ACIT, Circle-5(1), Hyderabad V. M/s S.K.Builders, Hyderabad

ITA 818/HYD/2013

• Counselvise Citation: [2013] 140 COUNSELVISE.COM (IT) 69803 (ITAT-HYDERABAD)
• Duration Of Justice: 4 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-09-2013
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2008-2009
• Appeal Filed On: 22-05-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: Y V S T SAI
• Assessee Lawyers: T CHAITANYA KUMAR
• Keywords: Revised return
• Section: 143(3); 133A; 147

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH B, HYDERABAD BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER AND SHRI SAKTIJIT DEY, JUDICIAL MEMBER ITA NO. 818/HYD/2013 ASSESSMENT YEAR : 2008-09 ASST. COMMISSIONER OF INCOME-TAX, APPELLANT HYDERABAD. VS. M/S S.K. BUILDERS, RESPONDENT HYDERABAD. (PAN AAWFS 8782 R) APPELLANT BY : SHRI Y.V.S.T. SAI RESPONDENT BY : SHRI T. CHAITANYA KUMAR DATE OF HEARING : 27/08 /2013 DATE OF PRONOUNCEMENT : 2 5/09/2013 ORDER PER SAKTIJIT DEY, J.M.: THIS APPEAL PREFERRED BY THE REVENUE IS DIRECTED AGAINST THE ORDER DATED 28/02/2013 PASSED BY THE CIT(A)-V, HYDERABAD IN ITA NO. 0075/DC-5(1)/CIT(A)- V/2011-12 FOR THE ASSESSMENT YEAR 2008-09. 2. BRIEFLY THE FACTS ARE, THE ASSESSEE IS A PARTNER SHIP FIRM CARRYING ON THE BUSINESS IN REAL ESTATE. DURIN G THE FY RELEVANT TO AY IN DISPUTE, A SURVEY OPERATION U /S 133A OF THE ACT WAS CARRIED ON 01/01/2008 IN THE PREMISES OF THE ASSESSEE. IN COURSE OF SURVEY, CERT AIN DOCUMENTS DISCLOSING TRANSACTION IN PURCHASE AND SA LE OF LAND WERE IMPOUNDED, WHICH DISCLOSED MAKING OF ADVA NCE ITA NO. 818/HYD/2013 M/S S.K. BUILDERS 2 TOWARDS LAND PURCHASES. WHEN THE ASSESSEE WAS CONFRONTED WITH THE IMPOUNDED MATERIAL, IT CAME FOR WARD TO DISCLOSE ADDITIONAL INCOME OF RS. 1.00 CRORE DUR ING THE SURVEY OPERATION ITSELF. SUBSEQUENTLY, THE ASSESSEE ON 16/02/2010 FILED ITS RETURN OF INCOME DECLARING A T OTAL INCOME OF RS. 1.71 CRORE FOR THE IMPUGNED ASSESSMEN T YEAR. IN COURSE OF SCRUTINY ASSESSMENT PROCEEDING, THE ASSESSING OFFICER QUERIED THE ASSESSEE ABOUT THE LA ND DEALINGS AS REFLECTED N THE IMPOUNDED DOCUMENTS. TH E ASSESSEE IN ITS REPLY SUBMITTED THAT THE ASSESSEE F IRM HAD PURCHASED LAND ADMEASURING ACRES 11 AND 20 GUNTAS SITUATED AT SURVEY NO. 309A AT NARKHODA VILL AGE, SHAMSHABAD MANDAL, R.R. DIST. IN THE NAME OF PARTNE RS OF THE FIRM. SUBSEQUENTLY, WHEN THERE WAS FAVOURABL E CONDITIONS PREVAILING IN THE MARKET WITH REGARD TO REAL ESTATE, THE ASSESSEE FIRM SEARCHED FOR A PROSPECTIV E BUYER CONSIDERED TO SELL AWAY THE LAND AND FINALLY THE LAND IN QUESTION WAS SOLD TO A CUSTOMER FOR A CONSIDERATION OF RS. 3,37,77,500/-, BUT, IN THE REG ISTERED DOCUMENT, THE VALUE ADOPTED BY THE SRO FOR THE PURP OSE OF STAMP DUTY WAS MENTIONED AS 1.65 CRORES. IT WAS SUBMITTED THAT THOUGH THE ASSESSEE HAD DECLARED ADDITIONAL