Income-Tax Officer Ward 7(1), Pune V. Raviraj Pashankar Developers, Pune

ITA 836/PUN/2022

AI Insights

The case involves the Income Tax Officer, Ward \\u2013 7 (1) as the appellant and Raviraj Pashankar Developers as the respondent. The dispute arose from a penalty levied by the Assessing Officer under Section 271(1)(c) of the Income Tax Act, 1961, following a search operation that led to a change in the method of income recognition by the assessee from project completion to percentage completion. The CIT(A) deleted the penalty, which was contested by the Revenue in the Tribunal. The Tribunal upheld the CIT(A)'s decision, noting that the issue was debatable and the method used by the assessee was valid.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 137372 (ITAT-PUNE)
• Duration Of Justice: 2 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-02-2023
• Appeal Filed By: Department
• Order Result: DismissedDismissed
• Bench Allotted: B
• Next Hearing Date: 01-02-2023
• Assessment Year: 2016-2017
• Appeal Filed On: 22-11-2022
• Other Referred Cases: Mak Data Pvt. Ltd. vs. CIT [2013] 358 ITR 593 (SC), CIT vs Suraj Bhan 294 ITR 481 (P & H HC), S.M.J. Housing v CIT 357 ITR 698 (Madras HC), PCIT vs Rajkumar Gulab Badgujar 111 taxman.com 257 (SC), Ajay Traders vs DCIT 81 taxmann.com 463 (ITAT Jaipur), Trident Estate (P) Ltd Vs ITO(2021) 127 taxmann.com 360, ITAT Mumbai, Krish Infrastructure(P)Ltd vs ACIT 35 taxmann.com38 (ITAT Jaipur), Paras Buildtech India Private Ltd. Vs CIT 80 taxmann.com 335(Delhi HC), DCIT vs Rajendra Agarwal 71 ITR (Trib) 0518 (Jaipur), Parinee Developers (P) Ltd vs ACIT 88 taxmann.com 42 (Mumbai Trib)
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Business income; Revised return; Capital Gains; Bogus
• Section: 145; 132; 271(1)(c); 143(3); 153A; 139(1)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH “B” : PUNE BEFORE SHRI SATBEER SINGH GODARA, JUDICIAL MEMBER AND DR. DIPAK P. RIPOTE, ACCOUNTANT MEMBER ITA.No.836/PUN./2022 Assessment Year 2016-17 The Income Tax Officer, Ward – 7 (1), Aaykar Sadan, Room No.330, 3 rd Floor, Bodhi Tower, 548/2B, Salisbury Park, Gultekdi, Pune – 411 037. Maharashtra. vs. Raviraj Pashankar Developers, Office No.1 to 5 Millenium Star, Dhole Patil Road, Near Ruby Hall, Pune – 411 001. Maharashtra. PAN AALAS6505J (Appellant) (Respondent) For Revenue : Shri M.G. Jasnani For Assessee : Shri Neelesh Khandelwal Date of Hearing : 02.02.2023 Date of Pronouncement : 06.02.2023 ORDER PER SATBEER SINGH GODARA, J.M. This assessee’s appeal for assessment year 2016-17, arises against the CIT(A), Pune-11, Pune’s order dated 21.09.2022, passed in Din & Order No.ITBA/APL/S/250/ 2022-23/1045776960(1), involving proceedings under Section 271(1)(c) of the Income Tax Act, 1961 (in short “the Act”). Heard both the parties. Case file perused. 2. The Revenue raised the following sole substantive ground in the instant appeal : “Whether on the facts and the circumstances of the case, the Hon’ble CIT(A)-11, Pune has erred in deleting the 2 ITA.No.836/PUN./2022 Raviraj Pashankar Developers, Pune. penalty u/s 271(1 )(c) of the Act levied by the Assessing Officer by ignoring the fact that by changing method of recognition of income from project completion to percentage completion, the income recognized had increased from zero to Rs.1,83,86,690/- for A.Y. 2016-17 in the return filed in response to notice issued u/s. 153A, which falls under purview of explanation 5A to 271 (1 )(c of the Income Tax Act, 1961.” 3. We next note that the CIT(A)'s detailed discussion reversing the Assessing Officer’s findings levying the impugned penalty of Rs.63,63,266/- in his order dated 28.06.2019 reads as follows : 4. “In brief, search u/s 132 of the IT Act 1961, in the ease of the assesses was conducted on 29.08.2016. During the course of search, it was noticed from the site office that the ongoing project ‘Crossroads” at Wakad was substantially completed and sales were executed, but revenue was not recognized and profit arising thereof was not offered for tax. During the course of search proceedings, at the business premises of Raviraj Group at Millennium Tower, Pune, some loose papers which denotes certificate issued by the architect was found and inventoried as page nos. 110 & 111 of Loose Paper 3 ITA.No.836/PUN./2022 Raviraj Pashankar Developers, Pune. Bundle no 11, Shri Ravindra Sakla was asked to go through it and describe the notings made on it. In response, Shri Ravindra Sakla in his statement recorded u/s 132(4) of the Act on 10.09.2016 stated that an architect was hired to assess the