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Income Tax Appellate Tribunal, ‘D’ BENCH: CHENNAI
Before: SHRI V. DURGA RAO & SHRI G. MANJUNATHA
PER V. DURGA RAO, JUDICIAL MEMBER:
This appeal filed by the assessee is against the order of the learned Commissioner of Income Tax (Appeals), Puducherry in dated 31.07..2018, relevant to the Assessment Year 2010 – 2011.
Facts are in brief that there was a survey conducted in the business premises of M/s. Sri Saibaba Guest House on 16th
2 -: September, 2009. The Assessee filed his return of income for the Assessment Year 2010 – 2011 on 29.07.2010 admitting a total income of Rs.2,53,090/-. Subsequently, the case of the Assessee was selected for scrutiny and the assessment was completed u/s.143(3) of the Income Tax Act, 1961 and passed the Assessment Order on 28.02.2013 by determining a taxable income of Rs.14,05,485/-. Subsequently, the Assessing Officer had initiated a penalty proceedings u/s.271(1)(c) of the Income Tax Act, 1961.
Before the Assessing Officer and during the course of the penalty proceedings, the Assessee had submitted that I have neither concealed any income nor filed any inaccurate particulars. Therefore, Section 271(1)(c) of the Income Tax Act, 1961 has no application.
The Assessing Officer during the course of the penalty proceedings had noted that the total receipt during the period starting from April 2009 to August 2009, as per the impounded Register No.3 was Rs.14,98,680/- and the monthly average receipts for this period was Rs.2,99,736/-. Taking into account the monthly average receipts, i.e.Rs.2,99,736/-, total lodging receipts for the Financial Year 2009 – 2010 adopted at Rs.35,96,832/-, whereas admitted receipts by the Assessee is only Rs.27,51,380/- . Therefore, the difference in lodging
3 -: receipts of Rs.8,45,452 (Rs.35,96,831/- minus Rs.27,51,380/-) was treated as suppression in lodging receipts and the same was treated as concealment of income and hence penalty was levied u/s.271(1)(c) of the Income Tax Act, 1961.
On appeal, the learned Commissioner of Income Tax (Appeals) confirmed the penalty order passed by the Assessing Officer.
The learned Counsel for the Assessee had submitted that the Assessing Officer by taking into consideration only five months receipts estimated for the remaining balance seven months and submitted that penalty u/s.271(1)(c) of the Act cannot be levied on an estimated basis.
On the other hand, the learned Departmental Representative relied on the order passed by the authorities below.
We have heard both the sides, perused the materials available on record and gone through the orders of the authorities below.
In this case, the Assessing Officer has levied the penalty by taking into consideration only five months of the lodging receipts and estimating for the remaining seven months and the addition is made.
4 -: 10. In our opinion, penalty u/s.271(1)(c) of the Income Tax Act, 1961 cannot be levied on the basis of estimation. The Assessing Officer has failed to prove that the Assessee had either concealed the income or filed inaccurate particulars. Therefore, Section 271(1)(c) of the Act has no application in this case. Accordingly, we reverse the order passed by the learned Commissioner of Income Tax (Appeals) and we cancel the penalty levied by the Assessing Officer.
In the result, the appeal filed by the Assessee in is allowed. Order pronounced on 4th August, 2021 in Chennai.