Case Laws Analysis
Applied on Alliance Infrastructure Projects (P). Ltd. v. ACIT 2021 TaxPub(DT) 4062 (Bang-Trib)
Relied on ACIT v. Harisons Steels Ltd. 2021 TaxPub(DT) 0573 (Mum-Trib)
Followed on Vinay Giridhari Motwani v. ACIT 2020 TaxPub(DT) 5312 (Mum-Trib)
Distinguished on Kailash Chander Malhotra, HUF v. ACIT 2020 TaxPub(DT) 4037 (Del-Trib)
Distinguished on Niral Krupesh Patel v. DCIT 2020 TaxPub(DT) 3451 (Ahd-Trib)
Followed on Dy. CIT v. TPI India Ltd. 2020 TaxPub(DT) 3186 (Mum-Trib)
Followed on Rheal Software (P.) Ltd. v. Dy. CIT 2020 TaxPub(DT) 1621 (Mum-Trib)
Relied on Pr. CIT v. Sai Developers 2019 TaxPub(DT) 5368 (Guj-HC)
Followed on Coop. Milk Producers Union Ltd. v. Dy. CIT 2019 TaxPub(DT) 2725 (Asr-Trib)
Applied on York Scientific Industries (P) Ltd. v. ITO 2019 TaxPub(DT) 2694 (Del-Trib)
Distinguished on Pr. CIT v. Deccan Mining Syndicate (P) Ltd. 2019 TaxPub(DT) 2368 (Karn-HC)
Followed on Yashwant Garments (P) Ltd. v. ITO 2019 TaxPub(DT) 2302 (Del-Trib)
Followed on Soni Ashokkumar Maganlal v. ACIT 2019 TaxPub(DT) 1155 (Ahd-Trib)
Followed on DCIT v. Nirala Housing (P) Ltd. & Vice-Versa 2018 TaxPub(DT) 7350 (Del-Trib)
Followed on Dy. CIT v. Sushrut Institute of Plastic Surgery (P) Ltd. 2018 TaxPub(DT) 6098 (Luck-Trib)
Followed on Sundaram Finance Ltd. v. Dy. CIT 2018 TaxPub(DT) 6091 (Mad-HC)
Followed on Pr. CIT v. American Express India (P) Ltd. 2018 TaxPub(DT) 5977 (Del-HC)
Relied on CIT v. Roger Enterprises (P) Ltd. 2018 TaxPub(DT) 5740 (Del-HC)
Followed on Supratik Banerjee v. ACIT 2018 TaxPub(DT) 5291 (Kol-Trib)
Followed on Laxmi Kant Todi v. ITO 2018 TaxPub(DT) 4731 (Kol-Trib)
Followed on Sahiwal Investment & Trading Co. v. ITO 2018 TaxPub(DT) 4723 (Del-Trib)
Distinguished on Pr. CIT v. Trisha Krishnan 2018 TaxPub(DT) 4578 (Mad-HC)
Distinguished on Pr. CIT v. Deccan Mining Syndicate (P) Ltd. 2018 TaxPub(DT) 4052 (Karn-HC)
Relied on Khandelwal Steel & Tube Traders v. ITO 2018 TaxPub(DT) 3031 (Mad-HC)
Distinguished on Alpha Lite v. ITO 2018 TaxPub(DT) 2853 (Mum-Trib)
Relied on Pr. CIT v. Vandana Gupta 2018 TaxPub(DT) 1008 (Del-HC)
Distinguished on ITO v. Baggu Sarojini Devi Hospitals 2018 TaxPub(DT) 0562 (Visakhapatnam-Trib)
Distinguished on ACIT v. Ashiana Amar Developers 2018 TaxPub(DT) 0560 (Kol-Trib)
Applied on Dy. CIT v. Mukesh Kalubhai Prajapati 2017 TaxPub(DT) 4125 (Ahd-Trib)
Relied on on Technocrats Security Systems Pvt. Ltd. v. Dy. CIT 2017 TaxPub(DT) 0367 (Mum-Trib)
Applied on Grass Field Farms & Resorts (P) Ltd. v. Dy. CIT 2016 TaxPub(DT) 4480 (Raj-HC)
Followed on Alpna Packaging Pvt. Ltd. v. Income Tax Officer 2016 TaxPub(DT) 1278 (Del-Trib)
Distinguished on Mahaluxmi Silk Store v. Asstt. CIT 2016 TaxPub(DT) 0789 (Chd-Trib)
Applied on P. Easwari v. Asstt. CIT 2015 TaxPub(DT) 4802 (Chen-Trib)
Relied on Rishab Rana v. ACIT 2015 TaxPub(DT) 4533 (Chd-Trib)
Relied on Krishan Kumar Palta v. ITO 2015 TaxPub(DT) 4292 (Chd-Trib)
Relied on Nirmal Kumar Bardia v. Dy. CIT 2015 TaxPub(DT) 4064 (Jp-Trib)
Distinguished on Pr. CIT v. Control & Switchgear Contractors Ltd. 2015 TaxPub(DT) 3481 (Del-HC)
Distinguished on CIT v. Chandrasekaran 2015 TaxPub(DT) 2858 (Karn-HC)
Relied on Nahid Bano Khan v. Asstt. CIT 2015 TaxPub(DT) 2043 (Jod-Trib)
Distinguished on Chambal Fertilizers & Chemicals Ltd. v. Asstt. CIT 2015 TaxPub(DT) 0980 (Jp-Trib)
Followed on Asstt. CIT v. Gems & Gems 2014 TaxPub(DT) 4453 (Jp-Trib)
Followed on CIT v. Kalindi Rail Nirman Engg. Ltd. 2014 TaxPub(DT) 2838 (Del-HC)
Followed on Dy. CIT v. Punjab Urban Planning & Development Authority 2014 TaxPub(DT) 2607 (Chd-Trib)
Distinguished on Dy. CIT v. Abhishek Export 2014 TaxPub(DT) 1309 (Ahd-Trib)
Followed on Sundaram Finance Ltd. v. Dy. CIT 2013 TaxPub(DT) 0297 (Mad-HC)
 
