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TMI Blog2023 (5) TMI 575X X X X Extracts X X X X X X X X Extracts X X X X ..... of Income. See Pushpendra Surana [ 2013 (8) TMI 969 - RAJASTHAN HIGH COURT] as held no inference drawn by the authority that it was a deliberate concealment on the part of the assessee and it could not be considered that there was an inaccurate particulars of income that was made the basis for inflicting penalty upon the assessee in exercise of powers conferred u/s 271(1)(c). Since the assessee participated in the assessment proceeding, has paid the tax, and filed the computation of income before issue of notice u/s. 148 levy of penalty is not sustainable - Decided in favour of assessee. - SHRI SANDEEP GOSAIN , JM And SHRI RATHOD KAMLESH JAYANTBHAI , AM For the Assessee : Sh. Devang Gargieya ( Adv . ) For the Revenue : Smt Chanchal Meena ( Addl. CIT ) ORDER PER: RATHOD KAMLESH JAYANTBHAI , AM This appeal is filed by assessee and is arising out of the order of the National Faceless Appeal Centre, Delhi dated 06.05.2022 [here in after ld. NFAC/CIT(A) ] for assessment year 2012-13 which in turn arise from the order dated 21.01.2020 passed under section 271(1)(c) of the Income Tax Act, 1961 [ here in after to as Act ] by the National Faceles ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eal raised by the appellant are adjudicated in the subsequent paras. 6. Ground of Appeal No. 1 relates to levy of penalty u/s 271(1)(c) of Rs. 2,40,795/- @100% of the tax sought to be evaded in respect of concealment of income of Rs. 12,95,940/-. 6.1 As observed earlier, the assessee is an individual and had invested in FDRs of Rs. 90,00,000/- with The Urban Co-operative Bank Ltd and had earned interest income thereon of Rs. 12,95,940/- during FY 2011-12. However, no return of income was filed for the relevant year u/s 139(1) of the I.T Act. Therefore, the case was re- opened u/s 148 of the I.T Act, 1961, after recording reasons and obtaining approval from the Pr. CIT-2, Jaipur. Notice u/s 148 of the I.T Act was issued and duly served upon the assessee. In response to notice u/s 148, the assessee filed her return of income on 29.04.2019 of Rs. 12,95,940/- Notices u/s 143(2) and 142(1) were issued on 29.05.2019. In response to these notices, the assessee filed requisite documents. The AO completed assessment u/s 143(3)/147 on 24.07.2019 determining total income of Rs. 12,95,940/-. The AO also initiated penalty proceedings u/s 271(1)(c) for concealment of income by issu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing of the redundant portion of the notice u/s 274 would not vitiate the penalty proceedings. The relevant portion of the decision of the Hon'ble Bombay High Court is reproduced as under. 10. We will first take up the show-cause notice dt. 29th March, 1972, pertaining to the asst. yrs. 1968-69 and 1969-70. The assessment orders were already made and the reasons for issuing the notice under s. 274 r/w s. 271(1) (c) were recorded by the ITO. The assessee fully knew in detail the exact charge of the Department against him. In this background, it could not be said that either there was non-application of mind by the ITO or the so-called ambiguous wording in the notice impaired or prejudiced the right of the assessee to reasonable opportunity of being heard. After all, s. 274 or any other provision in the Act or the Rules, does not either mandate the giving of notice or its issuance in a particular form. Penalty proceedings are quasi- criminal in nature. Sec. 274 contains the principle of natural justice of the assessee being heard before levying penalty. Rules of natural justice cannot be impris straight-jacket formula. For sustaining a complaint of failure of the Principles ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aid penalty was initiated and the penalty order were examined. From the assessment order, it is observed that the AO has initiated penalty proceedings for concealment of particulars of income after due application of mind. Further, the ultimate penalty order is also on the charge of concealment of particulars of income. Therefore, the penalty initiated and levied on the assessee u/s 271(1)(c) is held to have not been vitiated due to non-striking of the redundant portion in the notice issued u/s 274. 6.6 The appellant also contends that her return filed in response to notice u/s 148 has been accepted without making any further additions and that she had paid the due taxes prior to issue of the said notice-u/s-148, therefore there is no case for levy of penalty for concealment of income. It is noted that the appellant had not filed her return of income, though her income from interest on FDRS of Rs. 90,00,000/- for the relevant year was way above the maximum amount which is not subject to tax. It is only pursuant to notice u/s 133(6) issued by the AO that the appellant paid the due taxes and thereafter in response to notice u/s 148 filed her return of income disclosing the sa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the finding of concealment of income furnishing of inaccurate particulars. 2. Penalty so imposed being totally contrary to the provisions of law: 2.1 The order imposing penalty is quasi-criminal in nature and, thus, the burden lies on the department to establish that the assessee had concealed his income. Since the burden of proof in penalty proceeding varies from that in the assessment proceeding, a finding in an assessment proceeding that a particular receipt is income or that a deduction has wrongly been claimed, cannot automatically be adopted, though a finding in the assessment proceedings constitutes good evidence in the penalty proceeding. In the penalty proceedings, thus, the AO is required to bring positive material showing intentional concealment. 