TaxTMI 
TaxTMI 
2025 (11) TMI 725
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....e to the ground No. (1) above on the facts and in the circumstances of the case the learned CIT(A) is wrong, unjust and has erred in law in confirming penalty of Rs. 4,04,481/- imposed by the learned AO u/s 271(1)(c) of the IT Act, 1961." ITA No. 1454/JPR/2024 - A.Y. 2014-15 "1. That on the facts and in the circumstances of the case the learned CIT(A) is wrong, unjust and has erred in law in not accepting the plea of the appellant that the proceedings initiated by the ld. AO for imposition of penalty u/s 271(1)(c) of the IT Act, 1961 and consequent penalty of Rs 2,79,985/- imposed by him is wrong and bad in law. 2. That without prejudice to the ground No. (1) above on the facts and in the circumstances of the case the learned CIT(A) is wrong, unjust and has erred in law in confirming penalty of. Rs 2,79,985/- imposed by the learned AO u/s 271(1)(c) of the IT Act, 1961." 2. First of all, we take up the appeal of the assessee for adjudication relating to assessment year 2012-13 wherein brief facts of the case are that a search and seizure action u/s 132(1) of the Act was carried out on 5-022015 in the case of Bundi Silica Group, Kota to which the assessee belo....
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....levying penalty the assessee carried the matter before the ld. CIT(A) who confirmed the penalty imposed by the AO and thereby he dismissed the appeal of assessee by observing as under : Ground No. 1 - para -11 page 36 & 37 of ld. CIT(A) "11. In the instant case, the notice initiating the penalty proceedings talks about initiation of penalty proceedings U/s 271AAB of the Act in respect of undisclosed income of the specified previous year. However, while passing the penalty proceedings, the Assessing officer has given a clear finding as reflected in the penalty order that the assessee is liable for penalty U/s 271AAB(1)(a) which provides for levy of penalty @ 10% of the undisclosed income. As held by the Coordinate Bench (supra), the uncertain charge at the time of initiation of penalty has been made good and substituted with a conclusive default at the time of passing the penalty order and that in such a case, no fault can be found in the penalty order. In such a case, we do not see any infirmity in the initiation of penalty proceedings and consequent penalty order so passed by the Assessing officer and the contentions so raised by the ld AR in this regard cannot be acce....
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....d. AO in the penalty order levied penalty on the additional income shown in return of income filed u/s 153A of the Act. It is also submitted by the appellant that the explanation-1 to section 271(1)(c) is not applicable as the amount was included suo moto in return u/s 153A to correct the finding of assessee. The CIT (A)-4 on similar facts in case of KGK Creations P. Ltd vide dated 30-11-2015 in ITA No. 559/2013-14 it was held that when in the return filed in compliance to notice u/s 153A assessee suo moto corrected any mistake/wrong claim etc. in return filed u/s 139 (1) then explanation to section 271(1)(c) are not applicable. As against this it is seen from the penalty order that the Id. AO has noted that "During the course of assessment proceedings, it was noticed from the seized documents found during the search proceedings that the assessee has declared additional income of Rs. 13,09,000/- on account of unexplained investment in plot. As per statement of the partner of this firm Sh. Ashok Bansal recorded u/s 132(4) of the Income tax Act, 1961, Sh. Ashok Bansal admitted that the firm had made investment in plot out of its undisclosed income. The above stateme....
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....round in the appeal: 1. That on the facts and in the circumstances of the case the learned CIT(A) is wrong, unjust and has erred in law in not accepting the plea of the appellant that the proceedings initiated by the ld. AO for imposition of penalty u/s 271(1)(c) of the IT Act, 1961 and consequent penalty of Rs 404481 imposed by him is wrong and bad in law. 2. That without prejudice to the ground No. (1) above on the facts and in the circumstances of the case the learned CIT(A) is wrong, unjust and has erred in law in confirming penalty of Rs. 4,04,481/- imposed by the learned AO u/s 271(1)(c) of the IT Act, 1961. 3. That the appellant craves permission to add to or amend to any of grounds of appeal or to withdraw any of them. Facts of the case The assessee is a firm - a concern of Bundi Silica Group, Kota and is engaged in the business of mining and dealing in sand stone items. The assessee firm for the assessment year filed its return of income u/s 139(1) on 28-09-2012 declaring an income of Rs. 92,85,050/- which was processed u/s 143(1). A search u/s 132 was carried out at various business and residential premises of firm and its part....
