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Income Tax Appellate Tribunal, “A” BENCH, PUNE
Before: SHRI D. KARUNAKARA RAO, AM & SHRI VIKAS AWASTHY, JM
आदेश / ORDER
PER VIKAS AWASTHY, JM :
This appeal by the assessee is directed against the order of Commissioner of Income Tax (Appeals)-6, Pune dated 28-11-2016 for the assessment year 2010-11 confirming levy of penalty u/s. 271(1)(c) of the Income Tax Act, 1961 (hereinafter referred to as “the Act”).
Shri Mahavir Jain appearing on behalf of the assessee submitted that a survey action u/s. 133A of the Act was carried out at the premises
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of assessee on 15-03-2011. During survey the assessee declared additional income of Rs.11,50,000/-. Thereafter, on 30-09-2011 the assessee filed return of income declaring total income of Rs.8,90,329/-. The income declared by the assessee was accepted with the minor addition of Rs.25,000/-. However, the Assessing Officer initiated penalty proceedings u/s. 271(1)(c) of the Act in respect of income declared during survey action. The ld. AR submitted that the assessee had time to file return of income u/s. 139(4) for the impugned assessment year and the assessee filed his return of income for assessment year 2010-11. The penalty u/s. 271(1)(c) can be levied for any concealment of income or furnishing inaccurate particulars of income in the return of income. Since, there was no concealment of income or furnishing of inaccurate particulars of income by the assessee in the return of income for assessment year 2010-11, therefore, no penalty under the provisions of section 271(1)(c) could be levied. In support of his submissions the ld. AR placed reliance on the decision of Hon‟ble Delhi High Court in the case of Commissioner of Income Tax Vs. SAS Pharmaceuticals reported as 335 ITR 259 and the decision of Hyderabad Bench of Tribunal in the case of Assistant Commissioner of Income Tax Vs. Sri Lakshmi Gayatri Hotels Pvt. Ltd. reported as 36 CCH 522.
On the other hand Mrs. Shabana Parveen representing the Department vehemently defended the impugned order and prayed for dismissing the appeal of assessee.
We have heard the submissions made by representatives of rival sides and have perused the orders of authorities below. A survey action u/s. 133A of the Act was conducted at the premises of assessee on
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15-03-2011. The assessee declared additional income of Rs.11,50,000/- during survey action. Thereafter, the assessee filed return of income on 30-09-2011 declaring total income of Rs.8,90,329/-. The income declared by the assessee was accepted by the Assessing Officer. Penalty proceedings u/s. 271(1)(c) were initiated for concealing particulars of income in respect of declaration made by the assessee during survey proceedings. A bare perusal of provisions of section 271(1)(c) would show that the Assessing Officer/Commissioner of Income Tax (Appeals) or Pr. Commissioner of Income Tax in the course of any proceedings under the Act, if satisfied that the person has concealed the particulars of income or furnished inaccurate particulars of his income, they may levy penalty on such person. The expression „proceedings‟ referred to in sub-section (1) is in context with the proceedings arising after filing of return of income. Thus, filing of return is sine-qua-non for invoking penalty proceedings u/s. 271(1)(c) of the Act. Where return of income has been filed and the same is accepted by Assessing Officer without making addition, penalty provisions u/s. 271(1)(c) are not attracted.
In the present case, undisputedly, the assessee had time to file return of income under the provisions of section 139(4) of the Act. The assessee filed return of income within the extended time as prescribed under the provisions of the Act. The assessee in the said return of income declared the income disclosed during survey, and the same was accepted by the Assessing Officer. In the backdrop of these facts, there is no reason for Assessing Officer to invoke penalty provisions u/s. 271(1)(c) of the Act in respect of income declared during survey action.
