TaxTMI 
TaxTMI 
2026 (6) TMI 819
X X X X Extracts X X X X
X X X X Extracts X X X X
..... Though the assessee had claimed the refund of TDS of Rs. 3,79,717/-, he has not shown the income from capital gains of the property transaction or claimed any exemption u/s. 54 of the Act. Hence, the case was reopened by issuing notice u/s. 148 of the Act. The assessee filed a return of income in response to notice u/s. 148 of the Act on 12.11.2019 admitting the total income of Rs. 1,090. During the assessment proceedings, the assessee furnished a copy of sale deed, bank accounts, lease agreement copies and statement for withdrawals from bank and other details and also filed an explanation regarding sources for the property purchased during the FY 2013-14 for Rs. 3,79,61,700/- along with registration and stamp expenses of Rs. 30,50,500/-. Further, the assessee also explained the source for investment in the properties of Rs. 4,10,11,700/-. However, the assessee did not produce any details for agricultural income savings shown as a source for acquisition of the asset of Rs. 14,94,517/- and hence, the AO made an addition of Rs. 14,95,417/- as admitted by the assessee as his income for the AY 2014-15 and passed an assessment order u/s. 147 of the Act dated 29.12.2019. Further, the A....
X X X X Extracts X X X X
X X X X Extracts X X X X
....he above, the assessee is liable to imposition of penalty u/s 271(1)(c) of the Act. The case is squarely covered under explanation (1) to Section 271(1)(c) of the Act. Sl. No. Description Amount (in Rs. ) (i) Concealed / Inaccurate income 15,75,841/- (ii) Tax on concealed income 3,11,835/- (iii) Minimum Penalty (100%) 3,11,835/- (iv) Maximum penalty (300%) 9,35,505/- 11. I, therefore, impose a penalty of Rs. 311835/- u/s. 271(1)(c) read with Explanation-1 thereto, which is equivalent to 100% of tax sought to be evaded. Issue demand notice and challan accordingly." 4. Aggrieved by the order of the penalty levied by the AO, the assessee preferred an appeal before the ld.CIT(A). Before the ld.CIT(A), the assessee reiterated the facts and also circumstances under which the assessee agreed for additions during the assessment proceedings, and hence, prayed for deleting the penalty, which has been levied by the AO. However, the ld.CIT(A) was not convinced with the explanation given by the assessee and confirmed the order of the AO stating that the agricultural income savings and interest income had not been come to the light of the ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... Act, the assessee would not have revealed the true facts of his income (agricultural income savings and income from bank interest) and the same would have escaped the assessment leading to the loss of the revenue. Section 271(1)(c) of the Act states that if any person has concealed the particulars of his income or furnished inaccurate particulars of such income, he is liable for penalty 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 the furnishing of inaccurate particulars of such income. Further, Explanation-1 to section 271(1) of the Act, states that:- "Explanation 1 - Where in respect of any facts material to the computation of the total income of any person under this Act, - 1. Such person fails to offer an explanation or offers an explanation which is found by the Assessing Officer or the Commission Appeals or the Commission to be false, or 2. 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 materia....
X X X X Extracts X X X X
X X X X Extracts X X X X
....es not provide that when an assessee makes a voluntary disclosure of his concealed income, he had to be absolved from penalty. 9. We are of the view that the surrender of income in this case is not voluntary in the sense that the offer of surrender was made in view of detection made by the AO in the search conducted in the sister concern of the assessee. In that situation, it cannot be said that the surrender of income was voluntary. AO during the course of assessment proceedings has noticed that certain documents comprising of share application forms, bank statements, memorandum of association of companies, affidavits, copies of Income Tax Returns and assessment orders and blank share transfer deeds duly signed, have been impounded in the course of survey proceedings under Section 133A conducted on 16.12.2003, in the case of a sister concern of the assessee. The survey was conducted more than 10 months before the assessee filed its return of income. Had it been the intention of the assessee to make full and true disclosure of its income, it would have filed the return declaring an income inclusive of the amount which was surrendered later during the course of the assessme....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... agricultural income had not been added to the total income of the assessee in the assessments concluded by the AO. Therefore, the question of levying penalty u/s. 271(1)(c) of the Act does not arise when the assessee had only the exempt income, which was not liable for income-tax. In view of the above, the ld.AR prayed for deleting the penalty as the assessee had already discharged the taxes as per the assessment order and demand notice without preferring any further appeal on the quantum assessment. 6. Per contra, the ld.DR supported the orders of the authorities and submitted that as rightly held by the ld.CIT(A), the assessee would not have disclosed the additions made during the assessment proceedings if the case had not been reopened for reassessment u/s. 147 of the Act. The ld.DR prayed for upholding the order of the ld.CIT(A) by dismissing the appeal of the assessee. 7. We have heard the rival submissions, perused the orders of the lower authorities and carefully examined the material available on record. The solitary issue arising for our consideration is whether the penalty of Rs. 3,11,835/- levied by the AO u/s. 271(1)(c) of the Act and confirmed by the ld.CIT(A) i....