TaxTMI 
TaxTMI 
2024 (7) TMI 833
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....any of the ground/s of appeal." 2. Succinctly stated, the assessee had filed its original return of income for A.Y.2014-15 on 26.07.2014, wherein after raising a claim for exemption u/s 10(38) of the Act of the Long Term Capital Gain (LTCG) of Rs. 2,78,42,063/- on sale of shares of "CCL International Ltd." it had disclosed its net taxable income at Rs. 9,05,930/-. 3. On 20/21.04.2020, the assessee vide its letter dated 23.03.2020 addressed to the Pr. CIT-2, Raipur/Jt. CIT-Range-4, Raipur/AO, Ward-4(3), Raipur, had intimated about the withdrawal of its claim for exemption u/s. 10(38) of LTCG of Rs. 2,78,42,063/- on sales of shares of CCL International Ltd. (supra) that was raised in its original return of income. It was further intimated by the assessee that it had paid the taxes a/w. surcharge and education cess on the aforesaid amount of income. The assessee had explained that as the claim of exemption on sale of shares of the aforesaid scrip, viz. M/s. CCL International Ltd. (supra) was rejected by the A.O. while framing assessment u/s. 143(3) in the case of its co-parcener, viz. Shri Manish Kumar Sharma for A.Y.2015-16, therefore, to buy peace of mind and to avoid protract....
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....the course of the search/survey action conducted stated that they have been involved in providing accommodation entries through purchase/sale of shares. Accordingly, the A.O. based on the aforesaid facts concluded that the assessee HUF had routed its own unaccounted money in the guise of exempt capital gains on the sale of shares of "CCL International Ltd.". 7. The assessee on being queried about the aforesaid issue, submitted that it had for avoiding protracted litigation offered LTCG on the sale transaction of the aforesaid shares of "CCL International Ltd." as its income from "other sources" in its return of income filed u/s. 148 of the Act. However, the explanation of the assessee did not find favor with the A.O for the following reasons: "i) The explanation of the assessee is general in nature stating the transaction are through Stock Exchange and payments are made through cheque, the transactions should be treated as genuine. The background of the scheme given in earlier paras shows that both the requirements are inbult in the bogus LTCG scheme and does not ipso facto prove genuineness of transaction. The SEBI after thorough investigation has stated that such tran....
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....to find out the reality of the recitals made in those documents". vi) The genuineness could validly be tested on the ground or principle of preponderance of human probabilities, which could thus form a valid ground or parameter for determining the genuineness stands since settled by the Apex court in Sumati Dayal vs. CIT (1995) 214 ITR 801 (SC) wherein the apex court, in declaring the transaction as non-genuine discarded a host of documentary evidences filed or relied upon by the assessee-appellant. The documentary evidences are not by themselves conclusive, and the truth of the matter or the documents could be determined on the basis of or on the anvil of surrounding facts and circumstance of the case is well settled and reliance is placed on the decision in the case of Durga Prasad More 82 ITR 540(SC)." Accordingly, the A.O based on his aforesaid observations concluded that the transaction of purchase/sale of shares carried out by the assessee was not genuine and, thus, the exemption of LTCG of Rs. 2,78,42,063/- claimed in the original return of income was not to be accepted. As such, the A.O. recharacterized the LTCG income offered by the assessee as its "income from....
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....cted by the Investigation Wing and the FAO clearly bring out that the transactions in the purchase/sale of shares in the penny scrip "M/s. CCL International Ltd." was nothing but a pre-arranged transactions to introduce unaccounted income into the books of the assessee and investigations in the said stock have proven that the Company had no financial standing for it to generate such huge share price. d) The details submitted by the assessee reveal that the assessee has not been dealing in shares on a regular basis. e) The basic trading pattern of the shares of Mis. CCL International Limited were analyzed and it was seen that there was a common pattern in the trading of such scrips and the pattern is that they represent a bell share in their trading. The Balance Sheet of the Company showed that it had no credentials to support the share movement pattern. f) The assessee through an off market transaction purchased 60000 shares of AAP Infrastructure which on merger got converted into 1500000 shares which gained the assessee a price of Rs. 2,81,80,383/-. Such a huge rise is shares are not in line with the movement of the share market during this period and al....
