SMT. DURGA DEVI SOMANI, Jaipur V. ITO, Kishangarh

ITA 672/JPR/2011

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 82811 (ITAT-JAIPUR)
• Duration Of Justice: 3 year(s) 3 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-10-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2007-2008
• Appeal Filed On: 08-07-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Unexplained cash credit; Initiation of penalty proceedings; Agreed addition; Revised return
• Section: 133(6); 68; 37

Judgement Text

ITA NO.672/JP/2011 SMT. DURGA DEVI SOMANI VS. ITO, KIS HANGARH 1 IN THE INCOME TAX APPELLATE TRIBUNAL JAIPUR BENCH, JAIPUR (BEFORE SHRI R.P. TOLANI AND SHRI T.R. ME ENA) ITA NO. 672/JP/2011 ASSESSMENT YEAR: 2007-08 PAN : ADQPS 6808 R SMT. DURGA DEVI SOMANI VS. THE ITO PROP. M/S. RADHA MARBLES WARD- KISHANGARH H-85, IND. AREA, MADANGANJ, KISHANGARH KISHANGARH (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI MANISH AGARWAL DEPARTMENT BY: SHRI RAJESH OJHA DATE OF HEARING: 9-09-2014 DATE OF PRONOUNCEMENT: 31-10-2014 ORDER PER R.P. TOLANI, JM THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF THE LD. CIT(A), AJMER DATED 26-05-2011 FOR THE ASSESSMEN T YEAR 2007-08 WHEREIN THE ASSESSEE HAS RAISED FOLLOWING GROUNDS IN HER A PPEAL. 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE, THE LD. CIT(A) HAS GROSSLY ERRED IN CONFIRMING THE PENALTY OF RS. 14,42,682/- LEVIED U/S 271(1)( C) OF THE I.T. A CT, 1961. 1.1 THAT THE LD. CIT(A) HAS ERRED IN UPHOLDING THE PENALTY LEVIED U/S 271(1) (C) OF THE ACT WITHOUT AP PRECIATING THE FACT THAT THE INCOME WAS SURRENDERED BY THE ASSESSE E DURING THE COURSE OF ASSESSMENT PROCEEDINGS AND THE INCOME WAS OFFERED SUO-MOTO TO BUY THE PEACE OF MIND AND TO AVOID PROL ONGED ITA NO.672/JP/2011 SMT. DURGA DEVI SOMANI VS. ITO, KIS HANGARH 2 LITIGATION. THUS UPHOLDING THE PENALTY SO LEVIED DE SERVES TO BE DELETED. 1.2 THAT THE PENALTY U/S 271(1)( C) HAS BEEN IMPOSE D AND CONFIRMED BY THE LD. CIT(A) WITHOUT MAKING ANY INDEPENDENT ENQUIRY IN PENALTY PROCEEDINGS AND SIMP LY RELYING UPON THE CONCLUSION DRAWN IN ASSESSMENT ORDER THUS THE PENALTY DESERVES TO BE DELETED. 1.3 THAT THE ASSESSEE HAS VOLUNTARILY SURRENDERED T HE INCOME AND PAID THE DUE TAX THEREON THUS THERE REMA INED NO INCOME ON WHICH TAX SOUGHT TO BE EVADED COULD BE CA LCULATED WHICH FACT WAS NOT APPRECIATED BY THE LD. CIT(A). 2.1 BRIEF FACTS OF THE CASE ARE: ASSESSEE IS AN IND IVIDUAL RUNNING A PROPRIETORSHIP CONCERN IN THE NAME OF M/S RADHA MAR BLES AT KISHANGARH DEALING IN THE BUSINESS OF SLABS, MARBLE & GRANITE TILES. DURING THE COURSE OF ASSESSMENT AO OBSERVED THAT IN RESPECT OF FOLLOWING TRADE CREDITORS AS ON 01/04/2006 THERE WERE OPENING CREDIT BALANCES OF RS . 18,34,178/- A SUM OF RS. 2,45,,000/- WAS RECEIVED FROM FEW PARTIES IN TH IS YEAR BESIDES MAKING PAYMENTS TO SOME PARTIES : SL. NO. NAME OF PARTIES OPENING BALANCE AS ON 1.04.2006 RECEIPT DURING THE YEAR PAYMENT MADE DURING THE YEAR BALANCE OUTSTANDING AS ON 31.03.2007 1. ALKA MARBLE, KISHANGARH 6,08,355/- - 2,53,500/- 3,54,855/- 2. M/S. J.K. MARBLE INDUSTRIES, KISHANGARH 6,81,279/- - 2,53,500/- 4,27,779/- ITA NO.672/JP/2011 SMT. DURGA DEVI SOMANI VS. ITO, KIS HANGARH 3 3. SHIV TRADERS 2,75,771/- - - 2,75,771/- 4. DURGA IRON WORKS, HALDWANI 45.262/- - - 45,262/- 5. M/S. RAJESH KUMAR RAJENDRA KUMAR, TARAORI (HARYANA) 37,600/- - 37,600/- - 6. M/S. LOVELY MARBLES, KISHANGARH 73,911/- - 73,911/- - 7. M/S. DEEN DAYAL MARBLE TRADERS, KISHANGARH 1,12,000/- - - 1,12,000/- 8. M/S. KUMAR MARBLE UDYOG, KISHANGARH - 1,20,000/ - - - 9. M/S. BANGAR MARBLE, KISHANGARH - 1,25,000/ - - - TOTAL 18,34,178/- 2,45,000/ - THE BALANCES OUTSTANDING AS ON THE OPENING DAY OF T HE PREVIOUS YEAR RELEVANT TO ASSESSMENT YEAR UNDER APPEAL IN RESPECT TO PARTI ES AT SL. NO. 1, 2 & 6 REPRESENTS THE AMOUNT PAYABLE AGAINST PURCHASES MAD E BY THE ASSESSEE IN EARLIER YEARS. THE BALANCES APPEARING IN RESPECT OF PARTIES AT SL. NO. 3, 4 & 5 AND AMOUNTS RECEIVED DURING THE