Decided on May 23,2014

Hyderabad House Pvt. Ltd. Appellant


CHANDRA POOJARI,AM. - (1.) THESE appeals by the assessee are directed against the common order of the CIT(A) -III, Hyderabad dated 13th November, 2013 for A.Ys. 2006 -07 to 2008 -09.
(2.) THE ground raised by the assessee in these appeals is with regard to levy of penalty u/s. 271(1)(c) of the Act and being so, we are inclined to adjudicate the issue in a consolidated manner.
(3.) BRIEF facts of the issue are that the assessee is a company engaged in the business of supply of food items at several outlets. A search and seizure operation u/s. 132 of IT Act, 1961 was conducted on 12.12.2007 in the business premises of the assessee and subsequently statutory notices were issued. It has filed its return of income for the A.Ys. 2008 -09, 2007 -08 and 2006 -07 and assessment was completed on 31.12.2009 for all the three years. During search and seizure operations documentary evidence was found and seized according to which the actual turnover for certain months of the year was found to be much higher than the turnover shown by the assessee in its return of income. Accordingly, the assessing officer extrapolated the turnover for the entire year. During appeals before the CIT(A) and the Tribunal, it was held that the turnover has been correctly calculated. However, the net profit had been reduced by the CIT(A) and further reduced by the Tribunal. During penalty proceedings, the issue was examined and it was held by the assessing officer that the assessee has not only been concealing income, but had also been filing inaccurate particulars of income. Accordingly, following penalties were imposed in the three years: A.Y. 2008 -09 Penalty Imposed @ 100% Rs. 14,18,852/ - A.Y. 2007 -08 Penalty imposed @ 100% Rs. 38,56,477/ - A.Y. 2006 -07 Penalty imposed @ 100% Rs. 35,56,130/ - On appeal the CIT(A) observed that the argument of the assessee that proper opportunity was not provided and that he did not know what charge to defend against is incorrect and not tenable. A mere look at the penalty order will show that ample opportunity was provided. Even the assessment order very clearly lists down the default committed by the assessee. The appeals pertaining to the assessment orders travelled right up to the Tribunal and at no stage did the assesse question the initiation of penalty proceedings. Since the initiation pertains to the assessment order, it had to be questioned vis -a -vis the assessment orders. It cannot be questioned now in the appeal pertaining to the penalty orders because the impugned orders vis -a -vis the initiation of penalty were the assessment orders. In any case, even during penalty proceedings, the assessee could have asked the assessing officer if it was not sure of any charge. However, the written submissions of the assessee and its arguments filed during the penalty proceedings clearly indicate that it was very sure of the charges and had got ample opportunity to defend its case. For all the reasons given above, the arguments pertaining to the initiation of penalty proceedings are not tenable.;

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