TaxTMI 
TaxTMI 
2016 (9) TMI 9
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....ing the penalty levied by the AO u/s 271(1)(c) of the IT Act of Rs. 1,99,35,135/-? (b) Whether the Hon'ble ITAT is right in law and on facts of the case by not following the decision of the Hon'ble Apex Court in the case of MAK Data (P) Ltd. v. CIT (38 Taxmann.com 448) and the decision of the Madras High Court in the case of CIT v. Dr.A. Mohd. Abdul Khadir (260 ITR 650)? 2. Brief facts are as under : 2.1 The respondent - assessee is a company engaged in the business of trading in gold, silver and diamond jewelery. The assessee company was incorporated during the financial year 2009-2010. A survey operation under Section 133A of the Income-Tax Act,1961 (for short 'the Act') was conducted in case of the company on 1.7.2010. During th....
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....ssee's appeal holding that in such a case no penalty can be imposed. Hence, the present Tax Appeal by the revenue. 3. Learned counsel, Mr.Nitin K. Mehta for the department submitted that the assessee had made a disclosure of having received bogus share application money of Rs. 5.86 crores. It was only after the survey, that the assessee filed a return in which such income was also admitted. The material on record would clearly suggest that but for the survey the assessee would never have offered such income to tax. The finding of the Assessing Officer as well as CIT (Appeals) to this effect were not reversed by the Tribunal. That being the position, the penalty under Section 271(1)(c) of the Act was leviable. He relied upon the decision ....
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....y. Clause (c) of sub-section (1) of Section 271 of the Act provides that if the Assessing Officer during the course of any proceeding under the Act is satisfied that any person has concealed the particulars of his income or furnished inaccurate particulars of such income, he may direct such person to pay by way of penalty which shall not be less than, but which shall not exceed three times the amount of tax sought to be evaded by the reason of concealment of particulars or furnish inaccurate particulars of such income. Relevant provision or Section 271 of the Act reads, thus; "271.(1) If the Assessing Officer or the Commissioner (Appeals) or the[Principal Commissioner or] Commissioner in the course of any proceedings under this Act, is s....
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....e 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 such disclosure is not in dispute. The assessee having filed the return by the due date for filing return, in which such income was also offered to tax, the question of assessee having furnished inaccurate particulars of the income would not arise. 8. It may be that the assessee was subjected to search operation before filing of the return and it may also be that the revenue has sufficient material at its command to argue that but for the survey operation the assessee would not have disclosed such income. However, these are not the grounds on which t....
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....reme Court in case of MAK Data (P) Ltd. (supra) was based on different set of facts. It was a case where the assessee had filed a return of income for the Assessment Year 2004-04 declaring total income of Rs. 16.17 lacs. During the course of assessment proceedings, the Assessing Officer confronted the assessee with certain materials collected 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 assess....
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....f the assessment proceedings. Consequently, it is clear that the assessee had no intention to declare its true income. It is the statutory duty of the assessee to record all its transactions in the books of account, to explain the source of payments made by it and to declare its true income in the return of income filed by it from year to year. The AO, in our view, has recorded a categorical finding that he was satisfied that the assessee had concealed true particulars of income and is liable for penalty proceedings under Section 271 read with Section 274 of the Income Tax Act, 1961." 11. The vital difference in the aforesaid case, thus, was that the assessee had already filed a return disclosing an amount of Rs. 16.17 lacs. It was only ....