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TMI Blog2012 (12) TMI 488X X X X Extracts X X X X X X X X Extracts X X X X ..... and to produce before the AO treat as bogus – Held that:- As the amount of gift was duly recorded in books of accounts. The AO himself has recorded the fact that in the e-mail correspondence, the uncle of the assessee has accepted the said amount. Even the source of the gift was also explained as the sale proceed of flat and therefore, though the assessee offered the said amount to tax, the same was not held as a bogus. Issue decides in favour of assessee Penalty u/s 271(1)(c) - Whether penalty u/s 271(1)(c) can be levied, for gift which has been offered by assessee through revised return, to avoid the harassment of bringing donor from abroad and to produce before the AO – Assessee revise ROI filed u/s 153A – Held that:- As the revised return filed by the assessee within the period of limitation as prescribed u/s 139 (5), cannot be held invalid. When the assessee has already recorded the gift amount in the books of account and only to avoid the inconvenience and harassment to his uncle, the assessee offered the same to tax, would not automatically lead to the conclusion that the assessee had furnished inaccurate particulars of income or concealed particulars of income in the ab ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... exure A-1 seized from the residence of the assessee, there was a calculation of interest of Rs.. 20,000/- up to 31/03/2003, which indicated that the assessee had received interest of Rs.. 20,000 out of loan given to Shri Ketan. The Assessing Officer completed the assessment by accepting the income declared by the assessee in the return of income filed in response to notice under section 153A. 3.3 For the assessment year 2004-05, the original return of income under section 139 (1) was filed on 27/10/2004 declaring income at Rs.. 4,53,810/-. In response to notice under section 153A, the assessee filed the return of income for the same income on 10/7/2006, the assessee has shown the gift of Rs.. 9,25,000/- from his uncle Shri ChampakLal Parekh on 1.10.2003, who is settled in USA. In support of the gift received, the assessee furnished the gift deed signed by Shri Anil Parekh, Power of Attorney holder of Shri Champaklal Parekh. During the assessment proceedings, the Assessing Officer recorded the statement of the assessee on 23/10/2007 and asked the assessee to produce Shri ChampakLal Parekh to prove the creditworthiness and genuineness of gift. At this stage, the assessee filed a re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... issioner of Income-tax reported in 282 ITR 642 and submitted that when there is no clear cut finding that the penalty was levied for concealment of particulars of income or furnishing of inaccurate particulars of income, then the penalty could not be sustained and is liable to be cancelled. Thus, the ld AR has submitted that in the identical circumstances, the honourable Gujarat High Court has held that the penalty order is invalid when the Assessing Officer has not given a clear cut finding whether the assessee has concealed the particulars of income or furnished inaccurate particulars of income. 4.1 The 2nd leg of the argument of learned A.R of the assessee is that the seized document is a dumb paper without any signature and name and therefore, the same cannot be the basis for any addition of income. He has further submitted that the said paper was not confronted with the assessee during the search proceedings and therefore, the same cannot be used against the assessee when the assessee has not accepted the same. The income declared in the return of income filed in response to notice under section 153A was to buy peace and to avoid the litigation and the same would not automat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rs of income or furnished inaccurate particulars of income as per explanation 5 to section 271(1)(c). In support of his contention, the ld AR of the assessee has relied upon the decision of the honourable Supreme Court in case of Commissioner of Income-tax v. Suresh Chandra Mittal reported in 251 ITR 9(SC). 4.5 He has also relied upon the decision of coordinate Bench of this Tribunal in case of Sanjoy Sankar Salvi vs ACIT dated 31/10/2011 as well as decision of Delhi Benches of this Tribunal in case of Shri Prem Arora vs DCIT dated 9th March 2012 in ITA number 4702/Del/2010. The Ld AR of the assessee has submitted that in the identical facts, the coordinate Bench of this Tribunal in case of Sanjoy Sankar Salvi (supra) has cancelled the penalty levied by the Assessing Officer. He has pointed out that in case of Shri Prem Arora (supra), the Delhi benches of the Tribunal has held that no penalty under section 271(1)(c) is leviable when there is no variation in the return of income and total income assessed by the Assessing Officer under section 153. 