TMI Blog2015 (9) TMI 1585X X X X Extracts X X X X X X X X Extracts X X X X ..... with regard to purchase price of agricultural land, value of closing stock as well as the business income. The revised return modifying the figure of purchase value of agricultural land, value of closing stock as well as business income was furnished only after the detection of these discrepancies during the course of survey. In view of above, have no hesitation to hold that on the facts and circumstances of the case, learned Judicial Member rightly proposed to sustain the penalty imposed u/s 271(l)(c). - Decided against assessee. - IT APPEAL NO. 730 (JP.) OF 2011 - - - Dated:- 11-9-2015 - G.D. AGRAWAL, VICE-PRESIDENT (AS A THIRD MEMBER), V. DURGA RAO AND R. P. TOLANI, JUDICIAL MEMBER , B.R. JAIN AND VIKRAM SINGH YADAV, ACCOUNTANT MEMBER For The Appellant : P.C. Parwal, CA For The Respondent : Mansingh Meena, CIT ORDER B.R. Jain, Accountant Member - This appeal by assessee against the order dated 7th June, 2011 of Id. CIT (A)-l, Jaipur raises the following grounds :- 1. The Ld. CIT (Appeals) has erred on facts and in law in holding that order passed by A.O. u/s 271(1)(c) is not barred by limitations and thereby affirming the legality of the order. 2. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing 11 bigha 20 biswa vide sale deed dated 28.7.2005 wherein the actual sale consideration was of ₹ 4.60 lacs and the sale deed was executed for ₹ 2 lacs only. The difference was paid in cash. (iv) Agricultural land purchased from Shri Bhanwar Singh S/o Shri Gopal Singh measuring 21 bigha 14 biswa vide sale deed dated 19.9.2005. Shri Bhanwar Singh was an employee of Shri Sunil Bansal wherein the payment was made by the company and the land was purchased in the name of Shri Bhanwar Singh. (v) The incriminating papers found and impounded at Annexure A-1 page no. 1,2, 11, 12, 13 and Annexure A-2, page 13 were confronted and the company has made undisclosed investment in purchase of agricultural land. The transactions found noted on these papers, therefore, were included in the undisclosed investment admitted by the company. When the above assertions made by Shri Ram Kishore Jat were confronted to the Director Shri Sunil Bansal, he stated to have made undisclosed investment in purchase of agricultural land. For the year under consideration the undisclosed investment in purchase of agricultural land as was admitted in his statement made during such survey amounted t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nal income in his statement made during the course of survey. The land so acquired are sold to M/s. Grass Field Fire Capital Developers Pvt. Ltd. which have made payment of full consideration to the assessee being a FD1 concern in the subsequent years. No under consideration is involved in the sale of such lands. Even otherwise, there being lower cost of land acquisition and sales being at higher and appreciated prices have resulted into higher profit in the year of sale. The disclosure made has gone to increase the cost of acquisition of land and, therefore, the ultimate profit on sale is less. The surrender so made, therefore, was tax neutral. There was thus no concealment of income by the assessee. That besides, in survey proceedings, the assessee was asked to file the revised return and an assurance was given that no penalty would be levied. In other words, the assessee agreed to surrender the income merely because the survey party required him to do so and assessee filed a revised return only because the payment of tax is preponed to this year by which the tax rate being same in the year of sale, payment of tax in this year under consideration would make no difference to the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the department that resulted in discovery of proactive role of the assessee in making unrecorded investment in purchase of land, the ld. CIT (A) held that to that extent the AO was justified in holding that the assessee has filed inaccurate particulars of income. She further placed reliance on the judgment of Apex Court in the case of CIT v. Reliance Petroproduct (P.) Ltd. [2010] 322 ITR 158 and also further judicial pronouncement in the cases of M.S. Mojammed Marzook v. ITO [2006] 283 ITR 254 (Mad.), CIT v. Mahabit Prasad Bajaj [2008] 298 ITR 109 (Jhar.) and LMP Precision Engg. Co. Ltd. v. Dy. CIT (Asst.) [2011] 330 ITR 93 wherein it has been held that when revised return is filed after action of the department by way of search and seizure or survey operations and the assessee files revised return of additional income on the basis of evidence found during these operations it cannot be considered that the amount of wrong statement in the original return was bona fide or inadvertent mistake. These findings are applicable to the facts of the case of the assessee. Reliance is also placed on the finding of Madras High Court in the