The Tax Publishers2013 TaxPub(DT) 2358 (SC) : (2013) 054 (I) ITCL 0193 : (2013) 358 ITR 0593 : (2013) 263 CTR 0001 : (2013) 094 DTR 0379

 

MAK Data (P.) Ltd. v. CIT

 

INCOME TAX ACT, 1961

--Penalty under section 271(1)(c)--concealment penaltyAgreed additions--During the course of the assessment proceedings, it was noticed by the AO (assessing officer) that certain documents comprising of share application forms, bank statements, memorandum of association of companies, affidavits, copies of Income Tax Returns and assessment orders and blank share transfer deeds duly signed had been impounded. These documents had been found in the course of survey proceedings under section 133A conducted in the case of a sister concern of the assessee. The assessee made an offer to surrender a sum of Rs. 40.74 lakhs with a view to avoid litigation and buy peace and to make an amicable settlement of the dispute. The department initiated penalty proceedings for concealment of income and not furnishing true particulars of its income under section 271(1)(c) of the IT Act. During the course of the hearing, the assessee contended that penalty proceedings are not maintainable on the ground that the AO had not recorded his satisfaction to the effect that there has been concealment of income/furnishing of inaccurate particulars of income by the assessee and that the surrender of income was a conditional surrender before any investigation in the matter. The AO did not accept those contentions and imposed a penalty of Rs. 14,61,547 under section 217(1)(c) of the Act. Held: Assessee has only stated that he had surrendered the additional sum of Rs. 40,74,000 with a view to avoid litigation, buy peace and to channelize the energy and resources towards productive work and to make amicable settlement with the income tax department. Statute does not recognize those types of defences under the Explanation 1 to section 271(1)(c) of the Act. It is trite law that the voluntary disclosure does not release the appellant-assessee from the mischief of penal proceedings. The law does not provide that when an assessee makes a voluntary disclosure of his concealed income, he had to be absolved from penalty.

The AO, in our view, shall not be carried away by the plea of the assessee like 'voluntary disclosure', 'buy peace', 'avoid litigation', 'amicable settlement', etc. to explain away its conduct. The question is whether the assessee has offered any explanation for concealment of particulars of income or furnishing inaccurate particulars of income. Explanation to section 271(1) raises a presumption of concealment, when a difference is noticed by the AO, between reported and assessed income. The burden is then on the assessee to show otherwise, by cogent and reliable evidence. When the initial onus placed by the explanation, has been discharged by him, the onus shifts on the revenue to show that the amount in question constituted the income and not otherwise. [Para 7] Assessee has only stated that he had surrendered the additional sum of Rs. 40,74,000 with a view to avoid litigation, buy peace and to channelize the energy and resources towards productive work and to make amicable settlement with the income tax department. Statute does not recognize those types of defences under the Explanation 1 to section 271(1)(c) of the Act. It is trite law that the voluntary disclosure does not release the appellant-assessee from the mischief of penal proceedings. The law does not provide that when an assessee makes a voluntary disclosure of his concealed income, he had to be absolved from penalty. [Para 8] We are of the view that the surrender of income in this case is not voluntary in the sense that the offer of surrender was made in view of detection made by the AO in the search conducted in the sister concern of the assessee. In that situation, it cannot be said that the surrender of income was voluntary. AO during the course of assessment proceedings has noticed that certain documents comprising of share application forms, bank statements, Memorandum of Association of companies, affidavits, copies of Income Tax Returns and assessment orders and blank share transfer deeds duly signed, have been impounded in the course of survey proceedings under section 133A conducted on 16-12-2003, in the case of a sister concern of the assessee. The survey was conducted more than 10 months before the assessee filed its return of income. Had it been the intention of the assessee to make full and true disclosure of its income, it would have filed the return declaring an income inclusive of the amount which was surrendered later during the course of the assessment proceedings. Consequently, it is clear that the assessee had no intention to declare its true income. It is the statutory duty of the assessee to record all its transactions in the books of account, to explain the source of payments made by it and to declare its true income in the return of income filed by it from year to year. The AO, has recorded a categorical finding that he was satisfied that the assessee had concealed true particulars of income and is liable for penalty proceedings under section 271 read with section 274 of the IT Act, 1961. [Para 9]

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