T.R. Senthil Kumar ORDER
Waseem Ahmed, Member (A)
1. The captioned appeal has been filed at the instance of the assessee against the order of the Ld. Commissioner of Income Tax (Appeals)-2 (in short the Ld. CIT(A)), Rajkot dated 28/11/2018 arising in the matter of penalty order passed under Section 271(1)(c) of the Income Tax Act, 1961 (here-in-after referred to as "the Act") relevant to the Assessment Year 2012-13.
2. When the matter was called for hearing, nobody appeared from the side of the assessee. The appeal was filed by the assessee in the year 2019 and thereafter the same was listed for hearing on various occasions. But it was found that none of the time anyone appeared from the side of the assessee. Thus, in the absence of any cooperation from the side of the assessee, we decided to proceed with the hearing ex parte to the assessee and after hearing the Revenue.
3. The only effective issue raised by the assessee is that the learned CIT(A) erred in confirming the levy of penalty under section 271(1)(c) of the Act for Rs. 3,46,390/- only.
4. The facts in brief are that the assessee is a partnership firm and engaged in the business of real estate development. The Assessee for the year under consideration declared income at NIL. However, the AO in the assessment order passed under section 143(3) of the Act made addition of Rs. 11,21,000/- on account unexplained cash credit under section 68 of the Act. The AO also initiated penalty proceeding under section 271(1)(c) of the Act.
5. It was, during the penalty proceeding, was submitted that due to non-cooperation from the credit or parties, the assessee was not able to furnish necessary documents in support of genuineness of loan credit. Now it has gathered all the documentary evidences such as copy of confirmation, bank statement, PAN and ITR in respect of identity, genuineness and creditworthiness of the loan credit.
6. However, the AO found that the assessee not furnished any primary evidence required under section 68 of the Act, at the time of assessment proceeding and appellate proceeding before the learned CIT(A). Furthermore, the evidences furnished for the first time during penalty proceedings have certain deficiencies which are as under:
i. Confirmation letter in case of both the creditors is identical, having no mentioned of date and place.
ii. Signature on confirmation letter is fabricated.
iii. Bank stamen of creditor was not furnished
iv. ITR of only one party was furnished and that too belongs to different assessment year.
6.1. In view of the above, the AO held that the assessee failed to prove the genuineness of credit entries in the books of accounts. The AO accordingly held that the assessee furnished inaccurate particulars of income and thus the assessee is liable to the levy of penalty under section 271(1)(c) read with explanation. Thus, the AO levied penalty of Rs. 3,46,390/- being 100% of the amount of tax being sought to be evaded.
6.2. The learned CIT(A) on appeal by the assessee, also confirmed the levy of penalty by observing as under:
"Having considered facts and circumstances the case, I find that impugned penalty has been levied with respect to the addition of Rs. 1121000/- made under section 68 in respect of un-explained cash credits. The relevant facts are that the assessee during assessment proceedings had failed to prove the identity of the creditors, their creditworthiness and the genuineness of the credits by adducing necessary and sufficient........