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2015 (10) TMI 1762 - GUJARAT HIGH COURT

2015 (10) TMI 1762 - GUJARAT HIGH COURT - TMI - Penalty u/s 271(1)(c) - undisclosed income - assessee had offered the additional income for taxation only after it was detected by the department while conducting a survey operation u/s 133A(1) - ITAT set aside penalty - Held that:- r. In the facts of the present case, neither the Assessing Officer nor the Commissioner (Appeals) has recorded any categorical finding as to what is the nature of concealment or the inaccurate particulars furnished by t .....

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this regard it may be noted that section 271(1)(c) of the Act does not include “involuntary disclosure” as one of the grounds for imposing penalty. Under the circumstances, no infirmity can be found in the impugned order passed by the Tribunal in setting aside the order of penalty. - Decided in favour of assessee. - TAX APPEAL NO. 678 of 2015 - Dated:- 28-9-2015 - MS. HARSHA DEVANI AND MR. A.G.URAIZEE, JJ For the Petitioner : Mrs Mauna M Bhatt, Advocate ORDER PER : MS. HARSHA DEVANI 1. This appe .....

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closed income of ₹ 1,20,00,000/- without appreciating the fact that the assessee had offered the additional income for taxation only after it was detected by the department while conducting a survey operation u/s 133A(1) of the Income Tax Act? 2. The respondent - assessee, a firm, filed its return of income for assessment year 2009-10 on 30.07.2009 declaring total income of ₹ 20,10,190/-. During the course of survey, certain documents reflecting unaccounted income from the Nakshatra .....

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; 1,40,10,190/- and paid taxes accordingly. The Assessing Officer initiated proceedings under section 271(1)(c) of the Act on the ground that the assessee had furnished inaccurate particulars/concealed income of ₹ 1,20,00,000/-. The Assessing Officer upon conclusion of the said proceedings, was of the view that the income of ₹ 1,20,00,000/- as offered by the assessee in the revised return was filed only after the detection of unaccounted receipt of ₹ 1,20,00,000/- as a result o .....

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ommissioner (Appeals), who upheld the order passed by the Assessing Officer and dismissed the appeal. The assessee carried the matter in further appeal before the Tribunal and succeeded. 4. Mrs. Mauna Bhatt, learned senior standing counsel for the appellant submitted that it was only pursuant to the survey carried out by the Income Tax Department under section 133A(1) of the Act, that the assessee had disclosed the income of ₹ 1,20,00,000/-. Had it not been the survey action, no such discl .....

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e burden is then on the assessee to show otherwise, by cogent and reliable evidence. Voluntary disclosure does not release the assessee from the mischief of penal proceedings. The law does not provide that when an assessee makes a voluntary disclosure of his concealed income, he had to be absolved from penalty. The court held that the Assessing Officer should not be carried away by the plea of the assessee like voluntary disclosure , buy peace , avoid litigation , amicable settlement etc. to exp .....

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d the appeal deserves to be admitted on the question, as proposed or as may be formulated by this court. 5. The facts as emerging from the record show that the assessee had initially filed a return of income declaring total income of ₹ 20,10,190/-. Subsequently, pursuant to a disclosure made during the course of survey, the assessee filed revised return of income for the relevant year declaring total income of ₹ 1,40,10,190/- and paid taxes accordingly. The Assessing Officer while fr .....

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hat the revenue had not found actual concealment of income or furnishing inaccurate particulars of income in the return of income, no penalty under section 271(1)(c) of the Act would be attracted. 7. The Supreme Court in the case of Mak Data Private Limited v. Commissioner of Income Tax-II (supra), has, in paragraph-10 thereof, held thus : 10. We are of the view that the surrender of income in this case is not voluntary in the sense that the offer of surrender was made in view of detection made .....

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section 133A conducted on 16.12.2003, in the case of a sister concern of the assessee. The survey was conducted more than 10 months before the assessee filed its return of income. Had it been the intention of the assessee to make full and true disclosure of its income, it would have filed the return declaring an income inclusive of the amount which was surrendered later during the course of the assessment proceedings. Consequently, it is clear that the assessee had no intention to declare its t .....

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ner (Appeals) while upholding the order of the Assessing Officer, placed reliance upon the above decision of the Supreme Court. The learned counsel for the appellant has also strongly placed reliance upon the said decision. 9. From the observations made by the Supreme Court in the above decision as reproduced hereinabove, it is apparent that the court has observed that had it been the intention of the assessee to make full and true disclosure of its income, it would have filed the return declari .....

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red undisclosed income in relation to two assessment years and shown willingness to pay income-tax thereon. The assessee, accordingly, filed revised return of income declaring the income as stated during the course of survey, which came to be accepted by the Assessing Officer, without making any addition. Thus, it may be pursuant to the survey action, but the assessee did disclose the income in its revised return which was accepted by the Assessing Officer while framing assessment under section .....

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