YEAR UNDER CONSIDER ATION FROM PARTIES AT SL. NO. 8 & 9 WERE TOWARDS ADVANCE AGAINST SUPPLIES. IN CASE OF SOME PARTIES GOODS WERE ALSO SOLD TO THEM IN SUBSEQUENT YEARS AL SO WHICH IS EVIDENT FROM ITA NO.672/JP/2011 SMT. DURGA DEVI SOMANI VS. ITO, KIS HANGARH 4 THE COPY OF ACCOUNTS OF SUBSEQUENT YEAR. AS NO AGRE EMENT COULD BE REACHED WITH THE PARTIES TOWARDS TERMS AND RATES OF THE TRA NSACTIONS, THE AMOUNTS RECEIVED AS ADVANCE WAS REFUNDED IN SUBSEQUENT YEAR S. COPIES OF LEDGER ACCOUNTS OF SUBSEQUENT YEARS WERE ALSO SUBMITTED BY THE ASSESSEE DURING THE COURSE OF THE ASSESSMENT PROCEEDINGS. THE AO CALLE D INFORMATION U/S 133(6) FROM M/S DURGA IRON WORKS AND M/S RAJESH KUM AR RAJENDRA KUMAR, THEY STATED THAT THERE IS NO OUTSTANDING BAL ANCE DUE FROM THE ASSESSEE. IT WAS EXPLAINED THAT ASSESSEE THAT THEY WERE UNRELATED PARTIES AND SHE HAD NO CONTROL OVER THE THIRD PARTY AFFAIRS AND ACCOUNTS, IT WAS NOT KNOWN HOW THEY HAVE RECORDED THE PAYMENTS IN THEIR BOOKS OF ACCOUNTS, THUS TO BUY THE PEACE THE ASSESSEE ACCEPTED THE ENTIRE A MOUNT OF TRADE BALANCES, INCLUDING THE OPENING BALANCES AS HER INCOME. THE A O HOWEVER HELD THAT THE SURRENDER WAS NOT VOLUNTARY AND THE ASSESSEE FAILED TO ESTABLISH THE IDENTITY OF THE CREDITORS AND MADE THE ADDITION U/S 68 AND U /S 41(1)(A) RESPECTIVELY. FURTHER, ASSESSEES PERSONAL STATEMENT OF AFFAIRS S HOWED UNSECURED LOAN OF RS. 22,10,217/- (OUT OF WHICH A SUM OF RS. 18,52,07 6/- WAS THE OPENING BALANCE CARRIED OUT FROM PREVIOUS YEARS), THE AO EN QUIRED ABOUT THE SAME, ASSESSEE WAS UNABLE TO FILE THE CONFIRMATIONS DESP ITE BEST EFFORTS AS THESE PARTIES DID NOT CO-OPERATE. UNDER THESE COMPELLING CIRCUMSTANCES, ASSESSEE OFFERED THIS AMOUNT ALSO FOR TAXATION TO BUY THE PE ACE OF MIND AND TO AVOID ITA NO.672/JP/2011 SMT. DURGA DEVI SOMANI VS. ITO, KIS HANGARH 5 ANY LITIGATION. THE SURRENDER WAS MADE WITHOUT REAL IZING THAT EXCEPT RS. 3,58,141/- REST OF THE AMOUNT WAS OPENING BALANCE N OT TAXABLE IN THIS YEAR. THE AO INITIATED PENALTY PROCEEDINGS IN THIS BEHALF FOR WHICH A DETAILED EXPLANATION WAS FILED BY ASSESSE PLEADING THAT IT W AS NOT A FIT CASE FOR LEVY OF PENALTY. THE AO WITHOUT APPRECIATING THE MERITS OF EXPLANATION AND GLARING FACTS THAT MAXIMUM CREDIT AMOUNTS WERE OPENING BALA NCES; AND REJECTING THE SURRENDER AS NOT VOLUNTARY HELD THAT ASSESSEE CONCE ALED INCOME AND FURNISHED INACCURATE PARTICULARS & IMPOSED THE IMPU GNED PENALTY. 2.2 AGGRIEVED, THE ASSESSEE PREFERRED FIRST APPEAL BEFORE THE LD. CIT(A) WHERE IT WAS CONTENDED THAT ASSESSEES SURRENDER WA S FACTUALLY REJECTED BY THE AO HIMSELF. NO INDEPENDENT INQUIRY DURING THE C OURSE OF PENALTY PROCEEDINGS WAS MADE. THE AO THOUGH REJECTED THE SU RRENDER HOWEVER THE PENALTY WAS IMPOSED SOLELY ONLY RELYING ON THE SURR ENDERED AMOUNT. THE ASSESSEE PLEADED THAT ASSESSMENT PROCEEDINGS AND PE NALTY PROCEEDINGS ARE DISTINCT AND FOR IMPOSITION OF PENALTY PROPER ENQUI RIES SHOULD HAVE BEEN MADE AND THERE WAS NO JUSTIFICATION TO RELY ON THE REJECTED SURRENDER PENALTY FOR IMPOSING MERELY BECAUSE AO HAD POWER TO LEVY IT . IT WAS SUBMITTED THAT THOUGH THE FINDING OF THE ASSESSMENT ORDERS MAY BE RELEVANT AS EVIDENCE IN PENALTY PROCEEDINGS BUT THEY BY THEMSELVES CANNOT B E THE FOUNDATION FOR ITA NO.672/JP/2011 SMT. DURGA DEVI SOMANI VS. ITO, KIS HANGARH 6 IMPOSING THE PENALTY. HONBLE APEX COURT IN THE CAS E OF EILLY LILLY & COMPANY REPORTED IN 312 ITR 225 HAS HELD THAT THE PENALTY PROCEEDINGS IS NOT AN AUTOMATIC OR MANDATORY FALLOUT OF THE ADDITI ONS MADE DURING THE ASSESSMENT PROCEEDINGS. THEREFORE, THE PENALTY SHOU LD NOT BE LEVIED IN ROUTINE MANNER AND ONLY BECAUSE IT IS LAWFUL TO DO SO. ALL THESE CREDITS WERE DULY RECORDED IN THE BOOKS OF ACCOUNTS, PARTICULARS WERE FILED ALONG WITH THE RETURN OF INCOME. DUE TO STRAINED RELATIONSHIP WITH THE PARTIES, THE CONFIRMATIONS COULD NOT BE FILED, IT WAS NEVER ADMI TTED THAT CASH CREDITS WERE NO GENUINE. THERE WAS NEITHER ANY MISS-STATEMENT NO R WRONG INFORMATION FILED ALONG WITH THE RETURN OR DURING THE COURSE OF ASSESSMENT PROCEEDINGS. ASSESSEE WAS CONFUSED AND UNWITTINGLY SURRENDERED E NTIRE AMOUNT, PARTICULARLY WHEN THE MAXIMUM CREDIT AMOUNTS PERTAI NED TO EARLIER YEAR AND WERE NOT TAXABLE DURING THE YEAR. LD. CIT(A) HOWEVE R CONFIRMED THE PENALTY. 