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TMI Blog2018 (6) TMI 1678X X X X Extracts X X X X X X X X Extracts X X X X ..... deleted. 3. The issue raised in the present appeal is against levy of penalty under section 271(1)(c) of the Act at Rs. 2,20,617/-. 4. Briefly, in the facts of the case, the assessee was engaged in the business of trading in building / construction material of tiles. The assessee had furnished the return of income declaring total income of Rs. 8,70,514/-. Survey action under section 133A of the Act was carried out in the case of assessee. During the course of survey action, the Assessing Officer had duly inventoried the physical stock found and the business premises of assessee and discrepancies found were confronted to assessee. Thereafter, assessment was completed under section 143(3) of the Act accepting the income returned by the assessee. The income declared by assessee includes declaration of Rs. 8 lakhs covering up all discrepancies, omissions, etc. for the various activities done by the assessee. Penalty proceedings were initiated under section 274 r.w.s. 271(1)(c) of the Act in respect of declaration made by the assessee and show caused the assessee in this regard. In reply, the assessee submitted that as per provisions of the Act, there was no income which could be cons ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ter the survey, revised return of income was filed and the same has been accepted, there is no basis for levy of penalty under section 271(1)(c) of the Act. He further stressed that whether the return of income filed after survey was valid return under section 139(5) of the Act and whether the Assessing Officer made any addition thereafter are the issues to be decided. 8. The learned Departmental Representative for the Revenue placed reliance on the ratio laid down by the Hon'ble Supreme Court in MAK Data (P) Ltd. Vs. CIT (2013) 358 ITR 593 (SC) and the Hon'ble High Court of Karnataka in B. Damodar Vaman Baliga Jewellers Vs. JCIT (2013) 353 ITR 206 (Kar). He further referred to the provisions of section 271(1B) of the Act and pointed out that once the penalty proceedings have been initiated, then there is deemed satisfaction in the case. 9. The learned Authorized Representative for the assessee in rejoinder pointed out that even in the case of deemed satisfaction, it is the requirement of law that specific charge should be raised in the penalty proceedings itself. In respect of reliance on the ratio laid down by the Hon'ble High Court of Karnataka in B. Damodar Vaman Baliga ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e income has been declared by the assessee and has been accepted by the Assessing Officer as such, can the assessee be held liable for levy of penalty for concealment under section 271(1)(c) of the Act?. 11. Before going into jurisdictional issue of recording of satisfaction or not by the Assessing Officer while initiating penalty proceedings, the first part of the issue is levy of penalty under section 271(1)(c) of the Act on the returned income, which includes additional income offered during the course of Survey. The case of assessee before us is once the income returned has been assessed in the hands of assessee as such without making any addition, there is no merit in levying penalty under section 271(1)(c) of the Act. The case of the Revenue on the other hand, is that the additional income has been offered in the hands of assessee pursuant to Survey and in case no Survey was conducted, such additional income would not be offered, hence, it is a fit case for levy of penalty. 12. We find that similar case of levy of penalty on the additional income, which was offered in the return of income and whether the same was liable for levy of penalty under section 271(1)(c) of the A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... me; or (b) furnished inaccurate particulars of such income. 13. It is not the case of furnishing inaccurate particulars of income, as in the IT return, particulars of income have been duly furnished and the surrendered amount of income was duly reflected in the IT return. The question is whether the particulars of income were concealed by the assessee or not. It would depend upon the issue as to whether this concealment has reference to the IT return filed by the assessee, viz., whether concealment is to be found in the IT return. 14. We may, first of all, reject the contention of the learned counsel for the Revenue relying upon the expression "in the course of any proceedings under this Act‟ occurring in sub-s. (1) of s. 271 of the Act and contending that even during survey when it was found that the assessee had concealed the particular of his income, it would amount to concealment in the course of "any proceedings‟. The words "in the course of any proceedings under this Act‟ are prefaced by the satisfaction of the AO or 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. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed." 14. Another facet which has to be considered is that the additional income was offered during the course of Survey, which was conducted at the premises of assessee. However, it was the Assessing Officer who initiated penalty proceedings against the assessee and levied the same. The Hon‟ble Delhi High Court has categorically laid down that where the Assessing Officer had not recorded any satisfaction during the course of Survey, the decision to initiate penalty proceedings being taken while making the assessment order, then it was held Thus, the expression "in the course of any proceedings under this Act could not have the reference to survey proceedings, in this case". Since the assessee had made complete disclosure in the return and surrendered the amount for the purpose of tax, the Hon‟ble High Court held that there was no such concealment of non-disclosure and the assessee was held to be not liable for levy of penalty. Applying the said proposition to the facts of the present case, we hold that the assessee is not liable to 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 rev ..... X X X X Extracts X X X X X X X X Extracts X X X X
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