2017 (9) TMI 1396

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....ent firm engaged as builders and developers, was subjected to an assessment u/s 143(3) read with Section 153B(b) for the impugned AY on 30/12/2009. The assessment under question was undertaken consequent to search / seizure / survey action in Patel group of cases on 17/01/2008, assessee being one of group entity. 3. The assesse filed return of income on 30/09/2008 declaring total income of Rs. 5,94,33,881/- which included additional income of Rs. 4,29,96,250/- disclosed/offered by assessee during search. The income was later revised on 27/12/2008 at Rs. 5,92,39,159/-. However, the income was finally assessed at Rs. 5,05,97,208/- after certain adjustments / disallowances. In the present appeal, we are concerned with penalty on addition of....

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....fic concealment or suppression of the receipts and the addition was made purely on estimated basis. Thereafter, Ld. CIT(A) deleted the said penalty by making following observations:- "4.1.1 From the above facts emerging from the record, it is clear that the A.O. has not detected any specific concealment or suppression of the receipts. In fact, the A.O has also not issued any show cause notice quantifying additional income of Rs. 2,20,00,000/-. Under these circumstances, it is very clear that the appellant itself has come forward voluntarily to disclose an additional income of Rs. 2,20,00,000/- to buy mental peace and to avoid litigation with further condition that no penalty should be levied. It is also noticed that the appellant h....

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.... 271AAA in respect of the "on money" charged which clearly reflected two different views of the A.O. himself. It Is now an established legal position that, when two views are possible, penalty u/s 271(1)(c) cannot be imposed. Moreover, the addition made Itself is based on pure estimates and also on voluntary disclosure made by the appellant during the course of assessment proceedings, Therefore, I am of the considered view that it is not the fit case for imposition of penalty u/s. 271(1)(c) as the appellant has neither concealed the particulars of income nor furnished inaccurate particulars of such income within the meaning of section 271(1)(c ), This view also gets support from the decisions relied upon by the Ld. A.R. particularly the dec....

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..../s 274 read with section 271(1)(c) and the grounds on which the penalty has finally been levied. Reliance has been placed on many judicial pronouncements of various higher authorities for the contention that mere defect in the show-cause notice vitiates the penalty proceedings itself. 8. We have heard the rival contention and perused relevant material on record. Admittedly, the penalty has been levied on voluntary surrender made by the assessee during assessment proceedings without there being any cogent material on record. However, since the issue raised by Ld. AR questions the very validity of the penalty proceedings and goes to the root of the matter, we take up the same first. 9. A perusal of quantum assessment order reveals that ....

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....o the grounds / basis for which penalty was being initiated for the reasons sated hereinafter. 10. A perusal of the quantum assessment order reveals that the penalty has been initiated for furnishing of inaccurate particulars of income and concealment of income by invoking both Section 271(1)(c) and Section 271 AAA which altogether operate in different circumstances. Moreover, furnishing of inaccurate particulars and concealment of income as per settled legal propositions, are different connotations and carry different meaning and two separate limbs. The same also becomes clear from the language of show-cause notice which states that the assessee have concealed the particulars of income or furnished inaccurate particulars of income. Fina....

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....followed by the same court in CIT Vs. SSA's Emerald Meadows [ITA NO. 380 OF 2015 23/11/2015] against which special leave petition [SLP] filed by the revenue before Apex Court in CC No.11485/2016 order dated 05/08/2016 was dismissed by the Hon'ble court, finding no merits in the case. Further, Hon'ble Bombay High Court has followed the ratio of same judgment in CIT Vs. Shri Samson Perinchery [ITA No. 1154 of 2014 order dated 05/01/2017] and further Tribunal, in catena of judgment and more particularly in Wadhwa Estate & Developers Vs. ACIT [ITA N0. 2158/Mum/2016 dated 24/02/2017] has taken the same view following the aforesaid judgments. Even in the case of CIT Vs. Smt. Kaushalya [supra], the Hon'ble jurisdictional High Court observed that t....