INCOME OF RS. 1 CRORE, HOWEVER, THE RETU RN WAS FILED DECLARING INCOME AT RS. 1.71 CRORES, WHICH WA S MUCH MORE THAN THE ADDITIONAL INCOME DECLARED AT TH E TIME OF SURVEY OPERATION. THE ASSESSING OFFICER CONSIDERING THE EXPLANATION FURNISHED BY THE ASSESS EE COMPLETED THE ASSESSMENT VIDE ORDER DATED 29/12/201 0 PASSED U/S 143(3) OF THE ACT BY ACCEPTING THE RETUR NED INCOME. HOWEVER, THE ASSESSING OFFICER INITIATED PROCEEDINGS U/S 271(1)(C) OF THE ACT. DURING THE PE NALTY PROCEEDING, THE ASSESSEE IN ITS EXPLANATION SUBMITT ED ITA NO. 818/HYD/2013 M/S S.K. BUILDERS 3 THAT IN ITS CASE NO PENALTY CAN BE IMPOSED AS THERE IS NEITHER ANY CONCEALMENT OF INCOME OR FURNISHING OF INACCURATE PARTICULARS OF INCOME. IT WAS SUBMITTED THAT THE ASSESSEE ITSELF HAS VOLUNTARILY CAME FORWARD AN D FILED ITS RETURN OF INCOME DECLARING INCOME AT RS. 1.71 C RORE, WHICH WAS MUCH MORE THAN WHAT WAS ADMITTED AT THE TIME OF SURVEY. IT WAS FURTHER EXPLAINED THAT AT TH E TIME OF SURVEY OPERATION, THE ASSESSEE HAD DECLARED ADDI TIONAL INCOME TO BUY PEACE WITH DEPARTMENT. THE ASSESSING OFFICER, HOWEVER, WAS NOT SATISFIED WITH THE EXPLAN ATION FURNISHED BY THE ASSESSEE AND OBSERVED THAT THE ASSESSEE DID HAVE MENS-REA TO CONCEAL PARTICULARS O F INCOME AS IT HAS NOT FILED ANY RETURN OF INCOME WIT HIN TIME PRESCRIBED UNDER THE STATUTE AND HAS FILED THE RETURN OF INCOME BELATEDLY ONLY AFTER SURVEY OPERAT ION TOOK PLACE, WHICH REVEAL THE INTENTION OF THE ASSES SEE TO CONCEAL ITS INCOME. IT WAS FURTHER OBSERVED BY THE ASSESSING OFFICER THAT ONLY BECAUSE OF THE MATERIAL S FOUND AND IMPOUNDED AS A RESULT OF SURVEY OPERATION , THE ASSESSEE CAME FORWARD AND DISCLOSED ADDITIONAL INCO ME OF RS. 1 CRORE AT THE TIME OF SURVEY. HE FURTHER CO NCLUDED THAT ONLY BECAUSE OF UNEARTHING OF DOCUMENTS, THE ASSESSEE FINDING NO OTHER ALTERNATIVE AND CAME FORW ARD TO FILE ITS RETURN OF INCOME DECLARING THE INCOME, WHICH OTHERWISE THE ASSESSEE WOULD HAVE CONCEALED. THE ASSESSING OFFICER ON THE BASIS OF THE AFORESAID FIN DING PROCEEDED TO PASS AN ORDER IMPOSING PENALTY OF RS. 58,12,290/- U/S 271(1)(C) OF THE ACT VIDE ORDER DAT ED 29/06/2011. 3. THE ASSESSEE BEING AGGRIEVED OF THE ORDER PASSED BY THE AO, PREFERRED AN APPEAL BEFORE THE CIT(A). ITA NO. 818/HYD/2013 M/S S.K. BUILDERS 4 4. IN COURSE OF PROCEEDING BEFORE THE CIT(A), IT W AS CONTENDED ON BEHALF OF THE ASSESSEE THAT DURING THE POST SURV EY ENQUIRIES, THE ASSESSEE AGREED FOR DECLARATION OF ADDITIONAL I NCOME OF RS. 1 CRORE VOLUNTARILY. HOWEVER, THE ASSESSEE FILED RETU RN OF INCOME DECLARING INCOME OF RS. 1.71 CRORES AND PAID TAXES. IT WAS CONTENDED THAT NEITHER IN THE ASSESSMENT ORDER NOR IN THE PENALTY ORDER THE AO HAS BEEN ABLE TO CLEARLY MAKE OUT A CA SE BY BRINGING MATERIAL ON RECORD IDENTIFYING THE CONCEALED INCOME , THEREBY, MAKING THE ASSESSEE LIABLE FOR PENALTY U/S 