TaxTMI 
TaxTMI 
2015 (1) TMI 201
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....the Assessment Year 200203 on 07.06.2002, declaring total income at Rs. 1,30,900/. A search under Section 132 of the Income Tax Act, 1961 [for short"the act"] was conducted in the assessee's residential and office premises on 04.09.2003. In response to the notice under Section 153(1)(a) of the Act, the assesseeappellant disclosed additional income over and above the income which was declared in the original return. Thereafter, the assessment proceedings under Section 153(1)(b) of the Act were completed on 20.03.2006 and the return of income in pursuance to the search was accepted. Simultaneously, penalty proceedings were also initiated under Section 271(1)(C) of the Act as the appellant disclosed additional income in pursuance of the search. However, the Assessing Officer rejected the contention of the appellant and levied penalty @ 100% of the tax sought to be evaded. 4.1. Against the order of the Assessing Officer, the appellant preferred an appeal before the Commissioner of Income Tax (Appeals). The CIT(A) allowed the said appeal and deleted the penalty imposed by the Assessing Officer. Against the order of the CIT(A), the respondentrevenue preferred an appeal before the Income....
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....hed and set aside. 6.3. In support of his contentions, he relied the following judgments: (i) Commissioner of Income Tax Vs. Chhabra Emporium [264, ITR 249(Delhi)] (ii) Commissioner of Income Tax Vs. S.D.V. Chandru [266 ITR 175 (madras)] (iii) Gebilal Kanbhaialal (HUF) Vs. Assistant Commissioner of Income Tax [270 ITR 523 (Rajashtan)] (iv) Assistant Commissioner of Income Tax Vs. Gebilal Kanhailal HUF [ 348 ITR 561 (SC)] (v) Commissioner of Income Tax Vs. Kanhaiyalal [299 ITR 19 (Rajashtan)] (vi) Commissioner of Income Tax Vs. Radha Kishan Goel [ 278 ITR 454 (Allahabad)] (vii) Commissioner of Income Tax Vs. Abdul Rashid [40 taxman.com 244 (Chattisgarh)] (viii) S.M.J. Housing Vs. Commissioner of Income Tax, CentralII [ 2013] 38 taxman.com 203 (Madras). (ix) Commissioner of Income Tax, West Bangal Vs. Vegetable Products Ltd.[88 ITR page 192]. 6.4. Learned senior counsel for the appellants contended that in view of above submissions and in view of the above decisions, the present appeals deserve to be allo....
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.... Section 139 (1). This clause, in the opinion of the Court, extends to those cases, falling in clause (b) of the excepted part, i.e. where the return of year is yet to be filed, in respect of a previous year, during which the search took place. This is because of the expression "in his return of income to be furnished before the expiry of time specified in subsection (1) of section 139..". If Parliament had intended clause (2) (to Explanation 5) to cover all other categories, then, having regard to the structure and placement of the main provision, which is specially intended to cover search assessments, such intention would have been manifest if there were no reference to Section 139 (1) and instead, Section 153 A were to be used. That this is the correct position is also evident from the non obstante clause under Section 153A, which was resorted to by the AO in this case." 8. We have heard learned advocates for the parties and perused the material on record. Before dealing with the contentions, it would be relevant to reproduce Explanation 5 to Section 271 (1) (c) of the Income Tax Act, which reads as under: &nb....
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.... with interest, if any, in respect of such income." 9. The High Court of Madras in the case of S.D.V.Chandru (supra) held that in a case where the asseessee had not disclosed his income in the returns filed for the previous year which have ended prior to the date of the search and, in the statement given under Section 132(4) the assessee admitted the receipt of undisclosed income for those years and also specified the manner in which such income had been derived and thereafter pays the tax on that undisclosed income with interest, then such undisclosed income would get immunised from the levy of penalty. 10. Looking to the facts and circumstances of the case, it would be relevant to refer the decision relied upon by learned senior advocate for the appellant in the case of Gebilal Kanbhaialal (HUF) (supra), wherein the Apex Court in paragraph No.6 has observed as under: "6. Explanation 5 is a deeming provision. It provides that where, in the course of search under Section 132, the assessee is found to be the owner of unaccounted assets and the assessee claims that such assets have been acquired by him ....
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....e third condition also stood fulfilled. The assessee has paid tax with interest upto the date of payment. The only condition which was required to be fulfilled for getting the immunity, after the search proceedings got over, was that the assessee had to pay the tax together with interest in respect of such undisclosed income upto the date of payment. Clause(2) did not prescribe the time limit within which the assessee should pay tax on income disclosed in the statement under Section 132(4)." 11. Even, the High Court of Chattisgarh in the case of Abdul Rashid(supra) has held that in order to get the benefit of immunity under clause(2) of explanation5 to Section 271(1)(c) of the Income Tax Act, it is not necessary to file the return before the due date provided that the assessee had made a statement, during the search and explained the manner in which the surrendered amount was derived, and paid tax as well as interest on the surrendered amount. 12. At this stage, it is required to be noted that the Apex Court in the case of Commissioner of Income Tax, West BanagalI Vs. Vegetable Products Ltd. (supra), has held that if the Court finds that the language of a taxing provision is ambi....