TaxTMI 
TaxTMI 
TaxTMI 
2020 (1) TMI 911
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....evy of penalty of Rs. 14,420/- U/s 271(1)(c) of the IT Act, 1961 on the alleged undisclosed salary income of Rs. 70,000/- received from M/s Ganpati Royal Residency by not accepting the explanation of assessee that such salary income was inadvertently left to be included at the time of filing the return." 2. During the course of hearing, the ld AR submitted that the assessee derives income from salary and income from other sources. He filed his return of income u/s 139(1) on 30.03.2012 at total income of Rs. 5,41,460/-. A search was carried out on 03.03.2016 at his residential premises. In response to notice issued u/s 153A, he filed the return on 27.09.2016 declaring the same income. During the course of assessment proceedings when assesse....
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....see including making additions even without any incriminating material being available against the assessee in the search u/s 132. He further held that M/s Bhatia Infrastructure Pvt. Ltd. is a group concern wherein Sh. Prem J. Bhatia and Sh. Ram J. Bhatia are directors. Assessee is the son of Sh. Prem J. Bhaita. The assessee not being aware of salary credited to him by such group company is not a credible explanation. In the immediately preceding year, the assessee has been credited salary by another group concern Bhatia Automobiles Pvt. Ltd. wherein also Sh. Prem J. Bhatia and Sh. Ram J. Bhatia are directors but the salary was not declared by him in the return of income filed u/s 153A. Similarly in case of other group company namely M/s Bh....
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....ition made by the AO in assessment proceedings u/s 153A is illegal and bad in law. The Hon'ble ITAT, Jaipur Bench in case of Shri Navrattan Kothari Vs. ACIT ITA No. 425/JP/2017 order dated 13.12.2017 held that assessment or reassessment of income of person other than searched persons based on seized material can be made u/s 153C r.w.s. 153A and has overriding effect on section 147/ 148. In the present case, addition made by the AO is not on the basis of any material seized during the search proceedings. Hence, addition made by the AO in the assessment framed u/s 153A is incorrect. The addition, if any, could have been properly made by invoking the provisions of section 147 of the IT Act. Therefore, when addition made by the AO is itself ill....
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....f salary from income declared in the ROI filed u/s 153A is a bonafide mistake. On such bonafide mistake, no penalty is leviable. For this reliance is placed on the decision of Hon'ble Supreme Court in case of Price Waterhouse Coopers (P.) Ltd. Vs. CIT (2012) 348 ITR 306. In this case the assessee firm filed its return of income along with tax audit report. In its tax audit report it was indicated that provision towards payment of gratuity was not allowable but it failed to add provision for gratuity to its total income. It was held that it was a bona fide and inadvertent error. The same can only be described as a human error which we all are prone to make. The assessee could not be held guilty of either furnishing inaccurate particulars or ....
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.... well as under section 153A of the Act and which was brought to tax. It was accordingly submitted that it is a clear case of concealment of particulars of income and the Assessing officer has rightly levied the penalty u/s 271(1)(C) read with explanation 5A of the Act. 8. We have heard the rival contentions and perused the material available on record. The limited point of dispute is whether addition towards salary income made by the Assessing officer during the course of proceedings u/s 153A r/w 143(3) can form the basis for levy of penalty by invoking provisions of explanation 5A to section 271(1)(c) of the Act which reads as under: "Explanation 5A.- Where, in the course of a search initiated under section 132 on or after the 1st day o....