2021 (10) TMI 785

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....4 framed by DCIT-1(1), Bhopal. The Revenue has raised following grounds of appeal in ITA No. 334/Ind/2020: 1. On the facts and in the circumstances of the case, the Ld. CIT(A) has erred in: Whether on the fact and the circumstances of the case, the Ld. CIT(A) has erred in deleting penalty of Rs. 70,00,000/- levied u/s. 271(1)(c) of the Act. 2. The brief facts of the case are that the assessee is engaged in the business of purchase and sale of jewellery under his proprietor concern in the name of M/s. Beauty Jewellers at Itarsi. Survey u/s. 133A of the Income Tax Act was conducted and during the course of survey proceedings additional income of Rs. 2,15,21,144/- was declared by the assessee towards excess additional s....

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....ess premises on 26.10.2010. The assessee declared undisclosed income of Rs. 2,15,21,144/- which consisted of excess stock of Rs. 2,14,96,454/- and excess cash of Rs. 24,690/-. This survey was conducted during F.Y. 2010-11 (A.Y. 2011-12). Assessee filed the return of income on 30.09.2011 i.e. before the due date of filing the income Tax Return and declared income of Rs. 2,22,96,660/- incorporating the undisclosed income of Rs. 2,15,21,144/- surrendered during the course of survey. Assessment proceedings u/s. 143(3) of the Act was carried out and the Ld. AO made no addition and assessed the income as disclosed in the return of income. However, Ld. AO levied penalty u/s. 271(1)(c) of the Act for concealment of income. 9. We find that it is ....

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....(1)(c) of the Act is a penal provision and such a provision has to be strictly construed. Unless the case falls within the four-corners of the said provision, penalty cannot be imposed. Sub-section (1) of Section 271 stipulates certain contingencies on the happening whereof the AO or the Commissioner (Appeals) may direct payment of penalty by the assessee. We are concerned herewith the fundamentality provided in Clause (c) of Section 271 (1) of the Act, which authorizes imposition of penalty when the AO is satisfied that the assessee has either; (a) Concealed the particulars of his income; or (b) Furnished inaccurate particulars of such income. 13. It is not the case of furnishing inaccurate particular of income, ....

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...." cannot have the reference to 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 Commissioner of Income Tax, Delhi-I Vs. Mohan Das Hassa Nand 141 ITR 203 and in Reliance Petro products Pvt. Ltd. (supra), 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 5 and 5A of Section 271 of the Act as con....