K. Sai Ramakrishnam Raju, Visakhapatnam V. The Dy. CIT, Visakhapatnam

ITA 487/VIZ/2016

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 6441 (ITAT-VISAKHAPATNAM)
• Duration Of Justice: 2 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-02-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2007-2008
• Appeal Filed On: 09-12-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S R S NARAYAN
• Keywords: Income from undisclosed sources; Bonafide belief; Application of stay; Revised return
• Section: 80C; 142(1); 133A

Judgement Text

ITA NOS.487 & 488/VIZAG/2016 K. SAI RAMAKRISHNAM RAJU & K. SARITHA, VSKP 1 , , IN THE INCOME TAX APPELLATE TRIBUNAL, VISAKHAPATNAM BENCH, VISAKHAPATNAM . , . , $ BEFORE SHRI V. DURGA RAO, JUDICIAL MEMBER & SHRI G. MANJUNATHA, ACCOUNTANT MEMBER ./I.T.A.NOS.487/VIZAG/2016 ( / ASSESSMENT YEARS: 2007-08) K. SAI RAMA K RISHNAM RAJU, VISAKHAPATNAM DCIT, CIRCLE - 3(1), VISAKHAPATNAM [PAN NO. AIGPK9960K ] ( % / APPELLANT) ( &'% / RESPONDENT) S.P. NO.14/VIZAG/2016 (ARISING OUT OF I.T.A.NOS.487/VIZAG/2016) ( / ASSESSMENT YEARS: 2007-08) K. SAI RAMA K RISHNAM RAJU, VISAKHAPATNAM DCIT, CIRCLE - 3(1), VISAKHAPATNAM ( % / APPELLANT) ( &'% / RESPONDENT) ./I.T.A.NOS.488/VIZAG/2016 ( / ASSESSMENT YEARS: 2007-08) K. SARITHA, VISAKHAPATNAM DCIT, CIRCLE - 3(1), VISAKHAPATNAM [PAN NO.AJDPK0565G] ( % / APPELLANT) ( &'% / RESPONDENT) S.P. NO.15/VIZAG/2016 (ARISING OUT OF I.T.A.NOS.488/VIZAG/2016) ( / ASSESSMENT YEARS: 2007-08) K. SARITHA, VISAKHAPATNAM DCIT, CIRCLE - 3(1), VISAKHAPATNAM ( % / APPELLANT) ( &'% / RESPONDENT) ITA NOS.487 & 488/VIZAG/2016 K. SAI RAMAKRISHNAM RAJU & K. SARITHA, VSKP 2 / APPELLANT BY : SHRI C. SUBRAHMANYAM, AR / RESPONDENT BY : SHRI S.R.S. NARAYAN, DR / DATE OF HEARING : 15.02.2017 / DATE OF PRONOUNCEMENT : 28.02.2017 / O R D E R PER G. MANJUNATHA, ACCOUNTANT MEMBER: THESE ARE TWO APPEALS FILED BY TWO DIFFERENT ASSES SEES AGAINST SEPARATE, BUT IDENTICAL ORDERS OF THE COMMI SSIONER OF INCOME TAX (A)-1, VISAKHAPATNAM DATED 17.10.2016 FOR THE A SSESSMENT YEAR 2007-08. SINCE, THE FACTS ARE IDENTICAL AND ISSUES ARE COMMON, THEY ARE CLUBBED, HEARD TOGETHER AND DISPOSED-OFF BY WAY OF THIS COMMON ORDER FOR THE SAKE OF CONVENIENCE. 2. THE BRIEF FACTS OF THE CASE, EXTRACTED FROM ITA NO. 487/VIZAG/2016 ARE THAT THE ASSESSEE, AN INDIVIDUAL IS THE MANAGIN G PARTNER OF M/S. SAI SREE CONSTRUCTIONS, WHICH IS ENGAGED IN THE BUSINES S OF CONSTRUCTION OF FLATS. THE ASSESSEE FILED HIS RETURN OF INCOME FOR THE ASSESSMENT YEAR 2007-08 ADMITTING TOTAL INCOME OF ` 2,43,472/-. A SURVEY OPERATION U/S 133A OF THE INCOME TAX ACT, 1961 (HEREINAFTER CALLE D AS 'THE ACT') WAS CONDUCTED IN THE BUSINESS PREMISES