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TMI Blog2016 (10) TMI 935X X X X Extracts X X X X X X X X Extracts X X X X ..... sed by the ld. Commissioner of Income Tax (Appeals)-20, Kolkata, whereby he confirmed the penalties of ₹ 5,44,377/-, ₹ 7,28,402/-, ₹ 13,21,733/- and ₹ 15,01,410/- imposed by the Assessing Officer under section 271(1)(c) for assessment years 2007-08, 2008-09, 2009-10 2010-11 respectively. 2. The assessee in the present case is an individual, who derives income from business and other sources. The returns of income for all the four years under consideration regularly filed by the assessee were originally processed by the Assessing Officer under section 143(1). A search and seizure action under section 132 was conducted at the residential premises of the assessee on 12.07.2010. During the course of search, an undisclosed Bank account maintained by the assessee with IDBI Bank, Gariahat Road Branch, Kolkata, was found. In his statement recorded under section 132(4), the assessee agreed that the transactions reflected in the said Bank account were not accounted for by him. He also agreed to surrender his undisclosed income on account of such transactions. In the returns of income filed originally in response to the notices issued by the Assessing Officer unde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eturned income where the assesse could have exercised his option of willingness to offer an additional income as per his commitment u/s.132(4) of I.T. Act, 1961 in respect of undisclosed bank account transactions for each relevant assessment years covered u/s.153A of I.T. Act, 1961. But the assesse without seeking any extra time to file the return u/s. 153A, ultimately filed after inordinate delay on 06.03.2013 and revised it on 21.03.2013. Thus the returned income filed u/s. l53A is not in time as permitted by the notice u/s.153A or belated return. (iv) The case of the assesse is fully covered by the clause (i) below Explanation 5A to the section 271(1)(c) of I.T. Act, 1961 hence, the assessee in respect of year wise income has been deduced from the transactions of undisclosed bank account no.086104000105095 of IDBI Bank Ltd, Gariahat, Kolkata may be deemed to have concealed the particulars [i.e. account no.086104000105095 of IDBI] of his income . 3. The penalties imposed by the Assessing Officer under section 271(1)(c) for all the four years under consideration were challenged by the assessee in the appeals filed before the ld. CIT(Appeals) and since the submission made ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e u/s 153A was served on 10-10-2011 thereby requiring the assessee to submit his return within 30 days. The assessee in response neither sought extension of time for filing the return nor did he file the return within the enquired period of 30 days. The assessee instead filed the return on 06-03-2012. The assessee subsequently filed revised return on 21-03-2013. I am of the opinion that there is no explicit provision under the I T Act for revising a return filed in compliance to the notice u/s 153A. But even otherwise, if one attempts to draw a parallel with the provisions related to regular return, then the return filed by the assessee on 06-03-2012 was beyond the due date as prescribed in the notice u/s 153A and consequently the assessee was not lawfully competent to file the revised return. I uphold the finding of the AO that the revised return filed by the assessee on 2103-2013 was not valid in law. The assessee therefore cannot be permitted to argue that he had declared the undisclosed income of ₹ 15,71,724/- in his return. The Ld AR has argued before me that the assessee voluntarily admitted the undisclosed income and so there was no lawful case for levy of penalty u/s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... u/s 132 was conducted after the 1st June, 2007 and the assessee was found to be maintaining a bank account which represented income of ₹ 15,71,724/- for the previous year 2006-07 which had ended before the date of the search and such income had not been declared in the return for the previous year 2006-07 furnished before the date of the search and consequently, notwithstanding that such income was declared by him in any return furnished after the date of the search, the assessee for the purposes of levy of penalty u/s 271(1)(c) shall be deemed to have concealed the particulars of his income or furnished inaccurate particulars of such income. The Ld AR has argued that Explanation 5A was not applicable in a case where the assessment was made on the basis of estimate. I however find that the assessment in the present case involves no estimation. The search conducted at the residential premise of the assessee resulted in recovery of unaccounted money and undisclosed bank account. The unaccounted money so found and the unaccounted income represented by the undisclosed bank account was eventually surrendered by the assessee as his undisclosed income. The unaccounted income repres ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Officer for all the four years under consideration on the ground that in the absence of any specific mention in the show-cause notices issued under section 274 of the Act for all the four years under consideration by the Assessing Officer as to whether the assessee was guilty of having furnished inaccurate particulars of income or of having concealed particulars of such income , the initiation of penalty proceedings itself was bad in law and the penalty orders passed in pursuance thereof are liable to be quashed being invalid. He has invited our attention to the show-cause notices issued by the Assessing Officer for all the four years under consideration under section 274 in the printed form to point out that the irrelevant portion, viz. furnished inaccurate particulars of income or concealed particulars of such income was not struck off by the Assessing Officer. In this regard, it is observed that the Coordinate Bench of this Tribunal in the case of Suvaprasanna Bhattacharya vs.- ACIT (ITA No. 1303/KOL/2010) cited by the ld. Counsel for the assessee had an occasion to consider a similar issue in the identical fact situation and the order passed by the Assessing Officer im ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the said order which contains the satisfaction of the authority which has passed the order. However, if the existence of the conditions could not be discerned from the said order and if it is a case of relying on deeming provision contained in Explanation-1 or in Explanation-1(B), then though penalty proceedings are in the nature of civil liability, in fact, it is penal in nature. In either event, the person who is accused of the conditions mentioned in Section 271 should be made known about the grounds on which they intend imposing penalty on him as the Section 274 makes it clear that assessee has a right to contest such proceedings and should have full opportunity to meet the case of the Department and show that the conditions stipulated in Section 271(1)(c) do not exist as such he is not liable to pay penalty. The practice of the Department sending a printed farm where all the ground mentioned in Section 271 are mentioned would not satisfy requirement of law when the consequences of the assessee not rebutting the initial presumption is serious in nature and he had to pay penalty from 100% to 300% of the tax liability. As the said provisions have to be held to be strictly con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ngs once he is satisfied in the course of any proceedings that there is concealment of income or furnishing of inaccurate particulars of total income under clause (c). Concealment, furnishing inaccurate particulars of income are different. Thus the Assessing Officer while issuing notice has to come to the conclusion that whether is it a case of concealment of income or is it a case of furnishing of inaccurate particulars. The Apex Court in the case of Ashok Pai reported in 292 ITR 11 at page 19 has held that concealment of income and furnishing inaccurate particulars of income carry different connotations. The Gujarat High Court in the case of MANU ENGINEERING reported in 122 ITR 306 and the Delhi High Court in the case of VIRGO MARKETING reported in 171 Taxman 156, has held that levy of penalty has to be clear as to the limb for which it is levied and the position being unclear penalty is not sustainable. Therefore, when the Assessing Officer proposes to invoke the first limb being concealment, then the notice has to be appropriately marked. Similar is the case for furnishing inaccurate particulars of income. The standard pro forma without striking of the relevant clauses will lea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... If the explanation offered, even though not substantiated by the assessee, but is found to be bona fide and all facts relating to the same and material to the computation of his total income have been disclosed by him, no penalty could be imposed. n) The direction referred to in Explanation IB to Section 271 of the Act should be clear and without any ambiguity. o) If the Assessing Officer has not recorded any satisfaction or has not issued any direction to initiate penalty proceedings, in appeal, if the appellate authority records satisfaction, then the penalty proceedings have to be initiated by the appellate authority and not the Assessing Authority. p) Notice under Section 274 of the Act should specifically state the grounds mentioned in Section 271(1)(c), i.e., whether it is for concealment of income or for furnishing of incorrect particulars of income q) Sending printed form where all the ground mentioned in Section 271 are mentioned would not satisfy requirement of law. r) The assessee should know the grounds which he has to meet specifically. Otherwise, principles of natural justice is offended. On the basis of such proceedings, no penalty ..... X X X X Extracts X X X X X X X X Extracts X X X X
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