26. Pr. CIT vs. Shree Sai Developers; [2019] 418 ITR 306 (Guj.) Date of order: 23rd July, 2019 A.Y.: 2012-13
Penalty – Concealment of income – section 271(1)(c) of ITA, 1961 –
Income-tax survey showing undisclosed income – Amount offered in survey and
included in return – Return accepted – No concealment of income – Penalty
cannot be imposed u/s 271(1)(c)
On 17th July, 2012, a survey was carried
out u/s 133A of the Income-tax Act, 1961 in
the premises of the assessee. In the course of the survey proceedings, the
assessee declared unaccounted income of Rs. 1,78,50,000 received during
the A.Y. 2012-13. Later, the assessee filed its return of income for the A.Y.
2012-13 on 28th September, 2012 declaring total income of Rs.
2,59,11,800, including the unaccounted income of Rs. 1,78,50,000 disclosed
during the course of survey proceedings. The assessment was completed by an
order u/s 143(3) of the Act accepting the returned income. Penalty was also
levied u/s 271(1)(c) of the Act on the premise
that the assessee had furnished inaccurate particulars of its income which led
to concealment of income.
The Commissioner (Appeals) deleted the penalty and
this was confirmed by the Tribunal.
On appeal by the Revenue, the Gujarat High Court
upheld the decision of the Tribunal and held as under:
‘i) Section
271(1)(c) of the Income-tax Act, 1961, is a penal provision and such a
provision has to be strictly construed. Unless the case falls within the four
corners of the provision, penalty cannot be imposed.
ii) The
words “in the course of any proceedings under this Act” in section 271(1)(c)
are prefaced by the satisfaction of the Assessing Officer or the Commissioner
(Appeals). When a survey is conducted by a survey team, the question of
satisfaction of the Assessing Officer or the Commissioner (Appeals) or the
Commissioner does not arise. Concealment of particulars of income or furnishing
of inaccurate particulars of income by the assessee has to be in the income tax
return filed by it. The deletion of penalty was justified.’