OF M/S. SAI SREE CONSTRUCTIONS. DURING THE COURSE OF SURVEY, CERTAIN INCRIMINATING MATERIAL WAS FOUND ITA NOS.487 & 488/VIZAG/2016 K. SAI RAMAKRISHNAM RAJU & K. SARITHA, VSKP 3 AND WHILE EXPLAINING THE INCRIMINATING MATERIAL, TH E ASSESSEE HAD ADMITTED ADDITIONAL INCOME OF ` 10 LAKHS FOR THE IMPUGNED ASSESSMENT YEAR. IN PURSUANCE OF SURVEY OPERATION, A REVISED RETURN WAS FILED BY THE ASSESSEE ON 19.9.2008 DECLARING TOTAL INCOME OF ` 12,43,470/-, WHICH INCLUDES ADDITIONAL INCOME OFFERED OF ` 10 LAKHS ADMITTED DURING THE COURSE OF SURVEY. SUBSEQUENTLY, THE CASE HAS B EEN SELECTED FOR SCRUTINY ASSESSMENT AND ACCORDINGLY, NOTICES U/S 14 3(2) & 142(1) OF THE ACT WERE ISSUED. THE A.O. COMPLETED THE ASSESSMENT BY DETERMINING TOTAL INCOME OF ` 12,56,550/- INTER-ALIA MAKING CERTAIN ADDITIONS TO WARDS DISALLOWANCE OF DEDUCTION CLAIMED U/S 80C OF THE AC T. 3. THEREAFTER, THE ASSESSING OFFICER INITIATED PENA LTY PROCEEDINGS U/S 271(1)(C) OF THE ACT. THE A.O. NOTED THAT THE ADDI TIONAL INCOME OFFERED BY THE ASSESSEE DURING THE COURSE OF SURVEY WAS ON ACCOUNT OF INCRIMINATING MATERIAL FOUND AND THE SAME REPRESENT S UNACCOUNTED INCOME. IN RESPONSE TO SHOW CAUSE NOTICE, THE ASSE SSEE VIDE HIS EXPLANATION DATED 11.6.2010 SUBMITTED THAT HE HAD S URRENDERED INCOME TO BUY PEACE WITH THE DEPARTMENT AND TO AVOID FURTH ER LITIGATIONS AND ACCORDINGLY A REVISED RETURN WAS FILED DECLARING SU RRENDERED INCOME AND PAID TAXES THEREON. IT IS FURTHER SUBMITTED THAT T HERE IS NO DIRECT EVIDENCES OR INCRIMINATING MATERIALS ON RECORD TO S UGGEST THAT THE DISCREPANCIES WERE FOUND IN THE SURVEY OPERATION OR ASSESSMENT ITA NOS.487 & 488/VIZAG/2016 K. SAI RAMAKRISHNAM RAJU & K. SARITHA, VSKP 4 PROCEEDINGS PERTAINING TO THE IMPUGNED ASSESSMENT Y EAR. UNLESS THERE IS SOME MATERIAL ON RECORD, THE AUTHORITIES SHALL H AVE NO JURISDICTION TO INITIATE PENALTY PROCEEDINGS. THE A.O. AFTER CONSI DERING THE EXPLANATIONS OF THE ASSESSEE, HELD THAT THE ASSESSEE HAS CONCEAL ED PARTICULARS OF INCOME, WHICH IS EVIDENT FROM THE FACT THAT THERE I S A SUBSTANTIAL DIFFERENCE BETWEEN INCOME ADMITTED IN THE ORIGINAL RETURN OF INCOME AND INCOME DECLARED IN THE REVISED RETURN IN PURSUANCE OF SURVEY OPERATION. THE A.O. BY RELYING UPON THE DECISION OF THE HONBL E SUPREME COURT IN THE CASE OF UNION OF INDIA AND OTHERS VS. DHARMENDR A TEXTILE PROCESSORS AND OTHERS 306 ITR 277, CONCLUDED THAT THIS IS A FI T CASE FOR LEVY OF PENALTY U/S 271(1)(C) OF THE ACT AND ACCORDINGLY, L EVIED A PENALTY OF ` 4 LAKHS FOR CONCEALMENT OF PARTICULARS OF INCOME. 