TMI Blog2016 (12) TMI 1346X X X X Extracts X X X X X X X X Extracts X X X X ..... he Act. - I.T.A. No. 773/Mum/2014 - - - Dated:- 21-12-2016 - Shri Saktijit Dey, Judicial Member And Shri Ramit Kochar, Accountant Member Assessee by : None Revenue by : Shri Sachhidanand Dubey ORDER Per Ramit Kochar, Accountant Member This appeal, filed by the assessee, being ITA No. 773/Mum/2014, is directed against the appellate order dated 30th October, 2013 passed by learned Commissioner of Income Tax (Appeals)- 41, Mumbai (hereinafter called the CIT(A) ), for the assessment year 2008-09, the appellate proceedings before the learned CIT(A) arising from the penalty order dated 22nd June, 2011 passed by the learned assessing officer ( hereinafter called the AO ) u/s 271(1)(c) of the Income-tax Act,1961 (Hereinafter called the Act ). 2. The grounds of appeal raised by the assessee in the memo of appeal filed with the Income-Tax Appellate Tribunal, Mumbai (hereinafter called the Tribunal ) read as under:- On the facts and in circumstances of the case, and in law, the Learned CIT (A) -, Mumbai, erred in upholding the penalty under section 271(1)(c) of the Income tax Act, 1961 of ₹ 8,50,918/-, by a) Not considering the fact that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tter dtd.20-05- 2011 submitted Our client had not previously filed his return for AY 2008-09 as the accounts of certain firms wherein he was a partner were not ready and hence his individual return was pending. Further, during the course of search operation there were no documents pertaining to his individual income found or seized due to which his income was enhanced. In addition it would be pertinent to state that the audited accounts of his proprietorship business were audited prior to the due date and no additions thereto were made. Hence, no part of the income returned by him or assessed is a culmination of the search proceedings to warrant levy of penalty u/s.271(1)(c). Hence the penal proceeding initiated u/s. 271(l)(c) may be dropped. 4. The assessee s above contention was considered but was not found acceptable to the A.O. who rejected the same vide penalty order dated 22-06- 2011 passed u/s 271(1)(c) of the Act, by holding as under:- (a) The due date for filing of return for A.Y. 2008-09 is 30-09-2008, however the assessee had filed his return of income only after search action on 20-10-2010 and that too in response to notice u/s.153A of I.T. Act. (b) In ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l the sources which was accepted by the A.O. without making any further addition. It was submitted that the A.O. imposed penalty u/s. 271(l)(c) of the Act without considering the facts which led to the delay in filing of his return of income, and arrived at the conclusion that the assessee had concealed particulars of income. It was submitted that the A.O. has wrongly relied upon the judgment in the case of Dr. Mohamed Abdul Khadir [2003) 260 ITR 650 (Mad.) . It was submitted that no incriminating material was found which resulted in the concealment of income. The return of income was accepted in toto by the A.O. without any additions being made by the AO. The assessee submitted that there was no intention on the part of the assessee to deliberately conceal any income or not to file the return of income. There was a reasonable cause which led to non filing of the return which was beyond the control of the assessee. There was no intention to conceal his income as he was always filing his returns of income in time and he had got his tax audit conducted before the due date of filing the return. The assessee contended that there was no intention not to file his tax return. The asseesse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ppeal after hearing the ld. D.R. and material available on record. 9. The ld. D.R. submitted that no return of income was filed by the assessee u/s 139(1) of the Act. The due date of filing of return u/s 139(1) of the Act was 30th September, 2008. Search and seizure operation was carried out u/s 132 of the Act including the assessee on 24th February, 2009 and notice was issued u/s 143(2) of the Act dated 5th October, 2009. Penalty has been rightly imposed by the A.O. u/s 271(1)(c) of the Act. The ld. D.R. submitted that during the course of search, various incriminating material was found and seized. There was no voluntary disclosures made by the assessee u/s 132(4) of the Act. The ld DR relied upon the orders of learned CIT(A). 10. We have heard the ld. D.R. and also perused the material available on record. We have observed that the assessee is running proprietary concerns M/s. Reliable Sand and Timber Trader and Reliable Carriers and also partner in different partnership firms namely M/s Choice Construction Chemicals, M/s Hicons Syndicate, M/s Neeta Developers, M/s M.K. Shelter and M/s Skyline Builders. Apart from this, the assesee also derived house property income, incom ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s income and long term capital gain on sale of flat. Now the question arises whether the same can be categorized as income which could have been disclosed to Revenue or not , had the search not taken place . The Revenue has taken a plea that it is only due to the search , the assessee came forward and filed return of income and paid due taxes. The assessee had submitted that the accounts of the firms in which the assessee was partner could not be finalized. The contention of the assessee is that tax amount could not be paid due to non-availability of funds due to financial problems faced by the assessee as the assessee could not arrange funds for payment of taxes in time. The evidence for delay in finalizing of taxaudit of these two concerns namely Neeta Developers and Choice Construction Chemicals in which the assessee was partner and which was handled by other partner could not be brought on record. In our considered view and in the interest of justice, we are inclined to set aside and restore this matter to the file of the ld. CIT(A) for fresh adjudication of penalty u/s 271(1)(c) of the Act de novo on merits after verification whether the contentions/explanation of the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X
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