AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2021 (9) TMI 512
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....d by the appellant during the course of action under Section 132 of the Act. In appeal the Ld. CIT(A) applied profit ratio of 30% to gross unaccounted sales which was, in turn, confirmed by exparte order dated 30.05.2013 passed by the Ld. Tribunal. The impugned penalty order has been passed consequent upon the said order of the Hon'ble Tribunal. 3. At the time of hearing of the instant appeal the Ld. Counsel appearing for the assessee submitted before us that though the penalty proceeding was initiated on the count of furnishing of inaccurate particulars of income by the assessee while levying penalty no such allegation has been levied against the assessee by the ITO. Before the First Appellate Authority the appellant raised its preliminary objection as the levy itself is invalid and bad in law inasmuch as no order under Section 271(1)(c) could have been passed in the facts of the case. Rather the appellant relied upon the provision of sub-Section (3) of Section 271AAA of the Act where it says that no penalty under the provision of Clause (c) of sub-Section (1) of Section 271 shall be imposed upon the assessee in respect of undisclosed income refer to in sub-Section (1). 4. We ha....
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.... offered to tax the income or profit arising out of the said unaccounted sales. The entire unaccounted sales has not been offered / disclosed as income as is evident from the perusal of the statement recorded. 6.7 It is further noted that the appellant has shown the gross profit of Rs. 67,34,398/- on its accounted sales of Rs. 3,69,66,577/- in respect of Rushabh Vatika Project. Thus, the gross profit shown on the accounted sales is 18.22%. Therefore, the contention of the appellant, that for the same scheme of land plots, the Department has taxed the income @ 12% for block period ending on 12-09-2002 which has become final, is not justified so far as the present year is concerned wherein disclosed gross profit on accounted sales is 18.22%. It is also an admitted fact that in respect of unaccounted sales, the margin of profit is always higher. 6.8 In view of the above and considering the order of the Settlement Commission in respect of Silver Springs wherein profit has been estimated @ 30% instead of 20% offered in the return of income, it would be fair and reasonable to adopt the same rate of estimated profit even in the case of Rushabh Vatika Project of the appellant. The tota....
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....ars' would cover both falsity in final figure as also constituent elements, which are inaccurate in some specific or definite respect, whether in constituent or subordinate items of income or end result. Therefore, any concealment or inaccuracy in particulars of income in return occurring at any stage up to and inclusive of ultimate stage or working out of total income would attract penalty provisions of section 271(1)(c)." (ii) In a judgment in the case of Union of India Vs. Dharmendra Textiles Processor &. Others 306 ITR 277 the Honorable Supreme Court observed that the object of enactment of section 271(1)(c) read with explanation indicated that the section had been enacted to provide for a remedy for the loss of revenue. The penalty under this section is a civil liability. Willful concealment is not an essential ingredient for attracting civil liability as is in the matter of prosecution u/s. 276C. What is required is that there is concealment/or furnishing inaccurate particulars of income that would be sufficient to levy penalty. 6. Except the above mentioned letter dated 06.09.2013, in compliance to the show cause notice dated 19.08.2013, neither anybody attended nor ....
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....at in respect of such undisclosed income the jurisdiction itself for levy of penalty u/s 271(1)(c) would cease to apply in view of the explicit provisions of Sec. 271AAA(3) of the Act. In other words and having due regard to the purpose behind introduction of Sec. 271AAA by the Finance Act, 2007 w.e.f. 1-4-2007, the case of the appellant for levy of penalty would obviously arise u/s 271AAA only and not under any other section of the Act in respect of the income so assessed for the year under appeal. It is also pertinent to note that Sec. 271AAA appears to be a specific provision for levy of penalty in search cases only, more so because it says "notwithstanding anything contained in any other provisions of this Act ......" and also it is titled as "Penalty where search has been initiated." It is also a recognized principle in the income-tax Act that specific provision prevails over a general provision. In view of above, it becomes clear that once a search has been initiated within the period specified in section 271AAA, penalty in such cases could be considered only by passing an appropriate order under the said section and not under any other section or in particular not under Sec.....
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....f 30% than the rate of 20% declared by the appellant was based upon any incriminating material showing such 30% rate. Based on the same, it was argued that even a higher estimation of only a profit rate was an application of a theory accepted by the Hon'ble Gujarat High Court in several cases in search/ survey matters as cited and accepted by the tribunal in the case of the appellant itself and thus the same can be duly said to be covered by the provisions of sub-section (2) of Sec. 271AAA. The submissions on this aspect of the argument are duly considered. It is seen from record and in particular from the statement u/s 132(4) dated 23-10-2009 cop of which is in paper book that the undisclosed income was admitted u/s 132(4), that it was specified by the deponents that the same was derived from sale of plots in a specific real estate scheme named Rushabh Vatika of Chekhla, that the manner of deriving the same was in cash which was also substantiated alongwith land plot nos. of the said scheme as stated in the assessment order itself, as stated in the statement u/s 132(4) itself, profit thereon was declared in the return of income by computing the same @ 20%. Thus, I find that ....
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....arch 15-09-2009); income found was thus declared in regular return, hence no question of penalty; moreover the F.Y. had not even ended on the date of search. (iii) When the income declared in the ROI by estimating the profit rate @ 20% is not visited with penalty, any subsequent change in income is as a result of change in estimate only by assessing and appellate authorities (20% to 100% to 30%); estimated addition does not lead to penalty u/s 271(l)(c) even in search cases. [Bombaywala Readymade Stores 230 Taxman 0313 (Guj), Lallubhai Joglbhai Patel 261 ITR 216 (Guj)] (iv) There is no case by AO as to which and how "inaccurate particulars of income" were furnished, when all facts and figures were disclosed and reasons for adopting 20% profit rate were elaborately explained, none of which are negatived by the AO [Dilip Shroff 291 ITR 519 SC] (v) Further, Expl. 5A to Sec. 271(l)(c) does not get attracted since there was no search proceedings u/s 132 of the Act in case of respondent. [Decision of Bombay HC in case of Rajkumar Gulab Badgujar in Tax appeal no. 897-898-901-907- 914/2016 dated 08-01-2019]" 10. It appears from the entire set of facts that the quantum was finalized ....