2017 (1) TMI 1726

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....dated 03-12-2012 for the assessment year 2003-04 confirming the levy of penalty u/s. 271(1)(c) of the Act. 2. The brief facts of the case as emanating from records are: A search and seizure action u/s. 132 of the Act was carried out on Mulay Group on 10-10-2007. All the three assessees are part of Mulay Group. Notice u/s. 153A was issued to the assessees. In response to the said notice, the assessees filed their respective return of income for the impugned assessment years. During the course of assessment, certain additions/disallowances were made by the Assessing Officer in the ITA Nos. 288, 289 & 290/PUN/2013 income returned by the assessees. The assessees accepted the additions and did not file any appeal. Thereafter, penalty proceedings u/s. 271(1)(c) were initiated and penalties were levied in the case of respective assessees as under : ITA No. Name of Assessee  Assessment year Penalty levied \Rs. 288/PUN/2013 Rohini Ranjeet Mulay 2002-03 Rs. 1,13,220/- 289/PUN/2013 Padmakar Haribhau Mulay 2006-07  Rs. 3,47,606/- 290/PUN/2013 Snehal Sameer Mulay 2003-04 Rs. 5,73,090/- Aggrieved by the order levying penalty, the assessees filed appeals before the Com....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....viable as no incriminating material was seized during the course of search. Where during search action no incriminating document is found and seized no addition can be made. In support of his submissions the ld. AR placed reliance on the decision of Hon'ble Bombay High Court in the case of Commissioner of Income Tax Vs. Continental Warehousing Corporation reported as 374 ITR 645. 3.1 The ld. AR submitted that the assessee in ITA No. 288/PN/2013 has primarily derived agricultural receipts from M/s. Ajeet Seeds Ltd. The Tribunal in the case of Ajeet Seeds Ltd. has deleted the addition u/s. 40A(2)(b) of the Act. The Department filed appeal against the ITA Nos. 288, 289 & 290/PUN/2013 order of Tribunal before the Hon'ble High Court but the issue of disallowance u/s. 40A(2) was not raised by the Department in appeal before the Hon'ble High Court. The ld. AR placed on record the copy of the order of Tribunal in the case of ACIT Vs. Ajeet Seeds Ltd. in ITA Nos. 109 to 115/PN/2012 for the assessment years 2002-03 to 2008- 09 decided on 22-03-2013 and the copy of order of Hon'ble Bombay High Court, Aurangabad Bench in the case of the Commissioner of Income Tax Vs. Ajeet See....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

.... been issued to him under clause (i) of sub-section (1) of section 142 or section 148 and the Assessing Officer or the Commissioner (Appeals) is satisfied that in respect of such assessment year such person has taxable income, then, such person shall, for the purposes of clause (c) of this sub-section, be deemed to have concealed the particulars of his income in respect of such assessment year, notwithstanding that such person furnishes a return of his income at any time after the expiry of the period aforesaid in pursuance of a notice under section 148." A bare perusal of Explanation 3 shows that the same is applicable where the assessee has taxable income but has not filed return of income without reasonable cause within the time prescribed u/s. 153(1) and until the expiry of period u/s. 153(1) no notice u/s. 142(1) or 148 of the Act has been issued. The assessee shall be held to ITA Nos. 288, 289 & 290/PUN/2013 have concealed the income and penalty is leviable on him accordingly, if he is later found to have taxable income in that year. This provision is applicable even if such person furnishes return of income at any time after the expiry of period specified u/s. 153(1) in pur....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....sessing Officer was not clear whether the penalty u/s. 271(1)(c) is to be levied for furnishing of inaccurate particulars of income or concealment of income. The Assessing Officer while levying penalty u/s. 271(1)(c) has observed that the assessee has rendered himself as assessee in default within the meaning of section 271(1)(c) of the Act by not filing the return of income in time and furnishing of inaccurate of particulars of income/concealing the particulars of income. Thus, the Assessing Officer has levied penalty u/s. 271(1)(c) for not only the charges mentioned under the said section but for delay in filing of return of income as well. Penalty u/s. 271(1)(c) is levied where the Assessing Officer in the course of assessment proceedings is satisfied that the assessee has concealed the particulars of income or has furnished inaccurate particulars of income. Penalty u/s. 271(1)(c) is not attracted for delay in filing of the appeal. In first appeal, the Commissioner of Income Tax (Appeals) has confirmed the levy of penalty u/s. 271(1)(c) without invoking provisions ITA Nos. 288, 289 & 290/PUN/2013 of Explanation 5A. We find that the reasons recorded for initiating penalty procee....