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The Hon‟ble Delhi High Court in the case of Commissioner of Income Tax Vs. SAS Pharmaceuticals (supra) while dealing with similar situation held that there is no concealment or non-disclosure where the assessee had made complete disclosure in the income tax return and offered the surrendered amount to tax. No penalty u/s. 271(1)(c) can be levied in such case. The relevant extract of the observations of Hon‟ble High Court reads as under :
“13. It is not the case of furnishing inaccurate particulars of income, as in the IT return, particulars of income have been duly furnished and the surrendered amount of income was duly reflected in the IT return. The question is whether the particulars of income were concealed by the assessee or not. It would depend upon the issue as to whether this concealment has reference to the IT return filed by the assessee, viz., whether concealment is to be found in the IT return. 14. We may, first of all, reject the contention of the learned counsel for the Revenue relying upon the expression „in the course of any proceedings under this Act‟ occurring in sub-s. (1) of s. 271 of the Act and contending that even during survey when it was found that the assessee had concealed the particular of his income, it would amount to concealment in the course of „any proceedings‟. The words „in the course of any proceedings under this Act‟ are prefaced by the satisfaction of the AO or the CIT(A). When the survey is conducted by a survey team, the question of satisfaction of AO or the CIT(A) or the CIT does not arise. We have to keep in mind that it is the AO who initiated the penalty proceedings and directed the payment of penalty. He had not recorded any satisfaction during the course of survey. Decision to initiate penalty proceedings was taken while making assessment order. It is, thus, obvious that the expression „in the course of any proceedings under this Act‟ cannot have the reference to survey proceedings in this case. 15. It necessarily follows that concealment of particulars of income or furnishing of inaccurate particular of income by the assessee has to be in the IT return filed by it. There is sufficient indication of this in the judgment of this Court in the cases of CIT vs. Mohan Das Hassa Nand (1983) 34 CTR (Del) 361 : (1983) 141 ITR 203 (Del) and in Reliance Petroproducts (P) Ltd. (supra), the Supreme Court has clinched this aspect, viz., the assessee can furnish the particulars of income in his return and everything would depend upon the IT return filed by the assessee. This view gets supported by Explns. 4 as well as 5 and 5A of s. 271 of the Act as contended by the learned counsel for the respondent. 16. No doubt, the discrepancies were found during the survey. This has yielded income from the assessee in the form of amount surrendered by the assessee. Presently, we are not concerned with the assessment of income, but the moot question is as to whether this would attract penalty upon the assessee under the provisions of s. 271(1)(c) of the Act. Obviously, no penalty can be imposed unless the conditions stipulated in the said provisions are duly and unambiguously satisfied. Since the assessee was exposed during survey, may be, it would have not disclosed the income but for the said survey. However, there cannot be any penalty only on surmises, conjectures and possibilities. Sec. 271(1)(c) of the Act has to be construed strictly. Unless it is found that there is actually a concealment or non-disclosure of the
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particulars of income, penalty cannot be imposed. There is no such concealment or non-disclosure as the assessee had made a complete disclosure in the IT return and offered the surrendered amount for the purposes of tax.” [Emphasized by us]
Thus, in view of the facts of the case and the decision discussed above, we find merit in the contentions of assessee. Accordingly, the impugned order is set aside and the appeal of assessee is allowed.
In the result, the appeal of assessee is allowed.
Order pronounced on Wednesday, the 28th day of August, 2019.
Sd/- Sd/- (डी. करुणाकरा राव/D. Karunakara Rao) (ववकास अवस्थी / Vikas Awasthy) ऱेखा सदस्य / ACCOUNTANT MEMBER न्याययक सदस्य / JUDICIAL MEMBER ऩुणे / Pune; ददनाांक / Dated : 28th August, 2019 RK आदेश की प्रयिलऱवऩ अग्रेवषि / Copy of the Order forwarded to : अऩीऱाथी / The Appellant. 1. प्रत्यथी / The Respondent. 2. आयकर आयुक्त (अऩीऱ) / The CIT(A)-6, Pune 3. 4. The Pr. Commissioner of Income Tax-5, Pune ववभागीय प्रयतयनधध, आयकर अऩीऱीय अधधकरण, “ए” बेंच, 5. ऩुणे / DR, ITAT, “A” Bench, Pune. गाडड फ़ाइऱ / Guard File. 6. //सत्यावऩत प्रयत // True Copy// आदेशानुसार / BY ORDER,
यनजी सधचव / Private Secretary, आयकर अऩीऱीय अधधकरण, ऩुणे / ITAT, Pune