TMI Blog2017 (5) TMI 1679X X X X Extracts X X X X X X X X Extracts X X X X ..... ns. In any case the revenue has carried out survey operations only u/s 133A of the Act in the hands of the partnership firms. Hence, in the absence of search operation u/s 132 of the Act in the hands of Shri Roop Kishanchand Khemani, we are of the view that the assessing officer has misdirected himself in levying penalty u/s 271AAA Penalty levied u/s 271(1)(c) - contentions of the assessee are that the revenue was having only incomplete information in its hand - HELD THAT:- The assessees have voluntarily furnished all the details that were available with them. Further they have given authorization to the AO to collect necessary details from the HSBC bank. Thus, they have furnished all the materials available with them and they have also offered explanations as to why this income was not declared by them. Even though the income does not belong to the AY 2007-08, still they have agreed to offer the same in that year and also paid taxes. None of the explanations of the assessee was found to be false. Under these set of facts, the Ld A.R contended that the immunity given under Explanation 1 shall be available to the assessee. We also find merit in the said submissions and accordingl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d Shri Roop Kishanchand Khemani and it belongs to them in the ratio of 30:70. Shri Kumar submitted that they were doing textile consultancy for textile factories located in Nigeria during the period approximately from 1995 to 2003 and the income earned there from were deposited in the joint bank account opened with Deutsche Bank in Geneva. Subsequently he opened another bank account with HSBC Bank, Geneva jointly in his name and his wife s name Smt Lata Nathani, wherein the balance of the earlier account was transferred. This account was closed in the year 2010 and the balance was transferred to another account held in the name of his Cousin brother named Shri Satyam Somnani. It was submitted that both Kumar S Nathani and Shri Roop Kishanchand Khemani owned the moneys deposited in all these accounts and accordingly the revenue also accepted to assess the deposits in the ratio of 30:70 in the name of Shri Kumar Satur Nathani and Shri Roop Kishanchand Khemani. During the course of survey operations also, a statement was taken from Shri Roop Kishanchand Khemani, wherein he admitted that he earned income along with Shri Kumar Satur Nathani in Nigeria by way of Commission income from su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the Act has since been deleted by the co-ordinate bench of Tribunal, vide its order dated 17-03-2017 passed in ITA No.4160/Mum/2015 by holding that the benefit given u/s 271AAA(2) shall be available to the assessee, since the assessee has admitted the undisclosed income during the course of search, offered the same in the return of income and paid taxes thereon and also admitted as to how the income was earned. 8. The Ld D.R, on the contrary, vehemently opposed to the contentions of the assessee. The Ld D.R submitted that the assessee has come forward to disclose the income pertaining to undisclosed deposits only after the details were collected by Government from Swiss authorities. She further submitted that Shri Roop Kishanchand khemani has given a statement u/s 131 of the Act in the course of survey operations u/s 133A of the Act, which is just an extension of the search operations conducted u/s 132 of the Act in the hands of Shri Kumar Satur Nathani. She further submitted that it is the procedure of the department to conduct search operations at the residential premises and survey operations in the connected business premises. Accordingly the Ld D.R submitted that t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he order passed by Ld CIT(A) and direct the AO to delete the penalty levied u/s 271AAA of the Act in the hands of Shri Roop Kishanchand Khemani. 11. We shall now take up the appeals filed by both the parties challenging the penalty levied u/s 271(1)(c) of the Act in assessment year 2012-13 in the hands of both the assessees herein. 12. The Ld A.R raised certain legal contentions initially. He submitted that the assessing officer has initiated penalty proceedings u/s 271(1)(c) of the Act for concealing the particulars of income as is evident from paragraph 13 of the assessment order. However he has levied penalty for furnishing inaccurate particulars of income as per the decision given by him in paragraph 17 of the penalty order, which reads as under:- 17. In view of the totality of the facts of the case and keeping in view the provisions of section 271(1)(c) as discussed above, I am satisfied that the assessee has concealed his income and filed inaccurate particulars of income for the year. By placing reliance on the decision of Hon ble jurisdictional Bombay High Court rendered in the case of The CIT Vs. Shri Samson Perinchery (ITA No.115 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the basis of any incriminating materials found during the course of search, since the assessments have been completed u/s 153A of the Act. Since there is no difference between the returned income and assessed income, there is no scope for levying penalty. He submitted that identical addition made by the AO on the basis of information received from HSBC has been deleted by the Kolkatta bench of Tribunal in the case of Shri Bishwanath Garodia Vs. DCIT (ITA Nos.853 854/Kol/2016 dated 21-09-2016). The view taken by the Kolkatta bench of Tribunal is supported by the decision rendered by the Hon ble jurisdictional Bombay High Court in the case of Continental Constructions case. He submitted that the impugned addition (even though voluntarily offered by the assessees) would not be sustainable in law in view of the above said decisions as there is no estoppel against law. When there is no scope for making any addition, there should not be any scope for levying penalty. Accordingly he submitted that the penalty should be deleted. 