TaxTMI 
TaxTMI 
TaxTMI 
2025 (9) TMI 78
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....are of the view that the delay is attributable to the sufficient cause. We, therefore condone the said delay and proceed to decide the appeal. 3. Briefly stated, the facts of the case are that the assessee is an individual. He filed his return of income for AY 2010-11 on 16.10.2010 declaring total income of Rs. 7,12,450/-. Subsequently, he revised his return by filing revised return of income on 30.09.2011 declaring total income of Rs. 41,67,100/-. His return was processed u/s 143(1) of the Act. Thereafter, the case of the assessee was reopened u/s 147 by issue of notice u/s 148 on 25.07.2012 which was duly served upon the assessee. The case was reopened on the basis of reference received from the ITO (Inv.) Unit-II, Pune informing that the assessee had paid cash of Rs. 40,50,000/- to one Shri Pritam Sanas. During the course of enquiry before the ITO, the assessee admitted the said payment of cash to Shri Pritam Sanas and filed his revised return of income thereafter. The case of the assessee was reopened u/s 147 of the Act since the revised return was filed by the assessee beyond the time limit prescribed u/s 139(1) of the Act. The assessment u/s 143(3) r.w.s. 147 of the Act wa....
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....he instant case, subsequent return was filed voluntarily, but only after enquiry conducted by ITO (Inv) Unit-II, Pune. This clearly attracts the provision of section 271(1)(c) of the I.T.Act 1961. Even judicial decisions are also to the same effect, particularly in these few cases iPolo Singh & Co. Vs CIT (Del) 98 ITR 564,CIT Vs Krishna & Co. (Mad) 120 ITR 144,CIT Vs Dr. R.C. Gupta & Co. (Raj) 122 ITR 567, Union Engineering Co. Vs CIT (Ker) 122 ITR 719,ITO Vs Leela Mammen (ITAT, Cochin) 63 TTJ 252, CIT Vs P.B. Shah & Co. (Pvt.) Ltd. (Cal) 113 ITR 587,ACIT Vs S.M. Kannappa Automobiles (P) Ltd. (ITAT, Bang) 72 ITD 474. In all cases the gist is like this "Simply because assessee agreed to addition of concealed income after detection thereof and filed return in response to enquiry conducted by department, assessee cannot escape from penalty u/s 271(1)(c)' Moreover, The Supreme court in the case of MAK Data (P) Ltd. Vs Commissioner Of Income Tax 358 ITR 593 has clearly observed Voluntary disclosure does not release assessee from mischief of penal proceedings under section 271(1)(c). Same arguments and case laws are applicable for the additions made in the assessment order i....
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....TR. 5.7 In this context, it is clear that the appellant did not disclose the aforesaid cash payment in his original ITR. The appellant has disclosed the aforesaid cash payment in his revised ITR only after the enquiry conducted by the department. The claim of the appellant with regard to voluntary disclosure of the said amount is therefore not correct. The fling of revised return by the appellant was an action that originated from the fact that the department had the information of cash payment of Rs. 40,50,000/- and the appellant could not escape the notice of the same by the department. Hence, the fling of revised ITR was not on account of bonafide admission by the appellant but had arisen to escape the penal provisions of the act. The explanation offered by the appellant that the source of such cash was from agricultural receipts of his family year after year on account of sale of sugarcane is not acceptable as cash of Rs. 40.50,000/- in the year 2010 is not a small amount which is to be kept in normal household of a farmer. The claim of source of the said amount is not supported by any substantive documentary evidence either. Further, the appellant has not furnished an....
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....hat Section 271(1)(c) of the Act had been enacted to provide a remedy for loss of revenue and the penalty under the said provision was a civil liability. The Supreme Court further held that willful concealment was not an essential ingredient for attracting civil liability as was the case in matter of prosecutions under Section 276C of the Act. 6. In the pertaining facts and circumstances of the case in hand, and in view of the afore-discussed exposition of law applicable, the judgements cited by the appellant for the case in hand are all distinguishable because they are rendered on different factual matrix or they proceeded on the theory of wilful concealment. Therefore, it has to be held that the appellant has failed miserably to make out a case against the levy of penalty u/s 271(1)(c) of the Act and, thus, I find no infirmity in the order of the A.O. passed u/s 271(1)(c) of the Act. The levy of penalty of Rs. 12,24,938/- u/s 271(1)(c) is, accordingly, confirmed. Consequently, all the grounds of appeal raised by the appellant are dismissed." 5. Dissatisfied, the assessee is in appeal before the Tribunal challenging the imposition of penalty by the Ld. CIT(A) and all t....
