9911796707
TMI Blog2019 (1) TMI 1601X X X X Extracts X X X X X X X X Extracts X X X X ..... elhi High Court in the case of SAS Pharmaceuticals [ 2011 (4) TMI 888 - DELHI HIGH COURT] has considered the expression in the course of any proceedings under this Act appearing in section 271 of the Act and held that the said expression cannot have reference to the survey proceedings. It has also held that penalty proceedings would depend upon the return of income filed by the assessee. - Decided in favour of assessee. X X X X Extracts X X X X X X X X Extracts X X X X ..... ing on the said para the ld.CIT-DR inviting our attention to the impugned order submitted that relief has been granted by the CIT(A) for the reasons set out in para 7 to 7.3 which is assailed by the Revenue. The relevant extract which is common in these group of cases is extracted hereunder for ready reference : 7. I have gone through the facts of the case, the penalty order, the assessment order, the submission and the case law!on the issue including that relied upon by the AO and the appellant. 7.1 The appellant in the submissions has challenged the imposition of penalty and has pleaded that the penalty cannot be levied on merits, pleading that the income in question was disclosed during the course of survey itself as income earned outside books of account from project, the income was duly introduced into the books of account, was disclosed in the returns of income and the AO has only changed the head of income without making any addition on this issue. 7.2 As far as the imposition of penalty is concerned, the AO's case is basically built on the following premise: a) Although it has shown the income accepted during the course of survey in its returns, it has not b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Del). The appellant had disclosed the incomes in the returns filed and paid taxes b) No penalty is leviable just because an issue was not appealed against the quantum order. Time and again it has been held that the penalty proceedings are separate from the assessment proceedings. This cannot be a ground for imposition of penalty. The AO has to independently establish its case for default u/s. 271(l)(c). The Hon'ble Supreme Court in case of CIT vs. Khoday Eswarsa & Sons 1972 CTR (SC) 295 : (1972) 83 ITR 369, the same position was reiterated. In that case, the Tribunal had stated that there might be justification for making additions in the original assessment order to the amount shown in the return, but those additions by themselves could not lead to the inference that the assessee had concealed its income or had deliberately furnished incorrect particulars. It was furthermore stated that cogent material or evidence is necessary before penalty can be levied. Another judgment which I would like to cite is the CIT vs. Koduri Papa Rao (1976) 102 ITR 834 (AP), a decision of the Andhra Pradesh High Court to the same effect. c) A survey action was carried out at the business ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the penalty order submitted that the relief granted by the CIT(A) is contrary to the proposition of law as laid down by the Apex Court in the case of Mak Data Pvt. Ltd., 358 ITR 593 (SC). Accordingly it was his prayer that the impugned order may be set-aside and the penalty order may be upheld. 6. The ld.AR inviting our attention to the material available on record submitted that in the facts of the present case, the assessee has consistently accepted the fact that on-money has been received from the business of plotting / construction / development etc., of plots. It was his submission that in the related concerns no doubt various other objects may have been stated. However, it was consistently the fact on record that this was the only activity carried out by the assessee boking of plots at Gokuldham Project. Referring to the replies of the assessee in each of these cases, it was submitted that the assessee in the course of the assessment proceedings has carried out business as consistently made out the case that the respective assessees were engaged in plotting etc., It was submitted that since there was no other business except this business thus merely because the AO did not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d order passed by the Tribunal in confirming the order passed by the Commissioner (Appeals) in deleting the penalty under section 271(1)(c) of the Act. In the absence of any infirmity in the impugned order passed by the Tribunal, it is not possible to state that the impugned order gives rise to any question of law much less, any substantial question of law so as to warrant interference. The appeal accordingly dismissed." 