MR. CHITTARANJAN TRIMBAK GAIKWAD,PUNE V. THE ASST. COMMISSIONER OF INCOME TAX, CIRCLE-4, PUNE, PUNE

ITA 759/PUN/2024

AI Insights

The case involves Mr. Chittaranjan Trimbak Gaikwad, who appealed against the penalty imposed by the Assessing Officer and confirmed by the Commissioner of Income Tax (Appeals), for concealing income particulars under section 271(1)(c) of the Income Tax Act, 1961. The penalty was based on the assessee's revised return filed after an investigation revealed a cash payment of Rs. 40,50,000 to Shri Pritam Sanas, which was not disclosed in the original return. The Tribunal found that the revised return was filed voluntarily and accepted by the Assessing Officer, thus negating any concealment of income.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 28948 (ITAT-PUNE)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-01-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2010-2011
• Other Referred Cases: CIT Vs S. Shankaran, Mohammad Azim Ullah Vs CIT, CIT Vs Abdul Majeed, Sarabhai Chemicals Pvt Ltd Vs CIT, iPolo Singh & Co. Vs CIT, CIT Vs Krishna & Co., CIT Vs Dr. R.C. Gupta & Co., Union Engineering Co. Vs CIT, ITO Vs Leela Mammen, CIT Vs P.B. Shah & Co. (Pvt.) Ltd., ACIT Vs S.M. Kannappa Automobiles (P) Ltd., MAK Data (P) Ltd. Vs Commissioner Of Income Tax, K. P. Madhusudhanan vs. CIT, Union of India v. Dharamendra Textile Processors, Vaish Degree College Trust Vs. ACIT, Range-2 Muzaffarnagr, Pr. Commissioner of Income Tax, Kochi-1, Kochi Vs. Shri Ambady Krishna Menon, Sureshbhai Gordhanbhai Prajapati & others, Prem Arora Vs. Dy. CIT, Alok Bhandari & Anr. Vs. ACIT, CIT vs. B.G. Shirke Construction Technology Pvt. Ltd.
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAMNATH P. MURKUNDE
• Assessee Lawyers: B.C. MALAKAR
• Keywords: Condonation of delay; Set aside; Revised return; Corroborative evidences; Unexplained cash credit; Income from undisclosed sources; Revision of order
• Section: 147; 148; 143(3); 143(1); 263; 271(1)(c); 132; 153A; 139(1); 113; 13; 139; 44AB; 72; 139(5); 20

Judgement Text

" आयकर अपीलीय अधिकरण “ए” न्यायपीठ पुणे में । IN THE INCOME TAX APPELLATE TRIBUNAL “A” BENCH, PUNE BEFORE SHRI R.K. PANDA, VICE PRESIDENT AND MS. ASTHA CHANDRA, JUDICIAL MEMBER आयकर अपील सं. / ITA No.759/PUN/2024 धििाारण वर्ा / Assessment Year : 2010-11 Mr. Chittaranjan Trimbak Gaikwad, At Post Kadamwak Wasti, Loni Kalbhor, Pune – 412201 PAN : AEBPT5707L Vs. The Asst. Commissioner of Income Tax, Circle – 4, Pune अपीलार्थी / Appellant प्रत्यर्थी / Respondent Assessee by : Shri B.C. Malakar Department by : Shri Ramnath P. Murkunde Date of hearing : 28-10-2024 Date of Pronouncement : 10-01-2025 आदेश / ORDER PER ASTHA CHANDRA, JM : The appeal filed by the assessee is directed against the order dated 16.11.2023 of the Ld. Commissioner of Income Tax (Appeals)/NFAC, Delhi [“CIT(A)”] wherein he confirmed the penalty of Rs.12,24,938/- levied by the Ld. Assessing Officer (“AO”) u/s 271(1)(c) of the Income Tax Act, 1961 (the “Act”) pertaining to Assessment Year (“AY”) 2010-11. 2. The assessee has filed this appeal with a delay of 88 days. The assessee has filed an application for condonation of delay along with a sworn affidavit stating therein the reasons for delay in filing of the appeal. On perusal of the same, we are satisfied that the delay in filing of appeal is not intentional or deliberate but has occurred for the reasons mentioned in the affidavit. After hearing both the sides, we are of the view that the delay is attributable to the sufficient cause. We, therefore condone the said delay and proceed to decide the appeal. 3. Briefly stated, the facts of the case are that the assessee is an individual. He filed his return of income for AY 2010-11 on 16.10.2010 2 ITA No.759/PUN/2024, AY 2010-11 declaring total income of Rs.7,12,450/-. Subsequently, he revised his return by filing revised return of income on 30.09.2011 declaring total income of Rs.41,67,100/-. His return was processed u/s 143(1) of the Act. Thereafter, the case of the assessee was reopened u/s 147 by issue of notice u/s 148 on 25.07.2012 which was duly served upon the assessee. The case was reopened on the basis of reference received from the ITO (Inv.) Unit-II, Pune informing that the assessee had paid cash of Rs.40,50,000/- to one Shri Pritam Sanas. During the course of enquiry before the ITO, the assessee admitted the said payment of cash to Shri Pritam Sanas and filed his revised return of income thereafter. The case of the assessee was reopened u/s 147 of the Act since the revised return was filed by the assessee beyond the time limit prescribed u/s 139(1) of the Act. The assessment u/s 143(3) r.w.s. 147 of the Act was completed on 22.01.2014 at total income of Rs.49,96,650/- after making addition of Rs.8,29,550/- on account of profit from business, to the total income of Rs.41,67,100/- declared by the assessee. The Ld. AO also initiated penalty proceedings u/s 271(1)(c) of the Act for concealing the particulars of income. During the penalty proceedings, the assessee made detailed submissions before the Ld. AO on 23.07.2014 which are recorded by the Ld. AO in para 3.1 of the penalty order. The Ld. AO not being satisfied with the submissions of the assessee proceeded to levy penalty of Rs.12,24,938/- (@ 100% of tax sought to be evaded) u/s 271(1)(c) of the Act vide order dated 30.07.2014 by observing in para 4, 4.1 and 4.2 of the penalty order as under : “04. I have gone through his submission The assessee has mainly relied on that he has agreed to offer the income to buy the peace of mind and he has filed the revised return of income so penalty proceedings should be dropped.. The submission of the assessee has been considered and the same is not acceptable. A revised return was filed pursuant to enquiry conducted by ITO (Inv), Unit-II, Pune. After getting information from Investigation, a notice under section 148 for reopening of the case stands on a much higher pedestal and the fact that and assessment pursuant to notice issued under section 148 results in a higher tax liability is obviously a situation where it can be readily inferred that the assessee had not furnished full particulars of his correct or true income and, therefore, reopening became necessary. 