TMI Blog2021 (3) TMI 558X X X X Extracts X X X X X X X X Extracts X X X X ..... ee was required to plead not only the plea of non-specific notice but is also required to raise the defense of prejudice caused to him on account of nonspecific notice. In our considered opinion the assessee has not raised the plea of non-specific notice before the lower authorities and have further not raised the plea of prejudice caused to him on account of non-specific notice. Nothing has been pleaded before us or before the lower authorities to prove the prejudice caused to the assessee on account of non-specific notice. In the light of the above we do not find any merit in the contention of the assessee and therefore the CO filed by the assessee is required to be dismissed as no prejudice had been caused to the assessee - charge against the assessee was known to the assessee and had filed the reply thereto setting up the plea of buying the peace and to curtail the litigation. However in the reply the assessee has not submitted that he was not aware of the charges for which the penalty notices were issued by the assessing officer. Surrendered income during the course of survey - Initial surrender made by the assessee on 25 July 2012 was on account of the recovery of lo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... raised cross-objections stating that the learned Assessing Officer has erred in law and on facts in levying the penalty u/s. 271(1)(c) on a nonspecific notice initiating the penalty. 3. Brief facts of the case are that a survey u/s.133A was carried out on 25.07.2012 at the business premises of the assessee. During the course of survey, loose papers and other documents were found which were impounded and inventorized. The assessee was confronted with the documents so found and impounded. The assessee after being confronted with the documents, had given statements and the relevant portion of the statements given was as under : 4. Based on this statement, during the assessment proceedings, the assessee was asked to explain the source of income of ₹ 1.50 crores, which was not shown by the assessee during the assessment year 2013-14. In reply, the assessee has submitted as under : ..That however, in spite of all these factual position supra, as discussed during the course of assessment proceedings, the amount of₹ 1,50,00,000/- (₹ 1,80,00,000 ₹ 30,00,000) as declared during the course of survey, is being hereby offered for taxation just ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rcle 1(1), Gwalior. Dated 20/09/2016 To M/s. Fairyland Hotels and Resorts Private Limited A-225, Patel Nagar, City Center, Gwalior, MP 474011 Sir/Madam, Whereas in the course of proceedings before me for the Assessment year 2013-14, it appears that you have concealed the particulars of your income or furnished inaccurate particulars of such income. You are hereby requested to appear before me on 23/09/2016 at 11.30 AM and show cause why an order imposing a penalty on you should not be made under section 271(1)(c) of the Income Tax Act, 1961. If no one attends this office on the said date of hearing, the case shall be decided on the basis of material available on records. Yours faithfully (R.K. Garhwal) Asstt. Commissioner of Income Tax, Circle 1(1), Gwalior. 7. The assessee after receipt of notices had filed reply on 10.03.2016. Relevant portion of the reply was also reproduced by the Assessing Officer in the penalty order as under : ..That however, in spite of all these factual position supra, as discussed during the course of assessment proceedings, the amount of₹ 1,50,00,000/- ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... with law. The ld.AR has further submitted that the cross objection was filed by the assessee wherein it was submitted that the penalty order is required to be set aside not only on the ground mentioned by the CIT(A), but also on account of fact that all the three notices reproduced above were not specific on charge of penalty. He relied upon the decision of Hon ble Karnataka High court in the case of CIT vs. Manjunatha Cotton Ginning Factory, 359 ITR 565 (Kar) and of Hon ble Supreme Court in the case of SSA Emrald Meadows, 73 Taxman 248 (SC). Further, it was submitted by the ld. AR that there was no material in possession of the Assessing Officer to confirm the addition and he relied upon the recent decision in the case of Basir Ahmed Sisodia vs. ITO [2020] 116 taxmann.com 375 (SC). 11. In rebuttal ld. DR ha submitted that no prejudice was caused to the assessee as the assessee had not only participated in the penalty proceedings, but was aware of the fact as is clear from the reply submitted by the assessee reproduced hereinabove. She had also relied upon the decision in the case of Sudhir Kumar Singh and others vs. State of UP (Civil Appeal No. 3498 of 2020) wherein in para ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d inventoried. The statement was also recorded and the assessee agreed to declare income of ₹ 1, 80, 00000/-as the documents were found in the hard disk which were not recorded in the books of account of the assessee, his daughters and son.(AO page 2) 14. The assessing officer noticed that the assessee had only surrendered ₹ 30.00 Lakhs instead of income of ₹ 1,80,00, 000/-. The assessee was asked by the assessing officer to furnish his explanation regarding non-surrender of amount of ₹ 1,50,00,000/-. After that the assessee filed a written reply on 10 March 2016 whereby he had agreed to declare the additional income of ₹ 1,50,00,000/-. 