9911796707
TMI Blog2011 (6) TMI 750X X X X Extracts X X X X X X X X Extracts X X X X ..... ould be of the Income-tax Act, 1961 only unless otherwise specifically mentioned. 2. Briefly stated the facts leading to this appeal are that a search u/s 132 was conducted at the residence of Shri Subhash Chand Nahar, a partner of the firm M/s SMJ Housing, at No. 6/1, Nahar Drive, Maharani Chinnamma Road, Alwarpet, Chennai-18 on 26.10.2005. The assessee firm filed its return of income [ROI] on 30.08.2006 showing business income of ₹ 4,57,39,980/. During search, incriminating material/documents relating to M/s SMJ Housing were found and seized. Accordingly, a notice u/s 153A(a) r.w.s 153C of the Act was issued to the firm on 15.10.2007. This notice was complied with by filing return of income for Assessment Year 2005-06 on 19.12.20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... see was that due date for filing ROI for the year under consideration was 31.10.2005, which had not expired. But the Assessing Officer was not satisfied about the fact as to why ROI was not filed when the firm formed on 16.12.2003 was dissolved on 31.3.2005 by a deed of dissolution executed on 17,2,2006 and there was no transaction in the F.Y. 2005-06. During search, it was also found that this firm had sold immovable property situated at Old Mahabalipuram and had earned huge profit. During search, no books of account pertaining to the firm were found and ROI of the firm had not been filed till the date of search. It was only during post search enquiry that books of account were produced before the DDIT [Inv] showing net profit of ₹ 4 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he entire family was disturbed due to the search and thereby it took sometime to return to normalcy. 4. Now the Revenue is in appeal and has raised the following grounds. 1(a).On the facts and in the circumstances of the case, the ld. CIT(A) has erred in deleting the penalty levied u/s 271(1)(c) of the Act amounting to ₹ 1,67,37,400/-. 1(b) The ld. CIT(A) has failed to note that as on date of search on 26.10.2005, no advance tax relating to the returned income has been paid by the firm, no books of accounts pertaining to the firm were found, no return of income has been filed and that books of account were filed before the DDIT(Inv) only during the post search investigation which fact clearly proves that he assessee has conc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... naccurate particulars of income are two different defaults which can be committed by any assessee, either separately or even jointly sometimes. However, both refer to deliberate act on the part of the assessee to do so. But a mere omission or negligence on the part of the assessee would not constitute a deliberate suppressio veri or suggestion falso. The levy of penalty may draw strength from the additions made/confirmed, qua which penalty in question is being proposed, or it may not support the levy of penalty, yet it is a fact that both these proceedings operate in an entirely different and separate spheres. By the reason of simple concealment or of furnishing of inaccurate particulars alone, assessee does not ipso facto become liable to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ome to the department. Even after search, the return of income was filed by the assessee on 30.8.2006. The assessee has not paid advance tax relatable to this income and this factum is very relevant for the decision of the penalty appeal. The department has resorted to search in the case of partners and seized the cash and assessed it against first assessment tax of the firm and a sum of ₹ 67,37,403/- still remained payable u/s 40A of the Act. So, in our considered opinion, the returned income cannot be considered as voluntary declaration or admission but it is a concealed act of the assessee which came to forth only and only as a result of the search carried in the case of the partner. The last date for filing of ROI for this Assessm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to prove the mens rea in such cases as per the dictum of Hon'ble Supreme Court. It is enough if it is shown that either the assessee has concealed income or has furnished inaccurate particulars of income . In this case, assessee has concealed the taxable income and this is a clear cut case of concealment of income . If in such cases empathy or sympathy is shown, the provisions of section 271(1)(c) would become redundant and otiose. Assessee has furnished return of income only when it was cornered by the department by the search action carried in the partner s case. The payment of tax on returned income that too as a result of search action, does not absolve assessee from the provisions of this section. The acceptance of returned in ..... X X X X Extracts X X X X X X X X Extracts X X X X
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