MAK DATA P. LTD. vs. COMMISSIONER OF INCOME TAX-II

C.A. No.-009772-009772 - 2013Supreme Court30 October 201310 pages
For Petitioner: RANI CHHABRA
AI SummaryDismissed

What did the Supreme Court hold?

The Supreme Court held that a voluntary surrender of income to avoid litigation does not absolve the assessee from penalty proceedings under Section 271(1)(c). The court emphasized that the assessee has a statutory duty to disclose true income, and the surrender in this case was not truly voluntary.

What were the facts?

The assessee surrendered an amount of Rs. 40.74 lakhs during assessment proceedings to avoid litigation. This surrender was made after documents were impounded during a survey at a sister concern's premises. The Assessing Officer initiated penalty proceedings for concealment of income.

What were the issues?

Whether a surrender of income made to avoid litigation can be considered a voluntary disclosure that precludes penalty proceedings for concealment of income. The applicability of Explanation 1 to Section 271(1)(c) when an assessee fails to offer a bona fide explanation for income.

Which sections of the Income-tax Act were involved?

Section 271(1)(c),Section 133A,Section 143(2),Section 142(1)

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Cause title — parties, addresses and appearances
Page 1 JUDGMENT 1 REPORTABLE IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION CIVIL APPEAL NO. 9772 OF 2013 (Arising out of Special Leave Petition (Civil) No.18389 of 2013) MAK Data P. Ltd. … Appellant Versus Commissioner of Income Tax-II … Respondent

J U D G M E N T K.S. Radhakrishnan, J.

1.

Leave granted.

2.

The Appellant-assessee filed his return of income for the assessment year 2004-05 on 27th October, 2004, declaring an income of Rs.16,17,040/- along with Tax Audit Report. The case was selected for scrutiny and notices were issued under Sections 143(2) and 142(1) of the Income Tax Act. During the course of the assessment proceedings, it was noticed by Page 2 JUDGMENT 2 the Assessing Officer (AO) that certain documents comprising of share application forms, bank statements, memorandum of association of companies, affidavits, copies of Income Tax Returns and assessment orders and blank share transfer deeds duly signed had been impounded. These documents had been found in the course of survey proceedings under Section 133A conducted on 16.12.2003 in the case of M/s Marketing Services (a sister concern of the assessee). The AO t

The order continues below.

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