TaxTMI 
TaxTMI 
2020 (1) TMI 609
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....statement of the assessee under Section 132(4) of the Income-tax Act was recorded on 28.04.2011. He was confronted with the loose-papers and, in reply to question no.10, it was disclosed by the assessee that a land was sold for a consideration of Rs. 9,34,56,997/-; out of that, Rs. 5,23,27,500/- was received through cheque and balance amount of Rs. 4,11,29,497/- was received in cash. The assessee has 1/3rd share in the land and cash component falling to his share at Rs. 1,13,96,770/- was admitted as his undisclosed income. In response to notice under Section 153A of the Act, assessee has filed his return and included the amount of Rs. 1,13,96,770/- declared in the statement under Section 132(4) of the Income-tax Act. The return was accepted as it is and penalty proceedings were initiated by the learned Assessing Officer. The learned Assessing Officer has imposed penalty under Section 271(1)(c) of the Act vide order dated 25th September 2014 amounting to Rs. 23,47,735/-. The learned Assessing Officer, while concluding as to how the penalty is imposable upon the assessee, considered the Explanation 5A appended to Section 271(1)(c) of the Act as well as the facts unearthed during the ....
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....sessee had claimed that the same represented his income of Rs. 1,13,96,773/- for the previous year relevant to A.Y. 2010-11. iv) The relevant previous year has ended on 31/03/2010 i.e. before the date of search (27/04/2011). v) The due date for filing the return of income for A.Y. 2010-11 has expired at the time of search. vi) The income of Rs. 1,13,96,773/- was not declared by the assessee in his original return filed u/s,139 but the same has been declared by the assessee for the first time in his return filed on 30/03/2012 u/s. 153 A of the Act. vii) The disclosure was not voluntary declaration but was made in consequence of the search initiated u/s 132 and was based on certain incrementing documents found at the time of search. In the light of above narrated facts it is clear that as per the provisions of section 271(1)(c) explained vide Explanation 5A, as amended w.e.f. 01-06- 2007 by Finance Act 2009 the assessee has deemed to have concealed the particulars of his income to the extent of Rs. 1,13,96,770/- in respect of unaccounted income in capital gain on sale of land." 3. Appeal to the learned CIT(A) did not bring any relief to....
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.... said is offered through his statement the assessee had offered the same to tax. The said offer was thus made subject to the understanding that no penalty / prosecution proceedings would be initiated and therefore in order to buy peace and to avoid any further litigations this return is filed showing therein the above referred income as per the statement. In view of the said understanding the assessee filed his return of income & offered said income under the head capital gains. That the Ld. A.O has assessed the said income and thus as there is no variation to returned income." He pointed out that this issue has not been adjudicated by both the authorities. 6. The learned Departmental Representative, on the other hand, relied upon the orders of the Revenue Authorities. With regard to first fold of contentions of learned Counsel for the assessee, he pointed out that, during the course of search, loose-papers inventorised as Annexure B1 to B3 were found. The assessee has admitted the transactions i.e. sale of land. He has admitted receipt of cash over and above the consideration stated in the sale deed. Thus, there was direct evidence found during the course of search exhibitin....
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....come or furnished inaccurate particulars of such income. 271AAA. (1) The Assessing Officer may, notwithstanding anything contained in any other provisions of this Act, direct that, in a case where search has been initiated under section 132on or after the 1st day of June, 2007 but before the 1st day of July, 2012, the assessee shall pay by way of penalty, in addition to tax, if any, payable by him, a sum computed at the rate of ten per cent of the undisclosed income of the specified previous year. (2) Nothing contained in sub-section (1) shall apply if the assessee,- (i) in the course of the search, in a statement under sub-section (4) of section 132, admits the undisclosed income and specifies the manner in which such income has been derived; (ii) substantiates the manner in which the undisclosed income was derived; and (iii) pays the tax, together with interest, if any, in respect of the undisclosed income. (3) No penalty under the provisions of clause (c) of sub-section (1) of section 271 shall be imposed upon the assessee in respect of the undisclosed income referred to in sub-section (1). (4) The provisions of sect....
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.... ambit of "specified years". Since the period of these assessment years do not fall within the expression "specified year" provided in Section 271AAA, therefore, we do not deem it necessary to construe and explain the meaning of Explanation 5A within the scope of Section 271AAA. 7. At the cost of repetition, we would like to observe that as per Explanation 5A, if in the course of search initiated under section 132 on or after the 1st June, 2007, the assessee is found to be owner of any money, bullion, jewellery or other valuable article or things and the assessee claims such assets have been acquired by him by utilsing the whole or partly of his income from any previous year or any income based on any entry in any books of account or other documents or transactions found during the course of search, and the assessee claims that such entry in the books of account or other documents or transactions represents his income from any previous year, which has ended before the date of search, then, notwi hstanding 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 clause (c) of sub....
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....unts. Thus, there was ample evidence found during the course of search exhibiting the fact that income was not disclosed by the assessee in his regular books of accounts as well as in the return. The case of the assessee falls within the mischief of Explanation 5A. It is incorrect at the end of the assessee to say that no asset, money, jewellery or bullion representing the alleged undisclosed income was found during the course of search. Therefore, with regard to first fold of contentions, we do not find any merits in the contentions of the learned Counsel for the assessee. It is rejected. 9. As far as second fold of contentions is concerned, it is pertinent to observe that even if the assessee has filed the return of income and declared certain income, but the penalty proceeding is an independent proceeding. If on account of any legal or factual ground, assessee is able to absolve himself from levy of penalty, then all such rights are available in the penalty proceedings. The contention of the assessee is that agricultural land sold by him along with co-owners was not a capital asset and no capital gain tax was imposable upon the assessee. It is a different matter that he ha....