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2023 (5) TMI 837 - AT - Income TaxLevy of penalty u/s. 271(1)(c) - Income declared during search proceassessee had furnished inaccurate particulars of income - HELD THAT - It is an undisputed fact that during the course of search on 12.01.2010, the Director of the assessee company declared income of Rs. 1,80,00,000/- belongs to the assessee company and paid taxes thereon ad filed its Return of Income on 07.10.2010 for the AY 2010-11. Further the time limit of filing of Return of Income for A.Y. 2010-11 was not expired on the date of survey namely 12.01.2010 i.e. much before the end of the financial year itself. Assessee in its Return of Income duly declared the sum of Rs. 1,80,00,000/- which was admitted during the course of survey. Thus it cannot be said that the assessee had furnished inaccurate particulars of income which is not disputed by the AO. As per Explanation 5A to Section 271(1)(c), penalty is not leviable since the assessee has paid the taxes thereon in the Return of Income filed u/s. 139(1) - As supported by case of CIT vs. Jupiter Distillery 2011 (12) TMI 390 - ITAT, AHMEDABAD and Muninaga Reddy 2014 (2) TMI 82 - ITAT BANGALORE wherein deleted the levy of penalty u/s. 271(1)(c). Also in the case of CIT vs. SAS Pharmaceuticals 2011 (4) TMI 888 - DELHI HIGH COURT held where income surrendered by assessee during survey had been shown by it in its regular income-tax return filed within prescribed time, penalty could be imposed. CIT(A) has followed the above decisions and deleted the penalty on the declared income in search. CIT(A) confirmed the levy of penalty on the balance disputed income. We do not find any infirmity in the order passed by the CIT(A), who partly deleted the penalty levied u/s. 271(1)(C). The grounds raised by the Revenue is devoid of merits and the same is dismissed.
Issues involved:
The appeal concerns the penalty levied under section 271(1)(c) of the Income Tax Act, 1961 for the Assessment Year 2010-11. Summary of Judgment: Issue 1: The Revenue challenged the penalty imposed by the Assessing Officer on the additions confirmed by the CIT(A), specifically on the income of Rs. 1,80,00,000 declared during a survey. The CIT(A) partly allowed the appeal, deleting the penalty on the declared income but confirming it on the remaining disputed income of Rs. 4,08,097. The CIT(A) held that the assessee did not furnish inaccurate particulars of income for the declared amount of Rs. 1,80,00,000, as it was disclosed during the survey and in the return of income filed within the prescribed time. The CIT(A) relied on legal precedents to support this decision, emphasizing that penalty cannot be imposed where there is a complete disclosure of income. Issue 2: The Revenue appealed the CIT(A)'s decision, arguing that the assessee's adhoc disclosure of Rs. 1,80,00,000 during the survey amounted to furnishing inaccurate particulars of income under section 271(1)(c) of the Act. The Revenue contended that the CIT(A) should have upheld the Assessing Officer's order imposing the penalty. During the appeal hearing, the Revenue's representative supported the penalty order, while the assessee's counsel reiterated that there was no inaccurate disclosure of income, as the declared amount was promptly included in the return of income and taxes were paid accordingly. Judgment: The Tribunal upheld the CIT(A)'s decision, emphasizing that the assessee's disclosure of Rs. 1,80,00,000 during the survey and in the return of income within the stipulated time did not constitute inaccurate particulars of income. The Tribunal cited legal provisions and previous rulings to support this conclusion, highlighting that penalty cannot be imposed when there is full disclosure of income. The Tribunal dismissed the Revenue's appeal, affirming the partial deletion of the penalty by the CIT(A) and upholding the decision regarding the disputed income of Rs. 4,08,097. The Tribunal found no merit in the Revenue's grounds of appeal and upheld the CIT(A)'s order. This summary provides a detailed overview of the judgment, highlighting the issues involved, the arguments presented, and the Tribunal's decision in each case.
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