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2016 (1) TMI 82 - CALCUTTA HIGH COURT

2016 (1) TMI 82 - CALCUTTA HIGH COURT - TMI - Penalty under Section 271(1)(C) - concealed income as detected by the Department during the survey - ITAT deleted the penalty - notice under Section 148 of the Act was issued, finding no other alternative the assessee surrendered income to avoid penal consequences - Held that:- Since admittedly the revised return for the said assessment year was filed by the assessee before issuance of notice under section 148, we are of the view that the order of th .....

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eko, JJ. For the Appellant : Mr. P K Bhowmik, Adv For the Respondent : Mr. Avratosh Majumdar, Adv, Mr. Avra Mazumder, Adv JUDGMENT Soumitra Pal, J. The Department seeks admission of the instant appeal on the following substantial question of law: Whether on the facts and circumstances of the case the Learned Tribunal was justified in law in deleting the penalty under Section 271(1)© of the Income Tax Act, 1961 as concealed income as detected by the Department during the survey operation and .....

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was conducted at the business premises of the assessee and the concerned group companies. During the course of survey it was detected that the assessee made investment of ₹ 30 lakhs with M/s.Khetawat Stock Broking Ltd, relevant to the assessment year 2004-05. On being confronted with source of investment, the assessee admitted that the source of investment was the undisclosed income from his business activities. It was found that he was the proprietor of one M/s. Scrap (India) and also di .....

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th an assessed total income of ₹ 32,25,090/-. After assessment was completed, penalty proceedings under section 271(1)(c) of the Act were initiated. In the said penalty proceedings, while imposing 100% tax on the said income it was held, inter alia, as under : I have considered the assessee s explanation as above. This explanation is not tenable because of the following reasons :- a) First of all, the issue regarding additional income of ₹ 30 lakhs arose only after detection of undis .....

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particulars leading to computation of total income while submitting return u/s 139. Mere showing of additional income in a return filed in response to notice u/s 148 does not give immunity from penal action u/s 271(1)(c) to the assessee. In view of the above, I consider this case as a fit one for imposition of penalty u/s 271(1)(c). I impose penalty u/s 271(1)(c) @ 100% of tax sought to be evaded…. Aggrieved by the order imposing penalty, appeal was filed by the assessee before the CIT(A .....

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o additional facts other than the disclosure made during the Survey have been brought on record to justify initiation and subsequent levy of penalty u/s 271(1)(c). The appellant s disclosure followed up by filing revised return in fact reflects its bonafide intention as also the case for non-imposition of penalty. The A.O. in his order has imposed penalty simply by referring to the disclosure made in the course of Survey proceedings while ignoring the appellants plea for bona fide actions on one .....

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positive evidenced of concealment being brought to the fore by the A.O. in the assessment proceedings other than the fact of admission of additional income. In view of the decision of Hon ble Supreme Court in Rajasthan Spinning& Weaving.supra, the A.O. still has to establish the conditions for the levy of penalty and considering the ratio of judgment of Delhi High Court in CIT vs SAS Pharmaceuticals, it is the assessment proceedings and ROI and not the Survey proceedings which are relevant f .....

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partment, being aggrieved by the order of the CIT(A) preferred appeal which was dismissed by the Tribunal by holding, inter alia, as follows :- We have heard both the counsel and perused the records. We find that in this case the assessee has disclosed all the facts and its full income in the revised I.T.return filed by him voluntarily for the A.Y.2004-05 before issuing of notice u/s 148 of the Act. He has also paid self assessment tax and tax demanded after the assessment completed. Thus we agr .....

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