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....ppellant craves leave to add, alter, delete, amend, withdraw, modify, change or substitute any ground or grounds of appeal or to add any new ground or grounds of appeal during or before the hearing of the appeal." 6. The Ld. AR filed detailed submissions before us in support of the grounds raised by the assessee inter alia contending as under : "(a) The Observation and findings of the Assessing Officer 7. The facts of the case have been stated in detail above which may kindly be considered. The Id. Assessing Officer during the penalty proceedings found that for AY 2010-11 the assessee had disclosed income of Rs. 41,67,100/- in the Revised return of income filed 30/09/2011, as against the income declared in the original return of income filed on 16/10/2010 of Rs. 7,12,450/-. It was also notice by him that in assessee case, such Revised return was filed after the admission by the assessee before the ITO (Inv.), Unit-II, Pune that the assessee had paid a sum of Rs. 40.50,000/- to one Shri Pritam Sanas for purchase of a land. The Assessing Officer also found that a notice u/s.148 of the Act was issued to the assessee on 25/07/2012 and as such income in the Revised ....
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....penalty u/s.271(1)(c) of the Act had been levied, contended that the assessee had not furnished any bonafied explanation with regard to such addition and therefore the penalty u/s.271(1)(c) of the Act was attracted on such addition also (c) The submission and contention of the appellant before the Hon'ble ITAT 9. The appellant humbly submits that the Ld. Assessing Officer had failed to take cognizance of the fact that the appellant assessee had filed the Revised return of income voluntarily on 30/09/2011 before he had re-opened the assessment in the case of the assessee u/s.147 of the I.T. Act, 1961 and so also before issuing of notice u/s.148 of the said Act by him on 25/07/2012. Though the assessee appellant admits that such income in the Revised return of income filed on 30/09/2011 of Rs. 41,67,100/-, against the income declared in the original return of income filed on 16/10/2010 of Rs. 7,12,450/- had been declared and filed after the enquiry conducted by the ITO Inv.), Unit-II, Pune when the assessee had admitted the cash payment for purchase of land at Manjiri of Rs. 40,50,000/- to one Shri Pritam Sanas, it cannot be denied either by the Ld. Assessing Of....
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....r to issuing of the notice u/s.148 of the Act dated 25/07/2012, it is humbly submitted that the said return may kindly be treated as filed within the prescribed time limit u/s 139(5) of the Act. Accordingly, the Revised Return filed by the assessee on 30/09/2011 declaring total income of Rs 41,67,100/- was well within the prescribed time limit, as the same was filed as per law u/s. 139(5) of the IT Act, 1963. Therefore, when there was no any default on the part of the assessee in declaring the true and correct income in the Revised Return of Income filed on 30/09/2011 within the prescribed time limit, the income declared in the said return could not be treated as assessee's unaccounted income and so also it could not be held by the Ld. Assessing Officer as "concealing the particulars of income" as held by him in the assessment order. The Assensing Officer therefore was not factually and legally justified in attracting the penal provisions of sections 271(1)(c) of the IT Act, 1961 and so also levying penalty under the said section of Rs. 12,24.938/- holding "that the assessee has willfully concealed the particulars of income to evade the tax" while levying the said penalty in th....
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....rn of income had been accepted by the Assessing Officer and assessed as such in the assessment order, no penalty in assessee's u/s 271(1)(c) of the Act was attracted and the Ld. Assessing Officer therefore had wrongly and unjustifiably levied penalty under the said section of Rs. 12,24,938/-. 10. The appellant further humbly submits that in the case of the appellant, in the assessment order passed u/s 143(3) r.ws. 147 of the Act dated 22/01/2024, the Ld. Assessing Officer had accepted the income declared by the assessee in the Revised Return of Income filed on 30/09/2011 of Rs. 41,67,100/-. The only variation in the assessment was made to that of the income declared in the Revised Return only of Rs. 8,29,550/- and such addition was made purely on estimate basis on business profit inter-alia contending that "the AR attended and stated that he has no objection for proposed addition of Rs. 8,29,550/-". The relevant para 4 of the assessment order pertaining to such addition of Rs. 8,29,550/- is reproduced as below: "4. In response to the notice issued, Shri A. M. Hippargekar, Tax Consultant and AR of the assessee attended from time to time and explained the return....
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....hich also in no case could be held as concealment of income for the facts as detailed above, the assessee humbly contends that no penalty u/s. 271(1)(c) of the Act was attracted in the case of the assessee for such income declared in the Revised Return of Income and so also owing to the assessment order passed u/s.143(3) r.w.s. 147 of the Act on 22/01/2014 accepting such income declared in the Revised Return of Income filed. The penalty therefore so levied by the Assessing Officer in the penalty order passed u/s.271(1)(c) of the Act on 30/07/2014 was arbitrary, illegal and bad-in-law and therefore, in the humbly opinion of the appellant, the same the penalty levied of Rs. 12,24,938/- is deserved to be deleted. The appellant humbly prays before the Hon'ble Bench to kindly delete the penalty so levied and oblige. 10.2 In support of the above claim of the appellant assessee, the appellant relies on the decisions of the Hon'ble various Courts/Tribunals as below: Kirit Dahyabhai Patel Vs. ACTT (2017) 8o taxmann.com 162 (Gujarat HC) It was held in para 13 of the Order by the Hon'ble Gujarat High Court as below: - "13. Considering the facts ....