8. The ld.AR further submitted relying on decision in the case of DCIT, Circle-3, Surat vs. M/s.Suyog Corporation in ITA No.568/Ahd/2012 for A.Y. 2008-09 to the proposition that the moment the additions have been made in the taxable income of the assessee, even on account of disclosure made by the assessee during the course of survey proceedings then that amount would be considered as business profit of the assessee. Hence, the disclosure made by the assessee on the basis of material found during the course of survey pertaining to plotting / construction / development are related to only business income as the AO has not brought out anything contrary to the record that the income disclosed during the course of survey was from the other sources. The ld.AR contende ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hich tax sought to be evaded whereas in the present case the assessee has duly paid taxes along with while filing the return of income, therefore there was no evasion of tax sought to be evaded. The ld.AR also placed reliance on the following decisions in support of contentions i.e. CIT vs. Unique Precured Retraders [2008] 13 DTR (Raj-215), CIT vs SAS Pharmaceuticals [2011] 335 ITR 259 (Del), M/s.Sadbhava Builders vs ITO 1418/Ahd/2008, Ahmedabad Tribunal, CIT Vs. Amit Jain [2013] 351 ITR 74 Del, CIT vs Reliance Petro Products Pvt. Ltd., [2010] 322 158 ITR (SC) and other as per their comes law paper book. 11. We have heard the parties and perused the material available on record and gone through the above case laws. There is no dispute about the fact that there was a survey action u/s.133A, and the assessee offered additional income therein. The income so offered was duly declared in the return of income and the assessment was framed. Apart from his activity of plotting and development it was submitted that there was no other source of income. This position we find has not been disputed by the Revenue. The assessment of the assessee has also been completed u/s.143(3) duly acceptin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ence between tax on the total income assessed and the tax that would have been chargeable at such total income is reduced by the amount added. Since in the present case, the AO has not made any addition in the returned income, question of working out any tax sought to be evaded would not arise. For the sake of convenience we reproduce Explanation - 4 to section 271(1)(c) as under :- "Explanation-4 - For the purposes of clause (iii) of this sub-section, the expression 'the amount of tax sought to be evaded'- [(a) in any case where the amount of income in respect of which particulars have been concealed or inaccurate particulars have been furnished has the effect of reducing the loss declared in the return or converting that loss into income, means the tax that would have been chargeable on the income in respect of which particulars have been concealed or inaccurate particulars have been furnished had such income been the total income;] (b) in any case to which Explanation 3 applies, means the tax on the total income assessed [as reduced by the amount of advance tax, tax deducted at source, tax collected at source and self-assessment tax paid before the issue of notice under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o be seen whether it can be brought to a legal conclusion against the assessee by determining his right or liability. Merely carrying out survey under section 133A does not create any liability against the assessee which is created only through assessment proceedings or penalty proceedings. Therefore, the ld.DR is incorrect in his submission that survey being a proceedings and AO has discovered concealment during survey, therefore, the assessee is liable for penalty under section 271(1)(c). 15. We further find support from the reliance placed by the ld.AR on the decision in the case of PCIT vs Valibhai Khanbhai Mankad [TIOL 2164-HCAHM- IT [2015] wherein Hon'ble Gujarat High Court in para 5 the observed as under : "5. From the findings recorded by the Tribunal, it is evident that the factum of deletion of addition in respect of non-deduction of tax by the assessee was not controverted by the revenue. The Tribunal has further found that the penalty had been levied on the amount which was reflected in the original return as income. That it was an undisputed fact that the assessee had declared this income in his original return of income, although it was a belated return. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... upreme Court in Calcutta Discount Co. Ltd. v. ITO [1961] 41 ITR 191 where it was held that it is up to the Assessing Officer to interpret the return and discern as to which head of income the amount had to be brought to tax" 17. Therefore, in the light of ratio of above decision no penalty is leviable wherein even in the change of heads of income is made by the AO during the course of assessment proceedings. 18. The ld.DR has relied on the judgment of Mak Data Pvt. Ltd. vs. CIT [2013] 358 ITR 593 (SC), however, same is not applicable in the present case as in that case the survey was conducted more than 10 months before filing of returns and the disclosure was made by the assessee later during the course of assessment proceedings, whereas in the present case the amount disclosed during survey was duly included in the original return of income filed after the date of survey. Therefore, the facts of the said case are distinguishable. Further, there is no difference in the return of income and the income. 19. In the light of above facts and circumstances and case laws we are of the considered opinion that it is not a case of furnishing inaccurate particulars of income, as in the ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
