×Latest Case Laws on Income Tax by various Income Tax Appellate Tribunals in India
These are the latest case laws decided by various Income Tax Appellate Tribunals (ITAT) of India on Income Tax which have been published recently. The case laws are open for discussion and we invite expert comments from our members on its applicability and effect on relevant issues.
07-06-2019, Kamal Sethia, Section 153A, 271(1)(c), Tribunal Jaipur
These are two appeals filed by the Revenue against the order of ld. CIT(A)-4, Jaipur dated 01.10.2018 for AY 2014-15 wherein the ld. CIT(A) has deleted the levy of penalty u/s 271(1)(c) of the Act. Since the common issues are involved, both these appeals were heard together and are being disposed off by this consolidated order.
ITA No. 1498/JP/2018
2. With the consent of both the parties, the case of Sh. Kamal Sethia is taken as the lead case for the purposes of present discussion wherein the Revenue has taken the following sole ground of appeal as under:-
“whether on the facts and in the circumstances of the case and in law ld. CIT(A) is justified in deleting the penalty u/s 271(1)(c) of Rs. 1,23,40,919/- imposed by the AO.”
3. Briefly stated, the facts of the case are that a search & seizure action u/s 132(1) of the Act was carried out on 17 12.2014 at the various premises of Vardhaman Group and the assessee, being one of the members of this group was also covered by search operations. The assessee is a director in two companies, namely M/s Richwell Enterprises Pvt. Ltd., and M/s Yashraj Commercial Complex Pvt. Ltd. and also a partner in the firms, M/s Vardhaman Builders and Developers (28.00% share), M/s Sethia Real Estate (33.33% share) and M/s Manglam Vardhman Developers LLP (25.00% share).
4. The assessee originally filed his return of income u/s 139(1) on 24.07.2014 declaring income from house property, remuneration and interest from these firms and interest from bank during this year totaling to Rs. 23,74,227/-. Thereafter, the assessee filed his revised return of income u/s 139(5) on 19.03.2015 declaring total income of Rs. 3,85,78,660/- which includes undisclosed income of Rs. 3,63,07,500/- which has been accepted by the assessee in his statement u/s 132(4) recorded during the course of search. In response to notice u/s 153A of the Act issued to the assessee on 11.02.2015, the assessee again furnished his return of income on 27.03.2015 declaring total income of Rs. 3,85,78,660/- which is at the same figure as per the revised return filed earlier on 19.03.2015. The Assessment u/s 143(3) read with section 153A was completed on 24.11.2016 at assessed income of Rs. 3,85,78,660/-. The penalty proceedings u/s 271(1)(c) of the Act were separately initiated for concealment of income/furnishing inaccurate particulars of income vide issue of show cause notice dated 24.11.2016.
5. During the course of penalty proceedings, a fresh show cause notice dated 04.05.2017 was again issued and in response, the assessee filed his written submission. In its submission, the assessee submitted that given that he has filed his revised return of income, the concealment of income, if any has to be seen with reference to the revised return of income/return filed in response to notice u/s 153A as the original return has been replaced by the revised return. It was submitted that there was no concealment of income as the income declared in revised return, and also in return filed in response to notice u/s 153A and the income finally assessed by the AO are the same. The subm ssion so filed was not found acceptable to the Assessing Officer. As per the Assessing Officer, the case of assessee is covered under explanation 5A to section 271(1)(c) of the Act. As per the Assessing Officer, the assessee filed his original return of income on 24.07.2014 before the date of search on 17.12.2014. The assessee filed his revised return of income on 19.03.2015 after the date of search and included undisclosed income of Rs. 3,63,07,550/- in the said return. It has been clearly stated in explanation 5A to section 271(1)(c) where the undisclosed income was not included in the return of income filed for the relevant previous year before the date of search then, notwithstanding that such income is declared by him in any return of income furnished on or after the date of search, he shall, for the purposes of imposition of a penalty under clause (c) of sub-section (1) of this section, be deemed to have concealed the particulars of his income or furnished inaccurate particulars of such income with the amount of concealed income being Rs. 3,63,07,550/-. Further, the Assessing Officer relied on the Hon’ble Supreme Court decision in case of Prasanna Dugar vs. CIT  70 taxmann.com 175 (SC), Hon’ble Punjab and Haryana decision in case of Commissioner of Income-tax (Central), Ludhiana vs. Bansal Abushan Bhandar  42 taxmann.com 9 (Punjab & Haryana) and Chennai Tribunal in case of ACIT, Central Circle 11(5) vs. Smt. J. Mythili. Finally, the AO has given his conclusive finding at para 7 of his penalty order wherein it has been stated that in view of the above cited and facts and legal position, the assessee is liable for penalty u/s 271(1)(c) of the Act on account of concealment of income and accordingly, the penalty of Rs. 1,23,40,919/- was levied u/s 271(1)(c) of the Act.
6. Being aggr eved, the assessee carried the matter in appeal before the ld. CIT(A). As per ld. CIT(A), the prerequisite for invoking of explanation 5A to section 271(1)(c) is that the assessee should be found to be owner of any money, bullion etc. found or entry in books of accounts or other documents found from the ownership of the assessee during the course of search which represents his undisclosed income for any previous year which has ended before the date of search and where the return of income for such previous year has been furnished before the date of search but such income has not been declared therein. Therefore, the perquisite for invoking explanation 5A is that the assessee should be found to be owner of