progress of two ongoing projects of the group i.e. Crossroads at Waked, being developed by Shree Raviraj Pashankar Devlopers & Aurete at Pimple Saudagar by Raviraj Ventures. Further, in his statement, Shri Ravindra Sakla acknowledged the data provided by the search team and he admitted that revenue should have been recognized under percentage completion method. The operative part of his statement is reproduced as under : Q.24 : You are requested to go through page nos. 110 & 111 of the Loose Bundle 11 which is seized during the course of search. Please identify the contents. Ans: Sir there are currently two projects that are going on. One is Project "Crossroads" at Wakad and other is "Project Aurete" at Pimple Saudagar. To get an idea of the overall progress of the projects, we had hired Shri Vikas Achalkar, Architect to inspect the above said projects and submit his certificate. Accordingly, he had submitted the report April 2016 which is seized by you as page nos. 110 & 111 of the loose Bundle No. 11. 4 ITA.No.836/PUN./2022 Raviraj Pashankar Developers, Pune. Q.25. As per aforesaid certificates, the Architect has certified that approximately 45% and 37% work is completed in Projects "Crossroads" and Project "Aurete" respectively. In view of these facts, please state whether corresponding revenue has been recognized. Ans: Sir, the Project "Crossroads" is being constructed by the firm Shri Raviraj Pashankar Developers and Project "Aurete" is being constructed by Raviraj Ventures. We do maintain the books of accounts of both the firms on day- to-day basis. Ongoing through the tentative Profit and Loss Account of the above said firms by FY 2015-16, it is clear that no revenue has been recognized by these firms w.r.t. aforesaid projects. Q.26) It is evident from, the aforesaid certificates given by the architect w.r.t projects "Crossroad" and “Aurete", that the aforesaid projects have crossed the threshold limit as prescribed in Accounting Standard notified by IQAI for recognizing the revenue. However, you have not recognized any revenue w.r.t. aforesaid projects. Please explain. Ans: Sir, we have been regularly following project completion method of accounting. We were not aware of the fact that, the revenue w.r.t. aforesaid project should 5 ITA.No.836/PUN./2022 Raviraj Pashankar Developers, Pune. have been recognized after crossing the threshold limit as prescribed in the accounting standards notified by ICAI. However, after consulting our taxation experts, we realize that considering the stage of completion of the projects mentioned above, the revenue should have been booked. Accordingly, the assessee accepted that a revenue of Rs.2,89,36,437/- should have been recognised for the project being developed by the assessee. 5. The assessee filed its original return u/s 139(1) of the I.T. Act on 05/08/2016 declaring total income of Rs.NIL. Subsequently, revised return of income was filed by the assessee on 17/10/2016 declaring total income of Rs.1,83,86,690/-.In response to the notice u/s 153A, the assessee e-filed its return of income for AY 2016-17 by declaring total income at Rs.1,83,86,690/-. In the revised return as well as in the return filed u/s 153A of the Act, the income was offered by following the ‘percentage completion of method ’ as against the ‘project completion method’ followed while filing the original return of income. The assessment u/s 143(3) r.w.s. 153A of the Act was completed at the returned income. However, penalty proceedings as per explanation 5A to section 271(1)(c) of the I.T. Act, 1961 were initiated on the income of 6 ITA.No.836/PUN./2022 Raviraj Pashankar Developers, Pune. Rs.1,83,86,690/- for furnishing inaccurate particulars of income. 6. During the penalty proceedings, the assessee filed a detailed explanation before the assessing officer by submitting as under :-  The penalty proceedings are initiated as per explanation 5A to section 271(1)(c) of the Act. The income declared in the return for the year under consideration is based merely on the change of method of revenue recognition from ‘project completion’ to ‘percentage completion’ and doesn’t pertain to any material found as specified in explanation to section 5A of section 271(1)(c).  