4.1 In a situation where the assessee admits that a return which had been filed earlier did not disclose a true or full income, which is the position in the instant case, it does not warrant proof or burden on the revenue to prove things, as it is well-settled legal principle that any proof and manner of proof are all not required when there is an admission. The assessee has mainly relied upon the case laws of CIT Vs S. Shankaran (2000) 241 ITR 825, Mohammad Azim Ullah Vs CIT (1981) 131 ITR 680,CIT Vs Abdul Majeed(1998)232 ITR 50, Sarabhai Chemicals Pvt Ltd Vs CIT, 257 ITR 355 and few more case laws as discussed above in assessee's submission. But none of the case law is useful for the assessee as the facts of the case are different and distinguished. 3 ITA No.759/PUN/2024, AY 2010-11 4.2 It is not as though in the instant case, subsequent return was filed voluntarily, but only after enquiry conducted by ITO (Inv) Unit-II, Pune. This clearly attracts the provision of section 271(1)(c) of the I.T.Act 1961. Even judicial decisions are also to the same effect, particularly in these few cases iPolo Singh & Co. Vs CIT (Del) 98 ITR 564,CIT Vs Krishna & Co. (Mad) 120 ITR 144,CIT Vs Dr. R.C. Gupta & Co. (Raj) 122 ITR 567, Union Engineering Co. Vs CIT (Ker) 122 ITR 719,ITO Vs Leela Mammen (ITAT, Cochin) 63 TTJ 252, CIT Vs P.B. Shah & Co. (Pvt.) Ltd. (Cal) 113 ITR 587,ACIT Vs S.M. Kannappa Automobiles (P) Ltd. (ITAT, Bang) 72 ITD 474. In all cases the gist is like this \"Simply because assessee agreed to addition of concealed income after detection thereof and filed return in response to enquiry conducted by department, assessee cannot escape from penalty u/s 271(1)(c)' Moreover, The Supreme court in the case of MAK Data (P) Ltd. Vs Commissioner Of Income Tax 358 ITR 593 has clearly observed Voluntary disclosure does not release assessee from mischief of penal proceedings under section 271(1)(c). Same arguments and case laws are applicable for the additions made in the assessment order in which Assessing Officer found a difference of profit of Rs.8,29,550/- in original return Revised return of income and same was added in assessee’s total income.” 4. Aggrieved, the assessee carried the matter before the Ld. CIT(A) who vide his order dated 16.11.2023 dismissed the appeal of the assessee by referring to Explanation-1 to section 271(1) of the Act in para 5.5 of the appellate order and recording his findings in para 5.6 to 6 of the appellate order. The relevant observations and findings of the Ld. CIT(A) is reproduced below : “5.5 For the sake of ready reference, Explanation-1 to section 271(1) is reproduced below: \"Explanation 1.-Where in respect of any facts material to the computation of the total income of any person under this Act.- (A) such person fails to offer an explanation or offers an explanation which is found by the Assessing Officer or the Commissioner (Appeals) or the Commissioner to be false, or (B) such person offers an explanation which he is not able to substantiate and fails to prove that such explanation is bonafide and that all the facts relating to the same and material to the computation of his total income have been disclosed by him, then, the amount added or disallowed in computing the total income of such person as a result thereof shall, for the purposes of clause (c) of this sub- section, be deemed to represent the income in respect of which particulars have been concealed.\" 5.6 Thus, when the appellant has concealed particulars of his income or furnished inaccurate particulars, conditions laid down in Explanation-1 (supra) have to be examined. In the instant case, the appellant paid cash of Rs.40,50,000/- to Mr. Pritam. This information was received by the Assessing Officer from the Investigation Wing. The appellant declared total income at Rs.7,12,450/- in his original ITR. Thereafter, in pursuance of the enquiry conducted by the Investigation Wing, the appellant revised his ITR at total income of Rs.41,67,100/- The AO completed assessment u/s 143(3) r.w.s. 147 of the Act at total income of Rs.49,96,650/- after making addition 4 ITA No.759/PUN/2024, AY 2010-11 of Rs.8.29,550/- on account of difference of profit. The appellant has claimed that there was no concealment of income or inaccurate particular of income as the cash payment of Rs.40,50,000/- was declared by him in his revised ITR. 5.7 In this context, it is clear that the appellant did not disclose the aforesaid cash payment in his original ITR. The appellant has disclosed the aforesaid cash payment in his revised ITR only after the enquiry conducted by the department. The claim of the appellant with regard to voluntary disclosure of the said amount is therefore not correct. The fling of revised return by the appellant was an action that originated from the fact that the department had the information of cash payment of Rs. 40,50,000/- and the appellant could not escape the notice of the same by the department. Hence, the fling of revised ITR was not on account of bonafide admission by the appellant but had arisen to escape the penal provisions of the act. The explanation offered by the appellant that the source of such cash was from agricultural receipts of his family year after year on account of sale of sugarcane is not acceptable as cash of Rs.40.50,000/- in the year 2010 is not a small amount which is to be kept in normal household of a farmer. The claim of source of the said amount is not supported by any substantive documentary evidence either. Further, the appellant has not furnished any bonafide explanation with regard to the addition of Rs.8.29,550/- made in the assessment order. In view of the above, it is clear that there is concealment of income by the appellant. 5.8 Vide his written submissions, the appellant has relied upon several decided case laws in order to assert that no penalty u/s 271(1)(c) of the Act is leviable when the addition is made on account of unexplained credit. None of the decisions quoted by the appellant are relevant to the present case as the facts are different. Further, these case laws do not advance the arguments of the appellant since the appellant has revised his ITR only after the enquiry conducted by the department. 