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TMI Blog2016 (5) TMI 365X X X X Extracts X X X X X X X X Extracts X X X X ..... 2013 - - - Dated:- 30-3-2016 - MS. SUSHMA CHOWLA, JM AND SHRI PRADIP KUMAR KEDIA, AM For The Appellant : Shri Dheeraj Kumar Jain For The Respondent : Shri Pramod Kumar Shingte ORDER PER SUSHMA CHOWLA, JM: This appeal filed by the Revenue is against the order of CIT(A)-I, Nashik, dated 21.06.2013 relating to assessment year 2007-08 against deletion of penalty levied under section 271(1)(c) of the Income-tax Act, 1961 (in short the Act ). 2. The Revenue has raised the following grounds of appeal:- 1. Under the facts and circumstances of the case the CIT (A) erred in not appreciating the fact that additional income was declared by the assessee by filing return of income u/s.153A same was filed consequent to the search and seizer operation. If search and seizer operation were not conducted in the assessee's case, assessee could not have been disclosed such additional income by filing return of income u/s.153A of the Act. 2. Under the facts and circumstances of the case the CIT(A) erred in not appreciating the fact that the additional income was declared by the assessee by filing return of income u/s.153A and same was filed consequent to t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Act were conducted at the premises of assessee on 22.11.2006. During the course of search operation, cash of ₹ 15 lakhs was found from the locker of assessee with State Bank of Hyderabad, Vaijapur. Further, cash of ₹ 37.97 lakhs was found from Punjab National Bank, Aurangabad and cash of ₹ 1,39,650/- was found from the residence of assessee. Initially, the assessee explained it to be out of his personal savings but finally declared additional income of ₹ 42 lakhs from the business of commission from farmers for getting agricultural produce sold in the market. The assessee included the said sum of ₹ 42 lakhs in the return of income filed. For the year under consideration, the assessee had furnished original return of income declaring total income of ₹ 42,74,721/- and agricultural income of ₹ 3,26,000/- on 04.12.2007. The assessee since had included the said income in return filed under section 153A of the Act and had not shown in the original return of income filed under section 139(1) of the Act, the assessee was deemed to have concealed the particulars of income, in view of Explanation 5 to section 271(1)(c) of the Act and penalty proceed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ments seized / found as a result of search action that could co-relate the impugned income on which penalty under section 271(1)(c) of the Act was imposed. The CIT(A) was of the view that the case of assessee was covered by both the clauses i.e. (1) and (2) of Explanation 5 to section 271(1)(c) of the Act and therefore, penalty for concealment was not leviable. As per the CIT(A), clause (1) of Explanation was applicable to the cases where the books of account are not maintained and are required to be maintained under the provisions of law. However, in the present case, no books of account were required to be maintained under the provisions of law. Further, the said clause contained a word if any means if applicable, hence first limb of clause (1) was not applicable to the assessee, as such, it could not be said the said condition is not fulfilled by the assessee. As regards the second limb of the said clause (1) to Explanation 5, the CIT(A) observed that there was no procedure laid down in the Act to disclose the income to Chief Commissioner or Commissioner as far as the assessee was concerned. He thus, held that the said requirement was applicable only to abnormal transactions, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd from various places / lockers. The learned Authorized Representative for the assessee pointed out that the date of search was 22.11.2006 and the financial year relating to assessment year 2007-08 was still to end. The return of income admittedly, was filed two months late with a request for adjustment of cash seized against the taxes due. Our attention was drawn to the computation of income filed, which are placed at pages 18 and 19 of the Paper Book. The learned Authorized Representative for the assessee pointed out that the ratio laid down by the Hon ble Gujarat High Court in CIT Vs. Mahendra C. Shah (supra) was squarely applicable. Our attention was further drawn to the assessment order, wherein the Assessing Officer first talks of non-declaration in return of income under section 139(1) of the Act but talks of the declaration of additional income in the return filed pursuant to notice under section 153A of the Act. However, while levying penalty un der section 271(1)(c) of the Act, the Assessing Officer states that the assessee has failed to specify the manner in which the said income was earned and also penalty was levied since the additional income was offered because of s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ere is no specific charge as to whether penalty under section 271(1)(c) of the Act is leviable on concealment of income or furnishing of inaccurate particulars of income. In the absence of such specific charge, the assessee vehemently states that the entire penalty proceedings are vitiated. Similarly, in the order levying penalty under section 271(1)(c) of the Act, there is no specific charge. The perusal of penalty order passed by the Assessing Officer with reference to para 6, the contention of learned Authorized Representative for the assessee seems to be correct. The Assessing Officer while levying penalty for concealment has observed that he was satisfied that the assessee has without reasonable cause concealed the particulars of income of ₹ 42 lakhs and furnished inaccurate particulars of such income and is therefore, liable to penalty and hence, penalty of ₹ 13,03,990/-. While initiating penalty proceedings under section 271(1)(c) of the Act, the Assessing Officer in the assessment order had observed that additional income of ₹ 42 lakhs was not shown in the original return filed under section 139(1) of the Act, so the assessee was deemed to have concealed p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... - Penalty u/s271(1)(c) at 100% Rs.13,03,990/- 11. The perusal of order levying penalty under section 271(1)(c) of the Act reflects the Assessing Officer held the assessee to have defaulted in concealing particulars of income and also furnishing inaccurate particulars of income. Under the provisions of section 271(1)(c) of the Act, it is provided that a person is liable for levy of penalty where he has concealed the particulars of his income or furnished inaccurate particulars of income; either of two conditions have to be satisfied before penalty for concealment can be levied. The Courts have time and again held that the Assessing Officer has to be specific in reasons levying penalty for concealment, whether it is for concealment of income or furnishing of inaccurate particulars of income. Where the Assessing Officer is not clear whether penalty is levied for concealment of income or furnishing of inaccurate particulars, then such an order suffers from non-application of mind and cannot be upheld in law. We find support from the ratio laid down by Pune Bench of Tribunal in Sanjog Tarachand Lodha Vs. ITO (supra) ..... X X X X Extracts X X X X X X X X Extracts X X X X
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