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....32020 under appeal levied a penalty of Rs. 4,04,481/- on appellant u/s 271(1)(c) of I.T. Act, 1961. The present appeal is against said penalty order levying penalty of Rs. 4,04,481/- u/s 271(1)(c) of I.T. Act, 1961 on appellant firm. Order of CIT (A) The assessee firm filed appeal before CIT(A) against said penalty order and in course of hearing filed written submissions which reproduced in appeal order of CIT(A). The Ld. CIT(A)-IV in his order dated 16-10-2024 at page no. 36 & 42 para held that "11. In the instant case, the notice initiating the penalty proceedings talks about initiation of penalty proceedings U/s 271AAB of the Act in respect of undisclosed income of the specified previous year. However, while passing the penalty proceedings, the Assessing officer has given a clear finding as reflected in the penalty order that the assessee is liable for penalty U/s 271AAB(1)(a) which provides for levy of penalty @ 10% of the undisclosed income. As held by the Coordinate Bench (supra), the uncertain charge at the time of initiation of penalty has been made good and substituted with a conclusive default at the time of passing the penalty order and that in....
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.... seizure action. In view of the above discussion, the appellant has not discharged the onus to show that the additional income offered in the return of income under section 153A is not related to and not unearthed during the course of search and seizure action and is offered by the assessee on his own to correct earlier mistake. And further it is stated by the learned AO in the penalty order that the income was enhanced by the appellant on the basis of incriminating documents detected by the Department and this is not been factually countered by the appellant. Accordingly the penalty levied by the learned AO is hereby upheld. Accordingly this ground of appeal is hereby dismissed." The ground wise submission of assessee firm are as under:- Ground No. (1) That on the facts and in the circumstances of the case the learned CIT(A) is wrong, unjust and has erred in law in not accepting the plea of the appellant that the proceedings initiated by the ld. AO for imposition of penalty u/s 271(1)(c) of the IT Act, 1961 and consequent penalty of Rs 404481 imposed by him is wrong and bad in law. Submission of the assessee 1. Initiation of Penalty ....
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....posing of penalty u/s 271(1)(c) of Income Tax Act, 1961 i.e. concealed particulars of income or furnishing inaccurate particulars of income. Reliance is placed on the decision of Hon'ble Karnataka High Court in the case of CIT Vs. M/s SSA's EMERALD MEADOWS reported in (2016) 73 taxmann.com 248/242 Taxman 180, wherein Hon'ble Court has held that:- "3. The Tribunal has allowed the appeal filed by the assessee holding the notice issued by the Assessing Officer under section 274 read with Section 271(1)(c) of the Income Tax Act, 1961 (for short 'the Act') to be bad in law as it did not specify which limb of Section 271(1)(c) of the Act, the penalty proceedings had been initiated i.e. whether for concealment of particulars of income or furnishing of inaccurate particulars of income. The Tribunal, while allowing the appeal of the assessee has relied on the decision of the Division Bench of this Court rendered in the case of COMMISSIONER OF INCOME TAX - VS - MANJUNATHA COTTON AND GINNING FACTORY (2013) 359 ITR 565. 4. In our view, since the matter is covered by judgement of the Division Bench of this Court, we are of the opinion, no substantial question of law ar....