271(1)(C ) OF THE ACT. IT WAS SUBMITTED THAT NO MATERIAL HAS BEEN BROUGHT ON RECORD TO ESTABLISH THAT THE ASSESSEE HAS EITHER CONCEALED IT S INCOME OR FURNISHED INACCURATE PARTICULARS OF ITS INCOME. IT WAS SUBMITTED THAT WHEN THE ASSESSEE ITSELF HAS ADMITTED THE INCO ME IN THE RETURN OF INCOME, WHICH HAS BEEN ACCEPTED IN THE AS SESSMENT ORDER, THEN, HOW THE AO CAN ARRIVE AT THE CONCLUSIO N INDEPENDENTLY THAT THERE IS CONCEALMENT OF INCOME. IT WAS SUBMITTED THAT THE CONCLUSION ARRIVED AT BY THE AO WITH REGARD TO CONCEALMENT OF INCOME WAS NOT ESTABLISHED WITH POSI TIVE EVIDENCE, HENCE, PENALTY COULD NOT HAVE BEEN LEVIED ON THE BASIS OF INCOME DECLARED BY THE ASSESSEE VOLUNTARILY. 5. THE CIT(A) AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE ACCEPTED THE ASSESSEES CLAIM THAT THE RETURN FOR T HE IMPUGNED ASSESSMENT YEAR WAS FILED WITHIN THE TIME AVAILABLE UNDER THE STATUTE. HE FURTHER ACCEPTED THE CONTENTION OF THE ASSESSEE THAT NEITHER IN THE ASSESSMENT ORDER OR IN THE PENALTY O RDER THERE IS ANY DETAILED DISCUSSION WITH REGARD TO MATERIAL IDE NTIFIED DURING THE COURSE OF SURVEY OPERATION RESULTING IN IDENTIF ICATION OF ADDITIONAL INCOME. HE FURTHER OBSERVED THAT THE AO WHILE IMPOSING PENALTY HAS NOT GIVEN A POSITIVE FINDING A S TO WHAT IS THE EXACT FIGURE OF CONCEALED INCOME BUT PROCEEDED TO LEVY ITA NO. 818/HYD/2013 M/S S.K. BUILDERS 5 PENALTY IN RESPECT OF ENTIRE INCOME OF RS. 1.71 CRO RE. THE CIT(A) FURTHER HELD THAT THE PENALTY PROCEEDING U/S 271(1) (C) ARE INDEPENDENT PROCEEDINGS AND CONCEALMENT IN RESPECT OF INCOME SHOULD BE ESTABLISHED INDEPENDENTLY BEFORE LEVYING PENALTY ON THE BASIS OF THE FACTS AND MATERIALS ON RECORD. THE CIT (A) FINALLY CAME TO A CONCLUSION THAT CONCEALMENT OF PARTICULAR S BY THE ASSESSEE ARE NOT EVIDENT FROM THE DISCUSSIONS CONTA INED IN THE ASSESSMENT ORDER OR IN THE PENALTY ORDER, HENCE, LE VY OF PENALTY U/S 271(1)(C) CANNOT BE SUSTAINED AND ACCORDINGLY, HE DELETED THE SAME. 6. AGGRIEVED BY THE ORDER OF THE CIT(A), THE REVENU E IS IN APPEAL BEFORE US AND HAS RAISED THE FOLLOWING GROUN DS OF APPEAL: 1. THE CIT(A) ERRED BOTH ON FACTS AND IN LAW. 2. THE CIT(A) FAILED TO APPRECIATE THAT NO RETURN O F INCOME WAS FILED BY THE ASSESSEE VOLUNTARILY WITHIN THE DU E DATE, BUT, THE SAME WAS FILED AFTER SURVEY OPERATION INCO RPORATING THE ADDITIONAL INCOME, THEREBY IMPLYING CONCEALMENT OF INCOME. 3. THE CIT(A) OUGHT TO HAVE UPHELD THE PENALTY ORDE R AS BUT FOR THE SURVEY OPERATION, THE ASSESSEE WOULD NOT HA VE OFFERED THE ADDITIONAL INCOME. 