Penalty for concealment arising out of search - Change in method of accounting from completed contract method to percentage of completion method

Facts:

Assessee in the real estate was following completed contract method until assessment year 2015-16. Arising out of a search he admitted income as per the percentage of completion method. This was presumed to be concealment of income under section 271(1)(c) explanation 5A (deeming provision). On appeal CIT(A) dropped the penalty on grounds that the change in the method did not arise out of the search but was only a process acceleration of income taxation. On further appeal by the revenue -

Held against the revenue that the change in method of accounting does not warrant invocation of penalty under section 271(1)(c) Explanation 5A. The amendment in Section 43CB forcing assessee's to follow the percentage of completion method is only from assessment year 2017-18 (next assessment year).

Applied:

Trident Estate (P) Ltd. v. ITO (2021) 127 taxmann.com 360 (Mum. Trib.) : 2021 TaxPub(DT) 2657 (Mum-Trib)

Case: ITO v. Raviraj Ventures 2023 TaxPub(DT) 3135 (Pun-Trib)