The search party informed the assesses that as per the guidelines of ICAI percentage completion method could also he followed for recognizing the income. Since this was the 1 st year in which the basic conditions of percentage completion method were fulfilled, the assessee without taking into consideration the legal position that percentage completion method is not mandatory and project completion is also an acceptable method of recognition, agreed to recognize the revenue under percentage of completion method. Thus it is evident 7 ITA.No.836/PUN./2022 Raviraj Pashankar Developers, Pune. that the revenue recognized is only due to change in method of revenue recognizing wherein the method followed by the assessee is not found to be an invalid wrong method.  No penalty u/s 271(1)(c) of the Act is warranted when the revenue is reconginzed or addition is made on account of change in the method of revenue recognition as it doesn’t tantamount to furnishing of Inaccurate particulars of Income or concealment of Income.  With prejudice to point above, change in method from project completion to percentage completion amounts only to change in view regarding which method of revenue recognition is the most appropriate in the case of assessee. Following percentage method of completion over project completion method doesn’t affect the tax liability but only changes the timing of offering the revenue to tax. However the Assessing Officer did not agree with the above submission and levied a penalty u/s 271(1)(c) of the Act. 7. During the appellate proceedings, the appellant has file written submissions which is summarized as under : 8 ITA.No.836/PUN./2022 Raviraj Pashankar Developers, Pune. (i) Penalty cannot be levied merely on fact that the revised return shows higher income. For this proposition, the appellant has relied on :  CIT vs Suraj Bhan 294 ITR 481 (P & H HC)  The S.M.J. Housing v CIT 357 ITR 698 (Madras HC) (ii) No penalty can be levied, in the absence of any addition made to assessee’s income over and above the declared income. For this proposition, the appellant has relied on :  PCIT vs Rajkumar Gulab Badgujar 111 taxman.com 257 (SC). (iii) Project Completion method followed by the appellant earlier is a valid method. The search party informed the assessee that as per the guidelines of ICAI percentage completion method could also be followed for recognizing the income. Since this was the 1 st year in which the basic conditions of percentage completion method were fulfilled, the assessee without taking into consideration the legal position that percentage completion method is not mandatory and project completion is also an acceptable method of revenue recognition, agreed to recognize the revenue under percentage of completion method. For this 9 ITA.No.836/PUN./2022 Raviraj Pashankar Developers, Pune. proposition, the appellant has relied on :  M/s. Ajay Traders vs DCIT 81 taxmann.com 463 (ITAT Jaipur)  Trident Estate (P) Ltd Vs ITO(2021) 127 taxmann.com 360, ITAT Mumbai  Krish Infrastructure(P)Ltd vs ACIT 35 taxmann.com38 (ITAT Jaipur)  Paras Buildtech India Private Ltd. Vs CIT 80 taxmann.com 335(Delhi HC)  DCIT vs Rajendra Agarwal 71 ITR (Trib) 0518 (Jaipur) iv) The Explanation 5A to section 271(1)(c) of the Act is not applicable to present facts because the income agreed in revised return was not based on any entry in books of accounts of other documents or transactions which is a prerequisite for invoking the explanation 5A. v) The appellant was regularly following the percentage completion method since the inception of the project which is valid and acceptable method of accounting, income was offered only to buy peace of mind and avoid litigation. It is a well settled law that the suitability of the method of accounting has been discussed by various courts at various points of time and the issue regarding the most suitable method of accounting with respect to 10 ITA.No.836/PUN./2022 Raviraj Pashankar Developers, Pune. real estate transactions is a debatable issue and no penalty u/s 271 (1)(c) of the Act can be levied on such debatable issues. In this regard, the appellant has relied on the decision of Mumbai ITAT in the case of Parinee Developers (P) Ltd v ACIT 88 taxmann.com 42 (Mumbai Trib.) vi) Change in method of accounting doesn’t attract penalty provisions. It is a well settled legal position that, if the language of a taxing provision is ambiguous or capable of more meaning than one, then the interpretation which favours the assessee, more particularly so where the provision relates to the imposition of penalty, should be taken (CIT vs Vegetable Products (Supreme Court). 