TaxTMI 
TaxTMI 
2015 (12) TMI 1240
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.... u/s. 143(1) of the Act. Assessee has admitted 'income from house property' and 'income from profession' in the said return. There were search and seizure operations conducted in assessee's case on 16-06-2008, when he was intercepted at Rajiv Gandhi International Airport at Hyderabad on his way from Chennai and cash of Rs. 12.65 Lakhs was found. The search and seizure operation lead to the detection of 27 undisclosed bank accounts of assessee, in which there were deposits and withdrawals made at regular intervals. In his deposition u/s. 132(4), it was admitted that the deposits were out of the unaccounted sources of income. The extracts of these bank accounts were obtained from the banks and assessee was asked to furnish cash flow statements. Assessee had filed necessary cash flow statements and the excess application of funds over the explainable sources came to an extent of Rs. 90.47 Lakhs as on 31-03-2008. For the impugned assessment year, the unexplained negative cash balance came to an amount of Rs. 9,16,321/-. Since assessee's income has escaped assessment, proceedings u/s. 147 were initiated and notice u/s. 148 was issued on 30-03-2009. Assessee, it seems filed return of inc....
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....e's submissions. AO has come to a conclusion that even though assessee declared income, it was in response to notice u/s. 148 which amounts to furnishing on inaccurate/concealment of particulars in the original return of income filed by assessee. He also concluded that provisions of Explanation-5 to Section 271(1)(c) are not applicable w.e.f. 01-06-2007. Therefore, there is no immunity to assessee under this section. AO concluded that the additions made in the order u/s. 143(3) come clearly within the meaning of concealment u/s. 271(1)(c). AO relied on the judgment of the Hon'ble Supreme Court in the case of Dharmendra Textile Processors & Others [306 ITR 277] that penalty is a civil liability and willful concealment is not an essential ingredient. Accordingly, he arrived at the tax sought to be evaded Rs. 2,80,394/- and levied minimum 100%of the amount as penalty as per the provisions. 5. Assessee contested the issue before the Ld. CIT(A). Detailed submissions were made in the ground itself as extracted by the Ld. CIT(A) in para 2 of the order. Ld. CIT(A) however, did not agree with assessee's contentions and confirmed the penalty. While doing so, Ld. CIT(A) opined that ame....
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.... (Represented by legal heirs) Vs. ITO [283 ITR 254] (Mad); ix. Sardar Bhagwan Singh Chawla Vs. CIT [279 ITR 142] (ALL); x. Madanlal Kishorilal Vs. CIT (ALL) [144 CTR: Vol. 197 Dtd. 19-08-2005]; xi. CIT Vs. Gurbachan Lal [250 ITR 157] (Delhi); xii. Kamal Chand Jain Vs. ITO [277 ITR 429] (Del); xiii. Mak Data (P) Ltd., Vs. CIT [358 ITR 0593] 8. I have considered the issue and perused the various propositions laid down by rival parties and supporting case law. It is to be kept in mind that assessee admitted the transactions in the bank accounts only after the search and seizure proceedings undertaken on him. It is also a fact that he has disclosed most of the incomes u/s. 132(4) in the respective assessment years of the block and he got immunity from penalty in view of the provisions as applicable to the facts of the case therein. Just because he got immunity from penalty in other years, it does not automatically lead to cancellation of penalty in the impugned assessment year unless the facts of the case also warrant such immunity. 9. It is the fact that assessee filed his original return of income belatedly in the year 2002-03 i.e., on 31-03-....
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....son is found to have any asset (including financial interest in any entity) located outside India.]" 11. Section 147 authorises the AO to initiate proceedings u/s. 147, if there is any escapement of income as contemplated. It is to be noted that escapement of income is different from concealment of income or furnishing of inaccurate particulars. Therefore, in all cases where proceedings u/s. 147 are initiated, it does not automatically become 'concealment of income' or 'furnishing of inaccurate particulars' unless such income which escaped assessment comes within the provisions of Section 271(1)(c) warranting penalty. 12. Provisions of Section 271(1)(c) empowers the AO to levy penalty either for concealment of income or for furnishing of inaccurate particulars. These two concepts are subject matter of various adjudications not only by various High Courts but also by the Hon'ble Supreme Court in different cases. Both the parties relied on various case law supporting them. However, as can be seen from the facts of the case law relied upon, most of the propositions are arising from the additions made in the original assessment, but not in re-assessment. It is to be kept in m....
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....ee has disclosed the incomes in response to Section 153A proceedings, penalty was dropped. The scheme of assessing incomes identified in search have been modified and in the revised procedure, assessments u/s. 153A are independent of original assessment proceedings. Therefore, the immunity provided in proceedings u/s. 153A cannot be extended to the present proceedings being reassessment proceedings U/s 147. 14. Explanation-1 to Section 271(1)(c) is certainly applicable to the facts of the case. Assessee has not given any bonafide explanation why the incomes are not disclosed in the original return. The explanation given by assessee is with reference to the return filed in response to notice u/s. 148. It may be true that AO accepted the income as disclosed in the return filed in response to notice u/s. 148. But concealment of income happened viz-a-viz the original return filed on 31-03-2003 disclosing a lesser income. In the case of CIT Vs. Mohd. Mohtram Farooqui [259 ITR 132], Hon'ble Rajastan High Court confirmed the penalty when cash was seized from assessee by police authorities. It was explained by assessee that part of cash belong to third persons. There is no evidence ....