DCIT Vs Rajendra Dagadu Gaikawad (ITAT Pune Bench)
Survey Surrender Is Not Concealment in the Return: Penalty of ₹1.18 Crore u/s 271(1)(c) Deleted
Background: The assessee, proprietor of M/s Komal Properties, was engaged in the business of purchasing & selling land. A survey u/s 133A was conducted at his business premises on 05.02.2013. During the survey, the assessee declared additional income of ₹3,81,10,000.
Crucially, the survey occurred during the relevant previous year, before the statutory date for filing the return of income. When the assessee subsequently filed his original return on 30.09.2013, he included the entire surrendered amount & declared total income of ₹3,96,19,501.
The case was selected for scrutiny. During assessment, the AO noticed rental income of ₹2,40,000 credited to the assessee’s bank account but not offered to tax. After granting the statutory deduction of 30%, the AO added ₹1,68,000 & completed assessment u/s 143(3) at ₹3,97,87,501.
No addition was made in respect of the additional business income of ₹3.81 crore disclosed during the survey because that amount already formed part of the original return.
Penalty Despite Full Disclosure
The AO nevertheless initiated proceedings u/s 271(1)(c). According to the AO, the additional income had been disclosed only because of the survey. Had the Department not conducted the survey, the assessee might not have offered it to tax. The AO therefore treated the surrender as a case of concealment of income/furnishing inaccurate particulars.