7. THE LEARNED DR SUPPORTING THE PENALTY ORDER BY T HE AO SUBMITTED THAT SPECIFIC MATERIAL IMPOUNDED DURING T HE SURVEY OPERATION PROVED THE FACT OF CONCEALMENT, HENCE, TH E ASSESSEE IS LIABLE TO BE VISITED PENALTY U/S 271(1)(C) OF THE A CT. THE LEARNED DR FURTHER SUBMITTED THAT THE ASSESSEE HAD NOT FILE D ANY RETURN OF INCOME WITHIN THE PERIOD PRESCRIBED UNDER THE STATU TE, AND ONLY AFTER SURVEY IT CAME FORWARD TO FILE ITS RETURN OF INCOME, HENCE, THESE FACTS PROVE THAT ONLY AS A RESULT OF SURVEY, THE ASSESSEE WAS FORCED TO FILE RETURN OF INCOME DECLARING ADDIT IONAL INCOME. IN ITA NO. 818/HYD/2013 M/S S.K. BUILDERS 6 SUPPORT OF SUCH CONTENTIONS, THE LEARNED DR RELIED ON THE FOLLOWING CASES: 1. CIT VS. USHA INTERNATIONAL LTD., 2012-TIOL-920-H C-DEL- IT. 2. CIT VS. RAKESH SURI, 331 ITR 458 (ALL.) 3. N. RANJI VS. CIT, CHENNAI, 2013-TIOL-529-HC-MAD- IT 4. UNION OF INDIA VS. RAJASTHAN SPINNING & WEAVING MILLS, 224 CTR 1 8. THE LEARNED AR, ON THE OTHER HAND, SUBMITTED THA T THE ASSESSEE IS FILING ITS RETURN REGULARLY, HENCE, IT CANNOT BE SAID THAT THE ASSESSEE HAS EITHER CONCEALED ITS PARTICUL ARS OF INCOME OR FURNISHED INACCURATE PARTICULARS OF ITS INCOME. IT WAS FURTHER SUBMITTED THAT THE RETURN WAS FILED BY THE ASSESSEE FOR THE IMPUGNED ASSESSMENT YEAR DECLARING THE INCOME OF RS . 1.71 CRORES VOLUNTARILY WITHIN THE PRESCRIBED TIME U/S 1 39(4) OF THE ACT. HENCE, IT CANNOT BE SAID THAT THE RETURN WAS F ILED AFTER LAPSE OF TIME PRESCRIBED IN THE STATUTE OR THE ASSESSEE W OULD NOT HAVE FILED THE RETURN OF INCOME, BUT, FOR THE SURVEY OPE RATION. THE LEARNED AR SUBMITTED THAT ONLY BECAUSE THE RETURN W AS FILED AFTER THE DUE DATE U/S 139(1) OF THE ACT, IT CANNOT BE IM PLIED THAT THE ASSESSEE WOULD HAVE CONCEALED HIS INCOME. THE LEARN ED AR FURTHER SUBMITTED THAT THE FACT THAT THE ASSESSEE H AS DECLARED MUCH MORE INCOME THAN WHAT WAS ADMITTED AT THE TIME OF SURVEY OPERATION GOES TO PROVE THE BONAFIDE OF THE ASSESSE E IN DECLARING ITS INCOME TRULY AND CORRECTLY, WHICH IS FURTHER PR OVED FROM THE FACT THAT THE RETURN OF INCOME WAS ALSO ACCEPTED IN THE ASSESSMENT ORDER PASSED U/S 143(3) OF THE ACT. THE LEARNED AR SUBMITTED THAT THE AO HAVING NOT ESTABLISHED ON REC ORD THE FACT THAT THE ASSESSEE HAS EITHER CONCEALED THE PARTICUL ARS OF ITS INCOME OR FURNISHED INACCURATE PARTICULARS OF INCOM E, IMPOSITION OF PENALTY U/S 271(1)(C) OF THE ACT, COULD NOT HAVE BEEN SUSTAINED. HE, THEREFORE, SUBMITTED THAT THE CIT(A ) WAS JUSTIFIED ITA NO. 818/HYD/2013 M/S S.K. BUILDERS 7 IN DELETING THE PENALTY U/S 271(1)(C) OF THE ACT. T HE LEARNED AR RELIED UPON THE FOLLOWING DECISIONS IN SUPPORT OF A SSESSEES CASE: 1. CIT VS RELIANCE PETRO PRODUCTS (322 ITR 158) (S C). 2. JUDGMENT OF HONBLE DELHI HIGH COURT IN CASE OF M/S SAS PHARMACEUTICALS IN ITA NO. 1058 OF 2009, VIDE JUDGM ENT DATED 8 TH APRIL, 2011. 