5.9 The Hon'ble Supreme Court in the case of K. P. Madhusudhanan vs. CIT (2001) 118 Taxman 324 (SC) has laid down that \"it is for the assessee, to prove in the circumstances stated in the Explanation that his failure to return the correct income was not due to fraud or neglect. If he fails to do so, he shall be deemed to have concealed the particulars of his income or furnished inaccurate particulars thereof and consequently, liable for penalty as contemplated u/s 271(1)(c) of the Act The omission on the part of the appellant to answer the question put forth by the AO through his questionnaire/ notice for penalty in the instant case would also attract the presumption laid down in illustration (h) to Section 114 of the Evidence Act which provides \"that, if a man refuses to answer a question which he is not compelled to answer by law, the answer, if given, would be unfavourable to him\". All it, thus. appears that the conduct of the appellant has remained contumacious to the statutory proceedings and he has not been able to discharge the onus cast upon her by Explanation 1 to section 271(1)(c) of the Act. The facts and circumstances discussed in the foregoing paragraphs clearly indicate that the appellant has not offered any proper explanation, far less than a bonafide explanation, as required under Explanation 1 to section 271(1)(c) of the Act. 5.10 The Hon'ble Supreme Court in Union of India v. Dharamendra Textile Processors (2008) 13 SCC 369 has held that the explanations appended to section 271(1)(c) of the Act indicate the element of strict liability on the assessee for concealment or for giving inaccurate particulars while filing the return. It was held that Section 271(1)(c) of the Act had been enacted to provide a remedy for loss of revenue and the penalty under the said provision was a civil liability. The Supreme Court further held that willful concealment was not an essential ingredient for attracting civil liability as was the case in matter of prosecutions under Section 276-C of the Act. 5 ITA No.759/PUN/2024, AY 2010-11 6. In the pertaining facts and circumstances of the case in hand, and in view of the afore-discussed exposition of law applicable, the judgements cited by the appellant for the case in hand are all distinguishable because they are rendered on different factual matrix or they proceeded on the theory of wilful concealment. Therefore, it has to be held that the appellant has failed miserably to make out a case against the levy of penalty u/s 271(1)(c) of the Act and, thus, I find no infirmity in the order of the A.O. passed u/s 271(1)(c) of the Act. The levy of penalty of Rs. 12,24,938/- u/s 271(1)(c) is, accordingly, confirmed. Consequently, all the grounds of appeal raised by the appellant are dismissed.” 5. Dissatisfied, the assessee is in appeal before the Tribunal challenging the imposition of penalty by the Ld. CIT(A) and all the grounds of appeal relate thereto. The modified grounds of appeal raised by the assessee are as under : “i. On the facts and in the circumstances of the case and in law, the Ld. CIT(A), National Faceless Appeal Centre (NFAC) erred in dismissing the appeal of the appellant thereby confirming the penalty levied by the Ld. Assessing Officer of Rs.12,24.938/- u/s.271(1)(c) of the L.T. Act, 1961 ignoring and without appreciating the facts that no penalty on the facts of the case under the said section was attracted on the facts and legal judgements of various Hon'ble Courts/ Tribunals. The penalty so levied by the Assessing Officer duly confirmed by the Ld. CIT(A), NFAC being arbitrary, illegal and bad-in-law be deleted. ii. On the facts and in the circumstances of the case and in law, the Ld. CIT(A), National Faceless Appeal Centre (NFAC) erred in dismissing the appeal of the appellant thereby confirming the penalty levied by the Ld. Assessing Officer of Rs.12,24,938/- u/s.271(1)(c) of the I.T. Act, 1961 ignoring and without appreciating the facts that no penalty under the said section could be levied when the appellant had declared the return of income prior to issuing of notice u/s.148 of the said Act and the said income has been assessed by the Assessing Officer without making any variation in the assessment on such issue of income declared by the appellant before receiving such notice u/s.148 of the Act. The penalty so levied by the Assessing Officer duly confirmed by the Ld. CIT(A), NFAC being arbitrary, illegal and bad-in-law be deleted. iii. On the facts and in the circumstances of the case and in law, the Ld. CTT(A), National Faceless Appeal Centre (NFAC) erred in dismissing the appeal of the appellant thereby confirming the penalty levied by the Ld. Assessing Officer of Rs.12,24.938/-u/s.271(1)(c) of the L.T. Act, 1961 ignoring and without appreciating the facts that no penalty under the said section could be levied when the appellant had declared the income after receiving the notice from the Investigation Wing but prior to any notice u/s.148 of the Act is received and the said return income has been accepted by the Ld. Assessing Officer in the assessment order. The penalty so levied by the Assessing Officer duly confirmed by the Ld. CIT(A), NFAC being arbitrary, illegal and bad-in-law be deleted. iv. The appellant craves leave to add, alter, delete, amend, withdraw, modify, change or substitute any ground or grounds of appeal or to add any new ground or grounds of appeal during or before the hearing of the appeal.\" 6 ITA No.759/PUN/2024, AY 2010-11 6. The Ld. AR filed detailed submissions before us in support of the grounds raised by the assessee inter alia contending as under : “(a) The Observation and findings of the Assessing Officer 7. The facts of the case have been stated in detail above which may kindly be considered. The Id. Assessing Officer during the penalty proceedings found that for AY 2010-11 the assessee had disclosed income of Rs.41,67,100/- in the Revised return of income filed 30/09/2011, as against the income declared in the original return of income filed on 16/10/2010 of Rs.7,12,450/-. It was also notice by him that in assessee case, such Revised return was filed after the admission by the assessee before the ITO (Inv.), Unit-II, Pune that the assessee had paid a sum of Rs.40.50,000/- to one Shri Pritam Sanas for purchase of a land. The Assessing Officer also found that a notice u/s.148 of the Act was issued to the assessee on 25/07/2012 and as such income in the Revised return had been disclosed by the assessee after the admission before the Investigation Wing and taking action by the said Wing, the assessment was completed u/s.143(3) r.w.s. 147 of the Act at an assessed income of Rs.49.96,650/-, which included the amount of income declared in the Revised return filed of Rs.41,67,100/-. The Assessing Officer also made addition in the assessment of Rs.8,29,550/- on account of difference of profit as admitted by the AR of the assessee during the assessment proceedings. The Assessing Officer also had initiated penalty proceedings u/s.271(1)(c) of the Act on the income of Rs.48,79.550/- for concealing the particulars of income. 