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TMI Blog2021 (10) TMI 423X X X X Extracts X X X X X X X X Extracts X X X X ..... orded u/s. 131 (1A) of the Act and the said "on money" income was not accounted for in the regular books of account of the assessee on the date of survey?" 2. The Assessee a Partnership Firm was involved in the business of real estate development and construction, where it had come out with a scheme 'Shreedhar Residency' in the first year 20122013. The survey under Section 133 (A) of the Income Tax Act, 1961 ('the Act' hereinafter) was conducted on 09.01.2013 as a part of search operations in Rashmikant Bhatt Group along with other Assessees belonging to the very group. The total disclosure was made of Rs. 20 Cr. Of which Rs. 3.80 Cr. was of the respondent firm. This was offered as an additional income of a year under survey and the return which was filed by the respondent for the Assessment Year 2013-2014 on 29.09.2013. The total income disclosed and declared was Rs. 4,26,92,360/- which was inclusive of the sum of Rs. 3.80 Cr. 3. The Assessment Order under Section 143 (3) of the Act was passed by the DCIT, Central Circle 2, Vadodara on 28.12.2015 without any addition, whereby the return filed by the respondent Assessee was accepted. However, the Assessing Officer had initiated t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... T had rightly followed the decision PRINCIPAL COMMISSIONER OF INCOME TAX-3 vs. R UMEDBHAI JEWELLERS PVT. LTD (supra) where the identical circumstances existed. It was not a case where books were either closed and the return also was not filed as yet. In cases where the income had come to the fore after once the return had been filed by the Assessee, the revenue had an occasion to treat this as the income which was liable to the penalty, but not in the present case. 8. Having heard the learned advocates on both the sides and also having noticed that the survey had taken place on 09.01.2013 as a part of search operation of the entire group and when it chose to disclose additional Rs. 20 Cr., Rs. 3.80 Cr. came to be attributable to the respondent firm. The return was filed under Section 139 of the Act by the respondent for the Assessment Year 20132014 on 29.09.2013, which is after about eight months of the survey which was conducted. The books of account also were not closed and it was not a case of any revised return being filed by the respondent Assessee. In such circumstances, Assessing Officer also had not added any other income for the amount of Rs. 3.80 Cr. had already been dec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e or fringe benefits or the furnishing of inaccurate particulars of such income or fringe benefits. Explanation 1.-Where in respect of any facts material to the computation of the total income of any person under this Act,- (A) such person fails to offer an explanation or offers an explanation which is found by the Assessing Officer or the Commissioner (Appeals) or the [Principal Commissioner or] Commissioner to be false, or (B) such person offers an explanation which he is notable to substantiate and fails to prove that such explanation is bona fide and that all the facts relating to the same and material to the computation of his total income have been disclosed by him, then, the amount added or disallowed in computing the total income of such person as a result thereof shall, for the purposes of clause (c) of this sub-section, be deemed to represent the income in respect of which particulars have been concealed." 7. As noted, the revenue desired to bring in the element of the assessee having furnished inaccurate particulars of its income. The fact that the assessee did make a disclosure of such income in the return filed and the Assessing Officer was not dissatisfied by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... during the course of survey operation earlier conducted in case of assessee's sister concern. The assessee thereupon offered a further sum of Rs. 40.74 lacs to avoid litigation and buy peace. The Assessing Officer accepted such further disclosure and brought the said sum of Rs. 40.74 lacs to tax as income from other source and also initiated penalty proceedings with respect to such sum. When the assessee pressed the clause of making a declaration to buy peace, the matter ultimately reached the High Court which accepted the revenue's plea that the assessee had not offered any explanation about concealment of the income. The High Court thus applied explanation (1) to Section 271(1)(c) of the Act and upheld the penalty. This decision was carried by the assessee before the Supreme Court, which, while dismissing the appeal, observed as under : "9. We are of the view that the surrender of income in this case is not voluntary in the sense that the offer of surrender was made in view of detection made by the AO in the search conducted in the sister concern of the assessee. In that situation, it cannot be said that the surrender of income was voluntary. AO during the course of assessment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Assessing Officer. He, however, instituted penalty proceedings for the additional income surrendered by the assessee. In such background, the question arose whether after the assessee having filed the revised return, could the revenue have imposed penalty without making any additions to the income so returned. The High Court in the said judgment held that since the revised return was filed after detection of concealment of income, penalty under Section 271(1)(c) of the Act would be levied. Likewise, in case of Dr.A. Mohd. Abdul Khadir (Supra) also, the Madras High Court was concerned with the similar situation where the assessee revised his return pursuant to the search operation during which he had admitted to have concealed the income. The Court held that such revised return could not be treated as voluntary return and penalty under Section 271(1)(a) of the Act would be leviable." 10. The case relied upon by the Applicant for penalty is of Prasanna Dugar vs. Commissioner of Income Tax, reported in (2016) 70 taxmann.com 175 (SC) where penalty was imposed for concealment of income. It was a case of a search where Assessee made voluntary disclosure of Rs. 6 Cr. even though no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion before me, as already noted, there was survey at the assessee's premises. During the course of survey, various incriminating documents, including the purchase deed for purchase of agricultural land, were found. The statements of the employees were recorded. On the basis of those documents and statements, it was established that the assessee was recording the purchase of the land at a much lesser value than the actual purchase price. When these facts were confirmed to the director of the company, he admitted to have made the cash payment for purchase of agricultural land which was not recorded in the books of account. He, with the help of those documents, prepared a detailed chart and worked out the unrecorded investment in the land by the assessee company in three assessment years. The revised return wasfiled to include those unexplained investment in the purchase of agricultural land. Therefore, it is a case where the revised return is filed by the assessee after the detection of understatement of purchase price by the survey authorities. It is not a case where the revised return was furnished by the assessee voluntarily to buy peace with the Income-tax Department. In view of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ported in (2017) 79 taxmann.com 425 (Rajasthan) also there was a levy of penalty for the concealment of the income as during the survey operation, at Assessee's business premise, certain incriminating documents were found and impounded. This resulted into undisclosed investment in purchase of agricultural land and other discrepancies. The Assessee sought to file a revised return declaring an additional income offered during the course of survey and therefore, the Assessing Officer made not only the addition, but also levied the penalty under Section 271(1)(c). 12. Facts of the instant case would materially differ from this case of Grass Field Farms & Resorts (P.) Ltd. (supra) where also the question was of filing revised return during the course of the assessment year and income which was disclosed later in revised return had not been declared in earlier return. 13.Adverting to the facts of the present appeal, return was filed after about eight (8) months of conducting of survey and books of accounts were not closed also. In other words, neither it is a case of filing of revised return disclosing undisclosed income nor the case of books of accounts having been closed. Therefore, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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