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Sunil Satija Versus ACIT, Central Circle II, Faridabad

2017 (12) TMI 473 - ITAT DELHI

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 b .....

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ng 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 return income, which was subject matter of assessment before assessing officer. The return filed by the appellant has been accepted as such by your assessing officer, without any variation. Therefore, in the absence of any undisclosed income being found in the assessment vis-a-vis the return filed, the .....

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circumstances of the case the Ld. ITO & CIT(A) erred in: 1) Imposing penalty u/s. 271(1)(c) amounting to Rs. 2,36,000/-. 2) Levying penalty inspite of the fact that law applicable for imposing the penalty u/s. 271(1)(c) is the law in force at the time of filing of original return. The original return was filed on 11.11.2008 while the Finance Act (No. 2) of 2009 came in effect from 1.4.2009 passed in Lok Sabha on 27th July, 2009 and in Rajya Sabha 29th July, 2009 and assented on 19th August, .....

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u/s. 133A(1) of the Income Tax Act, 1961 (hereinafter referred as the Act) were also conducted simultaneously in the premises of some of the members of the group. Assessment u/s. 153A(1)(b) of the Act was completed on a total income of ₹ 3,25,98,240/- on 17.7.2009, which happened to be the income returned u/s. 153A of the Act. Penalty proceedings were initiated culminating into levy of penalty of ₹ 2,36,000/- @ the minimum rate of 100% vide order dated 19.03.2010 passed u/s. 271(1)( .....

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italities 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 th .....

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he law in force at the time of filing of original return. The original return was filed on 03.03.2009 while the finance Act (No.2) of 2009 came in effect from 01.04.2009 passed in Lok Sabha on 27th July, 2009 and in Rajya Sabha 29th July 2009 and assented on 19th August, 2009 with retrospective effect 01.06.2007. 3) Ignoring the fact that explanation 5A of Section 1271(1) was inserted by the Finance Act 2009, w.e.f. 01.06.2007 which is after the assessment year in question. 8. We find that the g .....

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once a return is filed pursuant to notice under section153A, the same is treated as return filed under section 139 of the Act [refer clause (a) of section 153(A)(91)]. 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 itself is declared which is accepted as such under section 139 r.w.s. 153A of the Act, then, the question of there being concealment/furnishing of inaccurate part .....

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f penalty does not arise. Thus the Assessing Officer is erred in imposing the penalty on the assessee. It is well established principle that law prevailing on the date of filing of return is applicable 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 .....

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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 statement of Sh. Dharmendra Bhandari, was recorded under section 132(4) of the Act wherein undisclos .....

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essee has been accepted as such. The learned assessing officer has levied penalty on the appellant u/s. 271(l)(c) of Income Tax Act, vide its order dated 19.03.2010. 5.2. There 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(1)]. Further, concealment/ furnishing of inaccurate particulars of income/undisclosed income, has to be necessarily seen vi .....

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epted as such by your assessing officer, without any variation. Therefore, in the absence of any undisclosed income being found in the assessment vis-a-vis the return filed, the issue of imposition of penalty does not, arise. 5.3 The reliance is placed on the following decision in this regard. i) It has been held in the decision of the Delhi Bench of the Tribunal in the case of Prem Arora vs. DCIT in (2012) 78 DTR (Del)(Trib)91 wherein the Tribunal held that where returned income filed u/s. 153A .....

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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. Howe .....

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d.) in response to the notice under section 148, the appellant filed the return of income 18.03.2004, admitting a total income of Rs. 2,71,960 which included additional income offered amounting to Rs. 1,82,000 being the loan credits in the names of ten persons. The AO imposed the penalty on the appellant on the ground that the appellant had disclosed additional income for the assessment years in question and also failed to prove the genuineness loan credits. The Tribunal deleted the penalty hold .....

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offering the additional income after search and in response to notice under section 148 of the Act issued by the Department?" The Court answered the above question in the affirmative. The Court held that no penalty uls 271(1 )(c) of the Act could be levied where the revised return had been accepted and assessed at the hands of the appellant although the revised returns had been fled after a search under section 132 of the Act and after a notice had been under section 148 of the Act. v) Raj .....

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der of the Tribunal deleting penalty, observed that undeniably the notice, under section 148 of the Act was issued on 21-3-2003 and the appellant filed its return on 30-4-2003. The CTT(A) has recorded a finding that the enquiries conducted by the DDTT (bn.), Gurgaon regarding the nature of transaction, sale and purchase of shares carried out through the broker Shri S.S. Mehta enabled the Assessing Officer to hold the capital gain as bogus. The information from investigation wing that sale was bo .....

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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 .....

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ed provision of Explanation 5 A made applicable w.e.f from 1.6.2007 cannot be pressed into service. In view of the aforesaid, the pre-substituted provisions of Explanation 5A to Section 271 would, therefore, apply in the present case of the appellantcompany for the year under consideration, even though the said Explanation stands substituted retrospectively by the subsequent Finance Act. 5.5 Even otherwise, it is further submitted that presumption raised by the Explanations to section 271(1) are .....

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