TMI Blog2020 (9) TMI 1134X X X X Extracts X X X X X X X X Extracts X X X X ..... he impugned order but also restored the penalty on the issue for which no ground was raised in the Grounds of Appeal filed by the Revenue before it. Tribunal ought to decide the Appeal again after giving opportunity to both the parties afresh on the grounds of Appeal raised by the Revenue. We set aside the order passed by Tribunal in respect of penalty under Section 271(1)(c) of the Act and we request the learned Tribunal to decide the Appeal again. - Tax Case ( Appeal ) No. 840 of 2017 - - - Dated:- 15-9-2020 - THE HON'BLE DR. JUSTICE VINEET KOTHARI And THE HON'BLE MR. JUSTICE KRISHNAN RAMASAMY For the Appellant : Mr. G. Baskar For the Respondent : Mr. J. Narayanasamy, Senior Standing Counsel JUDGMENT ( Delivered by DR. VINEET KOTHARI , J ) The Assessee has preferred this Tax Case under Section 260-A of the Income Tax Act aggrieved by the order dated 6.6.2017 for the Assessment Year 2006-2007, restoring the penalty under Section 271(1)(c) of the Act by reversing the order passed by the learned Commissioner of Income Tax (Appeals) in favour of the Assessee by which the learned Commissioner of Income Tax (Appeal) deleted the said penalty. 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... read with section 271(1)(c) of the Income Tax Act, 1961 to be bad in law as it did not specify which limb of section 271(1)(c) of the Act, the Penalty Proceedings had been initiated? 3. The findings of the learned Commissioner of Income Tax (Appeals) in this regard are quoted below for ready reference:- 6. l have carefully considered the facts of the case and the submission made by the ld. AR. I have also gone through the decisions relied on by the ld. AR. I have also gone through the returns of income filed on 30.11.2006 and 12.8.2009. It has wrongly been stated in the penalty order that the appellant had not filed any return of income u/s.139 of the Act. The assessee had e-filed his return for AY 2006-07 on 28.11.2006 declaring income of ₹ 1,01,46,668/-. Subsequently, in response to the notice u/s.153A dated 29.9.2008, it filed return on 12.8.2009 admitting income of ₹ 2,55,13,240/- inclusive of additional income of ₹ 1,53,98,570/- by withdrawing claim of land development charges. In the assessment order, the same was accepted with a further addition of ₹ 13,000/- only u/s.40(a)(ia). Thus, the total income determined was ₹ 2,55,26,240/-. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that case, the assessee had originally filed returns showing meagre income. When, after search action u/s.132, a notice u/s.148 was served on him, he filed revised returns showing higher income. Subsequently, assessment order was passed and the return submitted was regularized u/s.148. In penalty proceedings u/s.271(1)(c), the assessee claimed that he offered additional income to buy peace of mind and avoid litigation. A.O. did not accept the contention and levied penalty which was confirmed by CIT(A). But the ITAT held that the department has not discharged its burden of proving concealment and had simply rested its conclusion on the act of voluntary surrender done by assessee on good faith, and that penalty order could not be levied on such income. On a reference, the Hon'ble High Court held that no penalty could be levied for concealment. The Department preferred appeals to the Hon'ble Supreme Court. The Hon'ble Supreme Court dismissed the appeals holding that no interference with the order of the High Court was called for. (251 ITR 9). There is no reason as to why the ratio of the above decision will not be applicable to the facts of the present case. Here also, a s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rcumstances of the case, the ld. CIT(A) failed to appreciate that the Explanation 5A to the section u/s.271(1)(c) of I.T. Act, clearly attracts in thecase of the Assessee as the additional income of ₹ 1,58,98,570/- was offered in the return of income filed post search and no such income was disclosed in the original return of income filed by the assessee. 5. The learned Tribunal allowed the Appeal of the Revenue by a detailed order, apparently going beyond the grounds raised by the Revenue before it in the Memorandum of Appeal, while restoring the penalty on both the grounds viz., alleged non-disclosure of income and by voluntary surrender of income in the return of income filed by it to the extent of ₹ 1,53,99,000/- which was claimed to be an expenditure for Land Development Charges debited to Profit and Loss Account, which later on, the Assessee did not claim in the revised return filed after issuance of notice under Section 148 of the Act had been issued on 12.8.2009. The learned Tribunal also restored the penalty under Section 271(1)(c) of the Act for the disallowance of ₹ 13,000/- under Section 