Case Law Details
Assessing Officer was quite unsure as to which of the two sections namely, section 271(1)(c) of the Act or section 271AAA of the Act was he intending to proceed. Such an approach is also reflective of non application of mind by the Assessing Officer, and, therefore, the notice issued by the Assessing Officer under section 274 r.w.s. 271(1)(c) of the Act dated 30/12/2010 is untenable and consequently, the penalty imposed by the Assessing Officer under section 271(1)(c) of the Act of the Act is hereby directed to be deleted.
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1. The captioned appeal filed by the assessee pertaining to assessment year 2008-09 is directed against an order passed by CIT(A)-1, Mumbai dated 31/01/2013, which in turn, arises out of an order passed by the Assessing Officer under section 271(1)(c) of the Income Tax Act, 1961 (in short ‘the Act’) dated 29/06/2011.
2. The solitary grievance of the assessee in this appeal is with regard to the action of the CIT(A) in sustaining penalty of Rs.69,95,271/- imposed by the Assessing Officer under section under section 271(1)(c) of the Act.
3. Briefly put, the relevant facts are that the appellant is a partnership firm engaged in the business of Builder and Developer and civil construction. A search and seizure action under section 132 of the Act was carried out at various premises of Siddhi Group of cases, to which the assessee also belongs, on 19/02/2009. During the course of search and survey action under section 133A of the Act carried out simultaneously at different premises belonging to the group, various incriminating documents and records were found and seized. In the assessment finalized consequent to the search under section 143(3) r.w.s. 153A of the Act on 30/12/2010 for the assessment year 2008-09, the Assessing Officer made an addition on account of unaccounted receipts, which was based on the incriminating documents found and seized during course of search. Notably, the incriminating documents and material found during the search had revealed that the assessee was receiving incomes outside the books of account. Notably, in the course of its business activity, assessee had constructed a building at Navi Mumbai by the name “Ellora” consisting of various flats and shops. The Assessing Officer, based on the material found and seized during the course of search, namely, diaries, inferred that assessee was receiving on-money in cash on sale of units in “Ellora”, which was not accounted for in the Books of Account. Pertinently, the factum of the receipt of unaccounted consideration in cash was also admitted by the assessee and it suo-motu declared additional income on this count. In the return filed in response to the notice under section 153A of the Act assessee declared a total income of Rs.2,55,12,620/-, which inter-alia, included additional income offered of Rs.1,20,00,000/-, whereas in the return of income originally filed under section 139(1) of the Act on 02/09/2008, the total income was returned at Rs.1,13,93,844/-. The Assessing Officer finalized the assessment under section 143(3) r.w.s. 153A of the Act on 30/12/2010 assessing the total income at Rs.3,05,87,120/-, thereby making an addition Rs.50,74,500/- to the income returned in response to notice under section 153A of the Act. The variation in the returned income was also on account of determining the amount unaccounted cash receipts in respect of the units sold in the building “Ellora”. Subsequently, vide order dated 29/06/2011 passed under section under section 271(1)(c)of the Act the Assessing Officer held the assessee guilty of concealment of income and penalty equivalent to 100% of the tax sought to be evaded on the income of Rs.2,05,74,500/- has been levied, which came to Rs.69,93,271/-. The Assessing Officer also observed that the case of the assessee for levy of penalty was also covered by Explanation-5A to section 271(1)(c) of the Act. The said levy of penalty has since been affirmed by the CIT(A) and accordingly assessee is in further appeal before us.
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