TaxTMI 
TaxTMI 
2018 (5) TMI 1254
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.... penalty as levied by the A.O. u/s 271(1)(c) of the Income tax Act of Rs. 4,77,000/- without appreciating the facts of the case and submission made before him." In ITA No. 519/Ind/2016 the assessee has taken the following grounds :- "(i) That on the facts and in the circumstances of the case, in law, the ld. CIT(A) erred in confirming the penalty as levied by the A.O. u/s 271AAA of the Income tax Act even when on the facts of the present case the same is not justified. (ii) That on the facts and in the circumstances of the case, and in law, the ld. CIT(A) erred in confirming the penalty as levied by the A.O. u/s 271AAA of the Income tax Act of Rs. 5,58,840/- without appreciating the facts of the case and submission made before him." In ITA No. 520/Ind/2016 the assessee has taken the following grounds :- "(i) That on the facts and in the circumstances of the case, in law, the ld. CIT(A) erred in confirming the penalty as levied by the A.O. u/s 271AAA of the Income tax Act even when on the facts of the present case the same is not justified. (ii) That on the facts and in the circumstances of the case, and in law, the ld. CIT(A) erred in confirming the penalty as levied by t....
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.... committee members accepted the surrender made by the previous committee. The Assessing Officer accordingly concluded the assessment after making various additions on account of the alleged surrender as well as other additions emanating out of the documents seized in the case of office bearers, viz. K.K. Sharma, K.P. Dwivedi, Pushpandra Sharma and Lokendra Sharma. The income was accordingly assessed at Rs. 10,56,684/-, Rs. 58,01,313/- and Rs. 63,45,792/- for the assessment years 2007-08, 2009-10 and 2010-11, respectively. Against the impugned additions, the assessee did not prefer any appeal before the learned Commissioner of Income Tax (Appeals) and accepted to pay due taxes on the assessee income. 5. Subsequent thereto, penalty proceedings u/s 271(1)(c) of the Act(1)(c) of the Act were initiated for the assessment year 2007-08 and penalty proceedings u/s 271AAA of the Act were initiated for the assessment years 2009-10 and 2010-11. The assessee submissions during the penalty proceedings were not sufficient to convince the Assessing Officer and he, accordingly, levied the penalty of Rs. 4,77,000/- u/s 271(1)(c) of the Act(1)(c) of the Act for the assessment year 2007-08 and penal....
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....igation Wing, a declaration was made by the then President and Secretary of the society declaring an undisclosed income of Rs. 74,83,000 through a letter filed before ITO (Investigation) on 23.11.2009. The following items of income as per Balance sheet as on 31.03.2008 were offered to tax. However, no specific years for which the undisclosed income was being disclosed were mentioned in this letter : (i) Amount credited in Corpus Fund A/c and unsecured loans Rs.33,31,000 (ii) Amount credited in sundry creditors . Imratilal/Munnalal Rs.5,25,000 . Sundry Payable R s. 1,45,000 . Creditors for Raw Material Rs.17,82,000 Rs. 24,52,000 (iii) Amount for other errors & omissions Rs.17,00,000 Total Rs.74,83,000 Notice u/s 153A was issued on 30.6.2011 calling for returns of income for A.Y. 2004-05 to 2009-10 to be filed within 30 days. No returns of income were filed in response to notice u/s 153A. It was stated vide letter dt. 25.07.2011 that the returns filed u/s 139 may be treated as filed in response to notice u/s 153A. The return for A.Y. 2007-08 had been filed on 31.10.2007 declaring a loss of Rs. 5,31,945/-. Thus, even after the above declaration da....
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....ly on 16.09.2011. When asked why the amount of Rs. 74,83,000 claimed to have been voluntarily surrendered was not disclosed even in the return u/s 153A, the only explanation given is that due to change in management, the present Management of the society is unable to say anything about the matter which pertains to the period of the earlier Management. It is thus held that the assessee has no explanation for not showing the surrendered income in its return. 4.5(d) Regarding the quantum addition of Rs. 15,88,629 on account of Corpus Fund, it has been submitted that the addition has been made only on the basis of the disclosure made by the appellant itself on 23.11.2009 which has been accepted as such for purposes of assessment. No factum of concealment and mensrea has been proved or established in the penalty order. The Assessing Officer has simply rested its conclusion on the act of voluntary surrender made by the assessee in good faith to purchase peace and to avoid litigation. In such a situation, the ratio of the decision in the case of CIT vs. Suresh Chandra Mittal as spelt out by the Hon'ble Supreme Court 251 UTR 9(S.C.) comes to the rescue of the assessee and according....
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....the Act would arise. Penalty u/s 271(1)(c) of the Act is a civil liability and wilful concealment is, therefore, not an essential ingredient for attracting penalty under this section. It is evident in the case of the assessee that it did not disclose its correct and true income in the return filed by it u/s 153A. In response to the notice u/s 153A, the assessee only stated that the return under section 139 may be treated as return filed in response to notice u/s 153A. This reply was furnished after the assessee had already filed surrender letter to ITO (Inv.). The appellant thus failed to disclose all facts material to the computation of its total income in its return of income and failed to substantiate its explanation at the time of search as well as assessment and penalty proceedings. 4.5(e) In view of the above facts, the penalty levied by the A.O. u/s 271(1)(c) is upheld." We further note that the search in the case of the assessee was conducted on 23.7.2009 and this date falls after the first day of June, 2007 as provided in Explanation 5A to section 271(1)(c) of the Act(1)(c) of the Act. For better understanding we reproduce Explanation 5A to section 271(1)(c) of the Act ....
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....income and was finally admitted for paying tax in the course of assessment proceedings. In view of these facts, the assessee is directly hit by the provisions of Explanation 5A to section 271(1)(c) of the Act(1)(c) of the Act. Therefore, in our considered view, the learned Commissioner of Income Tax (Appeals) has rightly confirmed the penalty of Rs. 4,77,000/- u/s 271(1)(c) of the Act(1)(c) of the Act. No interference is, therefore, called for in the findings of the learned Commissioner of Income Tax (Appeals) and accordingly we confirm the same. 13. In the result, the assessee's appeal for assessment year 2007-08 is dismissed. 14. Now we shall take up the assessee's appeal for the assessment years 2009-10 and 2010-11 in which the assessee is aggrieved with the levy of penalty u/s 271AAA of the Act of Rs. 5,58,840/- and Rs. 5,79,465/- respectively. 15. The facts of the case remain the same as we have discussed above while adjudicating the appeal for the assessment year 2007-08. 16. Before us, the learned counsel for the assessee submitted that the additions were made on the ground that the assessee had made various payments to various persons and the alleged additions were made....
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.... income of the specified previous year. (2) Nothing contained in sub-section (1) shall apply if the assessee,- (i) in the course of the search, in a statement under sub-section (4) of section 132, admits the undisclosed income and specifies the manner in which such income has been derived; (ii) substantiates the manner in which the undisclosed income was derived; and (iii) pays the tax, together with interest, if any, in respect of the undisclosed income. (3) No penalty under the provisions of clause (c) of sub-section (1) of section 271 shall be imposed upon the assessee in respect of the undisclosed income referred to in sub-section (1). (4) The provisions of sections 274 and 275 shall, so far as may be, apply in relation to the penalty referred to in this section. Explanation.-For the purposes of this section,- (a) "undisclosed income" means- (i) any income of the specified previous year represented, either wholly or partly, by any money, bullion, jewellery or other valuable article or thing or any entry in the books of account or other documents or transactions found in the course of a search under section 132, which has- (A) not been recorded on or before t....