TMI Blog2019 (1) TMI 1601X X X X Extracts X X X X X X X X Extracts X X X X ..... he said expression cannot have reference to the survey proceedings. It has also held that penalty proceedings would depend upon the return of income filed by the assessee. - Decided in favour of assessee. - 3175/Ahd/2016, 3176/Ahd/2016, 3177/Ahd/2016, 3186/Ahd/2016, 3210/Ahd/2016, 3218/Ahd/2016, 3219/Ahd/2016, 3221/Ahd/2016, 3223/Ahd/2016, 3225/Ahd/2016 - - - Dated:- 25-1-2019 - SMT. DIVA SINGH, JUDICIAL MEMBER AND SHRI O.P. MEENA, ACCOUNTANT MEMBER For the Appellant : Shri Ashwin Parikh CA For the Respondent : Shri Srinivas T.Bidari Sr.DR ORDER PER BENCH: 1. These Ten appeals of related concerns are being decided by a common order as facts, circumstances and position of law in terms of the prayer made by the parties before the Bench remain identical in each of these appeals. These appeals have been filed by the Revenue pertaining to 2012-13 and 2013-14 in the respective appeals arise out of identical orders passed by the CIT(A)-4, Surat wherein the quashing of the penalty proceedings u/s.271(1)(c) has been assailed. 2. The ld.CIT-DR Mr.Srinivas T.Bidari referring to these T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the mischief of section 271(1)(c). The case of the assessee clearly attracts the penal provision of section 271(1)(c). 4. Relying on the said para the ld.CIT-DR inviting our attention to the impugned order submitted that relief has been granted by the CIT(A) for the reasons set out in para 7 to 7.3 which is assailed by the Revenue. The relevant extract which is common in these group of cases is extracted hereunder for ready reference : 7. I have gone through the facts of the case, the penalty order, the assessment order, the submission and the case law!on the issue including that relied upon by the AO and the appellant. 7.1 The appellant in the submissions has challenged the imposition of penalty and has pleaded that the penalty cannot be levied on merits, pleading that the income in question was disclosed during the course of survey itself as income earned outside books of account from project, the income was duly introduced into the books of account, was disclosed in the returns of income and the AO has only changed the head of income without making any addition on this issue. 7.2 As far as the imposition of penalty is co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) cannot be levied when there is no dispute with regard to fact that the particulars of income disclosed during the course of survey were duly reflected in the return of income. iii) The Hon'ble High Court of Delhi in the case of CIT Vs. SAS Pharmaceuticals (2011) 335 ITR 0259 (Del). The appellant had disclosed the incomes in the returns filed and paid taxes b) No penalty is leviable just because an issue was not appealed against the quantum order. Time and again it has been held that the penalty proceedings are separate from the assessment proceedings. This cannot be a ground for imposition of penalty. The AO has to independently establish its case for default u/s. 271(l)(c). The Hon'ble Supreme Court in case of CIT vs. Khoday Eswarsa Sons 1972 CTR (SC) 295 : (1972) 83 ITR 369, the same position was reiterated. In that case, the Tribunal had stated that there might be justification for making additions in the original assessment order to the amount shown in the return, but those additions by themselves could not lead to the inference that the assessee had concealed its income or had deliberately furnished incorrect particulars. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e as assessed was disclosed in the return filed u/s. 139(1) itself, it involves allegation of a mere change of head without any tax effect, no explanation has been proved bogus or mala fide. Therefore the penalty is directed to be deleted. 8. In the result, the appeal of the assessee is allowed. 5. The ld.CIT-DR in support of the departmental grounds assailing the quashing of the penalty order submitted that the relief granted by the CIT(A) is contrary to the proposition of law as laid down by the Apex Court in the case of Mak Data Pvt. Ltd., 358 ITR 593 (SC). Accordingly it was his prayer that the impugned order may be set-aside and the penalty order may be upheld. 6. The ld.AR inviting our attention to the material available on record submitted that in the facts of the present case, the assessee has consistently accepted the fact that on-money has been received from the business of plotting / construction / development etc., of plots. It was his submission that in the related concerns no doubt various other objects may have been stated. However, it was consistently the fact on record that this was the only activity carried ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... und as a matter of fact that there was no concealment of particulars of income on the part of the respondent assessee and in fact, the Assessing Officer had proceeded on the basis of the return filed by the assessee and particulars furnished therein. Under the circumstances, in the absence of any concealment of the particulars of income or furnishing of inaccurate particulars of income on the part of the assessee, no infirmity can be found in the impugned order passed by the Tribunal in confirming the order passed by the Commissioner (Appeals) in deleting the penalty under section 271(1)(c) of the Act. In the absence of any infirmity in the impugned order passed by the Tribunal, it is not possible to state that the impugned order gives rise to any question of law much less, any substantial question of law so as to warrant interference. The appeal accordingly dismissed. 