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....in favour of revenue on 14/06/2022. Thus, it is apparent that sufficient materials were available on record on the basis of which FAO rightly initiated penalty proceedings u/s 271(1)(c) of the Act. The AO dealt the issue in detail and proved that it was not a voluntary offer. The appellant could not controvert these findings recorded by the AO in the assessment order. 7. Whether it was a voluntary offer? 7.1. In this case, the transaction was pertaining to FY 2013-14 relevant to AY 2014-15. The appellant filed original return of income on 26.07.2014 by admitting total income of only Rs. 9,05,930/-. In the return he claimed exemption of Rs. 2,78,42,063/-. This was the return filed u/s 139(1) of the IT Act voluntarily by him within due date. If he was of the opinion that the LTCG and the claim of exemption was not correct, he could have filed a revised return voluntarily u/s 139(5) of the IT Act. These two provisions only ensure voluntary compliance. 7.2. In this case the appellant never admitted any income for Rs. 2,78,42,063/- voluntarily for taxation, Rather he deliberately made incorrect claim in his return of income to the extent of Rs. 2,78,42,063/- a....
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....ied the penny stock company namely M/s CCL International Ltd. If the department did not identify that penny stock company, the appellant would not have offered this bogus LTCG after receipt of notice u/s 148 of the IT Act. Resultant tax of Rs. 94,01,034/- also could not have been brought under taxation. 7.9. In view of the above, the submission of the appellant that he voluntarily offered Rs. 2,78,42,063/- for taxation and paid income tax of Rs. 94,01,034/- was devoid of any merit. This is what the AO also dealt in the assessment order and recorded a fact that it was not at all a voluntary offer. 8. AO did not initiate penalty in other cases. The appellant made another strange claim that AO did not initiate penalty in similar facts in other cases. Hence, the penalty levied in his case is not correct. Such contention is also devoid of any merit. Several individuals may jump the traffic signal and few are caught and fine has been levied. They cannot claim that in so many other cases, the traffic police did not levy such fine and he cannot levy fine only in his hands. The appellant's claim is similar to this situation. Penalty proceedings placed in IT Ac....
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....s. This is yet another claim similar to the discussion made in para-8 above. Several individuals may jump the traffic signal and few are caught and fine has been levied. Few individuals may escape from the traffic police from penalty and fine may be imposed in other cases. Those defaulters cannot claim that fine was not levied in some other cases. The appellant's claim is similar to this situation. This cannot be a valid ground for dropping of penalty for such large-scale evasion of income of Rs. 2,78,42,063/-. It is an organized modus operandi of evasion through sophisticated techniques. Such large-scale tax extensive and exhaustive investigation. That led to detection of bogus claim of LTCG. detected through an Hence, the AO rightly initiated penalty proceedings and levied penalty. Dropping of penalty in some other cases cannot prevent the AO from levying penalty in his case. 13. Findings of AO in the case of appellant: 13.1 The AO referred some of the judicial decision in support of his action in the penalty order. It is as under: i) Hon'ble M.P.High Court in its judgment in the case of Steel Infots Ltd. Vs. CIT [296 ITR 228] held that....
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....riginal return, it was a clear case of concealment of income attracting penalty under section 271(1)(c); in such a case it was unnecessary to invoke Explanation 5 to section 271(1)(c)." vii) Hon'ble ITAT Delhi in its judgment in the case of CIT Vs. Prasanna Duggar [[2015] 59 taxmann.com 99 (Calcutta)/[2015] 371 ITR 19 (Calcutta) (MAG.)/[2015] 279 CTR 86 (Calcutta)] held that "Even where subsequent to search, assessee voluntarily disclosed a sum and offered said sum to tax, since said amount was not disclosed in original return, penalty levied under section 271(1)(c) was justified." 13.2 These decisions are few illustrations considered by the AO for levy of penalty in the case of the appellant. The appellant in his detailed written submissions, stressed that he voluntarily admitted this sum of 2,78,42,063/- for taxation and hence, penalty is not leviable. However, this case cannot fit into the definition of voluntary compliance. 13.3 Hon'ble Supreme Court in the case of Prasanna Dugar Vs. CIT (2016) 373 ITR 681 held that even if the assessee voluntarily disclosed undisclosed income and paid tax, subsequent to search operations, penalty levied u/s 2....
