THE DCIT, CENTRAL CIRCLE-2(2), AHMEDABAD vs. MANN CORPORATION, AHMEDABAD

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ITA 3307/AHD/2016Status: DisposedITAT Ahmedabad24 April 2019AY 2012-135 pages

In favour of the assessee: the Revenue's appeal was dismissed. From the AI summary of this appeal.

AI SummaryDismissed

What did the Tribunal hold?

The Tribunal held that since the disclosures were made during survey action, included in the regular returns filed before the due date, and accepted by the AO without additions, there was no concealment of income. Therefore, the penalty under Section 271(1)(c) was not sustainable.

What were the facts?

During a survey action, the assessees disclosed on-money receipts. They subsequently filed returns of income including these disclosures, which were accepted by the Assessing Officer (AO) without additions. The AO then imposed penalties under Section 271(1)(c) on the grounds that the disclosures were not voluntary.

What were the issues?

Whether penalty under Section 271(1)(c) is leviable when income is disclosed during survey, included in the return filed before the due date, and accepted by the AO without additions.

Which sections of the Income-tax Act were involved?

Section 132,Section 133A,Section 139(1),Section 143(3),Section 271(1)(c)

AI-generated summary — verify with the full judgment below

Cases cited in this judgment(4)Show list

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Income Tax Appellate Tribunal, AHMEDABAD – BENCH ‘B’

Before: SHRI RAJPAL YADAV & SHRI AMARJIT SINGH

Hearing: 02/04/2019

Heard together (2 matters)

ITA No.3307/Ahd/2016
ITA No.3308/Ahd/2016

Read from the judgment's own cause title. This page is filed under one of them.

आयकर अपील�य अ�धकरण, अहमदाबाद �यायपीठ - अहमदाबाद । IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD – BENCH ‘B’

BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER AND SHRI AMARJIT SINGH, ACCOUNTANT MEMBER आयकर अपील सं./ ITA No.3307/Ahd/2016 �नधा�रण वष�/Asstt. Year: 2012-13 DCIT, Cent.Cir.2(2) Vs. Mann Corporation Ahmedabad. Mala Hills, Aarya Manan Shop B/h. Anand Party Plot Road GST Crossing, Ranip, Ahmedabad. PAN : AABFA 6682 K

आयकर अपील सं./ ITA No.3308/Ahd/2016 �नधा�रण वष�/Asstt. Year: 2012-13 DCIT, Cent.Cir.2(2) Vs. Yamunaji Corporation Ahmedabad. Survey No.131, Nr.Yogeshwar Kutir Bungalow New Ranip, Ahmedabad. PAN : AABFA 6682 K

अपीलाथ�/ (Appellant) �त् यथ�/ (Respondent)

Revenue by : Shri Mudit Nagpal, Sr.DR Assessee by : Shri S.N. Soparkar, Sr.AR with Shri Parin Shah, AR सुनवाई क� तार�ख/Date of Hearing : 02/04/2019 घोषणा क� तार�ख /Date of Pronouncement: 24 /04/2019 आदेश/O R D E R PER RAJPAL YADAV, JUDICIAL MEMBER: These are two appeals by the Revenue against orders of the ld.CIT(A)-12, Ahmedabad of even dated i.e. 10.9.2016 passed for the Asstt.Year 2012-13, vide which the ld.CIT(A) has deleted penalty of Rs.21,63,000/- in the case of Mann Corporation and

ITA No.3307 and 3308/Ahd/2016 2 Rs.6,93,70,500/- in the case of Yamunaji Corporation imposed by the Assessing Officer under section 271(1)(c) of the Income Tax Act, 1961. Since issue is common except variation in quantum, we proceed to dispose of both the appeals by this common order for the sake of convenience.

2.

Brief facts in this behalf are that the assessee is engaged in construction activities. A search action under section 132 of the Act was carried out in the cases of Ankur Dalal group on 28.3.2012. Survey action was carried under section 133A of the Act in which disclosure of on-money receipt of Rs.70 lakhs for the Asstt.Year 2012-12 in the case of Mann Corporation and Rs.22.45 crores in the case of Yamunaji Corporation was made. Subsequently, both the assessees filed returns of income on 18.9.2012 and 28.9.2012 under section 139(1) of the Act declaring total income of Rs.1,67,69,530/-, which included disclosure of Rs.70 lakhs by Mann Corporation and Rs.28,27,20,720/- including an amount of Rs.22.45 crores by the Yamunaji Corporation. The cases of the assessees were selected for scrutiny because of survey under section 133A. Assessment of the assessee was completed under section 143(3) at the returned income. Thereafter, the AO imposed impugned penalty of Rs.64,89,000/- and Rs.21,63,000/- respectively by observing that disclosure made by the assessees were not voluntary, and it has been made only when the department detected the same during the survey action. The assessees carried the matter in appeals before the ld.First Appellate Authority who after discussing the issue in great length and in the light of various authoritative judgments in this behalf, allowed the appeals of the assessees and

ITA No.3307 and 3308/Ahd/2016 3 deleted the impugned penalty. Aggrieved Revenue is now before the Tribunal in second appeal.

