Loading judgment…
No AI summary yet for this case.
Income Tax Appellate Tribunal, ‘B’ BENCH, CHENNAI
Before: SHRI N.R.S. GANESAN & SHRI A. MOHAN ALANKAMONY
आदेश /O R D E R
PER N.R.S. GANESAN, JUDICIAL MEMBER:
This appeal of the Revenue is directed against the order of the Commissioner of Income Tax (Appeals)-II, Coimbatore, confirming the penalty levied under Section 271(1)(c) of the Income- tax Act, 1961 (in short 'the Act').
There was a delay of 3 days in filing this appeal by the Revenue. The Revenue has filed a petition for condonation of delay. We have heard the Ld. D.R. and the Ld.counsel for the assessee. We find that there was sufficient cause for not filing the appeal before the stipulated time. Therefore, we condone the delay and admit the appeal.
Shri Sasikumar, the Ld. Departmental Representative, submitted that there was survey in the premises of the assessee on 17.09.2008. Search was also conducted in group cases and incriminating materials were found in respect of unaccounted sales and under invoiced sales. The quantum addition made by the Assessing Officer in respect of unaccounted sales and under invoiced sales was accepted by the assessee. The assessee, by reply dated 20.12.2010, admitted the unaccounted sales but it decided the gross profit rate adopted by the Assessing Officer. The assessee has filed the revised return admitting unaccounted sales in Karaikudi branch and Coimbatore branch. The assessee has also accepted the under invoiced sales in Karaikudi branch and Coimbatore branch. Therefore, the Assessing Officer found that there was a concealment of income to the extent of unaccounted sales and under invoiced sales, and levied penalty under Section 271(1)(c) of the Act. The Ld. D.R. further pointed out that even though the assessee filed revised return voluntarily, the concealment of income in the original return will not exempt the assessee from the rigour of penalty under Section 271(1)(c) of the Act. Therefore, the CIT(Appeals) committed an error in deleting the penalty levied by the Assessing Officer.
Referring to the order of the CIT(Appeals), more particularly para 6.1, the Ld. Departmental Representative pointed out that the judgment of the Apex Court in Dilip N. Shroff (291 ITR 519) referred by the CIT(Appeals) was overruled by the Apex Court in Union of India v. Dharmendra Textiles Processors And Others (2008) 306 ITR 277. Referring to the judgment of Delhi High Court referred by the CIT(Appeals) in Chhabra Emporium (264 ITR 249), the Ld. D.R. submitted that Explanation 5 to Section 271(1)(c) of the Act was not available in the statute book when the Delhi High Court decided the case. Therefore, these judgments of Apex Court and Delhi High Court may not help the assessee. Therefore, according to the Ld. D.R., the CIT(Appeals) has committed an error in deleting the penalty levied by the Assessing Officer.
We have considered the rival submissions on either side and perused the relevant material available on record. Admittedly, there was a survey in the premises of the assessee. A search was also conducted in group cases under Section 132A of the Act and the assessee was called upon to file return of income. On the basis of the material available on record, the assessee filed the return.
When certain omissions were brought to the notice of the assessee, the assessee immediately filed revised return with an intention to rectify the bonafide error in the original return. The question arises for consideration is whether there was any concealment or the assessee has furnished any inaccurate particulars? The assessee filed the return of income consequent to the notice issued by the Assessing Officer under Section 153A r.w.s. 153C of the Act. Since it is a case of search and survey, the assessee could not compute the total income on the basis of material found during the course of search operation. The fact remains that the assessee has filed return of income and the entire income disclosed in the revised return is accepted by the Assessing Officer and no further addition was made in the assessment proceeding. When the income disclosed in the revised return was accepted and no further addition was made, this Tribunal is of the considered opinion that it is not a fit case for levy of penalty under Section 271(1)(c) of the Act. The power to levy penalty under Section 271(1)(c) of the Act is one thing and exercising of power is another thing. This Tribunal is of the considered opinion that the power of the Assessing Officer to levy penalty has to be exercised judiciously in appropriate cases. When the assessee has disclosed entire income by way of revised return and no addition was made, this Tribunal is of the considered opinion that the CIT(Appeals) has rightly deleted the penalty levied by the Assessing Officer. Therefore, this Tribunal do not find any reason to interfere with the order of the CIT(Appeals) and accordingly, the same is confirmed.
In the result, the appeal filed by the Revenue is dismissed.
Order pronounced on 24th March, 2016 at Chennai.