8. I have considered the facts of the case and the submissions made by the appellant. In brief, the appellant filed its original return of income at Rs. Nil by following the project completion method. However, during the search operation based on the findings, the search team confronted Shri Ravindra Sankla with the facts that the conditions as prescribed by ICAI for percentage completion method are fulfilled. In the statement recorded u/s 132(4) of the Act on 03/08/2016, Shri Sankla categorically stated that they have 11 ITA.No.836/PUN./2022 Raviraj Pashankar Developers, Pune. been following the project completion method. However after consulting with his taxation experts, he agreed for recognising revenue by following the percentage completion method. Thereafter the assessee filed the revised return on 17/10/2016 and the assessment u/s 143(3) r.w.s. 153A was completed at such revised return income 9. One of the arguments of the appellant is that it was following an acceptable method of accounting and the income was declared only due to the change in the method of accounting. The appellant has further argued that that percentage completion method is not mandatory and project completion is also an acceptable method of revenue recognition, but in order to buy peace of mind and to avoid litigation, it agreed to recongize the revenue under percentage of completion method. In such situation no penalty should be levied on the income disclosed in the revised-return filed by it. The issue as to whether the ‘percentage completion method' is mandatory or not for the assessment years prior to insertion of section 43CB of the Act w.r.e. f 1.4.2017 i.e. AY 2017-18, has been discussed by various tribunals wherein it has been held that the percentage completion method has been made compulsory by insertion of section 43CB of the Act and is mandatory only for assessment years 2017-18 and onwards. Some of these decisions are as under – 12 ITA.No.836/PUN./2022 Raviraj Pashankar Developers, Pune. 9.1. In the case of Trident Estate (P) Ltd vs. ITO (2021) 127 taxmann.com 360 Hon’ble ITAT Mumbai Bench Has held that where for assessment year 2014-15 construction project of assesses was incomplete and in substance if assessee wished to offer for taxation its gain on completion of project i.e. apply completed contract method, same could not have been rejected as completed contract method and percentage completion method are both duly recognized methods of accounting under construction contracts for relevant assessment year. The relevant portion of the decision is as under : 25. Thus, we note that completed contract method and percentage complete method both were recognized method of accounting for computation of gains from construction contract Section 43CB was instituted by the Finance Act 2018 w.e.f. 1-4-2017 which provides that profits and gains arising from Construction contract or a contract for providing services shall be determined on the basis of percentage of completion method in accordance with the income computation and disclosure standards. However, this section was not in existence and applicable in the assessment year 2014-15 which we are concerned with. Thus, it is amply clear that percentage complete method and completed contract method were both acceptable 13 ITA.No.836/PUN./2022 Raviraj Pashankar Developers, Pune. method and accounting of construction contract in the impugned period. We note that the assesses has all along treated the said project as capitalised item and debited all the expenses to the capital account. This method has been accepted by the Revenue in the past. It is also undisputed that in the current year project is not at all complete. Redevelopment is still in progress. The assessee has also to recoup expenditure from other co-owners. Agreement to sale has not been registered, possession of the property has not been handed over. In these circumstances, assessee cannot be thrust upon percentage of completion method of accounting by the Assessing Officer. Hence, though we do not agree with the assessee that it is not a business project, we agree that the project is incomplete and in substance if assessee wishes to offer for taxation its gain on completion of project i.e. apply completed contract method the same cannot be rejected. This proposition is duly supported by Hon'ble Supreme Court exposition as above. Also, percentage completion method has been made compulsory by subsequent insertion of section 43CB of the Act, which is not applicable to the impugned assessment year. (Emphasis supplied) 14 ITA.No.836/PUN./2022 Raviraj Pashankar Developers, Pune. 9.2. In the case of Ashoka Hi-Tech Builders (P) Limited Vs DCIT ITA No. 121/Ind/2016 & 686/lnd/2016, Hon’ble ITAT, Indore, has also held that before insertion of section 43CB of the Act, it was not mandatory for a real estate developer