7.1 The Ld. Assessing Officer thereafter had passed penalty order u/s.271(1)(c) of the Act on 30/07/2014 levying penalty of Rs.12,24,938/- despite the fact that the assessee made detailed submission before him that as the income had been declared in the Revised return filed voluntarily by the assessee and had been accepted in the assessment, no penalty u/s.271(1)(c) of the Act were attracted. The assessee also had cited the decision of the Hon'ble Madras High Court in the case of CIT Vs. S. Shankaran [2000] 241 ITR 825 (Mad.). (b) The Observation and findings of the Ld. CIT(A) 8. The facts of the case along with the observation and findings of the Ld. CIT(A), National Faceless Appeal Centre (NFAC) in the order u/s.250 of the Act dated 16/11/2023 have been discussed in detail above, which may kindly be considered. The Ld. CIT(A) had confirm the levy of penalty dismissing the appeal filed by the appellant for the reason that the appellant had disclosed the income after the action was taken by the Investigation Wing and therefore, Explanation-1 to section 271(1) of the Act was attracted in the case of the assessee, though the assessee had filed Revised return of income on 30/09/2011 declaring the total income of Rs.41,67,100/-, prior to issuing of the notice u/s.148 of the Act related to the said addition on which the penalty had been levied by the Assessing Officer also treating the said amount as concealing the particulars of income. 8.1 In addition to the above, the Ld. CIT(A), for the addition of Rs.8,29,550/- agreed by the AR of the assessee during assessment proceedings being difference in profit on the instance of the Assessing Officer on which also the penalty u/s.271(1)(c) of the Act had been levied, contended that the assessee had not furnished any bonafied explanation with regard to such addition and therefore the penalty u/s.271(1)(c) of the Act was attracted on such addition also (c) The submission and contention of the appellant before the Hon'ble ITAT 9. The appellant humbly submits that the Ld. Assessing Officer had failed to take cognizance of the fact that the appellant assessee had filed the Revised 7 ITA No.759/PUN/2024, AY 2010-11 return of income voluntarily on 30/09/2011 before he had re-opened the assessment in the case of the assessee u/s.147 of the I.T. Act, 1961 and so also before issuing of notice u/s.148 of the said Act by him on 25/07/2012. Though the assessee appellant admits that such income in the Revised return of income filed on 30/09/2011 of Rs.41,67,100/-, against the income declared in the original return of income filed on 16/10/2010 of Rs.7,12,450/- had been declared and filed after the enquiry conducted by the ITO Inv.), Unit-II, Pune when the assessee had admitted the cash payment for purchase of land at Manjiri of Rs.40,50,000/- to one Shri Pritam Sanas, it cannot be denied either by the Ld. Assessing Officer or by the LL. CITIA), NFAC that before taking any action by the Department resorting to statutory provisions of the Act, such as action /147/148 of the Act and/or u/s 263 of the Act, the assessee was obliged to declare the additional income in the Revised return of income filed on 30/09/2011, much before the issuing of the statutory notice by the Ld. Assessing Officer u/s.148 of the P Act on 25/07/2012. Therefore, when the assessee had declared the due income for the year under consideration in the Revised return of income filed before issuing of the notice u/s.148 of the Art and the said return filed on 30/09/2011 had been considered by the 14. Assessing Officer while completing the re-assessment proceedings and after taking due hearing the assessment order was passed u/s.143(3) r.w.s. 147 of the Act on 22/01/2014 without giving any adverse findings in the Assessment Order as regards the income declared in the return of income filed on 30/09/2011 barring comment in para 3 of the Assessment Order as \"The return was filed beyond the time limit prescribed u/s. 139(1) of the Act\", in the humble opinion of the assessee, the said income declared in the Revised Return by the assessee could, in no case, be treated as concealment of income and/or concealing the particulars of income in the case of the assessee to the extent of the income of Rs. 41,67,100/- declared in the Revised Return of Income filed on 30/09/2011. Therefore, there was no question of invoking the provisions of Explanation-1 of section 271(1) of the Act in the case of the appellant assessee for levy of penalty u/s. 271(1)(c) of the Act, as had been allegedly held by the Ld. CIT(A) in the appellate order passed dated 16/11/2023. 9.1 The appellant further humbly contends that for the AY 2010-11, the accounts of the appellant were audited u/s. 44AB on 29/09/2010 of the Act and audited accounts along with Form No. 3CB and 3CD had been filed in due time and further the due date for filing the Return of income in the case of the assessee appellant was 30/09/2010, which was extended by the Hon'ble CBDT till 15/10/2010 and the assessee had filed the original return of income on 16/10/2010. It is submitted that 15/10/2010 was Friday and thereafter 16/10/2010 & 17/10/2010 were Saturday and Sunday respectively, which were holidays. The Revised return therefore so filed on 16/10/2010 30 prior to issuing of the notice u/s.148 of the Act dated 25/07/2012, it is humbly submitted that the said return may kindly be treated as filed within the prescribed time limit u/s 139(5) of the Act. Accordingly, the Revised Return filed by the assessee on 30/09/2011 declaring total income of Ra 41,67,100/- was well within the prescribed time limit, as the same was filed as per law u/s. 139(5) of the IT Act, 1963. Therefore, when there was no any default on the part of the assessee in declaring the true and correct income in the Revised Return of Income filed on 30/09/2011 within the prescribed time limit, the income declared in the said return could not be treated as assessee's unaccounted income and so also it could not be held by the Ld. Assessing Officer as \"concealing the particulars of income\" as held by him in the assessment order. The Assensing Officer therefore was not factually and legally justified in attracting the penal provisions of sections 271(1)(c) of the IT Act, 1961 and so also levying penalty under the said section of Rs. 12,24.938/- holding \"that the assessee has willfully concealed the particulars of income to evade the tax\" while levying the said penalty in the penalty order passed u/s. 271(1)(c) of the Act on 30/07/2014. For this reason itself, irrespective of any reference to the judicial decisions as had been cited by the Ld. Assessing Officer in the 8 ITA No.759/PUN/2024, AY 2010-11 penalty order and also the Ld. CIT(A) in the appellate order, no penalty in the case of the appellant u/s 271(1)(c) of the Act could be levied. Therefore, both the lower authorities ie. the Ld. Assessing Officer as well as the Ld. CIT(A) grossly erred in levying the penalty u/s.271(1)(c) of the Act and so also confirming the same in the penalty order and the appellate order passed respectively. 