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2016 (6) TMI 422 - ITAT JAIPUR

2016 (6) TMI 422 - ITAT JAIPUR - TMI - Penalty under section 271(1)(c) - ssessee surrendered the additional income under section 132(4) - Held that:- It is undisputed fact that during the course of search, no incriminating documents were found and seized. The assessee surrendered the additional income under section 132(4) at ₹ 15 lacs and requested not to impose penalty u/s 271(1)(c) of the IT Act. The ld. AO imposed the penalty by invoking the Explanation 5A to section 271(1)(c) of the Ac .....

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ed upon by the assessee, which are squarely applicable to the case of the assessee. As no incriminating documents were found during the course of search, therefore, Explanation 5A to section 271(1)(c) is not applicable. Accordingly, we delete the penalty confirmed by ld. CIT (A). - Decided in favour of assessee. - ITA No. 296/JP/2014 - Dated:- 6-5-2016 - Shri T. R. Meena, AM And Shri Laliet Kumar, JM For the Revenue : Shri G.R. Pareek (JCIT) For the Assessee : Shri Rajeev Sogani (C.A.) ORDER Per .....

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me filed for the assessment year under consideration in response to notice under section 153A. Thus the assessee enhanced the income declared in the original return of income filed under section 139 by ₹ 15 lacs. The AO initiated penalty proceedings u/s 271(1)(c). Before imposing penalty u/s 271(1)(c), the AO gave reasonable opportunity of being heard. In response to the notices, the assessee filed reply on 15.03.2011 in the Office of the AO and requested to allow the time for submission. .....

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vs. Bhuramal Manikchand (1981) 130 ITR 129. CIT vs. Jhagru Ram Kunda Ram (1972) 86 ITR 823. Indian Cashaw Trading co. vs. CIT (1974) 97 ITR 676. Gokuldas Harivallabh Das (1958) 34 ITR 98. After considering the assessee s reply, the AO held that facts of the case laws relied upon are not squarely identical to the case of the appellant. He further considered the Hon ble Supreme Court decisions in detail on facts and legal aspects in the case of Dilip N. Shroff, Dharmendra Textile Processors (supr .....

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as to accept his condition of not imposing penalty. The AO held that on the basis of statement recorded of Shri Ajay Agarwal by which surrender on behalf of the assessee being partner of firm had been made, no undertaking has been given the department that no penalty would be imposed in case of the assessee in view of surrender of unaccounted/undisclosed by him. Imposition of penalty in cases governed by provisions of section 271(1) and Explanation-5A of it and not by any other consideration. In .....

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eing aggrieved by the order of the AO, assessee carried the matter before ld. CIT (A) who has confirmed the penalty by observing as under :- 5.7. I have gone through the copy of the above order passed by the Hon ble ITAT, Jodhpur Bench and find that after considering the provisions of section 271(1)(c) of the IT Act and the decisions of the Hon ble Supreme Court rendered in the case of Dilip N. Shroff vs. JCIT & Anr., UOI vs. Dharmendra Textile Processors as well as UOI vs. Rajasthan Spinnin .....

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gment of the Hon ble Supreme Court in the case of MAK Data Pvt. Ltd. vs. CIT as reported in 358 ITR 593. It has been held by the Hon ble Court that there is no automatic immunity from penalty even if surrender has been made subject to non-initiation of penalty proceedings and prosecution. The initiation of penalty proceedings has been held to be justified under explanation 1 to section 271(1)(c) of the IT Act in that case. However, the facts prevailing in the present case are distinguishable fro .....

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the IT Act, which were in the statue as on the date of search [as the provisions have been amended by the Finance Act (No.2) of 2009 w.r.e.f. 01-06-2007] i.e. as on 17.09.2008. The relevant provisions are as under :- Explanation-5A - Where in the course of a search initiated under section 132 on or after the 1st day of June, 2007, the assessee is found to be the owner of, - (i) Any money, bullion, jewellery or other valuable article or thing (hereinafter in this Explanation referred to as assets .....

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expired and the assessee has not filed the return, then, notwithstanding that such incomes declared by him in any return of income furnished on or after the date of the search, he shall, for the purposes of imposition of a penalty under clause (c) of sub-section (1) of this section, be deemed to have concealed the particulars of his income or furnished inaccurate particulars of such income. 5.10. In this case, the appellant has himself made a disclosure of additional income of ₹ 15 lacs on .....

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to Section 271(1)(c) of the IT Act are clearly applicable to the facts and circumstances of this case. Accordingly, I confirm the levy of penalty of ₹ 5,04,900/- imposed by the AO u/s 271(1)(c) of the IT Act, 1961. 4. Now the assessee is in appeal before us. 4.1. The ld. A/R for the assessee submitted that there was a search under section 132 of the IT Act on the assessee firm along with other group entities, HUFs, Individuals etc. on 17.09.2008. In order to buy peach and to cooperate wit .....

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income. The AO invoked provisions of Explanation-5A to section 271(1)(c). During the course of search, no incriminating documents were found which is evident from the assessment order that no addition had been made by the AO. He accepted the returned income. The ld. CIT (A) also confirmed the penalty by mis-placing the Hon ble Supreme Court decision in the case of MAK Data Pvt. Ltd. vs. CIT (2013) 358 ITR 593 (SC). The surrender of income in the revised return was voluntary and suo moto. Additio .....

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as material found during the course of search operations for the purpose of Chapter XIV-B. The case law applied by the ld. CIT (A) has mis-placed the fact that in that case certain documents pertaining to share applications were found during the course of survey, whereas in assessee s case no incriminating documents were found. Therefore, case law relied upon by the ld. CIT (A) is not applicable. He further argued that ITAT Mumbai in the case of financial Technologies (I) Ltd., (2015) 61 Taxman .....

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