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TMI Blog2019 (7) TMI 383X X X X Extracts X X X X X X X X Extracts X X X X ..... declaring additional income which was accepted by the AO. Hence, they cannot be treated as the assessee has concealed income as concealment as to be dealt by the Revenue by way of unearthing sum of the income which has been kept away from the eye of the Revenue. Furnishing of inaccurate of particulars refers to filing of material which is not in conformity with the facts or truths The mere fact that the assessee has filed revised returns disclosing higher income than in the original return, in the absence of any other incriminating evidence, does not show that the assessee has concealed his income for the relevant assessment years. Considering that the non-obstante clause under Section 153A excludes the application of, inter alia, Section 139, it is clear that the revised return filed under Section 153A takes the place of the original return under Section 139, for the purposes of all other provisions of the Ac No difference between returned income and the assessed income, keeping in view the fact that the Revenue has not brought any material for levy of penalty - return filed in response to notice 153A of the Act needs to be treated as returned filed u/s 139 of the Act f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the Income Tax Act, 1961, neither in the Assessment Order nor in any of the notice(s) issued therefore, the imposition of penalty by the unilateral presuming that explanation 5 A to Sec. 271 (1 )(c) of the Income Tax Act, 1961 is applicable, was not sustainable in law and on facts. 5. That the Ld. CIT(Appeals)-4, Kanpur has erred in law and on facts in not considering and appreciating the conditions necessary for invocation of Explanation 5A to Section 271(1 )(c) of the Income Tax Act, 1961 were neither present in the facts of the present case nor the onus cast upon the A.O. for invocation of Explanation 5A to Section 271 (1 )(c) of the Income Tax Act, 1961 was discharged by him, therefore, the penalty imposed was not sustainable in law and on facts. 6. That the Ld. CIT(Appeals)-4, Kanpur has erred in law and on facts in not considering and appreciating that the income in the return of Income filed in response to Notice u/s 153A of the Income Tax Act, 1961 and the assessed income assessed u/s 143(3)/153A of the Income Tax Act, 1961 were the same, hence, the penalty imposed was insupportable in law and on facts and liable to be cancelled. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ble to be cancelled. 8. That the Ld. CIT(Appeals)-4, Kanpur has erred in law and on facts in not appreciating that it is essential on the part of the AO to inform the assessee that the penalty proceedings are being initiated against him under Section 271AAB of the Income Tax Act, 1961, hence, in the absence of the same the penalty imposed is insupportable in law and on facts. 2. Since, the issue being dealt in both the appellants is similar except the quantum involved, they are being adjudicated together for the sake of convenience. 3. In the case of Rishabh Buildwell Pvt. Ltd., the quantum of the penalty for the assessment year 2011-12 was of ₹ 6180000/- and for the assessment year 2013-14 was ₹ 148200/-. In these cases, the assessment was completed u/s. 153A on 30.12.2016 and simultaneously, penalty proceedings u/s. 271(1)(c) were initiated by the AO and the penalty was levied vide order dated in the case of Shri Sanjeev Jain, the quantum of the penalty for the assessment year 2009-10 was ₹ 24,00,000/-, for A.Y. 2010-11 the penalty was ₹ 21,88,500/-, for the A.Y. 2011-12 the amount was ₹ 120,91,5 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tted by the Assessing Officer in the penalty notice u/s. 271(1)(c) of the Act. Therefore, the legal ground of appeal of the appellant is hereby dismissed. iii) The contention of the appellant is that there is no variation in the income filed by the appellant u/s. 153A of the Act and the assessment of income u/s. 153A of the Act, hence, there is no concealment of income. 5.5 The undersigned has carefully considered the contention of the appellant and the factual matrix of the case, it is undisputed fact that the appellant has not disclosed the income in the original return of income filed u/s. 139(1) of the Act. The disclosure of additional income is on account of conduct of search u/s. 132(1) of the Act and issue of notice u/s. 153A of the Act. Disclosure of additional income u/s. 153A of the Act consequent to the search action cannot be treated as voluntary on the part of the appellant. Had there been no search, appellant would not have disclosed the additional income because there would not be any occasion to issue notice u/s. 153A of the Act. Hence, penalty u/s. 271(1)(c) of the Act is clearly attracted for furnishing the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e detected by the department and declared by the appellant, consequent to search action would attract penalty provisions u/S. 271(1)(c) of the Act. 5.10 Therefore, in view of the detailed discussion and case laws cited here-in-above, undersigned finds no reason to interfere with the levy of penalty by the Assessing Officer. The same is therefore, confirmed and grounds of appeal of the appellant is dismissed. 5. Before us during the argument, the ld. AR argued that the AO did not specifically invoke Explanation 5A to section 271(1)(c) of the Act either in the assessment order or in any of the notices issued prior to passing of the penalty order. He argued that no specific charge / default for which the penalty was initiated, was never clearly stated in either the notice or in the assessment order. His main argument revolved around two points, (a) since the returned income filed in response to notice u/s. 153A of the Act and the assessed income determined in such proceedings is exactly the same, hence, no penalty u/s. 271(1)(c) is attracted. (b) the absence of specific charge in the penalty notice for which he relied on the judgments of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 87, 96, 116, 117 and 118 of LP- 2(A-2) SEIZED FROM PREMISE OF 195-Ram Vihar Delhi. Which is related to cash payment to cash received. The assessee has submitted that the following amount was received in cash from resident of society towards maintenance and summary of the cash movement and cash payment made by Sh. Sanjeev Jain between different companies are on behalf of the companies by Sh. Sanjeev Jain, to summaries it is submitted that the net result of the above documents off ₹ 1,05,83,000/- already declared in the return of income in A.Y. 2014-15 . The reply of the assessee is considered and ₹ 1,05,83,000/- will be added in the hands of Sh. Sanjeev Jain in A.Y. 2014-15. Penalty proceeding u/s 271AAB of the I.T. Act also initiated separately. Addition: ₹ 1,05,83,000/- (A.Y.2014-15) 4.2 During the assessment proceeding assessee were required to explain the document as page no. 33-51 of LP-3(A-3) seized from premise of 195- Ram Vihar Delhi. The assessee is required to explain the above documents and a show cause given to assessee that why may not be treated as unexplained and added in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ealment as to be dealt by the Revenue by way of unearthing sum of the income which has been kept away from the eye of the Revenue. Furnishing of inaccurate of particulars refers to filing of material which is not in conformity with the facts or truths. They deal in with correct detail about income so that a part of the income could be covered up by the assessee. None of these two conditions are applicable to the instant case. The AO proceeded to treat the assessee s additional income so offered as concealment and furnishing of inaccurate particulars of income. The provisions of the explanation 5A to Section 271(1)(c) of the Act and 271AAB of the Act have to be interpreted strictly. Unless, there is an actual concealment or non-discloser of the particular of the income the penalty cannot be imposed. Further, when the revised income is accepted and the income is assessed as per the revised income there is no scope of penalty. In the case of Kirit Dahyabhai Patel Vs ACIT (2017) 80 Taxmann.com 162 (Guj.), the Hon ble High Court held that in view of specific provision of Section 153A, the return of income filed in response to notice u/s 153A is to be considered as retur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... turn. Similarly, the Karnataka High Court in the case of Bhadra Advancing Pvt. Limited v. Assistant Commissioner of Income Tax, (2008) 219 CTR 447 , held that merely because the assessee has filed a revised return and withdrawn some claim of depreciation penalty is not leviable. The additions in assessment proceedings will not automatically lead to inference of levying penalty. The Calcutta High Court in the case of Commissioner of Income Tax v. Suresh Chand Bansal, (2010) 329 ITR 330 (Cal) held that where there was an offer of additional income in the revised return filed by the assessee and such offer is in consequence of a search action, then if the assessment order accepts the offer of the assessee, levy of penalty on such offer is not justified without detailed discussion of the documents and their explanation which compelled the offer of additional income. The Madras High Court in the case of S.M.J. Housing v. Commissioner of Income Tax, (2013) 357 ITR 698 held that where after a search was conducted, the assessee filed the return of his income and the Department had accepted such return, then levy of penalty under Section 271(1)(c) was not justified. From the above cases it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... but for the insertion of Explanation-5, it would be open to the assessee to contend that additions made to his income in the return filed after the search operation, were only to buy peace and did not tantamount to concealment. This also flows from the language of Explanation-5 itself, wherein the words used by the Legislature are be deemed to have concealed the particulars of his income , which shows that there is a deeming fiction by virtue of which such additional income is considered as concealment. If such additions in the income in the return filed consequent to a search, were to automatically evidence concealment under Section 271(1)(c), there would be no need for Parliament to enact a deeming fiction in the form of Explanation-5; such a reading would render Explanation-5 otiose and without any purpose. This is also consonant with the view arrived at in the earlier part of this decision, i.e. mere increase of income in the return filed pursuant to Section 153A would not be sufficient to show concealment under Section 271(1)(c). 17. For the Revenue to invoke Explanation-5, it would have to prove that its requirements are clearly fulfilled in the present case ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gh the factum of the case, we are decline to interfere with the order of the ld. CIT(A) as there is no prescribed proforma for issue of notice and the assessee had to be made aware of the intention of levy of penalty by the Revenue. We agree with the judgments referred by the ld. DR. 21. Regarding the penalty levied u/s 271AAB of the Act for the assessment year 2014-15, in the case of Sanjeev Jain, the ld. AR relied upon the arguments taken before the ld. CIT(A) . 22. The ld. DR in addition to the judgments quoted earlier relied upon in the case of Sandeep Chandak Vs PCIT (2018) 93 Taxmann.com 406 (SC) and Ritu Gingal Vs CIT (2018) 403 ITR 97 (Del.). 23. We have perused the material before us and our findings are as under with reference to the conditions obligatory to be in existence for levy of penalty: a. Undisclosed income must be admitted by the assessee and the statement u/s 132(4) of the Act. b. Substantiate the manner in which undisclosed income is earned. c. The assessee paid the tax before filing of return. d. The assessee furnished return of income ..... X X X X Extracts X X X X X X X X Extracts X X X X
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