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TMI Blog2024 (11) TMI 386X X X X Extracts X X X X X X X X Extracts X X X X ..... the ld. AO has accepted the income of the assessee at a loss of ₹ 44.99 crore. No infirmity in the finding of the CIT (A) deleting the impugned penalty u/s 271(1)(c) of the Act on duly examining the facts of the case in light of the settled judicial precedence. The sole ground of appeal raised by the Revenue is dismissed. - Dr. Manish Borad, Accountant Member And Shri Manomohan Das, Judicial Member For the Assessee : Shri Ramesh Goenka, AR For the Revenue : Shri Soumendu Sekhar Das, DR ORDER PER DR. MANISH BORAD, ACCOUNTANT MEMBER: The captioned appeal filed by the Revenue, pertaining to assessment year 2015-16 is directed against the order passed by the Learned Commissioner of Income Tax (Appeals), Central, North-East Region, Guwahati (hereinafter referred to as the ld. CIT(A) ) dated 23rd June 2023 passed u/s 250 of the Income Tax Act, 1961 ( Act ), which is arising out of the assessment order u/s 153 read with section 143(3) of the Income-tax Act, 1961 (the Act) dated 20.12.2019. 2. Revenue has raised following ground of appeal:- 1. Whether the Ld. CIT(A) was correct in law and in fact in deleting the penalty imposed by the Assessing Officer u/s 271(1)(c) of the Income T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ions have been made in the assessment order. However, the ld. AO initiated the penalty proceedings u/s 271(1)(c) of the Act on the surrendered income of ₹ 5 crore and levied the impugned penalty vide its order dated 25th March, 2022. When the matter reached before the first appellate authority, we after considering the facts of the case and examining the same in light of the settled judicial precedence has deleted the impugned penalty. Thought he ld. CIT (A) has referred to the plethora of decision we take note of the following decisions: - in the case of DCIT vs. Purti Sakhar Karkhana {{2013) 23 ITR (Trib.} 667 (Nagpur)], it was held by the Hon ble ITAT Nagpur that a return in response to a notice under Section 153A/153C of the Income Tax Act, 1961 is required to be furnished, in the prescribed form, verified in the prescribed manner and setting forth such other particulars as may be prescribed and the provisions of Income Tax Act, 1961, so far as may be, apply accordingly as if it was a return required to be furnished under Section 139 of the Act. Therefore, in an assessment completed under Section 153A/153C read with Section 143(3) of the Act, any concealment has to be jud ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1{1)(c) of the Act, the return that has to be looked at is the one filed under section 153A. In the case of Sunil Satija vs. ACIT [2017 (12) TMI 473 - ITAT DELHI], it was held, as follows, by the Hon ble ITAT Delhi: Penalty under Section 271(1){c) - Survey operations under Section 133A (1) (conducted simultaneously in the premises of some of the members of the group and Assessment under Section 153A(1)(b} completed - 'undisclosed income was declared by the appellant in the statement recorded during search and the same - was also disclosed in the return filed pursuant to notice issued under section 153A Held that:- We find that there cannot be any dispute to the fact that once a return s filed pursuant to notice under section 1534, the same s treated as return filed under section 139 of the Act [refer clause (a) of section 153Afl}]. Further, concealment/ furnishing of inaccurate particulars of income/undisclosed income, has to be necessarily seen vis-a-vis return filed by the appellant Once, income it is declared which is accepted as such under section 139 r.w.s. 153A of Act, then, the question of there being concealment/_furnishing of inaccurate particulars of income/undisclose ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se of search and seizure operations conducted by the department. Despite this very important fact, the Appellant chose to offer such income for tax. It is also clear that such income was offered for tax by the Appellant only by way of a statement/letter of the Appellant on the free will and admission of the Appellant as evident from the relevant assessment order. Thus, it can be said that the offer of the said income for tax by the Appellant was purely voluntary. It is also clear that after such additional income was offered for tax by the Appellant through the said statement of the Appellant, honouring the statement so made and offering such income for tax, no retraction of such statement was made by the Appellant either before the Investigation Wing or before the A0. Even at the time of filing the return of income under Section 153A of the Act, after the date of search, the Appellant, dutifully declared such income in the said return and paid the admitted taxes on the same. It is also a relevant fact that in many cases, under subsequent legal counsel, the statements made by various assessee s are retracted. Thus, no such intention transpires on the part of the Appellant to retrac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t matter and the object of the statutory provision in question in determining whether the same is mandatory or directory . No universal principle of law can be laid in that behalf as to whether a particular provision or enactment shall be considered mandatory or directory . It is the duty of the Court to try to get at the real intention of