case of H.V. Venugopal Chettiar v. CIT [1985] 153 ITR ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... seized nor impounded by the department. She has further recorded a finding that the primary evidence in this case is the statement of Shri Sunil Bansal and its annexures. This statement of Shri Sunil Bansal and annexures made to the statement were prepared in the survey proceedings at the instance of survey party. There was no documentary evidence found as a result of survey nor the same is in possession of the department to support that the assessee has not correctly disclosed the investment made in the land by the assessee. The statement so given by said Shri Sunil Bansal during survey proceedings has no evidentiary value as has also been laid down by Apex Court in the case of CIT v. S. Khader Khan Son [2012] 25 taxmann.com 413. 9. It has further been contended that neither the AO nor the Ld. CIT (A) in penalty proceeding themselves have brought on record any evidence to show that any payment over and above that recorded in the books of account has been made by assessee. All particulars have truly been disclosed by the appellant in the books of account and the balance sheet drawn on that basis forming part of Income tax return originally filed on 29.11.2006. Undisputedly, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... - Dilip Yeshwant Oak v. Asstt. CIT [2012] 51 SOT 136 (Pune)(URO) Dy. CIT v. Bhanwar Lal Mahendra Kumar Soni [2012] 20 taxmann.com 253 (Jodh.) Ajay Sangari Co. v. Addl. CIT [2012] 51 SOT 127 (URO) (Chd.) Asstt. CIT v. Dr. Raj Dhariwal [2012] 23 taxmann.com 284 (Jodh.) Shabbir Allauddin Latiwala v. Dy. CIT [2012] 49 SOT 137 (URO) CIT v. Suresh Chand Bansal [2010] 329 ITR 330 (Cal.) CIT vs. Shankerlal Nebhumal Uttamchandani [2009] 311 ITR 327 (Guj.)[2009] 311 ITR 327 (Guj.) CIT v. Radhey Shyam [2000] 245 ITR 342 CIT v. Shyamlal M. Soni [2005] 276 ITR 156 CIT v. Navni Lal Pochalal [1995] 213 ITR 69 Sohinder Singh Bros. v. CIT [1980] 121 ITR 834 (Punj. Har.) CIT v. S. Sankaran [2000] 241 ITR 825 CIT v. Jayaraj Talkies [1999] 239 ITR 914 (Mad.) CIT v. C.J. Rathnaswamy [1947] 223 ITR 5 10. The Ld. D/R on the other hand contends that the assessee has admitted unexplained investment in the stock of land purchased during the year by an amount of ₹ 3,02,33,672/-. On the basis of such admission, he has revised the return of income. This revision had to be done by the assessee after the unexplained investment w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... come of ₹ 3,02,33,672/- towards investment in the said lands. The appellant company thereafter revised the cost of stock held by it as well as its return of income by honouring the surrender as was agreed to be done during the course of survey on the basis of such statement of one of its Directors. The Assessing Officer, however, did not treat this return as voluntary return and proceeded to assess the same as unexplained investment under section 69B of the IT Act. The Ld. CIT (A), in quantum appeal accepted assessee's declaration that the said investment is his income from business and not unexplained investment under section 69B of the Act. As a result, the increased cost of stock-in-trade by the amount of ₹ 3,02,33,672/- also stood admitted. It is also admitted fact that while making assessment for subsequent assessment years i.e. 2007-08 and 08-09 such increased cost has been taken as a cost against the sales made to companies under FDI for computing assessable income of those years. 12. In the back drop of the aforesaid facts, the Assessing Officer entertained the view that the assessee has furnished inaccurate particulars and rejected assessee's explana ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... x neutral. It is a case where only the year of payment has changed. Here, it is useful to make reference to the observations of Hon'ble Bombay High Court in the case of CIT v. Nagri Mills Co. Ltd. [1959] 33 ITR 681 at page 684 as under :- We have often wondered why the Income-tax authorities, in a matter such as this where the deduction is obviously a permissible deduction under the Income-tax Act, raise disputes as to the year in which the deduction should be allowed. The question as to the year in which a deduction is allowable may be material when the rate of tax chargeable on the assessee in two different years is different; but in the case of income of a company, tax is attracted at a uniform rate, and whether the deduction in respect of bonus was granted in the assessment year 1952-53 or in the assessment year corresponding to the accounting year 1952, that is in the assessment year 1953-54, should be a matter of no consequence to the Department; and one should have thought that the Department would not fritter away its energies in fighting matters of this kind. But, obviously, judging from the references that come up to us every now and then, the Department appears t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tuation and there being no documentary evidence on record to show payment of any on money or to suggest that there is unexplained investment in stock-in-trade, it will not amount to furnishing of inaccurate particulars by the appellant. We, therefore, do not find any justification in holding assessee liable to penalty under the peculiar facts and circumstances of the case. Accordingly the penalty so imposed is hereby cancelled. 