TaxTMI 
TaxTMI 
2016 (1) TMI 174
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....persons for conducting transactions belonged to him. There were shares purchased in various names through these bank accounts and profits had also been earned. Accordingly, in the proceedings u/s. 153A initiated against assessee, Assessee admitted additional incomes and paid taxes thereon. AO accepted the same in the respective assessment orders, however, initiated penalty proceedings u/s. 271(1)(c). The additional incomes offered and penalty imposed are as under: AY. Original Income returned (Rs) Additional Income Admitted (Rs) Penalty Imposed (Rs) 2004-05 5,47,980 7,82,215 2,21,727 2005-06 8,81,030 6,00,000 1,81,622 2006-07 5,79,280 9,00,000 2,42,212 3. AO levied penalty even though assessee explained that in order to settle the matters, he and his brother has offered the additional income in various assessment years and filed the returns, accordingly admitted the additional incomes. AO did not agree and levied penalty concealing the particulars of income. 4. Before the Ld. CIT(A), it was submitted that assessee has owned up bank accounts of some other persons in good faith and had made declaration u/s. 132(4) by sta....
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....sion of Mumbai Tribunal in the case of Mr. Kiran Shah Vs. ACIT, Central 15 & 16, Mumbai in ITA No. 5919 to 5925/Mum/2011 dt. 08-01-2014 which was extracted in the Co-ordinate Bench decision in the case of Mr. B. Rajeswara Rao in ITA Nos. 1531 to 1534/Hyd/2014 dt. 29-05-2015 (supra). For the sake of record, para 6 & 7 of that order is reproduced as under: "6. We have heard both the parties and also perused the relevant material on record. We find that the solitary issue in the present appeals is squarely covered by the order of the Coordinate Bench of Mumbai Tribunal in the case of Mr. Kiran Shah vs. ACIT, Central 15 & 16, Mumbai in ITA.No.5919 to 5925/Mum/2011 dated 08.01.2014 wherein the Tribunal while allowing the appeals of the assessee held as under : "13. .... It would be pertinent to refer to the decision of the Delhi Bench in the case of Prem Arora vs. DCIT (supra) wherein it has been held as under : "On bare reading of Section 153A it is seen that this section starts with a non obstante clause relating to normal assessment procedure covered by Sections 139, 147, 148, 149, 151 and 153 in respect of searches made after 31.5.2003. The sections, so ex....
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..../s. 271(1)(c) cannot be imposed." 14. .... 15. ... 15.1..... 15.2. Considering the facts under appeal with the judicial decisions relied upon and cited hereinabove, we do not find any substance for the levy of penalty u/s.271(1)(c) of the Act. The A.O. is directed to delete the penalty so levied in all the assessment years under consideration. The appeals filed by the assessee for all the above assessment years are allowed." 7. Respectfully following the order of the Coordinate Bench of Mumbai Tribunal in the case of Mr. Kiran Shah (supra), we allow the appeals of the assessee by deleting the penalty levied for all the assessment under consideration i.e., A.Ys. 2003-04 to 2006-07". 8.1. Not only that in the case of assessee, where the search and seizure proceedings have happened after 01-06-2007, Explanation- 5A is applicable while considering the penalty. Explanation-5A itself has undergone many amendments which was considered by the Co-ordinate Bench in the case of Dilip Kedia V/s. ACIT (40 Taxman.com.102)-(Hyd) dated 26-07-2013. The said case was analysed and considered in another Co-ordinate Bench decision in the case of Shri Sant....
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.... him by utilizing (wholly or in part) his income for any previous year ; or (ii) any income based on any entry in any books of account or other documents or transactions and he claims that such entry in the books of account or other documents or transactions represents his income (wholly or in part) for any previous year, which has ended before the date of the search and the due date for filing the return of income for such year has expired and the assessee has not filed the return, then, notwithstanding that such income is declared by him in any return of income furnished on or after the date of the search, he shall, for the purposes of imposition of a penalty under clause (c)of sub-section (1) of this section, be deemed to have concealed the particulars of his income or furnished inaccurate particulars of such income." 20. While the new explanation does away with the exemption from penalty if the Assessee offers the payment in the course of statement u/s 132(4), but under this explanation as it stood at the time of introduction, deemed concealment of income assessed in consequence of search applied only if the Assessees had not had filed a return of income befor....
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.... the Amendment to explanation 5A by the Finance (no.2) Act 2009, (which received the assent of the president on 13.8.2009), that addition made in the course of assessment u/s 153A, will be deemed to be concealed income, even if the Assessee had filed a return of income earlier for the relevant Assessment Year. Prior to the amendment, if an assessee had already filed a return of income, the addition made in the assessment made u/s 153A cannot be deemed to be concealed income. 23. No doubt the amendment to Explanation 5A has been made with retrospective effect from 1.6.2007 and is applicable to searches initiated after 1.6.2007, the issue is whether this amendment to Explanation will apply to returns filed before the amended explanation became part of the Statute in 2009. In the instant case the Assessee had filed return of income on 7.7.2008. He filed revised return pursuant to notice u/s 153A on 12.11.2008. Thus both the original return as well as the revised return was filed before the amendment to Explanation5A became a part of the Statute. The Supreme Court in the cases of Addl CIT v Onkar saran (195 ITR 1) has held that in case of return filed in response to Notice u/s....
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.... at the time when the original return was filed for the assessment year in question and not the law as it stood on the date on which the return was filed in response to the notice under section 148. 12. This was followed by the Apex Court in the case of B.N.Sharma V/s. CIT (226 ITR 442). Therefore the law prevailing as on the date of filing of return should be the basis of levy of penalty and not on the subsequent amendment, even if the amendment is retrospective. The Delhi High Court in the case of Engineers Impex (P) Ltd. & Ors. Vs. D.D. Sharma (244 ITR 247) has held as under: "12. Penal provisions in the statutes have to be considered strictly in the sense that if there is a reasonable interpretation which would avoid the penalty, that interpretation ought to be adopted. When the legislature imposes a penalty, the words imposing it must be clear and distinct. [CIT vs. T.V. Sundaram Iyenger & Sons (P) Ltd. 1976 CTR (SC) 25 : AIR 1976 SC 255 : TC 68R.372]. 13. If by an amendment in an existing statute or by an enactment an ex post facto offence is created, it will be violative of Art. 20(1) of the Constitution. Art. 20(1) is designed to prevent a person ....