TaxTMI 
TaxTMI 
TaxTMI 
2016 (5) TMI 365
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....e CIT(A) erred in not appreciating the fact that the additional income was declared by the assessee by filing return of income u/s.153A and same was filed consequent to the search operation. During the course of search operation a cash of Rs. 15 lac were seized from the locker maintained by the assessee with SBI, Vaijapur and Rs. 37.97 lac from locker maintained by the assessee with PNB, Vaijapur and 1.49 lac from the residence of the assessee were found. During the course of assessment proceedings, assessee has declared additional income of Rs. 42 lac in the return of income filed u/s.153A of the Act. Such income was not shown in the original income filed u/s.139(1) of the I.T. Act. Therefore, the addition was made on the basis of such unaccounted cash found during the course of search operation. Additional income was offered by the assessee after it was detected by the department during the course of search operation. During the penalty proceeding assessee could not produce any evidence of sources of such cash. 3. Under the facts and circumstances of the case the CIT (A) erred in not appreciating the fact that the assessee was aware of such cash kept in the various locker and ....
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....concealed the particulars of income, in view of Explanation 5 to section 271(1)(c) of the Act and penalty proceedings in this regard were initiated. Thereafter, while passing penalty order under section 271(1)(c) of the Act, the Assessing Officer noted that the return was filed by the assessee on 04.12.2007 i.e. after search and seizure operation and after the due date for furnishing the return of income under section 139(1) of the Act and since the additional income of Rs. 42 lakhs was offered as a result of search and seizure operation, case of assessee was held to be covered under Explanation 5 to section 271(1)(c) of the Act. The Assessing Officer was of the view that the benefit of Explanation 5 to section 271(1)(c) of the Act could not be given to the assessee as the income declared in the return of income was for the previous year 2006-07, which was to end after the date of search. The objection of the Assessing Officer was that no such income was recorded in the books of account maintained by the assessee and further, the assessee has also not specified the manner in which such income was derived while recording of statement under section 132(4) of the Act and also the fact....
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....s concerned. He thus, held that the said requirement was applicable only to abnormal transactions, therefore, the assessee was held to be eligible for immunity from levy of penalty for concealment. 6. As regards clause (2) of the said Explanation 5 to section 271(1)(c) of the Act, the contention of the Assessing Officer was that the assessee has failed to state the manner in which the said additional income was earned, was found to be not correct because the Assessing Officer himself had mentioned in para 6 of his order the manner the income was claimed to be earned by the assessee. Applying the ratio laid down by the Hon'ble Gujarat High Court in CIT Vs. Mahendra C. Shah (supra), the CIT(A) held that the assessee was entitled to the immunity from levy of penalty under section 271(1)(c) of the Act in terms of clause (2) of Explanation 5 to section 271(1)(c) of the Act. Vide para 4.2 at page 7 of the appellate order, the CIT(A) further held that the assessee had disclosed full facts regarding income offered to tax in the return of income filed under section 153A of the Act and he had acted bonafidely and cooperated in the assessment and also penalty proceedings. In the absence of a....
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....nd also penalty was levied since the additional income was offered because of search. Referring to para 6 of the order levying penalty under section 271(1)(c) of the Act, the learned Authorized Representative for the assessee pointed out that no specific default has been pointed out by the Assessing Officer that whether it was case of concealment of income or furnishing of inaccurate particulars of income. It was further pointed out that even in the notice issued for levy of penalty and the order levying penalty, there is no specific default mentioned whether it is the case of concealment or furnishing of inaccurate particulars of income. In this regard, the learned Authorized Representative for the assessee pointed out that the entire proceedings were not legal. Reliance in this regard was placed on the ratio laid down by Pune Bench of Tribunal in Sanjog Tarachand Lodha Vs. ITO in ITA Nos.688 & 689/PN/2014, relating to assessment years 2007 -08 and 2008-09, order dated 31.08.2015. Further, reliance was placed on the ratios laid down by Mumbai Bench of Tribunal in M/s. Parinee Developers Pvt. Ltd. Vs. ACIT in ITA No.6772/M/2013 , relating to assessment year 2009-10, order dated 11.....
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....139(1) of the Act, so the assessee was deemed to have concealed particulars of income, in view of Explanation 5 to section 271(1)(c) of the Act, hence, penalty proceedings under section 271(1)(c) of the Act were separately initiated. First of all, the observations of Assessing Officer vis-à-vis original return filed under section 139(1) of the Act are not correct. Search and seizure operations under section 132 of the Act were conducted at the premises of assessee on 22.11.2006 . Thereafter, the assessee filed his return of income showing total income of Rs. 42,74,721/- on 04.12.2007 which consisted of house property income, business income, other sources including additional income of Rs. 42 lakhs aggregating to Rs. 46,00,721/- and after claiming deduction, balance income was declared. The assessee admittedly, had filed return of income for the year under consideration belatedly on 04.12.2007 and also filed the same in response to notice issued under section 153A of the Act. The assessee had not filed any return of income within due date, hence, we find no merit in the observations of Assessing Officer in this regard that the original return was filed under section 139(1) o....