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....rnishing inaccurate particulars of income. Explanation to section 271(1) raises a presumption of concealment, when a difference is noticed by the Assessing Officer, between reported and assessed income. The burden is then on the assessee to show otherwise, by cogent and reliable evidence. When the initial onus placed by the explanation, has been discharged by him, the onus shifts on the revenue to show that the amount in question constituted the income and not otherwise. [Para 7] Assessee has only stated that he had surrendered the additional sum with a view to avoid litigation, buy peace and to channelize the energy and resources towards productive work and to make amicable settlement with the income tax department. Statute does not recognize those types of defences under the Explanation 1 to section 271(1)(c). It is trite law that the voluntary disclosure does not release the assessee from the mischief of penal proceedings under section 271(1)(c). The law does not provide that when an assessee makes a voluntary disclosure of his concealed income, he has to be absolved from penalty. [Para 7] The surrender of income on this case is not v....
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....is upheld and the grounds taken by the appellant was dismissed." 11. The assessee being aggrieved with the order of the CIT(Appeals) has carried the matter in appeal before us. 12. Shri R.B Doshi, Ld. Authorized Representative (for short 'AR') for the assessee at the threshold of hearing of the appeal submitted that both the lower authorities without appreciating the facts of the case in the right perspective had grossly erred in law and facts of the case in imposing/sustaining penalty u/s. 271(1)(c) of the Act. Elaborating further on his contention, the Ld. AR submitted that the bonafide of the assessee based on which its claim for exemption u/s. 10(38) of the Act (as raised in the original return of income) was withdrawn and the corresponding income was offered for tax could safely be gathered from the fact that its case was reopened only pursuant to the letter dated 23.02.2020 that was filed by the assessee with the Pr. CIT-2, Raipur/Jt. CIT, Range-4, Raipur and ITO-4(3), Raipur. The Ld. AR submitted that the assessee had after taking cognizance of the assessment order passed in the case of its co-parcener, viz. Shri Manish Kumar Sharma, to avoid protracted litigat....
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....t there was no iota of doubt as regards the genuineness of the LTCG derived by the assessee from the sale of shares of "CCL International Ltd." It was submitted by him that the assessee had purchased 60,000 shares of "AAR Infrastructure Ltd." and paid the purchase consideration through the banking channel on 06.01.2011, Page 16 of APB. The Ld. AR submitted that shares were allotted to the assessee vide letter dated 17.02.2011, Page 17 of APB. It was further submitted that the aforesaid shares were transferred to the Demat account of the assessee on 27.04.2011, Page 18 of APB. Elaborating further on the facts, it was submitted by the Ld. AR that "AAR Infrastructure Ltd." had thereafter merged with "CCL International Ltd." pursuant to the order of amalgamation passed by the Hon'ble High Court of Delhi dated 08.10.2011, Page 19-34 of APB. It was submitted by him that the assessee was thereafter under the aforesaid merger allotted 150000 shares of "CCL International Ltd.", Page 35 of APB, and the aforesaid shares of CCL International Ltd. were, thereafter, received by the assessee in its Demat account with Stock Holding Corporation of India Ltd., (SHICL), Page 36 of APB. The Ld. AR....
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.... of the assessee was required to be proved to be false, had relied on the judgment of the Hon'ble Supreme Court in the case of CIT Vs. Reliance Petroproducts Pvt. Ltd. (2010) 322 ITR 158 (SC). 16. Per contra, the Ld. Departmental Representative (for short 'DR') relied on the orders of the lower authorities. It was submitted by the Ld. DR that as the assessee had in its original return of income raised a false claim of exemption u/s. 10(38) of the Act which, on being cornered, was withdrawn in its return of income filed in response to notice u/s. 148 of the Act, therefore, the A.O. had rightly imposed the penalty u/s. 271(1)(c) of the Act. The Ld. DR in support of his aforesaid contention relied on the following judicial pronouncements: (i) Mak Data (P) Ltd. Vs. CIT, (2013) 38 taxmann.com 448 (SC) (ii) CIT Vs. Prasanna Dugar, (2015) 371 ITR 19 (Cal.) (iii) Pr. CIT Vs. Dr. Vandana Gupta, (2018) 92 taxmann.com 229 (Del) (iv) K.K Motwani HUF Vs. ACIT (2016)-TIOL-2910-HC-Mum-IT 17. We have heard the Ld. Authorized Representatives of both the parties, perused the orders of the lower authorities and material available on record, as wel....
