AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2021 (3) TMI 558
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....itional income of Rs. 1,80,00,000/- was not discernible from statements or from impounded material found during survey out of which Rs. 1,50,00,000/- was offered as additional income during assessment did not represent specific item of unexplained/undisclosed income/investment/expenses not shown in regular books of account/return of income and was not backed by any incriminating material ignoring the direct evidence and material found during survey and accepted as unexplained by the Managing Director in his statement." 2. The assessee has raised cross-objections stating that the learned Assessing Officer has erred in law and on facts in levying the penalty u/s. 271(1)(c) on a nonspecific notice initiating the penalty. 3. Brief facts of the case are that a survey u/s.133A was carried out on 25.07.2012 at the business premises of the assessee. During the course of survey, loose papers and other documents were found which were impounded and inventorized. The assessee was confronted with the documents so found and impounded. The assessee after being confronted with the documents, had given statements and the relevant portion of the statements given was as under : 4. Based o....
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....rate particulars of such income. You are hereby requested to appear before me on 21/09/2016 at 11.30 AM and show cause why an order imposing a penalty on you should not be made under section 271(1)(c) of the Income Tax Act, 1961. If no one attends this office on the said date of hearing, the case shall be decided on the basis of material available on records. Yours faithfully (Yaduvansh Yadav) Asstt. Commissioner of Income Tax, Circle 1(1), Gwalior. Dated 20/09/2016 To M/s. Fairyland Hotels and Resorts Private Limited A-225, Patel Nagar, City Center, Gwalior, MP 474011 Sir/Madam, Whereas in the course of proceedings before me for the Assessment year 2013-14, it appears that you have concealed the particulars of your income or furnished inaccurate particulars of such income. You are hereby requested to appear before me on 23/09/2016 at 11.30 AM and show cause why an order imposing a penalty on you should not be made under section 271(1)(c) of the Income Tax Act, 1961. If no one attends this office on the said date of hearing, the case shall be decided on the basis of material available on records. Yours faithfully (R.K. Garhwal) Ass....
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.... was in fact fully applicable against the assessee and the decision of the Tribunal in the case of Arpana Tiwari vs. ITO and Uttam Value Steels Ltd vs. ACIT were on its own facts and cannot dilute the proposition laid down by Hon'ble Supreme Court. 10. Per contra, ld. AR supported the order passed by the ld.CIT(A) and had also submitted that the order passed by the CIT(A) was in accordance with law. The ld.AR has further submitted that the cross objection was filed by the assessee wherein it was submitted that the penalty order is required to be set aside not only on the ground mentioned by the CIT(A), but also on account of fact that all the three notices reproduced above were not specific on charge of penalty. He relied upon the decision of Hon'ble Karnataka High court in the case of CIT vs. Manjunatha Cotton & Ginning Factory, 359 ITR 565 (Kar) and of Hon'ble Supreme Court in the case of SSA Emrald Meadows, 73 Taxman 248 (SC). Further, it was submitted by the ld. AR that there was no material in possession of the Assessing Officer to confirm the addition and he relied upon the recent decision in the case of Basir Ahmed Sisodia vs. ITO [2020] 116 taxmann.com 375 (SC). 11. In re....
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....ght to support the order passed by the Commissioner (appeal) on the ground that the notices issued by the assessing officer were non-specific. In this regard, it would be relevant to record the facts of the present case. A survey was carried out in the premises of the assessee on 25th of July 2012 when during the survey loose papers and other materials were found, which were impounded and inventoried. The statement was also recorded and the assessee agreed to declare income of Rs. 1, 80, 00000/-as the documents were found in the hard disk which were not recorded in the books of account of the assessee, his daughters and son.(AO page 2) 14. The assessing officer noticed that the assessee had only surrendered Rs. 30.00 Lakhs instead of income of Rs. 1,80,00, 000/-. The assessee was asked by the assessing officer to furnish his explanation regarding non-surrender of amount of Rs. 1,50,00,000/-. After that the assessee filed a written reply on 10 March 2016 whereby he had agreed to declare the additional income of Rs. 1,50,00,000/-. 15. In the penalty proceedings the notice was issued to the assessee and in response to the notice the assessee's counsel had stated that the amount of 1....
