TaxTMI 
TaxTMI 
2025 (6) TMI 464
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....the learned AO u/s 271(1)(c) of the IT Act, 1961 after rejecting submission of the appellant that provisions of explanation 5A to Sec. 271(1)(c) are not applicable to additional income offered to tax on suo moto basis in return filed u/s 153A of the IT Act, 1961. 2. That the appellant craves permission to add to or amend to any of grounds of appeal or to withdraw any of them." 3. The brief facts of the case are that the original return of income was e-filed by the assessee on 30.11.2011, declaring total income at Rs. 16,63,240/- for the assessment year 2011-12. A search and seizure action u/s 132(1) of the Income-tax Act, 1961 was carried out on 07.01.2016 in the case of Dilip Manihar Group, Jaipur to which the assessee belongs. During the search, various assets/books of account and documents were found and seized as per annexure prepared during the search. The assessee filed return of income u/s 153A, declaring total income at Rs 19,63,700/- in which additional income from long term capital gain at Rs. 6,19,338/- has been disclosed, Accordingly, the assessment u/s 143(3) r.w.s. 153A of the I.T. Act, 1961 was completed on 29.12.2017 and income was assessed at Rs. 6.18,7....
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.... of the Income tax Act, 1961 should not be imposed for above referred concealment of income and furnishing inaccurate particulars of income. In response, the AR of assessee filed his written submission on 10.02.2020. 3.3 The ld. AO noted that written submission of the assessee's AR requesting to delete the penalty has been duly considered but not found acceptable for the reasons that the AR of assessee gave a generic reply without specifically pointing out that why penalty wouldn't be levied on concealed income which was not disclosed in the original return. The assessee has also himself admitted that income from long-term capital gain was not disclosed in the original return of income although he was legally bound to do the same, Similarly, no loss was claimed in original return of income against LTCG. Thus, the assessee has tried to reduce his taxable income by claiming the above loss from LTCG. Also, the assessee has not challenged the above disallowance before the Ld. CIT(A) which proves that he has accepted the fact that this claim was not allowable as per the provisions of the Act. It is pertinent to mention here that had there been no search and seizure action bei....
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.... of LTCG of Rs. 3,18,558/- brought forward from earlier years. The Ld. A.O. thereafter took up penalty proceedings and held that assessee has declared additional income from long term capital gain of Rs. 6,19,338/- and adjusted the BF loss of Rs. 3,18,558/- from said LTCG in return of income filed u/s 153A of the Act in comparison to return filed u/s 139 (1) and therefore invoking expl. 1 of section 271(1)(c) held that assessee has concealed particulars of its true income to the extent of Rs. 6,19,338/- and so liable for penalty u/s 271 (1) (c) of the I. T. Act, 1961. The appellant has made to the submission on the issue in the appeal and placed reliance on the judgements and contended that the above referred income of long term capital gain was offered by the appellant in the income tax return under section 153A of the Act on his own and that the income under section 153A of the Act is treated as income under section 139(1) of the Act and thus when the income has already been offered and declared in the income tax return, no penalty is leviable. From the perusal of the judgements on the issue it is understood that the penalty under section 271(1)(c) is leviable o....
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.... support of the grounds of appeal the ld. AR of the assessee has relied upon the following written submission: - "Facts of the case The assessee is an individual deriving income from house property, business, capital gain and other sources. A search u/s 132 took place on 07-01-2016 in the case of Dilip Maihar Group in which assessee was also covered. The assessment u/s 143 (3) r.w.s. 153B (1) (b) of 1. T. Act, 1961 was completed on 29-12-2017. The assessee filed his return of income u/s 153A of the 1.T. Act, 1961 declaring total income of Rs. 19,63,700/-. In the assessment order following additions were made:- a) Protective addition u/s 68 on account of disallowance of Deduction claimed u/s 10(38) of the IT Act, 1961 Rs. 5,95,91,797/- b) Disallowance of brought forward long term capital loss Against the long term capital gain Rs. 3,18,558/- The assessee filed appeal against the assessment order before the Ld. CIT(A)-4, Jaipur who deleted addition of Rs. 5,95,91,797/-. After appeal effect the only addition remain sustained is Rs. 3,15,558/- on account of disallowing of set of brought forward loss against income from long term capital gain....
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....m of set off of said b/f loss under the head LTCG on the ground that the LTCG of Rs. 6,19,338/- was not disclosed in original return of income so deduction of Rs. 3,18,558/- set off of b/f loss is not allowable to assessee in return filed u/s 153A is not allowable. The above action of L.d. A.O. is wrong in law. In law the return filed u/s 153A is deemed to be return filed u/s 139(1) and therefore set off b/f losses of LTCG can be claimed against LTCG declared in return u/s 153A. Reliance is placed on the judgement ITAT, Chandigarh Bench in case of Sh. Tarminder Singh Vs. DCIT (ITA No. 732/Chd/2016 decided on 2-9-2017 and in case of ACIT Vs. Splender Landbase Limited (ITATDelhi) ITA No. 264/Delhi/2016 decided on 06-06-2018. The Ld. AO in the penalty order levied penalty of Rs. 1,91,375/- on the additional income from long term capital gain of Rs. 6,19,338/- shown in return of income filed u/s 153A of the Act in comparison to return filed u/s 139 (1). Thus, it was not an income found in search u/s 132 but found due to suo moto disclosure in return filed u/s 153A by assessee. Thus explanation-1 to section 271(1)(c) is not applicable and as the amount was inc....
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.... levy of penalty u/s 271 (1) (c) of the 1 T. Act. In view of the above discussion, we are of the considered opinion that the levy of penalty is not warranted and accordingly, the same is deleted" • The Hon'ble Rajkot Tribunal in the case of Shabbir Allauddin Latiwala vs. DCIT [2011] 16 taxmann.com 177 (Rajkot) held as under: "when there was nothing placed on record which might even remotedly indicate about specific nature of additional income offered by assessee while furnishing returns in response to a notice issued under section 1534, and there was no direct or indirect linkage brought on record with reference to any of specific seized materials so as to establish charge for which penalty had been levied then penalty order should be set aside" • The Hon'ble Nagpur Tribunal in the case of DCIT v. PurtiSakhar Karkhana [2013/35 Taxmann.com 594 (Nagpur-Trib) held as under "search assessments made under section 153A cannot be treated as continuance of normal assessment proceedings whether abated or not and, therefore, it will not be justified to refer to returned income under section 139 for purpose of imposition of penalty under sec....
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....ged that order of the ld. CIT(A) on the ground that the provisions of explanation 5A to Sec. 271(1)(c) are not applicable to additional income offered to tax on suo moto basis in return filed u/s 153A of the IT Act, 1961. The brief facts related to the dispute is that the assessee filed the original return of income on 30.11.2011, declaring total income at Rs. 16,63,240/-. A search and seizure action u/s 132(1) of the Income-tax Act, 1961 was carried out on 07.01.2016 in the case of Dilip Manihar Group, Jaipur to which the assessee belongs. In the meanwhile on 05.11.2016 the assessee revised the return of income and offered the additional income on account of capital gain. The assessee filed return of income u/s 153A, declaring total income at Rs 19,63,700/- in which additional income from long term capital gain at Rs. 6,19,338/- which was not included in the original return has been disclosed. Accordingly, the assessment u/s 143(3) r.w.s. 153A of the I.T. Act, 1961 was completed on 29.12.2017 and income was assessed at Rs. 6.18,74,055/- by making the additions and also penalty proceedings u/s 271(1)(c) of the IT Act, 1961 were initiated. The addition made was of bogus LTCG of R....