SHRI PRASHANT BALASAHEB JAVALEKAR,SURAT vs. INCOME TAX OFFICER, WARD-2(1)(3), SURAT

2. The learned AO has grossly erred in imposing and the learned CIT (Appeals) II Surat has grossly erred in confirming the penalty of Rs.213063/- U/s.271(1)(c) of the Act, ignoring the fact of deletion by CIT (A) of entire addition & confirming @ 50% by ITAT purely on estimates only.

Brief facts of the case are that assessee is an individual filed his return of income for assessment year (A.Y.) 2007-08 on d 26.02.2008 declaring income of Rs.2,28,230/-. The case was selected for scrutiny and assessment was completed under section 143(3) of the Act on 31.12.2009. The AO while passing the assessment order made addition under section 69C of the Act of Rs.12,42,571/-. In the computation of income the assessee has shown agricultural income of Rs.13,92,571/-. The AO restricted the agricultural income to the extent of Rs.1,50,000/- and thereby remaining income was treated from unexplained sources under section 69C of the Act by taking view that the assessee failed to submit quantitative details of production and details related to expenses. The AO initiated penalty under section 271(1(c) of the Act. On appeal before the ld.CIT(A), the addition was upheld. However, on further appeal before the Tribunal in the addition of agricultural income was restricted to 50% of 13,92,571/- thereby addition made by AO was restricted to Rs.6,96,285/-.

On receipt of order of Tribunal, the AO issued fresh show cause notice under section 271(1)(c) of the Act. The assessee filed his reply dated 11.03.2016. The contents of reply filed by assessee is extracted in para 4 of the penalty order. In the reply, the assessee stated that the AO before making any addition has not made any investigation, the addition were Shri Prashant Balasaheb Javalekar Vs. ITO, Ward-2(1)(3), Surat../ A.Y. 2007-08 made on conjunction and surmises. The Tribunal restricted the addition to 50%. The addition is made on the estimation basis and prayed for dropping proceedings under section 271(1)(c) of the Act. The reply of the assessee was not accepted by the AO. The AO held that during the assessment, the assessee failed to submit quantitative details of production and details related to expenses. On the basis of which the AO estimated the agricultural income of the assessee. The assessee deliberately concealed his income by way of hiding facts from the Department. The AO levied penalty @100% of tax sought to be evaded, on the addition of Rs.6,39,189/- sustained by the Tribunal. The AO worked out the penalty of Rs.2,13,063/- in his order dated 29.03.2016. On further appeal before the ld.CIT(A) the action of AO was upheld. Further aggrieved, the assessee has filed the present appeal before this Tribunal. 4. None appeared on behalf of the assessee, despite the fact that authority letter in favour of K.Bhai Gheewala is filed on record. Perusal of record shows that addition in the quantum assessment were made on estimation basis. On further perusal of record, we find that assessee has placed on record various submissions filed before the ld. CIT(A) and the order passed by the Tribunal in quantum assessment in ITA No.2526/AHD/2011 dated 19.06.2015. Therefore, we decide