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....the charge against the assessee was known to the assessee and had filed the reply thereto setting up the plea of buying the peace and to curtail the litigation. However in the reply the assessee has not submitted that he was not aware of the charges for which the penalty notices were issued by the assessing officer. 16. Now coming to the finding of the Commissioner appeal challenged by the revenue. The Commissioner appeal had deleted the penalty by distinguishing the judgement of the honourable Supreme Court in the matter of Mak Data and relied upon the decision of Uttam Value Steels (supra). The SC in Mak Data had held as under : 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 bl....
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....ctions 142(1) and 143(2) of the Act were issued to the appellant on 14th January, 2009. The notice also contains an annexure, seeking details of expenses debited to Profit and Loss Account, along with details of foreign exchange expenses. Even according to the appellant, the alleged mistake on its part was pointed out by a letter dated 23rd September, 2009 during assessment proceedings where it stated that it had committed a mistake in debiting foreign exchange loss to its determine non-tonnage income, when in fact, no foreign exchange loss was involved in respect of its non-tonnage business. Thus, it is clear that so-called mistake as claimed by the appellant-assessee, was only after notices dated 14th January, 2009 were issued under Sections 142 and 143 of the Act. It was only an attempt to pre-empt the Revenue finding out the appellant had furnished inaccurate particulars. Therefore, it cannot be said that it was voluntary disclosure. In fact, the Apex Court in MAK Data (P.) Ltd. (supra) has observed that " The Assessing Officer, in our view, shall not be carried away by the plea of the Assessee like "voluntary disclosure", "buy peace", "avoid litigation" "amicable settlement" e....
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....t made only in response to notices under Sections 142 and 143 of the Act. This finding of fact is not shown to be perverse and/or arbitrary, warranting interference. In view of the above, the question as framed does not give rise to any substantial question of law. 18. In the matter of Gangotri Textiles Ltd.[2020] 121 taxmann.com 171 (Madras) 4. We have carefully perused the penalty order dated 25-9-2015 and we find that the Assessing Officer considered all the factual aspects raised by the assessee and rejected the same to be absolutely without bonafides. The decisions relied on by the assessee were also taken note of and each of the decisions was dealt with. The Assessing Officer placed reliance on the decision of the Hon'ble Supreme Court in MakData (P.) Ltd. (supra) and stated that voluntary disclosure does not release the assesee from mischief of penalty proceedings under section 271(1)(c) of the Act. Therefore, we find that the penalty order is a reasoned order. 15. The learned counsel had argued that the defect in the penalty notice is a question of law which can be raised by the assessee at any point of time. We have considered this submission and we have rejecte....
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....sented by a Chartered Accountant. The Tribunal rightly proceeded on the basis that a Chartered Accountant is deemed to be aware of the law and its intricacies. Being a professional, he could not have committed a mistake as was attributed to him. The tax paid is undisputedly an inadmissible expenditure from the profits of the business. Hence this amount should have been statutorily added back. Further, from the computation of income, the assessee added back certain inadmissible expenditure. However, he excluded the amount of income tax paid to the extent of Rs. 48,90,114/-. Thus, the addition was only partial and not full. Unless and until the legal provision then in force permitted exclusion of the amount of income tax already paid, the Chartered Accountant could not have done this. The Chartered Accountant cannot feign ignorance of Section 40(ii) of the Income-tax Act as he is well trained and well versed in law representing not only the assessee, but various other clients. As far as the assessee'smalafide intention is concerned, the burden was entirely on the assessee to then show in terms of Explanation-I to the provision permitting imposition of penalty that such intention ....