15. The Ld A.R submitted that both the assessees have stated in their respective statements that the income was earned in the years prior to 2003. Fur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ty shall be leviable in such kind of situation as held by Hon ble Delhi High Court in the case of SAS Pharmaceuticals (335 ITR 259). 17. The Ld D.R, however, submitted that the provisions of Explanation 5A has been discussed by Ld CIT(A) in paragraph 12 of his order. She submitted that the first appellate authority s power is co-terminus with that of the AO and hence the Explanation 5A has been invoked in the instant cases. She submitted that the voluntary offer of income at a higher figure is not relevant in penalty proceedings, since the assessees have came forward to offer the same only when they were confronted with the information obtained by the Government of India about the foreign bank accounts. Thus the department was leading the evidences and since the assessees could not have any other option, they were constrained to admit additional income. Hence such admission cannot be considered to be voluntary, as contended by Ld A.R. She submitted that the assessees have made contradictory statements with regard to the nature of income, i.e., while one assessee has described the same as consultancy income and other one has stated the same to be commission income. She sub ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 06 Delhi HC) and CIT Vs. Dr. Sajjan Singh Malik (P H HC 47 taxmann 264). 21. With regard to the claim of the assessee that the assessing officer has initiated penalty proceedings under one charge and levied penalty under other charge, the Ld D.R submitted that the assessing officer has stated both the charges in the penalty order and hence the same shall not vitiate penalty proceedings. The Ld D.R also submitted that the assessees have participated in the penalty proceedings and then the specific charge for levying penalty would get vitiated. Accordingly she submitted that the initiating penalty proceedings under one limb of sec. 271(1)(c) and levying penalty under another limb would not vitiate the penalty proceedings, since the assessee has participated in the proceedings. The Ld D.R drew support for this proposition from the decision rendered by Hon ble Supreme Court in the case of Sh. Gunjan Girishbhai Mehta Vs. DIT (SLP No.30282/2015 dated 21-03-2017). In the above said case, the notice u/s 132 of the Act was issued on a dead person and the same was received by the petitioner as the legal heir of the dead person. In the assessment proceedings, the legal heir part ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ncome and furnishing inaccurate particulars of income . Though it is contended by Ld D.R that the AO has stated both the charges in the penalty order, yet the fact remains that there is no clarity in the action of the AO. In fact, the furnishing of inaccurate particulars of income would also lead to concealment of income. What is required to be seen is as to whether the assessee has concealed the particulars of income or furnished inaccurate particulars of income . Further, it is also contended that there is non-application of mind on the part of the assessing officer, which is reinforced by the fact that the assessing officer did not strike off inapplicable portion in the penalty notice issued to the parties. The co-ordinate bench has considered the effect of non-application of mind on the part of the AO while initiating penalty proceedings in the case ofDr. Sarita Milind Davare (supra). The co-ordinate bench considered the decision rendered by the jurisdictional Bombay High Court in the case of Smt Kaushalya and Others (216 ITR 660), the decision rendered by Hon ble Supreme Court in the case of Dilip N Shroff (291 ITR 519) and other decisions discussed by the Bombay High Court ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hall constitute sufficient material. The year under consideration, i.e., AY 2007-08 was concluded assessment and the same can be disturbed only on the basis of incriminating material found. Thus we notice that the question of assessing the impugned income in a 153A assessment in AY 2007-08, in the facts and circumstances of the case, becomes a debatable one. It is well settled proposition that the penalty u/s 271(1)(c) shall not lie on debatable issues. Further we notice that the statement u/s 132(4) has been taken only from Shri Kumar Satur Nathani and not from other assessee. Hence, on this legal ground also, we are of the view that the assessee has got merit. 27. The Ld D.R placed her reliance on various case laws and we notice that they have been rendered on a different context and hence all of them cannot be applied to the facts of the present case. 28. A perusal of the penalty order as well as the paragraph 14 of the order passed by Ld CIT(A) would show that the tax authorities have placed reliance on Explanation 1 to sec. 271(1)(c) of the Act, even though the Ld CIT(A) made a reference to Explanation 5A in paragraph 12 of his order. The contentions of the ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
