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TMI Blog2025 (3) TMI 455X X X X Extracts X X X X X X X X Extracts X X X X ..... -17 arising out of the order passed U/s. 271(1)(c) of the Income Tax Act, 1961 ("the Act"). Brief facts of the case are that the assessee is engaged in the business of executing contract works in the Government Departments like Irrigation, Public Health, Rural Water Supply and various Municipal Corporations as Special Class Contractor. The assessee-company filed its return of income for the AY 2016-17 admitting a total income of Rs. 3,38,91,662/-. A survey U/s. 133A of the Act was conducted in this case on 25/03/2019 and subsequently, initiated proceedings U/s. 147 of the Act. In response to the notice U/s. 148 of the Act issued on 30/03/2019, the assessee filed the return of income on 28/12/2019 admitting a total income of Rs. 4,03,16,660 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... IT(A) considered that the assessee has failed account for its income while filing the original return of income U/s. 139(1) of the Act and thereafter, confirmed the order of the Ld. AO. On being aggrieved by the order of the Ld. CIT(A), the assessee filed an appeal before us by raising the following grounds of appeal: "1. That on the facts and in the circumstances of the case, the order passed by the Assessing Officer U/s. 271(1)(c) of the Act, dated 23/03/2022 upheld by the Ld. CIT(A) vide order U/s. 250 of the Act dated 08/03/2024 is not in accordance with the facts of the case and the provisions of law. 2. That the Ld. CIT(A) erred in upholding the actions of the AO in levying the penalty U/s. 271(1)(c) of the Act despite there being ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l income by enhancing the profit percentage as mentioned in the reply to Question No. 15 during the survey proceedings. He further submitted that the admission was made by the assessee in order to avoid litigation and to buy peace with the Department. He therefore submitted that since it is a voluntary admission of additional income, there is no concealment of income or furnishing of inaccurate particulars of income and hence, levy of penalty U/s. 271(1)(c) of the Act is unsustainable. On this issue, the Ld. AR relied on the decision of the ITAT, Bangalore Bench in the case of Muninaga Reddy vs. ACIT (2017) 37 taxmann.com 440 (Bangalore - Trib.). The Ld. AR also argued that the Ld. AO has not specified under which limb of section 271(1)(c) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e and to avoid litigation with the Department, it has voluntarily offering profit percentage of 6% for the AY 2016-17, 6.5% for the AY 2017-18 and 7% for the AY 2018-19. However, the contention of the Revenue is that the assessee did not file its return of income in response to the notice U/s. 148 of the Act within the specified period of 30 days but has filed belatedly which was considered non-est by the Ld. AO. It was also the contention of the Ld. AO that if the survey proceedings have not been conducted, the assessee would not have disclosed the additional income while filing the return of income belatedly in response to the notice U/s. 148 of the Act. In the case of Muninaga Reddy vs. ACIT (supra) rendered by the Coordinate Bench of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n-disclosure as the assessee had made a complete disclosure in the income tax return and offered the surrendered amount for the purposes of tax." The Hon'ble Supreme Court in the case of SAS'S Emerald Medows (supra), relied on by the assessee, dismissed the Special Leave Petition ("SLP") by holding that the notice issued U/s. 274 r.w.s 271(1)(c) of the Act is bad in law as it did not specify under which limb of section 271(1)(c) penalty proceedings had been initiated. Further, the decision of the ITAT, Visakhapatnam Bench rendered in the case of Malla Appalaraju vs. ITO (supra) is of no help to the assessee as in the notice U/s. 274 r.w.s 271(1)(c) of the Act it was not mentioned the reason as to why they are invoking the penalty proceedi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Ld. AO between the reported income and the assessed income. However, we find that in the case of MAK Data (P.) Ltd vs. CIT (supra), during the assessment proceedings the Ld. AO has noticed the impounded documents during the course of survey proceedings U/s. 133A of the Act and clearly concluded that the surrender of income was not voluntary. In the instant case, no such impounded documents were available before the Ld. AO but the Ld. AO has purely relied on the admission made during the survey proceedings U/s. 133A of the Act by the assessee. Hence, the decision of the Hon'ble Supreme Court in the case of Mak Data (P.) Ltd vs. CIT (supra) cannot be applied to the instant case. We therefore are of the considered view that the assessee has d ..... X X X X Extracts X X X X X X X X Extracts X X X X
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