3.

Before us, the ld.DR relied upon the order of the AO, while ld.counsel for the assessee supported the order of the ld.First Appellate Authority. The ld.AR further submitted that additional income disclosed and offered for taxation, on which penalty was imposed has already been disclosed in the returns of income filed for the Asstt.Year 2012-13. It is further submitted that the date of filing return of income for the A.Y.2012-13 under section 139(1) had not expired as on the date of survey operation and regular return of income was yet to be filed. The ld.AO while accepting the returned income has not noticed any further discrepancy. The fact of disclosure has also been stated in the Notes forming part of accounts. He submitted that assessee is liable for penal action under section 271(1)(c) of the Act, only when return of income filed by the assessee is scrutinized by the AO and he finds some more income, over and above what is declared in the return. Assessee has paid taxes on the disclosed income and the AO has not disturbed the book results and the returned income was accepted. Therefore, there is no question of imposing penalty under section 271(1)(c) of the Act. In support of the case of the assessee, the ld.counsel for the assessee relied upon the following orders/judgments: i) Divya Sthapatya Vs. ITO, ITA No.2220 & 221/Ahd/2015 dated 20-2-2018; ii) ACIT Vs. Juiter Distillery, 23 taxmann.com 303 (Ahd- Trib.); iii) DCIT Vs. Dr.Satish B. Gupta, 42 SOT 48 (Ahd); iv) CIT Vs. SAS Pharmacetuticals, 11 taxmann.com 207 (Del); v) Pr.CIT Vs. Neeraj Jindal, 79 taxmann.com 96 (Del)

ITA No.3307 and 3308/Ahd/2016 4 4. We have considered rival submissions and gone through the record carefully. Undisputed facts of the case is that survey under section 133A was carried out at the premises of the assessee on 28.3.2012 i.e. much prior to the closing dates of accounts and date of filing of return under section 139(1) of the Act. The assessees have admitted an amount of Rs.70 lakhs and Rs.22.45 crores respectively during the survey action which were subsequently shown in the regular returns of income filed under section 139(1) of the Act. These returns were accepted by the AO without any addition or disallowance nor pointed out any discrepancies during the assessment. However, the impugned penalty was levied on the premise that the assessee would not have disclosed the receipt of on-money, but for the survey action. It is the case of the assessee that income admitted during survey u/s.133A when disclosed in the return of income furnished on or before due date and the same is accepted by the AO, there cannot be a case for levy of penalty. When the due date for filing return of income was not expired, then how the AO could infer that the assessee would not disclose the income in its return. The assessee has disclosed this income in its return and the AO has accepted the same without any addition or disallowance. The ld.AO has simply carried away by the surmise that had the survey not taken place, the assessee would not have disclosed this income. This assumption and surmises of facts are without any basis. The ld.AO cannot anticipate that assessee will not disclose a particular income. There are number of judgments available on this issue where it is held that when an assessee has made a complete disclosure in the return of income and offered the admitted amount for taxation, then there is no question of

ITA No.3307 and 3308/Ahd/2016 5 concealment of income or furnishing inaccurate particulars of income so as to attract provisions of section 271(1)(c) of the Act. Hon’ble Delhi High Court in the case of SAS Pharmaceuticals (supra) has held that when the assessee discloses amount during action under section 133A, and the same is honoured by filing return of income subsequent thereto, no penalty u/s.271(1)(c) of the Act is sustainable. The ld.CIT(A) has made detailed analysis of the issue in the light of the of various judgments and rightly come to the conclusion that levy of impugned penalty is neither sustainable on facts nor in law. We uphold of order of the ld.CIT(A) and reject the ground of appeal of the Revenue.

5.

In the result, both appeals of the Revenue are dismissed. Order pronounced in the Court on 24th April, 2019.

Sd/- Sd/- (AMARJIT SINGH) (RAJPAL YADAV) ACCOUNTANT MEMBER JUDICIAL MEMBER

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