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TMI Blog2020 (1) TMI 246X X X X Extracts X X X X X X X X Extracts X X X X ..... 132 of the Act and the said deeming provision cannot be applied in the case of survey conducted under section 133A of the Act. Concealment of particulars of income or furnishing of inaccurate particulars of income by the assessee has to be in the income tax return filed by it. Even if some discrepancies were found during the survey resulting in surrender of income by the assessee, once the assessee has declared the said income in the return of income filed under section 139(1) of the Act, then the penalty cannot be levied on the surmises, conjectures and possibilities that the assessee would not have disclosed the income but for survey. Accordingly, following the earlier decision of this Tribunal as well as the decision of Hon ble Delhi High Court in case of CIT vs. SAS Pharmaceuticals [ 2011 (4) TMI 888 - DELHI HIGH COURT ] the penalty levied by the AO and confirmed by the ld. CIT (Appeals) in respect of the amount of ₹ 3 crore is not sustainable, the same is deleted.- Decided in favour of assessee. - Shri Vijay Pal Rao, JM And Shri Vikram Singh Yadav, AM For the Assessee : Shri Mahendra Gargieya (Advocate) For the Revenue : Shri Varinder Mehta (CIT) ORDER PER VIJAY PAL RA ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... respect of the income surrendered by the assessee of ₹ 3 crore as well as ₹ 10,565/- the addition made during the course of assessment framed under section 143(3). The assessee objected to the levy of penalty and relied upon various decisions in support of the contention that when there is no addition to the returned income, then the penalty under section 271(1)(c) cannot be levied on the income which was surrendered during the survey prior to the end of the financial year relevant to the assessment year under consideration. The AO did not accept this contention of the assessee and levied the penalty of ₹ 1,03,86,055/- being 100% of tax sought to be evaded. The assessee challenged the action of the AO before the ld. CIT (A) but could not succeed. 3. Before us, the ld. A/R of the assessee has submitted that when the assessee has declared the income of ₹ 3 crores in the return of income filed under section 139(1) of the Act and no addition was made by the AO on this account while completing the assessment under section 143(3), then it cannot be said that the assessee has furnished inaccurate particulars of income or concealed the particulars of income for att ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ence notwithstanding the income declared in the return of income the particulars of the instant income were not accounted by the assessee in the books of account. Therefore, it is a clear case of concealment of particulars of income by the assessee which were detected during the course of survey. He has relied upon the orders of the authorities below. 5. We have considered the rival submissions as well as the relevant material on record. A survey under section 133A of the IT Act was carried out on 4th March, 2016 at the business premises of the assessee. During the course of survey proceedings, a diary was impounded containing certain entries against the names of certain persons. In the statement recorded under section 133A, the assessee surrendered the said income of ₹ 3 crore as recorded in the diary on account of advances to certain persons. In the return of income the assessee declared the said income and offered to tax. In the assessment framed under section 143(3), the AO has not disturbed the income returned by the assessee so far as ₹ 3 crore is concerned. The AO has made the addition of ₹ 10,565/- on account of short declaration of rental income. Thus the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assets) and the assessee claims that such assets have been acquired by him by utilising (wholly or in part) his income for any previous year; or (ii) any income based on any entry in any books of account or other documents or transactions and he claims that such entry in the books of account or other documents or transactions represents his income (wholly or in part) for any previous year, Which has ended before the date of search and,- (a) where the return of income for such previous year has been furnished before the said date but such, income has not been declared therein; or (b) the due date for filing the return of income for such previous year has expired but the assessee has not filed the return, then, notwithstanding that such income is declared by him in any return of income furnished on or after the date of search, he shall, for the purposes of imposition of a penalty under clause (c) of sub-section (1) of this section, be deemed to have concealed the particulars of his income or furnished inaccurate particulars of such income. The above provisions of section 271(1)(c) read with its explanation- 5A make it clear that if the Assessing Officer is satisfied that any person ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... except in the case of search and seizure where the Explanation 5 or 5A to section 271(1)(c) are applicable, the concealment of particulars of income or furnishing inaccurate particulars has to be considered only in the context of the income declared and particulars furnished in the return of income filed by the assessee. The Coordinate Bench of this Tribunal in case of AO vs. Shri Harbanslal Sethi (supra) while considering an identical issue has held in para 4 as under :- 4. Having considered the rival submissions as well as the relevant material on record, we note that if the assessee has not declared the surrendered income in the return of income and also not filing revised return of income, then the case of the assessee would certainly fall in the category of furnishing incorrect particulars of income in the return of income as the assessee had already declared and surrendered the said income during the course of survey proceedings under section 133A. However, in the case in hand the assessee has paid the due tax on the said income prior to the filing of the return of income and further this amount was duly reflected in the books of account of the assessee. Once the assessee ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the same. Thus, in the present case it is clear that the payment of taxes, not claiming refund of the same, inadvertent omission of additional income from the computation and subsequent revision through a computation in the course of assessment proceedings show the intention of the assessee to be bonafide and in my humble view, duly covered under the opinion of the courts as discussed above in this order. In the absence of bringing out any deliberate and malafide intent behind the omission or alleged concealment the penalty of ₹ 51,49,485/- levied by the AO is not found to be sustainable and is directed to be deleted. This ground of appeal is treated as allowed. Accordingly, the facts as discussed and considered by the ld. CIT (A) has not been disputed before us by the revenue that the assessee made the payment of tax before filing of the return and not claimed refund of the same. The non-inclusion of the said income was explained as due to inadvertent omission and bonafide mistake. Therefore, the explanation tendered by the assessee with the supporting facts and details falls in the Clause-B of Explanation-2 to section 271(1)(c) of the Act. Hence we do not find any error or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arise. We have to keep in mind that it is the Assessing Officer who initiated the penalty proceedings and directed the payment of penalty. He had not recorded any satisfaction during the course of survey. Decision to initiate penalty proceedings was taken while making assessment order. It is, thus, obvious that the expression 'in the course of any proceedings under this Act' cannot have the reference to survey proceedings, in this case. 15. It necessarily follows that concealment of particulars of income or furnishing of inaccurate particular of income by the assessee has to be in the income-tax return filed by it. There is sufficient indication of this in the judgment of this Court in the case of CIT v. Mohan Das Hassa Nand [1983] 141 ITR 203 / 13 Taxman 328 and in Reliance Petroproducts (P.) Ltd. (supra), the Supreme Court has clinched this aspect, viz., the assessee can furnish the particulars of income in his return and everything would depend upon the income-tax return filed by the assessee. This view gets supported by Explanation 4 as well as Explanations 5 and 5A to section 271 of the Act as contended by the learned counsel for the respondent. 16. No doubt, the disc ..... X X X X Extracts X X X X X X X X Extracts X X X X
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