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....rder. Hon'ble Gujrat High Court followed the ratio laid down in the case of New Sorathia Engg. Co. [2006] 282 ITR 642 (Guj-High Court). 5. The above ratio laid down in the case of Manjunatha Cotton & Ginning Factory Supra) has been followed by various High Courts in the below mentioned cases: i Shri Samson Perinchery. ITA 1154, 953, 1097, 1226 of 2014 (Order date - 5.01.2017) (Bombay High Court) ii SSA's Emerald Meadows [2016] 73 taxmann.com 241 (Karnataka High Court) iii Mitsu Industries Ltd. ITA No. 216 of 2004, Gujarat High Court 6. Further attention is drawn towards the following judgement of the Hon'ble ITAT, Jaipur Bench:- (i) Narayana Heights & Towers, Vs. I.T.O., Ward-2(4) Jaipur ITA No. 1033/JP/2016 has canceled the penalty by holding that:- "3.2 We have heard the rival contention, perused the material available on record and gone through the orders of the authorities below. For the sake of clarity the relevant contents of the Assessment order are reproduced as under:-" "Penalty u/s 271(1)(c) is separately as assessee has concealed the income." Relevant contents of the Penalty Order ar....
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....s of income. In the present case notice under section 274 dated 25/3/2015 enclosed at paper book page 16 reads as under: - "Penalty Notice Under Section 274. Read with Section 271 of the IT Act, 1961. Whereas in the course of proceedings before me for the Assessment Year 2012-13. It appears to me that you have: - Read With Section 271(1)(c) concealed particulars of income or furnished inaccurate particulars of income." Therefore, there is no specific charge by the Assessing officer. Further, it is noted that the Assessing officer in penalty order (as noted hereinabove) has proceeded on the basis of the assumption that the assessee is satisfied with the assessment order. Therefore, it appears that the assessee has nothing to say and has no objection regarding the imposing of the penalty under section 271(1)(c) of the Act. In our considered view, the assessing officer was not justified in imposing the penalty on this basis the action of the assessing officer is contrary to the provision of law." ii) Shankar Lal Khandelwal v. DCIT - ITA No. 878/JP/2003. iii) Radha Mohan Maheshwari v. DCIT - ITA No. 773/JP/2013. iv) Murari ....
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.... originally left to be included in the original return filed u/s 153A of the I T Act, 1961. The Ld. AO in the penalty order levied penalty of Rs. 4,04,481/- on the additional income shown in return of income filed u/s 153A of the Ac). It is submitted that the explanation-1 to section 271(1)(c) is not applicable as the amount was included suo moto in return u/s 153A to correct the finding of assessee. The CIT (A) - 4 on similar facts in case of KGK Creations P. Ltd vide dated 30-11-2015 in ITA No. 559/2013-14 it was held that when in the return filed in compliance to notice u/s 153A assessee suo moto corrected any mistake/wrong claim etc. in return filed u/s 139 (1) then explanation to section 271(1)(c) are not applicable. Therefore when returned income u/s 153A is accepted there is no default u/s 271(1)(c) and deleted the penalty u/s 271(1)(c). The case is covered from this judgement. The appellant further relies on the following judicial pronouncements: * The Hon'ble ITAT, Jodhpur Bench, Jodhpur in the case of Poonam Marble Pvt. Ltd. Vs DCIT (2013) 40 Taxmann.Com 164 dated 03-06-2024 having identical facts of the case held that : A search operation was conducted ....
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....ity. However, the proviso to Explanation 1 provides for shifting of this burden again where the explanation offered by the assessee is found to be bona fide. In the instant case, though it was true that the assessee had not surrendered at all and that 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. Therefore, the Tribunal was justified in cancelling the penalty levied. * The Hon'ble Supreme Court in case of Dilip N. Shroff Vs. JCIT (2007) 291 ITR 519 held that before penalty can be levied u/s 271(1)(c) the entirety of circumstances must reasonably point to conclusion that assessee had consciously concealed his particulars of income or had furnished inaccurate particulars thereof. If there is no evidence or material to show that the assessee has deliberately furnished inaccurate particulars and....
