DURING THE MONTHS OF FEBRUARY AND MARCH 2009. THIS IS A HUGE TRANSACTION WHICH WOULD NOT BE OMITT ED TO DISCLOSE IN THE REGULAR BOOKS OF ACCOUNT MAINTAINED BY ANY PRUDENT TAX PAYER. HOWEVER, THE ASSESSEE HAD NO T ONLY OMITTED THE SAID BANK ACCOUNT IN HER REGULAR B OOKS OF ACCOUNT MAINTAINED BUT ALSO NOT RECTIFIED THE OM ISSION OF INCOME BY FILING A REVISED RETURN OF INCOME BEFO RE ISSUE OF NOTICE ULS 143(2) OF THE ACT IN HER CASE O R DETECTION BY THE DEPARTMENT. AS COULD BE SEEN FROM THE FACTS DISCUSSED IN THE ORDER, THE ASSESSEE HAS NOT OFFERED ANY EXPLANATION FOR OMISSION OF THE LAKSHM I VILAS BANK ACCOUNT AND THE SOURCES OF INCOME FOR TH E DEPOSITS MADE INTO HER ACCOUNT AT THE TIME OF SCRUT INY. IT IS UNDOUBTEDLY ESTABLISHED THAT THE ASSESSEE'S INTE NTION WAS NOT TO DISCLOSE THE LAKSHMI VILAS BANK ACCOUNT AND THAT THE OFFER OF INCOME BEING THE AMOUNT DEPOSITED IN THE SAVINGS BANK ACCOUNT WITH THE LAKSHMI VILAS BANK IS NOT VOLUNTARY. THE ASSESSEE HAD NO CHOICE B UT TO ACCEPT THE ADDITION MADE BY THE ASSESSING OFFICER. THE OFFER OF INCOME DURING THE SCRUTINY CANNOT BE CONSIDERED AS VOLUNTARY AS THE ASSESSEE ADMITTED TH E INCOME ONLY AFTER THE RECEIPT OF SCRUTINY NOTICE FR OM THE DEPARTMENT. EVEN WHEN THE ASSESSEE WAS TO MAKE A SURRENDER IT MUST ADDUCE SUFFICIENT EXPLANATION FOR PREVIOUS OMISSION SO AS TO PROTECT ITSELF AGAINST A CTION ITA NO.2607/MDS/2014. :- 6 -: U/S 27J(J)(C) OF THE ACT AS HELD BY THE HON'BLE HIG H COURT, KERALA IN THE CASE OF CIT VS KERALA TRANSPOR T COMPANY 270 ITR 149. THE AR STATED IN THE REPLY THA T THE PENALTY U/S 27.1 (I )( C) OF THE ACT CANNOT BE LEVIED IN THE CASE OF THE ASSESSEE AS PER THE DECISIONS OF TH E HON'BLE HIGH COURT, MADRAS IN THE CASE OF CIT VS. S .I PARIPUSHPAM REPORTED IN 249 ITR 550 AND THE HON'BLE HIGH COURT, DELHI IN THE CASE OF CIT VS. KOHINOOR I MPEX PVT LTD. REPORTED IN 270 ITR 381. THE FACTS OF THE PRESENT CASE ARE TOTALLY DIFFERENT FROM THE DECISIONS IN TH E ABOVE REPORTED CASES. THE LD. ASSESSING OFFICER THOUGH ACCEPTED THE SUBMI SSIONS AND IS OF THE OPINION THAT ASSESSEE HAS CONCEALED INCOME AND ACCEPTANCE OF INCOME AFTER RECEIPT OF NOTICE U/S.143(2) OF THE AC T CANNOT BE A GROUND FURTHER RELIED ON THE JUDICIAL DECISION OF APEX COU RT AND LEVIED MINIMUM PENALTY OF >13,50,300/-. AGGRIEVED BY THE O RDER, THE ASSESSEE FILED AN APPEAL BEFORE COMMISSIONER OF INC OME TAX (APPEALS). 