SMT. R. PRAKASH BAI,CHENNAI vs. ACIT, CUDDALORE

This appeal of the assessee is directed against the order of the Commissioner of Income Tax (Appeals) – Puducherry, Chennai dated 25.05.2016, confirming the penalty levied by the Assessing Officer under Section 271(1)(c) of the Income Tax Act, 1961 (in short ‘the Act’) for the assessment year 2008-09.

Shri G. Baskar, the Ld. counsel for the assessee submitted that the Assessing Officer has not indicated in the show cause notice that whether he propose to levy penalty for concealment of particulars of income or for furnishing inaccurate particulars of such income.

Referring to the merit of the appeal, the Ld. counsel submitted that the assessee has furnished all the details of pawn broking advances before the Assessing Officer. The assessee has also explained before the Assessing Officer that the outstanding pawn broking advances includes her own money. Merely because the assessee agreed for addition of Rs.8,51,000/- and offered the same for taxation that does not mean that the assessee has furnished any inaccurate particulars. In the absence of any material to suggest that the assessee has furnished inaccurate particulars of income or concealed any part of her income penalty under Section 271(1)(c) of the Act cannot be levied at all.

On the contrary, Shri Sanat Kumar Raha, the Ld. Departmental Representative submitted that the assessee suppressed the pawn broking advance to the extent of Rs.9,51,000/-. The Revenue authorities found out the same during the course of survey operation.

I have considered the rival submissions on either side and perused the material available on record. The Assessing Officer levied penalty of Rs.3,45,261/- under Section 271(1)(c) of the Act without undertaking whether the assessee has concealed her income or furnished any inaccurate particulars of income. The fact remains is that Smt. R.

I have carefully gone through the orders of both the authorities below. The assessee furnished the books of accounts and also details of pawn broking advance. Merely because the source of the advance was not explained by the assessee before the Assessing Officer, the Assessing Officer levied the penalty. This Tribunal is of the considered opinion that when the assessee has filed all the details of the pawn broking advance and the books of accounts, it cannot be said that the assessee has concealed any part of her income. Moreover, the assessee is no more and the legal heirs of the assessee may not explain the source for making the pawn broking advance. Taking into consideration of the fact that the assessee has furnished the books of accounts before the Assessing Officer and also the details of pawn broking advance, this Tribunal is of the considered opinion that this is not a fit case for levy of penalty. Accordingly, the orders of the lower authorities are set aside and the penalty levied by the Assessing Officer is deleted.

In the result, the appeal of the assessee stands allowed.