4. AGGRIEVED BY THE PENALTY ORDER, THE ASSESSEE PRE FERRED AN APPEAL BEFORE THE CIT(A). BEFORE THE CIT(A), THE ASSESSEE REITERATED THE SUBMISSIONS MADE BEFORE THE A.O. THE ASSESSEE FURT HER SUBMITTED THAT THE LD. A.O. IMPOSED PENALTY ON MERE ALLEGATION THA T BUT FOR THE SURVEY, THE ASSESSEE WOULD NOT HAVE DISCLOSED HIGHER INCOME , IGNORING THE FACT THAT ADDITIONAL INCOME WAS OFFERED ONLY TO BUY PEAC E FROM THE DEPARTMENT AND TO AVOID PROTRACTED LITIGATION. THE A.O. OUGHT TO HAVE KNOWN THAT RETURNED INCOME AND ASSESSED INCOME IS O NE AND THE SAME AND HENCE, DOES NOT WARRANT INVOKING THE PROVISIONS OF SECTION 271(1)(C) ITA NOS.487 & 488/VIZAG/2016 K. SAI RAMAKRISHNAM RAJU & K. SARITHA, VSKP 5 OF THE ACT. THE A.O. INCORRECTLY PLACED HIS RELIAN CE ON THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF UNION OF INDIA & OTHERS VS. DHARMENDRA TEXTILE PROCESSORS REPORTED IN ITR NO.30 6 ITR 277. THE HONBLE SUPREME COURT EXPLAINED THE CONTEXT OF THIS DECISION IN THE CASE OF CIT VS. RAJASTHAN SPINNING MILLS LTD. REPORTED I N (2009) 23 DTR 158, THEREFORE THE A.O. WAS INCORRECT IN RELIED UPON THE DECISION OF SUPREME COURT TO LEVY PENALTY. 5. THE CIT(A) AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE, HELD THAT IT IS EVIDENT THAT THE ASSESSEE ON HIS OWN DID NOT OFFER ADDITIONAL INCOME OR FILED REVISED RETURN OF INCOME. THIS WAS TRIGGERED SOLELY AS A RESULT OF THE SURVEY IN THE FIRMS CASE, DURING THE COURSE OF WHICH CERTAIN INCRIMINATING MATERIAL WAS FOUND AND WHEN THE ASSES SEE WAS QUESTIONED WITH REFERENCE TO SUCH INCRIMINATING MATERIAL, THE ASSESSEE ADMITTED THE DISCREPANCIES AND ALSO CONFIRMED THAT THE UNACCOUNT ED INCOME WAS INVESTED IN PROPERTIES HELD IN THE NAME OF PARTNERS SMT. K. SARITHA AND SHRI K.S.R.K. RAJU. THE ASSESSEES CONTENTION THAT ADDITIONAL INCOME WAS OFFERED TO BUY PEACE WITH THE DEPARTMENT IS TOT ALLY BASELESS AND THE RATIO LAID DOWN BY THE HONBLE APEX COURT IN THE CA SE OF MAK DATA PVT. LTD. VS. CIT (358 ITR 593) (SC) WOULD SQUARELY APPL Y. THE CIT(A) FURTHER HELD THAT THE ASSESSEE FAILS TO OFFER ANY E XPLANATION FOR LOW INCOME OFFERED IN THE ORIGINAL RETURN OF INCOME. T HE MATERIALS ON RECORD ITA NOS.487 & 488/VIZAG/2016 K. SAI RAMAKRISHNAM RAJU & K. SARITHA, VSKP 6 CLEARLY INDICATE THAT THE ASSESSEE HAS CONCEALED PA RTICULARS OF INCOME AND THEREFORE, FOUND THAT THE A.O. IS JUSTIFIED IN LEVYING IMPUGNED PENALTY AND ACCORDINGLY, UPHELD PENALTY LEVIED BY T HE A.O. U/S 271(1)(C) OF THE ACT. AGGRIEVED BY THE PENALTY ORDER, THE AS SESSEE IS IN APPEAL BEFORE US. 6. THE LD. A.R. FOR THE ASSESSEE SUBMITTED THAT THE LD. CIT(A) ERRED IN CONFIRMING PENALTY LEVIED BY THE A.O. U/S 271(1) (C) OF THE ACT, DESPITE THE FACT THAT THE ASSESSEE HAS ADMITTED UNDISCLOSED INCOME VOLUNTARILY TO BUY PEACE FROM THE DEPARTMENT AND TO END PROTRAC TED LITIGATION. THE CIT(A) CONFIRMED