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....all the facts relating to the same and material to the computation of his total income under the Act, 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 clause (c) of this subsection, be deemed to represent the income in respect of which particulars have been concealed. For the sake of clarity, "Explanation 1" to Section 271(1)(c) of the Act is culled out as under: "Explanation 1.-Where in respect of any facts material to the computation of the total income of any person under this Act,- (A) such person fails to offer an explanation or offers an explanation which is found by the Assessing Officer or the Commissioner (Appeals) or the Principal Commissioner or 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....
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....in its letter dated 23.03.2020 had reiterated its claim for exemption of LTCG of Rs. 2.78 crore (supra) u/s. 10(38) of the Act on the sale of shares of "CCL International Ltd." We find that the assessee had at length demonstrated in its letter that as to how it had acquired 150000 shares of "CCL International Ltd." Elaborating on the facts, the assessee had stated as under: * that it had purchased 60000 shares of "AAR Infrastructure Ltd" and had paid the purchase consideration through the banking channel on 06.01.2011, Page 16 of APB. * that the shares of "AAR Infrastructure Ltd." were allotted vide allotment letter dated 17.02.2011, Page 17 of APB. * that shares of "AAR Infrastructure Ltd" were received by the assessee in its demat account on 27.04.2011, Page 18 of APB. * that "AAR Infrastructure Ltd." had thereafter, merged with "CCL International Ltd." pursuant to the order of the Hon'ble High Court of Delhi vide its order passed in Company Application (M) No.135 of 2011 dated 08.10.2011, Page 19 to 34 of APB. * that the assessee was thereafter pursuant to the aforesaid merger allotted 150000 shares of "CCL International Ltd.", Pa....
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.... in shares on a regular basis; (iii) that the trading pattern of shares of "CCL International Ltd." revealed bell-shape movement; (iv) that the balance sheet of "CCL International Ltd." did not reveal any such credentials which would have supported the shares movement pattern in its case; (v) that a huge rise in the price of shares was not in line with the movement of the share market during the relevant period; (vi) that the authenticity of the transaction of sale of shares as projected by the assessee could not be conclusively established based on the documentary evidence but was to be determined on the basis of or anvil of surrounding facts and circumstances; (vii) that shares were purchased by the assessee off line and no demat account was produced during the assessment proceedings to show the exact date of entry in its demat account; (viii) that the application of equity shares was un-dated and no application number was mentioned on the application form and (ix) that the assessee had not filed any appeal against the assessment order which proved that there was conscious concealment of income on its part. 27. At this stage, it would be pertinent to observe that the lower aut....
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....evidence to support its claim of having carried out genuine transactions of purchase/sale of shares of "AAR Infrastructure Ltd"/"CCL International Ltd.", which as observed by us had not been dislodged based on any irrefutable material by the department. 29. We are of a firm conviction that as the lower authorities had failed to place on record any such material/evidence that would suggest that the assessee or its broker was involved in rigging up the price of scrips of "CCL International Ltd.", there was no justification in the drawing of adverse inferences as regards the LTCG on the purchase/sale of shares that was claimed as exempt u/s. 10(38) of the Act. Admittedly, the assessee had in its original return of income for the subject year that was filed on 26.07.2014 claimed LTCG of Rs. 2.78 crore (supra) on the sale of shares of "M/s. CCL International Ltd." as exempt u/s. 10(38) of the Act, which, thereafter, was withdrawn by him in its return of income filed in response to the notice u/s. 148 of the Act. However, we cannot remain oblivion of the circumstances, under which, the assessee had withdrawn its claim for exemption u/s. 10(38) of the Act. As observed by us hereinabove....
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....tion in saddling the asseseee with penalty u/s 271(1)(c) of the Act for raising a false claim of exemption of LTCG can safely be gathered from the judgment of the Hon'ble High Court of Gujrat in the case of Pr. CIT Vs. Mamta Rajibkumar Agrawal, (2023) 155 taxmann.com 549 (Gujrat). For the sake of clarity, the observations of the Hon'ble High Court are culled out as under: "3.3 The Tribunal confirmed the findings of the CIT(A) insofar as, it held in favour of the assessee. Findings of the Tribunal indicate that the assumption of the AO that the transaction carried out by the assessee are similar to the modus operandi of penny stock was misplaced. The Tribunal on facts observed thus: "11.1.......On analyzing the facts of the present case, we note that the AO on one hand has alleged that the entire transaction was bogus but on the other hand the AO himself has allowed the cost of acquisition against the sale of shares, meaning thereby, the purchase of the shares has been admitted as genuine. The transactions of purchase and sales go hand in hand. In simple words, sales is not possible without having the purchases. Thus, once purchases has been admitted as gen....
