TaxTMI 
TaxTMI 
2014 (4) TMI 1259
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....l is finally heard and disposed off." 2. The brief facts of the case are that during assessment, it was noticed that the assessee disclosed an additional income of Rs. 71,00,000/- through filing of revised return in response to notice u/s 153A. This income was not disclosed at the time of filing of original return u/s 139. The A.O. has treated this sum of Rs. 71,00,000/- as assessee's income from undisclosed sources and initiated penalty proceedings u/s 271(1)(c) by issuing notice under that section on 27.12.2011. 3. The assessee on being confronted with the levy of penalty u/s 271(1)(c) submitted his arguments before the Assessing Officer as under: "In response to penalty notice u/s 271(1)(c) dated 25.04.2012, it is submitted that assessee filed his original return u/s 139 declaring an income of Rs. 5,35,401/-. Search and seizure operation has been conducted at the residential as well as business premises of assessee on 06.11.2009. Thereafter, notice u/s 153A was issued, in response to which assessee filed his revised Income Tax Return declaring an income of Rs. 76,35,440/-. While passing order u/s 153A of the Act, your goodself accepted the return filed by the assessee. Si....
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.... date of search, will not provide the immunity to the assessee from imposition to the penalty under Section 271(1)(c) of the Act unless the conditions mentioned the statement under Section 132(4) of the Act, as well as the conditions as laid down in Expln. 5, Sub-clause (2) to Section 271 are fulfilled." 4.1. The Ld. CIT(A) was of the opinion that in order to seek immunity under Expln. 5 to section 271(1)(c) of the Act, the assessee was required to fulfill the conditions as specified in Expln. 5, sub-cl.(2) to secion 271(1)(c) of the Act as well as the conditions specified in his statement u/s 132(4) of the Act while seeking Immunity from the Department. Ld. CIT(A) further stated that he has perused the provision of the Act, which was sought to be relied upon the assessee to escape the liability of the penalty u/s 271(1)(c) of the Act and are of the opinion that the case of the assessee does not fall in any of the two exceptions carved out in the Expln. referred to above. Admittedly, the income which was surrendered by the assessee was not disclosed by him in his return of income before the search took placed. Return for the income for the assessment year in question was not file....
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....income returned by the assessee in response to notice issued under section 153A/153X. It was therefore, proposed that the original return of income filed u/s 139 was of no relevance in deciding issue of concealment. The AR in support of his argument placed reliance upon the decision of the Hon'ble ITAT, Delhi in the case of Prem Arora vs. DCIT 24 Taxman.com 260. The decision of Hon'ble Calcutta High Court relied upon by the appellant has not taken into account explanation 5 or 5A to section 271(1)(c) which had been enacted specifically to cover the issue of concealment in respect of returns filed in consequence of search operations. The order of Hon'ble ITAT/CIT(A) approved by the Hon'ble High Court lays emphasis on highlighting the fact that returned income in response to notice u/s 153A has been assessed as such. The facts have been equated with voluntary declaration of income by assessee or additions on estimate basis. The reliance placed in the said judgment in terms of reference of decision of Hon'ble Punjab & Haryana High Court in the case of Hargipal Singh vs. CIT (2002) 177 CTR (P&H) 580 : (2002) 258 ITR 85 (P&H) is to take support with a view to treat assessments as "agree....
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....ed and assessed income. The burden is then on the assessee to show otherwise, by cogent and reliable evidence. When the initiation onus placed by the explanation, has been discharged by him, the onus shifts on the revenue to show that the amount in question constituted the income and not otherwise; The assessee has only stated that he had surrendered the additional sum of Rs. 40.74 lakhs with a view to avoid litigation, buy peace and to channelize the energy and resources towards productive work and to make amicable settlement with the income tax department. The status does not recognize those types of defenses under explanation 1 to section 271(1)(c) of the Act. It is trite law that the voluntary disclosure does not release the assessee from the mischief of penal proceedings. The law does not provide that when an assessee makes a voluntary disclosure of his concealed income, he had to be absolved from penalty: On the facts, the surrender of income is voluntary in the sense that the offer of surrender was made in view of detection made by the AO in the search conducted in the sister concern of the assessee. In that situation, it cannot be said that the surrender o....
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....nce Act, 2007 gave immunity to the assessee in respect of undisclosed income based on entries recorded in seized material. In the case of the assessee, the search was conducted on 22.11.2006 and cash of Rs. 1,11,45,350/- was found from the possession of the assessee. The assessee had undisclosed commission income as well as purchases and sales as seen from the statement of affairs made by the assessee based on seized material. The assessee had drawn cash flow statement for the entire period of six years in order to determine undisclosed income based on seized material for each of six assessment years. Explanation 5 to section 271(1)(c) of the Act cannot be invoked in assessment year 2004-05 merely on the presumption that the assessee might have been in possession of cash throughout the period covered by search assessments. The income offered to tax u/s 153A for A.Y. 2004-05 is based on entries recorded in the seized material. Unlike provisions of Explanation 5A, the provisions of Explanation 5 cannot be invoked in assessment year 2004-05 in respect of entries recorded in seized material. Thus, invoking of explanation 5 in assessment year 2004-05 is based on presumptions, surmises a....
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....income, which has been admitted by the assessee. On the contrary, the ld. CIT(A), Ludhiana has upheld the penalty imposed by the AO by invoking Expln. 5A to section 271(1)(c) of the Act. Accordingly, on perusal on records, we find that both the authorities below have different views on the penalty imposed u/s 271(1)(c) of the Act. It was submitted by the ld. counsel for the assessee that due date for filing the return of income had not expired and therefore, the said Expln. cannot be invoked. In the present case, the due date of filing of return of Income under section 139(1) was 31/07/2009 and under section 139(4) was 31.03.2011. The search in the present case had taken place on 06.11.2009 and by this date due date under section 139(4) had not expired and accordingly fiction of Expln. 5A to section 271(1)(c) cannot be brought into play. The assessee filed the return u/s 139(4) on 26.03.2010 and filed the return in response to notice u/s 153A of the Act on 31.03.2011 i.e. within due date u/s 139(4) of the Act. Section 139(4) provides for extension of period of due date in the circumstances mentioned therein, which enlarges the scope provided under section 139(1). Section 139(4) pro....
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....s are supported by the decision of ACIT vs. Shri A.N. Annamalaisamy in ITA No.1634/Mds/2012 decided by the ITAT Chennai Bench, dated 05.02.2013, which has been placed on record (PB 28 to 32). The relevant part in para 7 at PB 31 is reproduced for the sake of convenience as under: "7. We find that the Assessing Officer was carried away by the original return filed by the assessee, wherein originally the income admitted in the course of search was not returned by it. But the fact is that the assessee had filed a revised return before completing the assessment. When that is the case, the first return filed by the assessee is a non est. The only valid return is the revised return filed by the assessee. In that return, the amount admitted by the assessee at the time of search was offered for taxation. The assessee has paid the tax; he has paid the interest. He has not preferred any quantum appeal. He has also explained about the business and stated that the jewellery was acquired over a period of time. When all the pieces are put together, we find that the Commissioner of Income-tax(Appeals) is justified in holding that there is no ground to levy penalty in the present case under sec....