Income Tax Appellate Tribunal - Indore
M/S. Shri Shrishti Construction Pvt. ... vs The Acit Central-2, Indore on 6 February, 2019
आयकर अपील य अ धकरण, इ दौर यायपीठ, इ दौर
IN THE INCOME TAX APPELLATE TRIBUNAL
INDORE BENCH, INDORE
BEFORE HON'BLE KUL BHARAT, JUDICIAL MEMBER
AND
HON'BLE MANISH BORAD, ACCOUNTANT MEMBER
IT(SS)A No.435/Ind/2017
Assessment Year: 2012-13
ACIT-2 M/s. Shri Shrishti Construction Pvt.
बनाम/
Ltd. Khasra No.379/4, Bijalpur, Opp.
Indore Vs. Phal Bag A.B. Road, Indore
(Revenue) (Respondent)
PAN: AAJCS2398P
C.O.No.30/Ind/2018
(Arising out of IT(SS)A No.435/Ind/2017)
Assessment Year: 2012-13
M/s. Shri Shrishti ACIT-2
बनाम/
Construction Pvt. Ltd.
Khasra No.379/4, Vs. Indore
Bijalpur, Opp. Phal Bag
A.B. Road, Indore
(Revenue) (Respondent)
PAN: AAJCS2398P
Revenue by Shri V.J. Boricha, Sr. DR
Respondent by Shri Prakash Jain & Shreya Jain, CAs
Date of Hearing: 21.01.2019
Date of Pronouncement: 06. 02.2019
Shrishti Construction P. Ltd.
IT(SS)ANo.435/Ind/2017 & CO No.30/Ind/2018
आदे श / O R D E R
PER MANISH BORAD, A.M:
This appeal by Revenue and Cross Objection by the assessee pertaining to A.Y. 2012-13 are directed against the order of Ld. Commissioner of Income Tax(Appeals)-III Indore, (in short 'CIT(A)'), dated 31.01.2017 which is arising out of the order u/s 271(1)(c) of the Income Tax Act 1961(hereinafter called as the 'Act') framed on 29.09.2015 by ACIT, (Central)-2) Indore. The Revenue has raised following grounds of appeal:
"On the facts and in the circumstances of the case the Ld. CITYA) erred in deleting the penalty levied u/s 271(1)(c) of the Act, whereas the AO has given clear finding during assessment proceeding & penalty proceeding that the assessee has concealed its income."
The assesasee has raised following grounds in C.O. No.30/Ind/2018:
"The ld. CIT(A) erred in not deciding the following grounds of appeal on merits:
1. The order u/s 271(1)(c) is bad in law and illegal and hence be annulled.
1.1 There is no satisfaction of the Ld. AO about the concealment and the proceedings were initiated u/s 271AAB and as such penalty u/s 271(1)(c) cannot be invoked and levied. 1.2 There cannot be typographical mistake to mentioning the section and the provisions of section 292B are not applicable."
2. From perusal of the grounds raised by the revenue in its appeal and in the Cross Objection by the assessee, the issues revolves around the penalty levied u/s 271(1)(c) of the Act at Rs.1,30,01,827/-, against which the revenue is in appeal on merits 2 Shrishti Construction P. Ltd.
IT(SS)ANo.435/Ind/2017 & CO No.30/Ind/2018 and the assessee though supporting the order of Ld. CIT(A) has raised legal ground in the cross objection challenging the validity of the assessment proceedings for non-satisfaction of the assessing officer in the penalty notice issued u/s 274 r.w.s 271AAB of the Act.
First we take up Revenue's appeal in IT(SS)ANo.435/Ind/2017
3. Brief facts as called out from the records are that assessee is a Private Limited Company. A survey u/s 133A of the Act was conducted at the business premises of the assessee on 18.11.2011. Return of income filed on 30.09.2012, declaring total income of Rs.4,01,90,100/- which inter alia included the additional income of Rs.4,00,67,605/- admitted by the assessee during the survey proceedings on account of cessation of unpaid liabilities. Subsequently, notices u/s 143(2) & 142(1) of the Act were duly served upon the assessee and Ld. Assessing Officer after examining the records and satisfied with the submissions of the assessee, returned income of Rs.4,01,90,100/- was assessed as total income of the assessee u/s 143(3) of the Act vide order dated 23.03.2015. While framing the assessment order Ld. AO issued penalty notice u/s 271AAB of the Act.
4. Subsequently, penalty proceedings were initiated by issuance of notice u/s 274 r.w.s. 271AAB of the Act but Ld. AO while framing the penalty order accepted that a typographical error has been committed in mentioning the wrong section of 271AAB of the Act in place of 271(1)(c) of the Act and he accordingly levied penalty of 3 Shrishti Construction P. Ltd.
IT(SS)ANo.435/Ind/2017 & CO No.30/Ind/2018 Rs.1,30,01,827/- being 30% of tax sought to be evaded on the income of Rs.4,00,67,605/- for concealing the particulars of income.
5. Aggrieved, assessee preferred an appeal before the Ld. CIT(A) against the levy of penalty u/s 271(1)(c) of the Act and succeeded.
6. Now, the revenue is in appeal before the Tribunal.
7. Ld. Departmental Representative (DR) vehemently argued supporting the order of assessing officer.
8. Ld. counsel for the assessee supported the finding of Ld. CIT(A) and also challenged the validity of notice issued u/s 274 r.w.s 271(1)(c) of the Act.