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....ecord suggesting that the assessee or his broker was involved in rigging up of the price of the script of M/s Shree Nath Commercial & Finance Ltd. The assessee had acted in good faith. The Tribunal, therefore, correctly held that the Assessing Officer had acted only on assumption which was misconceived. The CIT(A) order dismissing the revenue's appeal was confirmed." 32. As regards the adverse inferences drawn by the A.O regarding the authenticity of the transaction of purchase of shares of "AAR Infrastructure Ltd" (supra) by the assessee, inter alia, for the reason that the same were bought/acquired from off-market sources, we are of the view that the said aspect on a standalone basis cannot justifiably dislodge the authenticity of the share transaction, and thus, justify imposition of penalty on the assessee u/s 271(1)(c) of the Act. Our aforesaid view is supported by the judgment of the Hon'ble High Court of Bombay in the case of Pr. CIT-3, Mumbai Vs. Ziauddin A Siddique, ITA No.2012 of 2017 dated 04.03.2022. The question of law, for which, the indulgence of the Hon'ble High Court was sought is culled out as under: "Whether on the facts and in the circums....
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....e reason that, viz. (i) price of a share of "M/s. CCL International Ltd." had increased manifold within a short span; (ii) the trade pattern of the company did not move a/w. sensex; and (iii) the financials of the company did not show any reason for the extraordinary performance of its stock. We find that the Hon'ble High Court of Delhi in the case of Pr. CIT Vs. Smt. Krishna Devi (2021) 431 ITR 361 (Delhi) had in the case before them wherein identical facts/issues were involved vacated the adverse inferences which were drawn by the A.O, observing as under: "11. On a perusal of the record, it is easily discernible that in the instant case, the AO had proceeded predominantly on the basis of the analysis of the financials of M/s Gold Line International Finvest Limited. His conclusion and findings against the Respondent are chiefly on the strength of the astounding 4849.2% jump in share prices of the aforesaid company within a span of two years, which is not supported by the financials. On an analysis of the data obtained from the websites, the AO observes that the quantum leap in the share price is not justified; the trade pattern of the aforesaid company did not move al....
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....channel, and the shares were dematerialized and the sales have been routed from de-mat account and the consideration has been received through banking channels." The above noted factors, including the deficient enquiry conducted by the AO and the lack of any independent source or evidence to show that there was an agreement between the Respondent and any other party, prevailed upon the ITAT to take a different view. Before us, Mr. Hossain has not been able to point out any evidence whatsoever to allege that money changed hands between the Respondent and the broker or any other person, or further that some person provided the entry to convert unaccounted money for getting benefit of LTCG, as alleged. In the absence of any such material that could support the case put forth by the Appellant, the additions cannot be sustained." Also, the aforesaid order of the Hon'ble High Court of Delhi in the case of Pr. CIT Vs. Smt. Krishna Devi (supra) had thereafter been followed by the Hon'ble High Court in the case of Pr. CIT-12 Vs. Karuna Garg, ITA No.477/2022 dated 23.11.2022. 34. Apart from that, as the Demat account/contract note of the assessee shows the details of share tran....
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....ney through transactions in penny stocks, therein, without placing on record any material which would irrefutably disprove the authenticity of the assessee's claim and prove that it had raised a false claim of exemption u/s. 10(38) of the Act to channelize its unaccounted money saddled it with penalty u/s. 271(1)(c) of the Act. We further find substance in the Ld. AR's claim that merely because the assessee had in its return of income filed in response to notice u/s. 148 of the Act to buy peace of mind and to avoid protracted litigation withdrawn its claim for exemption u/s. 10(38) of the Act of LTCG of Rs. 2.78 crore (supra) on the sale of shares of "CCL International Ltd." as was claimed in its original return of income, therefore, it could not be said that it had concealed part of its income specifically when the same was supported by documentary evidence, which had not been dislodged by the department. Our aforesaid view is fortified by the order of ITAT, Raipur in the case of ACIT-1(2), Raipur Vs. Agrawal Round Rolling Mills Ltd., ITA No.133 (BLPR) of 2009 dated 14.07.2010, wherein the Tribunal had observed that as there was neither any detection nor any information in....
