2019 (2) TMI 352 - AT - Income Tax

Penalty u/s.271(1)(c) - survey action u/s.133A - additional income offered during survey action was incorporated in the books of account and filed the return of income within the due date specified under the Act - Held that - We find, the assessee in the present case, filed the return of income u/s.139(1) offering the additional income disclosed during the survey action u/s.133A of the Act and the AO accepted the same u/s.143(3). AO did not make any addition. Under such circumstances, it is amply clear that there is no concealment of furnishing of inaccurate particulars which warrants imposition of penalty. We, therefore, concur with the arguments of ld. AR on this very issue. Further, we perused the decisions relied on by the ld. AR. Case of CIT Vs. SAS Pharmaceuticals 2011 (4) TMI 888 - DELHI HIGH COURT to be followed. - Decided in favour of assessee.

Summary

Issues:
Penalty under section 271(1)(c) for alleged concealment of income based on survey operation.

Analysis:
The appeal was filed by the Revenue against the order of CIT(A)-13, Pune, concerning the Assessment Year 2012-13. The assessee, a Doctor by profession, declared total income of ?1,37,46,603, including additional income of ?1.49 crore from unaccounted professional receipts revealed during a survey. The Assessing Officer disallowed a portion of claimed expenses, leading to a revised income assessment and imposition of a penalty under section 271(1)(c) for alleged income concealment.

The CIT(A) deleted the penalty, prompting the Revenue's appeal before the Tribunal. The Revenue contended that the penalty should not have been deleted as there was a significant discrepancy between the actual daily collection and recorded income in the books. Additionally, reference was made to the Supreme Court's decision in MAK Data P. Ltd. v/s Commissioner of Income Tax-II, emphasizing that voluntary disclosure does not absolve an assessee from penalty.

During the proceedings, the assessee's counsel argued that since the additional income disclosed during the survey was included in the return and accepted by the AO, there was no concealment warranting a penalty. The Tribunal concurred with this argument, citing precedents such as ACIT Vs. D.J. Builders and Developers and the decision of the Delhi High Court in CIT Vs. SAS Pharmaceuticals, which emphasized strict interpretation of section 271(1)(c) and the requirement of actual concealment for penalty imposition.

The Tribunal highlighted that the disclosure made in the return of income precluded the imposition of a penalty, as the assessee had not concealed any particulars. It was emphasized that penalty provisions should be strictly construed, and unless there is clear evidence of concealment or non-disclosure, penalties cannot be imposed based on assumptions. The Tribunal also referenced Explanations 4, 5, and 5A of section 271 to support its decision.

In conclusion, the Tribunal dismissed the Revenue's appeal, upholding the CIT(A)'s decision to delete the penalty. The judgment was pronounced on February 1, 2019.