TMI Blog2017 (2) TMI 1090X X X X Extracts X X X X X X X X Extracts X X X X ..... ₹ 1,50,000/- in the return of income filed with the Revenue. The assessee had also filed an affidavit dated 21-03-2011 explaining the facts and circumstances wherein the said income was not included as income in the return of income originally filed with the Revenue. Revenue could not controvert the contents of the affidavit filed by the assessee to prove that the said affidavit had a false or untrue averments made by the assessee. Thus penalty levied u/s 271(1)(c) cannot be sustained as the assessee had came forward with an explanation which is a reasonable and bonafide explanation complying with the mandate of Section 271(1)(c) read with explanation 1 and hence penalty levied is hereby ordered to be deleted. - Decided in favour of assessee. - I .T.A. No.3847/Mum/2016, I .T.A. No.3848/Mum/2016 - - - Dated:- 17-2-2017 - SHRI C.N. PRASAD, JUDICIAL MEMBER AND SHRI RAMIT KOCHAR, ACCOUNTANT MEMBER For The Assessee : Mr. Bhupendra Shah For The Revenue : Mr. R.A. Dhyani, DR ORDER PER BENCH : These two appeals, filed by the assessee, being ITA No. 3847/Mum/2016 and 3848/Mum/2016, are directed against two separate appellate orders both dated 21st March, 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a family have deposited huge cash in bank accounts and the same were not shown in their returns of income filed with the Revenue. The case was reopened u/s 147 of the Act by the AO after obtaining sanction u/s 151 (1) of the Act from Jt. Commissioner of Income Tax 21(3) , Mumbai and reasons were recorded for the reopening of the assessment. Notice dated 15.3.2012 u/s 148 of the Act was issued by the AO and duly served upon the assessee. The assessee in response to the afore-stated notice submitted that the assessee has already received notice dated 19-03-2012 u/s 148 of the Act from Asstt. Commissioner of Income, Circle 2, Kalyan . The assessee also submitted that the assessee has already filed voluntarily revised return of income on 28-02-2011 with Dy. Commissioner of Income Tax, Range 2, Kalyan and paid the due taxes due along with interest to the credit of Central Government. Subsequently , the records were transferred by ACIT, Circle 2, Kalyan to the A.O. on 30-10-2012 along with all the documents such as reasons recorded as well replies filed by the assessee. It was observed by the A.O. that the assessee is an individual and has declared income from business and income from ot ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... -2012 passed by the AO u/s 143(3) r.w.s. 147 of the Act. Penalty proceedings were initiated by the AO by issue of notice dated 29-11-2012 u/s 274 r.w.s. 271 of the Act dated 29-11-2012 as the assessee has furnished inaccurate particulars of his income in the return of income filed with the Revenue. In response, the assessee filed an explanation vide letter dated 18th March, 2013 with the AO on 10-4-2013, as under:- 1. During the assessment proceedings the assessee has submitted that as per advice of Ex-Advocate Tax Consultant the assessee had deposited cash in bank A/c. and as per the said advice of ex-tax consultant the assessee was under bona fide impression that the said cash deposited is not subject to Income Tax and therefore same was not included in the original return of income as filed with Income Tax Department. 2. The assessee has filed the return of income for the above year before receipt of any inquiry from the Assessing Officer or notice u/s 148 which was the received by the assessee after filing the return of income. 3. Assessee's statement u/s 131 was recorded by Income Tax Officer (Inv) in May/Jun 2012 which is also after filing return of income for t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e decision of Hon ble Supreme Court in the case of Price Waterhouse Coopers Private Ltd v. CIT (2012) 348 ITR 306(SC) wherein the said tax-payer failed to disallow the expenses u/s 40A(7) of the Act , while in the instant case the assesse had failed to disclose the bank account wherein cash was deposited and the said account was opened prior to filing of the return of income with the Revenue. The A.O. accordingly levied penalty of ₹ 45,900/- being 100% of the tax sought to be evaded u/s 271(1)(c) of the Act for the assessment year 2005-06, vide penalty order dated 13-05-2003 passed by the AO u/s 271(1)(c) of the Act. 4. Aggrieved by the penalty order dated 13-05-2013 passed by the A.O. u/s 271(1)(c) of the Act , the assessee carried the matter before the ld. CIT(A) and reiterated the submissions as were made before the AO . The learned CIT(A) confirmed/sustained the penalty of ₹ 45,900/- levied by the A.O. u/s 271(1)(c) of the Act by holding that the assessee failed to prove that the explanation offered by the assessee has not been substantiated and the assessee has failed to prove that such explanation was bonafide and all the facts relating to the same were disclos ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s not declared and disclosed in the return of income originally filed with the Revenue on 09-08-2005. It is the contention of the assessee that he relied on the expert advise of his tax-consultant who advised him that the said amount received was not taxable being his share in profits and investment in discontinued family business of properties on realization of funds invested in the properties on family separation . The assessee filed so called revised return of income on 28th February, 2011 wherein said cash deposit of ₹ 1.50 lacs in Union Bank of India, Shahad was duly included as income although the prescribed time limit for filing revised return of income as prescribed u/s 139(5) of the Act had lapsed long back on 31-03-2007. The said so called revised return of income was also not filed by the assessee with jurisdictional AO but with the ITO, Kalyan , but said so called revised return of income was admittedly filed prior to issuance of separate notice s u/s 148 of the Act by ITO, Kalyan and as well by the jurisdictional AO which remained uncontroverted and is an admitted position between the rival parties as notices u/s 148 of the Act was issued by the ITO, Kalyan as we ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion with Revenue come forward to file revised computation of income and pay taxes with applicable interest on some additional disclosure out of caution to avoid litigation. This is a normal and reasonable human conduct which falls within preponderance of human probabilities . The assessee in the instant case came forward and filed so called revised return of income on 28-02-2011 albeit beyond stipulated time u/s 139(5) of the Act of 1961 which expired on 31-03-2007 but before issuance of notice u/s 148 of the Act by the Revenue in the month of March 2012 as well the assessee filed affidavit dated 21-03-2011 explaining facts and circumstances under which the said cash of ₹ 1,50,000/- was deposited in his bank account which was not included in the return of income filed with the Revenue which shows and proves bona-fide conduct of the assessee . The assessee had submitted that the said receipt of ₹ 1,50,000/- which was deposited in cash in Bank account with Union Bank of India, Shahad was advised to be tax-free by his tax-expert Advocate for last thirty years .It is also submitted that the assessee being not highly educated person trusted the said advocate tax-expert and d ..... X X X X Extracts X X X X X X X X Extracts X X X X
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