2.3 AGGRIEVED, ASSESSEE IS BEFORE US. LD. COUNSEL F OR THE ASSESSE CONTENDS THAT:- (I) MAXIMUM AMOUNT ADDED IS ADMITTEDLY OPENING BALA NCE OF TRADE CREDITORS PERTAINING TO EARLIER YEARS WHICH ALSO PA ID SUBSEQUENTLY. THESE TRANSACTIONS OF PURCHASES AND SALE WERE ACCEPTED BY THE DEPARTMENT IN EARLIER YEARS. ITA NO.672/JP/2011 SMT. DURGA DEVI SOMANI VS. ITO, KIS HANGARH 7 (II) IN MARBLE TRADE MANY OF THE PARTIES KEEP ON SH IFTING PLACES DEPENDING ON THE MINING LEASE. THE PARTIES WERE GEN UINE AND THE ADDITIONS PERTAINED TO TRADE LIABILITIES. (III) THE SURRENDER WAS UNDER MISUNDERSTANDING AND WAS ALSO REJECTED BY THE AO HOLDING IT TO BE INVOLUNTARY. IN THAT CASE WITHOUT APPRECIATING THE ISSUE OF OPENING BALANCES AND THE FACT THAT IN EARLIER YEAR SAME PARTIES WERE HELD AS GENUINE, THE PENALTY CANN OT BE IMPOSED BY SOLELY RELYING ON THE REJECTED SURRENDER. (IV) THE PARTIES WERE NOT RELATED TO THE ASSESSEE, NOTHING WAS CROSS VERIFIED FROM THEIR END AS TO HOW AND WHY THEY HAD DEALT WITH THESE ENTRIES IN THEIR BOOKS. THESE PARTIES WERE EQUALLY OBLIGED TO EXPLAIN THE ENTRIES, THIS PART HAS NOT BEEN VERIFIED BY THE AO. BESIDES ADDIT IONS CANNOT BE MADE BASED ON THIRD PARTY BOOK ENTRIES WITHOUT PROPER CR OSS VERIFICATION AS ASSESSEE HAD NO CONTROL OVER THE BOOKS OF UNRELATED THIRD PARTIES. (V) RELIANCE IS PLACED BY THE ASSESSEE COUNSEL ON C ATENA OF JUDICIAL PRONOUNCEMENTS INCLUDING THE FOLLOWING FOR THE PROP OSITION THAT PENALTY U/S 271(1)(C ) CANNOT BE LEVIED IN THESE FACTS AND CIR CUMSTANCES:- A. CIT V SURESHCHANDRA MITTAL 251 ITR 9 (SC) B. GEBILAL KANHAIYALAL (HUF) V. ACIT 270 ITR 523 (RAJ) C. CIT V BADRILAL CHATURBHUJ 265 ITR 329(RAJ) (VI) PENALTY PROCEEDINGS ARE SEPARATE AND DISTINCT FROM ASSESSMENT PROCEEDINGS AND MERE FACT THAT INCOME HAS BEEN OFFE RED FOR TAXATION WILL NOT TANTAMOUNT TO ADMISSION OF FURNISHING INACCURATE PA RTICULARS WITHOUT PROPERLY EXAMINING THE EXPLANATION AND CIRCUMSTANCE S IN THIS BEHALF. ITA NO.672/JP/2011 SMT. DURGA DEVI SOMANI VS. ITO, KIS HANGARH 8 (VII) ALL THE RELEVANT PARTICULARS WERE FURNISHED A LONG WITH THE RETURN OF INCOME, PARTIES ARE OLD AND OPENING BALANCES HAV E BEEN ACCEPTED IN PRECEDING YEAR. WITH ALL THESE UNDISPUTED FACTS ON RECORD, IMPOSITION OF PENALTY WITHOUT ANY ENQUIRY IN INDEPENDENT PROCEEDI NGS IS UNTENABLE. RELIANCE IS PLACED ON HONBLE SUPREME COURT JUDGMEN T IN THE CASE OF RELIANCE PETRO PRODUCTS 322 ITR 158. (VIII) THE ASSESSEE HAS SURRENDERED THE AMOUNT DURI NG THE COURSE OF ASSESSMENT PROCEEDINGS ONLY TO BUY PEACE OF MIND AN D SHORTAGE OF TIME SPAN DURING WHICH THE JUSTIFICATION WAS TO BE FILED AND DUE TAX UPON SUCH AMOUNT WAS ALSO DEPOSITED BY THE ASSESSEE. THUS, THE ASSES SEE DUE TO THE TIME BARRING LIMIT WAS VERY CLOSE DO NOT HAVE SUFFICIENT TIME TO COLLECT THE DETAILS OF THE PARTIES, THEREFORE IN ORDER TO AVOID PROLONG ED LITIGATION AND TO BUY THE PEACE OF MIND HAD ACCEPTED CREDIT BALANCE AS HIS IN COME. IT IS NOT THE CASE THAT AFTER IN DEPTH EXAMINATION AND CROSS VERIFICAT ION BY THE ASSESSEE THE AMOUNT WAS SURRENDERED. (IX) LD. COUNSEL FURTHER CONTENDS THAT LD CIT(A) HA S NOT DISPUTED THE PROPOSITION THAT PENALTY PROCEEDINGS ARE DISTINCT A ND SEPARATE IN NATURE THAN ASSESSMENT PROCEEDINGS. THIS CLEARLY IMPLIES THAT M ERELY BECAUSE AN INCOME IS PURPORTEDLY SURRENDERED IT CANNOT BE A CONCLUSIV E FOR AUTOMATIC LEVY OF CONCEALMENT PENALTY. THE FACTS AND EXPLANATION OF T HE ASSESSEES CASE ARE TO BE CONSIDERED BEFORE LEVYING ANY PENALTY BECAUSE IM POSITION OF PENALTY IS PRIMARILY A QUESTION OF FACT AND DISTINCT FROM ASSE SSMENT PROCEEDINGS. IN THIS BACKDROP IT IS PLEADED THAT LD CIT(A) HAS ERRONEOUS LY HELD THESE LIABILITIES TO BE BOGUS, WHICH IS A FUNDAMENTALLY WRONG FINDING OF FACT IN AS MUCH AS LD. AO HAS HELD THEM TO BE CESSATION OF LIABILITY U/S 4 1(1). ALL THESE ENTRIES EMANATE FROM THE BOOKS OF ACCOUNTS AS OPENING BALAN CES, THUS THE RELATED ITA NO.672/JP/2011 SMT. DURGA DEVI SOMANI VS. ITO, KIS HANGARH 9 PURCHASE/ SALE TRANSACTIONS HAVE BEEN ACCEPTED BY T HE DEPARTMENT IN PRECEDING YEAR. THESE BEING THE UNDISPUTED FACT THE OPENING BALANCES COMING FROM EARLIER CANNOT BE HELD TO BE BOGUS. THU S THE ADVERSE INFERENCES DRAWN BY LOWER AUTHORITIES ARE SELF-CONTRADICTORY A ND FUNDAMENTALLY FLAWED. 