4. IN THE APPELLATE PROCEEDINGS, LD. COMMISSIONER OF I NCOME TAX (APPEALS) CONSIDERED THE DIRECTIONS OF THE CO-O RDINATE BENCH IN ITA NO.1500/MDS/2013, DATED 22.04.2014, WERE THE M ATTER WAS REMITTED TO COMMISSIONER OF INCOME TAX (APPEALS), C OIMBATORE WITH A DIRECTION TO INCLUDE LEGAL HEIRS AND DISPOSE OFF TH E APPEAL ON MERITS AS SMT. S. GOKULAMMAL (ASSESSEE) WHO WAS MORE THAN 80 YEARS DIED ON ITA NO.2607/MDS/2014. :- 7 -: 30.04.2013 AND THE LEGAL HEIR SHRI. S. BADRI WAS IM PLEADED. THE LD. AUTHORISED REPRESENTATIVE SUBMITTED DETAILED EXPLAN ATIONS AND THE REASONS WITH SUPPORTING JUDICIAL DECISIONS TO THE FACTS OF THE CASE REFERRED AT PAGE 3 BY LD.CIT(A). THE ASSESSEE SOLD INHERITED JEWELLERY IN THE FINANCIAL YEAR 2008-2009 AND THE PROCEED I N LAKSHMI VILAS BANK, AS THE ASSESSEE WAS AGED AND SENIOR CITIZEN B EING UNEDUCATED WAS UNDER MISTAKEN BELIEF THAT SALE OF PERSONAL ASS ETS ARE NOT TAXABLE AND OMITTED TO INCLUDE IN THE RETURN AND THE ASSESS EE ACCEPTED INCOME IN ASSESSMENT PROCEEDINGS AND FILED LETTER ON 21.1 1.2012. BUT THE COMMISSIONER OF INCOME TAX (APPEALS) OBSERVED AT PA GE 6 OF HIS ORDER AND DISMISSED THE APPEAL AS UNDER:- AS SEEN FROM THE BALANCE SHEET FILED BY THE ASSES SEE, THE FIXED DEPOSITS WITH KARUR VYSYA BANK AND REGARDING DEPOSITS WITH TAMILNADU MERCANTILE BANK AND CASH AND BANK BALANCES WITH INDIAN OVERSEAS BANK, CANARA BANK, T HE TAMILNADU MERCANTILE BANK AND KARUR VYSYA BANKS WER E DECLARED. THE DETAILS FOR CASH AND BANK BALANCES CL EARLY SHOW THE CASH WITH DIFFERENT BANKS. SIMILARLY, THE DETAILS OF DEPOSITS AND INTERESTS WITH DIFFERENT BANKS WERE AL SO DECLARED. THE INTERESTING ISSUE IS EVEN IF THE APPE LLANT WAS UNDER THE IMPRESSION THAT THE INCOME DERIVED ON THE SALE OF PERSONAL ASSETS IS NOT TAXABLE, SHE SHOULD HAVE DIS CLOSED THE CASH BALANCES IN THE BALANCE SHEET FILED ALONG WITH THE RETURN. HOWEVER, THE CASH BALANCE WITH LAKSHMI VILA S BANK WAS NOT DISCLOSED IN THE RETURN OF INCOME / BALANCE SHEET FILED WITH THE DEPARTMENT. AFTER PUTTING FORTH THE BANK STATEMENT OBTAINED FROM LAKSHMI VILAS BANK BY THE ITA NO.2607/MDS/2014. :- 8 -: ASSESSING OFFICER, THE APPELLANT HAS ACCEPTED TO OF FER THE INCOME TO TAX WHICH CANNOT BE ATTRIBUTED TO THE VOL UNTARY COMPLIANCE OF THE APPELLANT. IT IS A CLEAR CASE OF CONCEALMENT OF INCOME AND NOT FURNISHING THE ACTUAL PARTICULARS IN THE RETURN OF INCOME. THE ASSESSING OFFICER IN THE PENA LTY ORDER HAS ELABORATELY DISCUSSED THE VARIOUS ISSUES AND HA S ALSO DIFFERENTIATED THE JUDICIAL DECISIONS RELIED ON BY THE APPELLANT. CONSIDERING THE DISCUSSIONS MADE ABOVE, I CONFIRM T HE PENALTY LEVIED BY THE ASSESSING OFFICER. THE GROUND S OF APPEAL ARE DISMISSED. AGGRIEVED BY THE ORDER OF COMMISSIONER OF INCOME TA X (APPEALS), THE ASSESSEE ASSAILED AN APPEAL BEFORE TRIBUNAL. 