TaxTMI 
TaxTMI 
2016 (1) TMI 463
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.... stating that the provisions of Section 271(1)(c) of the Act are not attracted to the facts of the case so as to levy penalty under that section. 2. Briefly stated, there were search and seizure operations on 15-09-2008 in the residential premises of Shri B. Ramdas Goud and other assessee Shri Raghuveer Singh, was an associate. Proceedings u/s. 153A were initiated in the case of Shri B. Ramdas Goud, whereas proceedings u/s. 153C were initiated in the case of Shri Raghuveer Singh. After the search and seizure operations, both the assessees have declared the incomes consisting of commission, capital gains, rent, interest, salary and lease income etc., for AYs. 2002-03 to 2008-09. Consequent to the declaration given to the Dy. Director of I....
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....anation to be given by assessees, levied penalty of Rs. 1,06,000/- in the case of Shri B. Ramdas Goud and Rs. 7,000/- in the case of Shri Raghuveer Singh. 5. Before the Ld. CIT(A), it was contended that provisions of Section 271(1)(c) are not attracted as the income returned were accepted as such and there was no incriminating material found during the search. However, Ld. CIT(A) relying on the provisions of Explanation-5A of Section 271(1)(c), confirmed the penalty. 6. Before us, Ld. Counsel submitted that CIT(A) was wrong in considering that Explanation-5A is applicable. As far as the case of Shri Raghuveer Singh is concerned, he is not an assessee who has been searched. Proceedings are initiated u/s. 153C, therefore, provisions of ....
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....and answer are as under: Q.No. 3: During the search and seizure proceedings, the search team has not seized any material or Books of Account/money/bullion or any article or thing from your residence. Are you confirming the same? Ans: Yes, I am confirming that no article or thing or any Books of Account/documents/lose sheets are seized from my residence during the course of search and seizure operations. The above question and answer recorded in Sri Ramdas Goud case indicate that there was no incriminating material or any assets found consequent to the search. 8. Explanation-5A of Section 271(1)(c) is specifically made applicable for all the searches initiated u/s. 132 on or after first day of June, 2007. The search i....
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....f sub-section (1) of this section, be deemed to have concealed the particulars of his income or furnished inaccurate particulars of such income." 9.1. 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 Ju....
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....een clarified that the scope extends to the cases where the assessee has filed the return of income for any previous year and the income found during the course of search relates to such previous year and had not been disclosed in the said return, then such income shall represent deemed concealment of income and assessee shall be liable to pay penalty under section 271". 11. Thus, as per the existing Explanation-5A prior to the amendment by Finance (No.2) Act 2009, if an Assessee had filed the return of income for the years covered by the search, then the addition made shall not be considered as deemed concealment. It is only by the Amendment to explanation 5A by the Finance (No.2) Act 2009, that addition made in the course of assessment....