TaxTMI 
TaxTMI 
TaxTMI 
2019 (3) TMI 329
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....idated order being passed hereunder. 3. For the sake of convenience, we shall first take up ITA No. 159/Ahd/2017 concerning AY 2010-11 to appreciate the facts in perspective, issues involved and decision thereon. ITA No. 159/Ahd/2017 - AY 2010-11 4. Briefly stated, the assessee filed return of income originally under s.139(1) of the Act at Rs. 2,31,560/-. Thereafter, a search was conducted under s.132 of the Act in the case of Dhanjimama group of cases on 03.07.2012 which included the assessee as well. Consequent to the search action, incriminating materials were found and a statement was recorded under s.132(4) of the Act wherein the assessee admitted certain additional income based on documents found during the course of search. A proceeding under s.153A was initiated as a consequence. The assessee filed return of income under s.153A of the Act at Rs. 10,10,310/- in compliance of the notice and incorporated disclosure of Rs. 7,78,750/- in the return of income filed in response to such notice under s.153A of the Act. The assessment was completed under s.153A of the Act and the income declared in the said return was assessed as such. The AO however, imposed penalty of Rs. 2,18,7....
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....ly on the income assessed over and above the income returned under s.153A of the Act, if any. The learned AR for the assessee accordingly emphasized that imposition of penalty under s. 271(1)(c) of the Act towards additional income offered in the return filed under s.153A of the Act is not sustainable in law. The learned AR also relied upon the decision of the co-ordinate bench in the case of Dr. Naman A. Shastri vs. ACIT & Ors. IT(SS)A No. 561/Ahd/2011 order dated 29.09.2015; Shree Ram Corporation vs. DCIT ITA No. 726/Ahd/2015 order dated 09.06.2015 and Arvindbhai V. Bhanusali vs. ACIT IT(SS)A No. 271/Ahd/2013 & Ors. order dated 06.04.2017 to contend that Revenue is not entitled to impose penalty on income declared by the assessee himself under s.153A of the Act. It was thus submitted that the order of the CIT(A) sustaining the penalty under s. 271(1)(c) of the Act on unaccounted income suo moto included in the return filed under s.153A of the Act is not justified. 9. The learned DR for the Revenue, on the other hand, relied upon the orders of the revenue authorities and also relied upon the decision of the Hon'ble High Court of Calcutta in the case of CIT vs. Prasanna Dugar 371 ....
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....fall within the sweep of section 271(1)(c) unless the assessee is covered by 'exit route' provided in the Explanation-5 itself. Thus, the aforesaid proposition canvassed by the assessee that once the return is filed by the assessee after the search in response to notice issued under s.153A including undisclosed income discovered in the course of search, the assessee gets indefeasible right to shun away penalty proceedings on such undisclosed income is squarely at loggerheads with deeming fiction created under Explanation-5 for this purpose. Needless to say, this generic proposition towards non-applicability of penalty on undisclosed income, if seen in affirmative, will render the legislative fiat under Explanation-5 relatable to search cases as otiose and infructuous. As can be seen, the benefit of immunity provided under Explanation-5 is well defined and structured. As provided, it is available only in respect of such year where the due date of filing of the return has not expired before the date of search subject to fulfillment of conditions as contemplated in the said Explanation. 9.2. We shall now advert to the decision in the case of Kirit Dahyabhai Patel (supra) referred to....
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....isfaction of conditions as provided for its non-applicability as enumerated under clause(2) of Explanation-5. 9.4. Needless to say, sentences used while rendering a judgment cannot be read in isolation and their purport and contents are derived from their context. As noted, the law is codified for applicability of penalty in search cases. The legislature has made conscious distinction between the cases where the return of income has already been filed prior to search qua the cases where the return is yet to be filed and has put them on a different pedestal. It is trite law that a judgement cannot be read out of context in which the question arose for decision in that case. It is neither desirable nor permissible to pick out a word or a sentence from the judgment of a Court divorced from the context of the question in consideration and to treat it to be the complete law declared by the Court. A judgment must be read as a whole and the observations from the judgment have to be considered in the light of questions which were presented before the Court. A decision of the Court takes its colour from its question in which it is rendered as enumerated in CIT vs. Sun Engineering works Pvt.....
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....e declared by the assessee in the return filed under s.153A of the Act (notwithstanding the fact that such return filed after search includes additional nature based on incriminating material and oral evidence under s.132(4) of the Act). 12. Pertinently, the plea raised on behalf of the assessee, if admitted, would render provisions of Section 271AAA/271AAB of the Act otiose and infructuous as noted in the case of Vijay K. Shah (supra). 13. We also take note of the plea raised on behalf of the assessee that Section 153A of the Act opens with a non obstante clause which seeks to exclude the application of, inter alia, Section 139 of the Act and thus, in effect, the revised return filed under s.153A of the Act takes place of the original return under s.139 of the Act for the purposes of all other provisions of the Act. It is consequently the claim of the assessee that once the assessee files a revised return under s.153A of the Act, the revised return will be treated as the original return filed under s.139 of the Act in so far all other provisions of the Act are concerned. As noted earlier, Section 271AAA and Explanation 5A to Section 271(1)(c) of the Act deems culpability in appr....