TaxTMI 
TaxTMI 
2023 (1) TMI 620
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....d in full. 3. That the show cause notice issued u/s 274 r.w.s.. 271(1)(c) of the Act is quite vague and did not at all specify which limb of section 271(1)( c) of the Act, the penalty proceedings had been initiated i.e. whether for concealment particulars of income or furnishing of inaccurate particulars of income. The impugned penalty based on such a notice being contrary to the provisions of law and facts kindly be quashed.'' 2.1 During the course of hearing, the ld. AR of the assessee has not pressed the Ground No.3. Hence, the same is dismissed being not pressed. 3.0 Brief facts of the case are that the assessee filed the return of income for the assessment year under consideration on 30-03-2010 at a total income of Rs.80,56,970/-. Subsequently, the assessee revised return on 31-03-2011 declaring income of Rs.1,03,90,360/-. Hence, the case of the assesee was completed u/s 143(3) of the Act on 31-10-2011 at a total income of Rs.1,03,90,360/-. However, the ld. CIT(A) vide order dated 21-04-2015 dismissed the appeal filed by the assessee. 3.1 During penalty proceedings u/s 271(1)(c) of the Act, the AO noted that the assessee declared income from salary from Essar....
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....as under:- "2.3. I have perused the facts of the case, the penalty order and the submissions of the appellant. Ground No. 01 to 03 are being taken up together as they are interrelated. On perusal of overall facts, it is seen that the Assessing Officer treated the income to extent of Rs. 23,23,440/.7 as concealed income for reason that this income was declared in the revised return filed on 31.03.2011 whereas notice under section 143(2) was already issued on 18.10.2010. Ld. Authorized Representative argued that declaration of income was voluntarily made. Notice under section 143(2) only required the assessee to submit evidence in support of return. No specific query with reference to non-declaration of the various income was ever raised. 2.3.1 On perusal of overall facts, it is seen that the appellant has filed revised return only after issue of notice under section 143(2). If this notice was not issued, the appellant would not have revised his return. In fact, he revised return on 31.03.2011 though notice under section 143(2) was issued on 18.10.2010 i.e. only after 5 months. Therefore, it cannot be said that revised return was filed voluntarily by assessee. ....
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....port of the ROI filed. However, no specific query w.r.t. the non-declaration of the subjected items of income was ever raised. The notice u/s 142(1) was issued only on 06.09.2011 i.e. much later to the date of filing of the revised ROI 31.03.2011. Hence the question of detection of the discrepancy by the AO does not arise in the instant case. The assessing officer in the assessment order as also in the penalty order, if any, nowhere recorded any finding and nor refered any specific query raised by him nor it was a case of survey / search or a case of getting information from a third party) and it was the assessee itself who, on its own declared the income. The ld. CIT(A) did not judicially appreciate such contention. 2.2 Legally speaking, the revised computation / return of income might not be admissible for technical reasons yet it was a good material admittedly available on the record of the AO showing the fact that the assessee had included and always intended to include such income in its taxable total income and it is only such material, which has been made a basis and is the starting point by the AO. The AO has proceeded only w.r.t. such material. He has not....
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....ice u/s 143(2) was issued asking the assessee regarding share application money and the same was agitated also, by the assessee but later on he made a surrender w.r.t 12 share applicants. But it appears, no enquiry was made by the AO prior thereto. Thus, all the facts of our case are similar to the said case. 3.2 In the case of CIT v/s Shankerlal Nebhumal Uttamchandani (2009) 311 ITR 0327 (Guj) (DPB 3-6), it was held that: "Penalty under s. 271(1)(c)-Concealment-Revised return filed before detection of concealment-Tribunal has found that though certain queries were raised and put to the assessee, no particular item of concealed income was specifically pinpointed-As a matter of fact the process of detection was not complete till the date when the assessee filed revised returns surrendering the amounts reflected in various bank accounts in the names of his family members as his own income from undisclosed sources-There is no material on record to indicate that the aforesaid finding of the Tribunal is incorrect in any manner whatsoever-Further, Tribunal has also found that very same amounts have already been assessed along with interest in the hands of the family mem....
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.... best available or could be gathered. Although in this case some deductor might have uploaded the transactions in the TDS return like rental income, consultancy etc. but due to non-access to such online details and because of late receipt of TDS certificates, related income could not be noticed or sometime it may also be inadvertent error of the ld. C.A. In these circumstances thus, it is difficult to conceive that in absence of the relevant details how the assessee can be charged with the blame of the concealment. The assessee accordingly, after waiting for the uploading of the Form-26AS could file the original return only on 30.03.2010 (PB 1-3) i.e. before the due date u/s 139(4). It is only at a later point of time, when the assessee could obtain TDS certificates, he revised his ROI immediately. The revised ROI was filed on 31.03.2011 (PB 4) when additional income of Rs. 23.33 Lakh was declared, consisting of the interest on FDR of Rs.10,43,740/- (interest of Rs.2,71,133/- from ING Vysya Bank Ltd.(PB-22), Interest of Rs.56,491/67 from the Lakshmi Vilas Bank Ltd and Rs.7,18,122/- is maturity amount wrongly offered) apart from rental and other income which was noticed from Form-26....