5. BEFORE US, THE LD. AUTHORISED REPRESENTATIVE OF ASS ESSEE REITERATED THE SUBMISSIONS AND EXPLAINED THE CIRCUM STANCES AND THE REASONS AGITATED IN THE ASSESSMENT, PENALTY AND AP PELLATE PROCEEDINGS. THE LD. AUTHORISED REPRESENTATIVE OF THE LEGAL HEIR FURTHER SUBMITTED THAT THE ASSESSEE HAS INHERITED J EWELLERY AND THE SAME WAS SOLD AND DEPOSITED IN THE BANK ACCOUNT BU T BY MISTAKE COULD NOT BE RECONCILED AND REFLECTED IN BANK BALAN CE. THE ASSESSEE WAS HAVING SUFFICIENT BALANCE IN OTHER BANK ACCOU NTS AND CREDIT WORTHINESS WAS PROVED. THE ASSESSEE HAS ACCEPTED T HE INFORMATION OF AIR IN THE ASSESSMENT PROCEEDINGS AND OFFERED VOLUN TARILY BY LETTER DATED 21.11.2012 CASH DEPOSITS OF >45,01,000/- IN T HE LAKSHMI VILAS BANK FOR TAXATION AND PAID INCOME TAX. THE EXPLAN ATIONS OF THE ITA NO.2607/MDS/2014. :- 9 -: ASSESSEE BEFORE ASSESSING OFFICER ARE DULY SUPPORTE D WITH EVIDENCE OF PAYMENTS OF TAX CHALLANS AND AUTHENTICATED FACT. T HE ASSESSEE HAS EXPIRED ON 30.04.2013 AND HER LEGAL HEIR WAS BROUGH T ON RECORD AS PER LAW. CONSIDERING THE GENUINESS OF THE VOLUNTARY S UBMISSIONS, HE PRAYED FOR DELETION OF PENALTY. 6. CONTRA, THE LD. DEPARTMENTAL REPRESENTATIVE RELIED ON THE FINDINGS OF THE LOWER AUTHORITIES ORDER AND OPPOSED THE GROUNDS. 7. WE HEARD RIVAL SUBMISSIONS, PERUSED THE MATERIAL O N RECORD AND JUDICIAL DECISIONS CITED. THE LD. AUTHORISED R EPRESENTATIVE EXPRESSED AND EMPHASIZED ON THE GROUNDS THAT THE AS SESSEE HAS VOLUNTARILY ACCEPTED THE INCOME IN THE ASSESSMENT PROCEEDINGS AND GENUINE EXPLANATIONS WERE PROVIDED FOR OMITTING TO INCLUDE IN THE BALANCE SHEET. THE EXPLANATIONS ARE BONAFIDE, CONS IDERING THE AGE OF THE ASSESSEE AND SOURCES OF INCOME DECLARED IN THE INCOME TAX RETURN. THE ASSESSEE IS A SENIOR CITIZEN AND ALSO DERIVING INCOME FROM MARRIAGE HALL, RENTAL INCOME AND INCOME FROM OTHER SOURCES AND REGULARLY FILING INCOME TAX RETURNS. THE DEPOSITS IN LAKSHMI VILAS BANK PERTAINS TO SALE OF INHERITANTED JEWELLERY, W HICH ASSESSEE HAS TREATED AS PERSONAL ASSET AND OMITTED TO INCLUDE IN THE RETURN. THE ASSESSEE FILED LETTER VOLUNTARILY OFFERING THE IN COME AND PAYMENT OF TAXES. ON PERUSAL OF ORDERS OF LOWER AUTHORITIES, WE FOUND THE ITA NO.2607/MDS/2014. :- 10 -: ASSESSING OFFICER HAS