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2015 (10) TMI 2044 - ITAT AHMEDABAD

2015 (10) TMI 2044 - ITAT AHMEDABAD - TMI - Penalty u/s 271(1)(c) - undisclosed investment - Held that:- In the case of assessee the return under section 153A was furnished on 8.11.2007 and thereafter it was revised on 20.10.2008 and the assessment order was passed by the AO on 26.12.2008; which means that the return was revised before the completion of the assessment by AO. As regards imposition of penalty under section 271(1)(c), as decided by Hon’ble Gujarat High Court in the case of Kirit Da .....

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the penalty. - Decided in favour of assessee. - IT(SS)A Nos.404 & 405/Ahd/2011 - Dated:- 16-9-2015 - Shri Kul Bharat, JM, & Manish Borad, AM. For The Appellant : Shri Anil Kshatriya, AR For The Respondent : Shri R. P. Maurya, Sr. DR ORDER PER Manish Borad, Accountant Member. These two appeals bearing IT(SS)A No.404/Ahd/2011 relevant to AY 2004-05 is filed against the order of CIT(A) -II, Ahmedabad dated 25.3.2011 and IT(SS)A No.405/Ahd/2011 relevant to AY 205-06 is filed against the order of .....

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f the Act. 2. The appellant prays for the following relief - The order of the ld. CIT(A) confirming the levy of penalty may kindly be quashed. 3. Brief facts of the case as gathered from the records available are that the appeal is against levy of penalty of ₹ 2,29,000/- u/s 271(1)(c) of the I.T. Act, 1961 (herein after referred to as the Act). The original return of income was first filed on 16.3.2006 showing income of ₹ 2,38,538/-. Search operation u/s 132 of the Act was conducted .....

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g the investment, notice u/s 153C was issued on 31.7.2007. In response to this notice the assessee filed return of income on 8.11.2007 showing total income of ₹ 2,38,538/-. Notice u/s 143(2) along with the questionnaire was issued asking the assessee why all the investments made in property should not be treated as unexplained investment . Thereafter, the assessee filed a revised return of income on 20.10.2008 declaring income at ₹ 10,38,538/- including additional income of ₹ 8 .....

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e time of preparation of accounts he had found some discrepancy in his accounts and accordingly had offered additional income by submitting revised return and the additional income was offered voluntarily and he has neither concealed income nor has submitted any inaccurate particulars of income. The assessee also submitted that his return of income was accepted by the AO. However, the ACIT, Cen. Circle-1, did not agree to the submissions made by the assessee and vide his order dated 29.6.2009 un .....

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endra Kataria and post search enquiries. Further the appellant himself admitted the undisclosed investment in Om Surya Project, in his statement recorded on oath u/s 131 of the Act on 10.1.2007. However the appellant has not disclosed this investment in the books of accounts and also not disclosed the income for this undisclosed investment while filing original return of income on 16.3.2006 at ₹ 2,38,538/-. Even when the AO issued notice u/s 153C, the appellant filed return in its complian .....

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he AO was justified in levying the penalty which is confirmed. 6. Aggrieved, the assessee is now in appeal before the Tribunal. The ld. AR made following submissions :- (A) (1) The assessee is an individual trading in building material and submitting return of income showing presumptive income u/s 44AD of the Act. (2) Consequent to search operation u/s 132 of the Act in the case of Mahendra Katariya Group of Silvasa, it was admitted to have made investment therein and disclosed income of ₹ .....

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8377; 23,15,662/- which included additional income(s) of ₹ 8,00,000/- & ₹ 16,15,000/- respectively. (5) On the basis of these returns, the AO completed regular assessments u/s 143(3) r.w.s. 153C of the Act, accepting income as shown in the revised returns as such, as per his orders dated 26/12/2008. (6) Though the AO has not given any finding for concealment of income by way of furnishing of inaccurate particulars in the body of assessment order but merely below the computation p .....

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show cause notice was issued on account of concealment of income and while passing the penalty order, the penalty was levied for furnishing of inaccurate particulars which itself renders the penalty as void ab initio and illegal. (B) (1) The assessee has offered additional income of ₹ 8,00,000/- & ₹ 16,15,000/- for AY 2004-05 & 2005-06 respectively, through his revised returns of income during the course of scrutiny assessment proceedings. (2) It is also undisputed fact on r .....

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at all, of concealment of income. (3) However, the AO, without placing on record any material or evidence to discharge his burden of proof of concealment, has simply rested his conclusion on the voluntary surrender done by the assessee, in good faith. (4) The ld. CIT(A) has grossly erred in sustaining the penalty, without giving his own independent finding and in total disregard to the factual & legal aspect as well as peculiar circumstances involved in the case. Further to give support to .....

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circumstances of the case. In the judicial pronouncement referred by the ld. AR in the case of Kirit Dahyabhai Patel vs. ACIT in Tax Appeal No.1181 of 2010 along with others vide order dated 3/12/2014 wherein the facts of the case were as follows :- 4. The appellant-assessee had filed its return of income for the assessment year 2002-03 on 7.6.2002, declaring total income at ₹ 1,30,900/-. A search under section 132 of the Income-tax Act, 1961 (for short the Act ) was conducted in the asse .....

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appellant disclosed additional income in pursuance of the search. However, the Assessing Officer rejected the contention of the appellant and levied penalty @ 100% of the tax sought to be evaded. In this case the Hon ble High Court of Gujarat has held as under :- 13 Considering the facts and circumstances of the case and also considering the decisions relied upon by learned senior advocate for the appellant, we are of the considered opinion that the view taken by the Tribunal is erroneous. The .....

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to be considered for the purpose of penalty under section 271(1)(c) of the I.T. Act and the penalty is to be levied on the income assessed over and above the income returned under section 153A, if any. 14. Further, in the present case, it appears from the record that the assessee had satisfied all the conditions which are required for claiming immunity from payment of penalty under section 271(1)(c) of the Act. The provision does not specify any time limit during which the aforesaid amount i.e. .....

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for the appellant more particularly the principle laid down in the case of Assistant Commissioner of Income Tax vs. Gebilal Kanhailal (supra) and Commissioner of Income Tax vs. Abdul Rashid (supra), we are of the considered opinion that the penalty under section 271(1)(c) of the Incometax Act cannot be levied on the income shown in the return filed under section 153 of the I.T. Act. 17. Considering the facts and circumstances of the case and also considering the decision of the Madras High Court .....

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ppellant in reply to the notice under section 153C clearly admitted undisclosed investment of ₹ 8,00,000/- in his statement u/s 131 of the Act. Thereafter in pursuance to this notice appellant was required to furnish return of income under section 153A of the Act. Before adverting to the rival contentions for the sake of clarity we reproduce herein section 153A(1)(a) of the Act :- (a) issue notice to such person requiring him to furnish within such period as may be specified in the notice, .....

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for furnishing the return of income under section 153A, then the provisions of section 139 will come into effect for the purpose of filing such return of income. However, nothing specific is mentioned in section 153A that assessee will be allowed to file only one return of income. In the case under appeal, assessee has furnished a return in compliance with section 153A on 8.11.2007 showing total income of ₹ 2,38,538/-. Before the completion of assessment proceedings the assessee revised th .....

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e section 139(5) says that if any person, having furnished a return under sub-section (1) or in pursuance of a notice issued under sub-section (1) of section 142, discovers any omission or any wrong statement therein, he may furnish a revised return at any time before the expiry of one year from the end of the relevance assessment year or before the completion of the assessment, whichever is earlier. Provided that………………. 11. In the case of assessee the r .....

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