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....ee or its broker was involved in rigging up the price of scrip of "CCL International Ltd." there was no justification for the A.O. to have drawn adverse inferences as regards the authenticity of the assessee's claim of exemption of LTCG on the transaction of sale of said shares u/s. 10(38) of the Act; (VI) that the information received from Investigation Wing, Kolkata did neither make any reference of the involvement of the assessee in rigging up the price of scrips of "CCL International Ltd." nor any material relating to the assessee was found in the report filed by the Investigation Wing. (VII) that the A.O had not carried out the basic verification from the broker nor placed on record any such material which would disprove the authenticity of the shares transactions carried out by the assessee. 38. Further, our aforesaid view that where the department had failed to establish that the assessee had concealed her income, penalty u/s. 271(1)(c) of the Act could not have been saddled upon her is supported by the order of the ITAT, Raipur in the case of DCIT-1(1), Raipur (C.G.) Vs. Smt. Renu Behl, ITA No.289/RPR/2023 dated 11.12.2023, wherein on identical fact....
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....he original return, was indeed bogus, a notice under section 148 of the Act was issued on March 31, 2003, on the ground that certain income chargeable to tax had escaped assessment. In response to the said notice, the assessee filed the return of income, wherein income was declared at Rs. 63,39,640/-, which, inter alia, included the entire amount of receipts on account of sale proceeds of the shares of Rs. 33,10,380/- against the long-term capital gain of Rs. 29,74,951/- declared in the original return of income. This return of income was accompanied by a "note" in which the assessee submitted that the return of income is being voluntarily revised to include the entire amount of receipt along with other amounts to buy peace of mind and to avoid hazards of litigation and also to save himself from any penal action. Thereafter, the assessment order was framed on December 23, 2003, and the return submitted by the assessee was regularized as it is under section 148 of the Act. Meanwhile, the Assessing Officer initiated the penalty proceedings against the assessee under section 271(1)(c) of the Act. The Assessing Officer, after considering the submissions of the assessee, imposed a penal....
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.... the share dealings done by the assessee. Based on the aforesaid facts, the Tribunal observed that merely because the income had been offered by the assessee in response to the notice u/s. 148 of the Act, it cannot be ipso facto inferred that the penal provisions of Section 271(1)(c) of the Act are attracted. It was further observed that to apply the penal provisions of Section 271(1)(c) of the Act, it is to be necessarily inferred that there is a positive act of concealment of income or furnishing of inaccurate particulars of such income by the assessee. Observing, that in the case before them, it was brought out by the CIT(Appeals) that no chance had been given to the assessee to examine the broker regarding his denials, therefore, it could not be said that the department had discharged its burden of proving concealment. The department had simply rested its conclusion on the act of the assessee of having offered additional income filed in response to the notice u/s. 148 of the Act. The Tribunal observed that as additional income so offered by the assessee was done in good faith, therefore, penalty u/s. 271(1)(c) of the Act could not have been levied. The Tribunal had concluded as....
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....lish that the explanation of the assessee was not bonafide, thus, approved the view taken by the Tribunal in upholding the order of the CIT(Appeals) whereby the penalty imposed u/s. 271(1)(c) of the Act by the A.O. was deleted. For the sake of clarity, the observations of the Hon'ble High Court are culled out as under: "5. The Department has filed the instant appeal against the aforesaid order of the Tribunal raising the following substantial question of law for consideration of this court : "Whether, on the facts and in the circumstances of the case, the learned Income-tax Appellate Tribunal was right in law in confirming the order of the Commissioner of Income-tax (Appeals), deleting the penalty levied under section 271(1)(c)?" 6. We have heard the learned counsel for the appellant and gone through the impugned order. Learned counsel for the appellant submitted that in the present case the assessee filed its revised return, including the entire amount of share proceeds, after issuance of the notice under section 148 of the Act. By filing the revised return, the assessee owned the amount in question as his income and he had earlier filed the original....