9.2 The appellant humbly relies on certain judicial decisions as below: - i. Vaish Degree College Trust Vs. ACIT, Range-2 Muzaffarnagr. ITA Nos. 4538 to 4543/ Del/2011, A.Ys. 2003-04 to 2008-09 order dated 28/09/2012, In this case the Hon'ble Delhi Tribunal that there cannot be a penalty merely on the basis that the assessee has disclosed income after receiving the notice from the ADIT and the income was accepted during survey proceedings and no incriminating documents were discovered during the course of survey at the premises of the assessee. Similarly, the additional income offered by the assessee in return of income filed even in response to notice u/s.148 of the Act admitted and accepted by the Assessing Officer would not attracted penalty u/s.271(1) of the Act. ii. The Pr. Commissioner of Income Tax, Kochi-1, Kochi Vs. Shri Ambady Krishna Menon [20241 (5) TMI 1259 (Kerala High Court) In the above the Hon'ble Kevals High Court held that when the assessee had filed the return of income in response to notice u/s 148 of the Act and there was no difference between the returned income and the assessed income and the assessee had voluntarily disclosed and paid tax on such income during assessment proceedings, thereby filing the correct income and such disclosure made in the return of income is accepted by the Assessing Officer, no penalty u/s 271(1)(c) of the Act is leviable. 9.3 In addition to the above, the appellant humbly refers to the various decisions cited by the appellant in the original grounds of appeal along with the Form No. 36 before the Hon'ble ITAT in support of the claim of the appellant that in view of the facts of the appellant's case as the income voluntarily declared in the Revised return of income had been accepted by the Assessing Officer and assessed as such in the assessment order, no penalty in assessee's u/s 271(1)(c) of the Act was attracted and the Ld. Assessing Officer therefore had wrongly and unjustifiably levied penalty under the said section of Rs.12,24,938/-. 10. The appellant further humbly submits that in the case of the appellant, in the assessment order passed u/s 143(3) r.ws. 147 of the Act dated 22/01/2024, the Ld. Assessing Officer had accepted the income declared by the assessee in the Revised Return of Income filed on 30/09/2011 of Rs. 41,67,100/-. The only variation in the assessment was made to that of the income declared in the Revised Return only of Rs. 8,29,550/- and such addition was made purely on estimate basis on business profit inter-alia contending that \"the AR attended and stated that he has no objection for proposed addition of Rs. 8,29,550/-\". The relevant para 4 of the assessment order pertaining to such addition of Rs. 8,29,550/- is reproduced as below: “4. In response to the notice issued, Shri A. M. Hippargekar, Tax Consultant and AR of the assessee attended from time to time and explained the return of income and submitted various details as called for from time to time. During the course of assessment proceedings it is seen that the profit declared in the original and revised return are Rs. 7,12,450/- and Rs. 41.67,100/- respectively. However, the assessee failed to disclose the true profit in the revised return. The AR of the assessee was asked why difference of profit of Rs. 8,29,550/- 9 ITA No.759/PUN/2024, AY 2010-11 was not added to the revised returned Income. On 20/01/2014 the AR attended and stated that he has no objection for the proposed addition of Rs. 8,29,550/- Accordingly, Rs. 8,29,550/- is added to the total income of the assessee. Since the assessee has filed revised return after enquiry has been conducted by the Investigation Wing, Pune, penalty proceeding u/s 271(1)(c) of the Act is separately initiated for concealing the particulars of income of Rs.48,79, 550/.\" 10.1 It may kindly be notice that the Ld. Assessing Officer had not discussed any facts with supporting evidences in the assessment order as to why he had considered the difference in profit of Rs. 8,29,550/- and so also how he had stated that the assessee had not added the same to the Revised Return of Income. The Assessing Officer however contended that the AR attended on 20/01/2014 before him stated that he had no objection for the proposed addition of Rs. 8,29,550/-. The Assessing Officer had added the said amount to the total income. The appellant humbly submits that there was neither any basis for holding by the Assessing Officer as difference in profit of Rs. 8,29,550/- as apparent from the assessment order and so also no basis for being agreed by the AR of the assessee for making such addition, though he had agreed for such addition as proposed by the Ld. Assessing Officer. For the facts as above, the appellant humbly contends that for the said addition of Rs. 8,29,550/- also, the Ld. Assessing Officer could not hold that the assessee had concealed such income for which he could give his findings that there was \"concealing the particulars of income\". Since the income declared by the assessee in the Revised Return of Income filed u/s.139(5) of the Act within the prescribed time limit on 30/09/2011 of Rs. 41,67,100/- had been assessed in the assessment order passed by the Ld. Assessing Officer and the only variation was made in the assessment by making the addition of Rs. 8,29,550/- which also in no case could be held as concealment of income for the facts as detailed above, the assessee humbly contends that no penalty u/s. 271(1)(c) of the Act was attracted in the case of the assessee for such income declared in the Revised Return of Income and so also owing to the assessment order passed u/s.143(3) r.w.s. 147 of the Act on 22/01/2014 accepting such income declared in the Revised Return of Income filed. The penalty therefore so levied by the Assessing Officer in the penalty order passed u/s.271(1)(c) of the Act on 30/07/2014 was arbitrary, illegal and bad-in-law and therefore, in the humbly opinion of the appellant, the same the penalty levied of Rs. 12,24,938/- is deserved to be deleted. The appellant humbly prays before the Hon'ble Bench to kindly delete the penalty so levied and oblige. 