TaxTMI 
TaxTMI 
2018 (3) TMI 217
X X X X Extracts X X X X
X X X X Extracts X X X X
....s raised the following grounds of appeal:- 1. On the facts and circumstances of the case and in law, the CIT (A) has erred in upholding the levy of penalty u/s 271(1)(c) when there is no finding either in the Assessment Order or in the Penalty Order that the appellant has concealed any income or furnished inaccurate particulars of income and when the Assessing Officer has failed to record his satisfaction for initiating the penal proceedings. 2. On the facts and circumstances of the case and in law, the CIT (A) has erred in not considering critical admitted facts ..... a) That the returned income filed u/s 153A was accepted and that no addition to income or disallowance of any claim was made. b) That there was no detection of any income during the search proceeding or during post search inquiry or during assessment proceeding. c) That there was no admission of additional income during the search or after the search. d) That there was no seizure of valuables or books of accounts or documents. e) That the apparent voluntarily offered higher income in returns filed u/s 153A, in order to correct, the inadvertent omissions i....
X X X X Extracts X X X X
X X X X Extracts X X X X
....view of subsequent search action on 20.11.2010. The Assessing Officer noted that in the original return of income, the assessee had only declared income from salary. However, in the return of income submitted on 21.09.2012, the assessee had shown income from salary, capital gains and other sources. Since the additional income was offered for taxation only after search action in the case of assessee, penalty proceedings were initiated for concealing income and furnishing inaccurate particulars of income. The Assessing Officer thereafter, vide order passed under section 271(1)(c) of the Act levied penalty on account of concealment of income or furnishing of inaccurate particulars of such income on the part of assessee. It may be pointed out that penalty was levied only on additional income disclosed in the return of income. 5. The CIT(A) has upheld the levy of penalty under section 271(1)(c) of the Act, against which the assessee is in appeal. 6. The learned Authorized Representative for the assessee has filed detailed submissions on the ground that no penalty under section 271(1)(c) of the Act is to be levied. The explanation of assessee in this regard is as under:- "....
X X X X Extracts X X X X
X X X X Extracts X X X X
....g Officer had failed to record satisfaction on one of the limbs of section 271(1)(c) of the Act while initiating penalty for concealment. Further, there is no finding in the penalty order as to which limb the assessee has failed to comply with. 10. We have heard the rival contentions and perused the record. The issue raised in the bunch of appeals is against levy of penalty under section 271(1)(c) of the Act for concealment. In the facts of the case, search under section 132 of the Act was conducted on 20.11.2010 in group cases and the assessee being part of the said group, was issued notice under section 153A of the Act. The assessee in response to notice issued under section 153A of the Act offered additional income which was accepted and assessed as such by the Assessing Officer. The relevant details of income as per original return and income offered in response to notice issued under section 153A of the Act and income assessed in the hands of assessee for the respective years is as under:- Assessment Year Income as per original return Income as per 1st return u/s 153A Income as per 2nd return u/s 153A Income as assessed 2005-06 1,08,900/- 4,63,707/- ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....isclosure was made voluntarily and in good faith. On the basis of said disclosure, the assessee filed the return of income offering sum of Rs. 70,000/- for taxation during assessment year 2008-09. The assessee had not declared the said additional income in earlier return of income and the Assessing Officer imposed penalty under section 271(1)(c) of the Act, which was confirmed by CIT(A). The Tribunal cancelled the same. The Hon'ble High Court on the other hand, held that clause (b) of Explanation 5A to section 271(1)(c) of the Act was not applicable to the case of assessee for the reason that it was not case of assessee that he had not filed the return of income for the assessment year 2008-09. The Hon'ble High Court further held that clause (b) was not applicable to those cases where the assessee had filed the return but did not disclose the income as the present assessee. His case was covered by clause (a). The assessee was not entitled to get the benefit of immunity under clause (b). The Hon'ble High Court further held that where voluntary disclosure was made by the assessee and where the statement was not extorted from him, then meaning of expression 'voluntary' was elaborated ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....erved that it is the case of concealing income and furnishing of inaccurate particulars of income. In other words, the Assessing Officer while recording satisfaction for initiating penalty proceedings has failed to come to a finding as to which limb of section 271(1)(c) of the Act has not been fulfilled by the assessee. 14. The Hon'ble Bombay High Court in CIT Vs. Shri Samson Perinchery in Income Tax Appeal No.1154 of 2014 with other Income Tax Appeals Nos.953 of 2014, 1097 of 2014 and 1226 of 2014, judgment dated 05.01.2017 has held that where initiation of penalty is on one limb and the levy of penalty is on other limb, then in the absence of proper show cause notice to the assessee, there is no merit in levy of penalty. We find that the said satisfaction suffers from lacuna. Further, we also find that while levying penalty under section 271(1)(c) of the Act, the Assessing Officer has failed to come to a finding as to which limb of section has not been fulfilled by the assessee. The Assessing Officer holds that there is thus, concealment of income or furnishing of inaccurate particulars of such income on the part of assessee and levies penalty under section 271(1)(c) of the Ac....
X X X X Extracts X X X X
X X X X Extracts X X X X
....Hence, penalty proceedings under section 271(1)(c) of the Act were initiated for concealing particulars of income of Rs. 1,24,20,250/-. Thereafter, directions were given to issue notice under section 271(1)(c) of the Act. The CIT(A) in the quantum appeal deleted addition of Rs. 32,09,950/- and the returned income of Rs. 1.24 crores was assessed in the hands of assessee. The Assessing Officer while levying penalty under section 271(1)(c) of the Act for concealment was satisfied that the assessee has concealed income and furnished inaccurate particulars of income within meaning of said section. Consequently, penalty of Rs. 11,74,601/- was levied on concealed income. The Assessing Officer while computing penalty under section 271(1)(c) of the Act considered the tax on total income of Rs. 1.24 crores and tax on income excluding concealed income of Rs. 32,09,950/- and observed that on the tax sought to be evaded, penalty under section 271(1)(c) of the Act is leviable at Rs. 11,74,601/-. 12. The perusal of assessment order and the penalty order reflects that the Assessing Officer has mismatched the figures. The returned income was Rs. 1.24 crores and after making addition on pro....