VIRENDRA SINGH,MEERUT vs. ITO, WARD- 2(4), MEERUT

This appeal is filed by the Assessee against the order dated 22.12.2017 passed by the Ld. CIT(A), Meerut on the following grounds:-

1. That the AO as well as CIT(A) is in error that penalty was imposed of Rs. 2,78,000/- on Revised Return of Rs. 14,65,590/-.

2. That Ld. CIT(A) has referred the Supreme Court Judgement in the case of Max Data (P) Ltd. which relates to survey proceedings and the assessee fails to give evidence of surrender. Hence it is not applicable to the assessee case. However, Ld. CIT(A) ignore the various case law quoted by the assessee. Hence, rejects of appeals is against the facts and law.

3. That the assessee has right to add, modify or delete any ground during the appeal proceedings.

In response thereof, the assessee has filed its return declaring total income of Rs. 5,83,000/-. During the assessment year, various notices were issued to the assessee and in response to that notice, the assessee has filed the evidences as required by the AO. During the assessment proceeding, the assessee has filed revised return showing total income of Rs. 14,65,000/-. The AO has considered the revised return and made assessment on total income of Rs. 14,65,000/- as shown by the assessee in his revised return. Thereafter, the AO imposed the penalty u/s. 271(1)(c) of the Act for Rs. 2,78,000/- vide order dated 22.6.2017.

Against the penalty order, the assessee has preferred appeal against the penalty order before the Ld. CIT(A), Meerut who vide his impugned order dated 22/12/2017 has dismissed the appeal of the assessee.

5. I have heard both the parties and perused the records especially the impugned order. I find that Ld. CIT(A) has elaborately discussed the issue in dispute vide para no. 4 & 5 of the impugned order at page no. 5 & 6.

The relevant finding of the Ld. CIT(A)’s order is reproduced as under:-

“4. Facts of the case and decision:

I have gone through the facts of the case, penalty order and the submissions of the AR. Briefly the facts on the basis of AIR information, the AO initiated proceedings u/s 147/148 of the Act in response to which the assessee replied on 21.06.2016 that earlier return filed for A.Y 2013-14 declared income of Rs. 5,83,000/-.

Thereafter, when the AO commence scrutiny the AR of the assessee filed a revised return for A.Y 2013-14 declaring income of Rs. 14,65,590/-. The assessment was concluded on this income and penalty u/s 271(l)(c) was initiated. Thereafter, on 22.06.2017 the AO after giving opportunity in the appellate proceedings levied the penalty on the basis of revised return and imposed penalty of Rs. 2,78,000/-.

In appeal the Id. AR in the first ground stated that the AO was not justified in treating Rs. 14,65,590/- as capital gain. This ground is totally misplaced and misconceived when the assessee has already revised the return and declare the capital gain. The ground being irrelevant in the present facts and circumstances is hereby dismissed.

The second ground relates to levy of penalty which has been argued as being arbitrary, unjust and not accordingly to law. In this regard the Id. AR has relied upon several rulings ignoring the basic facts on record where discovery of unreported transaction by the assessee was made by the department. The same was taken note by the AO who found reason to belief that taxable income had escaped assessment and accordingly proceeded u/s 147/148 of the Act.

In response, the assessee initially stated that original return filed declaring income of Rs. 5,83,000/- be treated as return in response to notice u/s 148 of the IT Act. Thereafter during the proceedings the return is revised which shows that assessee has accepted that there was unreported income which would have not come to light had there been no proceedings against the appellant. The Act of revising of the return is the clear admission that hitherto concealed unreported income has been brought to tax by an act of admission by the assessee.

In this connection the reliance is placed on the Hon’ble Supreme Court judgment in the case of MAK Data MAK Data Pvt. Ltd. Vs CIT II CIVIL APPEAL NO. 9772 OF 2013 (Arising out of Special Leave Petition (Civil)

No.18389 of 2013)

“ The AO, in our view shall not be carried away by the plea of the assessee like “voluntary disclosure”, “buy peace”, “avoid litigation”,

“amicable settlement”, etc. to explain away its conduct. The question is whether the assessee has offered any explanation for concealment of particulars of income or furnishing inaccurate particulars of income. Explanation to Section 271(1) raises a presumption of concealment, when a difference is noticed by the AO, between reported and assessed income.

It is trite law that the disclosure made under such circumstances does not release the Appellant-assessee from the mischief of penal proceedings. The law does not provide that when an assessee makes a disclosure and claims it to be voluntary regarding his unexplained income, he has to be absolved from penalty especially when the so called surrender has been made under compulsion arising out of the inquiry during the assessment proceedings.

In view of the above observations the Assessee’s Appeal against the penalty imposed fails.