9911796707
TMI Blog2017 (1) TMI 1508X X X X Extracts X X X X X X X X Extracts X X X X ..... unting to Rs. 74998/- u/s 271(1)(c) of the Act for A.Y.2006-07 on the ground that return was not filed by the appellant within the due date u/s 139(1) without appreciating the facts of the case and submissions of the appellant. 2. The learned CIT (Appeals) erred in not appreciating the contention of the appellant that return of income filed by the appellant is not in response to notice u/s 153A but a regular return where in correct income is disclosed and merely rejected the contention without proving it to be false. 3. The learned CIT (Appeals) erred in not appreciating the following important facts and the submissions of the appellant that: a. Appellant has disclosed the correct income in the Return of Income filed relating to year in which survey U/Sec. 133A is carried out at the business premises. b. The disclosure made on account of errors and omission amounting to Rs. 9502.00 is not made because no such errors and omission were found. c. The learned A.O. has not found that the explanation of the assessee is false. d. The declaration of excess stock found during the course of survey has been offered by the appellant. e. The appellant has furnished the explanation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the stock which was found to be excessive during the course of Survey under section 133A of the Act, whether the assessee could declare it and whether the immunity provided under section 132(4) of the Act could be enjoyed by him and secondly, if it is assumed that the immunity was available, whether the return which was not filed within time prescribed under section 139(1) of the Act, could save the assessee from the clutches of penalty. In reply to the show cause notice, the assessee explained that the excess stock was found from his possession during the course of Survey and the said amount was offered as additional income and the assessee paid the taxes thereon. The Assessing Officer noted that though the assessee had included excess stock of gold and silver but had not included the addition on account of errors and omissions of Rs. 9,502/- in its return of income. Since he had not offered the said income, the Assessing Officer held the assessee liable for penalty on addition of Rs. 9,502/-. Similarly, in the absence of any immunity prescribed in Explanation 5 to section 271(1)(c) of the Act, the income of Rs. 2,30,498/- representing the excess stock of g ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rvey and not during the course of search. He placed reliance on the decision of Pune Bench of Tribunal in Nandkishor Tulsidas Katore Vs. ACIT in ITA Nos.2174 to 2180/PN/2014, relating to assessment year 2002-03 to 2008-09, order dated 14.12.2016. 10. The learned Departmental Representative for the Revenue placed reliance on the orders of authorities below. 11. We have heard the rival contentions and perused the record. The issue arising in the present appeal is against levy of penalty under section 271(1)(c) of the Act. The assessee is engaged in the business of jewellery. Survey action under section 133A of the Act was carried out at the business premises of assessee on 27.04.2005. Simultaneously, search action was also carried out at the residential premises of assessee. The instant assessment year in appeal is the year of search. During the course of Survey, the assessee declared certain additional income on account of excess stock found from his premises of gold and silver amounting to Rs. 2,30,498/-. The assessee included the said additional income in the return of income filed. Undoubtedly, no proceedings under section 153A of the A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ame as its income. 12. We find that Pune Bench of Tribunal in Nandkishor Tulsidas Katore Vs. ACIT (supra) while deciding the similar issue of additional income offered during the course of Survey and whether Explanation 5 to section 271(1)(c) of the Act is attracted had observed as under:- "11. We have heard the rival contentions and perused the record. In the facts of the present case before us dual action was taken against the assessee i.e. search under section 132 of the Act was carried out at the residence of assessee on 16.01.2009. Simultaneously, Survey was carried out at the hospital of assessee on 16.01.2009. During the course of Survey, evidence of certain unaccounted receipts, rough pages, note books, diaries, receipt books, etc. were found. The assessee admitted the fact of suppression of receipts from OPD, IPD, endoscopy charges, etc. The assessee has declared suppressed receipts for assessment years 2003-04 to 2008-09 on estimate basis as under:- "Receipts from OPD for A.Y. 2003-04 to 2008-09 - Rs. 15,40,000/- Receipts IPD patients for A.Y. 2003-04 to 200 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 004 6,05,710 7,56,152 5,60,437 1,55,713 2005- 06 2,97,960 26/02/2005 8,73,410 9,91,232 7,16,379 2,35,927 2006- 07 8,41,190 31/10/2006 14,57,430 17,11,731 8,70,949 2,93,160 2007- 08 13,65,163 30/10/2007 16,45,164 17,20,604 3,55,442 1,19,641 2008- 09 11,39,880 03/10/2008 15,34,880 16,00,084 4,60,210 1,56,425 13. The perusal of above details reflects that the returned income has been accepted with minor variations in the final assessed incomes. The issue which arises for adjudication before us is that where the additional income has been declared in his hands whether the same is liable for levy of penalty under section 271(1)(c) of the Act. The first issue raised by the learned Authorized Representative for the assessee is that in case any income is declared pursuant to Survey, then the same is not covered under Explanation 5A to section 271(1)(c) of the Act. We find merit in the stand of assessee in this regard, wherein Explanation 5A to section 271(1)(c) of the Act categorically provides that the same is applicable in case of searches. However, the Statute is silent about the additional income offered ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the CIT(A). When the survey is conducted by a survey team, the question of satisfaction of AO or the CIT(A) or the CIT does not arise. We have to keep in mind that it is the AO who initiated the penalty proceedings and directed the payment of penalty. He had not recorded any satisfaction during the course of survey. Decision to initiate penalty proceedings was taken while making assessment order. It is, thus, obvious that the expression 'in the course of any proceedings under this Act' cannot have the reference to survey proceedings in this case. 15. It necessarily follows that concealment of particulars of income or furnishing of inaccurate particular of income by the assessee has to be in the IT return filed by it. There is sufficient indication of this in the judgment of this Court in the cases of CIT vs. Mohan Das Hassa Nand (1983) 34 CTR (Del) 361 : (1983) 141 ITR 203 (Del) and in Reliance Petroproducts (P) Ltd. (supra), the Supreme Court has clinched this aspect, viz., the assessee can furnish the particulars of income in his return and everything would depend upon the IT return filed by the assessee. This view gets supported by Explns. 4 as well as 5 and 5A of s. 271 of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... levy of penalty on the additional income which was declared by the assessee during the course of Survey and was offered to tax in the revised return of income filed after the Survey." 13. The issue arising in the present appeal is in respect of Explanation 5 to section 271(1)(c) of the Act which was attracted in respect of searches conducted prior to 01.06.2007 and Explanation 5A to section 271(1)(c) of the Act is attracted to the searches carried out on or after 01.06.2007. But both the provisions deal with the cases of additional income offered pursuant to search action at the premises of assessee. As pointed out in the paras hereinabove, the additional income in the present case was offered after Survey action and consequently, there is no merit in the levy of penalty for concealment under Explanation 5 to section 271(1)(c) of the Act. 14. Another aspect to be taken note in the present case is the recording of satisfaction while initiating penalty proceedings against the assessee while completing assessment order. The perusal of assessment order passed under section 143(3) of the Act, dated 29.10.2007 reflects no satisfaction whatsoever recorded by the Asses ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
