9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2019 (7) TMI 383 - AT - Income TaxPenalty u/s. 271(1)(c) - income disclosed by the assessee under Section 153A - assessee has filed revised returns disclosing higher income than in the original return - HELD THAT - AO has not brought anything on record to assess any income over and above the returned income filed by the assessee. AO in the assessment order could not bring into fore as to how the seized material has been analyzed and to prove as to how the concealment or furnishing of inaccurate particulars of income has arisen. Though the assessing officer has mentioned the word Addition it does not represent any adding up of the income but narration of the income returned by the assessee in response to notice u/s 153A of the Act There was no addition made by the AO. There is no deeming fiction for the levy of penalty the provisions applicable whether it is an assessment u/s 153A or assessment u/s 143(3) or u/s 148 the provision essentially remain the same. In the instant case, the assessee has filed return of income declaring additional income which was accepted by the AO. Hence, they cannot be treated as the assessee has concealed income as concealment as to be dealt by the Revenue by way of unearthing sum of the income which has been kept away from the eye of the Revenue. Furnishing of inaccurate of particulars refers to filing of material which is not in conformity with the facts or truths The mere fact that the assessee has filed revised returns disclosing higher income than in the original return, in the absence of any other incriminating evidence, does not show that the assessee has concealed his income for the relevant assessment years. Considering that the non-obstante clause under Section 153A excludes the application of, inter alia, Section 139, it is clear that the revised return filed under Section 153A takes the place of the original return under Section 139, for the purposes of all other provisions of the Ac No difference between returned income and the assessed income, keeping in view the fact that the Revenue has not brought any material for levy of penalty - return filed in response to notice 153A of the Act needs to be treated as returned filed u/s 139 of the Act for the purpose of assessment, we hereby delete the penalty levy u/s 271(1)(c) of the Act. Penalty levied u/s 271AAB - Assessee has given a statement u/s 132(4) of the Act during the search and substantiated as to how the undisclosed income was derived (para 4.1 of AO), paid the taxes and filed the return. Hence, the assessee had made all the required conditions. At this juncture, it is to be adjudicated whether the levy of penalty is automatic or not under the present circumstances, we find that the rationale given in the case of 271(1)(c) so as to the requisite conditions for levy of penalty under the Income Tax law are equally applicable to the instant year also. Hence, the penalty levied is directed to be deleted. - Assessee appeal allowed.
Issues Involved:
1. Validity of penalty under Section 271(1)(c) of the Income Tax Act, 1961. 2. Absence of statutory notice under Section 274 of the Income Tax Act, 1961. 3. Specific charge/default for penalty initiation. 4. Invocation of Explanation 5A to Section 271(1)(c) of the Income Tax Act, 1961. 5. Conditions for invocation of Explanation 5A. 6. Consistency between returned income and assessed income. 7. Penalty for twin charges (concealment and inaccurate particulars). 8. Requirement to inform the assessee about penalty proceedings. 9. Satisfaction recording under Section 271(1)(c) r.w.s. 271(1B). 10. Justification of penalty amount. 11. Principles of natural justice and equity. Detailed Analysis: 1. Validity of Penalty under Section 271(1)(c): The assessee argued that the penalty of ?61,80,000/- under Section 271(1)(c) was erroneously confirmed by the CIT(A). The Tribunal noted that the penalty under this section is applicable when there is concealment of income or furnishing inaccurate particulars. However, in this case, the assessee had disclosed the income in response to notice under Section 153A, and there was no addition made by the AO over and above the returned income. The Tribunal held that since there was no actual concealment or furnishing of inaccurate particulars, the penalty was not justified. 2. Absence of Statutory Notice under Section 274: The assessee contended that the penalty proceedings were invalid due to the absence of a statutory notice in the prescribed format under Section 274. The Tribunal referred to the case of Sundaram Finance Ltd. vs. ACIT, where it was held that non-issue or defective service of notice does not affect the jurisdiction of the AO if reasonable opportunity of being heard has been given. Therefore, this ground was dismissed. 3. Specific Charge/Default for Penalty Initiation: The assessee argued that the specific charge for which the penalty was initiated was not clearly stated in either the assessment order or any notices. The Tribunal observed that the AO did not specify the exact charge of concealment or furnishing inaccurate particulars in the penalty notice, which is a prerequisite for imposing a penalty under Section 271(1)(c). 4. Invocation of Explanation 5A to Section 271(1)(c): The assessee claimed that Explanation 5A was not specifically invoked in the assessment order or any notices. The Tribunal noted that Explanation 5A applies when income is not disclosed in the original return but is disclosed in the return filed in response to a notice under Section 153A. However, since the returned income and assessed income were the same, the Tribunal found no basis for invoking Explanation 5A. 5. Conditions for Invocation of Explanation 5A: The Tribunal emphasized that for Explanation 5A to apply, the AO must prove that the additional income disclosed in the return filed after the search was not disclosed in the original return. In this case, the assessee had disclosed the income in response to the notice under Section 153A, and there was no additional income assessed by the AO. 6. Consistency Between Returned Income and Assessed Income: The assessee argued that since the income returned in response to notice under Section 153A and the assessed income were the same, no penalty should be imposed. The Tribunal agreed, stating that there was no concealment or furnishing of inaccurate particulars, and the penalty was not warranted. 7. Penalty for Twin Charges (Concealment and Inaccurate Particulars): The assessee contended that penalty could not be levied for both concealment of income and filing inaccurate particulars, as they are mutually exclusive. The Tribunal noted that the AO had not clearly specified the charge in the penalty notice, which is essential for imposing a penalty. 8. Requirement to Inform the Assessee About Penalty Proceedings: The assessee argued that the AO did not inform them about the initiation of penalty proceedings under Explanation 5A. The Tribunal found that the AO failed to specify the exact charge in the notice, which is crucial for a valid penalty proceeding. 9. Satisfaction Recording Under Section 271(1)(c) r.w.s. 271(1B): The assessee claimed that the AO did not record satisfaction as required under Section 271(1)(c) r.w.s. 271(1B). The Tribunal observed that the AO did not bring any material evidence to prove concealment or furnishing inaccurate particulars, and hence, the penalty was not justified. 10. Justification of Penalty Amount: The assessee argued that the penalty amount was unjustified and too high. The Tribunal, considering the facts and the absence of any concealment or inaccurate particulars, directed the deletion of the penalty. 11. Principles of Natural Justice and Equity: The assessee contended that the order of the CIT(A) was contrary to the principles of natural justice and equity. The Tribunal found that the AO had not provided sufficient grounds for imposing the penalty and upheld the principles of natural justice by deleting the penalty. Conclusion: The Tribunal concluded that there was no basis for imposing the penalty under Section 271(1)(c) as there was no concealment of income or furnishing of inaccurate particulars. The penalty was deleted, and the appeals of the assessee were allowed. The Tribunal also addressed the issue of notice format and found no prescribed proforma, agreeing with the judgments referred by the DR. The penalty under Section 271AAB for the assessment year 2014-15 was also deleted as the assessee had met all the required conditions.
|