9. We have heard the rival contentions, perused the record placed before us. The penalty u/s 271(1)(c) of the Act was levied by the assessing officer on the income of Rs.4,00,67,605/- admitted by the assessee during the course of survey on 18.11.2011 which was subsequently offered to tax in the regular return of income filed post survey on 30.09.2012. Returned income was accepted as assessed income by Ld. AO. The penalty so levied u/s 271(1)(c) of the Act was deleted by the Ld. CIT(A) relying on the judgment of Hon'ble High Court of Delhi in the case of CIT vs. SAS Pharmaceuticals (2011) 335 ITR 259 observing as follows:
"4.1 The Assessing Officer has imposed the penalty u/s 271(1)(c) stating that had the survey not been conducted the assessee would not have offered. This amount for taxation. It is a' fact that the discrepancies were noticed during the survey action u/s 133A on account of unpaid liabilities due to which the appellant has offered additional income of Rs. 4,00,67,605/- in 4 Shrishti Construction P. Ltd.
IT(SS)ANo.435/Ind/2017 & CO No.30/Ind/2018 the return of income filed for A.Y. 2012-13. However, for attracting penalty u/s 271(1)(c) the moot point is whether the particulars of income have been concealed or inaccurate particulars of income have been offered in the return of income. The appellant has made complete disclosure of the additional income detected during the survey in the return of income and has offered the surrendered amount for the purposes of tax and therefore there is no concealment or non- disclosure of the particulars of income.
4.2 The issue is squarely covered by the decision of Hon'ble Delhi High Court in the case of CIT vs. SAS Pharmaceuticals (2011) 335 ITR 259 where in it is held that where income declared by the assessee during survey has been reflected in the regular return of income filed within time, no penalty could be imposed under section 271(1)(c). It was also held in this case by the Hon'ble Delhi High Court that expression "in the course of any proceedings under this Act" could not have the reference to survey proceedings. Further, there could not be a satisfaction of AO. During survey for initiating penalty proceedings. The concealment of particulars of income or furnishing of inaccurate particulars of income by the assessee has to be in the Income-tax Return filed by it.
4.3 The Hon'ble ITAT, Indore in the case of ACIT-2(1), Bhopal vs. Ritesh Agrawal (2014) 50 taxmann.com 93 (Indore-Trib.) relying upon the decision of Hon'ble Delhi High Court in the case of CIT vs. SAS Pharmaceuticals has also held that penalty u/s 271(1)(c) is not imposable when the excess stock declare during the course of survey was surrendered and income declared in the return was accepted by the Department. The decision of the Hon'ble Delhi High Court has also been followed by Hon'ble ITAT, Bangalore in the case of Muninaga Reddy vs. ACIT, Circle-6(1), Bangalore (2013) 37 taxmann.com 440 (Bang-Trib.) and Hori'ble ITAT, Ahmadabad in the 5 Shrishti Construction P. Ltd.
IT(SS)ANo.435/Ind/2017 & CO No.30/Ind/2018 case of ACIT vs. Jupiter Distiller (2012) 23 taxmann.com 303
i) (Ahmd-Trib.)"
10. The above finding of fact has not been rebutted by the Ld. DR as Ld. CIT(A) has rightly applied the judgments of Hon'ble High Court of Delhi in the case of CIT vs. SAS Pharmaceuticals (supra) wherein it has been held that if the income declared by the assessee during survey u/s 133A of the Act has been reflected in the regular return of income filed within time, no penalty could be imposed u/s 271(1)(c) of the Act. It is also an undisputed fact that the alleged amount on which the penalty has been levied was not unearthed by the revenue authorities nor it was declared by the assessee as undisclosed income but was rather offered u/s 41(1) of the Act for the cessation of liability towards unpaid liability to certain creditors and the same was disclosed in the income tax return filed u/s 139(1) of the Act.
11. We, therefore, in the given facts and circumstances of the case and respectfully following the judgments referred by the Ld. CIT(A), find no reason to interfere in his finding deleting penalty of Rs.1,30,01,827/- levied u/s 271(1)(c) of the Act.
12. In the result, grounds raised by the revenue stands dismissed.
13. As regards Cross Objection raised by the assessee, as we have already confirmed the view taken by the Ld. CIT(A) 6 Shrishti Construction P. Ltd.
IT(SS)ANo.435/Ind/2017 & CO No.30/Ind/2018 deleting the penalty u/s 271(1)(c) of the Act, it will be merely academic in nature to deal with the grounds raised by the assessee in the Cross Objection and therefore, find no reason to deal with the same. Therefore Cross Objection raised by the assessee stands dismissed being academic in nature.
14. In the result, all ground raised in the appeal of the revenue and cross objection by assessee stands dismissed.
Order was pronounced in the open court on 06 .02.2019.
Sd/- Sd/-
(KUL BHARAT) (MANISH BORAD)
JUDICIAL MEMBER ACCOUNTANT MEMBER
Indore; दनांक Dated : 06/02/2019
ctàxÄ? P.S/. न.स.
Copy to: Assessee/AO/Pr. CIT/ CIT (A)/ITAT (DR)/Guard file.
By order Assistant Registrar 7