Judicial Analysis Court Copy Headnote Facts Arguments Court observation

2026 Supreme(Online)(ITAT) 6955

INCOME TAX APPELLATE TRIBUNAL (PUNE BENCH)
MANISH BORAD, Accountant Member, VINAY BHAMORE, Judicial Member
Omshree Agrotech Private – Appellant
Versus
Assessment Unit, ITD Limited, NFAC, Delhi – Respondent
ITA Nos.2189 to 2191/PUN/2024

Advocates:
For the Appellants/Petitioners: Shri Sharad A Shah, Shri Rohit S. Tapadiya
For the Respondents: Shri Udol Raj Singh

Penalty u/s 271(1)(c) not leviable on income voluntarily offered and accepted in returns filed u/s 153A post-search, deemed as u/s 139(1) returns; nor on minor estimated or calculation error additions.

Headnote:(A) Income Tax Act, 1961 - Sections 132, 153A, 271(1)(c) - Penalty for concealment - Search and seizure action conducted - Assessee filed returns in compliance with notice u/s 153A voluntarily offering undisclosed income towards share capital and investments in land - Returns accepted by Assessing Officer without additions on offered amounts - Minor additions made on estimated brokerage and calculation errors - Penalty levied u/s 271(1)(c) on offered income and minor additions - Held that return filed u/s 153A is deemed return u/s 139(1) - No concealment vis-à-vis such return once accepted - Penalty not leviable on voluntarily offered income or estimated/calculation error additions lacking mens rea. (Paras 3, 5, 7, 8, 9)

(B) Penalty proceedings - Distinct from assessment - Levy discretionary requiring proof of conscious concealment - Voluntary disclosure in post-search returns accepted without incriminating material does not attract penalty - Estimated additions or arithmetical errors do not constitute furnishing inaccurate particulars. (Paras 7, 9)

Facts of the case:
Assessee company subjected to search u/s 132 - Filed returns u/s 153A offering undisclosed income which was accepted - Taxes paid - Penalty u/s 271(1)(c) levied on offered amounts and minor additions by Assessing Officer - CIT(A) upheld penalties - Assessee appealed to Tribunal.

Findings of Court:
Penalties deleted for all years - Income offered in u/s 153A returns treated as u/s 139(1) returns - No variation between returned and assessed income on major amounts - Minor additions being estimates/errors not attracting penalty.

Issues: Whether penalty u/s 271(1)(c) leviable on income voluntarily disclosed and accepted in returns filed u/s 153A and on minor estimated/calculation additions.

Ratio Decidendi: Return u/s 153A deemed u/s 139(1) - Concealment judged vis-à-vis such return - Voluntary disclosure without incriminating material and acceptance by AO precludes penalty - No mens rea in estimated or clerical additions.

Result: Assessee's appeals allowed - Penalties deleted.

Table of Content
1. facts of search, voluntary disclosures, and penalty levy. (Para 2 , 3 , 4)
2. assessee argues no penalty on 153a returns; revenue defends. (Para 5 , 6)
3. 153a returns treated as 139(1); precedents support no penalty. (Para 7 , 8)
4. no penalty on voluntary disclosures or minor calculation errors. (Para 9)
5. assessee's appeals allowed; penalties deleted. (Para 10)

आदेश/ORDER

PER DR. MANISH BORAD, ACCOUNTANT MEMBER :

The captioned three appeals at the instance of assessee pertaining to A.Yrs. 2009-10, 2011-12 and 2012-13 are directed against the separate orders dated 26.08.2024 framed by CIT(A), Pune-11 arising out of Penalty orders passed u/s.271(1)(c) of the Income Tax Act, 1961 (in short ‘the Act’).

