As per explanation 1 to Section 271 (1) (c) of the Income Tax Act, the primary onus is on the assessee to furnish an explanation

IN THE INCOME TAX APPELLATE TRIBUNAL
ALLAHABAD SMC BENCH,ALLAHABAD
(THROUGH VIRTUAL COURT),

 BEFORE SHRI.VIJAY PAL RAO, JUDICIAL MEMBER
ITA No.137/ALLD/2019
Assessment Year: 2007-08

Bal Bharti Nursery School 13
Kamla Nehru Road, Allahabad
Uttar Pradesh.
PAN-AAATB6395D
(Appellant) 

vs. 

ACIT, Circle-2, Allahabad
(Respondent)

Appellant by: Mr. Vinay Kumar Agarwal, CA
Respondent by: Mr. A.K. Singh, Sr. DR

Date of hearing: 26.04.2021
Date of pronouncement 14.06.2021

O R D E R

PER SHRIVIJAY PAL RAO, JUDICIAL MEMBER:

This appeal by the assessee is directed against the order dated 08.08.2019 of CIT (appeals)arising from penalty order passed under Section 271 (1) (c) of the Income Tax Act for the assessment year 2007-08.

2. The assessee has raised following grounds:-

 (i) Because considering the facts and the circumstances of the case penalty of Rs. 9,54,952/- imposed under section 271 (1) (c) of the Income Tax Act, 1961 is erroneous and bad in law.

 (ii) Because order of CIT (Appeals) confirming the penalty of Rs. 9,54,952/- is illegal. The penalty is liable to be cancelled.The assessee is a society and engaged in the activity of running educational institution. The assessee has filed its return of income on 12th February, 2008 declaring ‘nil income’. There was a survey under Section 133 A of Income Tax Act at school and office premises of the assessee on 6.12.2006 during which certain facts were detected from the record of the assessee. The A.O. in the assessment proceedings noted that there a discrepancy in the student fee as shown by the assessee in the books of accounts in comparison to the facts and details noted during the survey. The Assessing Officer accordingly took the student fee as per survey recording and computed the total students fee for the year under consideration. Accordingly the A.O. made an addition of the differential amount of Rs. 27,97,056/- The assessee challenged the action of the Assessing Officer in making the addition to the income of the assessee, however, it could not succeed before the CIT (appeals) as well as before this Tribunal. In the meantime the Assessing Officer initiated penalty proceedings under Section 271(1) (c) of the act and levied the penalty of Rs. 9,54,952/-being 100% of tax should to have been evaded by the assessee on account of under reporting of student fee. The assessee challenged the penalty order passed under Section 271 (1) (c) by filling an appeal before the CIT (appeal) however, the CIT (appeal) has confirmed the levy of penalty under Section 271 (1) (c) while passing the impugned order.

3. Before the Tribunal the Ld. AR of the assessee has submitted that the assessee is an educational institution having income from fee and schools receipt from students. The assessee has maintained regular books of accounts, which have been duly audited by the Charted Accountant. The fee income recorded in the books of accounts has been supported by the fee receipt and other records. The assessee has shown a consolidated fee of Rs. 1,52,34,584/- comprising of Rs. 1,46,39,389/- pertaining to Allahabad unit and Rs. 5,95,195/-for Lucknow unit. The Assessing Officer has estimated the fee receipt for the entire financial year on the basis of compilation of fee income for one month and multiplying by 12. Thus, the Ld. AR has contended that the addition made by the Assessing Officer is based on estimation of the income of the assessee and thereby the case of the assessee does not fall in the ambit of furnishing inaccurate particulars of income or concealment of particulars of income. The Assessee Officer has estimated the fee receipt without considering the fact that for all the 12 months the receipt from the students is not uniformed but there are defaults and outstanding amounts in respect of the students who have left in between. The fee receipt recorded in the books of accounts by the assessee is supported by the fee receipts and therefore, it is the correct amount of fee received by the assessee during the year. Though the addition is sustained in the quantum proceedings however, the addition may made by the Assessing Officer is based on estimation. The Ld. AR has submitted that the penalty levied by the Assessing Officer under Section 271 (1) (c) of the Act is not sustainable and liable to be deleted. In support of his contention he has relied upon the decision of the Hon'bleSupreme Court in case of CIT vs. Reliance Petro Products Private Ltd.

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