15. In the result, appeal by assessee stands allowed. V. Durga Rao, Judicial Member - I have carefully gone through the order of Id. Accountant Member. Despite discussion and deep study of the order, I am unable to persuade myself to agree with his views and conclusions; I proceed to write my separate order as under. The grounds of the assessee intrinsically raise following issues. 1. The ld. CIT (Appeals) has erred on facts and in law in holding that order passed by A.O. u/s 271(1)(c) is not barred by limitations and thereby affirming the legality of the order. 2. The ld. CIT (Appeals) has erred on facts and in law in confirming the levy of penalty u/s 271 (1) (c) at ₹ 1,01,76,653/-. 3. The ld. CIT (Appeals) has erred on facts and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on the confrontation accepted by the Directors of the assessee's company and assurance for not to initiate/impose penalty under section 271(1)(c) by the Income Tax authorities during the survey conducted on 26.02.2008 to 28.02.2008 under section 133A we make it good to file the revised income tax return and that the payment due tax liability of ₹ 3,02,33,672/- being the amount accepted as purchase consideration paid over and above the disclosed purchase condition for acquiring agricultural land. Thereafter, on 27.03.2008, the assessee company had furnished revised return declaring total income of ₹ 3,04,21,370/-, wherein the additional income of ₹ 3,02,33,672/- [which as detected during the course of survey operation as unexplained investment in purchase of agricultural land] has been declared as income from business or profession. 20. The Assessing Officer after considering the explanation of the assessee and revised return filed by the assessee, the assessee's claim of declaring additional income as business or profession of ₹ 3,02,33,672/- stand rejected and the same was assessed to tax as undisclosed investment within the meaning of section 69 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rder passed by the Assessing Officer. 24. Aggrieved, the assessee preferred appeal before the Tribunal. 25. The Id. Counsel for the assessee has submitted that the addition was made by the Assessing Officer by taking into consideration of statement given by Shri Sunil Bansal, Director of the company during the course of survey The statements made during the course of survey have no evidential value and relied on the decision of the Hon'ble Supreme Court in the case of S. Khader Khan Son (supra). He further submitted that there is no material on record which suggests that on money was paid. The Department has pressurized to file revised return. The assessee neither concealed the income nor filed inaccurate particulars. The Assessing Officer had not made any enquiry either during assessment proceedings or penalty proceedings. Therefore, the revised return filed by the assessee is a voluntary return and no penalty can be imposed. The ld.Counsel for the assessee relied on the following case law and submitted that no penalty can be imposed. Dilip Yeshwant Oak (supra) Bhanwar Lai Mahendra Kumar Soni (supra) Ajay Sangari Co. (supra) Dr. Raj Dhariwal (supra) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng Officer rejected the revised return filed by the assessee on the ground that the same is not voluntary. 29. So far as first issue raised in the grounds of appeal of the assessee that the order passed by the Assessing Officer under section 271(1)(c) is barred by limitation is concerned, the CIT (Appeals) rejected the ground raised by the assessee by passing a detailed order. Even before the Tribunal, the ld. Counsel for the assessee has not advanced any argument in relation to limitations for passing penalty order. Therefore, the first issue raised by the assessee stands rejected. 30. The first point for consideration is whether, the assessee has filed correct particulars of income before the Assessing Officer. It is immaterial whether the undisclosed investment is business income or not. The assessee has purchased agricultural land for higher price, but recorded it at a lesser value in the regular books of account. This fact was admitted by the Directors of the company when the survey team confronted with incriminating material. The Directors of the company calculated undisclosed investment of ₹ 3,02,33,672/- and thereafter filed revised return of income. Therefore, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... see is rejected. 