TMI Blog2018 (2) TMI 1380X X X X Extracts X X X X X X X X Extracts X X X X ..... D MR. A.K. CHAWLA, JJ. For The Appellant : Mr. Zoheb Hossain, Sr. Standing Counsel For The Respondent : Mr. Abhinav Sharma, Advocate MR. JUSTICE S. RAVINDRA BHAT 1. The question of law framed for this appeal is as follows: Did the Income Tax Appellate Tribunal (ITAT) fall into error in holding that the penalty of ₹ 67,98,000/- imposed under Section 271(1)(c) of the Income Tax Act was not leviable in the facts and circumstances of the case? 2. The brief facts are that the assessee an individual, filed her return of income on 25.09.2009 in which she declared a total income of ₹ 9,18,060/-. During the pendency of proceedings for that assessment year, survey was conducted under Section 133A by the Revenue at her business premises (B-1, Rohit Kunj, Pitampura, New Delhi) on 22.02.2010. In these search proceedings, the assessee who is a Medical Practitioner, surrendered ₹ 2,00,00,000/- and filed a revised return declaring that amount as additional income. The AO completed scrutiny assessment, by assessing total of the two figures i.e. ₹ 2,09,18,060/-. He initiated penalty proceedings, on the footing that the assessee had concealed th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ble claims cannot be said to be bonafide. 5. The CIT (A) was of the opinion that the assessee could be said to have concealed material particulars and filed inaccurate returns. The ITAT- whom the revenue appealed to, held that since the assessee disclosed the income in the revised return which was in consonance with the voluntary statement made by her, the exercise of discretion in assuming jurisdiction and imposing penalty was unwarranted. In so concluding, the ITAT went by the decision of this Court in Commissioner of Income Tax v. SAS Pharmaceuticals (2011) 335 ITR. The ITAT was also of the opinion that the AO was wrong in invoking jurisdiction without first premising the notice upon one or the other condition i.e. with respect to concealing of income or filing inaccurate particulars. For these two reasons, the ITAT allowed the assessee s appeal and granted the relief. 6. Counsel for the Revenue urges that the ITAT fell into error in holding that Section 271(1)(c) was not attracted to the circumstances of this case. It was pointed out that prior to the survey (on 22.02.2010), the assessee had filed a return, which failed to disclose the true particulars. It was only dur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rt in Commissioner of Income Tax v. Mohandas Hassanand 141 ITR 203 in support of his submission. 8. Learned counsel submitted that like in the facts of the present case, penalty imposed in the cases of additional income surrendered after survey were held to be unwarranted by different High Courts. Reliance was placed upon the judgment of the Punjab Haryana High Court in Commissioner of Income Tax v. Bharat Rice Mills 201 Taxation 633; Additional Commissioner of Income Tax v. Bharatiya Bhandar (1979) 13 CTR 159 (MP) and Commissioner of Income Tax v. SI Paripushpam 249 ITR 550 (Mad.). 9. Learned counsel contended that in the case of search assessments, if the conditions spelt out in Explanation 5 to Section 271(1)(c) are satisfied, penalty cannot be levied. In the present case, however, no search took place and; a mere survey was conducted. Admittedly, no incriminating or damaging material or documents were seized. The assessee of her own record and in order to buy peace, surrendered ₹ 2,00,00,000/-. Without a finding that the returns (subsequently revised in consonance with law) did not furnish material particulars or were inaccurate in material facts, penalty could no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e is actually a concealment or non-disclosure of the particulars of income, penalty cannot be imposed. There is no such concealment or non-disclosure as the assessee had made a complete disclosure in the income tax return and offered the surrendered amount for the purposes of tax. 12. It is instructive at this stage to notice that after SAS Pharmaceuticals (supra) was decided, the Supreme Court rendered its ruling in MAK Data Private Ltd v Commissioner of Income Tax (supra). The facts there are interesting; they bear a close comparison with the circumstances of this case. During scrutiny assessment of the assessee, survey of its sister concerns was done; the assessee at that stage volunteered and surrendered some amounts, based on the following statement: The offer of surrender is by way of voluntary disclosure of without admitting any concealment whatsoever or with any intention to conceal and subject to non-initiation of penalty proceedings and prosecution. All the appellate authorities and the High Court upheld throughout the ensuing penalty. Rejecting the assessee s appeal, the Supreme Court observed as follows: The AO, in our view, shall not be carried away ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ter during the course of the assessment proceedings. Consequently, it is clear that the assessee had no intention to declare its true income. It is the statutory duty of the assessee to record all its transactions in the books of account, to explain the source of payments made by it and to declare its true income in the return of income filed by it from year to year. The AO, in our view, has recorded a categorical finding that he was satisfied that the assessee had concealed true particulars of income and is liable for penalty proceedings under Section 271 read with Section 274 of the Income Tax Act, 1961. 10. The AO has to satisfy whether the penalty proceedings be initiated or not during the course of the assessment proceedings and the AO is not required to record his satisfaction in a particular manner or reduce it into writing. The scope of Section 271 (1) (c) has also been elaborately discussed by this Court in Union of India v Dharmendra Textile Processors (2008) 13 SCC 369 and CIT v Atul Mohan Bindal (2009) 9 SCC 589. 11. The principle laid down by this Court, in our view, has been correctly followed by the Revenue and we find no illegality in the department ini ..... X X X X Extracts X X X X X X X X Extracts X X X X
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