TMI Blog2013 (12) TMI 1000X X X X Extracts X X X X X X X X Extracts X X X X ..... ll the appeals is that the ld. CIT(A) erred in confirming the order of the Assessing Officer levying penalty u/s 271(1)(c) of the Act. 3. For assessment years 2002-03 to 2007-08, the brief facts of the case are that the assessee is a transport contractor. A survey u/s 133A of the Act was conducted on 6.1.2009 in the premises of the assessee. The assessee had filed the return for assessment year 2002-03 on 29.3.2003 admitting income of Rs. 1,29,264/-, for assessment year 2003-04 on 30.3.2004 admitting income of Rs. 1,27,558, for assessment year 2004-05 on 29.3.2005 admitting income of Rs. 66,520/-, for assessment year 2005-06 on 31.3.2006 admitting income of Rs. 94,712, for assessment year 2006-07 on 23.3.2007 admitting income of Rs. ,48,410/-, and for assessment year 2007-08 on 28.3.2008 admitting income of Rs. 1,86,387/-. Subsequent to the survey, notice u/s 148 was issued on 4.3.2009 for the assessment year 2002-03. The assessee, in response to the notice, filed return of income offering an income of Rs. 3,14,164/- admitting investment in fixed deposits and interest income earned from the said deposit. Similarly, in the assessment year 2003-04, notice u/s 148 was issued on 4.3. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e legal heirs of Late Sri N.R.Palanivel Viz 1. Sri.P.Kailasam 2.5ri P.Loganathan 3. Sri P. Venkatachalan - Sons of Late Sri N.R.Palanivel; 4. Smt.Perumayee Ammal- Wife of Late Sri N.R.Palanivel and 5. Smt.P.Alamelu - Daughter of Late Sri N.R.Palanivel. Sri N.R. Palanivel died on 27.5.2009. Sri.P.Kailasam is the eldest son of Late Sri.N.R.Palanivel. The other legal heirs of Late N.R.Palanivel, Sri.P.Loganathan and Sri P.Venkatachalan - Son of Late Sri.N.R.Palanivel; Smt. Perumayee Ammal - Wife of Late Sri.N.R.Palanivel and Smt.P.Alamelu - Daughter of Late sri N.R.Palanivel have authorized Sri.P.Kailasam by letter dated 30.7.2009 to file appeal against the penalty orders in the case of the assessee Sri.N.R.Palanivel relating to this Assessment Year 2002-03 and also for the other Assessment Years 2003-04 to 2008-09. The copy of the letter given by other legal heirs authorizing Sri.P.Kailasam to file appeal is enclosed herewith as" Annexure-A". The penalty proceedings u/s.271(1)( c) for this Assessment year 2002-03 and for the other Assessment years 2003-04 to 2008-09 were initiated in the name of Sri.N.R.Palanivel on 31.3.2009 the date on which the Assessment order was made in h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ist of fixed deposits with the bank amounted to Rs.90,00,000/- which were renewed from 1.12.2007 to 22.12.2008. He has also surrendered the fixed deposit receipts with the officer. In the said letter he has mentioned that he has got about Rs.20,00,000/- at the time of partition between himself and his brother in the year 1977 and that he had income from agriculture from his own lands and from the lands taken on lease. He has mentioned in the letter the Fixed deposits in the bank were from the savings from the amount of Rs.20 lakhs got in partition and subsequent earnings from Agricultural lands owned by him and lands taken on lease. He has stated that the deposits in the bank and the amounts advanced to his known persons were held as HUF assets. He also intimated in the said letter that the interest earned on the deposits were mostly saved as deposits in the said bank. He has admitted that the details of the deposits made in each year are not available with him and therefore he will collect the details of the deposits and interest from the bank, and thereafter file the returns for each year and pay the tax there on. In the said letter he has submitted that he will pay the tax immed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hands of the revenue in the course of survey and it shows that Sri.N.R.Palanivel had co-operated to disclose the income to buy peace and to pay the tax in full to avoid the protracted litigation and to leave the legal heirs in peace as he was expecting his end. The income returned for this Assessment year and for all the Assessment years were accepted by the revenue without any further addition. Consequently in the light of the judgement of Hon'ble Supreme Court in the case of CIT Vs. Suresh Chandra Mittal (2001)(251 ITR 9)(SC) and CIT Vs. Pachamuthu Another (2007)(295 ITR 502) it was submitted that no penalty was exigible. However, the Assessing Authority declined to accept the explanation offered and levied the penalty u/s.271(1)(c) of the Act being the 100% of the tax sought to be evaded. Hence the appeal". 6. The ld. CIT(A) confirmed the order of the Assessing Officer levying penalty u/s 271(1)(c) of the Act, by observing as under: 5. I have considered the penalty order and the submissions of the appellant. The only issue to be adjudicated is the levy of penalty u/s 271(1) (c) of the Income-tax Act,1961. All the grounds relate to the same issue. 