PENALTY U/S 271(1)(C) OF THE ACT, ON MERE ASSUMPTION THAT THE ASSESSEE BEING A PARTNER OFFERED ADDITIONA L INCOME IN CONSEQUENCE TO THE INCRIMINATING MATERIAL FOUND WIT H THE FIRM, BUT THE OBSERVATION OF THE CIT(A) IS FACTUALLY INCORRECT AS THERE WAS NO SUCH INCRIMINATING MATERIAL TO SUGGEST THAT THE ASSESSEE HAS CONCEALED PARTICULARS OF INCOME. THE A.R. FURTHER SUBMITTED THAT THE ASSESSEE HAS ADMITTED INCOME, FILED RETURN OF INCOME DISCLOSING INCOME ADMITTED IN THE COURSE OF SURVEY AND PAID TAXES THEREON ON THE BONAFIDE BELIEF THAT THE DEPARTMENT WOULD NOT INITIATE PENALTY PROCEEDIN GS. THE MERE ADMISSION BY THE ASSESSEE TO BUY PEACE AND TO END P ROTRACTED LITIGATION CANNOT BE CONSIDERED AS CONCEALMENT OF PARTICULARS OF INCOME, WHICH WARRANTS LEVY OF PENALTY U/S 271(1)(C) OF THE ACT. IN SUPPORT OF HIS ITA NOS.487 & 488/VIZAG/2016 K. SAI RAMAKRISHNAM RAJU & K. SARITHA, VSKP 7 ARGUMENTS, RELIED UPON THE DECISION OF HONBLE SUPR EME COURT IN THE CASE OF CIT VS. SURESH CHANDRA MITTAL (2001) 251 IT R 0009 AND ALSO THE DECISION OF HONBLE HIGH COURT OF DELHI IN THE CASE OF CIT VS. SAS PHARMACEUTICALS PVT. LTD. (2011) 60 DTR 258. 7. THE LD. D.R. ON THE OTHER HAND STRONGLY SUPPORTI NG THE ORDER OF THE LD. CIT(A), SUBMITTED THAT THE A.O. HAS CLEARLY BROUGHT OUT INCRIMINATING MATERIAL WHICH SUGGESTS CONCEALMENT O F PARTICULARS OF INCOME BEFORE LEVY OF PENALTY U/S 271(1)(C) OF THE ACT. THE ASSESSEE HAS ADMITTED ADDITIONAL INCOME AFTER THE DEPARTMENT HAS FOUND INCRIMINATING MATERIAL WHICH SUGGESTS CONCEALMENT O F INCOME WHICH WAS INVESTED IN CERTAIN PROPERTIES. THE ASSESSEE HAS A DMITTED SUCH CONCEALMENT AND AGREED TO OFFER ADDITIONAL INCOME O F ` 10 LAKHS FOLLOWED BY FILING OF REVISED RETURN ADMITTING ADDI TIONAL INCOME, THEREFORE IT CLEARLY PROVES THAT THE ASSESSEE HAS C ONCEALED PARTICULARS OF INCOME WITHIN THE MEANING OF SECTION 271(1)(C) OF T HE ACT AND HENCE, THE A.O. WAS RIGHT IN LEVY OF PENALTY U/S 271(1)(C) OF THE ACT. THE D.R. FURTHER SUBMITTED THAT IT IS INCORRECT ON THE PART OF THE LD. A.R. TO SAY THAT THERE IS NO INCRIMINATING MATERIAL AND IN THE ABSENCE OF INCRIMINATING MATERIAL, PENALTY CANNOT BE LEVIED. BUT, THE FACT IS THAT DURING THE COURSE OF SURVEY OPERATION, THE DEPARTME NT HAS GATHERED CERTAIN INCRIMINATING MATERIAL AND WHEN THESE MATER IALS WERE CONFRONTED ITA NOS.487 & 488/VIZAG/2016 K. SAI RAMAKRISHNAM RAJU & K. SARITHA, VSKP 8 TO THE ASSESSEE, THE ASSESSEE HAS COME FORWARD TO O FFER ADDITIONAL INCOME. THE ADMISSION OF ADDITIONAL INCOME BY THE ASSESSEE CANNOT BE CONSIDERED AS VOLUNTARY, UNLESS THE SURVEY IS NOT T AKEN PLACE, THE ASSESSEE WOULD NOT HAVE DISCLOSED TRUE AND CORRECT INCOME. THEREFORE, IT IS A