2.4 TO AVOID LITIGATION ASSESSEE LADY WHO IS FROM A MOUFFISIL AREA MAY HAVE AGREED FOR ADDITION BUT THIS SURRENDER CANNOT BE SEEN DIVORCED FROM THE ACTUAL NATURE OF ENTRIES AND THE YEAR TO WHICH THEY PERTAIN. IN FACT THE AO INSTEAD OF ACCEPTING THE SURRENDER OUGHT TO HAVE MA DE PROPER INQUIRIES IN EARLIER RELEVANT YEAR AND PROPOSE THE ADDITION IN T HAT YEAR. THUS MERELY BECAUSE ASSESSE IN HER POOR KNOWLEDGE ABOUT INTRICA CIES OF INCOME TAX LAW SURRENDERED SOME INCOME WHICH OUGHT NOT TO HAVE BEE N SURRENDERED IN VIEW OF THE HUGE OPENING BALANCES, IT DOESNT ABSOLVE TH E AO FROM HIS STATUTORY OBLIGATION OF TAXING THE INCOME IN RIGHT YEAR. THUS IN FAIRNESS NEITHER ADDITION NOR THE PENALTY IN THIS BEHALF IS POSSIBLE IN THIS YEAR. 2.5 THE LD. AR FURTHER SUBMITTED THAT ONCE AO HIMS ELF HELD THAT THE SURRENDER IS NOT ACCEPTABLE AS IT WAS NOT VOLUNTARY , IN THAT CASE HE WAS UNDER OBLIGATION TO MAKE REGULAR ENQUIRE OF THE ISSUES AN D VERIFIED THE RIGHT TAXABILITY IN THE YEAR IN ACCORDANCE WITH LAW. IN T HAT CASE MAXIMUM AMOUNT WAS NO ASSESSABLE AS INCOME IN THIS YEAR. CONSEQUEN TLY THE INITIATION AND CONCLUSION OF THE FATE OF ASSESSMENT AND PENALTY PR OCEEDING WOULD HAVE ITA NO.672/JP/2011 SMT. DURGA DEVI SOMANI VS. ITO, KIS HANGARH 10 BEEN IN RELEVANT YEAR AND NOT IN THIS YEAR. THUS FR OM CORRECT PERSPECTIVE THE IMPUGNED ADDITIONS HAVE BEEN MADE IN WRONG YEAR AND PENALTY ALSO HAS BEEN IMPOSED IN WRONG YEAR. ASSESSEE HONORED HER CO MMITMENT BY ACCEPTING THE ASSESSMENT IT DOES NOT MEAN THAT PENA LTY WILL BE AUTOMATICALLY IMPOSED WITHOUT CONSIDERING THESE CRUCIAL ASPECTS. THOUGH NOT RAISED IN QUANTUM PROCEEDINGS ASSESSEE HAS A STATUTORY RIGHT TO RAISE THE PLEA FOR ADDITION IN CORRECT YEAR OF TAXABILITY AS WELL AS I MPOSITION OF PENALTY. THEREFORE, THE PENALTY HAS BEEN IMPOSED WITHOUT APP RECIATING THE RELEVANT ISSUES PROPERLY. SEC.271(1) OBLIGES THE AO TO CONS IDER ASSESSEES REPLY IN OBJECTIVE MANNER ALONG WITH FACTS, CIRCUMSTANCES AN D LAW AND THEREAFTER HAS TO ARRIVE AT A REASONED AND SPEAKING CONCLUSION T HAT INACCURATE PARTICULARS WERE FILED OR INCOME WAS CONCEALED. IN THIS CASE TH E ASSESSES EXPLANATION HAS BEEN SUMMARILY DISCARDED AND RELYING ON MERELY THE SURRENDER WHICH IS ALSO NOT ACCEPTED ON FACE VALUE BY AO, THE PENALTY HAS B EEN IMPOSED. ASSESSEE HAS DEMONSTRATED THAT ADDITIONS AND PENALTY WERE NO T POSSIBLE IN AY 2007- 08 AS ON FACE OF IT AMOUNTS WERE OPENING BALANCES. IN CARRYING FORWARDED CLOSING BALANCES OF EARLIER YEARS BOOKS WHICH ARE A CCEPTED BY THE DEPARTMENT, IT CAN NOT BE HELD THAT ASSESSEE FURNIS HED ANY INACCURATE PARTICULARS. THUS ALL THE RELEVANT PARTICULARS WERE FILED ALONG WITH THE RETURN AND NO INACCURATE PARTICULARS HAVE BEEN FURNISHED W ITH THE RETURN OF INCOME ITA NO.672/JP/2011 SMT. DURGA DEVI SOMANI VS. ITO, KIS HANGARH 11 AS ALLEGED, PENALTY IS THUS NOT LEVIABLE ON MERITS AS WELL AS THE PLEA ABOUT YEAR OF IMPOSITION. 