4.6 On the other hand, the ld DR has submitted that in paragraph 5 of the penalty order the Assessing Officer has specifically mentio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... already shown in the capital account of the assessee; therefore, the said amount was already recorded in the books of accounts and cannot be said that the additional income offered by the assessee was because of something, which was not recorded in the books of account; but only because of seized material. Once the gift was duly shown in the books of accounts, then the explanation 5 to section 271 (1)(c)would not apply. It appears from the assessment order that during the course of assessment proceeding, the Assessing Officer asked the assessee to produce his uncle, who has given this gift to the assessee and only at this point and stage, the assessee decided to offer the said amount to tax. 5.4 It is apparent and manifest from the facts and circumstances of the case that to avoid the harassment of bringing his uncle from abroad and to produce before the Assessing Officer, the assessee has offered the gift amount to tax. The Assessing Officer himself has recorded the fact that in the e-mail correspondence, the uncle of the assessee has accepted the said amount. Even the source of the gift was also explained as the sale proceed of flat and therefore, though the assessee offered t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed. In the course of search some material was found. When the assessee filed revised return of income in pursuance to section 153A of the Act, some additional income was declared voluntarily. During the course of assessment proceedings, no verification and enquiry was made by the Assessing Officer and accepted whatever income declared by assessee. Even in the course of penalty proceedings, the Assessing Officer without investigating and without making any enquiry into the facts of the case simply imposed penalty rejecting the explanation offered by the assessee. The learned CIT(A) confirmed the penalty by following third member decision of ITAT, Ahmedabad B Third Member Bench, in Asst. Commissioner of Income-tax in the case of Kirit Dahyabhai Patel. On perusal of the said case, we find the said case is not applicable to the facts of the case. We find that the judgment of the Hon ble Supreme Court in the case of CIT Vs. Suresh Chandra Mittal, (supra), on which reliance placed by the assessee, is squarely applicable to the facts of the case under consideration. The Hon ble Supreme Court affirmed the decision of the Madhya Pradesh High Court in the said Case and the facts of the sai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , the contention of the Revenue is that the return filed under sec. 153A, is not voluntary and is intended to assess the undisclosed income. Sec. 153A was inserted into statute with effect from 1st June, 2003 by the Finance Act, 2003 which reads as under: 153A Notwithstanding anything contained in section 139, section 147, section 148, section 149, section 151 and section 153, in the case of a person where a search is initiated under section 132 or books of account, other documents or any assets are requisitioned under section 132A after the 31st day of May, 2003, the Assessing Officer shall (a) issue notice to such person requiring him to furnish within such period, as may be specified in the notice, the return of income in respect of each assessment year falling within six assessment years referred to in clause (b), in the prescribed form and verified in the prescribed manner and setting forth such other particulars as may be prescribed and the provisions of this Act shall, so far as may be, apply accordingly as if such return were a return required to be furnished under section 139; (b) assess or reassess the total income of six assessment years immediately preceding the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he main action, or the proceedings ancillary or collateral to it. The word is commonly used in the legislations, which provide for abatement of action/suit; abatement of legacies; abatement of nuisance; and all actions for such nature, which have the pendency or continuance. The proceedings, which have already terminated are not liable for abatement unless statute expressly provides for such consequence thereof. The word pending occurring in the second proviso to section 153A of the Act, is also significant. It is qualified by the words on the date of initiation of the search , and makes it abundantly clear that only such assessment or reassessment proceedings are liable to abate. The pendency of an appeal in the Tribunal against the order of assessment against which an appeal has been decided by Commissioner (Appeals) is not a continuation of the proceedings of assessment. 11. Thus while section 153A prescribes for assessment or reassessment of total income in search cases, section 153B prescribes the time limit for completion of assessment under sec. 153A. Section 153C relates to the cases where books of accounts or documents or assets seized under sec. 132 or requisition ma ..... X X X X Extracts X X X X X X X X Extracts X X X X
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