CLEAR CASE OF CONCEALMENT OF PARTICULARS OF INCOME WHICH NECESSITATES LEVY OF PENALTY U/S 271(1)(C) OF THE A CT. 8. WE HAVE HEARD BOTH THE PARTIES, PERUSED THE MATER IALS AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHOR ITIES BELOW. THE A.O. LEVIED PENALTY U/S 271(1)(C) OF THE ACT, ON TH E GROUND THAT THE ASSESSEE HAS CONCEALED PARTICULARS OF INCOME WITHIN THE MEANING OF SECTION 271(1)(C) OF THE ACT. ACCORDING TO THE A.O ., THE ASSESSEE WOULD NOT HAVE DISCLOSED TRUE AND CORRECT INCOME, UNLESS THE SURVEY OPERATION HAS NOT TAKEN PLACE. SINCE, THE DEPARTMENT HAS GAT HERED INCRIMINATING MATERIALS, THE ASSESSEE HAS COME FORWARD TO OFFER A DDITIONAL INCOME, WHICH CANNOT BE CONSIDERED VOLUNTARY SURRENDER OF I NCOME TO BUY PEACE AND TO END PROTRACTED LITIGATION. IT IS THE CONTEN TION OF THE ASSESSEE THAT THE A.O. WAS ERRED IN LEVY OF PENALTY U/S 271(1)(C) OF THE ACT, AS THERE IS NO INCRIMINATING MATERIAL FOUND DURING THE COURSE O F SURVEY. UNLESS THERE IS SOME MATERIAL ON RECORD TO SUGGEST THAT TH ERE IS A CONCEALMENT OF INCOME, THE AUTHORITY SHALL HAVE NO JURISDICTION TO INITIATE PENALTY PROCEEDINGS. THE ASSESSEE FURTHER CONTENDED THAT H E HAD ADMITTED ITA NOS.487 & 488/VIZAG/2016 K. SAI RAMAKRISHNAM RAJU & K. SARITHA, VSKP 9 ADDITIONAL INCOME TO BUY PEACE WITH THE DEPARTMENT AND TO AVOID FURTHER LITIGATIONS AND ACCORDINGLY FILED REVISED RETURN DE CLARING SURRENDERED INCOME AND ALSO PAID TAXES THEREON. THEREFORE, IT CANNOT BE CONSIDERED AS CONCEALMENT OF PARTICULARS OF INCOME, WHICH WARR ANTS LEVY OF PENALTY U/S 271(1)(C) OF THE ACT. 9. THE ONLY ISSUE FOR DETERMINATION IS WHETHER THE ASSESSEE CAN BE SAID TO HAVE CONCEALED PARTICULARS OF INCOME, WHICH WARRANTS LEVY OF PENALTY U/S 271(1)(C) OF THE ACT. THE ISSUE RELATI NG TO DISCLOSURE OF ADDITIONAL INCOME CONSEQUENT TO SURVEY OPERATION IS NOT DISPUTED BY BOTH THE AUTHORITIES. BOTH THE AUTHORITIES AGREED THAT THE ASSESSEE HAS DISCLOSED ADDITIONAL INCOME IN PURSUANCE TO SURVEY. BUT, IT IS THE CLAIM OF THE ASSESSEE THAT THE DEPARTMENT DID NOT HAVE AN Y INCRIMINATING MATERIAL, WHICH SUGGESTS CONCEALMENT OF INCOME. TH E ADDITIONAL INCOME DISCLOSED DURING THE COURSE OF SURVEY TO BUY PEACE AND TO END PROTRACTED LITIGATION, CANNOT BE CONSIDERED AS CONC EALMENT OF PARTICULARS OF INCOME. WE FIND FORCE IN THE ARGUMENTS OF THE A SSESSEE FOR THE REASON THAT THE ASSESSEE HAS ADMITTED ADDITIONAL IN COME DURING THE COURSE OF SURVEY IN RESPONSE TO A STATEMENT RECORDE D U/S 133A OF THE ACT. THE ASSESSEE ALSO FILED A REVISED RETURN ADMI TTING ADDITIONAL INCOME DISCLOSED DURING THE COURSE OF SURVEY AND PA ID TAXES THEREON. THE A.O. COMPLETED ASSESSMENT IN PURSUANCE OF SURVE Y OPERATIONS ITA NOS.487 & 488/VIZAG/2016 K. SAI RAMAKRISHNAM RAJU & K. SARITHA, VSKP 10 WITHOUT THERE BEING ANY FURTHER ADDITIONS OR DISALL OWANCES TO THE RETURNED INCOME. THOUGH THERE IS A SLIGHT DIFFEREN CE IN ASSESSED INCOME, WHICH IS BECAUSE OF DISALLOWANCE OF DEDUCTI ONS CLAIMED U/S 80C OF THE ACT, WHICH DO NOT HAVE ANY BEARING ON THE PE NALTY PROCEEDINGS. WHEN THERE IS NO DIFFERENCE BETWEEN INCOME DECLARED BY THE ASSESSEE AND INCOME ASSESSED BY THE A.O., THE QUESTION OF LE VY OF PENALTY FOR CONCEALMENT OF INCOME ON INCOME SURRENDERED DURING THE COURSE OF SURVEY. THEREFORE, WE ARE OF THE VIEW THAT THE ASS ESSEE HAS NOT CONCEALED PARTICULARS OF HIS INCOME, WHICH WARRANTS LEVY OF PENALTY U/S 271(1)(C) OF THE ACT. 10. IN THE PRESENT CASE ON HAND, THE ASSESSEE HAS A DMITTED ADDITIONAL INCOME TO COVER UP THE DEFICIENCIES FOUND DURING TH E COURSE OF SURVEY. THE ASSESSEE ALSO FILED REVISED RETURNS IN PURSUANC E OF SURVEY ADMITTING ADDITIONAL INCOME DISCLOSED DURING THE COURSE OF SU RVEY. WE DO NOT FIND ANY MERITS IN THE FINDINGS OF THE A.O. THAT THE ASS ESSEE WOULD NOT HAVE DISCLOSED TRUE AND CORRECT INCOME, UNLESS SURVEY HA D TAKEN PLACE. WHEN THE ASSESSEE HAS FILED REVISED RETURN DISCLOSING IN COME ADMITTED DURING THE COURSE OF SURVEY, EVEN THOUGH THE SAID SURRENDE R OF ADDITIONAL INCOME WAS AFTER PERSISTENT QUERIES BY THE A.O., ON CE THE REVISED RETURNS FOUND REGULARIZED BY THE REVENUE, THE EXPLA NATIONS OF THE ASSESSEE THAT HE HAS DECLARED ADDITIONAL INCOME TO BUY PEACE AND TO ITA NOS.487 & 488/VIZAG/2016 K. SAI RAMAKRISHNAM RAJU & K. SARITHA, VSKP 11 COME OUT OF VEXED LITIGATION COULD BE TREATED AS BO NAFIDE AND PENALTY U/S 271(1)(C) OF THE ACT CANNOT BE LEVIED. 11. COMING TO THE CASE LAWS RELIED UPON BY THE ASSE SSEE. THE ASSESSEE HAS RELIED UPON THE DECISION OF HONBLE SU PREME COURT, IN THE CASE OF CIT VS. SURESH CHANDRA MITTAL (2001) 251 IT R 9 (SC) AND SUBMITTED THAT WHEN ADDITIONAL INCOME IS SURRENDERE D TO BUY PEACE AND TO END PROTRACTED LITIGATION, PENALTY CANNOT BE LEV IED FOR CONCEALMENT OF PARTICULARS OF INCOME. WE FIND THAT THE HONBLE SUP REME COURT, UNDER SIMILAR SET OF FACTS HAS HELD THAT THOUGH THE ASSES SEE SURRENDERED ADDITIONAL INCOME BY WAY OF REVISED RETURNS AFTER P ERSISTENT QUERIES BY THE A.O., ONCE THE REVISED RETURNS FOUND REGULARIZE D BY THE REVENUE, THE EXPLANATIONS OF THE ASSESSEE THAT HE HAS DECLARED A DDITIONAL INCOME TO BUY PEACE AND TO COME OUT OF THE VEXED LITIGATION C OULD BE TREATED AS BONAFIDE AND PENALTY U/S 271(1)(C) OF THE ACT WAS N OT LEVIABLE. 