KRISHNAPPA GOWDER KALYANASUNDARAM,COIMBATORE vs. DCIT, CC-3,, COIMBATORE

2.3 The Ld. CIT(A) noted that the assessee offered additional income of Rs.137 Lacs in return filed u/s 153A. An addition of Rs.13 Lacs was made for shortage of cash flows. The fact that the assessee did not offer additional income in regular return as filed u/s 139(1), the said offer could not be said to be voluntary disclosure. Distinguishing the case laws being relied upon by the assessee, impugned penalty was confirmed against which the assessee is in further appeal before us. Our findings and Adjudication 3. We find that the assessee was subjected to search action and notice u/s 153A was issued to the assessee. In response, the assessee filed return of income which was subsequently revised to Rs.150.55 Lacs which include additional income of Rs.137 Lacs as offered by the assessee to make up for the shortage of cash flows of cash loans. The Ld. AO has substantially accepted the same except for further addition of Rs.13 Lacs to make up for final deficit. The disallowance u/s 40A is a statutory disallowance only. In response to penalty show cause notice, the assessee submitted that no penalty could be levied if any income is voluntarily admitted in the return of income filed u/s 153A. On these facts, in our considered opinion, no case of concealment of income could be made out against the assessee as per the decision of Hon’ble Delhi High Court in the case of Neeraj Jindal (79 Taxmann.com 96). The Hon’ble Court, in para-21 of the decision, held that when Ld. AO accepted the revised return filed by the assessee u/s 153A, no occasion arises to refer to the previous return filed u/s 139 of the Act. For all purposes, including for the purpose of levying penalty under Section 271(1)(c) of the Act, the return that has to be looked at is the one filed under Section 153A. In fact, the second proviso to Section 153A(1) provides that "assessment or reassessment, if any, relating to any assessment year falling within the period of six assessment years referred to in this sub-section pending on the date of initiation of the search under Section 132 or making of requisition under Section 132A, as the case may be, shall abate." What is clear from this is that Section 153A is in the nature of a second chance given to the assessee, which incidentally gives him an opportunity to make good omission, if any, in the original return. Once the AO accepts the revised return filed under Section 153A, the original return under Section 139 abates and becomes non-est. Now, it is trite to say that the "concealment" has to be seen with reference to the return that it is filed by the assessee. Thus, for the purpose of levying penalty under Section 271(1)(c), what has to be seen is whether there is any concealment in the return filed by the assessee under Section 153A, and not vis-a vis the original return under Section 139. The ratio of this decision has been considered by Hon’ble High Court of Madras in the case of R.P. Darrmalingam (CRL O.P.No.28572 of 2018 & Crl. M.P.No.16630 of 2018 dated 09-11- 2023). In para 14 & 15 of this decision, the Hon’ble court has accepted the ratio of this decision. Considering the same, it has to be held that the concealment of income has to be in the return of income filed by the assessee which fact is substantially absent in the present case. Respectfully following these decisions, no case of concealment of income could be made out against the assessee. Accordingly, we delete the impugned penalty and allow the appeal of the assessee. Assessment Year 2014-15 5. It is admitted position that facts leading to levy of penalty in this year are quite identical as in AY 2013-14. The Ld. AO has substantially accepted returned income but levied penalty of Rs.29.67 Lacs which has been confirmed by Ld. CIT(A) on similar lines. Facts being pari-materia the same, our adjudication as for AY 2013-14 shall mutatis-mutandis apply to this appeal also. The appeal stand allowed accordingly.