2021 (10) TMI 785 - AT - Income Tax

Penalty levied u/s. 271(1)(c) - undisclosed income surrendered during the course of survey - HELD THAT - We find that it is a judiciary settled proposition that where the income declared during the course of survey is offered to tax in the return of income filed within the due date prescribed u/s. 139(1) of the Act and the assessing officer accepts the income declared in the return, the assessee cannot be held to have concealed the particulars of income nor or has furnishing inaccurate particulars of income because the due date of filing return of income did not expire and the particulars furnished in the return of income have not found to be untrue. Assessee cannot be held to have concealed or furnished the particulars of income since the income declared during the course of survey has been offered to tax in the return of income filed before the due date of filing the return of income. We, thus, find no reason to interfere in the finding of Ld. CIT(A) and the same stands confirm. Grounds raised by the revenue are dismissed.

Summary

Issues Involved:
Appeal against the deletion of penalty under section 271(1)(c) of the Income Tax Act for Assessment Year 2011-12.

Detailed Analysis:

Issue 1:
The Revenue challenged the deletion of penalty of ?70,00,000 levied under section 271(1)(c) of the Act by the Ld. CIT(A).

Analysis:
The assessee, engaged in the business of jewellery, declared additional income during a survey conducted under section 133A. The undisclosed income was declared before the due date of filing the income tax return. The Ld. AO imposed a penalty under section 271(1)(c) stating that the revised return was filed only after the discovery of concealment by the Revenue. The Ld. CIT(A) allowed the appeal, leading to the Revenue's appeal before the Tribunal.

Issue 2:
Interpretation of the provisions of section 271(1)(c) regarding concealment of income or furnishing inaccurate particulars.

Analysis:
The Tribunal referred to judgments by the High Courts of Gujarat and Delhi, emphasizing that if the income declared during a survey is offered in the return filed before the due date and accepted by the assessing officer without further additions, there is no concealment or furnishing of inaccurate particulars. The Tribunal highlighted that penalty provisions must be strictly construed and cannot be imposed unless the conditions are unambiguously satisfied.

Issue 3:
Determining whether the particulars of income were concealed in the income tax return filed by the assessee.

Analysis:
The Tribunal rejected the Revenue's argument that concealment during a survey amounts to concealment in the proceedings, emphasizing that concealment must be in the income tax return. The Tribunal stressed that the assessee's complete disclosure in the return, including surrendered income, precludes the imposition of a penalty. It noted that no penalty can be imposed based on surmises and conjectures, as section 271(1)(c) must be strictly construed.

Conclusion:
The Tribunal dismissed the Revenue's appeal, upholding the decision of the Ld. CIT(A) to delete the penalty under section 271(1)(c). The Tribunal relied on judicial precedents to conclude that since the assessee declared the undisclosed income before the due date of filing the return and the assessing officer accepted the declared income, there was no concealment or furnishing of inaccurate particulars. The Tribunal emphasized that penalty provisions should be strictly applied, and in this case, no fault was found with the decisions of the lower authorities.