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2015 (9) TMI 1585 - AT - Income TaxPenalty provisions under section 271(1)(c) - unrecorded payment in respect of the land purchased by the assessee survey record and statement taken during the course of survey relied upon - Held that - Since there was a difference of opinion between the learned Members, constituting a Division Bench of I.T.A.T., Jaipur and the Hon ble President, I.T.A.T. nominated Shri G.D. Agrawal, Vice President as Third Member. The Hon ble Third Member concurred with the findings of the Hon ble Judicial Member and held as agreeing with the finding of the Assessing Officer in the penalty order that the assessee did not disclose the correct purchase consideration of the agricultural land. The purchase price of the land was recorded at a lesser value in the regular books of account. These facts were detected by the Revenue as a result of survey at the assessee s premises. During the course of survey, the Director of the Company admitted these facts. Thus, it is a clear case where the assessee furnished incorrect particulars in the original return of income with regard to purchase price of agricultural land, value of closing stock as well as the business income. The revised return modifying the figure of purchase value of agricultural land, value of closing stock as well as business income was furnished only after the detection of these discrepancies during the course of survey. In view of above, have no hesitation to hold that on the facts and circumstances of the case, learned Judicial Member rightly proposed to sustain the penalty imposed u/s 271(l)(c). - Decided against assessee.
Issues Involved:
1. Whether the order passed by the A.O. under section 271(1)(c) is barred by limitations. 2. Whether the levy of penalty under section 271(1)(c) at Rs. 1,01,76,653/- is justified. 3. Whether the penalty can be confirmed without correlating the incriminating material found with the surrender made by the assessee voluntarily. Issue-wise Detailed Analysis: 1. Limitation of Order under Section 271(1)(c): The assessee contended that the penalty order was barred by limitation. However, the CIT (A) rejected this contention, and the Tribunal noted that the assessee did not advance any argument regarding limitations during the hearing. Thus, the first issue raised by the assessee was rejected. 2. Justification of Penalty under Section 271(1)(c): The assessee filed an original return declaring an income of Rs. 1,87,697/-. A survey under section 133A revealed that the company made undisclosed investments in agricultural land. The Directors admitted to recording lower values in the books than the actual purchase prices. Consequently, the assessee filed a revised return declaring additional income of Rs. 3,02,33,672/-. The Assessing Officer treated this as undisclosed investment under section 69B and initiated penalty proceedings under section 271(1)(c). The CIT (A) upheld the penalty, noting that the revised return was not voluntary but a result of the survey. The Tribunal, after considering the facts and arguments, concluded that the assessee did not file correct particulars of income in the original return and the revised return was not voluntary. The Directors themselves calculated the undisclosed income, and there was no necessity for the Assessing Officer to conduct further enquiry. Thus, the penalty was justified. 3. Correlation of Incriminating Material with Voluntary Surrender: The assessee argued that the penalty was imposed without correlating the incriminating material with the voluntary surrender. However, the Tribunal found that during the survey, incriminating documents were found, and the Directors admitted to making undisclosed investments. The revised return was filed based on these admissions. The Tribunal noted that the statement made during the survey had evidentiary value, and the Directors themselves calculated the undisclosed income. Thus, the argument that there was no material to support the penalty was rejected. Separate Judgments: The Judicial Member upheld the penalty, emphasizing that the revised return was not voluntary and was filed after the detection of discrepancies during the survey. The Accountant Member, however, proposed to cancel the penalty, arguing that the revised return was filed in good faith and the surrender was tax neutral. The Third Member concurred with the Judicial Member, stating that the assessee furnished incorrect particulars in the original return and the revised return was filed only after the survey detected discrepancies. Final Order: In accordance with the majority view, the appeal of the assessee was dismissed, and the penalty under section 271(1)(c) was sustained.
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