TaxTMI 
TaxTMI 
2018 (2) TMI 1203
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.... "1. Under the facts and circumstances of the case and in law, the order 29.06.2012 passed by the Learned Assessing Officer u/s 271(1)(c) of the Income Tax Act, 1961 without striking off the irrelevant portion of the printed show cause notice viz., furnishing inaccurate particulars of income or concealed particulars of such income is bad in law. 2. Under the facts and circumstances of the case and in law, the order passed by the learned Assessing Officer under section 271(1)(c) of the Act is against the principles of judicial consistency and therefore, bad in law." For admission of additional grounds 2 The ld. AR of the assessee has submitted that the additional grounds have been raised by the assessee first time before this tribunal. However, this ground is purely legal in nature and goes to the root of the matter. Therefore, the additional ground may be admitted for adjudication. He has further submitted that for adjudication of the additional ground no fresh material, evidence or facts are required to be investigated and the same may be decided on the basis of the facts which are on record. He has relied upon a decision of Hon'ble Supreme Court in case of....
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....f income. 5.2. The Assessing Officer can initiate the proceedings for levy of penalty on the basis of the grounds as mentioned in the show cause notice issued u/s 274 of the Act. The existence of the ground/conditions as stipulated in section 271(1)(c) is mandatory for initiation of proceedings for levy of penalty u/s 271. 5.3. Therefore, the notice issued u/s 274 of the Act should specifically state the grounds mentioned in section 271 (1)(c) i.e whether it is for concealment of income or furnishing of inaccurate particulars of income. The AO issued a notice u/s 274 in printed Performa without specified the grounds of penalty committed by the assessee. The requirement of law is not specified. 5.4. The ld. AR thus contended that the notice issued u/s 274 in the case of the assessee is The liable to be quashed. In support of the contention he has relied upon the decision of Hon'ble Karnataka High Court in case of CIT vs. Manjunatha Cotton & Ginning Factory (2013) 359 ITR 565 as well as the decision of Hon'ble Jurisdiction High Court dated 06.12.2016 in case of Sheveta Construction Company Pvt. Ltd., vs. ITO in ITA No. 534 of 2008. 6. On the other hand, ld. DR has submitt....
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....rn of income filed in response to notice u/s 153A of the Act therefore, it is note a case of any addition made by the AO during the course of assessment proceedings. There is no quarrel that it is incumbent upon the AO to specify the ground and default committed by the assessee on which the penalty was proposed to be levied u/s 271(1)(c). As per section 271(1)(c) a penalty can be levied either on the ground of concealment of particulars of income or on the ground of furnishing inaccurate particulars of income. 7.2. If an addition is made by the AO then said action of the AO may lead to either furnishing of inaccurate particulars of income by the assessee or concealment of the particulars of income and therefore in such a situation if the AO proposed to initiate the proceedings u/s 271(1)(c) then he is required to specify whether the assessee has committed the default of concealment of particulars of income or furnishing inaccurate particulars of income. We find that the Assessing Officer has not specifically stated in the show cause notice as what default was committed by the assessee. However, the question of the specifying the default arises only when the addition in the incom....
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....category of concealment of particulars of income as the assessee did not file any return of income prior to the date of search and time limit for filing the return of income u/s 139(1) was already expired on 31st July, 2009 much prior date of search. Accordingly, the amount surrendered during the course of search and seizure action and subsequently offered to tax in the return of income filed post search would fall in the category of concealment of particulars of income. When there is only one possibility of default and not the possibility of either of two defaults then the requirement of specifying the default does not arise. The assessee himself surrendered and offered the said amount to tax. Therefore, it is best known to assessee what default he had committed such default. Accordingly in the peculiar facts of the case the decision relied upon by the ld. AR are not applicable. Hence the income surrendered by the assessee on account of investment in properties in nothing but undisclosed income and therefore, the question of specifying the default by the AO would not arise as it was very well to none to the assessee that it is concealment of particulars of income. Accordingly the ....
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....on could be treated as bona fide explanation. 11. On the other hand, ld. DR has submitted that during the course of search and seizure action cash jeweler, stock entry, valuables documents, books of accounts and loose papers were found and seized from the premises of the members of Sodhani Sweets Group of which assessee belongs. Based on the material found, during the search undisclosed investment in the property was detected and accordingly the assessee surrendered an amount of Rs. 10,000,00/- as undisclosed income. Therefore when the assessment was completed on the basis of the search and seizure action then explanation 5A of section 271 (1)(c) is applicable in the case of the assessee. 12. The ld. DR has relied upon the orders of the authorities below and the 3rd Member decision of this Tribunal in case of Grass Field Farms & Resorts Pvt. Ltd. vs. DCIT(TM/[2016] 159 TTD 31 and submitted that as per the majority view of the Tribunal the explanation 5A to section 271(1)(c) is applicable in the case where the assessee has surrendered the undisclosed income detected during the course of search and seizure action. He has also relied upon the decision dated 31st Oct, 2012 of Cha....
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....culars of his income or furnished inaccurate particulars of such income.] 14. The undisclosed income was detected/discovered in the form of investment in he property and therefore the assessee was found to be owner of assets value of which was not disclosed and consequently it falls in clause (i) to explanation 5A to section 271 (1)(c). Further there is no dispute that assessee admitted the acquisition of property by utilizing his income from the previous year ended before the date of search and accordingly the assessee surrendered the said amount for the assessment year under consideration. Since assessee did not file return of income before the date of search notwithstanding the said income declared in the return of income furnished after the date of search, for purpose of levy penalty u/s 271(1)(c) the assessee shall be deemed to have concealed the particulars of income to the extent of such amount which was surrendered and offered to tax in the return of income filed post search. An identical issue was considered by the Coordinate Bench of this Tribunal in case of Grass Field Farms & Resorts (P) vs. DCIT wherein the Hon'ble 3rd Member agreeing with the view of the Judicial M....
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....he statement given during the course of survey have no value in the eyes of law, it has no application for the simple reason that if the Assessing Officer proceeding to impose penalty simply on the basis of statement recorded during the course of survey, the argument of the Id. Counsel for the assessee may be acceptable. But, in the present case, during the survey, the Department found incriminating material, statement of the employees and Directors of the company were recorded and thereafter, the Directors of the assessee company have calculated the concealed income and filed the revised return on 28.03.2008. Under these facts and circumstances, the case law relied on by the assessee in the case of Khader Khan Son (supra) have no application. 32. So far as argument of the assessee is concerned, there is no material available on record with regard to on money payment, during the course of survey certain incriminating documents were found and the same were brought to the notice of the Directors of the company and the Directors of the company themselves accepted there is undisclosed investment. Therefore, the argument of the assessee is rejected. 33. Further, as arg....