TMI Blog2012 (7) TMI 724X X X X Extracts X X X X X X X X Extracts X X X X ..... 012 - SHRI G.C. GUPTA,VP SHRI A.N. PAHUJA, JJ. Assessee by Shri Sameer Kapoor, AR Revenue by Smt . Surjani Mohanty,DR O R D E R A.N.Pahuja:- This appeal filed on 23.11.2009 by the assessee against an order dated 22.09.2009 of the CIT(A)-XXIV, New Delhi, raises the following grounds:- 1) Whether on the facts and circumstances of the case, the ld. CIT(A) has erred in upholding the order of the ld. AO levying penalty u/s 271(1)(c). 2) The assessee may please be allowed to add, delete, alter and modify any ground of appeal. 2. This appeal earlier disposed of exparte vide order dated 6th September, 2011 was recalled vide order dated 2nd March, 2012 in M.A. no.327/Del./2011. 3. Facts, in brief, as per relevant orders are that return declaring income of Rs.75,180/- filed on 01.02.2005 by the assessee, after being processed u/s 143(1) of the Income-tax Act, 1961 (hereinafter referred to as the Act, was selected for scrutiny with the service of a notice u/s 143(2) of the Act, issued on 14.11.2005. In this case, a survey was conducted u/s 133A of the Act on 12th December, 2003 in the business premises of the assessee, when the assessee disclosed additional in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the issue, the relevant facts have to be taken into consideration. Firstly, the discovery of the concealment, by way of stock and machinery not recorded in books of accounts was made by the AO prior to conclusion of the assessment proceedings i.e. at the time of survey operation itself. Secondly, the AO found out that the assessee had not returned the surrendered income for the year under consideration and it therefore, amounted to concealment and furnishing of inaccurate particulars of income. 4.1 The counsel of the appellant has mainly made two arguments. Firstly, certain material of inventory and machinery of Rs. 10,39,079/- found unrecorded in the books of accounts was owing to the fact that the same was pending to be entered in the books of accounts, as a usual practice of business. Secondly, noninclusion of Rs. 10,39,079/- in the income while filing the return of income was not a deliberate attempt on the part of the assessee rather it was due to omission and the assessee had already paid taxes on the surrendered amount with the condition that no penalty proceedings would be initiated against him. The Assessing Officer has invoked the provisions of section 271(1)(c) me ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) Ltd,5 SOT 36(MUM);DCIT vs. KR Malaimathi,99 ITD359(Chennai);Sree Nithya Kalyani Textiles Ltd. vs. DCIT,282 ITR154(Mad.);CIT vs. Master Sunil R Kalro,292 ITR 86(Kar);Durga Timber Works vs. CIT,79 ITR 63(Del.);Banaras Chemical Factory vs. CIT,108 ITR 96(All.);India Sea Foods vs. CIT,114 ITR 124(Ker);CIT vs. PB Shah Co(P) Ltd.,113 ITR 587(Cal.),Krishna Kumari Chamanlal vs. CIT,217 ITR 645(Bom.);CK Rao vs. C. Subbarao,AIR 1971 SC 1542;Western Automobiles(India) vs. CIT,112 ITR 1048(Bom.);Addl. CIT vs.Smt. Chandrakanta Anr.,205 ITR 607(MP);SS Ratanchand Bholanath vs. CIT,210 ITR 682(MP);CIT vs. Sree Krishna Training Co.,253 ITR 645(Ker);Electrical Agencies Corporation vs. CIT,253 ITR 619(Del.) KP Madhusudanan vs. CIT,251 ITR 99(SC) held that the AO has conclusively established the concealment of income and furnishing inaccurate particulars thereof. 5. The assessee is now in appeal before us against the aforesaid findings of the ld. CIT(A). The ld. AR on behalf of the assessee while carrying us through the impugned order contended that the assessee had no intention of concealment of income in the return, amount having been surrendered at the time of survey and disclosed in th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for levy of penalty is return of income. If any amount has been shown in the return of income then it cannot be said that assessee has concealed any particulars of that income or furnished inaccurate particulars thereof. There cannot be any concealment prior to filing of return and certainly not during the survey proceedings as held in S.A.S. Pharmaceuticals (supra). Hon ble Rajasthan High Court in the case of CIT vs. Unique Precured Retraders [2008] 13 DTR (Raj) 215 concluded that no penalty is leviable in respect of disclosure of additional income after the survey. 7.1 Now adverting to decisions relied upon by the ld. DR. In K. P. Sampath Reddy (supra) the assessee had filed a return of his income at Rs. 11,310/- for the assessment year 1976-77 from his business in kirana. The ITO suspected the correctness of this return. Thereafter, the assessee filed a revised return showing an income of Rs. 69,800. During the survey of his business, books of accounts were impounded, which recorded several erroneous entries. While the investigation was in progress as to the stocks, sales and various cash credit entries, the assessee filed his revised returns for the years 1972-73, 1973-74 an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... resaid decision is totally misplaced. 7.2 Facts, in the other decision relied on by the ld. DR in C Ananthan Chettiar(supra) are that consequent to a search in the assessee's shop and residence on November 22,1985, when cash, jewellery and certain documents were seized, a revised return for the AY 1986-87was filed by the assessee for this assessment year, which return was accepted and assessment made on the basis of that return. In response to a notice seeking to impose penalty, the assessee took the stand that there was no concealment and it was only for the purpose of buying peace with the Department that the additional income was disclosed and the return filed. The Tribunal, relying on the decision of the Supreme Court in the case of Sir Shadilal Sugar and General Mills Ltd. v. CIT [1987] 168 ITR 705, held that no penalty was in the circumstances leviable. Hon ble High Court while relying upon Explanation to section 271(1)(c) of the Act and the decision in the case of K.P. Madhusudhanan v. CIT [2001] 251 ITR 99 (SC), upheld the levy of penalty, the reason for not having disclosed the income earlier having not been stated. As is apparent from these facts, such is not the situ ..... X X X X Extracts X X X X X X X X Extracts X X X X
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