10.2 In support of the above claim of the appellant assessee, the appellant relies on the decisions of the Hon'ble various Courts/Tribunals as below: Kirit Dahyabhai Patel Vs. ACTT (2017) 8o taxmann.com 162 (Gujarat HC) It was held in para 13 of the Order by the Hon'ble Gujarat High Court as below: - \"13. Considering the facts and circumstances of the case and also considering the decisions relied upon by learned senior advocate for the appellant, we are of the considered opinion that the view taken by ITA Nos 526 to 528/Ahd/2018 Sureshbhai Gordhanbhai Prajapati & others, Ahmedabad the Tribunal is erroneous. The CTT(A) rightly held that it is not relevant whether any return of income was filed by the assessee prior to the date of search and whether any income was undisclosed in that return of income. In view of specific provision of section 1534 of the I.T. Act, the return of income filed in response to notice under section 153(a) of the I.T. Act is to be considered as return filed under section 139 of the Act, as the Assessing Officer has mode assessment on the said return and therefore, the return is 10 ITA No.759/PUN/2024, AY 2010-11 to be considered for the purpose of penalty under section 271(1)(c) of the L.T. Act and the penalty is to be levied on the income assessed over and above the income returned under section 1534. if any.\" ii. Principal CTT-19, Delhi Vs. Neeraj Jindal (2017) 79 taxmann.com 96 (Delhi), (2017) 393 ITR 1 (Delhi). The Hon'ble Delhi High Court in paras 20 and 21 of the order held as below:- \"20. Therefore, the position that emerges from the above-mentioned provision is that once the assessee files a revised return under Section 153A, for all other provisions of the Act, the revised return will be treated as the original return filed under Section 139. On similar lines, the Gujarat High Court in the case of Kirit Dahyabhai Patel v. Assistant Commissioner of Income Tax, (2015) 280 CTR (Guj) 216, held that: \"In view of specific provision of s. 153A of the 1.T. Act. the return of income filed in response to notice under s. 1538 of the 1.T. Act is to be considered as return filed under s. 139 of the Act, as the AO has made assessment on the said return and therefore, the return is to be considered for the purpose of penalty under s. 271(1)(c) of the LT. Act and the penalty is to be levied on the income assessed over and above the income returned under s. 153A, if any.\" 21. Thus, it is clear that when the A.O. has accepted the revised return filed by the assessee under Section 153A, no occasion arises to refer to the previous return filed under Section 139 of the Act. For all purposes, including for the purpose of levying penalty under Section 271(1)(c) of the Act, the return that has to be looked at is the one filed under Section 153A. In fact, the second proviso to Section 153A(1) provides that \"assessment or reassessment, if any, relating to any assessment year falling within the period of six assessment years referred to in this sub-section pending on the date of initiation of the search under Section 132 or making of requisition under Section 1324, as the case may be, shall abate.\" What is clear from this is that Section 153A is in the nature of a second chance given to the assessee, which incidentally gives him an opportunity to make good omission, if any, in the original return. Once the A.O. accepts the revised return filed under Section 153A, the original return under Section 139 abates and becomes non-est. Now, it is trite to say that the \"concealment has to be seen with reference to the return that it is filed by the assessee. Thus, for the purpose of levying penalty under Section 271(1)(C), what has to be seen is whether there is any concealment in the return filed by the assessee under Section 153A, and not vis-a vis the original return under Section 139. Issue II\" iii. Sureshbhai Gordhanbhai Prajapati Vs. DCTT, ITA No. 526 /Ahd/2028, Date of Order 19/09/2019 for A.Y. 2012-13. In this case while disposing the appeal relating to penalty levied u/s. 271(1)(c) of the Act referring to the effective Ground in para 3 of the Order, citing various decisions of various High Courts and Tribunals, the Hon'ble ITAT held in para 3 and para 9 of the Order as below: 3 The only effective ground is against confirming the penalty levied u/s 271(1)(c) of the Income Tax Act, 1961 hereinafter called as the Act'). At the outset, Ld. Counsel for the assessee submitted that the assessee had filed return u/s 153A of the Act. Consequent to search u/s 132 of the Act on 6.11.2012 the assessment orders were passed u/s 143(3) r.ws. 153A(1)(b) of the Act assessing the same income as returned by the assessee without any variation. It was further contended that during the search, no documents pertaining to the additional income was found/seized. Penalty proceedings have been initiated u/s 271(1)(c) of the Act for concealment of income. He submitted that as the income of return filed u/s 153A and assessed 11 ITA No.759/PUN/2024, AY 2010-11 income are the same, no penalty can be levied and the case of the assessee is covered by the following decisions: 1. The above appeals are covered by the order of ITA, in their own case vide ITA No. 456/Ahd/2018 pronounced on 19/07/2019 by ITAT SMC Bench. The facts are same. 2. Kirit Dahyabhai Patel (2017) 80 com.162(Gujarat) 3. Neeraj Jindal (2017) 79 Com. 96 (Delhi), 393 ITR 1(Delhi): The Hon'ble High Court referred to decision of Gujarat High Court in the case of Kirit Dahyabhai Patel (Para.20) In this case, the decision of Prem Arora V/s. Dy.CIT 149 TTJ (Delhi) 590 has also been mentioned at para-5. This case was relied upon by the assesses before lower authorities. 4. ITAT, Ahmedabad Bench-C ITA No. 2662/A/2017, 2669, 2670, 2671/A/2017 Α.Υ. 2009-10, 2010-11 and 2012-13, ITA No. 2663 to 2668/A/2017 Asstt.years 2007-08 to 2012-13 dtd.08/04/2019- In this case, the decision of Delhi High Court in the case of Neeraj Jindal mentioned above and decision of ITAT Rajkot Bench in case of Mansukhbhai R. Sorathia & Others ITSSKA.No.46/RJT/2014 were referred to and penalties were deleted. 