AI Drafter 
TaxTMI 
TaxTMI 
TaxTMI 
2019 (8) TMI 59
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....nal erred in not appreciating that penalty u/s 271(1)(c) is attracted for concealment detected in the course of any proceeding under the Act, which cannot be limited to assessment proceeding and should have been held to include survey proceeding u/s 133A(1)? [C] Whether on the facts and circumstances of the case and in law, the Appellate Tribunal erred in not appreciating that even clause (a) of explanation 4 to section 271(1)(c) does not refer to returned income so as to limit the penalty u/s 271(1)(c) with reference to difference between tax on Assessed Income and Returned Income?" 3. It appears form the materials on record that survey under Section 133A of the Act was carried out on 17.07.2012. In the course of the survey proceedings, the assessee firm declared unaccounted income of Rs. 1,78,50,000/- received during A.Y. 2012-13. Later, the assessee filed its return of income on 28.09.2012 declaring its total income of Rs. 2,59,11,800/- including the unaccounted income of Rs. 1,78,50,000/- disclosed during the course of the survey proceedings. The case of the assessee firm was selected for scrutiny under the CASS and notice under Section 143(2) of the Act was issued ....
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....t has been shown in the return of income, then it cannot be said that assessee has concealed any particular about that income or furnished inaccurate particulars in relation thereto. There cannot be any concealment prior to filing of return. Question of consideration whether assessee is liable for action under section 271(1)(c) would arise only when return of income is scrutinized by the AO and he finds some more items of income or additional income over an above what is declared in the return. If it is so, the assessee would be liable for action under section 271(1)(c) in respect of such items only which are discovered by the AO on the scrutiny of return of income or after carrying out investigation and discovering some more items of income not found declared or mentioned in the return of income. Prior to filing of return of income there is no concept of concealment or furnishing of inaccurate particulars. 14. The initial phrase used in section 271(1)(c) suggests that AO has to find in the course of any proceedings under this Act that assessee has concealed the particulars of his income or furnished inaccurate particulars of such income. In fact, the proceedings against t....
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....aring in section 271 of the Act and held that the said expression cannot have reference to the survey proceedings. It has also held that penalty proceedings would depend upon the return of income filed by the assessee." 6. Having regard to the materials on record, the question would be as to whether penalty can be imposed under Section 271(1)(c) of the Act when the assessee has shown his income in the Income Tax Return filed by it and contends that he had voluntarily declared the same in the "regular return filed for the relevant year. 6.1 Section 271 clause 1(c) reads as under : "(1) If the Assessing Officer or the Commissioner (Appeals) or the Principal Commissioner or Commissioner in the course of any proceedings under this Act, is satisfied that any person - (c) has concealed the particulars of his income or furnished inaccurate particulars of such income;" 6.2 The principle argument of Mrs. Bhatt is that the assessee disclosed income of Rs. 1,78,50,000/- only on account of the survey proceedings conducted by the Income Tax Department. According to Mrs. Bhatt, if there would have been no survey action, the undisclosed income of the said amount would h....
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.... the question of satisfaction of Assessing Officer or the Commissioner (Appeals) or the Commissioner does not arise. We have to keep in mind that it is the Assessing Officer who initiated the penalty proceedings and directed the payment of penalty. He had not recorded any satisfaction during the course of survey. Decision to initiate penalty proceedings was taken while making assessment order. It is, thus, obvious that the expression "in the course of any proceedings under this Act" cannot have the reference to the survey proceedings, in this case. 15. It necessarily follows that concealment of particulars of income or furnishing of inaccurate particular of income by the assessee has to be in the income tax return filed by it. There is sufficient indication of this in the judgment of this Court in the case of CIT v. Mohan Das Hassa Nand [1983] 141 ITR 203 (Delhi) and in Reliance Petroproducts Pvt. Ltd. [2010] 322 ITR 158 (SC) the Supreme Court has clinched this aspect, viz., the assessee can furnish the particulars of income in his return and everything would depend upon the income tax return filed by the assessee. This view gets supported by Explanation 4 as well as Expla....
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.... the case on hand, the amount disclosed during the survey was duly included in the original return of income filed after the date of survey. It took the view that there is no difference as such in the return of income and the income. 6.5 In the peculiar facts of the present case, the Tribunal arrived at the conclusion that the case is not one of furnishing inaccurate particulars of income. At this stage, we deem it appropriate to reproduce the relevant findings recorded by the CIT(A), which ultimately, came to be affirmed by the Tribunal in its impugned order : "A survey action was carried out at the business premises of the appellant form. The income declared in return of income filed by the appellant included the amount surrendered by the appellant during the course of survey operations conducted by the department at business premises. During the course of survey operations, certain incriminating documents were found and one of the partners of the assessee firm Shri Jayantibhai Virjibhai Babariya declared addition income of Rs. 1,78,50,000/- for A.Y. 2012-13. The survey team did not make further enquiries nor was it established that these represented any othe....