CALCULATED TAX LIABILITY IN T HE INCOME TAX COMPUTATION SHEET AND OMITTED TO GIVE CREDIT TO THE TAX PAID OF >15,00,000/- WHICH WAS PAID MUCH BEFORE COMPLETION OF ASSESSMENT ON 23.11.2011. THE LD. AUTHORISED REPRESENTATIVE DREW ATTENTION TO THE LETTER DATED 22.11.2011 AND EXPLAINED THAT THE ASSESSEE HAS OFFERED INCOME VOLUNTARILY IN GOOD FAITH TO BUY PEA CE WITH THE INCOME TAX DEPARTMENT AND SATISFIED THE BONAFIDES. ON PAY MENT OF TAXES WITH CHALLAN FOR THE RELEVANT ASSESSMENT YEAR ON 23 .09.2011 >5,00,000/-, 24.09.2011 >5,00,000/- AND 22.11.2011 >5,00,000/-, AGGREGATING TO >15,00,000/-. THE PENALTY PROCEEDIN GS CANNOT BE ALWAYS A GATEWAY ON ACCEPTING THE ADDITION AND IT I S NOT AUTOMATIC EACH AN EVERY CIRCUMSTANCE HAS TO BE WEIGHED WITH GENUINELY AND BONAFIDES. CONSIDERING THE APPARENT FACTS, SUBMISSI ONS ON RECORD, THE FINDINGS OF THE LOWER AUTHORITIES ARE ENTIRELY ONE WAY AS THE ASSESSEE HAS ACCEPTED THE INCOME AFTER RECEIPT OF NOTICE U/S .143(2) OF THE ACT. BUT THE LD. ASSESSING OFFICER RELIED ONLY ON AIR IN FORMATION AND NO INDEPENDENT INVESTIGATION WAS CONSIDERED BEFORE COM PLETION OF ASSESSMENTS. THE ASSESSEE HAS NOT CONTESTED DISPUT ED ISSUE IN THE ASSESSMENT PROCEEDINGS. CONSIDERING THE SENIOR CIT IZEN AGE OF THE ASSESSEE AND ASSESSEE DIED DURING THE INCOME TAX P ROCEEDINGS AND THE LEGAL HEIR WAS BROUGHT ON RECORD. THE GENUINE FACTS THAT THE ASSESSEE HAS PAID THE TAXES BEFORE THE COMPLETION O F ASSESSMENT ITA NO.2607/MDS/2014. :- 11 -: PROCEEDINGS AND NOT CONTESTED THE ASSESSMENT. PRIME FACIE PENALTY PROCEEDINGS ARE NOT AUTOMATIC AND EVERY ADDITION CA NNOT CONTESTED FOR LEVYING THE PENALTY AND WE DRAW SUPPORT FROM THE P RINCIPLES LAID DOWN IN CASE OF CASE OF CIT VS. MANJUNATHA COTTON AND GINNING FACTORY, 359 ITR 565 , (KARNATAKA) WERE IT WAS HELD THAT THE PENALTY PROCEEDINGS ARE NOT AUTOMATIC AND THEY ARE DISTINCT . CONSIDERING THE FACTUAL MATRIX, LEGAL DECISIONS AND ASSESSMENT RECO RDS, WE SET ASIDE THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS) A ND DIRECT THE ASSESSING OFFICER TO DELETE THE PENALTY. 8. IN THE RESULT, THE APPEAL OF THE ASSESSEE IN ITA NO.2607/MDS/2014 IS ALLOWED. ORDER PRONOUNCED ON TUESDAY, THE 24TH DAY OF MAY , 2016, AT CHENNAI. SD/- SD/- ( ) (CHANDRA POOJARI) / ACCOUNTANT MEMBER ( . ! ) (G. PAVAN KUMAR) / JUDICIAL MEMBER / CHENNAI 0 / DATED: 24.05.2016 KV 1 ( *',23 43%, / COPY TO: 1 . &' / APPELLANT 3. 5, () / CIT(A) 5. 389 *',' / DR 2. *+&' / RESPONDENT 4. 5, / CIT 6. 9:$ ; / GF