AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2017 (1) TMI 108
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....s. 9,84,314/-, besides agricultural income of Rs. 2,40,000/- respectively. However, he did not filed return of income for the assessment year 2012-13. A survey operation u/s 133A of the Income Tax Act, 1961 (hereinafter called as 'the Act') was conducted in the assessee's case on 12.11.2012. The post survey investigation revealed certain cash deposits in undisclosed bank account, unaccounted purchases and suppression of sales, etc. During the course of survey operations, a statement was recorded from the assessee, wherein the assessee has admitted suppression of sales turnover and agreed to disclose said suppressed sales turnover. 3. Consequent to survey, the assessment for the assessment year 2010-11 to 2012-13 has been re-opened by issuing notice u/s 148 of the Act for the reason that income chargeable to tax had been escaped assessment within the meaning of section 147 of the Act. In response to the notice u/s 148 of the Act, the assessee has filed return declaring total income of Rs. 22,09,314/- as against the original income return of Rs. 9,84,314/-, thus admitting additional income of Rs. 12,25,000/- on additional turnover declared to cover up the deficiencies found ....
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..... did not accept the contention of the assessee. After considering the details filed by the assessee held that the assessee himself confessed his concealment of income and furnishing inaccurate particulars by accepting (1) undisclosed bank account belongs to him (2) by filing a revised return (3) admitting unaccounted turnover of Rs. 70 lakhs and offering additional income of Rs. 12,25,000/- (4) by claiming benefit of telescope of unaccounted purchase to undisclosed sales and cash credits. The A.O. further observed that during the course of survey, the department had unearthed suppression of sales turnover and other deficiencies. When these facts were confronted to the assessee, the assessee has came forward to offer additional income, therefore, it is clearly exhibits that the assessee has concealed his particulars of income while filing return u/s 139(1) of the Act for the respective assessment years. Therefore, opined that the assessee has deliberately concealed particulars of income and furnished inaccurate particulars of income to evade payment of taxes and hence, it is a fit case for levy of penalty u/s 271(1)(c) of the Act. The A.O. further observed that the assessee has tri....
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....m the said turnover. It was contended that as the amount of profit was assessed on an estimate basis, there is no concealment referred to in section 271(1)(c) of the Act and accordingly, the A.O. was erred in levying maximum penalty of 300% tax sought to be evaded. 7. The CIT(A) after considering the submissions of the assessee, held that the assessee has concealed particulars of income and furnished inaccurate particulars of income, which is evident from the fact that a revised return was filed much after the issue of notice u/s 148 of the Act and after various enquiries which unearthed several material discrepancies. The A.O. has brought out clear facts that the assessee has suppressed sales turnover and also not disclosed bank accounts for the regular return of income filed for the respective assessment years. Though, the assessee has admitted additional turnover for both the assessment years, the same has been filed after the department found out the discrepancies in the form of unaccounted sales, purchases and bank account. Therefore, it cannot be said that the revised return was filed voluntarily to buy peace with the department. Accordingly, opined that the assessee has con....
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....ing the survey, therefore, voluntary surrender of income to buy peace from the department and also to cooperate with the department for smooth completion of assessment proceedings cannot be considered as concealment of particulars of income or furnishing inaccurate particulars of income. 9. The A.R. further submitted that in so far as credits found in the bank account, the assessee had explained before the A.O. that the sources for the credit found in the bank account are out of withdrawal from his capital account and also part of the amount is out of previous withdrawals from same bank account. Unless the A.O. proves otherwise, the withdrawals are used for acquiring any assets or expended outside books of accounts, the sources available cannot be ignored. Though assessee explained the sources for credits found in the bank account, the A.O. ignored the evidences filed by the assessee and made additions, therefore, it cannot be considered as deliberate concealment of particulars of income or furnishing inaccurate particulars of income. In so far as assessment year 2011-12 & 2012-13 are concerned, the A.R. submitted that most of the additions made by the A.O. have been deleted by th....
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....rchases and suppressed sales turnover, which was found and impounded during the course of survey. When these facts were confronted to the assessee, the assessee has admitted the lapses and agreed to disclose additional income, therefore, opined that it is a fit case for levy of penalty of 300% tax sought to be evaded. It is the contention of the assessee that there is no concealment of particulars of income or furnishing inaccurate particulars of income, as he had surrendered additional income to buy peace and to cooperate with the department for smooth completion of assessment. Though, there is a slight difference in income finally assessed by the A.O. consequent to the findings of the CIT(A), the income finally assessed by the A.O. is mainly because of estimation of sales turnover for the remaining period of 8 months based on the information of 4 months found during the course of survey. It is further contended that he himself had admitted additional income to cover up the deficiencies found in the course of survey and surrendered additional income, therefore, it cannot be considered as concealment of particulars of income or furnishing inaccurate particulars of income which warr....
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....e Act. 13. The question whether there was a reasonable cause for which the requirement of concerned provisions of section could not be complied with is primarily an essential question of fact and it has to be decided in each case on consideration of material placed before the concerned authority. The levy of penalty u/s 271(1)(c) of the Act is not automatic. Before levying penalty, the concerned authority is required to find out that even there was any violation referred to in the said provisions and the same was without a reasonable cause. The initial burden is on the assessee to show that there exists a reasonable cause, which was the reason for the failure referred to in the concerned provisions. Therefore, the assessing officer dealing with the penalty, is to consider whether the explanations offered by the assessee or the person as the case may be and as regards the reason was on account of reasonable cause. 14. In the present case on hand, the assessee has admitted additional turnover to cover up the deficiencies found during the course of survey. The assessee also filed revised returns in response to notice u/s 148 of the Act, admitting additional turnover disclosed during....
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....to be kept in mind that s. 271(1)(c) is a penal provision and such a provision has to be strictly construed. Unless the case falls within the four corners of the said provision, penalty cannot be imposed. Sub-s. (1) of s. 271 stipulates certain contingencies on the happening whereof the AO or the CIT(A) may direct payment of penalty by the assessee. Sec. 271(1)(C) authorizes imposition of penalty when the AO is satisfied that the assessee has either : (a) concealed the particulars of his income; or (b) furnished inaccurate particulars of such income. It is not the case of furnishing inaccurate particulars of income, as in the IT return, particulars of income have been duly furnished and the surrendered amount of income was duly reflected in the IT return. The quest/on is whether the particulars of income were concealed by the assessee or not. It would depend upon the issue as to whether this concealment has reference to the IT return filed by the assessee, viz., whether concealment is to be found in the IT return. The words 'in the course of any proceedings under this Act' are prefaced by the satisfaction of the AO or the CIT('A). When the survey is conducted by a surve....