TMI Blog2021 (4) TMI 666X X X X Extracts X X X X X X X X Extracts X X X X ..... rial was found during the curse of search relating to the alleged surrender of income made by the assessee in the Income Tax Return. The assessee suo moto offered the additional income in the return and paid taxes there on. It is also an established fact in the instant case that Ld. A.O. was not sure that which assessee has concealed the particulars of income or furnished inaccurate particulars of income. Even though the share application money was received by M/s. Exotic Exports P Ltd. and duly reflected in its books of accounts but Ld. A.O. accepted the additional income offered by the assessee in his individual capacity and levied the penalty also. Simultaneously the Ld. A.O. also made addition in the hands of M/s. Exotic Exports P Ltd. for the similar amount of share application money and initiated the penalty proceedings. In the given facts and circumstances itself the revenue fails to succeed and the action of initiating penalty by Ld. A.O. is unjustified. No incriminating material was found during the course of search relating to the additional income offered by the assessee during the course of search which was subsequently honoured by disclosing in the return of income ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cords are that the assessee is an individual and belongs to Apollo (NRK) Group of Indore. Major source of his income are from civil contract, colonizer and builder. Search and seizure operation u/s. 132 of the Act were carried out on Apollo Group Indore including the assessee on 21.9.2012. During the search proceedings assessee was asked to explain the source of share application money of ₹ 3.69 crores given by M/s. Airen Aditya Dev P. Ltd. to M/s. Exotic Exports P. Ltd. (where the assessee is the Director and share holder). No incriminating material relating to the alleged transaction was found during the course of search. Still the assessee accepted to offer the alleged amount to tax and the same was included in the total income of ₹ 4,31,58,695/- declared in the Income Tax Return for Assessment Year 2009-10 filed in compliance to the notice u/s. 153A on 30.12.2014. The assessment u/s. 153A r.w.s. 143(3) of the Act was completed on 24.03.2015 accepting the returned income. During the course of assessment proceedings itself Ld. A.O. initiated the penalty proceedings u/s. 271(1)(c) of the Act for the additional income offered in the Income Tax Return. Show cause notice ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ting to ₹ 1,43,45,000/- in AY 2009-10 u/s. 271(1)(c) is Deleted. Therefore, the appeal on these grounds is Allowed. 6. Now the Revenue is in appeal before the Tribunal challenging the finding of Ld. CIT(A). 7. Ld. Departmental Representative vehemently argued supporting the order of Ld. A.O. and also submitted that if the search u/s. 132 of the Act had not taken place the assessee would have not offered the additional income to tax. 8. Per contra Ld. Counsel for the assessee referring to the paper book running page 1 to 180 filed on 30.7.2020 and also supporting the order of Ld. CIT(A) submitted that the penalty proceedings needs to be quashed as legal ground being bad in law since specific charge was not mentioned in the show cause notice as held by Hon'ble jurisdictional High Court in the case of CIT V/s. Kulwant Singh Bhatia in ITA No. 9 of 2018 (M.P) dated 9.5.2018. Similar view was taken by this Tribunal in assessee's own case for Assessment Years 2007-08, 2008-09, 2010-11, 2012-13 2013-14 ITA Nos. 85 to 90/Ind/2017 dated 10.1.2019. 9. With regard to the merit of the case Ld. Counsel for the assessee submitted that no incriminating material was fou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ,00,000/- totaling to ₹ 4,22,00,000/- as additional income and the same was duly disclosed in the Income Tax Return filed on 30.12.2014. The returned income was accepted by the Ld. A.O. as assessed income. The Ld. A.O. initiated the penalty proceedings and levied the penalty u/s. 271(1)(c) of the Act on the additional income offered at ₹ 4,22,00,000/-. 11. Now the question before us are that whether under given facts the action by Ld. A.O. of levy of penalty u/s. 271(1)(c) of the Act was justified on legal ground as well as on merits . 12. Though it is the revenue's appeal but in the finding of Ld. CIT(A) the assessee's appeal has been allowed both on legal and merits, therefore adjudication about the legality of penalty proceeding is necessary at this juncture. 13. We will first take up the legal ground. We find that following show cause notice was issued to the assessee:- To, Shri Deepak Kalra, 6, Shriram Nagar, Indore 452001 NOTICE UNDER SECTION 274 READWITH SECTION 271(1)(c) OF THE INCOME TAX ACT, 1961 Whereas in the course of proceedings before me for the A.Y. 2008-09 it appears to me that you:- have concealed the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Kumar Yadava) Dy. Commissioner of Income Tax (Central)-1, Indore 7. The Hon'ble jurisdictional High Court in the case of PCIT-I vs. Kulwant Singh Bhatia (supra) in paras 9 to 11 has held as under:- 9. Considering the aforesaid, the Tribunal has held that the penalty levied under Section 271(1)(c) of the Act of 1961 is not sustainable in law, as no specific charge was levied in penalty show-cause notices and allowed the appeal no ITA (Appeal) 414/Ind/2012 and other five appeals. 10. It is submitted that the provision of Section 271(1)(c) together with Explanation 5(A) brings the assessee liable for imposition of penalty in respect of additional income, which has been offered following the search and the Assessing Officer is satisfied that it is a fit case for initiation of penalty proceedings under Section 271(1)(c) and 271(AA) of the Act of 1961. The learned Tribunal has committed an error in allowing the appeal and setting aside the well reasoned order of penalty. She also submits that the ITAT erred in not considered the satisfaction recorded by the Assessing Officer. She during the course of the arguments very specifically admitted that tax effect in this ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... like to deal with the merits of the case. no incriminating material was found during the curse of search relating to the alleged surrender of income made by the assessee in the Income Tax Return. The assessee suo moto offered the additional income in the return and paid taxes there on. It is also an established fact in the instant case that Ld. A.O. was not sure that which assessee has concealed the particulars of income or furnished inaccurate particulars of income. Even though the share application money was received by M/s. Exotic Exports P Ltd. and duly reflected in its books of accounts but Ld. A.O. accepted the additional income offered by the assessee in his individual capacity and levied the penalty also. Simultaneously the Ld. A.O. also made addition in the hands of M/s. Exotic Exports P Ltd. for the similar amount of share application money and initiated the penalty proceedings. In the given facts and circumstances itself the revenue fails to succeed and the action of initiating penalty by Ld. A.O. is unjustified. 17. We also observe that the Hon'ble High Court of Andhra Pradesh in the case of V.V. Projects and Investments Pvt. Ltd. in similar set of facts held th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Bhandari Construction Company, DCIT, ITAT, Pune Bench held that so far as the addition regarding loan obtained from Mr. Soni is concerned, it is a fact that the assessee has admitted and not contested the' addition in the quantum appeal. The loan obtained from Mr. Soni was already reflected in the balance sheet 'filed alongwith the original return of income which was filed prior to the data of search. Merely because the assessee did not contest the addition and accepted the same, penalty u/s. 271(1)(C) of the Income Tax in the given facts and circumstances of the case is not leviable:. Penalty is leviable only if any incriminating material is found during the course of search. 18. In almost identical facts similar view was taken by the Coordinate Bench, Kolkata in the case of DCIT V/s. M/s. Shree Salasar Properties Finance Ltd. IT A No. 1081/Kol/2013 order dated 15.4.2016 (supra) and relevant extract of the finding of Tribunal is reproduced below which has been arrived at after relying on the judgment of Hon'ble Apex Court in the case of Sudharshan Silks Sarees V/s. CIT (2008) 300 ITR 205 and other judgments of Coordinate Benches:- 8.4. From the above defini ..... X X X X Extracts X X X X X X X X Extracts X X X X
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