Revised return validly filed pursuant to notice u/s. 153A after Search & Seizure, is accepted, defects found in original return cannot be considered for imposing penalty u/s. 271(1) ©

The assessee filed return of income declar­ing a huge loss. Pur­suant to the search and seizure oper­a­tions u/s.132 and issuance of notice u/s.153A, assessee revised the loss return declar­ing as nil income. Assess­ment was com­plet­ed on the NIL income only.

The AO observed that the con­duct of the assessee ini­tial­ly declar­ing a huge loss which was reduced sub­stan­tial­ly pur­suant to the notice u/s. 153A and sub­se­quent revi­sion declar­ing nil income amounts to con­ceal­ment of income by fil­ing inac­cu­rate par­tic­u­lars, There­fore, he levied penal­ty u/s. 271(1) © being 100% of the tax sought to be evaded.

The ITAT observed that when the revised return pur­suant to the notice u/s.153A valid­ly revised and the assess­ment com­plet­ed accept­ing the revised return then no penal­ty could be ini­ti­at­ed. Fur­ther there is no incrim­i­nat­ing doc­u­ments, asset or income found dur­ing the course of search which leads to the con­ceal­ment or fur­nish­ing inac­cu­rate par­tic­u­lars of income. Fur­ther held that the return of income filed in response to notice under sec­tion 153(A) is termed as return filed under sec­tion 139 and offi­cer made assess­ment on said revised return and the penal­ty is to be levied on the income assessed over and above the income returned under sec­tion 153A of the Income-tax Act. if any. (AY 2009-10 to 2013–14)

Held in the case of M/s. OSE Infra­struc­ture Ltd. vs. ACIT, ITA No.5895/Del/2015, dt.14–8‑2018, (Del)(Trib.)