to follow the 'percentage completion method’. The relevant portion of the decision is as under: “42. Before parting of with adjudication of this issue it would be relevant to take note of the amendment brought in statute with retrospective effect w.e.f. 1.4.2017 by way of insertion of Section 43CB for the purpose of computation of income from construction and service contract. The relevant provision of Section 43CB of the Act reads as follows; "43CB. Computation of income from construction and service contracts — (1) The profits and gains arising from a construction contract or a contract for providing services 'shall be determined on the basis of percentage of completion method in accordance with the income computation and disclosure standards notified under subsection (2) of section 145: 15 ITA.No.836/PUN./2022 Raviraj Pashankar Developers, Pune. Provided that profits and gains arising from a contract for providing services,— i) with duration of not more than ninety days shall be determined on the basis of project completion method; ii) involving indeterminate number of acts over a specific period of time shall be determined on the basis of straight line method. (2) For the purposes of percentage of completion method, project completion method or straight line method referred to in sub-section (1)— i) the contract revenue shall include retention money; ii) the contract costs shall not be reduced by any incidental income in the nature of interest, dividends or capital gains.". 43. From the perusal of above section it is crystal clear that before the insertion of this section there was no legal obligation on the part of the assessee to follow percentage completion method only. Before insertion of this section person engaged in construction and service contracts were free to follow either the project completion / Completed project method or 16 ITA.No.836/PUN./2022 Raviraj Pashankar Developers, Pune. percentage completion method in accordance with the provisions of section 145 of Act. 9.3. Similar view have been expressed by Hon’ble ITAT Cuttack Bench in the case of Hi-tech Estates & Promoters Pvt Ltd vs PCIT ITA No.391/CTK/2018 (Cuttack Tribunal) wherein the hon’ble bench has observed as under : 29. At the same time we cannot ignore that the legislature, by Finance Act, 2018 has inserted Section 43CB to the Act w.e.f. 1.4.2017, which provides the profits and gains arising from a construction contract or a contract for providing services shall be determined on the basis of percentage completion method (PCM) in accordance with the income computation and disclosure standards notified under sub-section (2) of Section 145 of the Act. Thus, this provision is applicable from assessment year 2017-18 onwards and the ld. CIT DR, in all fairness, agreed that the provisions of section 43CB is applicable from assessment year 2017-18. On being asked by the Bench, the ld CIT DR could not controvert the fact that same is not mandatorily applicable to assessment year 2013-14, which is under consideration. 9.4 In the case of Krish Infrastructure (P) Ltd vs ACIT 35 17 ITA.No.836/PUN./2022 Raviraj Pashankar Developers, Pune. taxmann.com 38 (Jaipur-Tribunal), the Hon’ble Bench held that it is not mandatory for all real estate developers to workout their profits by following percentage of completion method as prescribed by the Institute of Chartered Accountants of India under AS7. 9.5 The above decisions suggest that whether the real estate developers were mandatorily required to follow the ‘percentage completion method' for the assessment years prior to AY 2017-18, is a debatable issue and there are decisions holding that the same was not mandatory, Therefore, for the year under consideration, whether the appellant was mandatorily required to follow the percentage completion method, remains a debatable issue. 10. Further, the issue as to whether penalty u/s 271(1)(C) of the Act should be levied on a debatable issue, has also been examined by various Courts/Tribunals and it has been held that no penalty u/s 271(1)(c) of the Act can be levied on a debatable issue. Some of the decisions on this issue are as under. 10.1. In the case of CIT vs Harshvardhan Chemicals & Mineral Ltd, 259 ITR 212 (Raj, HC), the Hon’ble Rajasthan High Court held – ‘In view of the finding of the Tribunal that when the assessee had claimed some amount though that 18 ITA.No.836/PUN./2022 Raviraj Pashankar Developers, Pune. was debatable, in such case, it could not he said that the assessee had concealed any income or furnished inaccurate particulars for the evasion of tax., therefore, no case was made out for interference by the High Court’, 10.2 In the case of Pramod Mittal vs CIT 212 Taxman G4 (Del), the Hon’ble Delhi High Court held that lack of clarity by the income-tax authorities right up to the ITAT itself, is a justifiable ground for the assessee to say that the point was debatable. 