Ramchandra Udaysingh Jadhavrao Vs ACIT (ITAT Pune)
ITAT Pune Rules Against Penalty for Declared Income Post-Survey
The Income Tax Appellate Tribunal (ITAT) Pune, in the case of Ramchandra Udaysingh Jadhavrao vs. ACIT, ruled that no penalty under Section 271(1)(c) of the Income Tax Act, 1961, can be imposed if income uncovered during a survey under Section 133A is voluntarily declared in the tax return. The case pertained to the assessment year 2016-17, where the appellant, a proprietor of M/s. JKG Developers, was subjected to a survey. During the survey, he admitted to undisclosed business income and long-term capital gains, which he later incorporated in his tax return before the filing deadline.
Despite the full disclosure, the Assessing Officer (AO) imposed a penalty of ₹2.7 crores, arguing that the income would not have been reported had the survey not taken place. The penalty was levied under the premise that the assessee had concealed income, making him liable under Section 271(1)(c). The Commissioner of Income Tax (Appeals) [CIT(A)] upheld the penalty, leading to an appeal before ITAT Pune.
The tribunal examined past judicial precedents, including CIT vs. Mohan Das Hassa Nand (141 ITR 203) and Reliance Petroproducts Pvt. Ltd., which held that penalty under Section 271(1)(c) applies only when income is concealed in the filed return. Since the appellant had voluntarily disclosed the income before the survey deadline and included it in his return, the tribunal concluded that the penalty was unjustified. Furthermore, ITAT referred to Prakash Mithalal Oswal vs. ITO (ITA No. 327/PUN/2019), where a similar penalty was overturned.
