AI Drafter 
TaxTMI 
TaxTMI 
2023 (5) TMI 959
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....n 30.12.2019 by making addition of undisclosed investment u/s. 69B of the IT Act of Rs.36,50,000/- thereby assessing total income at Rs.94,50,000/-. The Assessing Officer has gone through the facts and circumstances of the case and since the assessee had admitted the undisclosed investment of Rs.36,50,000/- in the sworn statements recorded u/s 131 during the course of assessment proceedings, the Assessing Officer held that the assessee is liable to levy of penalty u/s 271(1)(c) of the I.T. Act, 1961 for concealment of income and accordingly passed the penalty order u/s 271(1)(c) of the Act on 22.07.2021 determining the penalty of Rs.11,27,850/-. 3. In appeal, the learned CIT (A) sustained the penalty levied by the Assessing Officer by observing as under: "6. Decision: The issue in this appeal is levy of penalty of Rs.11,27,850/- u/s 271(1)(c) of the Act for concealment of income. Going into the facts of the case, the appellant individual has filed the Return of Income for A.Y.2015-16 on 30.09.2015 admitting total income of Rs.8,50,600/-. A search and seizure u/s. 132 of the IT Act was conducted in the case of Mytrah Energy group on 30.08.2017 and the a....
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.... Such person fails to offer an explanation or offers an explanation which is found by the Assessing Officer or the Commissioner (Appeals) or the Commissioner to be false, or B) Such person offers an explanation which he is not able to substantiate and fails to prove that such explanation is bona fide and that all the facts relating to the same and material to the computation of his total income have been disclosed by him, then the amount added or disallowed in computing the total income of such person as a result thereof shall, for the purposes of clause (c) of this sub-section, be deemed to represent the income in respect of which particulars have been concealed." 7. The AO, in our view, shall not be carried away by the plea of the assessee like voluntary disclosure", "buy peace", "avoid litigation", "amicable settlement", etc. to explain away its conduct. The question is whether the assessee has offered any explanation for concealment of particulars of income or furnishing inaccurate particulars of income. Explanation to Section 271(1) raises a presumption of concealment, when a difference is noticed by the AO, between reported and assessed income. The ....
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....the assessee had concealed true particulars of income and is liable for penalty proceedings under Section 271 read with Section 274 of the income Tax Act, 1961. ................" The Hon'ble ITAT, Rajkot in the case of M/s. Kashish Enterprise in ITA No. 256/Rajkot/20 14 dated 15.10.2018 held as under: "8. We have heard the rival contentions and perused the materials available on record The facts of the case as discussed above are not in disputed therefore we are inclined not to repeat the same for the sake of brevity and convenience. 8.1 It is a fact on record, the assessee did not disclose the income voluntarily but it was disclosed in pursuance to the survey conducted u/s 133A of the Act. During the course of survey, certain documents were found and seized which were sufficient enough to make the addition in the hands of the assessee. Therefore, the assessee has disclosed income of Rs. 53, 09,666/-. Thus, in our considered view had there not been Survey u/s 133A of the Act. the assessee would not have offered such undisclosed income. Therefore, in our considered view, the penalty u/s 271(1)(c) of the Act was correctly levied by the authorities below....
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.... (ii) in the cases referred to in clause (b), in addition to tax, if any, payable by him, a sum of ten thousand rupees for each such failure; (iii) in the cases referred to in clause (c) or cause (d), in addition to tax, if any, payable by him, a sum which shall not be less than, but which shall not exceed three times, the amount of tax sought to be evaded by reason of the concealment of particulars of his income or fringe benefits or the furnishing of inaccurate particulars of such income or fringe benefits.......... Explanation 5A.......... Where, in the course of a search initiated under section 132 on or after the 1st day of June, 2007, he assessee is found to be the owner of ...... (i) any money, bullion, jewellery or other valuable article or thing (hereafter in this Explanation referred to as assets) and the assessee claims that such assets have been acquired by him by utilizing (wholly or in part) his income for any previous year; or (ii) any income based on any entry in any books of account or other documents or transactions and he claims that such entry in the books of account or other documents or transactions represents his i....
