TMI Blog2020 (1) TMI 246X X X X Extracts X X X X X X X X Extracts X X X X ..... cted under section 133A of the Act. Concealment of particulars of income or furnishing of inaccurate particulars of income by the assessee has to be in the income tax return filed by it. Even if some discrepancies were found during the survey resulting in surrender of income by the assessee, once the assessee has declared the said income in the return of income filed under section 139(1) of the Act, then the penalty cannot be levied on the surmises, conjectures and possibilities that the assessee would not have disclosed the income but for survey. Accordingly, following the earlier decision of this Tribunal as well as the decision of Hon ble Delhi High Court in case of CIT vs. SAS Pharmaceuticals [ 2011 (4) TMI 888 - DELHI HIGH COURT ] the penalty levied by the AO and confirmed by the ld. CIT (Appeals) in respect of the amount of ₹ 3 crore is not sustainable, the same is deleted.- Decided in favour of assessee. - ITA No. 1087/JP/2019 - - - Dated:- 29-11-2019 - Shri Vijay Pal Rao, JM And Shri Vikram Singh Yadav, AM For the Assessee : Shri Mahendra Gargieya (Advocate) For the Revenue : Shri Varinder Mehta (CIT) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on account of short rental income of ₹ 10,565/- was made by the AO. The AO then initiated the proceedings for levy of penalty under section 271(1)(c) in respect of the income surrendered by the assessee of ₹ 3 crore as well as ₹ 10,565/- the addition made during the course of assessment framed under section 143(3). The assessee objected to the levy of penalty and relied upon various decisions in support of the contention that when there is no addition to the returned income, then the penalty under section 271(1)(c) cannot be levied on the income which was surrendered during the survey prior to the end of the financial year relevant to the assessment year under consideration. The AO did not accept this contention of the assessee and levied the penalty of ₹ 1,03,86,055/- being 100% of tax sought to be evaded. The assessee challenged the action of the AO before the ld. CIT (A) but could not succeed. 3. Before us, the ld. A/R of the assessee has submitted that when the assessee has declared the income of ₹ 3 crores in the return of income filed under section 139(1) of the Act and no addition was made by the AO on this account while complet ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng the entries of unaccounted/undisclosed income of the assessee. Therefore, the surrender was not voluntary but due to the reason of discovery of undisclosed income in the course of survey conducted at the business premises of the assessee. Hence notwithstanding the income declared in the return of income the particulars of the instant income were not accounted by the assessee in the books of account. Therefore, it is a clear case of concealment of particulars of income by the assessee which were detected during the course of survey. He has relied upon the orders of the authorities below. 5. We have considered the rival submissions as well as the relevant material on record. A survey under section 133A of the IT Act was carried out on 4th March, 2016 at the business premises of the assessee. During the course of survey proceedings, a diary was impounded containing certain entries against the names of certain persons. In the statement recorded under section 133A, the assessee surrendered the said income of ₹ 3 crore as recorded in the diary on account of advances to certain persons. In the return of income the assessee declared the said income and offered to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g of inaccurate particulars of such income: Explanation 5A-Where, in the course of a search initiated under section 132 on or after the 1st day of June, 2007, the assessee is found to be the owner of- (1) any money, bullion, jewellery or other valuable article or thing (hereafter in this Explanation referred to as assets) and the assessee claims that such assets have been acquired by him by utilising (wholly or in part) his income for any previous year; or (ii) any income based on any entry in any books of account or other documents or transactions and he claims that such entry in the books of account or other documents or transactions represents his income (wholly or in part) for any previous year, Which has ended before the date of search and,- (a) where the return of income for such previous year has been furnished before the said date but such, income has not been declared therein; or (b) the due date for filing the return of income for such previous year has expired but the assessee has not filed the return, then, notwithstanding that such income ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of search and seizure action under section 132 of the Act and the said deeming provision cannot be applied in the case of survey conducted under section 133A of the Act. When there is no difference in the returned income as well as the assessed income so far as the amount of ₹ 3 crore is concerned, then it would not amount to concealment of particulars of income or furnishing of inaccurate particulars of income in the return of income filed by the assessee. It is settled proposition of law that except in the case of search and seizure where the Explanation 5 or 5A to section 271(1)(c) are applicable, the concealment of particulars of income or furnishing inaccurate particulars has to be considered only in the context of the income declared and particulars furnished in the return of income filed by the assessee. The Coordinate Bench of this Tribunal in case of AO vs. Shri Harbanslal Sethi (supra) while considering an identical issue has held in para 4 as under :- 4. Having considered the rival submissions as well as the relevant material on record, we note that if the assessee has not declared the surrendered income in the return of income and also not filin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cessary that the claimed bona fide belief must be substantiated with some documentary evidence. The claim of bona fide belief can also be substantiated by circumstantial evidence when possibility of documentary evidence cannot be expected. Since the entire process in this case has involved voluntary surrender, there was no question of contest before the first appellate authority which has been made a ground by the A.O. while imposing the penalty. The huge amount of taxes paid which were in department s coffers show that the intent of the assessee was not malafide or else he could have not left it for 2 years in the government account and instead would himself have earned substantial interest on the same. Thus, in the present case it is clear that the payment of taxes, not claiming refund of the same, inadvertent omission of additional income from the computation and subsequent revision through a computation in the course of assessment proceedings show the intention of the assessee to be bonafide and in my humble view, duly covered under the opinion of the courts as discussed above in this order. In the absence of bringing out ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r this concealment has reference to the income-tax return filed by the assessee, viz., whether concealment is to be found in the income-tax 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-section (1) of section 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 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 Assessing Officer or the Commissioner of Income-tax (Appeals). When the survey is conducted by a survey team, the question of satisfaction of Assessing Officer or the Commissioner (Appeals) or the Commissioner does not arise. We have to keep in mind that it is the Assessing Officer 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 ..... 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