2013 (2) TMI 709 - AT - Income Tax

Summary

Issues Involved:
1. Levy of penalty u/s 271(1)(c) of the Income Tax Act.
2. Concealment of income and furnishing of inaccurate particulars.
3. Validity of the penalty in light of judicial precedents.

Summary:

1. Levy of Penalty u/s 271(1)(c):
The assessee challenged the order dated 9th March 2012, which upheld the penalty of Rs. 14,40,651/- imposed u/s 271(1)(c) of the Income Tax Act. The assessee argued that the profit was offered at 8% of the contract receipts, accepted by the department, and the return was filed before the issuance of notice u/s 148. Hence, there was no concealment or furnishing of inaccurate particulars of income, making the penalty u/s 271(1)(c) non-leviable.

2. Concealment of Income and Furnishing of Inaccurate Particulars:
The department conducted a survey u/s 133A on 8.8.2008, revealing that the assessee did not file returns for the assessment years 2005-06 to 2008-09. The gross contract receipts of Rs. 5,35,00,088/- from M/s Suzelon Infrastructure Services Limited were not declared. The statement of the director admitted discrepancies in the books of accounts and agreed to offer taxable income of Rs. 42,80,007/-. The department argued that the income was detected due to the survey, not voluntarily disclosed by the assessee, indicating concealment.

3. Validity of the Penalty in Light of Judicial Precedents:
The Tribunal analyzed the provisions of section 271(1)(c) and relevant explanations, emphasizing that if the conditions are satisfied, the penalty is mandatory. The Tribunal referred to various judicial precedents, including the Apex Court's decision in Union of India vs. Dharmendra Textile Processors, which clarified that mens rea is not an essential ingredient for imposing penalty u/s 271(1)(c). The Tribunal also considered cases where penalties were upheld due to non-voluntary disclosure of income following departmental detection.

The Tribunal concluded that the assessee's action was not suo motu but prompted by the survey, and the penalty was rightly levied. The appeal was dismissed, affirming the impugned order.

Conclusion:
The appeal of the assessee was dismissed, and the penalty u/s 271(1)(c) was upheld due to the concealment of income detected by the department during the survey. The Tribunal found no infirmity in the impugned order, affirming the penalty's validity.