9. The revenue has not brought any contrary binding precedent to our notice. It is transpired from the assessment order that the assessee has filed the return for the first time u/s 153A of the Act and no return was filed before initiation of search. Therefore, in terms of section 153A of the Act, return filed u/s 153A of the Act would be deemed to be return filed u/s 139 of the Act and all consequential provisions would apply. The Ld. D.R. has not rebutted this fact. I therefore, respectfully following judgment of Hon'ble Gujarat High Court rendered in the case of Kirit Dahyabhai Patel Vs. ACIT (supra) and other case laws as relied by the Ld. Counsel for the assessee, direct the A.O. to delete the penalty. The appeal of the assessee is allowed.\" iv. M/s. OSE Infrastructure Ltd. Vs. ACIT, ITA NO. 5891 to 5895/ Del/2016 dated 14/08/2018 (ITAT Delhi) The Hon'ble Delhi ITAT also has quashed the penalty proceedings thereby holding in para 15, 16 and 17 as below:- \"16. Lastly, when the revised return is accepted and the income is assessed as per the revised income, there is no scope for penalty. In the case of Kirit Dahyabhai Patel us ACIT, (2017) 80 Tuxmann.com 162 (Guj), the Hon'ble High Court held that in vieur of specific provision of Section 153A, the return of income filed in response to notice u/s 153A is to be considered as return filed u/s 139, as the AO has made assessment on the said return and, therefore, the return has to be considered for the purpose of penalty u/s 271(1)(c) of the Act and the penalty is to be levied on the income assessed over and above the income returned u/s 153A, if any. Admittedly. in this matter both the returned income and the assessed income are nil. On this ground also, we cannot sustain the penalty order. 17. Viewing from any angle, use do not find any ground to sustain the penalty, as such, we find that the penalty proceedings have to be quashed.\" vi. Mansukhbhai R. Sorathia & Ors. IT (SS)(A No. 46/RJT/2014) (Rajkot Tribunal) 12 ITA No.759/PUN/2024, AY 2010-11 vii. Prem Arora Vs. Dy. CIT 149 TTJ (Delhi) 590 (Delhi Tribunal) (2012) 24 taxmann.com 260 (Delhi ITAT) In the case of Prem Arora Vs. DCIT (Supra,) the Hon'ble Delhi ITAT held that in case of search initiated after 01/06/2003, a return of income is always filed on issue of notice under section 153A. The penalty u/s. 271(1)(c) is imposable when there is a variation in assessed, and returned income. If there is no variation, there will be no concealment. When there is no concealment, question of lexy of penalty under section 271(1)(c) will not arise. This is settled position of law. The Concept of voluntary return of income may be important is penalty proceedings in course of normal assessment proceedings made under section 143(3) or 147 but not under section 1534 of the Act. Where return income filed under section 153A is accepted by the Assessing Officer, there will be no concealment of income and, consequently, penalty under section 27(1) can be imposed. Similar view was also taken in the case of Mansukhbhai R. Sorathia & Ors. (supra). vii. Alok Bhandari & Anr. Vs. ACIT, ITA No. 5747, 5749/Del/2014 (Delhi ITAT) In the above case, it was held that presumption raised by the Explanations to section 271(1)(c) are rebuttable and does not, ipso- facto, result in automatic imposition of penalty. The fact that the entire 'undisclosed income was declared by the appellant in the statement recorded during search and the same was also disclosed in the return filed pursuant to notice issued under section 153A of the Act, clearly goes to show the bona fides of the appellant, not warranting imposition of penalty under section 271(1)(c) of the Act. viii. CIT vs. B.G. Shirke Construction Technology Pvt. Ltd. [2017] 79 taxmen.com 306 (BOM) The Hon'ble Bombay High Court held in this case as below:- \"A return filed u/s 153A is a return furnished u/s 139 and therefore, provisions of the Act which apply to return filed in regular course u/s 139(1), would also continue to apply in case of return filed u/s 1534\" The Hon'ble High Court after discussing the facts held that as the appellant's return was filed and assessed under section 153A and this return is treated as a valid return for the said assessment under section 153A, it is a return under section 139(1) filed by the appellant Accordingly, the provisions of section 80 do not apply to the appellant and the appellant eligible for carrying forward of the business loss. The ratio of this decision of the Bombay Hig Court is applicable to the case of the assessee under consideration as far as for the purpose treating the return filed by the assessee u/s. 153A as a return u/s. 139(1) of the Act. Since th assessed income was identical to that of the income declared in the return of income filed the assessee and no addition whatsoever was made over and above the return income the penalty u/s. 271(1)(c) could not be levied in the case of the assessee under consideration. 10.3 The appellant humbly submits that the above cited decisions in para 10.2 are related to the cases wherein search and survey action u/s. 132/133A of the Act had been conducted and thereafter owing to notices issued u/s.153A and 148 of the Act for filing the returns of income in all such cases returns had been filed declaring certain income which had also been accepted in the assessment by the different Assessing Officers in the respective cases but penalty u/s.271(1)(c) of the Act had been levied for the income disclosed after such search/survey action. The Hon'ble Courts held 13 ITA No.759/PUN/2024, AY 2010-11 that penalty under the said section could not be levied, the case of the assessee appellant under consideration, in the humble opinion of the appellant, is on more solid footing and ground that in his case, no survey/search action was conducted but the appellant had disclosed the income in the Revised return filed on 30/09/2011 much before even issuing the notice u/s.148 of the Act on 25/07/2017 by the Assessing Officer and such income disclosed had been accepted by the Assessing Officer in the assessment order and assessed as such no penalty u/s.271(1)(c) of the Act could be levied by the Assessing Officer on such income disclosed by the assessee in the Revised return and accepted by the Assessing Officer in the assessment order. 