Voluntarily surrender of income can’t escape penalty if assessee deliberately not shown unaccounted income in return

Brief of the case:

In the case of DCIT Vs. M/s Sunrise Stock Services P.Ltd. Chandigarh bench of ITAT reversed the order of CIT (A) who deleted the penalty made on estimation basis. It was allegation of AO that assessee voluntarily surrendered the addition and statement of the director was recorded. Finally ITAT have held that in the light of the statement of the Director recorded during the course of survey and ledger found against the assessee showing unaccounted commission earned by the assessee, clearly revealed that it is a fit case of levy of the penalty because the assessee has concealed the particulars of income.

Facts of the case:

• Survey was conducted under section 133A of the Act on the business premises of the assessee company on 15.06.2004, during the course of survey assessee disclosed additional income totaling to Rs. 14,25,000/-.
• The books of account of the assessee were seized during the survey operation and later on released as per order of the CIT dated 03.06.2005.
• AO made addition on account of commission earned i.e. 2% on the total turnover which comes to Rs. 66,62,980/-.
• Amount of commission was also added to the income of the assessee. In appeal, the entire addition was deleted by CIT (A).
• In further appeal by the department before ITAT, the addition on account of commission earned was confirmed and part addition was sustained.
• AO observed that in the second appeal, ITAT Chandigarh Bench vide order dated 31.12.2009 with regard to addition made on account of commission earned by assessee, directed to apply rate of 0.75% commission income on estimated basis.
• ITAT upheld addition of Rs. 24,98,616/- out of total addition of Rs. 66,62,980/- made by the Assessing Officer on account of commission.
• As per observation of the AO, assessee is liable for penalty under section 271(1)(c) of the Act and accordingly levied 100% penalty of the taxes.
• AO levied the penalty on account of commission earned by the assessee.

Contention of the assessee: