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TMI Blog2019 (6) TMI 299X X X X Extracts X X X X X X X X Extracts X X X X ..... ncome which is declared in a return of income, on the facts and circumstances of the present case. Penalty u/s.271(1)(c) is imposed for concealing particulars of income or furnishing inaccurate particulars of income . When an income which is ultimately brought to tax is declared in a return of income, there can be no question of treating the Assessee as having concealed particulars of income or furnished inaccurate particulars of income . See VASAVI SHELTERS VERSUS INCOME-TAX OFFICER, WARD 4(1), BANGALORE [ 2013 (4) TMI 485 - ITAT BANGALORE] The starting point of determining concealment for imposing penalty is the return of income. If the return of income declares income which is ultimately brought to tax there can be no complaint by the re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 9. In the course of survey it was noticed by the Officer conducting the survey that assessee had not deducted tax at source on expenditure to the tune of ₹ 30,09,087 on which tax was deductible as per the provisions of Chapter XVIIB of the Act. It was also noticed at the time of survey that there were expenditure to the tune of ₹ 28,94,491 which were incurred in cash above the limits specified u/s. 40A(3) of the Act and was therefore liable to be disallowed (not allowable as deductible expenditure in computing income from business). 3. Since the assessee had not filed return of income for AY 2008-09, a notice u/s. 148 dated 27.02.2009 was issued by the AO. In response to the same, assessee filed return of income on 21.12.2009 d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 7 6. We have already seen that in the assessment concluded for AY 2008-09 and the order dated 29.12.2009 passed u/s. 143(3) r.w.s. 147 of the Act that the AO accepted the income returned by the assessee, but nevertheless initiated penalty proceedings against the assessee for furnishing inaccurate particulars of income in respect of disallowance of expenses u/s. 40(a)(ia) and 40A(3) of the Act. The AO issued a show cause notice u/s. 274 of the Act for imposing penalty on the assessee u/s. 271(1)(c) of the Act. It is the case of the revenue that but for the survey u/s. 133A of the Act, the assessee would not have disallowed expenditure on which TDS was not deducted in view of the provisions of section 40(a)(ia) of the Act and expenses incurr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ice imposing penalty does not specifically state that the ground on which penalty is sought to be levied viz., as to whether it is for furnishing inaccurate particulars of income or for concealment of income, the order imposing penalty is liable to be held as invalid. The ld. counsel for the assessee also brought to our notice the decision of ITAT Bangalore Bench in the case of Vasavi Shelters in ITA Nos.499 & 500/Bang/2012 dated 22.2.2013 wherein the Tribunal on identical facts such as the case of assessee in the present appeal held that there should be no imposition of penalty when the income declared in the return of income is accepted as such by the AO. The following relevant observations are brought to our notice :- "13. There can be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ld have not disclosed the income but for the said survey. However, there cannot be any penalty only on surmises, conjectures and possibilities. Sec. 271(1)(c) has to be construed strictly. Unless it is found that there is actually a concealment or non-disclosure of the particulars of income, penalty cannot be imposed. There is no such concealment or non- disclosure as the assessee had made a complete disclosure in the IT return and offered the surrendered amount for the purposes of tax." 8. The ld. DR relied on the order of CIT(Appeals). 9. We have considered the rival submissions and are of the view that in the given facts and circumstances, imposition of penalty cannot be justified. Firstly, the disallowances u/s.40(a)(ia) and Sec.40A( ..... X X X X Extracts X X X X X X X X Extracts X X X X
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