9. WE HAVE HEARD THE SUBMISSIONS OF THE PARTIES, PE RUSED THE MATERIAL ON RECORD AS WELL AS GONE THROUGH THE ORDE RS OF THE REVENUE AUTHORITIES. WE HAVE ALSO CAREFULLY APPLIE D OUR MIND TO THE DECISIONS RELIED UPON BY THE PARTIES. BEFORE DE ALING WITH THE ISSUE AT HAND, IT IS NECESSARY TO LOOK INTO THE PRO VISIONS CONTAINED U/S 271(1)(C) OF THE ACT, FOR THE PURPOSE OF ADJUDI CATING THIS APPEAL, WHICH ARE AS FOLLOWS: 271. (1) IF THE [ASSESSING] OFFICER OR THE [***] [COMMISSIONER (APPEALS)] [OR THE COMMISSIONER] IN T HE COURSE OF ANY PROCEEDINGS UNDER THIS ACT, IS SATISF IED THAT ANY PERSON (A) [* * *] (B) **** (C) HAS CONCEALED THE PARTICULARS OF HIS INCOME O R [* * *] FURNISHED INACCURATE PARTICULARS OF [SUCH INCOME, O R] HE MAY DIRECT THAT SUCH PERSON SHALL PAY BY WAY OF PENALTY, 10. THE WORD MAY SIGNIFIES THAT DISCRETION IS LEF T TO THE AO FOR IMPOSING PENALTY IN A APPROPRIATE CASE, WHEN HE IS NOT SATISFIED WITH THE EXPLANATION OF THE ASSESSEE. IN THE AFORES AID CONTEXT, WE HAVE TO SEE WHETHER A CASE FOR IMPOSITION OF PENALT Y U/S 271(1)(C) OF THE ACT HAS BEEN MADE OUT BY THE AO. A S CAN BE SEEN FROM THE FACTS AND MATERIAL ON RECORD, THE ASS ESSEE IN COURSE OF POST SURVEY ENQUIRY HAD ADMITTED TO DECLA RE THE ADDITIONAL INCOME OF RS. 1 CRORE FOR THE IMPUGNED A SSESSMENT ITA NO. 818/HYD/2013 M/S S.K. BUILDERS 8 YEAR. THOUGH IT IS A FACT THAT THE ASSESSEE DID NOT FILE RETURN OF INCOME FOR THE IMPUGNED ASSESSMENT YEAR WITHIN THE DUE DATE PRESCRIBED U/S 139(1) OF THE ACT, HOWEVER, IT IS A FACT ON RECORD THAT BEFORE ISSUANCE OF NOTICE BY THE DEPARTMENT IT HAS VOLUNTARILY FILED ITS RETURN OF INCOME FOR THE IMPU GNED ASSESSMENT YEAR ON 16/02/2010, WHICH IS WELL WITHIN THE EXTEND ED TIME PROVIDED U/S 139(4) OF THE ACT FOR FILING OF RETURN OF INCOME. IT IS ALSO A FACT THAT THE INCOME OF RS. 1.71 CRORE DECLA RED BY THE ASSESSEE IN THE RETURN OF INCOME IS MUCH MORE THAN WHAT WAS ADMITTED TO BE DECLARED AT THE TIME OF POST SURVEY OPERATION. IT IS ALSO A FACT TO BE TAKEN NOTE OF THAT THE INCOME DE CLARED BY THE ASSESSEE IN THE RETURN OF INCOME HAS BEEN ACCEPTED BY THE AO IN THE ASSESSMENT ORDER PASSED U/S 143(3) OF THE ACT W ITHOUT MAKING ANY VARIANCE. THEREFORE, IT IS IMPERATIVE TH AT BEFORE IMPOSING PENALTY, REQUIREMENT OF PROVISIONS U/S 271 (1) MUST BE ESTABLISHED. THE AO MUST BRING POSITIVE EVIDENCE O N RECORD TO ESTABLISH THE FACT OF CONCEALMENT OF INCOME OR FURN ISHING OF INACCURATE PARTICULARS OF INCOME. THE WORD MAY US ED IN THE PROVISIONS CONTAINED U/S 271(1)(C) OF THE ACT INDIC ATES THAT THE POWER CONFERRED ON THE AO THOUGH IS DISCRETIONARY B UT SUCH DISCRETION HAS TO BE USED IN EXERCISE OF QUASI-JUDI CIAL FUNCTION. IF THE FACTS AND MATERIALS ON RECORD COUPLED WITH THE EXPLANATION FURNISHED BY THE ASSESSEE DO NOT PROVE EITHER CONCE ALMENT OF INCOME OR FURNISHING OF INACCURATE PARTICULARS OF I NCOME, THEN, CERTAINLY THE AO MAY DECIDE NOT TO IMPOSE PENALTY U/S 271(1)(C) OF THE ACT. 11. IN THE FACTS OF THE PRESENT CASE, IT IS QUITE E VIDENT THAT THE ASSESSEE HAS VOLUNTARILY FILED ITS RETURN OF INCOME FOR THE IMPUGNED ASSESSMENT YEAR DECLARING INCOME OF RS. 1. 