INCOME TAX ACT, 1961

Section 271(1)(c)

Penalty under section 271(1)(c) - Leviability - Escapement of additional income - Assessee made suo moto disclosure of additional income

Assessee's case was selected for scrutiny and accordingly, notice under section 143(2) was issued. During assessment proceeding, the assessee voluntary filed revised computation of income by offering an additional income. Assessee explained that there was search operation at the premises of third party namely 'D' where some incriminating materials related to land deal were found, which was related to him. AO accepted additional income and added the same to total income of the assessee. Further, the AO initiated penalty proceeding under section 271(1)(c) on the same. Assessee submitted that he did not conceal or furnish inaccurate particular of income as he voluntary offered additional income without any finding from the AO in that regard and hence, the said penalty would not be leviable. Held: It was found that there was no proceeding initiated under section 153C against assessee on account of search conducted at premises of 'D'. Non-initiation of the proceedings under section 153C established that there was no incriminating document found during the course of search qua the assessee. Thus, in absence of any incriminating document found during the search proceedings, it was transpired that the assessee had admitted the impugned income in his hands voluntarily in the statement furnished under section 131. Further, there was no specific query raised by the AO during the assessment proceedings regarding the income admitted by the assessee in the statement furnished under section 131. Accordingly, it was concluded that as the assessee made suo moto disclosure of the impugned income, hence, the penalty under section 271(1)(c) would not be leviable.

REFERRED : MAK Data Pvt. Ltd. v. CIT (2013) 358 ITR 593 (SC): 2013 TaxPub(DT) 2358 (SC)

FAVOUR : In assessee's favour

A.Y. :

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