New User   Login      
Tax Management India .com TMI - Tax Management India. Com
Extracts
Home List
← Previous Next →

2016 (12) TMI 441 - ITAT JAIPUR

2016 (12) TMI 441 - ITAT JAIPUR - TMI - Penalty u/s 271(1)( c) - additional income surrender by assessee - Held that:- As noted from the record that the AO had initiated penalty proceedings for concealment of income or for furnishing inaccurate particulars of income. In the notice also, the AO has not specified for which specific reason the penalty proceedings has been initiated whether it is for concealment of income or for furnishing inaccurate particulars of income. Ultimately, the AO levied .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

provisions have to be held to be strictly construed, notice issued under section 274 should satisfy the grounds which he has to meet specifically. Otherwise, the principles of natural justice is offended if the show-cause notice is vague. On the basis of such proceedings, no penalty could be imposed on the assessee. Thus penalty deleted - Decided in favour of assessee - ITA No. 333 & 334/JP/2015 - Dated:- 9-11-2016 - SHRI BHAGCHAND, ACCOUNTANT MEMBER For The Assessee : Shri Vijay Goyal and Shri .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

004-05 and ₹ 2,01,825/- for the assessment year 2005-06 respectively without appreciating the full facts of case and submission of the assessee during the course of appeal proceedings. 2.1 Brief facts of the case are that the assessee is an individual and derives income from interest including interest on security deposit from various pharmaceuticals companies, income from business & profession which consisted of income from trading of medicines and income from C&F Agent of various .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ments had been found and seized as per Annexures prepared during search. In compliance to the notice u/s 153A of the Act, the assessee filed the return declaring income of ₹ 5,85,090/- on 31-03-2009. The assessment was made u/s 153A/143(3) of the Act on income of ₹ 6,18,980/- vide assessment order dated 9-12-2010 which included surrender of income of ₹ 4,53,819/- on the basis of transactions recorded on various documents including documents seized from the premises at Mittal Ch .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

d on 9-12-2010 which was duly served upon the assessee for which the assessee filed the written submission on 8-05-2011. In penalty proceedings, the AO imposed the penalty of ₹ 1,36,145/- by observing as under:- 9. In view of above stated legal position and the fact of the case, I hold that the assessee has not been able to discharge his right part of the burden and establish his ignorance and righteous conduct. As a matter of fact the burden of proof has been entirely shifted to the asses .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

8,980 (as per order u/s 143(3)/154 dated 21-02-2011 ₹ 1,59,694/- 2. Tax on income excluding concealed income ₹ 23,548/- 3. Quantum of tax sought to be evaded (1-2) ₹ 1,36,145/- 4. Minimum penalty imposable 100% ₹ 4,08,435/- 5. Maximum Penalty imposable 300% ₹ 1,36,135/- 2.2 Being aggrieved, the assessee carried the matter before the ld. CIT(A) who confirmed the penalty of ₹ 1,36,135/- u/s 271(1)(c) of the Act by observing as under:- 4.6 Having considering the .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

cause of the compulsion on account of evidence in possession of the Income Tax Department. The appellant chose to accept this additional income after having been searched by the Department. 4.7 It is seen that provisions of Explanation 5A were inserted by the Finance Act 2007 with effect from 01- 06-2007. The provisions are:-……… 4.8 Thus, it is seen that the provisions of Explanation 5A are mandatory in nature and the penalty is leviable on the amount of additional income de .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

of MAK Data Pvt. Ltd. vs. CIT, 358 ITR 593 (SC) - where it was held that even if amount surrendered in survey was to buy peace of mind, levy of penalty was valid. This case law was in the context of the Explanation 5 of Section 271(1)© of the I.T. Act whereas after the insertion of Explanation 5A to this section, the levy of penalty on the additional income declared has become mandatory by virtue of express provisions to this effect in the statute. 4.10 In view of the above discussion, I co .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ed u/s 153A of the Act and additions sustained solely for the reason that the same was not declared in the income tax return filed u/s 139(1) of the I.T. Act, 1961. The AO initiated penalty proceedings u/s 271(1)© of Act in the assessment order dated 9-12-2010 on the additional income surrendered in the153A return by mentioning that penalty proceedings u/s 271(1)© of the Act are initiated for concealment of income/ filing of income. Further in the penalty notice u/s 274 read with Secti .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