33. Further, as argued by the Id. Counsel for the assessee that the revised return was filed due to pressure from the Department, there is nothing on record that the assessee filed revised return of income due to pressure from the Department. In fact, the Directors of the assessee company themselves have calculated the undisclosed income and thereafter revised return was filed. Hence, the ld. Counsel for the assessee's argument stands rejected. 34. Further, the contention of the Id. Counsel for the assessee that the Assessing Officer has not made any enquiry either in the assessment proceedings or in the penalty proceedings, the penalty cannot survive, appears to be incorrect. When the incriminating material brought to the notice of the Directors of the assessee company, they themselves calculated the undisclosed income and therefore, there is no necessity the Assessing Officer to conduct further enquiry in this case. It is not necessary that in each and every case enquiry has to be conducted. It is open to the Assessing Officer whether to conduct enquiry or not depending upon the facts and circumstances. In this case, when the Directors themselves calcul ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Hon'ble President, ITAT for consideration and disposal under Section 255(4) of the Income Tax Act, 1961. The Hon'ble President has referred the following point of difference between the learned Members of the Jaipur Bench, as framed by the learned Members:- Whether on the peculiar facts and circumstances of this case, there is any justification in sustenance of penalty imposed under section 271(l)(c)of the Act? 2. The facts of the case are that the return for Assessment Year 2006-07 declaring total income of ₹ 1,87,697/- was filed on 29.11.2006. The assessee-company has undertaken a project of developing Farm House Scheme at NH-8, at Village Mehla, Distt. Jaipur. A survey u/s 133A of IT Act, 1961 was conducted on 26.02.2008 to 28.2.2008 at following business premises of the assessee company:- (a) Registered office located at K-107, Kishan Nagar, Shyam Nagar, Jaipur; (b) Corporate office located at B-32, Raj Bhawan Road, Civil Lines, Jaipur; (c) Site office at village Mehla, Distt. Jaipur 3. During the course of survey operations certain incriminating documents were found and some were impounded u/s 133A(3)(ia) of IT Act, 1961. These incriminat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .Act,1961 in the original income declared. The assessee's claim of declaring additional income as business or profession of ₹ 3,02,33,672/- is rejected. And the same is assessed as undisclosed investment within the meaning of section 69B of the Income tax Act, 1961. As the assessee company has filed revised return due to the finding of survey operation, therefore, the revised return filed is not voluntary one but a result of survey operation. Therefore, the penalty proceedings u/s. 271(1)(c) are initiated for concealment of income and furnishing of inaccurate particulars. 4. With these remarks the Assessing Officer proceeded to compute the income of the assessee by taking the income at ₹ 1,87,697/- as shown by it in its original return and added ₹ 3,02,33,672/- to this declared income of the assessee as unexplained investment in purchase of agricultural land u/s.69B of the IT. Act. 5. Against the assessment order, the assessee filed an appeal before the CIT (A), wherein the only claim of the assessee was that the additional income of ₹ 3,02,33,672/- offered by the assessee should not be assessed as undisclosed income u/s 69B, but should be asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is evident from the fact that the revised return was filed within one month of the survey and the income disclosed in the revised return was accepted by the Assessing Officer within three days. 8. That the Assessing Officer in the penalty order as well as the learned CIT (A) in the appellate order heavily relied upon the statement recorded during the course of survey. That as per the decision of Hon'ble Apex Court in the case of S. Khader Khan Son (supra), the statement recorded at the time of survey has no evidentiary value. 9. That the year under consideration is the first year of the incorporation of the assessee-company; effectively there was no sale of any plot or bungalow, except sale of small piece of land to one of the Directors of the Company. Thus, there was no occasion of earning of any undisclosed income to the assessee-company during the year under consideration. Therefore, levy of penalty u/s 271(l)(c) is not justified. 