COMMISSIONER OF INCOME TAX vs. MICRO COMPUTER SERVICES
What did the High Court hold?
The Tribunal held that the penalty could not be levied as the assessee offered the amount to buy peace due to lack of traceable vouchers, not because the purchases were not genuine. The AO failed to prove concealment of income independently.
What were the facts?
During a survey, the assessee surrendered Rs. 1,25,00,000/-, with Rs. 25,00,000/- pertaining to AY 2003-04. The Assessing Officer imposed a penalty under Section 271(1)(c) on the surrendered amount.
What were the issues?
Whether a penalty under Section 271(1)(c) can be imposed when an amount is surrendered to buy peace due to lack of documentation, without independent proof of concealment by the Assessing Officer.
Which sections of the Income-tax Act were involved?
AI-generated summary — verify with the full judgment below
IN THE HIGH COURT OF DELHI AT NEW DELHI . ITA 25/2010 . COMMISSIONER OF INCOME TAX ..... Appellant Through: Ms. P.L. Bansal with Mr. Paras Chaudhary and Mr. Anshul Sharma, Advocates . . . Versus . MICRO COMPUTER SERVICES ..... Respondent Through: None. CORAM: HON'BLE MR. JUSTICE BADAR DURREZ AHMED HON?BLE MR. JUSTICE RAJIV SAHAI ENDLAW . O R D E R 13.01.2010 . This is an appeal against the order of Income Tax Appellate Tribunal dated 10th February, 2009 passed in ITA No.4313/Del/2007 in respect of assessment year 2003-04. The question before the Tribunal was with regard to the imposition of penalty under Section 271(1)(c) of the Income Tax Act, 1961. An amount of Rs.1,25,00,000/- was surrendered by the assessee during a survey operation out of which an amount of Rs.25,00,000/- pertained to the current assessment year, namely, 2003-04. The assessing officer imposed a penalty of Rs.7,35,000/-. The same was deleted by the Commissioner of Income Tax (Appeals) as well as by the Income Tax Appellate Tribunal by virtue of the impugned order dated 27th March, 2010. . ITA 25/2010 Page 1 of 2 After considering the contentions raised on behalf of the parties, the Tribunal concluded as under:- ?We have heard the rival contentions and perused the material on record. We find merit in the argument of learned counsel for the assessee. The assessee did not accept that purchases were not genuine, offer was made, as the vouchers are not traceable. Assessee offered the amount to buy peace, obeyed the same and paid the taxes. Books of account of the assessee have not been rejected. AO has not brought on record any further material to prove the charge of concealment of income except relying on statement of assessee. If at all statement of the assessee is to be believed in totality, which includes the deposition that the expenses are genuine but the offer is made for want of vouchers. If the AO wanted to go beyond the statement of the assessee he could have independently proven the falsity of the expenditure or should have rejected the books of account. Having not done so and relied on the statement partly, cannot be basis of penalty u/s 271 (1)(c). Since the AO failed to establish that particulars of income were false or income was concealed, order of CIT(A) cannot be found fault with. The same is upheld?. . We see no reason to interfere with the aforesaid finding because they are in the nature of findings of fact. No substantial question of law arises for our consideration. The appeal is dismissed. . BADAR DURREZ AHMED, J . . . . RAJIV SAHAI ENDLAW, J JANUARY 13, 2010 gsr . . . ITA 25/2010 Page 1 of 2 . . 6
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