AI Drafter 
TaxTMI 
TaxTMI 
2018 (5) TMI 706
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....had not been offered as income. The AO asked the assessee for the said discrepancy. In response, the assessee offered an additional income of Rs. 10,00,000/- to be added to his total income. Accordingly, addition of Rs. 10,00,000/- was made. The AO also initiated penalty proceedings u/s 271(1)(c) of the Act and levied the penalty of Rs. 3,00,000/-. 4. Being aggrieved the assessee carried the matter to the ld. CIT(A) and submitted that the penalty proceedings were completed in a hurry and that an adequate opportunity was not provided to the assessee. It was further submitted that it was a bonafide mistake. 5. The ld. CIT(A) after considering the submissions of the assessee observed that one should not loose the sight of the fact that the assessee was confronted by the AO on 13.07.2011 whereas the assessee chose to make a disclosure on 15.12.2011. According to the ld. CIT(A), the assessee had no business to take four months to decide that he had made a disclosure of Rs. 10,00,000/- before the Income Tax authority during the survey proceedings. The ld. CIT(A) was of the view that the intention of an individual was gauged by the deeds and in this case the assessee had betrayed th....
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....ed fact that the assessee surrendered the amount of Rs. 10,00,000/- during the course of survey and paid the taxes thereon. The assessee has also credited the said amount in his capital account. However, in the return of income, the amount was not disclosed and when this discrepancy was pointed out the assessee surrendered the amount of Rs. 10,00,000/-. The AO considered the said amount as concealed income and levied the penalty of Rs. 3,00,000/- which has been confirmed by the ld. CIT(A). It is noticed that a similar issue has been adjudicated by the ITAT Delhi Bench in the case of Saran Kumar Goel Vs ITO (supra) wherein the relevant findings have been given in paras 7 to 9 which read as under: "7. We have heard both the parties and gone through the facts of the case as also the aforesaid decisions. Indisputably, the disclosure of an amount of Rs. 10,39,079 was made during the course of survey u/s 133A of the Act conducted in the premises of the assessee on 12.12.2003(wrongly mentioned 12.12.2005 in the penalty order and impugned order) and the assessee is also stated to have paid tax of Rs. 3 lacs in three instalments of Rs. 1 lac each on 19.12.2003, 20.2.2004 & 23.12.20....
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....s. 3,00,840 for the three years. The ITO found the books of account not dependable and the income stated in the revised returns unacceptable. Ultimately, on a consideration of several factors, the total income for the years 1972- 73 to 1977-78 was estimated at Rs. 6,00,000 For the assessment year 1976-77, the income allocated for the period thus arrived at was Rs. 1,44,000.On the date of the assessment, the assessee gave a letter to the ITO, agreeing to the total income of Rs. 6,00,000 as estimated by the Income-tax Officer. The ITO, accordingly, concluded the assessments and then simultaneously penalty proceedings were initiated, inter alia, u/s 271(1)(c) for concealment of income by the assessee in the returns filed by the assessee ; subsequently, penalty was levied at 100 per cent, of the tax levied. The assessee appealed and contended that he agreed to have the assessments made on a total income of Rs. 6,00,000 for the years 1972-73 to 1977-78, and the assessment order was the result of the agreement with the Revenue and, therefore, penalty ought not to have been levied. The alleged agreement was held not proved before the Commissioner (Appeals). The ITAT, however, cancelled th....
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....n helps the Revenue. 8. Mere enquiry about surrendered income having not been shown in the return, does not tantamount to detection of concealment of income u/s. 271(1)(c) of the Act. Hon'ble Madhya Pradesh High Court in the case of CIT v. S.V. Electricals P. Ltd., 155 Taxman 158 and Hon'ble Jharkhand High Court in CIT v. Ashim Kumar Agarwal, 153 Taxman 226 held that where the assessee surrenders his full income, though at a later stage, there was no question of any concealment on his part and consequently no penalty under Section 271(1)(c) was leviable, and that a omission from return of income did not amount to concealment. Hon'ble jurisdictional High Court while adjudicating the issue of levy of penalty u/s 271(1)(c) of the Act in the case of CIT vs. Harnarain in their decision dated 31st October,2011 in ITA no.2072/2010 concluded that "surrender of the amount by the assessee after receipt of the questionnaire could not lead to an inference that it was not voluntary, in the absence of any material on record to suggest that it was bogus or untrue. It is further evident that there was neither any detection nor any information in the possession of the Revenue w....
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....which is placed ate page no. 28 of the assessee's paper book) was not sure as to whether the assessee concealed the particulars of income or furnished inaccurate particulars of such income which is evident from the said notice wherein neither of the two was struck off. 12. On a similar issue, the Hon'ble Karnataka High Court in the case of CIT Vs Manjunatha Cotton and Ginning Factory (2013) 359 ITR 565 (supra) held as under: "Chapter XXI of the Income-tax Act, 1961, enacts provisions for the levy, imposition and collection of penalty. The general principles relating to penalty or concealment of income are: (a) penalty under section 271(1)(c) is a civil liability; (b) mens rea is not an essential element for imposing penalty for breach of civil obligations or liabilities ; (c) wilful concealment is not an essential ingredient for attracting civil liability ; (d) existence of conditions stipulated in section 271(1)(c) is a sine qua non for initiation of penalty proceedings under section 271; (e) the existence of such conditions should be discernible from the assessment order or order of the appellate authority or revisional authority ; (f) even if there is no specific fin....