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....g the amount received on the maturity of some FDR. In support of the same we are filling a duly sworn affidavit of Shri Suresh Chandra Gour, CA and the Tax Consultant, who prepared and filed the revised ROI of the assessee containing the wrong amount the interest on FDR of Rs.7,18,122/-. 5.4 This was informed to the AO also during assessment proceeding on 25.10.2011 (PB-21), but the AO ignored. Accordingly, the ld. C.A. also filed an application for rectification u/s 154 of the I T Act before the AO on 21.11.2011 to get the mistake rectified by reducing the income wrongly declared to the extent of 7,18,122/- (Rs.7,72,570/- less Rs.54,448/-) but still remains pending till date to the best of our knowledge. 5.5 Once, there was no income at all of Rs.7,18,122/- there cannot be any question of imposition of penalty u/s 271(1)(c) w.r. thereto We may clarify that revision of income was not at all necessitated because of the issuance of the notice u/s 143(2) on dated 18.08.2010 (refer AO order u/s 143(3) Pg-1) because there was no specific query raised by the AO upto that point of time so as to make the assessee wiser but it was an move taken by the ld. C.A. him....
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....particulars of income - Commissioner (Appeals) upheld penalty imposed on assessee - Assessee contended that matter of filing returns did not come to his mind, as for last 20 years as a Judge, his returns used to be taken care of by his office staff, accounts officer, etc., and thereafter, he was confined to bed and could not file his return - Whether since revenue could not controvert assessee's plea and further assessee had paid TDS on salary and advance tax on his royalty income and after adjusting same, balance amount of tax along with interest was also deposited, it could be held that assessee had not concealed particulars of his income - Held, yes - Whether therefore, penalty imposed on assessee was to be deleted - Held, yes" 6.2.3 PCIT vs. Trisha Krishnan [2019] 111 taxmann.com 97 (SC) (DPB 11) "Section 4, read with section 271(1)(c), of the Income-tax Act, 1961 - Income - Chargeable as (Advances) - Assessment year 2010-11 - Assessee was a Cine artist - For relevant year, assessee filed her return declaring certain taxable income - Subsequently, assessee filed a revised return admitting additional income - Difference between income originally declared and to....
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....l its income. 20. We are of the opinion, given the peculiar facts of this case, that the imposition of penalty on the assessee is not justified. We are satisfied that the assessee had committed an inadvertent and bona fide error and had not intended to or attempted to either conceal its income or furnish inaccurate particulars" 7. Past History does not suggest: Another aspect establishing the bonafied and absence of any intention of the assessee not to declare income is also proved from the fact that the declared figure of interest on FDR in A.Y. 2006-07 stood at Rs.38,325/- (PB 35), in A.Y. 2007-08 it was Rs.`Nil` (PB 32) and in A.Y. 2008-09 it was of Rs.2,21,497/- (PB 27), as against Rs.3,27,624/75 in the year under consideration i.e. A.Y. 2009-10. Thus, the income from interest on FDR never reached the whopping figure of Rs.10,43,740/- (PB 6). Similarly, there was no consultancy in earlier years and the rental income was only upto Rs.2 Lakh. 8. Initially no TDS claimed by the assessee: The bonafide of the contention of the assessee and the fact that the assessee never intended to conceal any income at all, is fully established from a bare perusal of co....
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.... his income. The said principle has been reiterated in Virtual Soft Systems Ltd. vs. CIT (2007) 207 CTR (SC) 733: (2007) 289 ITR 83 (SC) held that "24. Sec.271 of the Act is a penal provision and there are well established principles for the interpretation of such a penal provision. Such a provision has to be construed strictly and narrowly and not widely or with the object of advancing the object and intention of the legislature." 10.2 In the peculiar facts this case, the decision in the case of CIT v/s Reliance Petroproducts (P) Ltd. (2010) 322 ITR 158 (SC) is quite useful in as much as in that case it was held that w.r.t. return "Penalty under s. 271(1)(c)-Concealment-Disallowance of claim for deduction- In order to attract the provisions of s. 271(1)(c), there has to be concealment of income or furnishing of inaccurate particulars of his income by the assessee-In the instant case, assessee claimed deduction of interest on loans taken by it for purchase of shares-AO disallowed such interest-Admittedly, no information given in the return was found to be incorrect or inaccurate-Hence, the assessee cannot be held guilty of furnishing inaccurate p....
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.... reference to all the three items of income additionally declared. Otherwise also, the revenue may be technically correct in not considering the later return of income as a revised return but it cannot be denied that additional income was shown by the assessee himself and it is not the case of the revenue that they unearthed the additional income by carrying out investigations. In addition, we find force in the contention by the Ld. AR that there were justified reasons behind delayed declaration of additional income from these sources. Hence, it was not improbable if the original return could have been filed beyond the due date of Section 139(1) waiting for the correct and complete information of income to be included, necessitating an upward revision of income. Further had the assessee woke up only after issuance of notice u/s 143(2), he could have filed the revised return immediately but not after a long gap of 5 months i.e. on 31.03.2011. Undisputedly, the assessee is aged 61 years mainly deriving salary income and stationed at Mumbai whereas his chartered accountant was situated at Jaipur. It was a period when there was less or no automation and the department also could not br....