2. The common issue raised in all these three appeals is against the levy of penalty u/s.271(1)(c) of the Act.

3. Facts in brief commonly applicable for all the three appeals are that the assessee is a Private Limited Company and search and seizure action u/s.132 of the Act was conducted on the Omshree Group cases of Dhule on 20.11.2013 and the assessee has been part of the said search. During the course of assessment proceedings for A.Y. 2009-10, 2011-12 and 2012-13 which are in appeal before this Tribunal, assessee furnished return in compliance to notice u/s.153A of the Act and offered undisclosed income at Rs.70.00 lakh towards share capital for A.Y. 2009-10; Rs.32,22,111/- towards alleged undisclosed investment in land for A.Y. 2011-12; and Rs.3.50 lakh towards undisclosed investment in land for A.Y. 2012-13. All the additions referred in the above referred amounts have been reflected in the return of income filed in compliance to notice u/s.153A of the Act and ld. Assessing Officer has accepted those returns and due taxes have been paid and thereafter no appeal is pending before this Tribunal. However, while concluding the assessments, minor additions of Rs.1.40 lakh for A.Y. 2009-10 has been made for the deemed brokerage for arranging the share capital, Rs.1,27,839/- and Rs.1,11,500/- has been further added towards some calculation errors/deemed court fee expenses for A.Y. 2011-12 and A.Y. 2012-13. Now after the conclusion of the assessment proceedings, ld. Assessing Officer initiated penalty proceedings and in the penalty order the penalty has been levied on the amounts offered by the assessee in the return of income filed in compliance to notice u/s.153A of the Act and on the minor additions made by the Assessing Officer as discussed above.

4. Against the levy of penalty at Rs.26,80,847/- (levied on the addition of Rs.71,40,000/-); penalty of Rs.11,12,808/- for A.Y. 2011-12 (levied on the addition of 33,49,950/-); and penalty of Rs.1,49,737/- (levied on the addition of Rs.4,61,500/-) for A.Y. 2012-13, assessee preferred appeal before ld.CIT(A) but failed to succeed. Now the assessee is in appeals before this Tribunal.

5. Ld. Counsel for the assessee at the outset submitted that under similar set of facts and circumstances this Tribunal has consistently held that penalty u/s.271(1)(c) of the Act is not leviable on the income declared by the assessee in reply to notice u/s.153A of the Act since such return is treated to be a return filed u/s.139(1) of the Act. Reliance placed on various decisions including the decision of Coordinate Bench, Guwahati in the case of ACIT Vs. Brahmaputra Metallics Limited – ITA No.97/GTY/2023, dated 18.10.2024. Reference also made to the paper book running into 267 pages providing details of various case laws relied on by the assessee along with written submissions.

6. On the other hand, ld. DR supported the order of ld.CIT(A) and stated that the impugned penalties levied for A.Yrs. 2009-10, 2011-12 and 2012-13 deserved to be confirmed.

7. We have heard the rival contentions and perused the record placed before us. We observe that the assessee has been subjected to search proceedings and for the years under consideration namely A.Y. 2009-10, A.Y. 2011-12 and A.Y. 2012-13 the assessee ha

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2026 Supreme(Online)(ITAT) 6955

INCOME TAX APPELLATE TRIBUNAL (PUNE BENCH)MANISH BORAD, Accountant Member, VINAY BHAMORE, Judicial MemberOmshree Agrotech Private – AppellantVersusAssessment Unit, ITD Limited, NFAC, Delhi – RespondentITA Nos.2189 to 2191/PUN/2024

Penalty u/s 271(1)(c) not leviable on income voluntarily offered and accepted in returns filed u/s 153A post-search, deemed as u/s 139(1) returns; nor on minor estimated or calculation error additions.

INCOME TAX APPELLATE TRIBUNAL (PUNE BENCH)
MANISH BORAD, Accountant Member, VINAY BHAMORE, Judicial Member
Omshree Agrotech Private – Appellant
Versus
Assessment Unit, ITD Limited, NFAC, Delhi – Respondent
ITA Nos.2189 to 2191/PUN/2024