71 CRORE, WHICH HAS ALSO BEEN ACCEPTED IN THE ASSESSMENT COMP LETED U/S 143(3) OF THE ACT. IT IS ALSO A FACT, WHICH HAS BEE N NOTED BY THE ITA NO. 818/HYD/2013 M/S S.K. BUILDERS 9 CIT(A) WHILE DISPOSING OF THE ASSESSEES APPEAL THA T THE AO NEITHER IN THE ASSESSMENT ORDER NOR IN THE PENALTY ORDER HAS BROUGHT ANY POSITIVE EVIDENCE ON RECORD TO ESTABLIS H EITHER CONCEALMENT OF INCOME OR FURNISHING INACCURATE PART ICULARS OF INCOME BY THE ASSESSEE. THEREFORE, IN THE ABSENCE O F ANY MATERIAL BROUGHT BY THE AO TO ESTABLISH THAT THE ASSESSEE HA S CONCEALED ITS INCOME OR FURNISHED INACCURATE PARTICULARS OF I NCOME, IN OUR VIEW, NO PENALTY U/S 271(1)(C) IS WARRANTED. THE HO NBLE SUPREME COURT IN CASE OF RELIANCE PETROPRODUCTS VS. CIT, 322 ITR 158 HELD AS FOLLOWS: A GLANCE AT THE PROVISIONS OF SECTION 271(1)(C) OF THE INCOME TAX ACT, 1961, SUGGESTS THAT IN ORDER TO BE COVERED BY IT, THERE HAS TO BE CONCEALMENT OF THE PARTICULA RS OF THE INCOME OF THE ASSESSEE. SECONDLY, THE ASSESSEE MUST HAVE FURNISHED INACCURATE PARTICULARS OF HIS INCOME. THE MEANING OF THE WORD PARTICULARS USED IN SECTION 271(1)(C) WOULD EMBRACE THE DETAILS OF THE CLAIM MADE. WHERE NO INFORMATION GIVEN IN THE RETURN IS FOUND TO BE INCO RRECT OR INACCURATE, THE ASSESSEE CANNOT BE HELD GUILTY OF F URNISHING INACCURATE PARTICULARS. IN ORDER TO EXPOSE THE ASSE SSEE TO PENALTY, UNLESS THE CASE IS STRICTLY COVERED BY THE PROVISION, THE PENALTY PROVISION CANNOT BE INVOKED. BY NO STRE TCH OF IMAGINATION CAN MAKING AN INCORRECT CLAIM TANTAMOUN T TO FURNISHING INACCURATE PARTICULARS. THERE CAN BE NO DISPUTE THAT EVERYTHING WOULD DEPEND UPON THE RETURN FILED BY THE ASSESSEE, BECAUSE THAT IS THE ONLY DOCUMENT WHERE T HE ASSESSEE CAN FURNISH THE PARTICULARS OF HIS INCOME. WHEN SUCH PARTICULARS ARE FOUND TO BE INACCURATE, THE LI ABILITY WOULD ARISE. TO ATTRACT PENALTY, THE DETAILS SUPPLI ED IN THE RETURN MUST NOT BE ACCURATE, NOT EXACT OR CORRECT, NOT ACCORDING TO THE TRUTH OR ERRONEOUS. WHERE THERE IS NO FINDING THAT ANY DETAILS SUPPLIED BY THE ASSESSEE IN ITS RETURN ARE FOUND TO BE INCORRECT OR ERRONEOUS OR FALSE THERE IS NO QUESTION OF INVITING THE PENAL TY UNDER SECTION 271(1)(C). A MERE MAKING OF A CLAIM, WHICH IS NOT SUSTAINABLE IN LAW, BY ITSELF, WILL NOT AMOUNT TO F URNISHING INACCURATE PARTICULARS REGARDING THE INCOME OF THE ASSESSEE. SUCH A CLAIM MADE IN THE RETURN CANNOT AMOUNT TO FU RNISHING INACCURATE PARTICULARS. ITA NO. 818/HYD/2013 M/S S.K. BUILDERS 10 12. IN CASE OF HINDUSTAN STEEL LTD. VS. STATE OF OR ISSA, [1970] 25 STC 211, AIR 1970 SC 253, 256, THE HONBLE SUPRE ME COURT HELD THAT IMPOSITION OF PENALTY U/S 271(1)(C) IS NO T AUTOMATIC, PENALTY CANNOT ALSO BE IMPOSED BECAUSE IT IS LAWFUL TO DO SO. THE HONBLE SUPREME COURT FURTHER HELD THAT UNLESS THE ASSESSEE CAN BE ATTRIBUTED WITH CONTUMACIOUS CONDUCT OR THERE