10. That, the surrender made by the assessee was towards the alleged excess amount paid for acquisition of agricultural land which is stock-in-trade of the assessee. Thus, by the amount of surrender, the value of the stock-in-trade has in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (d) Dr. Raj Dhariwal (supra) (e) Shabbir Allauddin Latiwala (supra) (f) Suresh Chand Bansal (supra) (g) Shankerlal Nebhumal Uttamchandani (supra) (h) Radhey Shyam (supra) (i) Shyamlal Soni (supra) (j) Navnit Lal Pochalal (supra) 13. The learned Departmental Representative, on the other hand, relied upon the order of the Assessing Officer, CIT (A) as well as Judicial Member of the ITAT. He referred to the order of the CIT (A) and pointed out the statement of the various persons which were recorded during the course of survey and which were discussed at length by the CIT (A). He stated that the assessee purchased the agricultural land in the name of the employees and ultimately this agricultural land was got transferred in the name of the company at a much lesser rate than the actual purchase price. That, when the incriminating documents found at the time of survey, which were also fortified by the statement of the employees, were confronted to the Director of the assessee-company, the Director admitted to have purchased the land at a higher rate than what is recorded in the books of account. The Director of the assessee-company has made the calculation of actual ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ice of land by the assessee, the village where the land is situated, khasra number, area of the land, name of the seller, date of purchase, purchase value, the value recorded in the books of account and the cash amount paid on such purchases. The detailed chart is annexed to the statement of Shri Sunil Bansal. In his statement, Shri Sunil Bansal summarized the figures of unrecorded investment for Assessment Years 2006-07, 2007-08 and 2008-09 and declared the same as undisclosed income as under:- Assessment Year 2006-07 ₹ 3,02,33,672/- Assessment Year 2007-08 ₹ 5,57,72,494/- Assessment Year 2008-09 ₹ 5,68,10,943/- Total ₹ 14,28,17,110/- 16. The statement given during the course of survey was never retracted by the assessee. On the other hand, the assessee itself has furnished the revised return during the course of assessment proceedings for Assessment Year 2006-07, offering the additional income of ₹ 3,02,33,672/-. During the assessment proceedings, the assessee never claimed that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ised return was under coercion or pressure from the Revenue Authorities. It would be evident from the assessee's reply dated 02.03.2010 furnished before the Assessing Officer during the penalty proceedings which is reproduced by the Assessing Officer in paragraph 2 of the penalty order, which reads as under:- In the above case, it is submitted that: (i) Considering the income offered of ₹ 3023672.00 as unexplained investment u/s 69B by then learned ITO have been rejected by the Hon'ble CIT (A) Jaipur in his order dt. 16.10.2008 (ii) Then learned Assessing Officer's observation that the revised return filed by the assessee was not voluntary but as a result of survey operation, has also been rejected by the Hon'ble CIT (A) Jaipur. After order of the learned CIT (A), Jaipur there is no concealed income and no penalty can be imposed. You are therefore requested to kindly drop the penalty proceedings. 18. In view of the above facts, I have no hesitation to hold that the contention of the learned Counsel before me that the disclosure of the additional income was made at the behest of the survey party and there was no evidence of actual payment of on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... an important piece of evidence but it cannot be said that it is conclusive and it is open to the person who made the admission to show that it is incorrect and that the assessee should be given a proper opportunity to show that the books of account do not correctly disclose the correct state of facts, vide decision of the apex Court in Pullangode Rubber Produce Co. Ltd. v. State of Kerala (supra); (ii) In contradistinction to the power under s. 133A, s. 132(4) of the IT Act enables the authorised officer to examine a person on oath and any statement made by such person during such examination can also be used in evidence under the IT Act. On the other hand, whatever statement is recorded under s. 133A of the IT Act it is not given any evidentiary value obviously for the reason that the officer is not authorised to administer oath and to take any sworn statement which alone has evidentiary value as contemplated under law, vide Paul Mathews Sons v. CIT (supra); (iii) The expression such other materials or information as are available with the AO contained in s. 158BB of the IT Act, 1961, would (not) include the materials gathered during the survey operation under s. 133A, v ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der Khan Son (supra) would be of no help to the assessee. 