TMI Blog2017 (11) TMI 1762X X X X Extracts X X X X X X X X Extracts X X X X ..... efore is : (i) the assessee-company filed its return of income for the AY 2008-09 on 09.07.2008 disclosing total income of ₹ 11,49,410/-, (ii) the AO issued notice u/s 148 on 21.02.2012, (iii) the assessee filed an affidavit on 20.03.2013 offering ₹ 15,00,000/- to tax and (iv) the AO complete the assessment on 22.03.2013 making an addition of ₹ 15,00,000/- to the income shown by the assessee. The background as delineated hereinbefore is that during the course of search and seizure action u/s 132 conducted in the case of M/s Mahasagar Securities Pvt. Ltd., it was revealed that these were fraudulent transactions. This led the assessee-company to offer ₹ 15,00,000/- to tax by filing an affidavit before the AO on 20.03.2013. Therefore, the submission of the Ld. counsel of the assessee delineated at para 9 hereinbefore loses its significance. Where the assessee himself voluntarily concedes that a particular item of income had been concealed by him and surrenders such income for the purpose of assessment, there is nothing left for the Revenue to prove the factum of it being assessee’s income and also the factum of it having been concealed by him. In such cas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e not engaged in any genuine business but involved in fraudulent billing activities and providing bogus speculation profit/loss, short term capital gains/loss, share application money, profit/loss on commodity trading (through MCX). It was further revealed that the assessee-company had given share application money of ₹ 5,00,000/- from M/s Jai hind Syntetics Ltd. and ₹ 10,00,000/- from M/s Talent Infoway Ltd. totalling ₹ 15,00,000/-. 3.1 On the basis of the above specific information, the AO issued notice u/s 148 on 21.02.2012. In response to it, the assessee submitted on 29.02.2012 that the original return filed on 09.07.2008 be treated as return filed in response to notice u/s 148. 3.2 During the course of reassessment proceedings, the AO asked the assessee to explain the source of application money amounting to ₹ 15,00,000/-. The assessee submitted before the AO on 20.03.2013 an affidavit of its Director, Shri Vishwanathan H. Iyer, stating that the above amount of ₹ 15,00,000/- represents its income and it offered the same to tax to buy peace with the Department and accordingly paid the tax. The AO, thus, completed the assessment u/s 143(3) r. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... atio laid down in NTPC vs. CIT (1998) 229 ITR 383 (SC), we admit the above additional ground filed by the assessee. 7. Now we consider the merit of the additional ground filed by the assessee. We find that in the assessment order dated 22.03.2013 completed u/s 143(3) r.w.s. 147, the AO has initiated the penalty proceedings u/s 271(1)(c) on the ground that the assessee has furnished inaccurate particulars of its income. In the penalty order dated 25.09.2013, the AO has levied penalty on the assessee for furnishing inaccurate particulars of income. 7.1 In Mak Data Pvt. Ltd. (supra), the Hon ble Supreme Court has held at para 10 the following: The AO has to satisfy whether the penalty proceedings be initiated or not during the course of the assessment proceedings and the AO is not required to record his satisfaction in a particular manner or reduce it into writing. The scope of Section 271(1)(c) has also been elaborately discussed by this Court in Union of India vs. Dharmendra Textile Processors (2008) 13 SCC 369 and CIT vs. Atul Mohan Bindal (2009) 9 SCC 589. 7.2 In the case of CIT vs. Smt. Kaushalya and Others (1995) 216 ITR 660 (Bom), the Hon ble Bombay High Court hel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the two breaches mentioned under Section 271(1)(c) of the Act, for initiation of penalty proceedings will not warrant/permit penalty being imposed for the order breach. This is more so, as an Assessee would respond to the ground on which the penalty has been initiated/notice issued. It must, therefore, follow that the order imposing penalty has to be made only on the ground of which the penalty proceedings has been initiated, and it cannot be on a fresh ground of which the assessee has no notice. 8. In view of the factual matrix in the instant case and the judgments of the Hon ble Supreme Court and Hon ble Bombay High Court narrated hereinbefore at para 7, 7.1,7.2 7.3 , we find that the additional ground raised by the assessee is devoid of merit. Hence, the same is dismissed. 9. Now we dwell on the merit of the case. Before us, the Ld. counsels of the assessee in support of their arguments have filed a Paper Book containing (i) acknowledgement of filing return of income for AY 2008-09 along with computation of total income, (ii) details of shareholders along with number of shares held by them, (iii) notice issued u/s 148 along with reasons recorded for reopening of the as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d been concealed by him and surrenders such income for the purpose of assessment, there is nothing left for the Revenue to prove the factum of it being assessee s income and also the factum of it having been concealed by him. In such cases, such concession by the assessee may afford sound foundation for the imposition of penalty. A plethora of precedents on the subject in which we are presently concerned compels us, in order to avoid prolixity, to refer only a few decisions. These are : Durga Timber Works vs. CIT, (1971) 79 ITR 63 (Del); Banaras Chemicals Factory vs. CIT, (1977) 108 ITR 96 (All), Ayyasami Nadar Bros. vs. CIT, (1956) 30 ITR 565 (Mad); India Sea Foods vs. CIT, (1978) 114 ITR 124 (Ker); H.V. Venugopal Chettiar vs. CIT, (1985) 153 ITR 376 (Mad); Western Automobiles (India) vs. CIT, (1978) 112 ITR 1048 (Bom); CIT vs. Krishna Co., (1979) 120 ITR 144 (Mad); CIT vs. P.B. Shah Co. Pr. Ltd. (1978) 113 ITR 587 (Cal); CIT vs. Dr. R.C. Gupta Co. (1980) 122 ITR 567 (Raj). 11.3 In Mak Data Pvt. Ltd. (supra), their Lordships of the Hon ble Supreme Court at para 8 have held: 8. Assessee has only stated that he had surrendered the additional sum of ₹ 40,74,000/- ..... X X X X Extracts X X X X X X X X Extracts X X X X
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