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....en the assessee has disclosed all the primary facts in the return of income filed u/s 139, then the additional income offered in the return filed u/s 153A because of some discrepancy and error would not amount to concealment of income or furnishing inaccurate particulars of income attracting levy of penalty u/s 271(1)(c) of the I. T. Act. In view of the above discussion, we are of the considered opinion that the levy of penalty is not warranted and accordingly, the same is deleted." * The Hon'ble Nagpur Tribunal in the case of DCIT v. PurtiSakharKarkhana [2013] 35 Taxmann.com 594 (Nagpur - Trib) held as under: "search assessments made under section 153A cannot be treated as continuance of normal assessment proceedings whether abated or not and, therefore, it will not be justified to refer to returned income under section 139 for purpose of imposition of penalty under section 271(1)(c)..... .....where returned income filed under section 153A is accepted by Assessing officer and there is no variation in assessed income and returned income, penalty under section 271(1)(c) cannot be imposed". In view of above facts of the case penalty order is no....
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....ble on record. Vide Ground no 1 & 2 the assessee challenges the levy of penalty of Rs. 4,04,481/-. The brief facts related to the levy of this penalty is that the assessee there was an action of search and seizure action u/s 132(1) of the Act was carried out on 5-02-2015 in the case of Bundi Silica Group, Kota to which the assessee belongs. It is noted that the AO issued a notice u/s 153 of the Act to the assessee on 13-05-2015. In response to the notice, the assessee filed its return of income on 08-06-2015 for the Assessment Year 2012-13 declaring a total income at Rs. 92,85,050/-. The assessee filed its revised return of income on 19-10-2015 for the assessment year 2012-13 declaring a total income at Rs. 1,05,94,050/-. Thus, the AO completed the assessment u/s 143(3) r.w.s. 153A vide order dated 28-12-2016 at a total income of Rs. 1,40,62,140/-. Further, the order u/s 154 of the Act was also made on 25-09-2017 and the income was assessed at Rs. 1,61,76,089/- by making additions on account of disallowance of unabsorbed depreciation. The assessee filed the appeal before the ld. CIT(A)-4, Jaipur which was disposed off vide order 04-04-2018 by the ld. CIT(A). After giving the ....
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....rn within the time allowed under sub-section (1) may still furnish a return at any time before the end of the relevant assessment year or before the completion of the assessment whichever is earlier. Sub-section (5) of Section 139 provides that any person having furnished a return under sub-section (1) or sub-section (4) discovers any omission or a wrong statement therein, he may furnish a revised return any time before the expiry of one year from the end of relevant assessment year or before the completion of the assessment whichever is earlier. 6. Sub-section (5) of Section 139, therefore, gives right to an assessee who has furnished a return under sub-section (1) or sub-section (4) to revise such return on discovery of any omission or a wrong statement. Such revised return, however, can be filed before the expiry of one year from the end of the relevant assessment year or before the completion of the assessment, whichever is earlier. This is precisely what the assessee did while exercising the right to revise the return. Sub-section (5) of Section 139 does not envisage a situation whereupon revising the return if a case for loss arises which the assessee wishes to carry....
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....ourt in the case of Commissioner of Income-tax, Udaipur v. Udaipur Central Cooperative Bank Ltd. [59 taxmann.com 471 (Rajasthan)] wherein the Hon'ble High Court observed that ; The respondent assessee is carrying out business of banking and providing credit facility to its members. The assessee while filing return of income on 29.9.2008 declared no taxable income. A revised return was subsequently filed on 25.11.2009 showing taxable income of Rs. 93,13,296/-. Suffice to mention that in the original return dated 29.9.2008 the assessee claimed deduction of Rs. 93,13,296/- as per provisions of Section 80-P(2)(d) of the Income Tax Act, 1961 (hereinafter referred to as 'the Act of 1961'). 2. The Assessing Officer by a notice, as per provisions of Section 271(1)(c) of the Act of 1961, dated 5.12.2011 called upon the assessee respondent to explain as to why penalty be not imposed upon it for concealment of particulars of income for the assessment year 2008-09. 3. The assessee responded the notice with assertion that it disclosed full particulars of the income and did not conceal any particulars of income, as such no action as per Section 271(1)(c) of the....
