2004 (7) TMI 86

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....ed on its premises? (ii) Whether the time lag between making the offer to surrender during the statement under section 132(4) and filing of return for offering surrendered amount for taxation has any effect on the operation of Explanation 5 to section 271(1)(c)? (iii) Whether there is any requirement of the time when tax and interest on the income surrendered during the statement made under section 132(4) is to be paid for availing of the benefit of Explanation 5 to section 271(1)(c); and whether the length of period between the statement under section 132(4) and the payment of tax and interest on income so surrendered has any effect on operation of Explanation to section 271(1)? (iv)In case the particulars of the income earned by ....

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....with interest in time, the benefit of Explanation 5 to section 271(1)(c) of the Act cannot be extended to the assessee. Mr. Vineet Kothari, learned counsel for the assessee, brought to our notice the relevant facts that the assessee during the search has surrendered the amount of Rs. 22,32,000 for tax and that has been paid before completion of the assessment along with interest. Therefore, he is entitled to the benefit of Explanation 5 to section 271(1)(c) of the Act. He has placed reliance on the decision of the Delhi High Court in the case of CIT v. Chhabra Emporium [2003] 264 ITR 249. On the other hand, Mr. K.K. Bissa, learned counsel for the Department, submits that as the returns are not filed in time and the tax along with interes....

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....is hereby set aside and that of the Assessing Officer restored." The facts are not in dispute that search under section 132 of the Act has been started from July 29, 1987, and that has been concluded on August 1, 1987, and during the course of search, the assessee has surrendered Rs. 22,32,000. The relevant part of the statement of the assessee reads as under: This statement has been given on August 1, 1987. Sub-clause (2) of Explanation 5 to section 271(1)(c) of the Act provides that during the course of search, in a statement under sub-section (4) of section 132, if the assessee has disclosed concealed income and the manner in which it has been derived and if the tax is paid on that income along with interest, then there will be no ....