TaxTMI 
TaxTMI 
2018 (5) TMI 1254
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....he case, and in law, the ld. CIT(A) erred in confirming the 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 circumsta....
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...., which was not aware of the alleged disclosure. However, during the course of assessment proceedings the new 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 th....
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....surrender of undisclosed income was made during the course of the search. - After the seizure and analysis of seized documents by the Investigation 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 trea....
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.... income for A.Y. 2008- 09 or filed return of income for A.Y. 2009-10 u/s 139 declaring additional income. The return for A.Y. 2009-10 was filed much beyond the due date, i.e. on 31.03.2011. Similarly the regular return for A.Y. 2010- 11 was filed only 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 assess....
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....d by it u/s 153A. As held by various courts, the foundational fact here depends upon the return filed by the assessee because that is the only document where the assessee can furnish the particulars of income. When such particulars are found to be inaccurate, the liability u/s 271(1)(c) of 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 fur....
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.... return for the assessment year 2007-08 was filed on 31.10.2007 declaring loss of Rs. 5,31,945/-. Search was conducted on 23.7.2009 i.e. after the first day of June, 2007. The assessee accepted the unexplained income on account of corpus fund relating to its source. The alleged undisclosed income was not offered to tax in the regular return of 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/- r....
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....ay, notwithstanding anything contained in any other provisions of this Act, direct that, in a case where search has been initiated under section 132 on or after the 1st day of June, 2007 but before the 1st day of July, 2012, the assessee shall pay by way of penalty, in addition to tax, if any, payable by him, a sum computed at the rate of ten per cent of the undisclosed 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 secti....