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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 ..... iculars of income, penalty cannot be imposed. In the instant case, there is no such concealment or non-disclosure as the assessee has made a complete disclosure in the return of income offered, surrendered the amount for the purpose of tax.
The Explanation-5 and 5A to section 271(1) of the Act are also an exception to the Rule that the income is ultimately brought to tax is declared in a return of income, there can be no question of treating the assessee as having concealed particulars of income or furnished inaccurate particulars of income. Decided in favour of assessee. X X X X Extracts X X X X X X X X Extracts X X X X ..... s 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 no concealment of income or furnishing of inaccurate particulars the essential ingredients required to be established before levying such penalty. 3. The Ld. CIT(A) ought to have acknowledged that the assessee company had offered additional income in the return of income filed in response to notice U/s. 148 of the Act and this return of income was duly accepted by the AO. Therefore, the levy of penalty U/s. 271(1)(c) is unwarranted and uncalled for. 4. The levy of penalty U/s. 271(1)(c) is unsustainable on the ground that the assessee had voluntarily and in good faith disclosed the addition income in response to the reassessment notice, and there was no deliberate act of concealment of furnishing of inaccurate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... upheld. We have heard both the sides and perused the material available on record as well as the orders of the Ld. Revenue Authorities. It is an admitted fact that the assessee has been confronted by the Survey Team and accepted disclosing of lower profits in the range of 3.5% to 4% on the turnover when compared to the other assessees in the same line of business which were showing a profit percentage of 8% to 10%. The assessee in his reply explained that they are Special Class Contractors attributed the low profits to increase in the cost of raw material year after year. Further, the assessee stated that to buy peace 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oking the penalty proceedings and hence the facts are distinguishable. The only contention of the Revenue is that the assessee has filed its return of income in response to the notice U/s. 148 of the Act belatedly after a period of nine months and hence, could not be considered as voluntary disclosure. On a perusal of section 271(1)(c) of the Act, Explanation-3 to section 271(1)(c) clearly states that Explanation-3 shall have no application if a notice U/s. 142(1) or 148 of the Act was issued within two years and if an assessee files a return of his income within a period of two years in response to a notice U/s. 148, he would be caught within the mischief of this Explanation. In the instant case, the assessee has filed his return of income belatedly in response to the notice U/s. 148 of the Act by admitting the additional income detected during the survey. Hence, the reliance placed by the assessee in the decision rendered by the Coordinate Bench of the Tribunal in the case of Muninaga Reddy vs. CIT (supra) is of no help to the assessee because the facts are distinguishable. The reliance placed by the Ld. DR in the judgment of the Hon'ble Supreme Court in the case of MAK Data (P.) ..... X X X X Extracts X X X X X X X X Extracts X X X X
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