PALLADAM KRISHNASAMY GANESHWAR,TIRUPUR vs. DCIT, CC-3, COIMBATORE
Facts
The assessee filed a return of income under Section 153A, declaring an additional income that represented unaccounted cash paid for land purchase. The Assessing Officer (AO) accepted this returned income but initiated penalty proceedings for concealment of income.
Held
The Tribunal held that concealment of income must be in the return filed by the assessee. Since the AO accepted the return filed under Section 153A, and the original return under Section 139 abates, there is no concealment with reference to the revised return. The penalty proceedings are therefore not sustainable.
Key Issues
Whether penalty for concealment of income can be levied when the income declared in the return filed under Section 153A has been accepted by the Assessing Officer, even if it is higher than the income declared in the original return filed under Section 139.
Sections Cited
271(1)(c), 153A, 143(3), 153A(1)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, ‘C’ BENCH, CHENNAI
Before: HON’BLE SHRI MANOJ KUMAR AGGARWAL, AM & HON’BLE SHRI MANU KUMAR GIRI, JM
आयकर अपीलीय अिधकरण ‘सी’ �ायपीठ चे�ई म�। IN THE INCOME TAX APPELLATE TRIBUNAL ‘C’ BENCH, CHENNAI माननीय +ी मनोज कुमार अ/वाल ,लेखा सद3 एवं माननीय +ी मनु कुमार िग7र, �ाियक सद3 के सम8। BEFORE HON’BLE SHRI MANOJ KUMAR AGGARWAL, AM AND HON’BLE SHRI MANU KUMAR GIRI, JM आयकरअपील सं./ ITA No.1221/Chny/2024 (िनधा9रणवष9 / Assessment Year: 2013-14) Shri Palladam Krishnasamy Ganeshwar DCIT बनाम/ 21, Shri Ganesa Textiles, Pollachi Road, Central Circle-3 Vs. Palladam, Tirupur-641 664. Coimbatore. �थायीलेखासं./जीआइआरसं./PAN/GIR No. ADFPG-6476-N (अपीलाथ�/Appellant) : (� थ� / Respondent) अपीलाथ� कीओर से/ Appellant by : Shri S. Sridhar (Advocate)-Ld.AR � थ� की ओर से/Respondent by : Shri R. Clement Ramesh Kumar (CIT)-Ld. DR सुनवाई की तारीख/Date of Hearing : 10-09-2024 घोषणा की तारीख /Date of Pronouncement : 19-11-2024 आदेश / O R D E R Manoj Kumar Aggarwal (Accountant Member)
Aggrieved by confirmation of penalty of Rs.86.39 Lacs u/s 271(1)(c) for Assessment Year (AY) 2013-14 vide impugned order passed by learned Commissioner of Income Tax (Appeals), Chennai-20, [CIT(A)] on 29-02-2024, the assessee is in further appeal before us. The penalty has been levied by Ld. AO vide order dated 18-03-2022 against an assessment framed u/s 143(3) r.w.s 153A of the Act on 18-06-2021. 2. Upon perusal of assessment order, it could be seen that the assessment was framed consequent to search action on assessee on
06-03-2019. In response to notice issued u/s 153A, the assessee filed return of income declaring income of Rs.513.15 Lacs which include additional income of Rs.279.61 Lacs vis-à-vis regular return of income filed u/s 139(1). The additional income represents unaccounted cash paid by the assessee for purchase of land from certain parties. The Ld. AO accepted the same but initiated impugned penalty for concealment of income. 3. 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. In case the returned income has been accepted by the revenue, no penalty could be levied in terms of decision of Hon’ble High Court of Delhi in the case of Neeraj Jindal (79 Taxmann.com 96). The assessee submitted that mere rejection of the explanation as offered by the assessee would not tantamount to presumption of concealment of income. However, Ld. AO rejected the same in terms of Explanation-5A to Sec. 271(1)(c) which provide that such admission would be deemed concealment of income or furnishing of inaccurate particulars of income. Finally, the impugned penalty was levied on the assessee. The Ld. CIT(A) confirmed the same against which the assessee is in further appeal before us. 4. From the facts, it is undisputed fact that the returned income as filed by the assessee has been accepted by Ld. AO. The only reason to levy penalty is that such declared income is more than income previously reported by the assessee in original return of income. Nevertheless, in our considered opinion, the concealment of income has to be in the return of income filed by the assessee which fact is absent in the present case. The assessed income is nothing but returned income. Therefore,
no case of concealment of income could be made out against the assessee. Our view is duly fortified by the cited decision of Hon’ble High Court of Delhi in the case of Neeraj Jindal (supra). 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 A.O. 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. Respectfully following the same, we delete the impugned penalty. 5. The appeal stand allowed. Order pronounced on 19th November, 2024
Sd/- Sd/- (MANU KUMAR GIRI) (MANOJ KUMAR AGGARWAL) �ाियक सद3 / JUDICIAL MEMBER लेखा सद3 / ACCOUNTANT MEMBER चे3ई Chennai; िदनांक Dated : 19-11-2024 DS आदेशकीTितिलिपअ/ेिषत/Copy of the Order forwarded to : 1. अपीलाथ�/Appellant 2. � थ�/Respondent 3. आयकरआयु</CIT Coimbatore 4. िवभागीय�ितिनिध/DR 5. गाडAफाईल/GF
