TaxTMI 
TaxTMI 
2016 (6) TMI 422
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....Rs. 15 lacs for the year under consideration on account of unaccounted/undisclosed sales and included it in the return of income filed for the assessment year under consideration in response to notice under section 153A. Thus the assessee enhanced the income declared in the original return of income filed under section 139 by Rs. 15 lacs. The AO initiated penalty proceedings u/s 271(1)(c). Before imposing penalty u/s 271(1)(c), the AO gave reasonable opportunity of being heard. In response to the notices, the assessee filed reply on 15.03.2011 in the Office of the AO and requested to allow the time for submission. The AO again gave show cause notice on 17.03.2010 and case was finally fixed for 29.03.2011. The assessee filed the reply on 28.....
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....ty. The AO held that on the basis of statement recorded of Shri Ajay Agarwal by which surrender on behalf of the assessee being partner of firm had been made, no undertaking has been given the department that no penalty would be imposed in case of the assessee in view of surrender of unaccounted/undisclosed by him. Imposition of penalty in cases governed by provisions of section 271(1) and Explanation-5A of it and not by any other consideration. In the present case of the assessee, penalty proceedings u/s 271(1)(c) had been initiated on account of concealment of income to the extent of Rs. 15 lacs as its case was specifically covered by the provisions of Explanation 5A to section 271(1). As per this section, penalty under section 271(1)(c) ....
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....e initiation of penalty proceedings has been held to be justified under explanation 1 to section 271(1)(c) of the IT Act in that case. However, the facts prevailing in the present case are distinguishable from that case. 5.9. I find that the judgment given by the Hon'ble ITAT Jodhpur Bench is also not applicable to the facts of this case, as the ITAT had not considered in its order the provisions of Explanation-5A to Section 271(1)(c) of the IT Act. The other decisions cited by the appellant are also relating to the period before the insertion of Explanation-5A to section 271(1)(c) of the IT Act. It would be relevant at this stage to consider the provisions of Explanation-5A to Section 271(1)(c) of the IT Act, which were in the sta....
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....n account of unaccounted sales and thus the requirement of clause (ii) of the above Explanation-5A that "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", could be said to have been satisfied in real sense. The disclosure in this case has been made by the appellant on account of his inability to explain the entries. 5.11. In view of the above discussion, I find that the provisions of Explanation-5A to Section 271(1)(c) of the IT Act are clearly applicable to the facts and circumstances of this case. Accordingly, I confirm the levy of penalty of Rs. 5,04,900/- imposed by the AO u/s 271(1)(c) of the IT Act, 1961." 4. Now the assess....
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....2(4) of the IT Act. He further argued that under similar facts and circumstances which came before the Hon'ble Delhi High Court in the case of Raj Pal Bhatia (2011) 333 ITR 315 (Delhi) wherein the Hon'ble Court held that statement could not be construed as material found during the course of search operations for the purpose of Chapter XIV-B. The case law applied by the ld. CIT (A) has mis-placed the fact that in that case certain documents pertaining to share applications were found during the course of survey, whereas in assessee's case no incriminating documents were found. Therefore, case law relied upon by the ld. CIT (A) is not applicable. He further argued that ITAT Mumbai in the case of financial Technologies (I) Ltd., (2015) 61 Tax....