40(a)(ia) of the Act which was not found in the grounds rai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ase of CIT v. Suresh Chandra Mittal (2001) 251 ITR 9 (SC), wherein, similarly, notice u/s.148 had been issued after search action u/s.132, in response to which the assessee had offered a higher income (refer para 6.1). The penalty, which stands levied on the entire assessed income, would accordingly need to be considered separately for each of the three sums comprising it. While the Revenue maintains that no return of income had been filed prior to 12/8/2009, the ld. CIT(A) has allowed relief to the assessee (on the regular business profit as per it s books of account) on the basis that the same had been duly returned on 30/11/2006. The issue thus turns on a matter of fact, i.e., whether or not the assessee had filed its return of income on 30/11/2006, the only return admittedly furnished by it prior to that u/s.153A on 12/8/2009. It is indeed surprising that there should be any ambiguity and, further, continuing up to the second appellate stage, on such a simple matter of fact. Where the assessee has filed a return on 30/11/2006, the same-would necessarily be receipted, i.e., carry a receipt number and, besides, would have been processed u/s.143(1)(a). Be that as it ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e total income assessed as reduced by the amount of advance tax, tax deducted at source, tax collected at source and self-assessment tax paid before the issue of notice under section 148; (c)... We decide accordingly, with the AO computing the penalty, where no return has been filed on 30.11.2006, allowing credit for the advance tax. 4.2. Next, we may discuss the aspect of levy of penalty on the sum of ₹ 153.99 lacs offered as additional income per the S.153A return. Explanation 5A to S.271(1)(c) of the Act reads as under: 'Explanation 5A --- Where in the course of a search initiated under section 132 on or after the 1st day of June, 2007, the assesses is found to be the owner of,-- (i) any money, bullion, jewellery or other va1uable article or thing (hereinafter in this Explanation referred to as assets) and the assessee claims that such assets have been acquired by him by utilizing (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 represent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y, having been recovered from the allottees by the assessee as a part of the cost, or otherwise charged to them? This is all the more so as the assessee has claimed and been allowed deduction (in computing its regular profit) in respect of expenditure of its business by way of on money paid to the sellers of land, as development charges . How does it, in any case, represent a liability of the assessee? In fact, to the extent the assessee has received money, duly entered in its' books of account, the same is also covered under clause (i), i.e., besides clause (ii), of Explanation 5A. The facts and circumstances of the case are squarely covered by the said provision, even as observed by the Bench during hearing, to no satisfactory answer by the ld. AR. The ld. CIT(A) has in our view completely misled himself in the matter by not considering a direct provision of law, clearly applicable in the facts and circumstances of the case. In fact, that the AO has not referred to it is not relevant in-as-much as the provision of law (section), is to be read along with Explanation appended thereto, with there being no estoppel against law (also refer: CIT v. Durga Prasad More (1971) 82 ITR ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ffect; rather, whatsoever. And, consequently, absence of any finding by any authority. The matter would accordingly have to go back to the file of the AO to determine as a matter of fact whether the amount disallowed outstands, in whole or in part, as at the year-end, so that to the extent it outstands, no penalty would be exigible. Where, and to the extent not, an absence of any explanation would justify the levy of penalty under 271(1)(c) We decide accordingly. 7. We have gone through the order of the learned Tribunal, which was almost fully read out by the learned counsel for the Assessee before us. 8. We are of the opinion that the matter deserves to be remanded back to the learned Tribunal as it seems, prima facie, that the learned Tribunal has not only committed some factual errors in respect of filing of return of income by the Assessee but also invoked Explanation 3 and 5A of Section 271(1)(c) of the Act with respect to the alleged non-filing return of income by the Assessee in pursuance of notice issued after the Search which took place in the business place of the Assessee and such a revised Return was filed by the Assessee voluntarily surrendering such income of ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