22. The next contention of the learned Counsel for the assessee was that during the year under consideration, there was effectively no sale of any plot or bungalow and therefore, there was no occasion of earning of any undisclosed income to the assessee. From the facts of the case as discussed above earlier, it is undisputed that the assessee filed a revised return during the course of assessment proceedings, admitting undisclosed income of more than ₹ 3 crores. The Assessing Officer assessed such income as undisclosed investment u/s 69B. The assessee took the matter in appeal before the CIT (A) and claimed the additional income to be assessed as business income. Therefore, in this case, now under appeal before me, there is no dispute of existence of additional income which is to be finally assessed after the order of the CIT (A). Therefore, the contention of the Id. Counsel for the assessee that there was no occasion of earning of any undisclosed income to the assessee-company during the year under consideration is irrelevant. 23. The next contention of the learned Counsel for the assessee was that the addition ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ccurate particulars of income. The notice issued u/s 271(l)(c) also included both the charges. However, penalty is levied for furnishing of inaccurate particulars of income and the same is illegal. In support of this contention, he relied upon the decision of Hon'ble Karnataka High Court in the case of Manjunatha Cotton Ginning Factory (supra). 25. I have carefully considered the arguments of learned Counsel for the assessee and have gone through the decision of Hon'ble Karnataka High Court. The learned Counsel, at the time of hearing before me, has specifically referred to paragraph 60 and 61 of the report, i.e., Manjunatha Cotton Ginning Factory, which reads as under: 60. Clause (c) deals with two specific offences, that is to say, concealing particulars of income or furnishing inaccurate particulars of income. No doubt, the facts of some cases may attract both the offences and in some cases there may be overlapping of the two offences but in such cases the initiation of the penalty proceedings also must be for both the offences. But drawing up penalty proceedings for one offence and finding the assessee guilty of another offence or finding him guilty for eithe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t levy of penalty has to be clear as to the limb for which it is levied and the position being unclear penalty is not sustainable. Therefore, when the Assessing Officer proposes to invoke the first limb being concealment, then the notice has to be appropriately marked. Similar is the case for furnishing inaccurate particulars of income. The standard proforma without striking of the relevant clauses will lead to an inference as to non-application of mind. 26. From the above, it is evident that their Lordships of Hon'ble Karnataka High Court have noticed that the penalty u/s 271(l)(c) can be levied for two specific offences; one is concealing the particulars of income and second for furnishing of inaccurate particulars of income. The Assessing Officer cannot initiate penalty proceedings for one offence and then finally levy the penalty for another offence, because in such circumstance the assessee will not get proper opportunity to explain the charge levelled against him. Their Lordships have also noticed that the facts of some cases may attract both the offences and in some cases there may be overlapping of these two offences, but in such cases the initiation of penalty proc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... observing that the case of the assessee is covered by the Explanation to Section 271(1)(c). We may observe that in the case of furnishing inaccurate particulars of income, the onus is on the Revenue to, prove that the assessee had furnished the inaccurate particulars, while in the case of concealment of particulars of income, where the Explanation (1) is applicable, the onus is on the assessee to prove that he has not concealed the particulars of income. As is apparent from the Explanation, this explanation clearly states where in respect of any facts material to the computation of total income of any person such person fails to offer an explanation or offers explanation which is found by the Assessing Officer to be false or such person offers an explanation, which he is not able to substantiate or fails to prove that such explanation is bona fide and with all the facts relating to the same and material to the computation of his total income have been disclosed by him. This is not denied that the particulars of provisions of doubtful debts have duly been shown by the assessee and debited in the audited profit and loss account. It is also not denied that the assessee has submitted t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on for bad and doubtful debt. It was only a legal dispute whether the provision for bad and doubtful debt is an allowable deduction or not. Therefore, the facts of the case under consideration before me are altogether different than the facts before the ITAT, Indore Bench. 