10.3 In the case of CIT vs Chandrasekharan 56 taxmann.com 210 (Karnataka HC). The Hon’ble High Court held that 'Where revenue brought to notice of assessee that income from let out of premises was to be treated as income from house property and not business income and assessee accordingly paid tax on it, no penalty could be levied. 10.4. In the case of Parinee Developers (P) Ltd vs ACIT 88 taxmann.com 42 (Mumbai Trib), the Hon’ble Tribunal observed that the assessee-company, engaged in real estate business, did not show sale of certain commercial area in assessment year 2009-10 based on percentage completion method. However, said amount was reflected in next assessment year. The Assessing Officer however 19 ITA.No.836/PUN./2022 Raviraj Pashankar Developers, Pune. taxed said income in 2009-10 and also imposed penalty for concealment of income. Hon’ble Tribunal held that “The assessee offered the said income in the later assessment year basing on the principle 'pay as you earn'. This principle is upheld by the Supreme Court in the case of CIT v. Excel Industries Ltd. [2013] 358 ITR 295 / 38 taxmann.com 100/219 Taxman 379 wherein it is held that the income-tax cannot be levied on hypothetical income. In the instant case, the liability to pay by the other parties crystallized in the assessment year 2010-11 not in the assessment year 2009-10. But the Commissioner (Appeals) insists the same would be taxable in the year under consideration. Such additions, in principle, are unsustainable in law considering the said binding judgment. It for some of the reasons, such additions are accepted by the assessee, the same will not attract penalty under section 271(1)(c) as the said amount was already offered to tax by the assessee. There is neither concealment of income nor furnishing of any inaccurate particulars in such matters. Therefore, this addition does not attract penalty under section 271(1)(c).' The Hon'ble Tribunal has further observed that - 20 ITA.No.836/PUN./2022 Raviraj Pashankar Developers, Pune. 13. What is the better method of accounting is a matter of debate and no concealment of penalty should be attracted to such debatable issues. We find the addition of Rs. 28.62 Crs has the genesis in the estimations on one side and preponement on the other and also on the change of method of accounting. In our opinion, penalty cannot be levied on such additions as they constitute debatable issues..... 11.1. In the present case, the appellant filed its original return of income by following the 'project completion method' which was an acceptable method of accounting. During, the search, the authorised officer, based on the fact that the project was completed about 45%, confronted the partner as to why the percentage completion method was not followed. The Partner of the appellant AOP after consulting with his tax advisor agreed to recognise revenue as per ‘percentage of completion method’. The appellant has further claimed that it agreed to follow the percentage completion method only to buy peace of mind and to avoid litigation because this method only results in preponement of taxability of profits of the project. The present case pertains to AY 2016-17 and as 21 ITA.No.836/PUN./2022 Raviraj Pashankar Developers, Pune. discussed in para 9 above, various benches of Hon’ble ITAT have held that before insertion of section 43CB of the Act i.e., before AY 2017-18, it was not mandatory for a real estate developer to follow the percentage completion method. In such situation the issue as to whether the appellant was mandatorily required to follow percentage completion method for the year under consideration, remains a debatable issue. As discussed earlier in this order, it has been held by higher judicial bodies that penalty u/s 271(1)(c) of the Act cannot be levied on a debatable issue, even if, the assessee agreed for the addition on a debatable issue and paid taxes. 