M/S. VIJAY LAKSHMI PRINTING WORKS (P) LTD.,NEW DELHI vs. ACIT, NEW DELHI

The only issue involved in this appeal is the imposition of penalty u/s 271(1)(c) sustained by Ld. CIT(A). None appeared on behalf of the assessee. I, therefore, decided to dispose of the appeal after hearing Ld. D.R. and gone through the orders of tax authorities below.

I noted that in this case, the A.O. has imposed penalty for Rs.2,11,197/- u/s 271(1)(c) of the Act being 100% of the tax sought to be evaded for concealment of particulars of income and furnishing of inaccurate particulars of income. The A.O. made addition of Rs.6,68,157/- in respect of credit balance of the following parties:-

Out of these parties, one of the parties M/s. Gokul Enterprises confirmed the balance but the AO made the addition as according to Him ITR/PAN was missing. So far the assessee submitted that M/s. Gokul Enterprises is the proprietorship concern and, therefore, He filed the copy of PAN of the Proprietor. The copy of the same was also produced before me which contained PAN:AGZPM1198G. Similarly, assessee has submitted confirmation in respect of other two parties along with their PAN but the A.O. noted difference in the accounts. The assessee submitted the explanation which was rejected by the AO and penalty u/s 271(1)(c) was imposed which was confirmed by Ld. CIT(A).

Penalty u/s 271(1)(c) is not automatic. Penalty cannot be imposed in each and every case where the addition has been made and sustained. The AO imposed the penalty for concealing the particulars of income and furnishing of inaccurate particulars of income u/s 271(12)(c). Penalty can be imposed by the AO if he is satisfied that the assessee has concealed the particulars of income or furnished inaccurate particulars of income. There must be specific default committed by the assessee. In case, the concealment of particulars of income in Explanation (1) will apply and the onus will be on the assessee to submit the explanation while in the case of furnishing of inaccurate particulars of income as per Explanation (1), does not apply, the onus will be on the Revenue to prove that the assessee has furnished inaccurate particulars of income. In this case, I noted that the assessee has submitted explanation which is supported by the evidence as is apparent from the copy of accounts of these parties furnished along with the paper book. These parties are I.T.payees in existence and the assessee has even regular dealing with these parties. There may be a number of reasons for difference in the reconciliation but it cannot be said that the assessee has concealed the particulars of income and furnished inaccurate particular of income. 6. Ultimately, I noted that the A.O. has imposed the penalty for furnishing of inaccurate particulars of income. The AO has not brought out that what inaccurate particulars have been furnished by the assessee for the sum of Rs.5,00,914/- is concerned out of Rs.6,68,157/- in respect of which the penalty has been imposed, the said sum has duly been confirmed by the parties concerned and it appears that the AO ignored the fact that in the case of proprietorship concerned, the assessment is made in the hands of individual and the proprietorship concern is not apparently assessed. Under these facts, since the Revenue has not discharged its onus, I delete the penalty imposed u/s 271(1)(c) of the Act. 7. In the result, appeal filed by the assessee is allowed. Order pronounced in the open court on 10th Nov., 2015. 8.