29. I have carefully perused the penalty order at page Nos 1 2, wherein the Assessing Officer has discussed the facts of the case, the assessee's written submission, and thereafter at page No.3, the Assessing Officer has discussed the provisions of Section 271(l)(c), Explanation (1) and then his conclusion for levying the penalty u/s 271(l)(c) was as under:- . . . in this case assessee company was engaged in undisclosed investment in purchase of agricultural land wherein the real transaction was recorded at a lesser value in the regular books of account. The Directors of the Company admitted the same. Further, during course of survey the fact was proved that assessee had concealed the correct particulars of income by not showing correct position of stock in books and as such assessee has shown lesser business profit which was detected by the department. Hence, assessee company furnished of inaccurate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... red by Section 275(l)(c), by which the penalty is to be levied within six months from the end of the month in which action for imposition of penalty is initiated. Section 275(1) reads as under:- 275 [(1)] No order imposing a penalty under this Chapter shall be passed - [(a) in a case where the relevant assessment or other order is the subject matter of an appeal to the Commissioner (Appeals) under section 246 [or section 246A] or an appeal to the Appellate Tribunal under Section 253, after the expiry of the financial year in which the proceedings, in the course of which action for the imposition of penalty has been initiated, are completed, or six months from the end of the month in which the order of the Commissioner (Appeals) or, as the case may be, the Appellate Tribunal is received by the [Principal Chief Commissioner or] Chief Commissioner or [Principal Commissioner or] Commissioner, whichever period expires later: [Provided that in a case where the relevant assessment or other order is the subject matter of an appeal to the Commissioner (Appeals) under section 246 or section 246A, and the Commissioner (Appeals) passes the order on or after the 1st day of June, 2003 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or the assessee was that sub-section (a) to Section 275(1) is not applicable on the ground that in the appeal filed by the assessee, it has not disputed the addition made by the Assessing Officer. However, the condition for applicability of clause (a) to Section 275(1) is filing of the appeal against the relevant assessment order before the CIT (A) u/s 246/246A. What is in dispute before the CIT (A) is not relevant. Admittedly, the assessee had filed the appeal against the relevant assessment order before the CIT (A) u/s 246 of the Income-tax Act. Therefore, I reject the contention of the learned Counsel for the assessee that the clause (a) to section 275(1) was not applicable. 33. At the end, it was contended by the learned Counsel that merely because the assessee surrendered the income he cannot be liable for penalty u/s 271(l)(c). In support of this, he relied upon the decision of Hon'ble Apex Court in the case of Suresh Chandra Mittal (supra). We find that the order of the Hon'ble Apex Court is a brief order, which reads as under:- We have read the order of the High Court (see [2000] 241 ITR 124) and the statement of case. Given the facts and circumstances, we do ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... return was furnished by the assessee voluntarily to buy peace with the Income-tax Department. In view of above, in my opinion, the above decision of Hon'ble Apex Court would not be applicable to the facts of the assessee's case. 36. After considering the arguments of both the sides and the facts of the case, I agree with the finding of the Assessing Officer in the penalty order that the assessee did not disclose the correct purchase consideration of the agricultural land. The purchase price of the land was recorded at a lesser value in the regular books of account. These facts were detected by the Revenue as a result of survey at the assessee's premises. During the course of survey, the Director of the Company admitted these facts. Thus, it is a clear case where the assessee furnished incorrect particulars in the original return of income with regard to purchase price of agricultural land, value of closing stock as well as the business income. The revised return modifying the figure of purchase value of agricultural land, value of closing stock as well as business income was furnished only after the detection of these discrepancies during the course of survey. In vi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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