TMI Blog2015 (11) TMI 1576X X X X Extracts X X X X X X X X Extracts X X X X ..... sment rather it being a forfeiture of sale amount as income for the assessment year 2006-07, assessee has bona fidely surrendered the same. So, as a sequel to the discussion made in the preceding paragraphs, we are of the considered view that the A.O. has failed to make out the case of concealment of particulars of income or furnishing of inaccurate particulars of such income by the assessee, rather, it was a case of voluntary surrender of income of ₹ 40,00,000/- for tax purpose in order to buy peace of mind and to avoid vexed litigation and Ld. CIT(A) has legally and rightly passed the impugned order. Finding no illegality or perversity in the impugned order, we hereby dismiss the present appeal filed by the Revenue. - Decided in favour of assessee. - I.T.A. No.4250 /Del/2011 - - - Dated:- 30-11-2015 - SHRI N. K. SAINI, ACCOUNTANT MEMBER AND SHRI KULDIP SINGH, JUDICIAL MEMBER. Appellant by : Ms. Kesang Y. Shirpa, Sr. DR. Respondent by : Sh. Ashish Goel, CA and Sh. Pranjal Srivastava, Advocate. ORDER PER KULDIP SINGH, JM: The appellant, ACIT, Central Circle I, Faridabad (hereinafter referred as revenue ), by filing the present appeal, sought to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ome with proper note in the books of accounts and filed its return of income for the assessment year 2007-08. From the report, it has come on record that assessee has not voluntarily surrendered the amount of ₹ 40,00,000/- but only after he was cornered by the search team during search operation. Consequently, notice u/s 271(1)(c) of the Act was served on the assessee who has filed reply after availing numerous opportunities. Penalty officer on the basis of record and reply furnished by the assessee, came to the conclusion that the assessee has no explanation for concealing the income/furnishing inaccurate particulars of income to the extent of ₹ 40,00,000/- and subsequently, imposed minimum penalty of ₹ 13,46,400/- i.e. 100% of the tax evaded. The assessee challenged the penalty order before Ld. CIT(A) who has allowed the appeal. Feeling aggrieved, the Revenue has come up before the Tribunal by way of filing the present appeal. 5. Ld. D.R. Challenging the impugned order, contended that since the quantum in this case has already been confirmed, having not been challenged by the assessee, the Revenue is justified in imposing the penalty and relied upon the penal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent to sell for financial year 2006-07 and as such, there cannot be any concealment of the same. Ld. CIT(A) in the impugned order, has concluded as under: I have considered the facts of the case and the basis upon which the AO proceeded to impose penalty u/s 271(:l!)(c) and also the arguments of the AR on the issue. It is apparent that the assessee company had filed its return of income for the A/Y 2007-08 declaring Nil income on 24.03.2008 and the amount disclosed during the course of search operation had been returned in a return of income filed in response to notice issued by the AO u/s 1S3C and therefore, the provisions of explanation SA read with S.271(1)(c) do seem to apply to the facts of the case. However, the AR of the appellant has taken the arguments that the receipt of cash in pursuance of an agreement to sell the land of the assessee company did not amount to generation of income for the A/Y 2007-08 It has been claimed that what was received was merely 'an advance and the transactions of sale of land to the buyer did not take place till date. The AR has filed copies of account of the Balance Sheet, wherein, the impugned piece of land stands reflected in the St ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pugned amount of cash has become income only' on the basis of a statement made by the Director of the assessee company and an independent factual/legal appreciation of the facts of the case lead only to one logical conclusion that there was no income on account of cash received in pursuance of agreement to sell for F/Y 2006-07 and therefore, there cannot be any concealment of same. It needs to be understood that to prove concealment of income firstly the existence of taxable income will have to be established. It is clear that there was no income on the basis of the facts of the case and the amount returned by the appellate company in its return of Income in response to notice u/s 153C is only intended to honor the disclosure made during the course of search operation even if the same was not warranted as per the facts of the case. The Hon'ble Supreme Court in the case of Abraham (C.A.) Vs LT.O. (1961) 41 LT.R. 425 (SC) has held that penalty proceedings is part of machinery for assessment and penalty partakes character of additional tax. It should be possible for the taxpayer to question the validity of assessment / re-assessment on merits, but limiting the claim for relief ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... AFTER SEARCH AND NOTICE FOR REOPENING ASSESSMENT, TO PURCHASE PEACE AND AVOID LITIGATION APPELLATE TRIBUNAL HOLDING THAT BURDEN OF PROVING CONCEALMENT NOT DISCHARGED AND PENALTY CANNOT BE LEVIEED- PROPERINCOME TAX ACT, 1961, ss.132, 271. The assessee had originally filed returns showing meager income. When, after action under section 132 of the Income tax Act, 1961, a notice under section 148 was served on him, he filed revised returns showing higher income. Eventually, assessment orders were passed and the returns submitted regularized under section 148. In penalty proceedings under section 271, the assessee claimed that he had offered additional income to buy peace of mind and avoid litigation. Penalty orders were passed and the Commissioner (Appeals) confirmed the orders. But the Appellate Tribunal held that the Department had not discharged its burden of proving concealment and had simply rested its conclusion on the act of voluntary surrender done by the assessee in good faith, and that penalty could not be levied. On a reference, the High Court held that no penalty could be levied for concealment (see (2000) 241 ITR 124). The Department preferred appeals to the Supr ..... 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