2.6 ALTERNATIVELY IT IS PLEADED THE AO HAS ERRED IN NOT GIVING ANY SET OFF OF AMOUNTS AS PAYABLE AND RECEIVABLE BOTH HAVE BEEN ADDED. IF SET OFF IS GIVEN THE PENALTY WILL BE DRASTICALLY REDUCED. RELI ANCE IS PLACED ON THE SUPREME COURT JUDGMENT IN THE CASE OF RELIANCE PETR O PRODUCTS LTD. 322 ITR 158; PRICE WATER HOUSE COOPER 348 ITR 306(SC) A ND OTHER JUDGMENTS RELIED ON BEFORE LOWER AUTHORITIES. IN THIS REGARD RELIANCE IS PLACED ON DECISION OF HONBLE ITAT, MUMBAI (TM) GIVEN IN CASE OF NARANGS INTERNATIONAL HOTELS (P) LTD. V/S. DCIT, CIRCLE 1 ( 2), MUMBAI REPORTED IN 137 ITD 53 AS UNDER: SECTION 271 (1)(C) READ WITH SECTION 37 (1) OF THE INCOME TAX ACT, 1961 PENALTY FOR CONCEALMENT OF INCOME ASSESSMENT YE AR 2002-03 WHETHER MERE FACT OF MAKING OR CONFIRMING THE ADDITION IN Q UANTUM CANNOT IPSO FACTO LEAD TO INFERENCE THAT THERE HAS BEEN CONCEALMENT O F INCOME OR FURNISHING OF INACCURATE PARTICULARS OF SUCH INCOME BY ASSESSEE S O AS TO LEVY PENALTY UNDER SECTION 271 (1)(C) HELD YES. .. W HETHER SINCE ASSESSEE HAD MADE A PROPER DISCLOSURE OF FACT MATER IAL TO CLAIM IN QUESTION, THERE WAS NO CONCEALMENT OF PARTICULARS OF INCOME O R FURNISHING OF INACCURATE PARTICULARS OF SUCH INCOME BY ASSESSEE S O AS TO ATTRACT LEVY OF PENALTY UNDER SECTION 271 (1)(C) HELD YES, (2) THE HONBLE GUJRAT HIGH COURT IN THE CASE OF N ATIONAL TEXTILES VS. CIT 249 ITR 125 HAS HELD THAT PROVISIONS OF SECTION 68 PERMITS THE AO TO PROVE THE UNEXPLAINED CASH CREDITS AS INCOME FOR MA KING CERTAIN ADDITIONS IF THERE IS FAILURE BY THE ASSESSEE TO GIVE AN EXPLANA TION. HOWEVER, THE ADDITION MADE ON THIS COUNT AUTOMATICALLY CANNOT JUSTIFY THE PENALTY LEVIED U/S ITA NO.672/JP/2011 SMT. DURGA DEVI SOMANI VS. ITO, KIS HANGARH 12 271(1)(C). HONBLE HIGH COURT FURTHER HELD THAT FOR LEVY OF PENALTY U/S 271(1)(C) TWO FACTORS MUST CO-EXIST (I) THERE MUS T BE SOME MATERIAL OR CIRCUMSTANCES LEADING TO THE REASONABLE CONCLUSION THAT THE AMOUNT DOES REPRESENT THE ASSESSEES INCOME. IT IS NOT ENOUGH F OR THE PURPOSE OF PENALTY THAT THE AMOUNT HAS BEEN ASSESSED AS INCOME AND (II ) THE CIRCUMSTANCES MUST SHOW THAT THERE WAS ANIMUS, I.E. CONSCIOUS CONCEALM ENT OR ACT OF FURNISHING OF INACCURATE PARTICULARS ON THE PART OF THE ASSESS EE. EXPLANATION 1 TO SECTION 271(1)(C) HAS NO BEARING ON FACTOR NO. 1 BU T HAS A BEARING ONLY ON FACTOR NO. 2. THE EXPLANATION DOES NOT MAKE THE ASS ESSMENT ORDER CONCLUSIVE EVIDENCE THAT THE AMOUNT ASSESSED WAS IN FACT THE I NCOME OF THE ASSESSEE. NO PENALTY CAN BE IMPOSED IF THE FACTS AND CIRCUMSTANC ES ARE EQUALLY CONSISTENT WITH THE HYPOTHESIS THAT THE AMOUNT DOES NOT REPRES ENT CONCEALED INCOME WITH THE HYPOTHESIS THAT IT DOES. IF THE ASSESSEE G IVES AN EXPLANATION WHICH IS UNPROVED BUT NO DIS-PROVED I.E. IT IS NOT ACCEPTED BUT CIRCUMSTANCES DO NOT LEAD TO THE REASONABLE AND POSITIVE INFERENCE THAT THE ASSESSEES CASE IS FALSE, THE EXPLANATION CANNOT HELP THE DEPARTMENT BECAUSE THERE WILL BE NO MATERIAL TO SHOW THAT THE AMOUNT IN QUESTION WAS TH E INCOME OF THE ASSESSEE. (3) HONBLE APEX COURT IN THE CASE OF EILLY LILLY & COM PANY REPORTED IN 312 ITR 225 HAS HELD THAT THE PENALTY PROCEEDINGS I S NOT AN AUTOMATIC OR MANDATORY FALLOUT OF THE ADDITION MADE DURING THE A SSESSMENT PROCEEDINGS, THEREFORE, THE SAME SHOULD NOT BE LEVIED IN ROUTINE MANNER. (4) EVEN IF CERTAIN ADDITIONS MADE BY THE LEARNED A SSESSING OFFICER ARE CONFIRMED IN APPEAL, NO PENALTY PROCEEDINGS U/S 271 (1) (C) ARE ATTRACTED AS HELD BY THE JURISDICTIONAL HIGH COURT IN THE CASE O F GOSWAMI SMT. CHANDRALATA 125 ITR 700 (RAJ.). IN THAT CASE THE HO NBLE HIGH COURT HAS HELD AS UNDER:- IT IS UNDISPUTED THAT PENALTY PROCEEDINGS ARE SEPA RATE AND DISTINCT FROM ASSESSMENT PROCEEDINGS. FINDINGS IN QUANTUM PROCEEDINGS THOUGH RELEVANT AND ADMISSIBLE, THEY CA NNOT OPERATE AS RES-JUDICATA. PENALTY IS NOT A MATTER OF COURSE AND IT IS NOT ATTRACTED AUTOMATICALLY SIMPLY BECAUSE THE ADDITION HAVE BEEN SUSTAINED IN QUANTUM PROCEEDINGS. (5) THE HONBLE INDORE BENCH OF ITAT IN THE CASE OF ASSTT. CIT VS. ABRIL PHARMACEUTICALS (P) LTD. REPORTED IN 70-ITD-2 06/212 HAS ALSO OF THE SAME VIEW AND HELD AS UNDER: ITA NO.672/JP/2011 SMT. DURGA DEVI SOMANI VS. ITO, KIS HANGARH 13 WHETHER PENALTY PROCEEDINGS ARE DISTINCT FROM ASSES SMENT PROCEEDINGS AND ONE IS INDEPENDENT OF OTHER AND THE REFORE, ANY ADDITION MADE IN ASSESSMENT PROCEEDINGS MAY NOT BY ITSELF JUSTIFY IMPOSITION OF PENALTY HELD, YES (6) SIMILAR VIEW WAS EXPRESSED BY THE HONBLE CHAND IGARH B BENCH OF ITAT IN THE CASE