initiated for concealment of particulars of income or for furnishing inaccurate particulars of income. Therefore, the initiation and imposing of penalty proceedings is wrong, bad in law, invalid and void ab initio. The ld. AR of the assessee relied on following case laws. (i) H.Lakshminarayana vs. ITO (ITAT Banglore Tribunal in ITA No. 992 to 996/Ban/2014 order dated 3-07-2015) wherin the decision of Hon'ble Karnataka High Court in the case of CIT & Anr. vs. Manjunatha Cotton and Ginnin .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

of M/s. Mittal Enterprises. The return u/s 139(1) of the Act was filed on 25-10-2004 by the assessee declaring total income of ₹ 1,51,100/-. Search and seizure operations were carried out on 27-08-2008 on residential and business premises of the assessee. The return u/s 153 of the I.T. Act was filed on 31-03-2009 declaring total income of ₹ 5,85,090/- which included additional income surrender of ₹ 4,53,819/-. The assessment was made by the AO u/s 153A/143(3) of I.T. Act on to .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

articulars of income. In the notice also, the AO has not specified for which specific reason the penalty proceedings has been initiated whether it is for concealment of income or for furnishing inaccurate particulars of income. Ultimately, the AO levied the penalty for concealment of income. The Hon'ble Karnataka High Court in the case of CIT & Anr vs. Manjunatha Cotton & Ginning Factory, 359 ITR 565 held as under:- though penalty proceedings are in the nature of civil liability, in .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

sending a printed form where all the grounds mentioned in section 271 are mentioned would not satisfy the requirement of law when the consequences of the assessee not rebutting the initial presumption is serious in nature and he had to pay penalty from 100 per cent. to 300 per cent. of the tax liability. As the said provisions have to be held to be strictly construed, notice issued under section 274 should satisfy the grounds which he has to meet specifically. Otherwise, the principles of natur .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

the material available on the record. In this case, the ld Assessing Officer initiated penalty proceedings for concealing of particulars of income and for furnishing inaccurate particulars of income vide order dated 31/12/2009. Notice U/s 274 read with Section 271-272 of the Act was issued on 30/12/2009 by ticking of the notice as under:- U/s 271(1)(c):- Concealed particulars of income or furnished inaccurate particulars of income . The ld Assessing Officer again gave notice during the course o .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

h and additional income has been disclosed U/s 153A. Therefore, deeming provisions are applicable. It is undisputed fact that the assessee has disclosed additional income in return filed U/s 153A on the basis of incriminating document found during the course of search. We have considered view that Explanation 5A is not required to be mentioned by the Assessing Officer specifically at the time of initiation or even in the show cause notice issued by the Assessing Officer, but basic defect we foun .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

(1B) of Section 271 has been considered by the Hon'ble Delhi High Court in the case of Madhu Shree Gupta vs. UOl, 317 ITR 107 wherein it has been held that at the stage of initiation of penalty proceedings, the order passed by the Assessing Officer need not reflect satisfaction vis a vis each and every item of addition or disallowance if the overall sense gathered from the order is that a further prognosis is called for. It would be sufficient compliance with the law that there is a prima fa .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ld not satisfy the requirement of law. The assessee should know the ground which he has to meet specifically, otherwise, the principle of natural justice is offended on the basis of such proceedings, no penalty could be imposed to the assessee. The Hon ble Punjab & Haryana High Court in the case of Tej Bhan Cotton Ginning & Pressing Factory Vs. CIT, Rohtak (supra) has held that the Assessing Officer in assessment order has satisfied himself regarding initiation of penalty proceedings, wh .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

tting oblique between concealing and furnishing of inaccurate particulars of income whereas the Hon ble Karnataka High Court has held that the Assessing Officer has to satisfy at the time of initiation of penalty proceeding and issuing notice U/s 274 of the Act that whether penalty is for concealed particulars of income or furnishing of inaccurate particulars of income. There were two opinions of the Hon ble Courts. The Hon'ble Supreme Court has held that in case of two views of the court, f .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

 

 

 

 

 



|| Home || Acts and Rules || Notifications || Circulars || Schedules || Tariff || Forms || Case Laws || Manuals ||

|| About us || Contact us || Disclaimer || Terms of Use || Privacy Policy || TMI Database || Members || Site Map ||

© Taxmanagementindia.com [A unit of MS Knowledge Processing Pvt. Ltd.] All rights reserved.

Go to Mobile Version