9911796707
TMI Blog2022 (7) TMI 677X X X X Extracts X X X X X X X X Extracts X X X X ..... olanki with 50% share but the assessee did not file the return of income. In the meanwhile, a survey U/S.133A of the Act was conducted upon Shri Amarsinh Ramubhai Soianki on 12th December, 2011. During the course of survey, statement of Shri Amarsinh Ramubhai Solanki and the assessee was recorded. Both these persons admitted that they had earned income of Rs.50 lakhs by selling property in which the appellant had 50% share. After the survey, the assessee filed his return of income on 31st March, 2012 declaring total income at Rs.13,29,340/- and paid taxes of Rs.3,44,215/- ,as admitted during the course of survey u/s.133A of the Act on 12.12.2011. Assessment order u/s.143(3) r.w.s. 147 of the Act was passed by the AO making additions of Rs.2,16,420/- after disallowing 5% out of expenditure. The AO initiated penalty proceedings u/s.271(1)(c) of the Act upon the total income of Rs. 15,44,760/- determined by the AO. Thereafter the AO levied the penalty amounting to Rs.4,17,700/-, being 100% of the tax on the assessed income vide order dated 27.9.2013. 3. The ld. CIT(A) confirm the penalty with respect to the portion of income relating to capital gain declared by the assessee in his re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fore, the AO is justified in levying penalty under section 271(1j(c) of the Act upon the income of Rs.13,29,340/-. Thus penalty to that extent is confirmed. Regarding the penalty levied upon Rs.2,16,420/- by disallowing expenditure on estimated basis i.e. 5% of the total expenses, it is not found justified for the reason that the additions were made on estimated basis and the AO did not prove conclusively that the appellant is liable for imposition of penalty u/s.271(1)(c) of the Act. Hence, penalty levied upon Rs.2.16,420/- are deleted. This ground of appeal is partly allowed. 4. Aggrieved by the same the assessee has come up in appeal before us raising the following grounds: 1. That the learned CIT(A) -11, Ahmedabad has erred both in law and on the facts while sustaining the penalty u/s 271(1)(c) on returned Income of Rs. 13.29.340/- for the A.Y. 2009-10, which deserves to be deleted. 2. That the penalty u/s 271(1)(c) imposed on declared income of Rs. 13.29.340/- is against the provision of law and therefore it requires to be deleted. 3; That the Ld. CIT(A) has wrongly appreciated the facts while making the decision in para 6 of the appellate order and therefore the penalt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... return of income u/s. 148 of the Act. Ld. Counsel for the assessee contended that it was only on the fulfilment of the above conditions that penalty could be levied for non-filing return of income originally and filing the same only in response to same u/s. 148 of the Act, which was the fact in the present case. Ld. Counsel for the assessee contended that in the present case though the assessee had not initially filed return of income u/s. 139(1) of the Act but the condition envisaged Explanation 3 of no notice being issued either u/s. 142(1) or 148 of the Act was not fulfilled, since notice u/s. 148 of the Act was issued in this limitation period, as provided u/s. 153 of the Act and therefore the assessee was not liable for levy of penalty in the present case. Our attention was drawn to the time line of events as under: Sr. No. Particulars Date of Event 1. Notice U/s 148 was issued in case of Shri Jitendra P. Vaghela 22/07/2011 2. Notice U/s 142(1) was issued in case of assessee 11/11/2011 3. Survey U/s 133A was conducted in case of Amarsingh Ramubhai Solanki 12/12/2011 4. Return Filled against the Notice U/s 148 of the IT. Act, 1961 31/03/2012 5. Time ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3, the assessee should be a nonfiler of return, no return ought to have been filed within the time specified for framing assessment u/s 153 of the Act and no notice u/s 142(1) /148 of the Act should have been issued to the assessee for filing return within this time period. Also the AO should be satisfied that the assessee had taxable income for the said year. The court interpreted that in such eventuality even if the assessee files return after the expiry of time u/s 153 of the Act in response to notice u/s 148 of the Act, he shall be deemed to have concealed particulars of his income and be liable for penalty u/s 271(1)(c) of the Act. The relevant findings of the Hon'ble court at para 10-15 of the order is as under: 10. A plain reading of section 271(1) of the Act shows that if the AO or any of the officers specified under the said sub-section, in the course of any proceedings under the Act is satisfied that any person has concealed particulars of his income or furnished inaccurate particulars of his income, he may direct that such person shall pay penalty in accordance with the provisions of the Act. In the facts of the present case, the failure on the part of the petitioner i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a person, who has not hitherto been assessed to tax under the IT Act, 1961 does not file a return of income for an assessment year voluntarily within the normal period of limitation and no notice under section 142(1) or 148 is issued to him till the expiry of the said period, he will be treated to have concealed his income and penalty will be leviable on him accordingly if he is later found to have had taxable income in that year. Thus, for the purpose of falling within the purview of Expln. 3, firstly a person should not have been previously assessed (that is, a new assessee); secondly, he should have failed without reasonable cause, to furnish return of income for assessment year 1989-90 or any year subsequent thereto within two years from the end of the assessment year concerned; thirdly, that no notice should have been issued to him under section 142(1) or section 148 of the Act till the expiry of the two year period; and lastly, the concerned officer is satisfied that in respect of such assessment year, such person had taxable income, hi such cases, Expln. 3 provides that such person shall be deemed to have concealed the particulars of his income within the meaning of cl. (c) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the petitioner to furnish return of Income within the specified period, therefore, cannot be deemed to be concealment within the meaning of the Expln. 3 to section 271(l)(c) of the Act. 15." hi the light of the aforesaid, it is apparent that the case of the petitioner does not fall within the ambit of Expln. 3 to section 271(1) of the Act and as such, no penalty could be levied on the petitioner under section 271 (l)(c) of the Act for concealment of particulars of his income on the ground that, the petitioner had failed to furnish return of income for the year under consideration. The impugned order, therefore, being contrary to the provisions of the Act, cannot be sustained. 11. In the present case the assessee has demonstrated that the conditions specified in explanation 3 have not been fulfilled. He has pointed out that during the time period u/s 153 of the Act in the present case notice u/s 148 of the Act was issued to the assessee in response to which return was filed by him. The aforesaid fact has remained uncontroverted before us. In view of the same, we hold the issue is squarely covered in favour of the assessee by the decision of the Hon'ble jurisdictional High cour ..... X X X X Extracts X X X X X X X X Extracts X X X X
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