the legislature by carefully analyzing the whole scope of the statute or the section or the phrase under consideration. As stated earlier, the question as to whether the statute or the provision is mandatory or directory , depends upon the language in which the intent is couched. However, in this case, the words may has been used which undoubtedly gives a judicial discretion to the Ld. AO to impose the penalty but only after judicially exercising the discretion of imposing the penalty on consideration of all relevant circumstances and evidences on record. Looking at the conspectus of the case of the Appellant, wherein, no incriminating material found by the Department during the course of search and seizure operation has been referred in the relevant assessment order as well as in the impugned penalty order, such income was offered for tax by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on Wing of the Department. There was not even any false explanation given by the Appellant which was suggestive of the fact that the Appellant wanted to deliberately evade any taxes. Even though it cannot be said that the penal proceedings under the Income tax Act, 1961 are in the nature of criminal proceedings and a higher degree of probability of the assessee being guilty of the charge needs to be applied in the case of penalty proceedings, but it can be certainly said that penalty would definitely need a different approach than what is required in the case of assessment proceedings. The facts and circumstances of an Appellant's case in a penal proceedings need to be looked and judged at from a different point of view altogether than the one which is done in the case of assessment proceedings. Suppose there is a case of a law-abiding taxpayer who inadvertently omits to pay due taxes on a particular receipt. No doubt he is liable for paying the due taxes on that receipt but should he be additionally penalized for his inadvertence just because the Act stipulates the imposition of penalty? That is a difficult question to answer. There can be mechanical imposition of tax on a par ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... income, then only a penalty prescribed in the statute is attracted. It may safely be concluded that the additional tax imposed by way of penalty is nothing but a punishment for a statutory offence and that instead of judicial punishment, the statute prescribes for a penalty being awarded by the Revenue authority in question. In the case of a statutory penalty, the proceeding to make such imposition is, however, not a penal or criminal proceeding. However, in the case of a penalty, in accordance with the principles of natural justice, the person charged must have a reasonable opportunity of meeting such charge and the onus of establishing the ingredients of the penalty lies on the authority seeking to punish the person and that a penalty cannot be awarded unless this onus is discharged by the authority. In this case, it cannot be said that the Appellant deliberately concealed the particulars of income or deliberately furnished inaccurate particulars of income or had hidden any of its income, even from the assessment order, it does not appear that the Appellant had deliberately concealed his income or furnished inaccurate particulars of income or hide any of its income. No evidence o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... asis of which the assessee has declared additional income. At this juncture, we would like to refer to the decision of Coordinate Bench of Ahmedabad in the case of Guruprasad Infrastructure Pvt. Ltd. vs. DCIT [2019 (7) TMI 1549-ITAT Ahmedabad] where the head note of this decision considering similar issues reads as follows: Penalty u/s 271(1)(c) - income returned accepted by AO in order passed u/s 153 A r w s 143 (3) - HELD THAT: - There was no reference made to any incriminating document found during the search. Therefore, we are of the view that the addition of undisclosed income was based on the statement furnished under section 132(4) of the Act. At the time of the hearing, a query was raised to the Ld. DR whether the assessee disclosed the income in pursuance to the search based on the incriminating document, but he failed to bring any material on record. Therefore, in the absence of any documentary evidence, we infer that the income disclosed by the assessee was not based on the incriminating materials. Penalty under Explanation 5A to section 271(1)(c), the of the Act can be attracted if the assessee was found to be the owner of any money, bullion, jewellery or other valuable ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... w 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 Act. 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 for the purpose of assessment, we hereby delete the penalty levy u/s 271(l)(c) of the Act. Penalty levied u/s 271AAB - Assessee has given a statement u/s 132(4) of the Act during the search and substantiated as to how the undisclosed income was derived (para 4.1 of AO), paid the taxes and filed the return. Hence, the assessee had made all the required conditions. At this juncture, it is to be adjudicated whether the levy of penalty is automatic or not under the present circumstances, we find that the rationale given in the case of 271(1)(c) so as to the requisite ..... X X X X Extracts X X X X X X X X Extracts X X X X
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