The Tax Publishers2021 TaxPub(DT) 1080 (Mum-Trib)

INCOME TAX ACT, 1961

Section 271(1)(c)

For the purpose of imposing penalty under section 271(1)(c), concealment of particulars of income or furnishing of inaccurate particulars of income by the assessee has to be reflected in income-tax return filed by it and since there was no dispute that assessee had indeed disclosed a sum as additional income in the income-tax return and there was no concealment of income which was ultimately accepted by Revenue, therefore, penalty under section 271(1)(c) could not be levied.

Penalty under section 271(1)(c) - Assessee offered additional income to tax pursuant to survey, which was also disclosed by him in return of income filed - Assessee had disclosed the sum as additional income in the return -

Assessee was engaged in business of manufacturing and marketing of plastic products and purchased a land along with a house. During the course of survey proceedings, statement on oath of assessee company for purchase of land was recorded wherein they had admitted additional income as cash component towards purchase of property. However, in the return of income, assessee offered only part sum as on-money payment made for purchase of property as its additional income. AO completed the assessment without considering the income offered by the assessee and made a total addition based on the statement recorded as unexplained investment under section 69B. CIT(A) in the quantum appeal deleted the addition. Thereafter, AO levied penalty under section 271(1)(c). Held: Similar issue was the subject-matter of adjudication by High Court in the case of CIT v. SAS Pharmaceuticals (2011) 335 ITR 259 (Del-HC) : 2011 TaxPub(DT) 999 (Del-HC) wherein it was held that for purpose of imposing penalty under section 271(1)(c), concealment of particulars of income or furnishing of inaccurate particulars of income by the assessee has to be reflected in the income tax return filed by assessee. High Court held that no penalty would be exigible in such scenario. There was no dispute that assessee had indeed disclosed a sum as additional income in the income tax return filed by it. Since there was no concealment in the return of income filed by assessee which was ultimately accepted by the Revenue, there cannot be any levy of penalty under section 271(1)(c) and the same was liable to be deleted.

Followed:Pr. CIT v. Shree Sai Developers (2019) 418 ITR 306 (Guj-HC) : 2019 TaxPub(DT) 5368 (Guj-HC) and CIT v. SAS Pharmaceuticals (2011) 335 ITR 259 (Del) : 2011 TaxPub(DT) 999 (Del-HC)

REFERRED :

FAVOUR : In assessee's favour.

A.Y. : 2009-10



IN THE ITAT, MUMBAI BENCH

SUBSCRIBE TaxPublishers.inSUBSCRIBE FOR FULL CONTENT

TaxPublishers.in

'Kedarnath', 7, Avadh Vihar, Near Nirali Dhani,

Chopasni Road

Jodhpur - 342 008 (Rajasthan) INDIA

Phones : 9785602619 (11 am - 5 pm)

E-Mail : mail@taxpublishers.in / mail.taxpublishers@gmail.com