2019 (2) TMI 638

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....ed his return of income for A.Y. 2009-10 on 02.01.2010, declaring total income at Rs. 4,59,510/- which was processed u/s 143(3) of the Act. Subsequently on 18.05.2010, a survey was conducted where introduction of share capital with premium in M/s. Chokshi Maganlal Jewellers Pvt. Ltd., by the directors/share holders of the company was detected. It was relevant to mention that the assessee is one of the directors of the said company. The assessee disclosed Rs. 1.60 crores as undisclosed income and prayed for immunity for penalty u/s 271(1)(c) of the Act by a letter dated 21.10.2010. On 03.12.2010 revised return was filed by the assessee declaring total income of Rs. 1,64,59,510/- including 1.60 crores in respect of share capital introduced in the said company. The case was subsequently reopened by issuance of notice u/s 148 of the Act on 30.03.2013 i.e. after 27 months from the date of filing of revised return upon which the assessee requested to take into consideration the disclosure made by him to the tune of Rs. 1.60 crores towards introduction of share capital with premium in M/s. Chokshi Maganlal Jewellers Pvt. Ltd. by filing revised return of income on 03.12.2010. The assessmen....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....g of disclosure of income being made as a result of survey proceeding and not voluntary. 5. In fact in the penalty proceeding when the show cause notice u/s 271(1)(c) was issued upon the assessee directing him to explain as to why the penalty should not be levied u/s 271(1)(c) of the I.T. Act, 1961, the assessee furnished a letter dated 21.03.2014 explaining the following: i. the assessee filed its return of income on 02.01.2010 Rs. 4,59,510/-; total tax of Rs. 55,794/- was paid; ii. the revised return of income was filed declaring Rs. 1,64,59,510/- on 03.12.2010; the total tax of Rs. 70,06,683/- was paid on 18.05.2010. Survey was conducted by the Investigation Wing, Ahmedabad in the case of Hiralal Maganlal Jewellars Pvt. Ltd. where the assessee declared Rs. 160.00 lacs as invested in the share of Chokshi Hiralal Maganlal Pvt. Ltd. during the year under assessment. The assessee received the notice u/s 148 of the Act on 30.03.2013; iii. reply to the notice was given by the assessee on 13.05.2013; iv. on 08.08.2013, the assessment notice was issued; v. finally assessment order was passed on 26.11.2013 with NIL demand. Further that, the assessee also submitted that by and....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....untary. If the conduct of the assessee is coming under the purview of explanation - 1 of Section 271(1)(c) then the income so disclosed by him represents the income in respect of which particulars have been concealed. It is an admitted position that the income so disclosed by the assessee in the revised return was concealed while filing the original return of income. The assessee's plea that declaration was made by revised return or that the assessee asked for immunity from penalty for income declared in survey by and under letter dated 18.05.2010 or that disclosure was made to purchase peace and to avoid litigation or that the revised return was filed before the issuance of notice u/s 148 or that there is no addition on the income declared in revised return and therefore penalty under section 271(1)(c) cannot be levied is not tenable in law. Apart from that, voluntary disclosure does not release the assessee from the mischief of penalty proceeding. Statute does not recognize those type of defenses under the explanation of Section-1 to Section 271(1)(c) of the Act. All such issues have already been decided by the Hon'ble Apex Court in the judgment of MAK Data Pvt. Ltd.-vs-CIT [2013....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

.... The law does not provide that when an assessee makes a voluntary disclosure of his concealed income, he had to be absolved from penalty. 9. We are of the view that the surrender of income in this case is not voluntary in the sense that the offer of surrender was made in view of detection made by the AO in the search conducted in the sister concern of the assessee. In that situation, it cannot be said that the surrender of income was voluntary. AO during the course of assessment proceedings has noticed that certain documents comprising of share application forms, bank statements, memorandum of association of companies, affidavits, copies of Income Tax Returns and assessment orders and blank share transfer deeds duly signed, have been impounded in the course of survey proceedings under Section 133A conducted on 16.12.2003, in the case of a sister concern of the assessee. The survey was conducted more than 10 months before the assessee filed its return of income. Had it been the intention of the assessee to make full and true disclosure of its income, it would have filed the return declaring an income inclusive of the amount which was surrendered later during the course of the asse....