COMMISSIONER OF INCOME TAX Vs. TRISHUL DEVELOPERS

JUDGEMENT

(1.) THE Revenue has preferred this appeal challenging the order passed by both the appellate authorities who have set aside the penalty proceedings initiated under Section 271(1)(c) of the Income Tax Act, 1961.

(2.) THE assessee firm is engaged in the business of purchase of sale of land. The assessee filed its return for the assessment year 2004 -05 on 31.10.2004. On 30.08.2005 a survey was conducted in the premises of the assessee and they found there were cash credits of Rs.3.35 crores in the books of account. According to the assessee, it represented advance from various parties for sale of property being developed by the assessee. However, he was not in a position to give any further details such as the address and PAN numbers of these persons from whom the cash was received. The assessee also contended that the said amounts are refunded to the concerned parties. However on 31.01.2006 the assessee filed revised return offering the said amount of Rs.3.35 crores for tax. The Assessing Authority proceeded to pass orders making the assessment. He also directed initiation of penalty proceedings. It is in pursuance of the said order, notice in the prescribed form is issued to the assessee. The assessee in its reply reiterated the stand taken by it on the assessment proceedings. The Assessing Authority did not accept the explanation offered and he levied penalty.

(3.) THE assessee preferred an appeal against the order of the Appellate Commissioner, who set aside the appeal on technical grounds.