9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2019 (2) TMI 1140 - AT - Income TaxAddition u/s 271(1)(c) - no return filed u/s 139 - in response to a notice under section 153A assessee furnishes a return disclosing higher income - HELD THAT - As extracted the assessment order nowhere the AO has made reference to any seized material. Meaning thereby, the assumption of the AO that the assessee has concealed the income amounting to ₹ 6,85,480/- is misplaced. He assumed concealment of this figure while comparing with non-filing of the return under section 139. The assumption for considering it as concealed income could only be made if incriminating material qua that was found during the course of search. Explanation 5A could authorise him to visit the assessee with penalty. In the case of Shri Mansukhbhai R. Sorathia 2013 (7) TMI 1124 - ITAT RAJKOT , we have rejected assumption at the end of the Revenue that additional income in the return after search was filed because some incriminating material was found. The assumption of incriminating material cannot be entertained or construed. It should be in physical form. Therefore, the AO has erred in visiting the assessee with penalty by observing that since no return was filed under section 139, therefore it is to be assumed that assessee has concealed the income. This concealed income should be represented by some incriminating material during the course of search. In response to a notice under section 153A assessee furnishes a return disclosing higher income, it could be considered as concealed income only if some incriminating material representing that higher income was found during the course of search. In view of the above we allow appeal and delete penalty. - Decided in favour of assessee.
Issues Involved:
1. Confirmation of penalties under section 271(1)(c) of the Income Tax Act for the Assessment Years 2008-09 and 2010-11. 2. Determination of income in an assessment order passed under section 153A. 3. Applicability of Explanation 5A for imposing penalties under section 271(1)(c). Detailed Analysis: 1. Confirmation of Penalties under Section 271(1)(c): The primary grievance of the assessee was the confirmation of penalties of ?32,540/- and ?93,820/- for the Assessment Years 2008-09 and 2010-11, respectively, imposed by the Assessing Officer (AO) under section 271(1)(c) of the Income Tax Act. The penalties were imposed on the grounds of concealing particulars of income. 2. Determination of Income in an Assessment Order Passed under Section 153A: For the Assessment Year 2008-09, the assessee filed a return of income under section 139 declaring a total income of ?7,73,820/-. A search under section 132 led to a reassessment under section 153A, where the AO found discrepancies in the short-term capital gain declared by the assessee. The AO noted a difference in the cost of acquisition of a property, leading to an addition of ?1,05,300/- to the short-term capital gain. The AO initiated penalty proceedings under section 271(1)(c) for concealing particulars of income. For the Assessment Year 2010-11, the assessee did not file a return under section 139 but filed one in response to a notice under section 153A, declaring a total income of ?6,85,480/-. The AO accepted this return without making any additions but initiated penalty proceedings under section 271(1)(c) on the grounds that the income declared in response to the notice under section 153A represented concealed income. 3. Applicability of Explanation 5A for Imposing Penalties under Section 271(1)(c): The Tribunal examined whether penalties were imposable under section 271(1)(c) considering recent jurisprudential developments. It was noted that penalties under section 271(1)(c) could be imposed with the help of Explanation 5A, applicable for searches initiated after June 1, 2007. Explanation 5A deems income found during a search as concealed if it was not declared in the return filed before the search. In the case of the Assessment Year 2010-11, the AO did not refer to any seized material indicating concealed income. The Tribunal noted that penalties under section 271(1)(c) could only be imposed if incriminating material was found during the search. Since no such material was referenced, the penalty was deemed unjustified. For the Assessment Year 2008-09, the only issue was the difference in the computation of the cost of acquisition of a property. The Tribunal observed that no incriminating material was found during the search to support the AO's reduced cost of acquisition. The income declared by the assessee under section 139(1) matched the reassessed income, indicating no concealment. Conclusion: The Tribunal concluded that penalties under section 271(1)(c) were not justified in either assessment year due to the lack of incriminating material found during the search. The appeals of the assessee were allowed, and the penalties were deleted. Order: Both appeals of the assessee were allowed, and the penalties imposed were deleted. The order was pronounced on February 18, 2019.
|
