AI Drafter 
TaxTMI 
TaxTMI 
2020 (9) TMI 566
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....anation 5A to Section 271(1)( c) is illegal and bad in law. 2. The ld. CIT(A) has erred on facts and in law in confirming the levy of penalty of Rs. 6,18,983/-u/s 271(1)(c) of the I.T. Act, 1961 on the alleged undisclosed short term capital gain (STCG)of Rs. 20,03,183/- by not accepting the explanation of assessee that such STCG was left to be included in the income due to oversight.'' 2.1 Brief facts of the case are that the assessee filed his return of income u/s 139 of the Act on 20-12-2013 declaring total income of Rs. 48,76,360/-. Thereafter a search took place on Shubham Group on 03-03-2016 of which assessee is a part. In response to notice u/s 153A of the Act, again a return was filed on 27-09-2016 declaring the same inco....
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.... filed the written submission in order to support of his arguments and the same is reproduced below. ''Facts: - 1.The assessee derives income from salary and income from other sources, i.e. interest income. He is not required to maintain books of accounts. Return was filed by him u/s 139 on 20.12.2013 declaring income of Rs. 48,76,360/-. Thereafter a search took place on Shubham Group on 03.03.2016 of which assessee is a part. In response to notice u/s 153A again a return was filed on 27.09.2016 declaring the same income of Rs. 48,76,360/-. 2. In course of assessment proceedings u/s 153A, assessee while preparing the statement of affairs noticed that there is a short term capital gain of Rs. 20,03,183/- on sale of an immov....
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....sideration were found, addition made by the AO in assessment proceedings u/s 153A is illegal and bad in law. 2. It is further submitted that during the course of assessment proceedings u/s 153A when the assessee prepared his statement of affairs it came to his notice that short term capital gain of Rs. 20,03,183/- was left to be included in the income by mistake. Accordingly, he filed revised computation of total income and offered the same for taxation. Thus, the omission of short term capital gain 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)....
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....hat any documents/material/information was found during the course of search which remotely indicate that the assessee is recipient of salary income. It is only during the course of proceedings u/s 153A that the Assessing officer noticed that the assessee is in receipt of salary income and which has not been disclosed by the assessee in his return and the same was accordingly brought to tax. The dispute is not that the salary income was not offered to tax by assessee in his return of income which is an admitted position but the question is whether such salary income has been found during the course of search and the answer to that in not in affirmative. In the present case, we therefore find that none of the conditions specified in explanat....
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....certain income is offered for tax in sec.153A proceedings, then in the absence of any incriminating document found in the search, Explanation 5A to sec. 271(1)(c) is not applicable on such income. In view of above, penalty levied by AO and confirmed by Ld. CIT(A) be directed to be deleted.'' 2.6 On the other hand, the ld. DR relied on the orders passed by the Revenue authorities. 2.7 We have heard the ld. Counsel for both the parties and we have also perused the materials placed on record, judgements/ orders cited by the parties as well as the orders passed by the Revenue authorities. From the facts of the present case, we noticed that during the course of assessment proceeding u/s 153A of the Act, as per assessee, while prep....
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.... assessee was obliged to maintain books of account. However, as per present facts, the assessee derived income from salary and income from other sources i.e. interest income and he is required to maintain the books of account. It is settled legal proposition that penalty provision must be strictly construed and only on satisfaction of conditions specified therein, the penalty can be levied. In the instant case, the assessee has not been found to have earned short term capital gain on sale of immovable property during the course of search. The assessee is an individual and derived income from salary and income from other sources i.e. interest income and he was not required to maintain the books of account. We found nothing on record which su....