OF ITO VS. GURCHARAN SINGH & CO. R EPORTED IN 72-TTJ-774 AND HELD AS UNDER: MERE FACT THAT THE ASSESSEE HAD ACCEPTED THIS ADDIT ION WOULD NOT, BY ITSELF, JUSTIFY IMPOSITION OF PENALTY ORDER S. 2 71 (1)(C) BECAUSE PENALTY PROCEEDINGS ARE DISTINCT AND DIFFERENT. FOR LEVY OF PENALTY, AO IS REQUIRED TO ESTABLISH THAT THE EXPLANATION GI VEN BY THE ASSESSEE WAS NOT BONA FIDE. 2.7 THUS IN THE CIRCUMSTANCES OF THE CASE LD. COUNS EL SUBMITTED THAT THERE IS NEITHER ANY MISS-STATEMENT NOR ANY INFORMATION F ILED DURING THE COURSE OF ASSESSMENT PROCEEDINGS WAS HELD AS FALSE NOR DURING THE ASSESSMENT / PENALTY PROCEEDINGS LD. AO HAS BROUGHT ON RECORD ANY MATERI AL TO PROVE THAT THE ASSESSEE IN ANY MANNER FURNISHED INACCURATE PARTICU LARS OF HIS INCOME MORE PARTICULARLY WHEN THE MOST OF AMOUNTS ON WHICH SUCH PENALTY HAS BEEN LEVIED IS OPENING BALANCES AND DOES NOT REPRESENTS THE TRANSACTIONS ENTERED INTO BY THE APPELLANT DURING THE IMPUGNED ASSESSMEN T YEAR AND THE BOOKS OF ACCOUNTS WERE NOT DOUBTED NOR THE TRADING RESULTS D ECLARED WERE DISTURBED. THEREFORE, IT IS PRAYED THAT THE PENALTY OF RS. 14, 42,682/- AS IMPOSED U/S 271(1)(C) DESERVES TO BE DELETED. 2.8 FURTHER CASE LAWS RELIED UPON BY THE ASSESSEE A RE AS UNDER:- ITA NO.672/JP/2011 SMT. DURGA DEVI SOMANI VS. ITO, KIS HANGARH 14 170 TAXMAN 471 CIT VS. ASHOK TAKER (DELHI) PENALTY FOR CONCEALMENT OF INCOME: - ASSESSMENT YEAR 1998-99 DURING ASSESSMENT PROCE EDINGS, ASSESSEE SURRENDERED CERTAIN AMOUNT FOR TAXATION AND SUBMITT ED THAT SAME WAS DONE IN ORDER TO BUY PEACE ASSESSING OFFICER ADDE D BACK SAID AMOUNT TO INCOME OF ASSESSEE AND ALSO INITIATED PENALTY PR OCEEDINGS AGAINST HIM UNDER SECTION 271(1)(C) COMMISSIONER (APPEALS) FO UND THAT BESIDES FACTUM OF SURRENDER OF INCOME BY ASSESSEE, ASSESSIN G OFFICER HAD FAILED TO BRING ANY OTHER MATERIAL ON RECORD TO SHOW THAT SURRENDERED INCOME WAS CONCEALED INCOME AND, THEREFORE, INITIATION OF PENALTY PROCEEDINGS WAS NOT WARRANTED IN LAW TRIBUNAL UPHELD SAID ORD ER WHETHER ORDER OF TRIBUNAL WAS TO BE UPHELD HELD, YES. 300 ITR 40 V.V. PROJECTS AND INVESTMENTS PVT. LTD. VS. DY. CIT (2008) (AP) PENALTY REVISED RETURN TO BUY PEACE PENALTY DEL ETED S. 271(1)(C) THE DECLARATION OF INCOME MADE BY THE ASSESSEE COMP ANY IN THE REVISED RETURN AND THE EXPLANATION THAT IT HAD DONE SO TO B UY PEACE WITH THE DEPARTMENT AND TO AVOID PROTRACTED LITIGATION WAS A CCEPTED BY THE ASSESSING OFFICER. THE ASSESSMENT WAS COMPLETED ACCEPTING THE NET INCOME RETURNED IN THE REVISED RETURN OF INCOME. NOT ONLY DID THE ASSE SSMENT ORDER NOT REFLECT ANY SATISFACTION AS REQUIRED UNDER SECTION 271(1) O F THE ACT BUT EVEN THE SHOW CAUSE NOTICE DATED SEPTEMBER 17, 2001, WAS SIL ENT WITH REFERENCE TO THE SATISFACTION ARRIVED AT BY THE ASSESSING OFFICE R AS TO THE CONCEALMENT OF INCOME BY THE ASSESSEE COMPANY. NOTHING HAD BEEN PL ACED BEFORE THE COURT BY THE REVENUE TO SHOW THAT ANY OTHER MATERIAL WAS AVAILABLE WITH THE ASSESSING OFFICER TO THE EFFECT THAT THE ASSESSEE H AD CONCEALED ITS INCOME. HENCE, IT WAS HELD THAT PENALTY COULD NOT BE IMPOSE D. 35 DTR 420 ASSTT. CIT VS. INDICA EXPORTS (DEL H) PENALTY UNDER SECTION 271(1)(C) CONCEALMENT ADD ITION UNDER SECTION 68 AO HAVING MADE ADDITION UNDER SECTION 68 PURSUANT TO THE OFFER OF THE ASSESSEE SURRENDERING RS. 10 LACS IN VIEW OF ITS IN ABILITY TO PRODUCE ITS BOOKS OF ACCOUNT AND THE CREDITORS, SUBJECT TO THE CONDIT ION OF NON-LEVY OF PENALTY, PENALTY UNDER S. 271(1)(C) WAS NOT CALLED FOR, PART ICULARLY WHEN NO SUCH PENALTY WAS IMPOSED IN OTHER YEARS IN RESPECT OF SI MILAR SURRENDER. ITA NO.672/JP/2011 SMT. DURGA DEVI SOMANI VS. ITO, KIS HANGARH 15 127 TTJ 599 ACIT VS. MALU ELECTRODES PVT. LTD. (201 0) (NAG.) [SOURCE: TAX WORLD MAGAZINE VOL. XLIII, PART-2] MERE FACT OF AGREED ADDITION DOES NOT RESULT INTO A CONCLUSION THAT THE AMOUNT AGREED TO BE ADDED AS INCOME IS CONCEALED IN COME. IN SUCH A CASE THE AO SHOULD FURTHER BRING SOME MATERIAL ON RECORD SO THAT IT IS CONCLUSIVELY ESTABLISHED