JT.CIT.,-8(1)(OSD), MUMBAI vs. CLEANTEC HOSPITALITY SERVICES PVT.LTD.(NOW KNOWN AS ISS INTERGREATED FACILITY SERVICES PVT.LTD), MUMBAI

The present appeal has been filed by the Revenue against the order of CIT(A)-16, Mumbai dated 31.10.2012 in respect of Assessment Year (AY) 2006-07 on the following grounds of appeal:

"On the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in cancelling the penalty of Rs.12,05,725/- levied by the AO u/s 27l(1)(c) of the I.T. Act.

"On the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in cancelling the penalty levied by the AO u/s 27l(1)(c) of the I.T. Act, in 2 ITA No. 469/M/2013 M/s Cleantec Hospitality Services Pvt. Ltd.

"On the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in cancelling the penalty levied by the AO u/s 27l(1)(c) of the I.T. Act, by relying upon the decision of Hon'ble Supreme Court in CIT Vs Reliance Petroproducts (P) Ltd.(2010) 322 ITR 158 (SC), the facts of which are distinguishable from the facts of the assessee's case and therefore the Ld.CIT(A) was not justified in deleting the penalty u/s27l(1)(c) by referring to the said decision."

"On the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in cancelling the penalty levied by the AO u/s 27l(1)(c) of the I.T. Act, by relying upon the decision of Hon'ble Supreme Court in CIT Vs Reliance Petroproducts (P) Ltd.(2010) 322 ITR 158 (SC), without appreciating that, the quantum addition has been confirmed by the Ld. C!T(A) himself on the ground that the assessee failed to furnish evidence to show that the said receipts of Rs.35,82,07l/- did not pertain to it, and thus the assessee had failed to discharge its onus in terms of Section 27l(l)(c) r.w. Explanation 1 thereof." The appellant prays that the order of the CIT(A) on the above ground above set aside and that of the A.O. be restored.

The brief facts of the case are that the assessee filed its return of income on 30.11.2006 declaring total income of Rs. 1,29,29,730/-. The return of income was selected for scrutiny. While making assessment the Assessing Officer (AO) seek explanation about the entries appearing in the books of account of the assessee and added a total sum of Rs. 35,82,071/- being unexplained amount in the income of the assessee and initiated penalty proceeding for concealment of income vide assessment order dated 29.12.2008. 3. Against the order dated 29/12/2008, an appeal was filed before the CIT(A) and the addition made by AO were confirmed by the CIT(A).

In the show cause notice against the penalty proceedings, the assessee explained that transaction involved medium and large seized corporate spread out all over India wherein all transaction are done through monthly and regular billing and payments settled by crossed account payee cheque only and therefore, missing out or recording of any transaction is not possible and thus by invoking the provision of section 271(1)(c) of the Act, the AO imposed a penalty @ 100% of evaded tax .

Against the order of AO an appeal was filed before the CIT(A) and the ld. CIT(A) while disposing of the appeal accepted the appeal and set-aside the order of AO about the penalty vide order dated 31.10.2012 against which the present appeal is filed by the Revenue before us.

We have heard ld. Departmental Representative (DR) of the Revenue and Authorised Representative (AR) of the assessee and perused the material available on record.

The Ld. (DR) of the Revenue relied upon the order of AO and argued that the assessee concealed his income and was liable to saddled with the penalty as provided u/s 271(1)(c) of the Act.

We have seen the order of the Ld. CIT (A), wherein CIT(A) wrongly observed that AO has not been able to established that the explanation given by the assessee was not bona fide. The burden of prove was rather on the assessee.

During the hearing of the appeal, the ld. AR of the assessee seeks permission to file additional evidence by way of written application along with the evidence (document). The application of the assessee is supported with certain documents, in the application, the assessee has prayed that during the assessment proceeding, he did not have its books of account as the Accountant of the company has resigned from M/s Telesoftware, wherein the books of account of assessee were maintained , which was having password protection due to which the assessee could not reconcile the entries.

The application of the assessee which is supported with the documentary evidence is considered and the same is allowed to place on record.

The additional evidence filed by the assessee goes to the root of the issue for levying the penalty U/S 271(1) (c ) of the Act, which has not been considered by the lower authority while deciding the penalty in respect of the additions / disallowance so made in the quantum assessment. In view of filing and allowing the assessee to allow the additional evidence on record the case is restored/remanded to the file of AO, who shall to re-examine the evidence filed by the assessee, after giving an opportunity to the assessee for reconciliation of entries after giving appropriate opportunity to the assessee. The assessee is also directed to fully co-operate and not to seek unnecessary adjournment during the remand proceeding.

In view of allowing the application for filing additional evidence for its examination, the case is restored to the file of AO.

In the result, the appeal filed by the Revenue is allowed for statical purpose.

""यथ"/ The Respondent. 3. आयकरआयु"त(अपील) / The CIT(A), Mumbai. 4. आयकरआयु"त/ CIT आदेशानुसार/BY ORDER,

"वभागीय""त"न"ध, आयकरअपील"यअ"धकरण, मुंबई/ DR, ITAT, Mumbai 6. गाड"फाईल / Guard file. ////स"या"पत""त /// उप/सहायकपंजीकार (Asstt.