Law:

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Section 271(1)(c) of the Income-tax Act, 1961 - Penalty - For concealment of income - Assessment year 1997-98 - During assessment proceedings, Assessing Officer added unproved credits in assessee's income and also initiated penalty proceedings under section 271(1)(c) - Assessee contended that he had accepted order adding undisclosed credit as he could not produce creditors though confirmation letters had been filed and there being no lack of bona fides on his part, penalty proceedings should be dropped - Assessing Officer rejected assessee's explanation and levied penalty - On appeal, Commissioner (Appeals) accepted assessee's explanation and deleted penalty - Order of Commissioner (Appeals) was upheld by Tribunal - Whether, on facts, concurrent finding arrived at by appellate authority and Tribunal was justified - Held, yes [In favour of assessee] FACTS The assessee was an excise contractor and filed his return of income for the relevant assessment year admitting an income of Rs. 6,68,050. The assessment was completed under section 143(3) on an income of Rs. 20,68,050 by adding unproved credits in the assessee's books of account to the tune of Rs. 14 lakhs. The Assessing Officer also initiated penalty proceeding under section 271(1)(c ) for concealing income and furnishing of false/inaccurate particulars. In response to the notice, the assessee contended that he had accepted the order adding the undisclosed credit as he could not produce the creditors though confirmation letter had been filed and there was no lack of bona fide on his part wherefore in view of the Explanation 1(d) to section 271 penalty proceedings should be dropped. The Assessing Officer rejected the assessee's explanation and levied penalty under section 271(1)(c). On appeal, the Commissioner (Appeals) deleted the penalty accepting with the assessee's explanation. The Tribunal concurred with the order passed by the Commissioner (Appeals). On the revenue's appeal to the High Court: HELD The material on record would clearly show that the assessee had accepted undisclosed credit. As he could not secure the presence of the creditors though confirmation letter had been filed. In any view of the…

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