TaxTMI 
TaxTMI 
2006 (8) TMI 141
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....the assessment year 1993-94?" Briefly, the facts of the case are that search and seizure operation was carried out at the residential and business premises of the assessee, who was in the business of property dealing, on March 26, 1993. During the course of search, a large number of books of account and other incriminating documents were found from the business as well as residential premise. Undisclosed cash and jewellery were also found and seized. The statement of the assessee under section 132(4) of the Income-tax Act, 1961 (for short "the Act"), was also recorded wherein the assessee offered to surrender undisclosed income of Rs. 10 lakhs for the purpose of taxation, which included the cash and jewellery found at the time of search, deposits in the bank, investment in household articles and the income reflected from various transactions recorded in the seized papers. Thereafter, on January 19, 1995, a return for the assessment year 1993-94 was filed declaring an income of Rs. 10,25,530 which included the surrendered income. This return was filed in response to a notice under section 142(1) of the Act. In the assessment, certain additions were made by disallowing certain ....
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....pellant defaulted in clearing the tax along with interest on the amount so surrendered. One of the basic conditions of Explanation 5 having not been complied with, therefore, I find merit in the order of the Assessing Officer and the penalty worked out at a sum of Rs. 4,42,928 is confirmed." Before the Tribunal to explain the non-payment of tax and interest along with the return, the only plea raised by the assessee was that he did not have sufficient funds to pay the tax. The Tribunal also dismissed the appeal of the assessee by recording the following observations: "We have considered the rival submissions and are of the view that the assessee has not complied with the conditions specified in Explanation 5 to section 271(1)(c) of the Income-tax Act. The authorities below have referred to Explanation 5 to section 271(1)(c) of the Income-tax Act and are of the specific view that the assessee has not paid the taxes together with interest. in respect of the concealed income. It is essential conditions before getting immunity from penalty. The assessee even if made a statement under section 132(4) of the Income-tax Act in order to surrender Rs. 10 lakhs as concealed income but h....
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...., 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 or 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 Chief Commissioner or Commissioner before the said date; or (2) he, in the course of the search, makes a statement under subsection (4) of section 132 that any money, bullion, jewellery or other valuable article or thing found in his possession or under his control, has been acquired out of his income which has not been disclosed so far in his return of income to be furnished before the expiry of time specified in sub-section (1) of section 139, and also specifies in the statement the manner in which such income has been derived and pays the tax, together with interest, if any, in respect of such income." We have heard learned counsel for the parties and perused the record. The only contention raised by learned counsel for the assessee is that there is no requirement for payment of tax and interest thereon along with the return. If the assessee ha....
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....ides for levy of penalty, inter alia, for concealment of particulars of income, which could be up to three times the amount of tax sought to be evaded. By adding Explanation 5 to section 271(1)(c) of the Act, a concession is sought to be given to an assessee, who during the course of search and seizure operation, is found to have concealed particulars of his income, in case he surrenders such income by making a statement during the course of search that such undisclosed money, bullion, jewellery or other valuable article or thing found at the time of search has been acquired by him out of his undisclosed income and further specifies in the statement the manner in which the income has been derived and pays the tax together with interest, if any, in respect of such income. It is not in dispute that certain undisclosed assets were found from the premises of the assessee at the time of search and besides that certain books of account and other documents were also found from which it was evident that the assessee had earned undisclosed income as well. In the statement made under section 132(4) of the Act on the date of search, the assessee surrendered a sum of Rs. 10 lakhs as conceal....