[aaykarbhavan] Mere fact of surrender could not necessarily be an admission of assessee that amount surrendered was undisclosed income and liable to be subjected to penalty

1. ITAT DELHI - Income Tax
   Asstt. IT., Cirle-2, Gurgaon Versus Shri Shailesh Mital
   Penalty u/s 271(1)(c) of the Act – Held that:- The order of the CIT(A) upheld - It cannot be held as an inflexible rule that when the assessee agrees to have certain items included in his total income, he makes an admission which by itself would warrant the imposition of penalty - It would be a wrong notion deciding the penalty proceedings that once a surrender is made of any amount, the assessee can be straightaway penalized without asking the Assessing Officer to bring some other material and further proof establishing the dishonest concealment of the undisclosed income and the falsity of the return and without affording the assessee an opportunity to show that the surrendered amount was in reality his undisclosed income or that it was for certain other reasons that the assessee had made surrender of the amount - no addition on account of sundry creditors can be made unless the trade liability had ceased to exist, even if no confirmations are filed – Relying upon CIT vs. Sita Devi Juneja [  PUNJAB AND HARYANA HIGH COURT].
   
   Mere fact of surrender could not necessarily be an admission of assessee that amount surrendered was undisclosed income and liable to be subjected to penalty – Relying upon CIT of CIT vs. Punjab Tyres - MADHYA PRADESH High Court] - no penalty u/s. 271(1)(c) can be levied when the assessee has surrendered certain amount in the assessment proceedings - The requirements of sections 271(1)(c) had not been satisfied so as to bring the case of the assessee within the same - Thus, the penalty could not be levied on the amount surrendered by the assessee, unless there was material on the record to show that the surrendered item was his income - there was no case of furnishing of inaccurate particulars of income so as to make the appellant liable for penal consequences – thus, the order passed by the AO u/s 271(1)(c) levying penalty is cancelled – Decided against Revenue.

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Regards

Prarthana Jalan

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