2016 (7) TMI 938

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....g the penalty levied u/s.271(1)(c) of the IT Act by holding that in case, the additional income is disclosed in furtherance to section 153A notice, the same has to be treated as one filed u/s. 139(1) and unless any addition thereupon is made, it is not a case of penalty u/s.271(1)(c) of the Act? 2. Brief facts are that for the assessment year 2005-2006, the respondent assessee was subjected to search operation under section 132 of the Income Tax Act("the Act" for short). Based on such investigation, proceedings under section 153A were initiated. Notice was issued on 30.11.2007 in compliance to which the assessee filed the return declaring total income of Rs. 2.13 crores (rounded off) as against the return of 6.93 lacs filed in the origin....

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....ition of Rs. 27,750/- ( supra). Therefore, we follow the jurisdictional High Court and delete the impugned penalty. Coming to the aforesaid residual addition, the case file reveals that the assessee had already disclosed its all necessary details so as to qualify for immunity u/s.271(1)(c) Explanation 5. The assessee's grounds challenging imposition of the impugned penalty succeed." 3. Learned counsel Shri Parikh for the department contended that in terms of explanation 5 of section 271(1)(c), the assessee was liable to pay penalty on the income disclosed in response to notice under section 153A of the Act. The Tribunal committed an error in deleting the penalty on the ground that there was no further addition to such disclosed incom....

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.... search, he shall, for the purposes of imposition of a penalty under clause (c) of subsection (1) of this section, be deemed to have concealed the particulars of his income or furnished inaccurate particulars of such income, [unless,- (1) such income is, or the transactions resulting in such income are recorded, (i) in a case falling under clause (a), before the date of the search; and (ii) in a case falling under clause (b), on of before such date, in the books of account, if any, maintained by him for any source of income or such income is otherwise disclosed to the Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner before the said date; or (2) he, in the course of the search, makes....

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.... other valuable article or thing, explanation 5 would not apply. This becomes clear when the legislature for the period post 1st June, 2007 has enacted explanation 5A which reads 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 (a) 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 part) his income for any previous year; or (b) any income based on any entry in any books of account or other documents or transactions represents his income (wholly or in part....