12. THE ASSESSEE HAS RELIED UPON THE DECISION OF H ONBLE DELHI HIGH COURT, IN THE CASE OF CIT VS. SAS PHARMACEUTICALS P VT. LTD. (2011) 335 ITR 239. THE HONBLE DELHI HIGH COURT, HELD THAT N O PENALTY CAN BE LEVIED FOR INCOME SURRENDERED DURING THE COURSE OF SURVEY. THE RELEVANT PORTION OF THE ORDER IS EXTRACTED BELOW: IT IS TO BE KEPT IN MIND THAT S. 271(1)(C) IS A PE NAL PROVISION AND SUCH A PROVISION HAS TO BE STRICTLY CONSTRUED. UNLESS THE CASE FALLS WITHIN THE FOUR CORNERS OF THE SAID PROVISION, PENALTY CANNOT BE IM POSED. SUB-S. (1) OF S. 271 STIPULATES CERTAIN CONTINGENCIES ON THE HAPPENI NG WHEREOF THE AO OR THE CIT(A) MAY DIRECT PAYMENT OF PENALTY BY THE ASS ESSEE. SEC. 271(1)(C) ITA NOS.487 & 488/VIZAG/2016 K. SAI RAMAKRISHNAM RAJU & K. SARITHA, VSKP 12 AUTHORIZES IMPOSITION OF PENALTY WHEN THE AO IS SAT ISFIED THAT THE ASSESSEE HAS EITHER : (A) CONCEALED THE PARTICULARS OF HIS I NCOME; OR (B) FURNISHED INACCURATE PARTICULARS OF SUCH INCOME. IT IS NOT TH E CASE OF FURNISHING INACCURATE PARTICULARS OF INCOME, AS IN THE IT RETU RN, PARTICULARS OF INCOME HAVE BEEN DULY FURNISHED AND THE SURRENDERED AMOUNT OF INCOME WAS DULY REFLECTED IN THE IT RETURN. THE QUEST/ON IS WHETHER THE PARTICULARS OF INCOME WERE CONCEALED BY THE ASSESSEE OR NOT. IT WOU LD DEPEND UPON THE ISSUE AS TO WHETHER THIS CONCEALMENT HAS REFERENCE TO THE IT RETURN FILED BY THE ASSESSEE, VIZ., WHETHER CONCEALMENT IS TO BE FOUND IN THE IT RETURN. THE WORDS 'IN THE COURSE OF ANY PROCEEDINGS UNDER T HIS ACT' ARE PREFACED BY THE SATISFACTION OF THE AO OR THE CIT('A). WHEN THE SURVEY IS CONDUCTED BY A SURVEY TEAM, THE QUESTION OF SATISFACTION OF A O OR THE CIT(A) OR THE CIT DOES NOT ARISE. ONE HAS TO KEEP IN MIND THAT IT IS THE AO WHO INITIATED THE PENALTY PROCEEDINGS AND DIRECTED THE PAYMENT OF PENALTY. HE HAD NOT RECORDED ANY SATISFACTION DURING THE COURSE OF SURV EY. DECISION TO INITIATE PENALTY PROCEEDINGS WAS TAKEN WHILE MAKING ASSESSME NT ORDER. IT IS, THUS, OBVIOUS THAT THE EXPRESSION 'IN THE COURSE OF ANY PROCEEDINGS UNDER THIS ACT' CANNOT HAVE THE REFERENCE TO SURVEY PROCE EDINGS IN THIS CASE. IT NECESSARILY FOLLOWS THAT CONCEALMENT OF PARTICULARS OF INCOME OR FURNISHING OF INACCURATE PARTICULAR OF INCOME BY TH E ASSESSEE HAS TO BE IN THE IT RETURN FILED BY IT. THE ASSESSEE CAN FURNISH THE PARTICULARS OF INCOME IN HIS RETURN AND EVERYTHING WOULD DEPEND UP ON THE IT RETURN FILED BY THE ASSESSEE. THIS VIEW GETS SUPPORTED BY EXPLNS. 