2023 (5) TMI 837 - AT - Income Tax

Levy of penalty u/s. 271(1)(c) - Income declared during search proceassessee had furnished “inaccurate particulars of income” - HELD THAT:- It is an undisputed fact that during the course of search on 12.01.2010, the Director of the assessee company declared income of Rs. 1,80,00,000/- belongs to the assessee company and paid taxes thereon ad filed its Return of Income on 07.10.2010 for the AY 2010-11. Further the time limit of filing of Return of Income for A.Y. 2010-11 was not expired on the date of survey namely 12.01.2010 i.e. much before the end of the financial year itself.

Assessee in its Return of Income duly declared the sum of Rs. 1,80,00,000/- which was admitted during the course of survey. Thus it cannot be said that the assessee had furnished “inaccurate particulars of income” which is not disputed by the AO.

As per Explanation 5A to Section 271(1)(c), penalty is not leviable since the assessee has paid the taxes thereon in the Return of Income filed u/s. 139(1) - As supported by case of CIT vs. Jupiter Distillery [2011 (12) TMI 390 - ITAT, AHMEDABAD] and Muninaga Reddy [2014 (2) TMI 82 - ITAT BANGALORE] wherein deleted the levy of penalty u/s. 271(1)(c).

Also in the case of CIT vs. SAS Pharmaceuticals [2011 (4) TMI 888 - DELHI HIGH COURT] held where income surrendered by assessee during survey had been shown by it in its regular income-tax return filed within prescribed time, penalty could be imposed. CIT(A) has followed the above decisions and deleted the penalty on the declared income in search.

CIT(A) confirmed the levy of penalty on the balance disputed income. We do not find any infirmity in the order passed by the CIT(A), who partly deleted the penalty levied u/s. 271(1)(C). The grounds raised by the Revenue is devoid of merits and the same is dismissed.