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TMI Blog2021 (4) TMI 666X X X X Extracts X X X X X X X X Extracts X X X X ..... me Court in the case of M/s. Mak. Data (P) Ltd. (2013) 38 taxman.com 48 though the same was specifically relied upon in the penalty order? 3. Whether on the facts and in the circumstances of the case, the Ld. CIT(A) was justified in deleting the penalty amounting to Rs. 1,43,45,000/- made by the AO under section 271(1)(c) of the I.T. Act by not appreciating the fact that the disclosure of income was the result of search operation on the assessee and not voluntary? 4. Whether on the facts and in the circumstances of the case, the Ld. CIT(A) was justified in ignoring that if in pursuant to search operation, penalty is not levied for unearthing of additional income detected during a search, it would be an open incentive to all to conceal their income till such time it is detected by the revenue? 5. The appellant craves leave to add to or deduct, from or otherwise amend the above grounds of appeal. 3. Brief facts of the case as culled out from the records are that the assessee is an individual and belongs to Apollo (NRK) Group of Indore. Major source of his income are from civil contract, colonizer and builder. Search and seizure operation u/s. 132 of the Act were carried out on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... It has been held by Hon'ble M.P. High Court which has been upheld by Hon'ble Supreme Court in the case of CIT vs. Suresh Chandra Mittal [2001] 251 ITR 9, that where the assessee filed revised return showing higher income after search and notice for re-opening of assessment to purchases peace and avoid litigation, the department simply rested its conclusion on the Act of voluntarily surrendered done by the assessee in good faith High court was justified in holding that no penalty could be levied. In view of the above facts the AO is not justified in imposing the penalty on the returned income. Appellant during appellate proceedings submitted that Hon'ble ITAT, Indore vide ITA Ne 85 to 87/Ind/2017 dated 10.01.2019 has deleted entire penalty for AY. 2007-08, 2008-09 and 2010-11 on the same, facts and grounds. Looking to the facts and circumstances, evidence and order of the ITAT, the penalty imposed by the AO amounting to Rs. 1,43,45,000/- in AY 2009-10 u/s. 271(1)(c) is Deleted. Therefore, the appeal on these grounds is Allowed. 6. Now the Revenue is in appeal before the Tribunal challenging the finding of Ld. CIT(A). 7. Ld. Departmental Representative vehemently argued ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Ld. CIT(A) deleting the penalty made u/s. 271(1)(c) of the Act at Rs. 1,43,45,000/- on the income surrendered during the course of search and offered to tax in the return filed in response to notice u/s. 153A of the Act. Search was carried out at the premises of the assessee on 21.09.2012 being part of the Apollo (NRK) Group, Indore. There was a transaction of share application money of Rs. 3.90 crores received by M/s. Exotic Exports P. Ltd. (where the assessee is Director and share holder) which was received from M/s. Airen Aditya Dev P. Ltd. This fact is not disputed at the end of revenue that no incriminating material with regard to the alleged transaction of share application money received by M/s. Exotic Exports P. Ltd. was found during the course of search carried out u/s. 132 of the Act. However assessee accepted to offer to tax the alleged share application money and other amount of Rs. 53,00,000/- totaling to Rs. 4,22,00,000/- as additional income and the same was duly disclosed in the Income Tax Return filed on 30.12.2014. The returned income was accepted by the Ld. A.O. as assessed income. The Ld. A.O. initiated the penalty proceedings and levied the penalty u/s. 271(1)( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s Park, Bl, PU-4, 3rd floor. Scheme No. 54, Behind Mangal City Indore 452001 NOTICE UNDER SECTION 274 READWITH SECTION 271(1)(c) OF THE INCOME TAX ACT, 1961 Whereas in the course of proceedings before me for the A.Y. 2011-12 it appears to me that you:- have concealed the particulars of your income or furnished inaccurate particulars of such income. You are hereby requested to appear before me at 03.30 PM on 10/04/2015 and show cause why an order imposing penalty on you should not be made under section 271(1)(c) of the Income Tax Act, 1961. If you do not wish to avail yourself of this opportunity of being heard in person or through authorised representative, you may show cause in writing or before the said date which will be considered before any such order is made under section 271(1)(c). Sd/- (Ram Kumar Yadava) Dy. Commissioner of Income Tax (Central)-1, Indore 7. The Hon'ble jurisdictional High Court in the case of PCIT-I vs. Kulwant Singh Bhatia (supra) in paras 9 to 11 has held as under:- 9. Considering the aforesaid, the Tribunal has held that the penalty levied under Section 271(1)(c) of the Act of 1961 is not sustainable in law, as no specific charg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s. Kulwant Singh Bhatia (supra). Accordingly, the impugned penalty order is hereby quashed, being bad in law. 9. In the result, the appeal filed by the assessee in ITA No. 789/Ind/2017 is allowed. 15. Ld. Departmental Representative failed to controvert the fact that the legal issue raised in the instant appeal is squarely covered by the decision of this Tribunal in assessee's own case. We therefore respectfully following the same are of the considered view that the Ld. CIT(A) was justified in deleting the penalty on legal ground by holding the penalty proceedings as void ab initio as the Ld. A.O. failed to level the specific charge against the assessee. Thus on the legal ground itself the appeal of revenue deserves to be dismissed. 16. However for academic purpose we would like to deal with the merits of the case. no incriminating material was found during the curse of search relating to the alleged surrender of income made by the assessee in the Income Tax Return. The assessee suo moto offered the additional income in the return and paid taxes there on. It is also an established fact in the instant case that Ld. A.O. was not sure that which assessee has concealed the part ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mittedly the AO accepted the return filed by the assessee after verification of the information filed and books of account produced. Thus the assessment was completed accepting the returned net income as per the revised return of income. Not only the assessment order did not reflect any satisfaction as required under s. 271(1)(c) of the Act but even the show-cause notice was silent with reference to the satisfaction arrived at by the AO with reference to the concealment of income by the assessee. Nothing has been placed by the Revenue to show that any other material was available with the AO to the effect that the assessee concealed the income. In the circumstances; it is not open to the AD to invoke the power, under s. 271(1)(c) levying penalty.'. In the case of M/s. Bhandari Construction Company, DCIT, ITAT, Pune Bench held that so far as the addition regarding loan obtained from Mr. Soni is concerned, it is a fact that the assessee has admitted and not contested the' addition in the quantum appeal. The loan obtained from Mr. Soni was already reflected in the balance sheet 'filed alongwith the original return of income which was filed prior to the data of search. Me ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... llment of certain conditions stipulated in the said section. Hence in view of the above, we hold that the levy of penalty is not automatic and assessee is clearly entitled for immunity from levy of penalty. 19. Examining the facts of the instant case in the light of above decisions, we find that in the case of assessee penalty was levied on the additions made for unexplained share application money and unsecured loans. No incriminating material was found during the course of search relating to the additional income offered by the assessee during the course of search which was subsequently honoured by disclosing in the return of income and paying taxes thereon. Transaction of alleged share application money was duly reflected in the regular books of accounts. Under these given facts and circumstances of the case the ratio laid down in the above referred decisions is squarely applicable on the issue before us and we therefore respectfully following the same are of the considered view that on merits also the revenue fails to succeed as the Ld. A.O. was not justified in levying the penalty u/s. 271(1)(c) of the Act. Since the revenue failed to succeed on both legal ground as well as g ..... X X X X Extracts X X X X X X X X Extracts X X X X
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