KAMAL PANDEY Vs. THE INCOME TAX OFFICER

JUDGEMENT

(1.) THIS appeal filed by assessee against the order of the Commissioner of Income Tax (Appeals) -18, Mumbai having concurrent jurisdiction with CIT(A) -VI, Hyderabad dated 05 -09 -2013, is on the issue of levy of penalty u/s. 271(1)(c) of the Income Tax Act (Act).

(2.) BRIEFLY stated, assessee an individual is in the business of undertaking labour contracts. Assessee filed return of income declaring total income of Rs. 4,83,380/ -. Assessment was completed u/s. 143(3) determining total income of Rs. 7,09,130/ - inter alia making an addition of Rs. 2,25,800/ - as a disallowance of various expenditure under wages account. This disallowance made by Assessing Officer was accepted by assessee. Assessing Officer initiated proceedings u/s. 271(1)(c). During the proceedings, assessee was asked to submit the Books of Accounts again to justify the assessee's submission that there are genuine omissions which were offered as income during the assessment. Assessing Officer noted that assessee has tried to manipulate entries so as to show that expenditure was claimed genuinely. He was of the opinion that there are discrepancies, interpolation and over -writings done by the assessee after the assessment was completed so as to avoid the penalties. Accordingly, AO came to the conclusion that assessee has deliberately furnished inaccurate particulars of income and levied penalty of Rs. 1,95,000/ -.

(3.) IT was the submission of the ld. Counsel that the observations of the Assessing Officer and the CIT(A) with reference to tampering of books are not warranted. It was submitted that Assessing Officer examined the books at the time of scrutiny, found out certain discrepancies which the assessee accepted due to his inability to verify each and every entry in the Books of Accounts. Ld. Counsel explained the nature of additions made in the assessment to submit that these are genuine mistakes happened in the course of business and since assessee has accepted those discrepancies, there is no need to levy any penalty. Ld. DR however, relied on the orders of the Assessing Officer and CIT(A) to submit that assessee deliberately tampered to the Books of Accounts in the course of penalty proceedings and therefore levy of penalty is warranted.