15. In the penalty proceedings the notice was issued to the assessee and in response to the notice the assessee s counsel had stated that the amount of 1.5 crore was declared during the course of survey and was offered for taxation to avoid litigation and to buy peace. In our opinion there was no ambiguity in the mind of the assessee either at the assessment stage or at the stage of imposition of penalty that the assessee had not disclosed the income of ₹ 1.5 crore in the return of income, despite surrenderi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Commissioner appeal challenged by the revenue. The Commissioner appeal had deleted the penalty by distinguishing the judgement of the honourable Supreme Court in the matter of Mak Data and relied upon the decision of Uttam Value Steels (supra). The SC in Mak Data had held as under : 9. We are of the view that the surrender of income in this case is not voluntary in the sense that the offer of surrender was made in view of detection made by the AO in the search conducted in the sister concern of the assessee. In that situation, it cannot be said that the surrender of income was voluntary. AO during the course of assessment proceedings has noticed that certain documents comprising of share application forms, bank statements, memorandum of association of companies, affidavits, copies of Income Tax Returns and assessment orders and blank share transfer deeds duly signed, have been impounded in the course of survey proceedings under Section 133A conducted on 16.12.2003, in the case of a sister concern of the assessee. The survey was conducted more than 10 months before the assessee filed its return of income. Had it been the intention of the assessee to make full and true disclosure ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tember, 2009 during assessment proceedings where it stated that it had committed a mistake in debiting foreign exchange loss to its determine non-tonnage income, when in fact, no foreign exchange loss was involved in respect of its non-tonnage business. Thus, it is clear that so-called mistake as claimed by the appellant-assessee, was only after notices dated 14th January, 2009 were issued under Sections 142 and 143 of the Act. It was only an attempt to pre-empt the Revenue finding out the appellant had furnished inaccurate particulars. Therefore, it cannot be said that it was voluntary disclosure. In fact, the Apex Court in MAK Data (P.) Ltd. (supra) has observed that The Assessing Officer, 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 its conduct. The Apex Court has also further observed that It is trite law that the voluntary disclosure does not release appellant-assessee from the mischief of penal proceedings. The law does not provide that when an assessee makes a voluntary disclosure of his concealed income, he had to be absolved from penalty. In the pec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (Madras) 4. We have carefully perused the penalty order dated 25-9-2015 and we find that the Assessing Officer considered all the factual aspects raised by the assessee and rejected the same to be absolutely without bonafides. The decisions relied on by the assessee were also taken note of and each of the decisions was dealt with. The Assessing Officer placed reliance on the decision of the Hon'ble Supreme Court in MakData (P.) Ltd. (supra) and stated that voluntary disclosure does not release the assesee from mischief of penalty proceedings under section 271(1)(c) of the Act. Therefore, we find that the penalty order is a reasoned order. 15. The learned counsel had argued that the defect in the penalty notice is a question of law which can be raised by the assessee at any point of time. We have considered this submission and we have rejected it. The learned counsel relied on the decision of the Hon'ble Supreme Court in the case of K. Lubna to submit that if the factual foundation for a case has been laid and the legal consequences of the same having been examined, the examination of such legal consequences would be a pure question of law. We have noted the factu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the business. Hence this amount should have been statutorily added back. Further, from the computation of income, the assessee added back certain inadmissible expenditure. However, he excluded the amount of income tax paid to the extent of ₹ 48,90,114/-. Thus, the addition was only partial and not full. Unless and until the legal provision then in force permitted exclusion of the amount of income tax already paid, the Chartered Accountant could not have done this. The Chartered Accountant cannot feign ignorance of Section 40(ii) of the Income-tax Act as he is well trained and well versed in law representing not only the assessee, but various other clients. As far as the assessee'smalafide intention is concerned, the burden was entirely on the assessee to then show in terms of Explanation-I to the provision permitting imposition of penalty that such intention never existed when the above act was committed. For that, there was no material either in the form of evidence of the assessee or the affidavit of the Chartered Accountant. Hence the Commissioner was right, according to the Tribunal, in imposing this penalty. The attempt to blame the Chartered Accountant cannot result ..... X X X X Extracts X X X X X X X X Extracts X X X X
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