TMI Blog2021 (5) TMI 437X X X X Extracts X X X X X X X X Extracts X X X X ..... 271(1)(c) of the Income Tax Act, 1961 ; in short the Act . 2. We notice at the outset that assessee s instant appeal suffers from 353 days delay in filing. To this effect, the assessee filed petition for condonation of the said delay therein, inter-alia that due to the ill health during the relevant period, caused the impugned delay in filing of the instant appeal. Case law Collector Land Acquisition vs Mst. Katiji Ors, 1987 AIR 1353 (SC) and University of Delhi Vs. Union of India, Civil Appeal No. 9488 9489/2019 dated 17 December, 2019, hold that such a delay; supported by cogent reasons, deserves to be condoned so as to make way for the cause of substantial justice. We accordingly hold that assessee s impugned delay of 353 days is neither intentional nor deliberate but due to the circumstances beyond its control. The same stands condoned. Case is now taken up for adjudication on merits. 3. Briefly the facts of the case are that assessee, in the business of wholesale trade in electrical goods in the name of M/s Sri Trinetra Electricals, filed his return of income for the AY 2009-10 on 30/09/2009 declaring a total income of ₹ 3,35,670/-. Subsequently, the case was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... raising a ground that the levy of penalty is not maintainable since the notice issued u/s 274 rws 271(1)(c) dated 28/12/2011 does not contain if the proceedings are initiated for concealment of particulars of income or furnishing of inaccurate particulars of such income. Also raised a ground on merit that the levy of penalty u/s 271(1)(c) of the Act is not justified since the substantial part of the additional tax liability of ₹ 4,96,945/- is covered by corresponding TDS of ₹ 4,21,811/- for which credit was not claimed in the return of income. 6. None appeared on behalf of the assessee at the time of hearing. However, we proceed to decide the appeal after hearing the ld. DR and the facts available on record. 7. After hearing the ld. DR and perusing the material on record as well as the orders of revenue authorities, we do not want to adjudicate the legal ground raised by the assessee as notice issued by the AO u/s 274 rws 271(1)(c) is not filed on record. 7.1 As regards the ground raised on merits, on going through the orders of authorities below, we observe that penalty has been imposed by the AO on the ground of non-disclosure of the contract works and additi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd during the course of search for levy of the penalty. It was, therefore, submitted that levy of penalty may also be cancelled. The learned CIT(A) on consideration of the submissions of the assessee, cancelled the penalty under this head also. The findings of the learned CIT(A) in para 8 of the appellate order arc reproduced below : 8. I have considered the facts of the case and the basis of penalty imposed by the AO on the issue. It is a matter of fact that the addition made is purely on estimate basis and nothing had been brought on record by the AO which could be termed as evidence to reject the sale price as recorded in the registered document. The AO rejected the various contentions of the appellant for having sold the plot at price lower than the normally expected price by recording his own conclusions and finally proceeding to make the addition by substituting an estimated sale price as against the price recorded in the registered document which was not below the price fixed by the Revenue authorities. The addition so made got confirmed before the CIT(A) in proceedings under s. 264, but the fact remains that the AO even during the penalty proceedings has merely relied ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d during the search itself on 10th Aug., 2006 which is already part of the record. The assessee has paid advance tax of ₹ 5 lakhs each on due dates and the same has also been the part of the record and thus assessee paid ₹ 15 lakhs as advance tax on the surrendered income which is also shown in the original return of income filed on 3rd September 2007 under s. 139(1) of the IT Act (paper book-2). Paper book-04 is revised return in which assessee has specifically mentioned the surrender of ₹ 45 lakhs upon which advance tax has also been paid. The cash flow chart and balance sheets were filed before the AO and at the assessment stage on 16th Dec, 2008 i.e. before the order sheet dt. 24th Dec, 2008 pointed out by the learned Departmental Representative in which also the assessee has specifically declared the surrendered income of ₹ 45 lakhs. The copy of the same is filed at pp. 6 and 7 of the paper book reflecting surrendered amount of ₹ 45 lakhs. The assessee never retracted from the surrender of ₹ 45 lakhs at any stage. There was no query raised by AO regarding non-inclusion of ₹ 45 lakhs till 16th Dec, 2008 though the proceedings started ea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 08, therefore, it is a case of bona fide error and not a case of concealment of income. He has submitted that assessee has surrendered amount during the course of search under s. 132(4) r/w cl. (2) of Expln. 5 to s. 271(1)(c) of the Act which has been accepted, therefore, penalty is not leviable. Learned counsel for the assessee also submitted that none of the judgments cited by the learned Departmental Representative are applicable because in all these cases there was a enquiry by the Department and all the facts were confronted to the assessee and thereafter the assessee made the surrender. Thus, the facts are entirely different. As regards the penalty on sale of property, he has submitted that merely because the sale rate was enhanced by the AO as against the sale deed is no ground to prove that assessee has concealed the particulars of income or filed inaccurate particulars of income. 9.We have heard the rival submissions and considered the material available on records It is not disputed that assessee has made surrender of ₹ 45 lakhs during the course of search on 10th Aug., 2006 itself and surrender was within the knowledge of the Revenue Department. The assessee n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of ₹ 45 lakhs was already disclosed before the AO prior to the assessment as well as the assessment stage before the AO detected any mistake. Revised return filed by the assessee under s. 139(5) was also valid return of income filed in accordance with law. Thus, it is not a case of detection of anything by the AO prior to filing of the revised return by the assessee. The AO was having all facts and information on record of surrender of ₹ 45 lakhs and payment of tax on the same before filing the original return of income. 9.1 The Hon'ble Madras High Court in the case of CIT v S.I. Paripushpam [2001] 249 ITR 550/118 Taxman 844 held that 'there was no evidence on the basis of which the Department could contend that the assessee had fraudulently or wilfully or negligently concealed the income. The assessee's agreeing to the addition of the amount by itself did not establish fraud or wilful neglect without something more. Hence the Tribunal was justified in cancelling the penalty levied under s. 271(1)(c) of the IT Act, 1961.' 9.2 The Hon'ble Gujarat High Court in the case of CIT v. Union Electric Corpn. [2006] 281 ITR 266 held that &# ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t. yr. 1989-90 under s. 139(1) had not expired on the date of search and the assessee having disclosed the amount of ₹ 1,25,000 in the return filed for the asst. yr. 1989-90 and paid all taxes could not be held to have concealed the particulars of income which were liable to penalty under s. 271(1)(c). The Tribunal was, thus, right in upholding the cancellation of penalty on this amount as well'. 10. Considering the above discussion and the case laws, it is clear that all the facts of surrendered income and actual surrender of ₹ 45 lakhs and payment of tax thereon were within the knowledge of the Revenue Department and were in fact disclosed by the assessee to the Revenue Department prior to the order sheet dt. 24th Dec, 2008. It appears to be inadvertent mistake on the part of the assessee in not mentioning ₹ 45 lakhs in the original return of income, therefore, the decision in the case of Price Waterhouse Coopers (P) Ltd. (supra) delivered by Hon'ble Supreme Court squarely applied in favour of the assessee. The assessee thus would be entitled for benefit of Expln. 5(2) to s. 271(1)(c) of the IT Act. The decisions cited by learned Departmental Repres ..... X X X X Extracts X X X X X X X X Extracts X X X X
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