TaxTMI 
TaxTMI 
2011 (1) TMI 156
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....idual who is engaged in the business of trading in textile in Ahmedabad. A search and seizure operation under section 132 of the Act was conducted against the assessee by the Investigation Wing of the Income-tax Department, Mumbai in his residential premises on 15-10-2003. In consequence of the search and seizure action, notice under section 153A of the I.T. Act was issued to the assessee and in response to the said notice, the assessee filed the return of income for assessment year 2000-01 declaring the total income of Rs. 8,76,399. The Assessing Officer completed the assessment by finally determining the total income at Rs. 11,19,550. The Assessing Officer also initiated the penalty proceedings in respect of the following incomes/addition....
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....section 271 and even as per language of said provision, it is mandatory that the Assessing Officer must record a specific satisfaction to make out the case that the assessee has concealed the particulars of income or has filed the inaccurate particulars of income. It is argued that so far as Rs. 6,20,000 which is an income offered by the assessee in respect of the cash deposits found in the bank a/cs, no addition is made by the Assessing Officer and hence, by virtue of provision of sub-section (IB) to section 271, no penalty is attracted. The Ld. Counsel heavily relied on the decision of the full Bench of the High Court of Delhi in the case of CIT v. Rampur Engineering Co. Ltd. 309 ITR 143 and he pleaded that as the Assessing Officer has no....
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....t or reassessment shall be deemed to constitute satisfaction of the Assessing Officer for initiation of the penalty proceedings under the said clause (c)." 7. From the language used in sub-section (1B), it provides that if any addition or disallowance is made while computing the total income of the assessee and if the directions are contained in the said assessment order then legal fiction is created that the same constitute deemed satisfaction by the Assessing Officer. So far as the income of Rs. 6,20,000 which was detected only on the search action taken by the Department and also offered by the assessee as undisclosed income, then the question is whether further satisfaction is required to be recorded. Admittedly, the income of Rs. 6,....
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....he 1st day of June, 2007, the assessee is found to be the owner of any money, bullion, jewellery or other valuable article or thing (hereafter in this Explanation referred to as assets) and the assessee claims that such assets have been acquired by him by utilising (wholly or in part) his income,- (a) for any previous year which has ended before the date of the search, but the return of income for such year has not been furnished before the said date or, where such return has been furnished before the said date, such income has not been declared therein; or (b) for any previous year which is to end on or after the date of the search, then, notwithstanding that such income is declared by him in any return of income fu....
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....he year where the due date of the filing of the return has not expired under section 139(1) of the Act before the date of search. If we accept the argument that if undisclosed income is detected and then only same is admitted and offered by the assessee as his undisclosed income, whether further satisfaction is required to be recorded by the Assessing Officer? Our answer will be No. So far as the undisclosed income unearthed in course of the search action, only protection the assessee gets to the extent provided in Explanation 5 to section 271(1)(c) and otherwise it is presumed that to that extent the assessee deemed to have concealed the particulars of his income or furnished inaccurate particulars of his income. So far as the decision of ....
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....extent of the penalty levied on Rs. 6,20,000which is undisclosed income. 11. Now, another addition which is the subject matter of the penalty is in respect of addition towards expenditure on marriage of Rs. 1,50,665. 12. The facts which revealed from the record are as under. In the case of the search, a small diary marked as "Surya Note Book No. 35" was seized in which certain noting was made in handwriting. The Assessing Officer sought the Explanation of the assessee in respect of the said noting found in the diary. It was explained that the handwriting in the diary was of his father and that was in respect of the estimate of marriage expenditure of his two sisters. It was seen by the Assessing Officer on page 77 that the amount of R....