AI Drafter 
TaxTMI 
TaxTMI 
2005 (5) TMI 549
X X X X Extracts X X X X
X X X X Extracts X X X X
....served on the assessee on 13-2-2002. 3. Meanwhile a survey action was conducted under section 133A in the business premises of the assessee on 15-5-2002. In the course of survey action the assessee agreed with the authorized officer that the conditions necessary for claiming deduction under section 80-IB were not complied with and, therefore, the said deduction claimed by the assessee was not in accordance with law. A statement to this effect was recorded under section 131 from the assessee in the course of survey. 4. Soon after the statement was given by the assessee in the course of survey, the assessee filed a revised return of income on 7-3-2002 wherein a total income of Rs. 45,40,591 has been returned as a result of the disclaimer of deduction under section 80-IB. The assessment was completed under section 143(3) on 9-2-2004 accepting the said revised income. 5. The Assessing Officer further held the view that there was wilful attempt on the part of the assessee to conceal the income by furnishing inaccurate particulars of income and thereby claiming deduction under section 80-IB without eligibility. Therefore, he came to an opinion that there is a case of concealment....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... the claim could be disallowed. Depending upon the facts and circumstances of the case, the action of the assessing authority may be valid. But such circumstances leading to denial of deduction did not automatically endorse consequential view that the claim made by the assessee amounted to concealment of income or furnishing of inaccurate particulars. The distinction between the assessment proceedings and the penalty proceedings should be clearly demarcated before coming to conclusions under the above two different situations. 10. The learned CA submitted that as far as the present case is concerned, the assessee was in fact engaged in the business of manufacturing of glow signboards. The signboards are to be erected at various places according to the directions of the customers. When the survey action was conducted at the factory premises at Silvassa, many of the employees of the assessee were in fact attending various assignments at different sites. Therefore, the assessee could not produce the required number of employees at the time of survey. Even though the manufacturing was carried out at the place of Silvassa, the real activities were spread over at different places and ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....133 if the Assessing Officer believed that the claim was not in order. Therefore, the statement of the assessee made in the course of survey proceedings should not be isolated and singled out as a ground to impose penalty on the assessee. 13. The learned CA submitted that the assessing authority has grossly erred in imposing the penalty only on the ground of admission of the assessee in a statement recorded under section 131. The assessing autho-rity while alleging a case of furnishing of inaccurate particulars or concealment of income should have fortified the case independent of the statement given by the assessee under section 131. The learned CA filed before us a paper book containing copies of various documents filed before the lower authorities such as statement of accounts, copies of electricity bills pertaining to factory premises at Silvassa, copies of transport bills, copies of telephone bills, copies of challans used for paying excise duty, registration particulars under Directorate of Industries, Dadra & Nagar Haveli, etc. The learned CA submitted that the claim was made by the assessee on the basis of the above particulars and details which were filed before the ass....
X X X X Extracts X X X X
X X X X Extracts X X X X
....s rea should be established. 17. In the present case, the assessee had in fact claimed deduction under section 80-IB. Thereafter, in a survey operation carried under section 133A, the assessee made a statement, which was detrimental to himself. He admitted that the claim made under section 80-IB was not fully supported. Therefore, he withdrew the claim and filed revised return and paid the differential amount of tax. We cannot say that whether there was an understanding between the assessee and the officers at the time of survey to the effect that whether or not the assessee would be subjected to penal action. But at the same breath we cannot rule out the possibility either. It is because the conduct of the assessee after the survey demonstrates a positive approach from his side. The assessee could perhaps, if so advised, have retracted from his statement, if needed be, but did not do so. He abided by his statement and filed revised return and also paid tax on the additional income offered for tax immediately after the survey. The fast and positive response from the assessee reflected in the conduct of the assessee makes out a prima facie case that there was some motivation for ....