2.2 In the present case, notice u/s 133(6) was issued on 08.03.2019 immediately thereafter the assessee voluntarily deposited the tax along with the computation of income in response to the said notice vide letter dated 25.03.2019. It only after this the AO issued notice u/s 148 (i.e. on 30.03.2019). The assessee on his own after receiving notice u/s 148 voluntarily declared the income in ROI and paid taxes ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se thereto, it has been held that no penalty u/s 271(1)(c) can be imposed in as much as a comparison has to be made between the return of income filed u/s 148 viz-a-viz the assessed income. 3.2 Further, behind issuing a notice u/s 148, the legislative intent is, to give a second chance to such assessee who might not have filed any ROI mistakenly or inadvertently despite having taxable income so as to give him one more opportunity to come clean. If despite such opportunity, the notice does not care of filling ROI or a lesser income is declared if filed, the AO may impose penalty but not in a case where an assessee bonafidely acted in compliance and the assessment is also completed on the income declared in the ROI filed u/s 148. Otherwise, there is no purpose behind asking the assessee to file ROI if the original ROI u/s 139 was to be considered for the purpose of imposing penalty. This intention is also supported by the further fact that the ROI filed u/s 148 is deemed to be an ROI filed u/s 139 and all the provisions of the Act shall apply accordingly. Looking from this angle in absence of any difference in the returned and assessed income. 4. Supporting case laws u/s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mately AO levied penalty u/s 271(1)(c) for Rs.10,75,000/- for concealment CIT(A) deleted this penalty - Now Tribunal have upheld the deletion of penalty and have dismissed the departmental appeal after observing that assessment has been completed on the basis of revised return and hence there was no concealment on the part of assessee Whether concealment of income has to be seen with reference to the return of income on the basis of which assessment has been made ? Held Yes Further held that assessment in this case has been completed on the basis of revised return filed, there was no concealment and hence penalty u/s 271(1)(c) for concealment cannot be imposed 4.3 In CIT vs Suresh Chand Mittal (2001) 170 CTR 182, 281 ITR 0009 (SC) 5. Supporting case laws u/s 271(1)(c) r.w.s. 153A: 5.1 In Pr. CIT vs. Neeraj Jindal 2017) 393 ITR 0001 (Delhi), it was held that: Thus, it is clear that when the A.O. has accepted the revised return filed by the assessee under Section 153A, no occasion arises to refer to the previous return filed under Section 139 of the Act. For all purposes, including for the purpose of levying penalty under Section 271(1)(c) of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion 5 in assessment year 2004-05 in respect of cash found in previous year relevant to assessment year 2007- 08, merely on presumption that assessee might have been in possession of cash throughout period covered by search assessments - Held, yes [In favour of assessee] 5.3 PCIT vs. Trisha Krishnan [2019] 111 taxmann.com 97 (SC) Section 4, read with section 271(1)(c), of the Income-tax Act, 1961 - Income - Chargeable as (Advances) - Assessment year 2010-11 - Assessee was a Cine artist - For relevant year, assessee filed her return declaring certain taxable income - Subsequently, assessee filed a revised return admitting additional income - Difference between income originally declared and total income admitted in revised return represented advance received by assessee in said assessment year from various cinema producers towards work to be done by her - In course of assessment, Assessing Officer opined that assessee filed revised returns only after revenue issued notice under section 143 and, therefore, it should be construed that assessee was guilty of deliberate concealment of income - Assessing Officer further noted that assessee had made payments of audit fee, p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the case of CIT vs. Pushpendra Surana (2014) 264 CTR 0204 (Raj) wherein it was held that: 6. In our considered view, the CIT (Appeals) and so also the Income Tax Appellate Authority both have considered the matter, in detail, and finally arrived at a conclusion that the income declared by the assessee from the long term capital gain by selling agricultural land, disclosed by the assessee in his revised return of Income was accepted by the Assessing Authority and there was no material available on record by which there could be an inference drawn by the authority that it was a deliberate concealment on the part of the assessee and it could not be considered that there was an inaccurate particulars of income that was made the basis for inflicting penalty upon the assessee in exercise of powers conferred u/S.271(1)(c) of the Act. 7. We do not find any substance in the submissions made by counsel for appellant and apart from that even if there appears some substance, this court has a limited scope in the instant appeal u/S.260A of the Act, to examine if a substantial question of law arises for consideration. 8. Taking note of the submissions and the order passed by ..... X X X X Extracts X X X X X X X X Extracts X X X X
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