ASHOKA TUBEWELL BORING ENGINEERING & CONSTRUCTION,KOLKATA vs. DCIT, CC-2, PATNA

PDF · subscribers
ITA 90/PAT/2025Status: HeardITAT Patna18 July 2025AY 2016-1716 pages

In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the penalty imposed under Section 271(1)(c) of the Income Tax Act, 1961, should be deleted. The Tribunal noted that no incriminating material was found during the search concerning the income in question. The assessee made a disclosure in respect of outstanding liabilities for which no bills or vouchers were available. This income was disclosed in the return filed in response to the notice under Section 153A, and this return was accepted by the Assessing Officer. The Tribunal relied on the decision of a co-ordinate bench in ACIT vs. Brahmaputra Metallics Limited, which held that when income is disclosed voluntarily in a return filed under Section 153A and accepted by the AO without additions, there is no concealment or furnishing of inaccurate particulars. The Tribunal found that the facts of the present case were materially the same as in the cited precedent. Therefore, the order of the CIT(A) was set aside, and the AO was directed to delete the penalty. The issue of whether the penalty was automatic was not expressly left undecided, but the reasoning focused on the absence of concealment.

What were the facts?

The assessee, Ashoka Tubewell Boring Engineering & Construction, is in appeal against the order of the CIT(A) dated 30.12.2024, which confirmed a penalty imposed by the AO under Section 271(1)(c) of the Income Tax Act, 1961, for Assessment Year 2016-17. A search action under Section 132(1) was conducted on the assessee on 29.10.2010. Subsequently, a notice under Section 153A was issued on 25.11.2021. The assessee filed a return under Section 153A on 25.03.2022, declaring a total income of ₹3,16,08,250/-, a significant increase from the original return filed under Section 139(1) on 26.03.2017, which showed an income of ₹2,11,608,250/-. The AO noted that the assessee offered ₹2.00 crores as undisclosed income, based on a disclosure admitted under Section 132(4), and an addition of ₹1,83,640/- was made under Section 68 for unexplained credit. Penalty proceedings were initiated on a total amount of ₹2,01,83,642/-. The AO imposed a penalty of ₹69,85,155/-.

What were the issues?

1. Whether the penalty imposed under Section 271(1)(c) of the Income Tax Act, 1961, is leviable when the income was suo motu declared in the return filed under Section 153A of the Act, without any incriminating material being seized during the search. Assessee's Contention: The penalty order is erroneous and should be deleted. No incriminating material was found or seized regarding the additions. The assessee voluntarily offered this income in the Section 153A return, which was accepted by the AO. Therefore, no penalty can be imposed on suo motu declared income. The assessee relied on the decision of the ITAT, Guwahati Bench in ACIT vs. Brahmaputra Metallics Limited (ITA No. 97/GTY/2023). Revenue's Contention: The disclosure was made specifically in relation to unpaid liabilities in the books of accounts, and therefore, there was no question of incriminating material being seized. These are sufficient grounds for initiating and imposing the penalty under Section 271(1)(c). The order of the CIT(A) upholding the AO's order is correct and should be affirmed.

Which sections of the Income-tax Act were involved?

Section 271(1)(c),Section 153A,Section 132(1),Section 68,Section 139(1),Section 132(4)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, ‘PATNA’ BENCH, PATNA

Before: SHRI RAJESH KUMAR, AM & SHRI PRADIP KUMAR CHOUBEY, JM

For Appellant: Shri S. Jhajhariya, AR
For Respondent: Shri Ashwani Kr. Singal, DR
Hearing: 07.07.2025Pronounced: 18.07.2025

O R D E R Per Rajesh Kumar, AM:

This appeal preferred by the assessee against the order of the Commissioner of Income Tax, Appeal (hereinafter referred to as the “Ld. CIT(A)”] dated 30.12.2024 for the AY 2016-17.

2.

The only issue raised by the assessee in the various grounds of appeal is against the confirmation of penalty by the ld. CIT (A) as imposed by the ld. AO u/s 271(1)(c) of the Act.

3.

The facts in brief are that there was a search action on the assessee u/s 132(1) of the Income-tax Act, 1961 (the Act) on 29.10.2010. The assessee is engaged in the business of executing government contracts like roads, water tanks and over bridges, etc. Accordingly,

4.

In the appellate proceedings, the ld. CIT (A) confirmed the said order by holding that there is no perversity in the order passed by the ld. AO as the ld. AO has made out a specific case for concealment of income and imposed the penalty accordingly.

5.

The ld. AR vehemently submitted before us that the penalty order passed by the ld. AO is erroneous and may be deleted. The ld. AR

6.

The ld. DR on the other had relied heavily on the authorities below by stating that the disclosure was made specifically in relation to the unpaid liabilities in the books of accounts and therefore, there was no question of any incriminating material being seized during the search. The ld. DR stated that these are sufficient reasons and grounds for

7.

After hearing the rival contentions and perusing the materials available on record, we find that in this case undoubtedly there was no incriminating material found during the course of search qua this income. The assessee made disclosure in respect of outstanding liabilities which were outstanding in the books of accounts of the assessee. We have noticed that in the assessment order there was no discussion by the ld. AO apart from the fact that these disclosures were made in respect of outstanding liabilities for which no bills/ vouchers were available with the assessee. We further note that the income has been disclosed by the assessee in the return filed in response to notice u/s 153A of the Act which has also been accepted by the ld. AO. Then there is no question of concealment of income or/ furnishing of inaccurate particulars of income as has been held by the co-ordinate Bench in the case of Brahmaputra metallics Limited (supra). For the sake of ready reference, we reproduce the operative part of the said decision as under: - “5. We have heard the rival contentions and perused the records available on record. We notice that the assessee which is a limited company disclosed loss of ₹54.99 crore (approx.) in the return filed u/s 139(1) of the Act for A.Y. 2015-16 on 13th September, 2015. Thereafter, the assessee which is a part of the Lohia Group of companies was subjected to search and seizure proceedings u/s 132 of the Act carried out on 24th October, 2017. On the basis of the data backup found at the assessee premises, the assessee surrendered additional business income of ₹5 crore. Thereafter, in compliance to notice issued u/s 153A of the Act, assessee after including the additional business income of ₹5 crore, declared the loss in the return at ₹4,99,90,0346/-. The return of income has been accepted by the ld. AO as the assessed income and no additions have been made in the assessment order. However, the ld. AO initiated the penalty proceedings u/s 271(1)(c) of the Act on the surrendered income of ₹5 crore and levied the impugned penalty vide its order dated 25th March, 2022. When the

9.

In the result, the appeal of the assessee is allowed.

Order pronounced in the open court on 18.07.2025.

More judgments on Section 271(1)(c)

All 25,141 judgments and leading authorities on Section 271(1)(c) →

Recent GST High Court judgments

Search GST case law →