1. The question of law framed for this appeal is as follows: <\/p>\n
“Did the Income Tax Appellate Tribunal (ITAT) fall into error in holding that the penalty of <\/em>`67,98,000\/- imposed under Section 271(1)(c) of the Income Tax Act was not leviable in the facts and circumstances of the case?” <\/em> <\/p>\n 2. The brief facts are that the assessee – an individual, filed her return of income on 25.09.2009 in which she declared a total income of `9,18,060\/-. During the pendency of proceedings for that assessment year, survey was conducted under Section 133A by the Revenue at her business premises (B-1, Rohit Kunj, Pitampura, New Delhi) on 22.02.2010. In these search proceedings, the assessee who is a Medical Practitioner, surrendered `2,00,00,000\/- and filed a revised return declaring that amount as additional income. The AO completed scrutiny assessment, by assessing total of the two figures i.e. `2,09,18,060\/-. He initiated penalty proceedings, on the footing that the assessee had concealed the income and filed inaccurate particulars when she, in fact, filed the return on 25.09.2009. The penalty order was subsequently made on 29.06.2012. The assessee appealed to the CIT (A) against imposition of penalty contending that she neither concealed particulars of income nor furnished inaccurate particulars and that all material disclosures were made during the assessment proceedings. The revised return merely reflected the voluntary disclosures made by her. <\/p>\n 3. In the appellate proceedings, the assessee also urged that during survey, no documents or evidence was gathered by the Revenue Department, establishing that she did not, in fact, conceal any particulars of income. The disclosures were not related to any incriminating document or material recovered or gathered during the survey action. The assessee stated that she disclosed the amount to buy peace of mind and avoid further proceedings. The assessee relied upon the statement made by her in the course of the survey in this regard. <\/p>\n 4. The CIT (A) considered the contentions of the assessee as well as the decisions cited before him (including the judgments of the Supreme Court in Dilip & Shroff v. Joint Commissioner of Income Tax <\/em>291 ITR 519 (SC); MAK Data Pvt. Ltd. v. Commissioner of Income Tax <\/em>(2014) 1 SCC 674 and observed as follows: <\/p>\n “………. I find that the appellant has disclosed the income only after a survey was conducted by the Department. Moreover, the disclosure was made as the appellant was unable to produce the books of account for F.Y. 2008-09. She admitted that part of the receipts had not been declared for taxation while filing the Income Tax Return for A Y. 2009-10. This shows that the claim of the Appellant was not bona fide. Therefore, the information furnished by the appellant in the return of income was factually incorrect and the appellant cannot escape the rigors of section 27l(l)(c) of the LT. Act, 1961. The Hon’ble Delhi High Court in the case of CIT vs. Escort Finance Ltd., 328 I.T.R. 44 has held that even if there is no concealment of income or furnishing of inaccurate particulars, but if a claim which is ex-facie bogus is made, the same will still attract penalty provisions. Similar views have been expressed by the Hon’ble Court in the case of CIT vs. Zoom Communications (P) Ltd. holding that very few returns are selected for scrutiny and therefore, non- sustainable claims cannot be said to be bonafide.” <\/em> <\/p>\n 5. The CIT (A) was of the opinion that the assessee could be said to have concealed material particulars and filed inaccurate returns. The ITAT- whom the revenue appealed to, held that since the assessee disclosed the income in the revised return which was in consonance with the voluntary statement made by her, the exercise of discretion in assuming jurisdiction and imposing penalty was unwarranted. In so concluding, the ITAT went by the decision of this Court in Commissioner of Income Tax v. SAS Pharmaceuticals <\/em>(2011) 335 ITR. The ITAT was also of the opinion that the AO was wrong in invoking jurisdiction without first premising the notice upon one or the other condition i.e. with respect to concealing of income or filing inaccurate particulars. For these two reasons, the ITAT allowed the assessee’s appeal and granted the relief. <\/p>\n 6. Counsel for the Revenue urges that the ITAT fell into error in holding that Section 271(1)(c) was not attracted to the circumstances of this case. It was pointed out that prior to the survey (on 22.02.2010), the assessee had filed a return, which failed to disclose the true particulars. It was only during survey proceedings that she surrendered income to the extent of `2,00,00,000\/- and revised the returns subsequently. The fact that she voluntarily revised the return, would not absolve the assessee from liability to penalty. Learned counsel submitted that the onus of proving that the returns were filed accurately, in the circumstances shifted to the assessee. Once it was shown that additional income was surrendered and a revised return was filed, it was up to the assessee to establish that, in fact, the omission was bona fide or that there was a cogent and reasonable explanation. In this respect, learned counsel relied upon the explanation inserted by the Finance Act, 1964 to Section 271(1)(c) and also cited the judgment reported as Additional Commissioner of Income Tax v. Jeevan Lal Shah <\/em>205 ITR 244. It was highlighted that the object