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Income Tax Appellate Tribunal, “B” BENCH, PUNE
Before: SHRI INTURI RAMA RAO, AM & SHRI SS VISWANETHRA RAVI, JM
आदेश / ORDER
PER SS VISWANETHRA RAVI, JM :
This is an appeal filed by the Assessee directed against the order of ld.Commissioner of Income Tax(Appeals)-6, Pune Appeal No.PN/ CIT(A)- 6/DCIT CIir-8/10005/2017-18 dated 07.09.2018 for the Assessment Year 2013-14. The Assessee raised following grounds of appeal: ―1. On the facts and in the circumstances of the case & as per provisions of law, it be held that the penalty levied by the Ld. AO and upheld by the first Appellate Authority under section 271(1)(c) of the Act is unjustified, improper and contrary to the provisions of the Act and hence the penalty be deleted. The Appellant be granted just and proper relief in this respect.
2. The appellant prays to be allowed to add, amend, modify, rectify, delete, raise any grounds of appeal at the time of hearing.‖
2. Brief facts of the case are that in this case a survey was conducted under section 133(A) of the Act in the business premises of the assessee on 05.02.2013 i.e. during the financial year 2012-13(AY 2013-14). Subsequent A.Y. 2013-14 Shubham Industries (A) to the survey, assessee filed return of income on 30.09.2013 declaring total income of Rs.1,56,36,310/-. The Assessing Officer(AO) passed assessment order on 28.03.2016 accepting the returned income. In the assessment order, the AO had initiated the penalty proceedings under section 271(1)(c) of the Act for furnishing the inaccurate particulars and concealing the income. The AO passed the penalty order under section 271(1)(c) of the Act on 27.09.2016 levying penalty of Rs.49,48,810/-. The assessee filed an appeal before the ld.CIT(A). The ld.CIT(A) confirmed the penalty. The ld.CIT(A) vide para 5.3 has mentioned as under: ―5.3 The other ground of the appellant is that there is no concealment or furnishing of inaccurate particulars of income as the return filed has been accepted without any additions. This claim of the appellant is not acceptable as it is seen that in the statement recorded during the survey, the appellant has specifically mentioned that the amount has not been recorded in the books of accounts. The relevant portion of the statement recorded of Shri Rajendra D. Gaikwad during the survey on 5/2/2013 is reproduced below: ―Q-15: along with Q 14: I am showing you page number 72 and 73 in the loose paper bundle number 1. Please inspect the said papers carefully and give details about the contents in the pages. Ans – 15: I have carefully seen the papers show to me. These notings are related to land transaction for the land situated at Sawardari owned by Shubham Industries. According to the notings, an amount of Rs.1,58,85,000/- in the financial yar 2011-12 and an amount of Rs.66,900/- in the financial year 2012-13 has been received by Shubham Industries from various people in cash. These amounts have not been taken into consideration in the account books for the financial year 2011-12 and 2012-13. As per partner of Shubham Industries, I am declaring Rs.1,58,85,000/- for the financial year 2011-12 and Rs.66,90,000/- for the financial year 2012-13 as additional income for Shubham Industries. I will be binding on all the partners of Shubham Industries to pay the income tax related to it.‖ There is no possibility of same being declared in the return if no survey had taken place. The returns are based on the books of accounts maintained and audited. There is also an evidence of the group having not reflected the cash received in the F.Y. 11-12 which was also detected during the course of survey. So going by the antecedents of the group, the appellant would not have disclosed this amount in the return sou moto. The books of accounts are maintained A.Y. 2013-14 Shubham Industries (A) in such a manner that the true transactions are not reflected in them and therefore, it tantamount to furnishing of inaccurate particulars of income. Further, as the evidence has been detected of suppression, the same also tantamount to concealment of income. So in the present case, both the charges are attracted. In view of this, the action of the AO is upheld.‖
