B.R. STEEL PRODUCTS P. LTD,NAVI MUMBAI vs. ITO 2(1)(1), NAVI MUMBAI

The present appeal is filed by the assessee against the order of CIT(A)-4, Mumbai dated 27.08.2010 confirming the order of penalty order dated 27.11.2003 passed u/s. 271(1)(c) of the I.T. Act.

The brief facts of the case are that the assessee filed return of income for Assessment Year (AY) 1998-99 on 30.11.1998 declaring total loss of Rs. 11,30,760/- and the assessment order dated 15.03.2011 u/s 143(3) of the Act was passed after scrutiny of the return, total income of assessee was assessed at Rs. 27,04,525/-. While computing the total income, the Assessing Officer (AO) added a sum of Rs. 26,00,000/- as unexplained cash credit. 3. The assessee preferred an appeal in respect of quantum before the CIT(A) and the same is dismissed vide order dated 25.07.2003. After dismissal of appeal, the assessee was issued show cause notices to appear before the AO within three days of receipt of the said notice and make submission as to why the penalty should not be imposed, since no reply could be filed, the AO inflicted the penalty of Rs. 9,10,000/- vide order dated 27.11.2003. Against the order of AO dated 27.11.2003, assessee preferred an appeal before the CIT(A) and the same was dismissed vide order dated 27.08.2010, against which the present appeal is filed before us.

Ld. Authorised Representative (AR) of the assessee has argued that no opportunity for explaining or making submission was given by AO and the order of AO itself revealed that a show cause notice was issued to the assessee either to appear or send written submission within three days of receipt of notice and further argued that even the CIT(A) has not given proper and fair opportunity to the assessee. During the course of submission, we raised the query from AR of the assessee about the result of second appeal before the ITAT. However, the AR fairly conceded that 2nd appeal against the quantum has been dismissed but no order is available with the assessee and further disclosed that the assessee has died and his LRS are not aware about the detailed of the orders passed by the ITAT in quantum appeal and does not know if the appeal was dismissed on merit or in default.

The AR of the assessee further argued that addition was made u/s 68 of the Act as the confirmation of loan availed by assessee could not be filed from the certain lenders during the assessment proceedings, though the assessee has not concealed any income nor filed any inaccurate particulars and relied upon the following judgments. 1. [2014] 32 ITR (Trib.) 206 (Lucknow) titled as Vikram Bhatia vs. ITO. 2. [2008] 218 CTR (Bom HC) 581 titled as Shree Nirmal Commercial Ltd. vs. CIT. 3. [2014] 147 ITD 686 (Del. Trib.) titled as Saket Agarwal vs. ITO.

The DR of the revenue has relied upon the orders of authorities below: In case of Vikram Bhatia vs. ITO, the Co-ordinate bench of ITAT, Lucknow has held that explanation of assessee regarding cash credit not established to be not bonafide penalty cannot be imposed. In Shree Nirmal Commercial Ltd. vs. CIT, the Tribunal has held that addition u/s 68, assessee nowhere admitted that amount added u/s. 68 was is concealed income, no penalty u/s 271(1)(c) could be levied and further the Co-ordinate Bench of Delhi Tribunal in case of Sakat Agarwal vs. ITO, it was held by Co-ordinate Bench of Delhi Tribunal that assessment order is not conclusive evidence that the amount assessed was infact the income of the assessee and cannot be presumed that there was a conscious concealment or act of furnishing inaccurate particulars of income by the assessee, therefore, the penalty was not imposable and the penalty imposed by the AO was erroneous assumption.

We have considered the rival contentions of the parties and the material available on record and the assessment order including of the statement of bank account of assessee from 25.09.1997 to 16.10.1997 and the deposit slip with the Bankers of the assessee shown the 3 B. R.Steel Products Pvt. Ltd. credit in the account of assessee in respect of addition made in the assessment order, which is filed in the form of Paper Book.

Perusal of the statement of account, deposit slips and the submissions made to the AO dated 03.03.2003 one can easily conclude that there was no concealment on the part of assessee or reason of filing inaccurate particular. Penalty u/s 271(1)(c) can only be inflicted wherein the assessee intentionally and deliberately concealed the income or submits the inaccurate particulars. However, in the present case, the element of intentional concealment is missing. Moreover, the addition was made by the AO due to non-confirmation by the creditors. The ratio laid down in case(s) of Shree Nirmal Commercial Ltd. vs. CIT., Vikram Bhatia vs. ITO. & Saket Agarwal vs. ITO are squarely covered the facts of assessee case.

Hence, in our opinion the order passed by CIT(A) vide its order dated 27.08.2010, confirming the order of penalty is not sustainable in law, hence, the same is set-aside.