THAT SUCH SURRENDER, IN FA CT, REPRESENTED THE REAL INCOME OR UNDISCLOSED INCOME OF THE ASSESSEE. ON TH E FACTS OF THE CASE, PENALTY WAS NOT LEVIABLE IN RESPECT OF SURRENDER OF SHARE CAPITAL AS INCOME. CONCEPT OF PLEA BARGAIN IS RECOGNIZED IN THE IT ACT , 1961, IN SPECIFIC SITUATIONS AS WELL AS BY GIVING DISCRETION TO THE A O TO LEVY OR NOT TO LEVY PENALTY UNDER S. 271(1)(C), HENCE, THE AO, IN CASE OF AGREED ADDITIONS, SHOULD NOT LEVY PENALTY UNDER S. 271(1)(C). IT IS G ENERALLY BELIEVED THAT THIS LEGITIMATE EXPECTATION OF THE ASSESSEE IS NOT BINDI NG ON THE AO BECAUSE THE ASSESSING AUTHORITY CANNOT MAKE A PROMISE AGAINST S TATUE. BUT WHEN THERE IS A DISCRETION WITH THE AO, THEN, SUCH LEGITIMATE EXP ECTATION SHOULD BE FULFILLED AS THE PRINCIPLE OF ESTOPPELS CAN BE APPL IED ONLY WHEN THERE IS NO DISCRETION. 131 ITR 619 ADDITIONAL COMMISSIONER OF INCOME-TAX V . AGGARWAL MISTHAN BHANDAR (RAJ.) PENALTY--CONCEALMENT OF INCOME--ASSESSEE, A SMALL T RADER, DOING HALWAI BUSINESS--NET PROFIT DECLARED VERY LOW--ESTIMATED H IGHER ASSESSMENT MADE BY ITO ACCEPTED BY ASSESSEE TO AVOID DISPUTES BY WA Y OF APPEALS, PENALTIES, ETC.--TRIBUNAL FINDING THAT SUCH BOOKS OF ACCOUNT A S WERE POSSIBLE OR PRACTICABLE IN SUCH BUSINESS WAS MAINTAINED--NO MAN IPULATION OR OTHER INDICATION OF CONCEALMENT OF INCOME POINTED OUT BY DEPARTMENT--CO- OPERATION EXTENDED IN COMPLETING ASSESSMENT DOES NO T AMOUNT TO CONFESSION OF CONCEALMENT OF INCOME--LEVY OF PENALTY NOT VALID --INCOME-TAX ACT, 1961, S. 271(1)(C). 308 ITR 33 (AT) STAR INTERNATIONAL P. LTD. V. ASSI STANT COMMISSIONER OF INCOME-TAX (LUCKNOW ) PENALTY--CONCEALMENT OF INCOME OR FURNISHING OF INA CCURATE PARTICULARS-- COMMISSION PAID TO ARTISANS ON SALE OF MACHINES BY BEARER CHEQUE--NOTHING ON RECORD TO SHOW CLAIM BOGUS OR THAT MONEY ON CHEQ UES DID NOT GO TO ARTISANS--ASSESSING OFFICER IMPOSING PENALTY BASED ON PRESUMPTION AND ITA NO.672/JP/2011 SMT. DURGA DEVI SOMANI VS. ITO, KIS HANGARH 16 INFERENCE--NOT PROPER--LEVY OF PENALTY TO BE SET AS IDE--INCOME-TAX ACT, 1961, S. 271(1)(C). 251 ITR 9 (SC) COMMISSIONER OF INCOME-TAX V. SURESH CHANDRA MITTAL PENALTY--CONCEALMENT OF INCOME--ASSESSEE INITIALLY FILING RETURNS WITH MEAGRE INCOME--FILING REVISED RETURNS SHOWING HIGHE R INCOME AFTER SEARCH AND NOTICE FOR REOPENING ASSESSMENT, TO PURCHASE PE ACE AND AVOID LITIGATION-- APPELLATE TRIBUNAL--HOLDING THAT BURDEN OF PROVING CONCEALMENT NOT DISCHARGED AND PENALTY CANNOT BE LEVIED--PROPER--IN COME-TAX ACT, 1961, SS. 132, 271. 265 ITR 329 COMMISSIONER OF INCOME-TAX V. BADRILAL CHATURBHUJ (RAJ.) REFERENCE--PENALTY--TRIBUNAL FINDING REVENUE GAVE A SSURANCE TO THE EFFECT THAT NO PENALTY SHALL BE LEVIED IF APPEAL FILED BY ASSESSEE WAS WITHDRAWN AND CANCELLING PENALTY--FINDING OF FACT --NO QUESTION O F LAW ARISES--INCOME-TAX ACT, 1961, SS. 256(2), 271(1)(C). 2.9 THE LD DR ON THE OTHER HAND VEHEMENTLY ARGUES T HAT ONCE THE INCOME IS SURRENDERED BY ASSESSEE, REVENUE HAS NO BURDEN O N IT T PROVE THE MOTIVE OR MENS REA. RELIANCE IS PLACED ON FOLLOWING RECENT JUDGMENT OF HONBLE SUPREME COURT: MAK DATA V CIT 358 ITR 593 (SC) 2.10 THE LD COUNSEL FOR THE ASSESSEE ON THE OTHER H AND CONTENDS THAT MAK DATA JUDGMENT ITSELF POSTULATES THAT THE PENALTY CA N BE IMPOSED ON SURRENDER BY THE ASSESSEE IF IT IS MADE AFTER DETECTION BY TH E DEPARTMENT AND ASSESSEE DOESNT GIVE PROPER REPLY. IN THAT CASE THE ADDITIO N WAS MADE AFTER DETECTION BY THE DEPARTMENT, ASSESSEE WAS FOUND TO BE DEFLECT ING THOSE ENQUIRIES AND ITA NO.672/JP/2011 SMT. DURGA DEVI SOMANI VS. ITO, KIS HANGARH 17 NO OTHER REPLY WAS FILED. IN THE INSTANT CASE ASSES SEE HAS DEMONSTRATED THAT NEITHER THE ADDITION NOR THE PENALTY COULD HAVE BEE N IMPOSED IN THIS YEAR. THE SURRENDER OFFER WAS NOT ACCEPTED ON FACE VALUE BY THE AO. IN THAT CASE ASSEESEES REPLY IN PENALTY PROCEEDINGS OUGHT TO HAV E BEEN CONSIDERED, CONTROVERTED AND NOT SUMMARILY BRUSHED ASIDE. THUS MAK DATA CASE IS NOT APPLICABLE TO ASSESSEE. BESIDES ALL THE RELEVANT PA RTICULARS HAVING BEEN FURNISHED WITH THE RETURN, HONBLE SUPREME COURT JU DGMENT IN THE CASE OF RELIANCE PETRO PRODUCTS IS SQUARELY APPLICABLE. 