M/S. OM PRAKASH & SONS (HUF),NEW DELHI vs. ACIT, FARIDABAD

The present appeal has been filed by the assessee assailing the correctness of the order dated 09.06.2014 of CIT(A)-V, Gurgaon pertaining to 2002-03 assessment year on the ground of upholding penalty u/s 271(1)(c) of Rs.11,095/-. The relevant facts as emanating from the record are that the assessee declared an income of Rs.50,140/- by way of filing its return which was accepted by an order u/s 143(1) on 14.02.2005. Subsequently it was noticed that the assessee had received interests of Rs.54,374/- on its deposit from Baburam Om Prakash which had not been shown in the return, accordingly proceedings u/s 148 was initiated wherein the said amount was accepted as the income of the assessee resulting in the assessment being concluded at an income of Rs.1,14,210/-. As a result of this addition penalty proceedings u/s 271(1)(c) were initiated the Ld. AR relied upon the letter dated 19.10.2007 made in the assessment proceedings stated that due to over sight the interests received was not shown and as soon as this fact was noticed the assessee has filed its return accepting the same as assessee’s income. In the penalty proceedings it was also submitted that the assessee did not maintain any books of accounts and since the accounts of Baburam Om Prakash had not been received the mistake had occurred. Not convinced with the I.T.A .No.-5648/Del/2014 explanation offered, penalty of Rs.11,095/- was levied. The said explanation was reiterating before the CIT(A). Apart from the above, it was also stated that infact before the issuance of notice u/s 148, the AO proposed to rectify the apparent error and the assessee has accepted it as a bonafide mistake. In the above background, the Ld.AR relied upon the CIT vs Rajiv Garg & Ors. [2009] 313 ITR 0256 [High Court of Punjab & Haryana] and submitted that the amount was not disclosed on account of inadvertent omission accordingly it was submitted that the penalty may be quashed.