We have heard ld.Departmental Representative(ld.DR) for the Revenue and perused the material available on record. It is an admitted fact that there is no addition in the assessment order. It means whatever discrepancies were found during the surveys, the assessee has declared income on account of those discrepancies in the return of income filed. It means during the assessment proceedings, no concealment was detected. During the assessment proceedings, there is no evidence of detection of any inaccurate particulars. The Hon’ble Apex Court while dealing with phrase 'concealment of income' and 'inaccurate particulars' as used under section 271(1)(c) of the Act discussed in detail in the judgment of Dilip N. Shroff v. CIT [2007] 161 Taxman 218/291 ITR 519. Relevant paras are Para Nos. 48, 49, 50, 51 and 71 which are extracted here as under:— '48. The expression "conceal" is of great importance. According to Law Lexicon, the word "conceal" means: "To hide or keep secret. The word 'conceal' is derived from the latin concelare which implies con + celare to hide. It means 'to hide or withdraw from observation; to cover or keep from sight; to prevent the discovery of; to withhold knowledge of'. The offence of concealment is thus a direct attempt to hide an item of income or a portion thereof from the knowledge of the Income-tax Authorities." 49. In Webster's Dictionary, "inaccurate" has been defined as: "not accurate, not exact or correct; not according to truth; erroneous; as an inaccurate statement, copy or transcript.‖ 3.1. The Hon’ble Madhya Pradesh High Court in the case of CIT vs. Suresh Chandra Mittal 241 ITR 124 has held as under:
A.Y. 2013-14 Shubham Industries (A)
―3. The assessee took appeal against this to the Commissioner (Appeals) but failed. He then carried the matter to the Tribunal and succeeded. The Tribunal held as under : "The assessee had no chance of carrying through his explanation and the Assessing Officer too did not record any finding as to the acceptability or otherwise of the explanation of the assessee. Under these circumstances the proviso to Explanation 1 to section 271 is not attracted. The revenue did not at all discharge the burden to prove that there was concealment of income by the assessee. It simply rested its conclusion on the act of voluntary surrender by the assessee, which obviously was done in good faith and to buy peace." [Emphasis supplied] 4. The Tribunal also placed reliance on the Supreme Court’s judgment in Sir Shadilal Sugar & General Mills Ltd. v. CIT [1987] 168 ITR 705 1 , in support, holding as under : ". . . We find that the assessee admitted that these were the incomes of the assessee but that was not an admission that there was deliberate concealment. From agreeing to additions, it does not follow that the amount agreed to be added was concealed income. There may be a hundred and one reasons for such admission, i.e., when the assessee realises the true position, it does not dispute certain disallowances but that does not absolve the revenue from proving the mens rea of a quasi-criminal offence. . . ." (p. 713) 5. We find ourselves in agreement with the view taken by the Tribunal. It is well-settled that under section 271(1)(c), the initial burden lies on the revenue to establish that the assessee had concealed the income or had furnished inaccurate particulars of such income. The burden shifts to the assessee only if he fails to offer any explanation for the undisclosed income or offers an explanation which is found to be false by the assessing authority. However, the proviso to Explanation 1 provides for shifting of this burden again where the explanation offered by the assessee is found to be bona fide.
In the present case, though it is true that the assessee had not surrendered at all and that he had done so on the persistent queries made by the Assessing Officer, but once the revised assessment was regularised by the revenue and once the assessing authority had failed to take any objection in the matter, the declaration of income made by the assessee in his revised returns and his explanation that he had done so to buy peace with the department and to come out of vexed litigation could be treated as bona fide in the facts and circumstances of the case. Therefore, the Tribunal was justified in cancelling the penalty levied by the Assessing Officer and affirmed by the Commissioner (Appeals) in the facts and circumstances of the case. This reference is, accordingly, answered in the affirmative holding that the Tribunal was justified in doing so.‖ 3.2. The Hon’ble Supreme Court [251 ITR 9] upheld the order of Hon’ble Madhya Pradesh High Court as under:
A.Y. 2013-14 Shubham Industries (A)
―We have read the order of the High Court in CIT v. Suresh Chandra Mittal [2000] 241 ITR 124 (MP) and the statement of case. Given the facts and circumstances, we do not think that any interference with the order of the High Court is called for.‖ 3.3. The penalty proceedings were initiated during the assessment proceedings. It is a fact that no concealment has been detected during the assessment proceedings. It is also a fact that no inaccurate particulars have been detected during the assessment proceedings. Therefore, the fundamental basis for initiating penalty proceedings i.e. concealment or inaccurate particulars, were not existing at the time of assessment proceedings. Therefore, the penalty levied under section 271(1)(c) is not sustainable. Therefore, the AO is directed to delete the penalty under section 271(1)(c) of the Act.
Thus, the appeal filed by the assessee is allowed. Order pronounced in the open Court on 08th April, 2022.