TaxTMI 
TaxTMI 
2017 (7) TMI 1146
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....sory notes each of Rs. 6 Lacs were issued by Vijay Grahnirman Ltd. which were owned by the assessee. Therefore, to verify the said transactions, the case of the assessee was covered u/s 153C by issuance of notice dated 16/11/2009 where the assessee was directed to file the return of income for financial years 2001-02 to 2006-07. In response to the same the assessee, vide his letter dated 04/12/2009 submitted as under: "I submit that the revised return of income filed by me on 31-12-2008 vide R No. 2113003269 with ITO, 21(1)(3), Mumbai may also please be treated as return of income filed in compliance to the subject notice issued." Considering the same as return filed in response to notice u/s 153C, further notice u/s 142(1) was issued for further compliance against which the assessee vide its letter dated 17/12/2009 submitted as under:- "...During the course of search on 03-08-2006 in the case of Shri Vimalkumar Rathi, assessee's husband, certain loose papers S.NO." 05 to 08 were seized vide Annexure A-2 of the Panchnama. At the time of search in the statement of Shri Vimalkumar Rathi, it was stated that these papers were belonging to the assessee. The aforesaid seized papers S.....
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.... has assailed the imposition of penalty on legal grounds as well as on merits by contending that the penalty has been imposed without due application of mind without specifying the exact charge for which penalty was being levied. Our attention has been drawn to the quantum assessment order, show cause notices issued and penalty order passed by Ld. AO. 3.1 On merits, it was contended that the assessee filed revised return of income well before issuance of notice u/s 153C and offered the additional income and paid due taxes and hence no proceedings were pending on the date of filing of revised return of income. Further, the revised returned income has been accepted by the revenue as such without any further additions and therefore, there being no difference in the returned income vis-à-vis assessed income, penalty was not warranted for. Reliance has been placed on many judicial pronouncements for various contentions. 3.2 Per contra, Ld. DR contended that the assessee is debarred from raising legal ground since he filed the revised return of income on the basis of seized material and therefore, quite aware of the grounds for which penalty was being levied. Further, the assess....
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....act, changed its color to a return filed in response to notice u/s 153C. We note that the provision of Section 153C starts with non-obstante clause and overrides the provisions of Section 139 and various other sections. Further, as per the provisions of Section 153C, the AO is required to proceed against such person in accordance with the provisions of Section 153A. 5.1 With this background, we find that Hon'ble Delhi High Court in the recent judgment of PCIT Vs. Neeraj jindal ITA No. 463/2016 & CM No. 26604/2016 order dated 09/02/2017 has exhaustively discussed the identical issue in the following words:- 13. At the outset, it must be noted that pursuant to the search and seizure operation conducted under Section 132(4) of the Act, the assessee was given notice under Section 153A to file fresh return of his income. Thereafter, the assessee filed revised returns and the return filed by the assessee under Section 153A was accepted as such by the A.O. However, the A.O. was of the opinion that inasmuch that the income disclosed by the assessee under Section 153A was higher than the income in the original return filed under Section 139(1) and since in his view, such disclosure of inc....
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....he case from the purview of non-disclosure, cannot by itself take out the case from the purview of furnishing inaccurate particulars. Mere omission from the return of an item of receipt does neither amount to concealment nor deliberate furnishing of inaccurate particulars of income unless and until there is some evidence to show or some circumstances found from which it can be gathered that the omission was attributable to an intention or desire on the part of the assessee to hide or conceal the income so as to avoid the imposition of tax thereon. In order that a penalty under Section 271(1)(c) may be imposed, it has to be proved that the assessee has consciously made the concealment or furnished inaccurate particulars of his income." 16. Thus, despite the fact that there is no requirement of proving mens rea specifically, it is clear that the word "conceal" inherently carries with it the requirement of establishing that there was a conscious act or omission on the part of the assessee to hide his true income. This was also the conclusion of the Supreme Court in the case of Dilip N. Shroff Karta of N.D. Shroff v. Joint Commissioner of Income Tax, Special Range Mumbai and Anr., (2....
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....f a search action, then if the assessment order accepts the offer of the assessee, levy of penalty on such offer is not justified without detailed discussion of the documents and their explanation which compelled the offer of additional income. The Madras High Court in the case of S.M.J. Housing v. Commissioner of Income Tax, (2013) 357 ITR 698 held that where after a search was conducted, the assessee filed the return of his income and the Department had accepted such return, then levy of penalty under Section 271(1)(c) was not justified. From the above cases it would be clear that when an assessee has filed revised returns after search has been conducted, and such revised return has been accepted by the A.O., then merely by virtue of the fact that such return showed a higher income, penalty under Section 271(1)(c) cannot be automatically imposed. 19. The whole matter can be examined from a different perspective as well. Section 153A provides the procedure for completion of assessment where a search is initiated under Section 132 or books of account, or other documents or any assets are requisitioned under Section 132A after 31.05.2003. In such cases, the Assessing Officer shall ....
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....erefore, the position that emerges from the above-mentioned provision is that once the assessee files a revised return under Section 153A, for all other provisions of the Act, the revised return will be treated as the original return filed under Section 139. On similar lines, the Gujarat High Court in the case of Kirit Dahyabhai Patel v. Assistant Commissioner of Income Tax, (2015) 280 CTR (Guj) 216, held that: "In view of specific provision of s. 153A of the I.T. Act. the return of income filed in response to notice under s. 153A of the I.T. Act is to be considered as return filed under s. 139 of the Act, as the AO has made assessment on the said return and therefore, the return is to be considered for the purpose of penalty under s.271(1)(c) of the I.T. Act and the penalty is to be levied on the income assessed over and above the income returned under s. 153A, if any." 21. Thus, it is clear that when the A.O. has accepted the revised return filed by the assessee under Section 153A, no occasion arises to refer to the previous return filed under Section 139 of the Act. For all purposes, including for the purpose of levying penalty under Section 271(1)(c) of the Act, the return t....