TaxTMI 
TaxTMI 
2018 (8) TMI 648
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....o search whereas the assessee either did not file returns originally or concealed income was not admitted in the original return. 4) The CIT(A) has overlooked decision of the jurisdictional High Court in P.C. Joseph & Bros. vs. CIT (Ker) 243 ITR 818 (sic) where it was held that filing return of income admitting income after detection by the department does not absolve the assessee from penalty. 3. The facts of the case are that there was a search u/s. 132 of the I.T. Act at the business premises of the assessee on 05/08/2010 which unearthed a large amount of unaccounted money and other assets. On the basis of the findings of the search and examination of the seized material, notice u/s. 153A of the Act was issued on 18/02/2011. Consequently, assessments were framed u/s. 143(3) r.w.s. 153A of the Act. Finally, penalty was levied u/s. 271(1)(c) of the Act. For clarity, we reproduce the income returned, income assessed, income after giving effect to the CIT(A) order and the penalty levied as follows:- Asst. Year Income as per Return Income fixed by the A.O. Income fixed after giving effect to the appellate orders Difference in assessed Income & Returned Income P....
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.... The AO has levied penalty on interest and other components also. The appellant contended that the penalty is leviable only on the amount of tax sought to be evaded. Contention of the appellant is correct. The AO is directed to calculate the tax sought to be evaded and levy penalty on tax component alone. Since there is no difference between Return Income in A.Ys. 2005-06, 2007-08, 2009-10 and 2010-11 and the assessed income, penalty-levied in these four years are deleted." 5. Against this, the Revenue is in appeal before us. The Ld. DR submitted that in this case, penalty is levied u/s. 271(1)(c) of the Act on the assessee to make good an omission on the part of the assessee to voluntarily disclose the income by filing return of income u/s. 139 of the Act. She submitted that the assessee has not filed the return of income u/s. 139 of the Act and deliberately concealed the income and only consequent to search action u/s. 132 of the Act, the assessee filed the return of income u/s. 153A of the Act and the return filed by the assessee u/s. 153A was not voluntary disclosure but was as a result of detection by the department. Therefore, filing of return of income u/s. 153A ....
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....he owner of 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 utilizing wholly or in part) his income, - (a) for any previous year which has ended before the date of the search, but the return of income for such year has not been furnished before the said date or, where such return has been furnished before the said date or, where such return has been furnished before the said date, such income has not been declared therein; or (b) for any previous year which is to end on or after the date of the search, then notwithstanding that such income is declared by him in any return of income furnished on or after the date of the search, he shall, for the purposes of imposition of a penalty under clause (c) of sub-section (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, before the date of search; and (ii) in a case falling under clause (a)....
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....eemed to have concealed the particulars of his income or furnished inaccurate particulars of such income." 7.2 For searches initiated under section 132 of the Act on or after first day of June, 2007, this Explanation 5A was applicable, which was introduced by the Finance Act, 2007 w.e.f 01.06.2007. The original Explanation 5A provided that where in the course of search, the assessee was found to be the owner of any money, bullion, jewellery, valuable articles or things and the assessee claims that such asset had been acquired by him by utilizing wholly or in part his income for any previous year or any income is based on any entry in books of account or other documents or transactions and he claims that the same represents his income for any previous year, then where the period has ended before the date of search and the due date for filing the return of income for such year has expired and the assessee has not filed the return of income, then notwithstanding that such income is declared by him in any return of income furnished on or after the date of search, he shall for the purpose of imposition of penalty under section 271(1)(c) of the Act, be deemed to have concealed the parti....
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....lent to the value of money, bullion, jewellery, valuable articles or things from the possession of the assessee during the course of search conducted on or after first day of June, 2007. Further, where any income is based on any entry in any books of account or other documents or transactions and he claims that all the above said represents his income for any previous year, then the Explanation lays down to that extent, the person would be deemed to have concealed his particulars of income or furnished inaccurate particulars of income. Applying the said proposition to the facts of the present case, we hold that the income offered by the assessee in the income filed pursuant to issue of notice under section 153A of the Act, is the income detected during the course of search and seizure operation. The case of the assessee is squarely covered by the provisions of Explanation 5A to section 271(l)(c) of the Act and the assessee is exigible to levy of penalty on such income which was detected during the course of search and seizure operation, which in turn has been offered by the assessee in return of income filed pursuant to notice issued under section 153A of the Act. 7.4 Since the as....