IS DELIBERATE DEFIANCE OF LAW, PENALTY CANNOT BE IMPOSED. IN CASE OF CIT VS. SURESH CHAND MITTAL, 251 ITR 9, THE ASSESSEE HAD OR IGINALLY FILED RETURNS SHOWING CERTAIN AMOUNTS OF INCOME. SUBSEQUE NTLY, A SEARCH OPERATION WAS CONDUCTED IN CASE OF THE ASSES SEE AND IN PURSUANCE TO THE SEARCH OPERATION, ACTION WAS INITI ATED U/S 147 OF THE ACT ISSUING NOTICE TO THE ASSESSEE U/S 148. IN RESPONSE, THE ASSESSEE FILED REVISED RETURN SHOWING HIGHER INCOME . IN THE ASSESSMENT COMPLETED U/S 143(3) READ WITH SECTION 1 47 OF THE ACT, THE INCOME DECLARED IN THE REVISED RETURN WAS ACCEPTED, HOWEVER PENALTY PROCEEDING U/S 271(1)(C) WAS INITIA TED AND PENALTY WAS IMPOSED UNDER THE SAID SECTION. DURING PENALTY PROCEEDING, THE ASSESSEE TOOK A STAND THAT HE HAD O FFERED ADDITIONAL INCOME TO BUY PEACE AND AVOID LITIGATIO N. THOUGH THE CIT(A) CONFIRMED PENALTY, THE TRIBUNAL DELETED THE PENALTY BY HOLDING THAT THE DEPARTMENT HAS NOT DISCHARGED ITS BURDEN OF PROVING CONCEALMENT AND HAD SIMPLY MENTIONED ITS CO NCLUSION ON THE ACT OF VOLUNTARY SURRENDER DONE BY THE ASSESSEE IN GOOD FAITH. THE DECISION OF THE TRIBUNAL WAS UPHELD BY THE HON BLE HIGH COURT. WHEN THE DEPARTMENT WENT TO THE HONBLE SUPR EME COURT, THE APEX COURT ALSO DISMISSED THE APPEAL BY HOLDING THAT NO INTERFERENCE OF THE ORDER OF THE HONBLE HIGH COURT WAS CALLED FOR. CONSIDERED IN THE CONTEXT OF THE FACTS INVOLVED IN THE CASE OF SURESH CHAND MITTAL (SUPRA), THE ASSESSEES CASE ST ANDS STILL IN A BETTER FOOTING AS IN CASE OF THE ASSESSEE, THERE IS NO REVISED RETURN FILED DECLARING HIGHER INCOME BUT THE ASSESS EE HAS VOLUNTARILY FILED RETURN OF INCOME WITHIN THE TIME PRESCRIBED UNDER ITA NO. 818/HYD/2013 M/S S.K. BUILDERS 11 THE STATUTE DECLARING INCOME, WHICH HAS ALSO BEEN A CCEPTED IN THE ASSESSMENT. IN CASE OF CIT(A) VS. M/S SAS PHARMACEU TICALS (SUPRA), THE HONBLE DELHI HIGH COURT WHILE DEALING WITH IMPOSITION OF PENALTY IN IDENTICAL FACTS AND CIRCUM STANCES HELD AS UNDER: 15. IT NECESSARILY FOLLOWS THAT CONCEALMENT OF PAR TICULARS OF INCOME OR FURNISHING OF INACCURATE PARTICULAR OF INCOME BY THE ASSESSEE HAS TO BE IN THE INCOME TAX RETURN FIL ED BY IT. THERE IS SUFFICIENT INDICATION OF THIS IN THE JUDGM ENT OF THIS COURT IN THE CASE OF CIT VS. MOHAN DAS HASSA NAND, 141 ITR 203 AND IN RELIANCE PETROPRODUCTS PVT. LTD. (SUPRA) , THE SUPREME COURT HAS CLINCHED THIS ASPECT, VIZ., THE A SSESSEE CAN FURNISH THE PARTICULARS OF INCOME IN HIS RETURN AND EVERYTHING WOULD DEPEND UPON THE INCOME TAX RETURN FILED BY THE ASSESSEE. THIS VIEW GETS SUPPORTED BY EXPLANATI ON 4 AS WELL AS 5 AND 5A OF SECTION 271 OF THE ACT AS CONTE NDED BY THE LEARNED COUNSEL FOR THE RESPONDENT. 