2005 (5) TMI 639

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....ion 271(1)(c) of the Income-tax Act, 1961 ? 2. Whether, on the facts and in the circumstances of the case, the ITAT was justified in holding that the immunity available under the aforesaid explanation were available to the assessee in respect of the amounts surrendered in the hands of the firm M/s. Ganesh Prasad Gondi Lal & Sons by his father and partners of the firm and taxed in the hands of the assessee as per settlement arrived at later on ?" The present reference relates to the assessment year 1989-90. 2. Brief facts of the case are that the assessee belongs to Ganesh Pd. Gondi Lal & Sons group of cases of Banda, in which a search was conducted at the residential as well as business premises of the assessee and other assessee o....

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....nious interpretation of the law. The Hon'ble Supreme Court in the case of the Reserve Bank of India v. Peerless General Finance had held that the interpretation of law as it stands, deserves to be construed in the way as it had been the intention of the Legislature. In this case, Explanation 5 to section 271(1)(c) provides a deeming provision for imposing penalty on recovery of certain undisclosed assets at the time of search and seizure, yet it gives an exception for the benefit of the assessee too in sub-section (2) of the said Explanation that if the assessee makes a statement under sub-section (4) of section 132 that such assets have been required out of his income not disclosed in his return of income, then no penalty shall be imposed.....

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....at the recovery of jewellery from the residential portion occupied by the assessee and from the alleged portion occupied by the firm were all mixed up and a common panchnama was prepared clearly indicate that the department was not treating the assessee differently. It is not in dispute that there were certain lockers belonging to various members of the group and they were operated on 17-11-1988 and, thus, if a liberal interpretation of the facts is taken, then the search and seizure will be deemed to have been carried till 17-11-1988 as has been held by us in the case of Radha Krishna Goel and Man Mohan Goel. Under these circumstances, if a broad liberal interpretation is given to Explanation 5 to section 271(1)(c), specially in view of th....

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....chase peace with the department, but it by no stretch of imagination establishes the concealment of income by the assessee. Following said ratio, it implies that even despite the surrender of the income by the assessee, the department is yet to prove some circumstances or the other to prove the concealment of income. Here, as discussed above, either the assessee was not found in possession or owner of the recovery of jewellery from the premises occupied by the firm or if deemed to be the owner of the jewellery on the basis of the settlement arrived at later on, then he could not be deprived of the benefit of Explanation 5(2) to section 271(1)(c) where the group had surrendered the said amount at the very time of the search as undisclosed in....