TaxTMI 
TaxTMI 
TaxTMI 
2015 (10) TMI 2470
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....admitted an income of Rs. 2,92,384. Consequent upon search and seizure operations and in response to notice under S.153A dated 17.11.2011, assessee filed return of income on 14.8.2012, admitting total income of Rs. 19,07,254, which included income admitted of Rs. 16,14,870 on account of undisclosed investment in Kisan Viskas Patra, interest on FDRs and bogus gifts received. Accepting the said return, assessment was completed on a total income of Rs. 19,07,254, vide order of assessment dated 25.3.2013 passed under S.143(3) read with S.153A of the Act. 3. While completing the assessment as above, the Assessing Officer also initiated proceedings for imposition of penalty under S.271(1)(c) of the Act. In response to the penalty notice, assessee pointed out that an amount of Rs. 16,14,870 was admitted in the course of statement under S.132(4), and the same has also been disclosed in the return of income filed in response to notice under S.153A for assessment year 2005-06, and the said return has been accepted by the Assessing Officer. Once the income declared in the return filed in response to the return under S.153A was accepted by the Assessing Officer in the assessment completed the....
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....ames of the family members. Thus, on facts, the assessee has admitted certain income and has filed the return in order to settle the matter consequent upon the search conducted. However, it was also contended that provisions of Explanation 5A to S.271(1)(c) cannot be invoked, as he has filed the original return much before the provisions were amended and relied on the coordinate bench decision of the Tribunal in the case of Dilip Kedia V/s. ACIT (40 Taxman.com.102)- (Hyd) dated 26.7.2013. 7. The Learned Departmental Representative, however, submitted that Explanation 5A of S.271(1)(a) will apply, as penalty has to be calculated with reference to the original return, and the assessee has filed the return admitting enhanced income in response to notice under S.153A. He supported the orders of the Assessing Officer and the CIT(A). 8. We have considered the rival submission and perused the relevant material on record. We find that the assessee has originally field the return under S.139(1) of the Act on 10.10.2005 declaring an income of Rs. 2,92,384. In response to the notice under S.153A dated 17.11.2011, issued subsequent to the search action of 8.9.2010, for the year under appeal,....
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....ithstanding 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 before the due date for filing of return in the respective years. Explanation 5A was further amended by Finance Act (no.2) 2009 as under: "Explanation 5A.- Where, in the course of a search initiated under section 132 on or after the 1st day of June, 2007, the assessee is found to be the owner of- (i) 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 ....
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....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 148, law prevailing as on the date of filing of return will govern the levy of penalty by holding as under: "Even in a case where a return filed in response to a notice under section 148 involved an element of concealment, the law applicable would be the law as it stood 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." 10. In this case, even though both the returns were not filed before the Explanation 5A was introduc....
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....l 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 from being prosecuted for an act or omission which was considered innocent when done. [G.P. Nayyar vs. State (Delhi Admn) AIR 1979 SC 602]. An Explanation is appended to a section to explain the meaning of the words contained in the section and normally is to be read to harmonise with and to clear up any ambiguity in the main section. However, in the present case, the Explanation inserted has widened the scope of the main section and has created an obligation breach of which entails penalty and subjects to criminal prosecution. This Explanation to s. 194A has been inserted w.e.f. 1st June, 1987, and obviously is p....