TMI Blog2015 (4) TMI 4X X X X Extracts X X X X X X X X Extracts X X X X ..... t anything on or before December 24, 2008 because every fact was disclosed to the Revenue Department and within the knowledge of the Assessing Officer. In view of the above discussion, we do not find any infirmity in the order of the learned Commissioner of Income-tax (Appeals) and delete the penalty with regard to the surrender of ₹ 45 lakhs. As regards the levy of penalty on account of sale of property to Rahon Road, Ludhiana, the main reason for levy of penalty was that assessee disclosed lower rates of plots but the same was not supported by any reasons by the Assessing Officer for taking higher valuation. The learned Departmental representative admitted that no material or evidence was found during the course of search to support the findings of the Assessing Officer that assessee has concealed any higher sale consideration. The assessee in support of the sale consideration had filed sale deeds which have not been rebutted through any evidence. The assessee did not maintain regular books of account, and therefore, provisions of section 145(3) were applied and the rates were enhanced by the Assessing Officer for making estimated addition of ₹ 1,38,750. It is well ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing Officer was confirmed by the learned Commissioner of Income-tax (Central) in the order passed under section 264 of the Income-tax Act. The Assessing Officer rejected the assessee's argument that he has sold the impugned plot at a particular price on the ground that the same was not substantiated and there was huge variation in the sale rates. The Assessing Officer rejected the contention of the assessee by holding that the assessee has shown the sale consideration at a lower price. 3. During the course of appellate proceedings, the assessee challenged the levy of penalty on income surrendered at ₹ 45 lakhs and addition in respect of Rahon Road Property in a sale of ₹ 1,38,750. The comments of the Assessing Officer were called for and the Assessing Officer in his comments reiterated the stand taken in the assessment order. The Assessing Officer submitted that the assessee despite making surrender of ₹ 45 lakhs in the said statement under section 132(4) of the Act has not made surrender in the original return of income. It was disclosed in the revised return only. Therefore, the revised return cannot be treated as voluntary and suo motu. The assessee in t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e during the course of search operation as necessary taxes had been paid and no retraction had been made. Further necessary entries in the books of account evidencing the fact of disclosure of ₹ 45 lakhs had also been made and submitted during the course of assessment proceedings even before any issue about this raised by the assessee. This means that and unintentional mistake that had crept in while filing the return of income had been rectified within the time permissible as per provision of section 139(5). The revised return so filed cannot be ignored by the Assessing Officer in determining the assessee's liability for imposition of penalty under section 271(1)(c). Since there is no difference between assessed income and valid revised return filed by the assessee, there is no case for imposition of penalty. As such the same is deleted. 4.1. With regard to the levy of penalty on addition of ₹ 1,38,750, it was submitted that penalty was imposed merely on estimate of income. The Assessing Officer rejected the assessee's contention on the reason that the plot though had not been sold at the price low than the price fixed by the Revenue authorities, the same w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the case and the basis of penalty imposed by the Assessing Officer on the issue. It is a matter of fact that the addition made is purely on estimate basis and nothing had been brought on record by the Assessing Officer which could be termed as evidence to reject the sale price as recorded in the registered document. The Assessing Officer rejected the various contentions of the appellant for having sold the plot at a price lower than the normally expected price by recording his own conclusions and finally proceeding to make the addition by substituting an estimated sale price as against the price recorded in the registered document which was not below the price fixed by the Revenue authorities. The addition so made got confirmed before the Chief Commissioner in proceedings under section 264, but the fact remains that the Assessing Officer even during the penalty proceedings has merely relied upon the addition made and sustained and not brought any evidence to hold that the plot in question had actually been sold at price other than the registered price. The penalty under section 271(1)(c) would not be leviable as the assessee had given detailed explanation for charging lower rates ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... art of the record. The assessee has paid advance tax of ₹ 5 lakhs each on due dates and the same has also been the part of the record and thus assessee paid ₹ 15 lakhs as advance tax on the surrendered income which is also shown in the original return of income filed on September 3, 2007 under section 139(1) of the Income-tax Act (paper book 2). Paper book 4 is revised return in which the assessee has specifically mentioned the surrender of ₹ 45 lakhs upon which advance tax has also been paid. The cash flow chart and balance sheets were filed before the Assessing Officer and at the assessment stage on December 16, 2008, i.e., before the order sheet dated December 24, 2008 pointed out by the learned Departmental representative in which also the assessee has specifically declared the surrendered income of ₹ 45 lakhs. The copy of the same is filed at pages 6 and 7 of the paper book reflecting surrendered amount of ₹ 45 lakhs. The assessee never retracted from the surrender of ₹ 45 lakhs at any stage. There was no query raised by the Assessing Officer regarding non inclusion of ₹ 45 lakhs till December 16, 2008 though the proceedings started ea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... led at assessment stage on December 16, 2008, therefore, it is a case of bona fide error and not a case of concealment of income. He has submitted that the assessee has surrendered amount during the course of search under section 132(4) read with clause (2) of Explanation 5 to section 271(1)(c) of the Act which has been accepted, therefore, penalty is not leviable. Learned counsel for the assessee also submitted that none of the judgment cited by the learned Departmental representative are applicable because in all these cases there was an enquiry by the Department and all the facts were confronted to the assessee and thereafter the assessee made the surrender. Thus, the facts are entirely different. As regards the penalty on sale of property, he has submitted that merely because the sale rate was enhanced by the Assessing Officer as against the sale deed is no ground to prove that assessee has concealed the particulars of income or filed inaccurate particulars of income. 9. We have heard the rival submissions and considered the material available on record. It is not disputed that the assessee has made surrender of ₹ 45 lakhs during the course of search on August 10, 2006 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 6, 2008 including the surrender amount of ₹ 45 lakhs in the return of income. Such was an inadvertent mistake on the part of the assessee because the fact of the surrender of ₹ 45 lakhs was already disclosed before the Assessing Officer prior to the assessment as well as the assessment stage before the Assessing Officer detects any mistake. Revised return filed by the assessee under section 139(5) was also valid return of income filed in accordance with law. Thus, it is not a case of detection of anything by the Assessing Officer prior to filing of the revised return by the assessee. The Assessing Officer was having all facts and information on record of surrender of ₹ 45 lakhs and payment of tax on the same before filing the original return of income. 9.1. The hon'ble Madras High Court in the case of CIT v. S. I. Paripushpam [2001] 249 ITR 550 (Mad) held that (headnote) there was no evidence on the basis of which the Department could contend that the assessee had fraudulently or willfully or negligently concealed the income. The assessee's agreeing to the addition of the amount by itself did not establish fraud or willful neglect without something mor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the penalty on ₹ 2 lakhs. It had been noticed by the Tribunal that the assessee had disclosed the amount of ₹ 1,25,000 at the time the search party was leaving the premises of the assessee. It was further recorded that the time for filing the return of income for the assessment year 1989-90 under section 139(1) had not expired on the date of search and the assessee having disclosed the amount of ₹ 1,25,000 in the return filed for the assessment year 1989-90 and paid all taxes could not be held to have concealed the particulars of income which were liable to penalty under section 271(1)(c). The Tribunal was, thus, right in upholding the cancellation of penalty on this amount as well . 10. Considering the above discussion and the case law, it is clear that all the facts of surrendered income and actual surrender of ₹ 45 lakhs and payment of tax thereon were within the knowledge of the Revenue Department and were in fact disclosed by the assessee to the Revenue Department prior to the order sheet dated December 24, 2008. It appears to be inadvertent mistake on the part of the assessee in not mentioning ₹ 45 lakhs in the original return of income, ther ..... X X X X Extracts X X X X X X X X Extracts X X X X
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