16. NO DOUBT, THE DISCREPANCIES WERE FOUND DURING T HE SURVEY. THIS HAS YIELDED INCOME FROM THE ASSESSEE I N THE FORM OF AMOUNT SURRENDERED BY THE ASSESSEE. PRESENT LY, WE ARE NOT CONCERNED WITH THE ASSESSMENT OF INCOME, BU T THE MOOT QUESTION IS TO WHETHER THIS WOULD ATTRACT PENA LTY UPON THE ASSESSEE UNDER THE PROVISIONS OF SECTION 271(1) (C) OF THE ACT. OBVIOUSLY, NO PENALTY CAN BE IMPOSED UNLES S THE CONDITIONS STIPULATED IN THE SAID PROVISIONS ARE DU LY AND UNAMBIGUOUSLY SATISFIED. SINCE THE ASSESSEE WAS EXP OSED DURING SURVEY, MAY BE, IT WOULD HAVE NOT DISCLOSED THE INCOME BUT FOR THE SAID SURVEY. HOWEVER, THERE CANN OT BE ANY PENALTY ONLY ON SURMISES, CONJECTURES AND POSSI BILITIES. SECTION 271(1)(C) OF THE ACT HAS TO BE CONSTRUED ST RICTLY. UNLESS IT IS FOUND THAT THERE IS ACTUALLY A CONCEAL MENT OR NON-DISCLOSURE OF THE PARTICULARS OF INCOME, PENALT Y CANNOT BE IMPOSED. THERE IS NO SUCH CONCEALMENT OR NON-DIS CLOSURE AS THE ASSESSEE HAD MADE A COMPLETE DISCLOSURE IN T HE INCOME TAX RETURN AND OFFERED THE SURRENDERED AMOUN T FOR THE PURPOSES OF TAX. 13. IN THE FACTS OF THE PRESENT CASE ALSO, THE INCO ME RETURNED BY THE ASSESSEE HAS BEEN ACCEPTED BY THE AO. THE AO HA S NOT FOUND THAT THERE IS EITHER CONCEALMENT OF PARTICULARS OF INCOME OR FURNISHING OF INACCURATE PARTICULARS OF INCOME BY T HE ASSESSEE IN ITA NO. 818/HYD/2013 M/S S.K. BUILDERS 12 THE RETURN FILED BY IT. HENCE, PENALTY COULD NOT HA VE BEEN IMPOSED U/S 271(1)(C) OF THE ACT MERELY ON SURMISES AND CONJECTURES WHEN THE AO HAS NOT BEEN ABLE TO ESTABL ISH CONCEALMENT BY BRINGING SUFFICIENT MATERIALS ON REC ORD. THEREFORE, THERE CANNOT BE ANY REASON TO INTERFERE WITH THE OR DER OF THE CIT(A) IN DELETING THE PENALTY IMPOSED U/S 271(1)(C ) OF THE ACT BY THE AO. THE DECISION RELIED UPON BY THE DR ARE FOUND TO BE FACTUALLY DISTINGUISHABLE AS IN ALL THOSE CASES THE ASSESSEE HAD SUBMITTED REVISED RETURNS DECLARING ADDITIONAL INCO ME AND SO FAR AS IN THE CASE OF UNION OF INDIA VS. RAJASTHAN SPIN NING & WEAVING MILLS (SUPRA) IS CONCERNED, IMPOSITION OF PENALTY I S UNDER THE CENTRAL EXCISE ACT. THEREFORE, THE CASES RELIED UPO N BY THE REVENUE ARE NOT APPLICABLE TO THE FACTS INVOLVED IN THE PRESENT APPEAL. 14. IN VIEW OF THE AFORESAID, WE FIND NO INFIRMITY IN THE ORDER OF THE CIT(A) IN DELETING PENALTY IMPOSED U/S 271(1)(C ) OF THE ACT BY THE AO AND ACCORDINGLY, THE ORDER OF THE CIT(A) IS UPHELD WHILE THE GROUNDS RAISED BY THE REVENUE IN THIS REGARD AR E DISMISSED. 15. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISS ED. PRONOUNCED IN THE OPEN COURT ON 25/09/2013. SD/- SD/- (CHANDRA POOJARI) (SAKTIJIT DEY) ACCOUNTANT MEMBER JUDICIAL MEMB ER HYDERABAD, DATED: 25 TH SEPTEMBER, 2013. KV ITA NO. 818/HYD/2013 M/S S.K. BUILDERS 13 COPY TO:- 1) ACIT, CIRCLE 5(1), 6 TH FLOOR, AAYAKAR BHAVAN, BASHEERBAGH, HYDERABAD. 2) M/S S.K. BUILDERS, 4-1-911, SK APARTMENTS, ABIDS , HYDERABAD. 3) CIT(A)-V, HYDERABAD. 4) CIT-IV, HYDERABAD 5) THE DEPARTMENTAL REPRESENTATIVE, I.T.A.T ., HYDERABAD.