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2022 (11) TMI 306 - AT - Income TaxLevy of penalty u/s 271(1)(c) - where the income with reference to which penalty was levied, was already included in the return of income - HELD THAT - It is an admitted fact that the additional income declared during the course of survey operations was already included in the return of income under the provisions of section 139 - The Hon ble Delhi High Court in the case of SAS Pharmaceuticals, in a case involving the identical facts held that no penalty could be imposed as there was no concealment or furnishing inaccurate particulars of income, as the assessee had made a complete disclosure in the return of income and offered the additional amount for the purpose of tax. We are of the considered opinion that it is not a fit case for levy of penalty u/s 271(1)(c). Accordingly, we uphold the order of the ld. CIT(A) deleting the penalty u/s 271(1)(c) - Thus, the grounds of appeal filed by the Revenue stand dismissed.
Issues:
Levy of penalty under section 271(1)(c) for undisclosed income declared during survey operations. Analysis: 1. The Revenue appealed against the order of the Commissioner of Income Tax (Appeals) concerning the deletion of a penalty under section 271(1)(c) of the Act amounting to Rs. 72,30,600/- due to the disclosure of unaccounted income of Rs. 2.34 crores during a survey action under section 133A of the Act. 2. The main contention was whether the disclosed unaccounted income, not part of the books of accounts, would have escaped assessment without the survey action, and if the subsequent disclosure in the return of income can be considered voluntary, as per the decision in MAK Data Pvt. Ltd. CIT (2012) 358 ITR 593(SC). 3. The Assessing Officer initiated penalty proceedings under section 271(1)(c) alleging concealment of income, despite the respondent-assessee's explanation that the disclosed income was included in the revised return of income based on the decision in CIT vs. Mohan Das Hassa Nand, 141 ITR 203 (Delhi). 4. The Commissioner of Income Tax (Appeals) relied on decisions in CIT vs. SAS Pharmaceuticals, 335 ITR 259 (Delhi) and CIT vs. Mohan Das Hassa Nand, 141 ITR 203 (Delhi), along with the MAK Data (P.) Ltd. vs. CIT, 358 ITR 593 (SC) judgment, to rule that since the disclosed income was already in the return of income, no penalty was justified. 5. The Revenue contended that the respondent-assessee concealed income by not disclosing the additional Rs. 2.34 crores during the survey, contrary to the MAK Data (P.) Ltd. vs. CIT, 358 ITR 593 (SC) judgment. 6. The Tribunal noted that the disclosed income was included in the return of income, following the decision in SAS Pharmaceuticals, where complete disclosure in the return and offering the additional amount for tax purposes absolved the assessee from penalty under section 271(1)(c). 7. Consequently, the Tribunal upheld the decision of the Commissioner of Income Tax (Appeals) to delete the penalty, as the conditions for penalty under section 271(1)(c) were not met, and the disclosed income was part of the return of income. 8. The appeal filed by the Revenue was dismissed, affirming the deletion of the penalty under section 271(1)(c) by the Commissioner of Income Tax (Appeals) based on the principle that complete disclosure in the return of income precludes the imposition of a penalty for concealment or furnishing inaccurate particulars of income.
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