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TMI Blog2025 (3) TMI 984X X X X Extracts X X X X X X X X Extracts X X X X ..... osure made in the revised return.
CIT(A) should have discussed the above said point first and then proceeded further to decide the validity of the impugned penalty order.
We are in agreement with CIT(A) that furnishing of revised return certainly replaces the original ITR, and accordingly, for the year under consideration i.e. AY 2017-18, CIT(A) was justified in setting aside the penalty order, once the assessee, even though after search action, came forward to disclose the foreign assets by furnishing revised return. Decided against revenue. X X X X Extracts X X X X X X X X Extracts X X X X ..... nowledgement filed under section 139(5) for assessment year 2017-18 and also at paper book pages 304-329 which is a copy of ITR Form filed by the appellant for the assessment year 2017-18, whereby in schedule FA (pages. 326 & 327) due disclosure has been made by the appellant in his return. 34.9 Now proceeding further, our attention was also drawn on paper book pages 376-377 which is a copy of revised return filed for the assessment year 2017-18 whereby due disclosure regarding the financial interest and details of signatory to the foreign bank account had been made by the appellant. Apart from this, appellant assessee had also filed copy of chart of dates of return filed original as well as revised which are at paper book page 844. After analyzing and scrutinizing all the events, disclosures and evidences in the form of documents, which are placed in paper book, we find that assessee had made due disclosure in his respective returns more particularly the original return for assessment years 2019-20 and 18-19 have been filed within due dates. So far as with regard to assessment year 2017-18 is concerned, the same has stood amended/revised by the assessee and revenue has not contr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 43 of the Act is hereby directed to be deleted. Therefore ground of appeal no. 4.2 of the appellant is hereby allowed." Other grounds raised by the appellant there were treated, by Learned CIT(A), as disposed off. 4. Hence this appeal by the department. Then, the Second Captioned Appeal BMA No. 2/JPR/2024 5. By way of present appeal, Department has challenged order dated 07.06.2024, passed by Learned CIT(A), relating to the assessment year 2016-17, whereby the appeal filed by the assessee challenging the penalty order dated 31.02.2022, passed by the Assessing Officer, has been partly allowed thereby setting aside the penalty imposed on the assessee u/s 43 of the Act, 2015. Penalty came to be imposed due to the reason that the assessee, a resident in India, was required to file his return of income u/s 139(1) of the Income Tax Act, 1961 (in short "the Act") and also disclose therein his assets located outside India; that the information was required to be disclosed in the relevant schedule of the return i.e. schedule FA ', but he had failed to disclose the same in the return of income; and that the such assets held by the assessee came to the notice, only after search and seiz ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rred to provisions of Section 43 of the Act, 2015 and submitted that under the said provision of law, levy of penalty is discretionary and not mandatory. Further, it has been pointed out by Ld. Counsel for the assessee that provisions of Section 43 of the Act, 2015 get attracted when the requisite information is not furnished by an assessee in the original return u/s 139(1) of the Act, 1961 or belated return of income u/s 139(4) or revised return u/s 139(5). Ld. Counsel has contended that since the assessee furnished requisite particulars in the revised return filed u/s 139(5) of the Act, question of levy of penalty did not arise. Ld. Counsel has urged to uphold the impugned order, passed by Learned CIT(A), whereby he has deleted the penalty that was imposed by the Assessing Officer. In support of his contention, Ld. Counsel has relied on observations made by Hon'ble Apex Court in State of Jharkhand v. Ambay Cements, (2005) 1 SCC 368. Reliance has also been placed on decision in CIT v. Mangalore Chemicals, (1991) 191 ITR 156/59 taxman. 508 ( Kar.) and in Chief Commissioner of Income-tax v. Machine Tool Corpn. Of India Ltd. (1993) 67 taxman 363 (Karnataka) 8. Another contention ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... law is no excuse. Furthermore, the Assessee has nowhere claimed that he had no assistance of any Chartered Accountants or practitioners skilled in the subject or that for want of best legal advice on the subject, he could not disclose the foreign assets. Even if at the time of search proceedings, the assessee expressed that he was not aware of the legal requirement to report his foreign assets in the return of income in India and sought enlightenment over the subject so as to comply with said instructions, ignorance of law does not come to the aid of the assessee. It is significant to note that the assessee violated the provision of law not only once, but, even in the succeeding Assessment Year as well, by not furnishing requisite information in the return of income initially presented. 12. As regards the submission that the assessee had no mala fide intention or that due to lack of ignorance, he could not disclose the foreign assets, suffice it to state that mens rea is not an essential to attract provisions of section 43 of the Act, 2015. 13. So far as the contention on behalf of the respondent that the provision of section 43 of Act, 2015 is not mandatory, and merely director ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to advert to the original returns or the statement filed along with it for the purpose of allowing deductions after such claim was expressly withdrawn under the revised return." In M/s Hindustan Steel Ltd's case, Hon'ble Apex Court observed as under:- "10.1 By reading bare provisions of section 43 of the Act, it clearly reflects that a person shall pay by way of penalty of sum of Rs. 10, 00, 000/- who fails to furnish any such information or furnishes inaccurate particulars qua any asset/located outside India / sourced from outside India in the return of income filed under sub- section (1) or (5) of section 139 of the Act Further, the AO may direct that such person shall pay by way of penalty of Rs. 10, 00, 000 No doubt the AO is empowered to impose the penalty as discretion is vested with him by using word May in the provisions. The discretion is always at wisdom of an authority, however, discretion is required to be exercised judicially and under the Judicial canons of law and in reasonable and justified manner to impart the Justice, by considering all the relevant circumstances and in case the Assessee is able to discharge its burden for reasonable cause then the discretion a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... from AY 2016-17 onwards which is under consideration before us, however, in the instant case, it is not the case of total defiance or malafide or dishonest breach/non-disclosure of information of foreign investment in schedule FA, therefore, on the aforesaid analyzations and considerations, in our view the penalty is not warranted, hence, the same sa deleted Consequently, the appeal filed by the Assessee is allowed" 14. Admittedly, the appeal filed by the assessee against the quantum assessment proceedings, before Coordinate bench, ITAT, Jaipur Bench was allowed, but, the legal proposition as rightly put forth by ld. DR for the appellant, and not controverted on behalf of the assessee, is that quantum assessment proceedings are different from the proceedings for levy of penalty. Therefore, the observations made by the Coordinate Bench in the quantum assessment proceedings were of no avail to the assessee in the penalty proceedings. It is significant to note that at page 28 of the impugned order, Learned CIT(A) observed that he was not going into the issue as to whether the appellant was required to disclose the asset in Schedule FA or not, as according to him, ground of appeal 4 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 017-18, the assessee was able to file revised return disclosing the entire all the particulars as regards foreign assets, but, as regards assessment year 2016-17, the window of the department portal having closed, he could not get an opportunity to revise the return so as to disclose his foreign assets, and that this fact may also be taken into consideration, while adjudicating this appeal BMA 2/JP/2024. In the course of arguments, Learned DR has not controverted this fact that the window of the department portal stood closed. But, the fact remains that in the only return of income filed by the assessee, relating to the Assessment Year 2016-17, he had not disclosed the requisite information as regards his foreign assets, and as such, it can safely be said that he violated the provisions of Act, 2015, and Learned Assessing Officer was justified in exercising discretion in passing the penalty order. As regards the mitigating circumstance pointed out by Learned counsel for the appellant that the Act, 2015 was a new enactment and that came into force w.e.f., 26th of May, 2015, said submission is attractive, but liable to be rejected, in view of the legal proposition that when the re ..... X X X X Extracts X X X X X X X X Extracts X X X X
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