M. CHANDRA SEKHAR GOUD,,HYDERABAD vs. INCOME TAX OFFICER, WARD-7(2), HYDERABAD

Coming to the assessee’s sole substantive ground challenging correctness of both the lower authorities’ action adding license fee amount of Rs.16,13,400/- as “unexplained” forming subject matter of quantum appeal Assessing Officer had indeed initiated Section 154 proceedings qua the same on 13- 08-2010 rendering the impugned re-assessment as “invalid”

I find no merit in either of the assessee’s foregoing twin arguments. This is for the reason that even if it is presumed that the Assessing Officer ought to have proceeded with Section 154 action only there is hardly any dispute in light of hon'ble apex court’s decision in T.S.Balaram, ITO Vs. M/s.Volkart Brothers [82 ITR 50] (SC) provides that such a rectification is meant for apparent mistake(s) than those requiring detailed roving enquiries. It is made clear that the Assessing Officer had indeed issued Section 148 notice resulting in the impugned addition on account of assessee’s failure only to explain the source of the foregoing license fee amount of Rs.16,13,400/-. His latter argument in light of the ACIT Vs. Hotel Blue Moon (2010) 321 ITR 362 (SC) also stands rejected as it has come on record that no return had been filed in furtherance to Section 148 notice. This quantum appeal is declined therefore.

I next advert to assessee’s consequential penalty appeal involving the Assessing Officer’s penalty show cause notice dt.01-12-2012 nowhere specifying as to whether the taxpayer had concealed particulars of his taxable income or furnished inaccurate particulars of such an income as contemplated u/s. 271(1)(c) of the Act. Hon'ble jurisdictional high court’s decision Pr.CIT Vs. Baisetty Revathi [398 ITR 88] (Telangana & AP) holds that - such a failure renders penal action as not sustainable in law. The very legal preposition also stands reiterated in Mohd.Farhan A.Shaikh

To sum up, assessee’s quantum appeal is allowed. A copy of this common order be placed in the respective case files.