5.1 The appellant, i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... epartment, he surrendered these fixed deposits as his income in the years under consideration. The assessee was not in a position to file the required details explaining the sources of deposits to be out of his earlier renewal f fixed deposits due to his ill health. He relied on the decision of the Amritsar Bench of the Tribunal in the case of ITO vs Fashionways,[2002] 77 TTJ (Asr) 59, and submitted that the Tribunal in that case held that Department having accepted the revised return filed by the assessee declaring higher income without making any addition to the revised income, penalty u/s 271(1)(c) of the Act was not leviable. He further relied on the decision of the Hon'ble Delhi High Court in the case of CIT vs Sas Pharmaceuticals [2011] 335 ITR 259(Del), wherein it was held as under: It is to be kept in mind that s. 271(1)(c) is a penal provision and such a provision has to be strictly construed. Unless the case falls within the four corners of the said provision, penalty cannot be imposed. Sub-s. (1) of s. 271 stipulates certain contingencies on the happening whereof the AO or the CIT(A) may direct payment of penalty by the assessee. Sec. 271(1)(c) authorizes imposition o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... el) 361 : (1983) 141 ITR 203 (Del) and CIT vs. Reliance Petroproducts (P) Ltd. (2010) 230 CTR (SC) 320 : (2010) 36 DTR (SC) 449 : (2010) 3 SCR 510 relied on. 8. On the other hand, the ld. DR submitted that the decisions relied upon by the ld. A.R of the assessee are on the fact that the assessee had filed revised return of income wherein he additional income was disclosed by the assessee which was accepted by the Department in the assessment framed thereafter. He submitted that in the case of the assessee, additional income was disclosed in pursuance to the notice issued u/s 148 of the Act. He relied on the decision of the Hon'ble Karnataka High Court in the case of CIT vs Sangmeshwara Associates [2012] 345 ITR 396(Kar), wherein it was held that in situation where issue is not contested, but admitted, production of proof is neither necessary nor warranted in law before levying penalty u/s 271(1)(c). Penalty is imposable u/s 271(1)(c) of the Act where assessee himself admitted his failure to furnish true or full disclosure of income. It was submitted that in the case of the assessee, after the survey, in pursuance of notice issued u/s 148 of the Act by the Assessing Officer, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed the rival submissions, perused the orders of the lower authorities and materials available on record. The undisputed facts of the case for assessment years 2002-03 to 2007-08 are that the assessee in its original returns filed for the assessment years in question had not shown interest income earned on FDRs and investments made in FDRs. A survey u/s 133A of the Act was conducted in the case of the assessee on 6.1.2009 wherein the fact of earning of interest income on FDRs and investment in FDRs was found by the Department. Thereafter, notices u/s 148 were issued for all the years under consideration and in pursuance to which the assessee filed return for each of the years disclosing additional income. The Assessing Officer levied penalty u/s 271(1)(c) of the Act for all the years under consideration in respect of this additional income which was not disclosed in the original returns filed by the assessee and was only disclosed in the returns which were filed in pursuance to notices issued u/s 148 of the Act. 13. The ld. CIT(A) confirmed the action of the Assessing Officer. 14. Before us, the ld. A.R of the assessee contended that as the assessee could not file evidences to s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . We find that regular returns of income were filed in each of the years under consideration before the date of survey wherein full and true income was not disclosed by the assessee, but disclosed the same in the returns which were filed in pursuance to notices issued u/s 148 of the Act. We find that the assessee could not produce any bonafide reason for which correct income could not be disclosed in the regular returns filed u/s 139(1) or 139(4) or 139(5) of the Act. We, therefore, do not find any reason to interfere with the orders of the lower authorities. They are confirmed and the grounds of appeal of the assessee for the years under consideration are dismissed. 19. For assessment year 2008-09, the undisputed facts of the case are that the assessee filed return of income on 26.2.2009 admitting income from bus business of Rs. 1,81,971/-, investment in fixed deposits made during the year of Rs. 18,20,000/- and interest on fixed deposit of Rs. 2,72,272/-, thereby showing total income of Rs. 22,74,243/-. The assessment was completed by the Assessing Officer at the returned income of the assessee. Thereafter, the Assessing Officer issued notice u/s 271(1)(c) of the Act and levied ..... X X X X Extracts X X X X X X X X Extracts X X X X
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