Brief of the case:
In the case of S.L. Shiva Raj Vs. DCIT Hyderabad Bench of ITAT uphold the penalty order by holding that the penalty is levied with reference to original return of income and not with reference to the assessment made consequent to the disclosure by assessee.
Facts of the case:
- Assessee is a Sales Tax Practitioner and filed ROI for the AY 2002-03 disclosing an income of Rs. 2,99,263/-.
- There were search and seizure operations conducted in assessee’s case on 16-06-2008, when he was intercepted at Rajiv Gandhi International Airport at Hyderabad on his way from Chennai and cash of Rs. 12.65 Lakhs was found. During search 27 undisclosed bank accounts of the assessee were detected.
- In his deposition u/s. 132(4), it was admitted that the deposits were out of the unaccounted sources of income. Hence, Assessee was asked to submit cash flow statement.
- Assessee had filed necessary cash flow statements and the excess application of funds over the explainable sources came to an extent of Rs. 90.47 Lakhs as on 31-03-2008.
- For the impugned assessment year, the unexplained negative cash balance came to an amount of Rs. 9,16,321/-.
- Since assessee’s income has escaped assessment, proceedings u/s. 147 were initiated and notice u/s. 148 was issued. In response to which assessee filed ROI after admitting amount of Rs. 9,16,321/-.
- AO completed the assessment proceedings determining the total income at Rs. 12,15,580/- as admitted in the return in response to notice u/s. 147 after quantified the peak negative balance of Rs. 9,16,321/- and separately brought to tax taking the income as per the original return and initiated penalty proceedings u/s 271 (1) (c).
- As assessment was accepted no appeal was filed against the assessment order.
Contention of the assessee:
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