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2017 (12) TMI 473

Penalty u/s. 271(1)(c) - Survey operations u/s.133A(1) conducted simultaneously in the premises of some of the members of the group and Assessment u/s.153A(1)(b) completed - 'undisclosed income' was declared by the appellant in the statement recorded during search and the same was also disclosed in the return filed pursuant to notice issued under section 153A - Held that:- We find that in the case of Alok Bhandar [2017 (9) TMI 954 - ITAT DELHI] under similar circumstances held that here cannot be any dispute to the fact that once a return is filed pursuant to notice under section 153A, the same is treated as return filed under section 139 of the Act [refer clause (a) of section 153A(l)]. Further, concealment/ furnishing of inaccurate particulars of income/undisclosed income, has to be necessarily seen vis-a-vis return filed by the appellant Once, income it is declared which is accepted as such under section 139 r.w.s. 153A of Act, then, the question of there being concealment/ furnishing of inaccurate particulars of income/undisclosed income, does not arise at all. - In the present case, the entire undisclosed income has been offered for tax by the appellant-company in the ret .....

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ssessee appealed before the Ld. First Appellate Authority, who vide impugned order dated 09.7.2014 has dismissed the appeal of the assessee. 4. Against the impugned order of the Ld. CIT(A) dated 09.7.2014, assessee is in appeal before the Tribunal. 5. Before us, the Ld. Counsel of the assessee submitted that in another cases of group of Sh. Alok Bhandari, Sh. Rajendra Bhandari and M/s Bestech Hospitalities Pvt. Ltd., in identical circumstances the Tribunal has deleted the penalty under section 271(1)(c) of the Act. Accordingly, he submitted that issue in dispute is squarely covered in the favour of the assessee. 6. On the contrary, Ld. CIT(DR) relied on the order of the authorities below and submitted that the Explanation 5A to the section 271(1)(c) of the Act has been made effective retrospectively from 1.6.2007 and therefore assessee was liable for penalty under section 271(1)(c) of the Act. 7. We have heard the rival submissions and perused the relevant material on record. We find that in the case of Alok Bhandari in ITA No. 5747/Del/2014 for assessment year 2006-07 following grounds was taken before the Tribunal:- (A) That on the facts & circumstances of the case the learne .....

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e for imposition of penalty. In the present case for the assessment year 2007-08, though the first two conditions i.e. (a) and (b) of explanation 5A to Section 271(1), are satisfied since the relevant previous year had ended prior to the date of search on 7th February, 2008 and the due date expired prior to the date of search. However, the third condition, i.e., the appellant has not filed return of income for the said previous year, is not satisfied inasmuch as for the previous year relevant to the assessment year 2007- 08, the appellant company has filed return of income under section 139(1) of the Act on 31.07.2007. In view of the aforesaid, deeming fiction enacted in the aforesaid Explanation 5A as on the statute on 03.03.2009, i.e., the date of filing in return of income under section 153 A of the Act, is not at all applicable to the facts of the appellant-company. Thus the Assessing Officer erred in imposing the penalty on the assessee. 5.1. The facts of the case in the present appeal in fact are that search and seizure operation under section 132 of the Act was carried out in the case of the appellant and its group concerns on 7th February, 2008. During the course of search .....

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furnishing of inaccurate particulars of income by the assessee has to be in the IT return filed by it. The assessee can furnish the particulars of income in his return and everything would depend upon the IT return filed by the assessee. The assessee can furnish the particulars of income in his return and everything would depend upon the IT return filed by assessee. This view gets supported by explanations 4 as well as 5 and 5A of Section 271. Obviously no penalty can be imposed unless the conditions stipulated in the said provisions are duly and unambiguously satisfied. Since the assessee was exposed during survey, may be, it would have not disclosed the income but for the said survey. However, there cannot be any penalty only on surmises, conjectures and possibilities. Section 271(1 )(c) has to be construed strictly. Unless it is found that there is actually a concealment or non-disclosure of particulars of income, penalty cannot he imposed. There is no such concealment or non-disclosure as the assessee had made a complete disclosure in the IT return and offered the surrendered amount for the purposes of tax". iii) In CIT v. T.M. Abdul Hazeez & CO. [2007J 293 ITR 384 (Ma .....

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Officer to hold the capital gain as bogus. The information from investigation wing that sale was bogus was not communicated to appellant when notice under s. 148 was issued. The return filed 'under section 148 was not filed after 'detection'. The return of income so filed was voluntary and had offered the additional income to buy peace of mind and to avoid litigation. In the aforesaid facts the Court held that during the course of assessment; the aforesaid explanation given by the appellant was neither rejected nor it was held to be mala fide. Further, the assessing authority had failed to take any objection that the declaration of income made by the appellant in his revised return and in his explanation were not bona fide. Therefore, in view of the aforesaid finding, the Court held that the Tribunal was justified in upholding the order of the Commissioner of Income tax (Appeals), whereby the penalty imposed under section 271(l)(c) of the Act by the Assessing Officer was ordered to be deleted." 5.4 Furthermore, levy of penalty has to be as per law applicable on the date of filing of the return and admittedly on 03.03.2009 when the return of income for assessment y .....

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