Itta/144/2013 Of Commissioner Of Income Tax-V v. M/S.arpitha Constructions

HON’BLE THE CHIEF JUSTICE SRI KALYAN JYOTI SENGUPTAANDHON’BLE Ms. JUSTICE G.ROHINI I.T.T.A.No.144 of 2013 Date: 28.06.2013 Between: Commissioner of Income Tax-V,Hyderabad. .....Appellant AND M/s Arpitha Constructions,Secunderabad. ...Respondent HON’BLE THE CHIEF JUSTICE SRI KALYAN JYOTI SENGUPTAANDHON’BLE Ms. JUSTICE G.ROHINI I.T.T.A.No.144 of 2013 JUDGMENT:(per Hon’ble the Chief Justice Sri Kalyan Jyoti Sengupta ) This appeal is sought to be admitted on the following suggestedquestions of law: i. In the facts and circumstances of the case,where the impounded material found during surveyoperations relating to suppression of receipts, lead tofiling of revised returns and the respondent assesseeconcealed the said additional income in the originalreturn filed by it, whether the order of penalty underSection 271 (1) ( c ) of Income Tax Act is not sustainablein law as erroneously held by the Hon’ble Tribunal? ii. In the facts and in the circumstances of thecase, when the respondent assessee concealed itsincome particulars in the original return of income,whether the order of penalty issued by the AssessingOfficer under Section 271 (1) ( c ) of Income Tax Act isnot valid in law as erroneously held by the Hon’bleTribunal? This appeal is preferred against the judgment and order of thelearned Tribunal dated 03.03.2010 in relation to the assessment year2001-2002. We have heard the learned Counsel for the appellant and gonethrough the impugned judgment and order. The learned Tribunal by the impugned judgment and order setaside the proceedings initiated under Section 271 (1) ( c ) of theIncome Tax Act. The learned Tribunal after analyzing the fact came tothe conclusion that there was no concealment on the part of therespondent/assessee. The relevant fact-findings of the learnedTribunal read as under: “After examining the material available and thebooks of accounts filed by the assessee, the assessingofficer accepted the income returns in the revised returnswith minor addition towards some interest income andinitiated penalty proceedings under Section 271 (1) ( c ) of the Act. The assessing officer did not find out anyspecific omission or concealment either at the time ofsurvey or at the time of assessment proceedings.” Therefore, the pre-conditions for initiating proceedings underSection 271 (1) ( c ) of the Act are not satisfied. Section 271 (1) ( c ) ofthe Act is extracted as under: “271. “Failure to furnish returns, comply withnotices, concealment of income etc., (1) If the Assessing Officer or the Commissioner(Appeals) or the Commissioner in the course of anyproceedings under this Act, is satisfied that any person--- ( c ) has concealed the particulars of his income orfurnished inaccurate particulars of such income or he maydirect that such person shall pay by way of penalty,--- The aforesaid Section clearly shows that penalty proceedingscan be initiated on various grounds. In this case, during the course ofsurvey proceedings or subsequent to the proceedings, the assessingofficer did not find out any specific concealment. When on fact it wasfound that there was no concealment on the part of therespondent/assessee, initiation of proceedings of penalty under theaforesaid Section is without jurisdiction. The learned Tribunal hascorrectly held the legal position. Therefore, we affirm the order of thelearned Tribunal. Accordingly, the appeal is dismissed. No order as to costs. Miscellaneous petitions, if any, pending shall also stand closed. ___________________ K.J. SENGUPTA, CJ _______________ G.ROHINI, J 28.6.2013 Gsn.