8. The ld.AR further submitted relying on decision in the case of DCIT, Circle-3, Surat vs. M/s.Suyog Corporation in ITA No.568/Ahd/2012 for A.Y. 2008-09 to the proposition that the moment the additions have been made in the taxable income of the assessee, even on account of disclosure made by the asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s of section 271(1)(c) in order to levy penalty there must on the amount of tax sought to be evaded by reason of concealment of income. In the facts of the case there is no difference in the return of income and assessed income and taxes paid. Therefore, the provisions of section 271(1)(c) are not attracted. Further, as per Explanation 4 to section 271(1)(c) there is a mechanism for calculation of penalty, according to which the penalty could be calculated with reference to the income of which tax sought to be evaded whereas in the present case the assessee has duly paid taxes along with while filing the return of income, therefore there was no evasion of tax sought to be evaded. The ld.AR also placed reliance on the following decisions in support of contentions i.e. CIT vs. Unique Precured Retraders [2008] 13 DTR (Raj-215), CIT vs SAS Pharmaceuticals [2011] 335 ITR 259 (Del), M/s.Sadbhava Builders vs ITO 1418/Ahd/2008, Ahmedabad Tribunal, CIT Vs. Amit Jain [2013] 351 ITR 74 Del, CIT vs Reliance Petro Products Pvt. Ltd., [2010] 322 158 ITR (SC) and other as per their comes law paper book. 11. We have heard the parties and perused the material available on record and g ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... particulars have been concealed would indicate that it is only the addition or disallowance to the total income that would represent the income for the purposes of levy of penalty within the meaning of Explanation-1 to section 271(1)(c). In other words, if no addition or disallowance is made in computing total income then there will not be any income which can be deemed as income in respect of which particulars have been concealed. Clause (c) to explanation-4 to section 271(1)(c) explains the amount of tax sought to evaded. It means the difference between tax on the total income assessed and the tax that would have been chargeable at such total income is reduced by the amount added. Since in the present case, the AO has not made any addition in the returned income, question of working out any tax sought to be evaded would not arise. For the sake of convenience we reproduce Explanation - 4 to section 271(1)(c) as under :- Explanation-4 For the purposes of clause (iii) of this sub-section, the expression the amount of tax sought to be evaded - [(a) in any case where the amount of income in respect of which particulars have been concealed or inaccurat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... start only after return of income is filed by the assessee or after issuance of statutory notice against him such as under section 142(1) or u/s 143(2). Carrying out survey under section 133A is not at all any proceedings. Proceedings as used in section 271(1)(c) are statutory proceedings initiated against the assessee either by issuance of statutory notice or after filing of return of income. Survey u/s.133A or search under section 132 or issuance of notice u/s.133(6) for example, are only means of collecting evidence against the assessee and are not equivalent to statutory proceedings. Another criteria of finding out ks to be seen whether it can be brought to a legal conclusion against the assessee by determining his right or liability. Merely carrying out survey under section 133A does not create any liability against the assessee which is created only through assessment proceedings or penalty proceedings. Therefore, the ld.DR is incorrect in his submission that survey being a proceedings and AO has discovered concealment during survey, therefore, the assessee is liable for penalty under section 271(1)(c). 15. We further find support from the reliance placed by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er : 3. This court notices that the Tribunal, while upholding the order of the Appellate Commissioner, relied upon the decision in CIT v. Reliance Petroproducts (P.) Ltd. [2010] 322 ITR 158/189 Taxman 322 (SC). Furthermore, the record reveals that the amount in question, which formed the basis for the Assessing Officer to levy penalty-was in fact truthfully reported in the returns. In view of this circumstance, that the Assessing Office chose to treat the income under some other head cannot characterize the particulars or reported in the return as an inaccurate particulars or as suppression of facts. The court is also conscious of the decision of the Supreme Court in Calcutta Discount Co. Ltd. v. ITO [1961] 41 ITR 191 where it was held that it is up to the Assessing Officer to interpret the return and discern as to which head of income the amount had to be brought to tax 17. Therefore, in the light of ratio of above decision no penalty is leviable wherein even in the change of heads of income is made by the AO during the course of assessment proceedings. 18. The ld.DR has relied on the judgment of Mak Data Pvt. Ltd. vs. CIT [2013] 358 I ..... X X X X Extracts X X X X X X X X Extracts X X X X
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