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....During the course of assessment, the aforesaid explanation given by the assessee was neither rejected nor was it held to be mala fide. The Tribunal has recorded a pure finding of fact to the effect that the Revenue has not placed on record any material or evidence to dis-charge its burden of proving concealment. In the assessment order no such finding was recorded. The Department has simply rested its conclusion on the act of the assessee of having offered additional income in the return filed in response to the notice issued under section 148 of the Act. The Tribunal has further held that the additional income so offered by the assessee was done in good faith and to buy peace. The Tribunal has relied upon the decision of the apex court in case of CIT v. Suresh Chandra Mittal [2001] 251 ITR 9, wherein the Supreme Court has upheld the decision of the Madhya Pradesh High Court CIT v. Suresh Chandra Mittal [2000] 241 ITR 124 (MP), where in similar circumstances it was held that the initial burden lies on the Revenue to establish that the assessee had concealed the income or had furnished inaccurate particulars of such income. The burden shifts to the assessee only if he fails to offer....
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.... he had done so on the persistent queries made by the Assessing Officer, but once the revised assessment was regularised by the Revenue and once the assessing authority had failed to take any objection in the matter, the declaration of income made by the assessee in his revised returns and his explanation that he had done so to buy peace with the Department and to come out of vexed litigation could be treated as bona fide in the facts and circumstances of the case. Therefore, the Tribunal was justified in cancelling the penalty levied by the Assessing Officer and affirmed by the Commissioner of Income-tax (Appeals) in the facts and circumstances of the case. This reference is accordingly answered in the affirmative holding that the Tribunal was justified in doing so." We may herein observe that Special Leave Petition (SLP) filed by the revenue against the aforesaid order of the Hon'ble High Court of Madhya Pradesh in the case of CIT Vs. Suresh Chandra Mittal (2000) 241 ITR 124 (MP) had been dismissed by the Hon'ble Supreme Court in the case of CIT Vs. Suresh Chandra Mittal (2001) 251 ITR 9 (SC). Also, a similar view had been taken by the ITAT, Surat in the case of Ashvin....
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....ed to him under Clause (i) to sub-section (1) of Section 142 or 148, which, however, is not the case of the assessee before us. 49. We shall now deal with the judicial pronouncements that have been pressed into service by the Ld. DR, as under: A.) MAK Data (P) Ltd. Vs. CIT (2013) 38 taxmann.com 448 50. We may herein observe that the judgment of the Hon'ble Supreme Court in the case of MAK Data P. Ltd. Vs. CIT (2013) 358 ITR 593 (SC) is distinguishable on facts. We find that in the case before the Hon'ble Apex Court, certain documents comprising share application forms, bank statements, memorandum of association of companies, affidavits, copies of income-tax returns, and blank share transfer deeds duly signed were impounded during the course of the survey operation conducted on 16.12.2003 in the case of its "sister concern‟. The assessee only during the course of the assessment proceedings in its case, on being confronted with the aforesaid documents pertaining to the share applications found in the course of survey proceedings, particularly, blank transfer deeds duly signed, had as per its reply filed on 22.11.2006 came up with a disclosure of Rs. 40.74 lakhs....
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..... C.) Pr. CIT Vs. Vandana Gupta (2018) 101 CCH 53 (Del.) 54. In the aforesaid case, the assessee who was a medical practitioner was subjected to survey u/s. 133A of the Act. The assessee in the course of survey proceedings surrendered certain amount. The A.O. imposed penalty u/s. 271(1)(c) of the Act on the ground that the assessee had concealed income and furnished inaccurate particulars. On appeal, the Tribunal vacated the penalty. On further appeal by the revenue, the Hon'ble High Court observed that as the assessee had merely made a voluntary surrender and not offered any explanation as to the nature of income or its source, therefore, as per "Explanation 1" to Section 271(1)(c) of the Act in absence of any explanation forthcoming penalty u/s. 271(1)(c) of the Act was justifiably imposed on her. 55. As the facts involved in the present case before us are distinguishable, therefore, reliance placed by the Ld. DR on the aforesaid judicial pronouncement will not carry the case of the revenue any further. D.) K.K Motwani HUF Vs. ACIT, 2016- TIOL-2910-HC-IT 56. The assessee HUF who was a property developer had though debited an additional price for the re-purchase....