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....the Act, the return that has to be looked at is the one filed under Section 153A. In fact, the second proviso to Section 153A(1) provides that "assessment or reassessment, if any, relating to any assessment year falling within the period of six assessment years referred to in this sub-section pending on the date of initiation of the search under Section 132 or making of requisition under Section 1324, as the case may be, shall abate." What is clear from this is that Section 153A is in the nature of a second chance given to the assessee, which incidentally gives him an opportunity to make good omission, if any, in the original return. Once the A.O. accepts the revised return filed under Section 153A, the original return under Section 139 abates and becomes non-est. Now, it is trite to say that the "concealment has to be seen with reference to the return that it is filed by the assessee. Thus, for the purpose of levying penalty under Section 271(1)(C), what has to be seen is whether there is any concealment in the return filed by the assessee under Section 153A, and not vis-a vis the original return under Section 139. Issue II" iii. Sureshbhai Gordhanbhai Prajapati Vs. DCTT,....
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....at the assessee has filed the return for the first time u/s 153A of the Act and no return was filed before initiation of search. Therefore, in terms of section 153A of the Act, return filed u/s 153A of the Act would be deemed to be return filed u/s 139 of the Act and all consequential provisions would apply. The Ld. D.R. has not rebutted this fact. I therefore, respectfully following judgment of Hon'ble Gujarat High Court rendered in the case of Kirit Dahyabhai Patel Vs. ACIT (supra) and other case laws as relied by the Ld. Counsel for the assessee, direct the A.O. to delete the penalty. The appeal of the assessee is allowed." iv. M/s. OSE Infrastructure Ltd. Vs. ACIT, ITA NO. 5891 to 5895/ Del/2016 dated 14/08/2018 (ITAT Delhi) The Hon'ble Delhi ITAT also has quashed the penalty proceedings thereby holding in para 15, 16 and 17 as below:- "16. Lastly, when the revised return is accepted and the income is assessed as per the revised income, there is no scope for penalty. In the case of Kirit Dahyabhai Patel us ACIT, (2017) 80 Tuxmann.com 162 (Guj), the Hon'ble High Court held that in vieur of specific provision of Section 153A, the return of i....
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.... penalty under section 271(1)(c) of the Act. viii. CIT vs. B.G. Shirke Construction Technology Pvt. Ltd. [2017] 79 taxmen.com 306 (BOM) The Hon'ble Bombay High Court held in this case as below:- "A return filed u/s 153A is a return furnished u/s 139 and therefore, provisions of the Act which apply to return filed in regular course u/s 139(1), would also continue to apply in case of return filed u/s 1534" The Hon'ble High Court after discussing the facts held that as the appellant's return was filed and assessed under section 153A and this return is treated as a valid return for the said assessment under section 153A, it is a return under section 139(1) filed by the appellant Accordingly, the provisions of section 80 do not apply to the appellant and the appellant eligible for carrying forward of the business loss. The ratio of this decision of the Bombay Hig Court is applicable to the case of the assessee under consideration as far as for the purpose treating the return filed by the assessee u/s. 153A as a return u/s. 139(1) of the Act. Since th assessed income was identical to that of the income declared in the return of income filed....
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....uch levy of penalty by the Ld. CIT(A) and oblige." 7. The Ld. DR strongly supported the order of the Ld. AO/CIT(A). He submitted that there was no willful disclosure on the part of the assessee. It is only after subsequent enquiry that the assessee declared the additional income which would have otherwise got escaped from assessment. In support thereof, the Ld. DR relied on the decision of the Hon'ble Rajasthan High Court in the case of Grass Field Farms & Resorts (P.) Ltd. Vs. Deputy Commissioner of Income Tax reported in (2017) 79 taxmann.com 426 (Rajasthan). He therefore prayed that the penalty of Rs. 12,24,938/- u/s 271(1)(c) of the Act confirmed by the Ld. CIT(A), be sustained. 8. We have heard the Ld. Representatives of the parties and perused the material on records, written submissions filed by the assessee and various judicial precedents relied upon by the Ld. AR and Ld. DR. The facts are not in dispute. The original return of income was filed by the assessee on 16.10.2010. The revised return was filed on 30.09.2011. Notice u/s 148 was issued on 25.07.2012. It is therefore apparent that the notice u/s 148 of the Act was issued after filing of revised return of income....