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..... I confirm that the above amount of Rs. 1,00,000/- paid for Rs.5,00, 000/- interior and payment of towards purchase of villa was not disclosed in my return of now, I offer Rs.6,00, income ana 000/-to tax ", The appellant had clearly stated that the amounts paid towards villa are out of his savings that were not disclosed in the return of income. During the appeal proceedings, the appellant submitted that the payments made in this regard are out of admitted income on which taxes were paid. The appellant had clearly deviated from his sworn statement where he stated that the amounts were not disclosed in the return of income. Further, the appellant did not provide any documentary evidence showing that the payments were out of nis admitted income in the returns s of incomes. In view of the above discussion, the A0 is correct in concluding the above investment of Rs. 6,00.000/- is concealed and levying penalty thereof. Similarly, the appellant had purchased a property Unit No. G-01, San Diego, Koramanmgala, Bangalore for Rs. 50,00.000/- as seen from the seized material vide Annexure A/SSR/0l. page no. 7. The said page also denoted that the payments were already made i....
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....not furnished any bonafide reply within the meaning of Explanation 1 to Section 271(1)(c). The appellant is expected to file an explanation to the notice as to why penalty should not be levied u/s 271(1)(c). As per Explanation 1 to Section 271(1)(c), the appellant has failed to offer an explanation regarding the non-disclosure of income in this year, while filing the return u/s 139 and also return u/s 153A. It was only during the assessment proceedings consequent to Search u/s 132, the undisclosed income was admitted. In view of the above discussion, the action of the Assessing Officer for levy of penalty is hereby confirmed in view of the detailed discussion in the preced1ng paragraphs, it is held that the appellant had income or investment particulars that were concealed and the decision of AO in determining the concealment of income particulars and levying penalty of Rs. 11,27,850/- is upheld and accordingly the ground no. 3,4 and 5 are dismissed " 4. Aggrieved with such order of the learned CIT (A) the assessee is in appeal before the Tribunal by raising the following grounds: "1. The order of the Hon'ble CIT (A) is erroneous both on facts and in law. 2....
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....t of Rs. 50 lacs which remains undisputed and since the so-called confirmation letter is undated, the Ld.CIT(A) has not considered the same to be a valid confirmation. Therefore, in light of the elaborate discussions made by the ld.CIT(A) while sustaining the penalty levied by the AO, the same should be upheld and the grounds raised by the assessee should be dismissed. 7. We have heard the rival arguments made by both the sides, perused the orders of the AO and the learned CIT (A) and the paper book filed on behalf of the assessee. We have also considered the various decisions cited before us by both sides. We find the assessee in the instant case had filed the original return of income disclosing total income of Rs. 8,50,600/-. After the search was initiated u/s. 132 of the I.T.Act in the case of assessee and his group concerns on 30.08.2017, the assessee, in response to the notice u/s. 153A filed the return of income declaring total income of Rs. 58,00,600/-. The AO completed the assessment u/s. 143(3) r.w.s. 153A determining the total income of the assessee at Rs. 94,50,600/- wherein he made addition of Rs. 36,50,000/- on account of undisclosed investment u/s. 69B. We find th....
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....ount. Had there been no search, the assessee would not have offered the above income to tax. So far as the confirmation from M/s. Trident Constructions in respect of sale of immovable property, copy of which is placed at page 64, is concerned, the same cannot help the assessee since the same is undated and further, the assessee has already paid an amount of Rs. 50 lacs and he was unable to explain the source of the same. For ready reference, we reproduce the statement of the assessee recorded u/s. 131 of the Act on 21.11.2019 wherein in response to question no.11, the assessee has given the date wise payment of Rs. 50 lacs to M/s. Trident Constructions. "11. Please go through page No.7 of Annexure No.A/SSR/01 seized from your residence and explain the contents? Ans: The page No.7 of Annexure No.A/SSR/01, signed by the builder represents term sheet for purchase of property bearing Unit No.G-01, "SAN DIEGO", Koramangala, Bangalore entered on 15.12.2014. Originally, the property was negotiated for a total sale consideration of Rs. 50.00 lakhs. This amount of Rs. 50.00 lakhs paid in three installments on different dates i.e. Rs. 5.00 lakhs on 15.12.2014; Rs.25.00 lakh....