4 AS WELL AS S AND 5A OF S. 271. OBVIOUSLY, NO PENALTY CAN BE IMPOS ED UNLESS THE CONDITIONS STIPULATED IN THE SAID PROVISIONS ARE DU LY AND UNAMBIGUOUSLY SATISFIED. SINCE THE ASSESSEE WAS EXPOSED DURING SU RVEY, MAY BE, IT WOULD HAVE NOT DISCLOSED THE INCOME BUT FOR THE SAI D SURVEY. HOWEVER, THERE CANNOT BE ANY PENALTY ONLY ON SURMISES, CONJE CTURES AND POSSIBILITIES. SEC. 271 (1) (C) HAS TO BE CONSTRUED STRICTLY. UNLESS IT IS FOUND THAT THERE IS ACTUALLY A CONCEALMENT OR NON-D ISCLOSURE OF THE PARTICULARS OF INCOME, PENALTY CANNOT BE IMPOSED. T HERE IS NO SUCH CONCEALMENT OR NON-DISCLOSURE AS THE ASSESSEE HAD M ADE A COMPLETE DISCLOSURE IN THE IT RETURN AND OFFERED THE SURREND ERED AMOUNT FOR THE PURPOSES OF TAX.CIT VS. MOHAN DAS HASSA NAND (1983 ) 34 CTR (DEL) 361 (1983) 141 ITR 203 (DEL) AND CIT VS. RELIANCE P ETRO PRODUCTS (P) LTD. (2010) 230 CTR (SC) 320: (2010) 36 DIR (SC) 44 9: (2010) 3 SCR 510 RELIED ON. 13. IN THIS VIEW OF THE MATTER AND ALSO FOLLOWING T HE RATIOS OF THE CASE LAWS DISCUSSED ABOVE, WE ARE OF THE VIEW THAT THE A SSESSEE HAS NOT CONCEALED PARTICULARS OF INCOME, WHICH WARRANTS LEV Y OF PENALTY U/S 271(1)(C) OF THE ACT. THE INCOME RETURNED BY THE A SSESSEE, IN THE REVISED RETURN IN PURSUANCE OF SURVEY AND THE INCOM E FINALLY ASSESSED BY THE A.O. IS ONE AND THE SAME. THEREFORE, WE ARE OF THE VIEW THAT THE ITA NOS.487 & 488/VIZAG/2016 K. SAI RAMAKRISHNAM RAJU & K. SARITHA, VSKP 13 A.O. WAS ERRED IN LEVYING PENALTY U/S 271(1)(C) OF THE ACT AND HENCE, WE DELETE PENALTY LEVIED BY THE A.O. U/S 271(1) OF TH E ACT. 14. THE FACTS AND ISSUES INVOLVED IN ITA NO.488/VIZ AG/2016 ARE IDENTICAL TO THAT OF ITA NO.487/VIZAG/2016. THEREF ORE, FOR THE REASONS RECORDED IN THE PRECEDING PARAGRAPHS IN ITA NO.487/ VIZAG/2016, WE DIRECT THE A.O. TO DELETE PENALTY LEVIED U/S 271(1) (C) OF THE ACT. 15. IN THE RESULT, THE APPEALS FILED BY THE ASSESS EES IN ITA NOS.487 & 488/VIZAG/2016 ARE ALLOWED. S.P. NOS.14 & 15/VIZAG/2016: 16. THE ASSESSEES HAVE FILED STAY PETITIONS REQUES TING FOR STAY OF DEMAND. SINCE, THE APPEALS OF THE ASSESSEES HAVE B EEN DISPOSED, THE STAY APPLICATIONS FILED BY THE ASSESSEES BECOME INF RUCTUOUS. THEREFORE, STAY APPLICATIONS FILED BY THE ASSESSEES ARE DISMIS SED AS INFRUCTUOUS. THE ABOVE ORDER WAS PRONOUNCED IN THE OPEN COURT ON 28 TH FEB17. SD/- SD/- ( . ) ( . ) (V. DURGA RAO) (G. MANJUNATHA) /JUDICIAL MEMBER /ACCOUNTANT MEMBER # /VISAKHAPATNAM: ' /DATED : 28.02.2017 VG/SPS ITA NOS.487 & 488/VIZAG/2016 K. SAI RAMAKRISHNAM RAJU & K. SARITHA, VSKP 14 )# *# /COPY OF THE ORDER FORWARDED TO:- 1. / THE APPELLANT SHRI K. SAI RAMAKRISHNAM RAJU, D .NO.9-17-24/1, PLOT NO.84, SAI SREE SADAN APARTMENTS, CBM COMPOUND, VISAKHAPATNAM. 2. / THE APPELLANT SMT. K. SARITHA, D.NO.9-17-24/1, PLOT NO.84, SAI SREE SADAN APARTMENTS, CBM COMPOUND, VISAKHAPATNAM. 3. / THE RESPONDENT THE DCIT, CIRCLE-3(1), VISAKHAP ATNAM 4. + / THE CIT, TDS, VIJAYAWADA 5. + ( ) / THE CIT (A)-2, GUNTUR 6. # . , . , # / DR, ITAT, VISAKHAPATNAM 7 . / GUARD FILE / BY ORDER // TRUE COPY // SR. PRIVATE SECRETARY ITAT, VISAKHAPATNAM