of omitting the expression “deliberately” from the provision i.e. Section 271(1)(c) was to remove the requirement of a mental state and shifting the burden of proof to the assessee. In support, the Revenue relied upon Commissioner of Income Tax v. Musaddilal Ram Bharose <\/em>165 ITR 14 (SC). <\/p>\n 7. Lastly, counsel relied upon the judgment of a Division Bench of this Court in Commissioner of Income Tax v. Zoom Communications Pvt. Ltd. <\/em>(2010) 327 ITR 510. Counsel for the assessee argued that Section 271(1)(c) plainly states that an act of concealment or furnishing inaccurate particulars can relate only to a return. It is submitted that in the present case, returns were filed and the mere circumstance that the survey was conducted leading to further disclosures that led to additions could not have legitimately led to the Revenue authorities concluding that there was concealment of material particulars. The assessee did all that she was expected to do when the survey was conducted. Concededly, no material was seized; the record bears testimony to the fact that she voluntarily offered `2,00,00,000\/-. Learned counsel placed heavy reliance upon the judgment of this Court in SAS Pharmaceuticals <\/em>(supra<\/em>) and stated that in that decision the Court in similar circumstances where additions were made based upon disclosures during the survey, nevertheless held that the initiation and imposition of penalty, would be based on surmises unless there is some intentional omission. Learned counsel also points out the decision of the Court in Commissioner of Income Tax v. Mohandas Hassanand <\/em>141 ITR 203 in support of his submission. <\/p>\n 8. Learned counsel submitted that like in the facts of the present case, penalty imposed in the cases of additional income surrendered after survey were held to be unwarranted by different High Courts. Reliance was placed upon the judgment of the Punjab & Haryana High Court in Commissioner of Income Tax v. Bharat Rice Mills <\/em>201 Taxation 633; Additional Commissioner of Income Tax v. Bharatiya Bhandar <\/em>(1979) 13 CTR 159 (MP) and Commissioner of Income Tax v. SI Paripushpam <\/em>249 ITR 550 (Mad.). <\/p>\n 9. Learned counsel contended that in the case of search assessments, if the conditions spelt out in Explanation 5 to Section 271(1)(c) are satisfied, penalty cannot be levied. In the present case, however, no search took place and; a mere survey was conducted. Admittedly, no incriminating or damaging material or documents were seized. The assessee of her own record and in order to buy peace, surrendered Rs 2,00,00,000\/-. Without a finding that the returns (subsequently revised in consonance with law) did not furnish material particulars or were inaccurate in material facts, penalty could not have been imposed. It was stated that for these reasons, the impugned order is reasonable and does not call for interference. <\/p>\n 10. The above factual background shows that when originally filed, the assessee had not disclosed the income that she ultimately declared. On 22.02.2010, during the course of survey, she voluntarily surrendered `2,00,00,000\/- and filed a revised return declaring that amount as additional income. She later filed a revised return. Based on it, the assessment was completed and accepted. The AO imposed and the CIT (A) affirmed penalty under Section 271 (1) (c) of the Act. The ITAT, professing to follow certain decisions of this court, held that there was no concealment of income or filing of inaccurate particulars. <\/p>\n 11. In SAS Pharmaceuticals <\/em>(supra) relied upon by the assessee and ITAT, in this case, it was observed as follows: <\/p>\n “15. It necessarily follows that concealment of particulars of income or furnishing of inaccurate particular of income by the assessee has to be in the income tax return filed by it. There is sufficient indication of this in the judgment of this Court in the case of Commissioner of Income Tax, Delhi-I Vs. Mohan Das Hassa Nand 141 ITR 203 and in Reliance Petroproducts Pvt. Ltd. (supra), the Supreme Court has clinched this aspect, viz., the assessee can furnish the particulars of income in his return and everything would depend upon the income tax return filed by the assessee. This view gets supported by Explanation 4 as well as 5 and 5A of Section 271 of the Act as contended by the learned counsel for the Respondent. 16. No doubt, the discrepancies were found during the survey. <\/em> <\/p>\n 17. This has yielded income from the assessee in the form of amount surrendered by the assessee. Presently, we are not concerned with the assessment of income, but the moot question is to whether this would attract penalty upon the assessee under the provisions of Section 271 (1) (c) of the Act. Obviously, no penalty can be imposed unless the conditions stipulated in the said provisions are duly and unambiguously satisfied. Since the assessee was exposed during survey, may be, it would have not disclosed the income but for the said survey. However, there cannot be any penalty only on surmises, conjectures and possibilities. Section 271 (1) (c) of the Act has to be construed strictly. Unless it is found that there is actually a concealment or non-disclosure of the particulars of income, penalty cannot be imposed. There is no such concealment or non-disclosure as the assessee had made a complete disclosure in the income tax return and offered the surrendered amount for the purposes of tax.” <\/em><\/p>\n