2014 (2) TMI 82 - ITAT BANGALORE

Penalty u/s 271(1)(c) of the Act – Survey conducted u/s 133A of the Act – Held that:- There cannot be any penalty on income which is declared in a return of income - When an income which is ultimately brought to tax is declared in a return of income, there can be no question of treating the Assessee as having "concealed particulars of income or furnished inaccurate particulars of income" - The starting point of determining concealment for imposing penalty is the return of income - If the return of income declares income which is ultimately brought to tax there can be no complaint by the revenue that the Assessee is guilty of "concealing particulars of income or furnishing inaccurate particulars of income".

There can be no concealment or non-disclosure, as the assessee had made a complete disclosure in the IT return and offered the surrendered amount for the purposes of tax and therefore no penalty under s. 271(1)(c) could be levied - Decision to initiate penalty proceedings is taken while making assessment order - the expression 'in the course of any proceedings under this Act' cannot have the reference to survey proceedings - It necessarily follows that concealment of particulars of income or furnishing of inaccurate particular of income by the assessee has to be in the IT return filed by it - there cannot be any penalty only on surmises, conjectures and possibilities - Sec. 271(1)(c) has to be construed strictly - Unless it is found that there 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 IT return and offered the surrendered amount for the purposes of tax - Relying upon Commissioner of Income-tax Versus SAS Pharmaceuticals [2011 (4) TMI 888 - Delhi High Court] There can be no justification for imposition of penalty on the income offered in the return of income by the Assessee, because there cannot be any penalty on income which is declared in a return of income – Decided in favour of Assessee.