11.2. While levying penalty, the Assessing officer has relied on the Explanation 5A and the fact that the return was revised after the search. However as per the penalty order, the material found during the search was the certificate issued by the Architect regarding the progress of the project. There is no finding in the penalty order that the seized documents indicate that the appellant had claimed any inadmissible expenses or received any unaccounted sale receipts, etc. As per the statement recorded ids 132(4) of the Act, the architect’s certificate only indicates that the project was complete 22 ITA.No.836/PUN./2022 Raviraj Pashankar Developers, Pune. beyond the threshold limit, prescribed in the guidelines for applying the percentage completion method of accounting. Thus, the seized document only suggests that the conditions for applying, the percentage completion method are being fulfilled. However, as discussed above, whether the appellant was mandatorily required to follow, ‘percentage completion method’ for the year under consideration, remains a debatable issue. 11.3. Considering the totality of facts of the case and the judicial position, l am of the considered view that if the appellant agreed to recognise revenue by following the 'percentage completion method’ and revised its Return of income, same shall not attract the levy of penalty u/s 271(1)(c) of the Act because it cannot be said that the appellant furnished inaccurate particulars of its income or concealed the particulars of its income. Accordingly, the penalty u/s 271(1)(c) of the Act as levied by the Assessing Officer is directed to be deleted. The ground no.1 raised by the appellant is ALLOWED.” 4. Both the learned representatives reiterated their respective stands against and in support of the CIT(A)'s 23 ITA.No.836/PUN./2022 Raviraj Pashankar Developers, Pune. foregoing detailed discussion deleting the impugned penalty. Mr. Jasnani quoted Mak Data Pvt. Ltd. vs. CIT [2013] 358 ITR 593 (SC) that the mere fact of the assessee having declared his income from real estate development business of Rs.1,83,86,690/- post-facto the search conducted in its case on 29.08.2016 would hardly absolve it from the penalty proceedings in issue. He further placed reliance on sec.271(1)(c) Explanation-5A that the presumption of such an instance is of the assessee having furnished inaccurate particulars of its taxable income only. 5. All these Revenue’s arguments hardly carry any substance. We first of all note from the Assessing Officer’s penalty order that he has nowhere invoked the foregoing deeming fiction of furnishing of inaccurate particulars of undisclosed taxable income as per his detailed discussion comprising of nine pages. The Revenue has further not placed on record any such notice to this clinching effect. We make it clear that Explanation 5A to sec.271(1)(c) is a special provision imposing deeming fiction of an assessee having both concealed particulars of his taxable income as well as furnishing of inaccurate particulars of such income, as the case may be, in an instance of a search carried out on or after 01.06.2007. We observe that once the Assessing Officer had nowhere invoked the above specific provision, there is hardly any justification 24 ITA.No.836/PUN./2022 Raviraj Pashankar Developers, Pune. on Revenue’s part to quote general principles of furnishing of inaccurate particulars u/s.271(1)(c) of the Act. The Revenue could further not dispute the clinching fact taken note of both in the assessment order dated 27.12.2018 as well as the CIT(A)'s order before us in para-5 that the assessee had already filed his revised return declaring the very income of Rs.1,83,86,690/- which stood duly accepted and processed. 6. So far as Revenue’s reliance on hon'ble apex court’s decision Mak Data Pvt. Ltd., vs. CIT (supra) is concerned, we note that the said assessee was found in possession of bogus share application form and other documents as against facts of the instant case wherein this taxpayer had only followed project completion method. Be that as it may, we make it clear that Revenue’s instant arguments deserve to be rejected only in light of the foregoing factual matrix i.e., non-application of Explanation 5A to sec.271(1)(c) of the Act and filing of revised return at the assessee’s behest indicated hereinabove. We thus reject the Revenue’s instant sole substantive grievance. Ordered accordingly. 7. This Revenue’s appeal is dismissed in above orders. 25 ITA.No.836/PUN./2022 Raviraj Pashankar Developers, Pune. Order pronounced in the open Court on 06.02.2023. Sd/- Sd/- [DR. DIPAK P. RIPOTE] [SATBEER SINGH GODARA] ACCOUNTANT MEMBER JUDICIAL MEMBER Pune, Dated 06 th February, 2023 VBP/- Copy to 1. The appellant 2. The respondent 3. The Ld. CIT(A) concerned. 4. The CIT concerned 5. D.R. ITAT, Pune “B” Bench, Pune 6. Guard File. //By Order// Assistant Registrar, ITAT, Pune Benches Pune.