Commissioner of Income Tax vs Ashok Taker

In this appeal u/s 260A of the Income Tax Act, 1961 (hereinafter referred to as ''Act''), the revenue is aggrieved by an order dated 2-9-2005 passed by the Income Tax Appellate Tribunal (hereinafter referred to as ''Tribunal''), New Delhi, Bench "G" in ITA No. 3144/Delhi/2002 relevant for the assessment year 1998-99.

By the order under appeal, the Tribunal set aside the penalty proceedings initiated by the assessing officer and upheld the view taken by the Commissioner (Appeals) [''(Commissioner (Appeals'')] to the effect that on merits no case has been made out for initiating penalty proceedings.

During the assessment proceedings it transpired that the assessee had not carried out any business for the last three years and in spite of that its balance sheet showed sundry creditors to the extent of Rs. 31,95,530. On being asked the names and addresses of the parties concerned, the assessee surrendered the amount for taxation. The assessee filed a letter dated 12-1-2001 stating that he was surrendering the amount of Rs. 31,95,530 for taxation to buy peace. The assessee also filed an affidavit affirming a declaration that since the loans for sundry creditors were more than 3 years old and time-barred he wanted to add back the amount of sundry creditors to his income. On this basis, the assessing officer added back the amount and also initiated the penalty proceedings u/s 271(1)(c) of the Act.

Subsequently the assessing officer issued a penalty order levying a penalty of Rs. 9,58,659 on the assessee. In the appeal filed by the assessee, the Commissioner (Appeals) relied upon the several decisions to hold that merely because the assessee had voluntarily surrendered income to buy peace, it did not follow that the said amount was concealed income. The Commissioner (Appeals) relied on the judgment of this court in Commissioner of Income Tax Vs. Aggarwal Pipe Co., where it was held that there must be some other material besides the factum of surrender of income by the assessee to show that the income was concealed income. The Commissioner (Appeals) concluded that the assessing officer had failed to bring any other material on record and accordingly held that the initiation of penalty proceedings was not warranted in law.

The view taken by the Commissioner (Appeals) was upheld by the Tribunal which noted that apart from the fact that the assessee had surrendered the income there was no additional adverse material brought on record by the assessing officer.

Apart from the fact that the two authorities have taken a concurrent view which should not be lightly interfered with, we are satisfied that no error has been committed by the Commissioner (Appeals) or by the Tribunal. The assessee had surrendered the income at the first instance. The assessing officer had failed to bring on record any other material to show that the conduct of the assessee was such that it warranted penalty proceedings being initiated against him. We find no error in the view taken by the Commissioner (Appeals) as well as by the Tribunal. There is no merit in the appeal.

No substantial question of law arises.

Dismissed.