https://www.taxtmi.com/css/info/rss_sitemap/rss_feed.css?v=1746094055 https://www.taxtmi.com Business/Tax/Law/GST/India/Taxation/Policies/Legal/Corporate Tax/Personal Tax/Vat Law/Legal Information/Tax Information/Legal Services/Tax Services Tax Management India. Com / MS Knowledge Processing Pvt. Ltd. All rights reserved. One stop solution for Direct Taxes and Indirect Taxes https://www.taxtmi.com/caselaws?id=762842 https://www.taxtmi.com/caselaws?id=762842 Penalty u/s 271(1)(c)/271AAB - additional income brought to tax owning to search action - income is assessed on the basis of material seized in search seizure action carried out u/s 132 - addition is buoyed by the declaration on oath u/s 131 of the Act - HELD THAT:- As in the similar facts and circumstance, where the income of the assessee is assessed in variation to income returned, the Hon ble Supreme Court in the case of MAK Data Pvt Ltd [ 2013 (11) TMI 14 - SUPREME COURT] observed that, the explanation to section 271(1) raises a presumption of concealment when income is finally assessed in variation of returned income, and it was in this factual scenario where the income reported by the assessee in the return filed was lower than the income finally assessed and brought to tax, it is held that the penalty was rightly leviable irrespective of the fact whether such variation was on account of voluntary surrender or surrender of income or otherwise. Glaringly, the sum surrender to pay tax on the sum of sub-contracting expenditure sprung out upon respondents failure to prove veracity genuineness which came to light solely on account of search action. Therefore, it is not a case wherein a disclosure was voluntarily made; indeed, it was out of search action. Otherwise, bogus expenditure claimed earlier could have continued to hold field of deduction. In any case, so-called voluntary disclosure/surrender of sub-contract expenditure claimed earlier by furnishing inaccurate particulars of income cannot alter the consequences in the light of decision of the Hon ble Apex Court in the similar facts and circumstances in view of former judicial precedents, irrespective of the fact as to how much of such bogus/sham sub-contact/expenditure has actually been brough to tax in the course of assessment by the Ld. AO, as the same is subject matter of revision under the provisions of law. Given section 274 provides that, no order imposing a penalty shall be made unless the assessee has been heard or has been given a reasonable opportunity of being heard. The requirement of section 274 of the Act since shown complied and remained undisputed, and the penal provisions being a civil liability calling no act of or ingredient for wilful concealment as laid in the case of UOI Vs Dharmendra Textile Processors [ 2008 (9) TMI 52 - SUPREME COURT] the penalty imposed u/s 271AAB also deserves to be sustained on similar observation. Nothing contrary has been shown to us in the present facts which would warrant diversion from the view fortified in K P Madhusudan Vs CIT [ 2001 (8) TMI 8 - SUPREME COURT] MAK Data Pvt Ltd [ 2013 (11) TMI 14 - SUPREME COURT] Apropos, in view of the aforesaid discussion and former judicial precedents (supra) the impugned orders of CIT(A) for AY 2013-14 2014-15 are set-aside in its entirety and for AY 2019-20 to the extent it relates to penalty on unexplained sub-contracting expenditure brought to tax u/s 69C of the Act. The respective orders of penalty are thus restored accordingly. Case-Laws Income Tax Tue, 26 Nov 2024 00:00:00 +0530