M/S. DHANLAXMI DEVELOPERS,,PUNE vs. DEPUTY COMMISSIONER OF INCOME-TAX, CIRCLE - 8,, PUNE

This appeal by the assessee against the order dated 07-09-2018 passed by the Commissioner of Income Tax (Appeals)-6, Pune [‘CIT(A)’] for assessment year 2013-14.

The only issue is to be decided is as to whether the CIT(A) justified in confirming the penalty imposed by the AO u/s. 271(1)(c) of the Act in the facts and circumstances of the case.

At the outset, we note that there was a survey u/s. 133A of the Act conducted in the business premises of the assessee on 05-02-2013. During the said survey, the assessee declared income of Rs.1,04,87,640/- as undisclosed income. Thereafter, the assessee filed return of income declaring total income of Rs.1,18,52,080/- and the same was accepted by the AO by completing assessment u/s. 143(3) of the Act. As matter stood thus, the AO initiated penalty proceedings u/s. 271(1)(c) of the Act for escaped income on the ground that the assessee would not have declared Rs.1,18,52,080/- as undisclosed income had no survey taken place. We note that admittedly, the assessee filed return of income declaring total income of Rs.1,18,52,080/- which is inclusive of undisclosed income as declared during the course of survey which was admitted by the respondent-revenue. We find when the respondent-revenue accepted return income, there is no income escaped on which no penalty is leviable. Therefore, the order of CIT(A) is not justified and it is set aside. Thus, the grounds raised by the assessee are allowed.

In the result, the appeal of assessee is allowed.