11. The appellant humbly contends that neither the Ld. Assessing Officer in the penalty order passed u/s.271(1)(c) of the Act dated 30/07/2014 nor the Ld. CIT(A), NFAC in the appellate order passed u/s.250 of the Act dated 16/11/2023 had appreciated the above facts, despite the facts that necessary submissions in this regard was made and further that factually and legally in view of the various judicial decisions cited in the case of the appellant as above, no penalty u/s.271(1)(c) of the Act could be levied by the Assessing Officer and/or if levied arbitrarily and illegally, could not be confirmed by the Ld. CIT(A) as had been allegedly held before both the authorities. The appellant therefore humbly prays before Hon'ble Bench to kindly delete the penalty levied by the Assessing Officer u/s.271(1)(c) of the Act of Rs. 12,24,938/-and so also confirmed such levy of penalty by the Ld. CIT(A) and oblige.” 7. The Ld. DR strongly supported the order of the Ld. AO/CIT(A). He submitted that there was no willful disclosure on the part of the assessee. It is only after subsequent enquiry that the assessee declared the additional income which would have otherwise got escaped from assessment. In support thereof, the Ld. DR relied on the decision of the Hon’ble Rajasthan High Court in the case of Grass Field Farms & Resorts (P.) Ltd. Vs. Deputy Commissioner of Income Tax reported in (2017) 79 taxmann.com 426 (Rajasthan). He therefore prayed that the penalty of Rs.12,24,938/- u/s 271(1)(c) of the Act confirmed by the Ld. CIT(A), be sustained. 8. We have heard the Ld. Representatives of the parties and perused the material on records, written submissions filed by the assessee and various judicial precedents relied upon by the Ld. AR and Ld. DR. The facts are not in dispute. The original return of income was filed by the assessee on 16.10.2010. The revised return was filed on 30.09.2011. Notice u/s 148 was issued on 25.07.2012. It is therefore apparent that the notice u/s 148 of the Act was issued after filing of revised return of income. In light of these facts on record, the Ld. Counsel for the assessee submitted that the assessee has voluntarily declared the additional income in the revised return which has been accepted by the Ld. AO and brought to tax and hence there could be no question of treating the assessee as having 14 ITA No.759/PUN/2024, AY 2010-11 concealed the particulars of income or furnished inaccurate particulars of income under the provisions of section 271(1)(c) of the Act. The only variation made in the assessment was that of Rs.8,29,550/- which was made by the Ld. AO purely on estimate basis of business profit contending that the authorized representative of the assessee attended hearing on 20.01.2014 before him and stated that he had no objection for the proposed addition of Rs.8,29,550/-. There is no finding by the Ld. AO as to how there is concealment of income by the assessee in order to invoke the provisions of section 271(1)(c) of the Act. It is further submitted by the Ld. AR that the revised return filed by the assessee on 30.09.2011 declaring total income of Rs.41,67,100/- was well within the prescribed time limit as per the provisions of section 139(5) of the Act. There was no default on the part of the assessee in declaring the true and correct income in the revised return of income filed on 30.09.2011 within the prescribed time limit, the income declared in the said return could not be treated as assessee’s unaccounted income and there could not be any concealment of particulars of income in respect thereof (para 9.1 of the written submissions of the assessee reproduced above refers). We tend to agree with the contentions of the Ld. AR. When the assessee had declared the due income for the year under consideration in the revised return of income filed by him before issuance of the notice u/s 148 of the Act and the said return filed on 30.09.2011 had been considered by the Ld. AO while completing the re-assessment proceedings and after taking due hearing the assessment order was passed u/s 143(3) r.w.s. 147 of the Act on 22.01.2014 without giving any adverse findings in the assessment order as regards the income declared in the return of income filed on 30.09.2011 barring comment in para 3 of the assessment order as \"the return was filed beyond the time limit prescribed u/s 139(1) of the Act\", in our opinion, the said income of Rs.41,67,100/- declared in the revised return by the assessee could not be treated as concealment of income and/or concealing the particulars of income. Therefore, the Ld. AO was not justified in invoking the provisions of section 271(1) of the Act. 9. We observe that the Ld. DR has cited the decision of Hon’ble Rajasthan High Court in the case of Grass Field Farms & Resorts (P.) Ltd. (supra) to justify the penalty levied by the Ld. AO and confirmed by the Ld. CIT(A). In our considered opinion, the said decision is not applicable to the facts of the present case in hand for the reason that the same is distinguishable on facts in as much as no survey/search action was 15 ITA No.759/PUN/2024, AY 2010-11 conducted in the assessee’s case but the assessee disclosed the income in the revised return filed by him which was much prior to the issue of notice u/s 148 of the Act. Therefore, in our view, no penalty u/s 271(1)(c) of the Act is called for on account of concealment of income by the assessee. 10. For the reasons set out above and on the facts and in the circumstances of the case as well as various judicial precedents cited by the assessee (supra), we hold that the Ld. CIT(A) was not justified in confirming the penalty imposed by the Ld. AO u/s 271(1)(c) of the Act on account of concealment of particulars of income by the assessee. Accordingly, we set aside the order of the Ld. CIT(A) and allow the grounds of appeal raised by the assessee. 11. In the result, the appeal of the assessee is allowed. Order pronounced in the open court on 10th January, 2025. Sd/- Sd/- (R.K. Panda) (Astha Chandra) VICE PRESIDENT JUDICIAL MEMBER पुणे / Pune; दिन ांक / Dated : 10th January, 2025. रदि आदेश की प्रधिधलधप अग्रेधर्ि / Copy of the Order forwarded to : 1. अपील र्थी / The Appellant. 2. प्रत्यर्थी / The Respondent. 3. The Pr. CIT concerned. 4. दिभ गीय प्रदिदनदि, आयकर अपीलीय अदिकरण, “ए” बेंच, पुणे / DR, ITAT, “A” Bench, Pune. 5. ग र्ड फ़ इल / Guard File. //सत्य दपि प्रदि// True Copy// आिेश नुस र / BY ORDER, िररष्ठ दनजी सदचि / Sr. Private Secretary आयकर अपीलीय अदिकरण ,पुणे / ITAT, Pune "