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.... must have furnished inaccurate particulars of his income. The present is not a case of concealment of the income. That is not the case of the Revenue either. However, the learned counsel for Revenue suggested that by making incorrect claim for the expenditure on interest, the assessee has furnished inaccurate particulars of the income. As per Law Lexicon, the meaning of the word "particular" is a detail or details (in plural sense); the details of a claim, or the separate items of an account. Therefore, the word "particulars" used in the section 271(1)(c) would embrace the meaning of the details of the claim made. It is an admitted position in the present case that no information given in the return was found to be incorrect or inaccurate. It is not as if any statement made or any detail supplied was found to be factually incorrect. Hence, at least, prima facie, the assessee cannot be held guilty of furnishing inaccurate particulars. The learned counsel argued that "submitting an incorrect claim in law for the expenditure on interest would amount to giving inaccurate particulars of such income". We do not think that such can be the interpretation of the concerned words. The words ....
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....t all the facts relating to the same and material to the computation of his income were not disclosed by him. It was then held that the explanation must be preceded by a finding as to how and in what manner, the assessee had furnished the particulars of his income. The court ultimately went on to hold that the element of mens rea was essential. It was only on the point of mens rea that the judgment in Dilip N. Shroff v. Joint CIT was upset. In Union of India v. Dharamendra Textile Processors, after quoting from section 271 extensively and also considering section 271(1) (c), the court came to the conclusion that since section 271(1)(c) indicated the element of strict liability on the assessee for the concealment or for giving inaccurate particulars while filing return, there was no necessity of mens rea. The court went on to hold that the objective behind the enactment of section 271(1)(c) read with Explanations indicated with the said section was for providing remedy for loss of revenue and such a penalty was a civil liability and, therefore, wilful concealment is not an essential ingredient for attracting civil liability as was the case in the matter of prosecution under section ....
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....of 1961 it is required to be seen as to whether the assessee has concealed the income or the details supplied by him in return were found incorrect, erroneous, not accurate, not according to the truth or not exact depiction of the taxable income. No such eventuality in the instant matter exists. The Commissioner of Income Tax as well as the Income Tax Appellate Tribunal after examining the entire record arrived at the conclusion that first return submitted by assessee Udaipur Central Cooperative Bank Ltd. was a bonafide error and that was immediately rectified by submitting a revised return. 8. In this factual background we do not find any substantial question of law that may demand adjudication by us by entertaining an appeal as per provisions of Section 260-A of the Income Tax Act, 1961. 9. The appeal is dismissed accordingly. Respectfully, following the finding of our Hon'ble High Court that once the assessee files the revised return of income and thereby the revenue recovered the tax and since there is no finding that any details supplied by the assessee in its return were found to be incorrect or erroneous or false. Such not being the case, there would be ....
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....t without prejudice to the ground No. (1) above on the facts and in the circumstances of the case the learned CIT(A) is wrong, unjust and has erred in law in confirming penalty of Rs. 2,79,985/- imposed by the learned AO u/s 271(1)(c) of the IT Act, 1961. 3. That the appellant craves permission to add to or amend to any of grounds of appeal or to withdraw any of them. 10. The brief facts related to the levy of this penalty are that in the case of the assessee as noticed above, there was an action of search and seizure action u/s 132(1) of the Act was carried out on 5-02-2015 in the case of Bundi Silica Group, Kota to which the assessee belongs. It is noted that the AO issued a notice u/s 153A of the Act to the assessee on 13-05-2015. In response to the notice, the assessee filed its return of income on 08-06-2015 for the Assessment Year 2014-15 declaring a total income at Rs. 16,12,000/-. Records also reveal that the assessee on 26.09.2014 e-filed the original return of income declaring income as Rs. 7,05,900/- which was revised i.e. on 19.03.2015 after the search, wherein the income of Rs. 16,12,000/- was declared by the assessee. Since the assessee filed the revise....