TMI Blog2022 (7) TMI 677X X X X Extracts X X X X X X X X Extracts X X X X ..... ee should be a nonfiler of return, no return ought to have been filed within the time specified for framing assessment u/s 153 of the Act and no notice u/s 142(1) /148 of the Act should have been issued to the assessee for filing return within this time period. Also the AO should be satisfied that the assessee had taxable income for the said year. The court interpreted that in such eventuality even if the assessee files return after the expiry of time u/s 153 of the Act in response to notice u/s 148 of the Act, he shall be deemed to have concealed particulars of his income and be liable for penalty u/s 271(1)(c). In the present case the assessee has demonstrated that the conditions specified in explanation 3 have not been fulfilled. He has pointed out that during the time period u/s 153 of the Act in the present case notice u/s 148 of the Act was issued to the assessee in response to which return was filed by him. The aforesaid fact has remained uncontroverted before us. In view of the same, we hold the issue is squarely covered in favour of the assessee by the decision of the Hon ble jurisdictional High court. Thus we hold that no penalty in the present case was leviable ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of income relating to capital gain declared by the assessee in his return filed in response to notice u/s 148 of the Act which income amounted to Rs.13,29,340/- holding that the facts of the case clearly show that the assessee did not file his return of income either as per the provisions of Section 139(1) of the Act or after issuance of notice u/s. 148 of the Act within 30 days thereof, clearly proving that the return was filed only after survey was conducted upon the co-owner of the property and his statement recorded . Ld.CITA held that it clearly proved that the assessee tried his best to evade taxes and filed return of income only when it was detected by the department. On the addition to the income of the assessee pertaining to expenses disallowed on estimate basis ,which addition amounted to Rs.2,16,420/- he deleted the penalty levied holding that the assessee was not conclusively found to have concealed this income. The relevant findings of the Ld. CIT(A) at Para 6 of the order is as under: 6. The AO levied penalty upon Rs.13,29,340/- stating that the appellant has returned his income after conducting survey upon Shri Amarsinh Ramubhai Solanki on 12.12.2011. The appell ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... while making the decision in para 6 of the appellate order and therefore the penalty sustained on returned Income u/s 148 of the IT. Act, 1961 requires to be deleted. 4. That the learned A.O. has passed penalty order U/s 271(1)(c) without giving reasonable opportunity of being heard to the appellant and therefore penalty deserves to be cancelled. 5. On the facts and circumstances of the case, the order passed by learned A.O. is in gross violation of Sec. 274 of the IT. Act 1961 and considering the same, penalty order requires to be cancelled. 5. The solitary contention of the ld. Counsel for the assessee before us was that mere fact of non-filing of return of income did not tantamount to concealment/furnishing inaccurate particulars of income for the purpose of levying penalty u/s. 271(1)(c) of the Act and the legislature had acknowledged this position by inserting explanation 3 to Section 271(1)(c) categorically providing for specific situation of non-filing of return of income which alone would attract the levy of penalty. Ld.counsel for the assessee drew our attention to Explanation 3 to Section 271 (1)(c) as under: Explanation 3.-Where any person fails, withou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Notice U/s 142(1) was issued in case of assessee 11/11/2011 3. Survey U/s 133A was conducted in case of Amarsingh Ramubhai Solanki 12/12/2011 4. Return Filled against the Notice U/s 148 of the IT. Act, 1961 31/03/2012 5. Time limit for completion of Assessment U/s 1 53(1 )(a) 31/03/2012 6. Time limit for completion of Assessment U/s 153(1)(b) 31/03/2013 6. Ld. Counsel for the assessee further relied on the decision of the Hon ble Jurisdictional High Court in the case of Chhaganlal Suteriya vs. ITO Anr. reported in [2011] 337 ITR 350 in this regard. Copy of the order was placed before us. 7. Ld. D.R. on the other hand vehemently supported the order of the authorities below stating that the assessee had filed return only on detection of his undisclosed income during survey and therefore had been rightly held to be liable for penalty u/s. 271(1)(c) of the Act. Reliance was placed on the decision of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 10-15 of the order is as under: 10. A plain reading of section 271(1) of the Act shows that if the AO or any of the officers specified under the said sub-section, in the course of any proceedings under the Act is satisfied that any person has concealed particulars of his income or furnished inaccurate particulars of his income, he may direct that such person shall pay penalty in accordance with the provisions of the Act. In the facts of the present case, the failure on the part of the petitioner is non-furnishing of return of income for the assessment year under consideration. As to whether failure to furnish return of income per se amounts to concealment of income, the law all along has been that mere failure to file a return of income is not tantamount to concealment of particulars of income. In S. Narayanappa Bros. vs. CIT (1961) 41 1TR 125 (Mys)the question arose as to whether the ITO could levy a penalty under section 28(l)(b) of the Act where the assessee failed to submit a return in response to a notice under section 22(2) and further failed to produce his books of account when called upon to do so under section 22(4). That was a case where there was a total failure to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ar 1989-90 or any year subsequent thereto within two years from the end of the assessment year concerned; thirdly, that no notice should have been issued to him under section 142(1) or section 148 of the Act till the expiry of the two year period; and lastly, the concerned officer is satisfied that in respect of such assessment year, such person had taxable income, hi such cases, Expln. 3 provides that such person shall be deemed to have concealed the particulars of his income within the meaning of cl. (c) of section 271(1) of the Act for such assessment year. In such an eventuality, even if the person concerned files a return after the expiry of the said period of two years in pursuance of a notice under section 148 of the Act, the deeming provision of Expln. 3 shall still have application. 13.' Though it has been contended on behalf of the respondents that in the present case Expln. 3 has not been applied; as noticed earlier mere non-furnishing of a return per se is not tantamount to concealment within the meaning of section 271(l)(c) of the Act. The only eventuality under which non-furnishing of return of income amounts to concealment is as provided under Expln. 3 to su ..... X X X X Extracts X X X X X X X X Extracts X X X X
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