The court established that mere omission from income disclosures does not signify concealment without intent to hide income, reinforcing distinctness between assessment and penalty proceedings.

ORDER

Per Udayan Dasgupta, J.M.:

This appeal is filed by the assessee against the order of the ld. CIT(A) NFAC, Delhi dated 25.11.2024 passed u/s 250 of the Income Tax Act, 1961 which has emanated from the penalty order of the AO, Ward-3, Moga passed u/s 271(1)(c)of the Act, 1961, dated 17.03.2020 (imposing a penalty of Rs.4.18 lakhs).

2. Brief facts emerging are that the assessee is a transport contractor under FCI (Food Corporation of India)engaged in the business of providing goods carriage (trucks)for transportation of food grains from their godowns, as per requirement of FCI (the contractee in this case).

3. For the year under appeal return of income was filed disclosing gross transport contract receipt at Rs.13.96 crores (from FCI), but as per Form 26AS (income tax portal), the gross contract receipts from FCI was reflected at Rs.15.69 crores (and TDS deducted accordingly), which resulted in an apparent non -disclosure of gross contract receipts to the tune of Rs.1.73 crores, as per the return filed.

4. The assessee explained the difference that the said transport bill amount of Rs.1.73 crores has been actually received on 17^th April, 2015, and the same has also been considered in the gross receipts of the subsequent year (FY 2015-16) and has formed a part of the total turnover in the Asst year 2016-17 and has been duly subjected to taxation and the corresponding expenditure relating to the said contract receipts has also been booked in the subsequent year and duly reflected in audited profit and loss account, (in support of which a certificate has also been filed from the tax auditor).

5. The AO has rejected the book results u/s 145(3) of the Act, and has completed the assessment by estimating the business profits at 23.53 lakhs @ 1.5% of the gross transport contract of Rs.15.69 crores (as per reflection in Form 26AS) plus (addition of interest income of Rs. 4.11 lakhs under other source and truck income u/s 44AE Rs. 90,000/-).

6. Penalty has been initiated u/s 271(1) ( c) of the Act , in course of assessment proceedings, both for (i) furnishing of inaccurate particulars on the estimated contract income of Rs. 23.53 lakhs and also (ii) for concealment of particulars of income on the addition of Rs. 90,000/- being the alleged undisclosed truck income u/s 44AE.

7. Penalty subsequently imposed amounting to Rs. 4.18 lakhs, has been carried in first appeal and the Ld CIT (A) has dismissed the appeal by observing as follows:

Observation of first appellate authority:

“In the present case, estimation of profit on the gross receipt is secondary issue. The gross receipt reflected in the audit report itself is questionable and not found correct as was confirmed by the FCI that amount of Rs. 1.73 cr., the difference in gross receipt was actually credited in the month of March only in the books of the appellant. Hence, assessee has misled the department and concealed the gross receipt. AO has fairly applied the net profit on concealed gross receipt by following the decision of Hon'ble ITAT, Amritsar. Therefore, it is not a case of increasing and estimating the net profit on the declared gross receipt. But the net profit has been applied on the concealed gross receipt not declared by the appellant. Hence, AO has rightly concluded that gross receipts are not estimated but based on form no. 26AS and confirmed by the FCI under section 133(6). I also concur with the view of AO that the decision of Hon'ble P&H High court in the case of Sandeep Kumar Garg and Company Vs. ITO reported in 298-ITR-106 is squarely applicable in the present case wherein it has been held that showing lower receipt of income itself proves concealment. Hon'ble High Court dealing with the similar issue as in the present case has held as under-

“5. Front perusal of the material on record,