2.11 WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSE D THE MATERIAL AVAILABLE ON RECORD. WE ARE INCLINED TO DELETE THE PENALTY ON FOLLOWING REASONS:- I. IT CLEARLY EMERGES THAT THE AMOUNTS IN QUESTION WER E CARRIED OVER TRADE CREDITS FROM EARLIER YEAR, CORRESPONDING PURCHASES WERE INCLUDED IN TRADING A/ C THUS LEGALLY SPEAKING IF TRADE CREDITS ARE ADDED AS CESSATION OF LIABILITY, THE RELEVANT ENTRIES EXIST IN BOOKS AND IF THEY ARE HELD AS BOGUS THEN THEY BELONG TO E ARLIER YEARS. BESIDES RELEVANT INFORMATION IS FURNISHED AL ONG WITH RETURN OF INCOME. II. THOUGH SURRENDERED IN ASSESSMENT THE ASSESSEE CAN T AKE FRESH PLEAS IN THE PENALTY PROCEEDINGS WHICH BY SET TLED LAW ARE DISTINCT AND SEPARATE. ASSESSEE CAN MAKE FR ESH SUBMISSIONS AND LEAD FRESH EVIDENCE. AO CAN TAKE F RESH INVESTIGATIONS ON THE BASIS OF NEW PLEAS AND MATERI AL. THUS WHEN SURRENDERED IS TECHNICALLY REJECTED AND ASSESSEE GIVES REASONABLE EXPLANATION, PENALTY CAN BE ITA NO.672/JP/2011 SMT. DURGA DEVI SOMANI VS. ITO, KIS HANGARH 18 IMPOSED NOT ON THE SOLE BASIS OF ALLEGED REFUSED SURRENDER. AO HAS A DUTY TO CONSIDER THE MATERIAL A ND SUBMISSION OF THE ASSESSEE AND DECIDE WHETHER INCOM E ON THE BASIS OF THESE PLEAS WAS ASSESSABLE IN THE YEAR IN QUESTION. III. AO HAS HELD THAT THE SURRENDER IS NOT ACCEPTABLE AN D CHOSE TO ADD IT U/S 41(1) OF THE ACT. THUS TECHNICA LLY EVEN THE SURRENDER IS NOT ACCEPTED AND UNILATERAL CESSATION OF LIABLE IS ASSUMED IGNORING THE PLEA TH AT IN SUBSEQUENT YEARS TRADING LIABILITY AMOUNTS WERE PAI D IV. THE MAK DATA JUDGMENT RELIED BY LD DR ALSO HOLDS TH AT PENALTY CANNOT BE DELETED MERELY HOLDING THAT ASSES SES VOLUNTARILY SURRENDERED THE INCOME. THERE IS NO SUC H IMMUNITY AND IT IS THE EXPLANATION WHICH SHOULD BE CONSIDERED FOR PENALTY. IN THAT CASE ASSESSEE DID N OT OFFER ANY EXPLANATION EXCEPT A SPECIOUS PLEA OF VOLUNTARY SURRENDER, WHICH ALSO ON FACTS WAS FOUND TO BE NOT VOLUNTARY. THUS IN MAK DATA CASE ALSO HONBLE SUPREME COURT DID NOT DISPENSE WITH THE CONSIDERATI ON OF EXPLANATION OF THE ASSESSE AND DERMINATION OF IMPOS ITION ON MERITS. V. THE DETAILS ABOUT TRADING LIABILITIES AND TRANSACTI ONS WERE REFLECTED IN THE ACCOUNTING STATEMENTS WHICH WERE P ART OF THE RETURN OF INCOME. HONBLE SUPREME COURT IN RELI ANCE PETRO PRODUCTS CASE (SUPRA) HAS HELD THAT IF THE RE LEVANT INFORMATION IS FILED WITH THE RETURN OF INCOME IN T HAT CASE ANY VARIATION IN THE CLAIMS OF THE ASSESSEE WILL NO T ENTAIL PENALTY. THIS JUDGMENT ALSO SUPPORTS THE CASE OF TH E ASSESSEE, IN VIEW THEREOF ALSO THE PENALTY IN THIS CASE CAN NOT BE IMPOSED BY MERELY REFERRING TO THE ALLEGED SURRENDER AND WITHOUT CONSIDERING THE EXPLANATION. VI. ASSUMING WORST AGAINST ASSESSEE, PENALTY PROCEEDING S BEING SEPARATE AND DISTINCT THE YEAR OF TAXABILITY CAN BE ITA NO.672/JP/2011 SMT. DURGA DEVI SOMANI VS. ITO, KIS HANGARH 19 DETERMINED DURING PENALTY PROCEEDINGS. LOOKING FROM THIS ANGLE THE AMOUNT WHICH AT ALL MAY BE CONSIDERE D FOR PENALTY ARE TRANSACTIONS OF THIS YEAR WHICH ARE RS. 2,45,000/- AND RS. 3,58,141/-. THESE ALSO IN OUR VI EW ARE NOT LIABLE FOR PENALTY AS ALL THE RELEVANT PARTICUL ARS ARE FILED ALONG WITH THE RETURN. THUS, IN CONSIDERATION OF ENTIRETY OF FACTS, CIRCUM STANCES AND CASE LAWS AS RELIED ON BY ASSESSEE, WE ARE OF THE VIEW THAT IT I S NOT A FIT CASE OF IMPOSITION OF PENALTY U/S 271(1) OF THE ACT . THEREFORE, WE D IRECT TO DELETE THE PENALTY 3.0 IN THE RESULT, THE APPEAL OF THE ASSESSEE IS AL LOWED. THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 31- 10-2014 SD/- SD/- (T.R. MEENA) (R.P. TOLANI) ACCOUNTANT MEMBER JUDICIAL MEMBER JAIPUR DATED: 31 ST OCT. 2014 *MISHRA COPY FORWARDED TO:- 1. SMT. DURGA DEVI SOMANI, KISHANGARH 2. THE ITO, KISHANGARH 3. THE LD. CIT(A) 4. THE LD. CIT BY ORDER 5..THE LD. DR 6.THE GUARD FILE (IT NO. 672/JP/2011) AR ITAT, JAIPUR