TaxTMI 
TaxTMI 
1999 (9) TMI 110
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....vate limited company. If filed its return of income for the asst. yr. 1987-88 and asst. yr. 1988-89 on 29th June, 1987, and 30th July, 1998, respectively. Search under s. 132 was carried out at the assessee's business premises as well as at the residence of its managing director and other director on 29th Nov., 1988, and 30th Nov., 1988. 5. During the course of search on 29th Nov., 1988 at the residence of premises No. 44, Thornhill Road, Allahabad, Sri Shyama Charan Gupta, managing director of the assessee-company disclosed an amount of Rs. 50 lakhs on account of various undisclosed investments, as the assessee's income, whereas during the course of search on 30th Nov., 1988 at the business premises of M/s Shyam Biri Works (P) Ltd. the assessee's director Sri Uma Charan Gupta disclosed a sum of Rs. 32,24,000 on account of unrecorded entries in regular books. Later on the assessee seems to have furnished an affidavit giving year-wise details of disclosed income of Rs. 33 lakhs as well as undisclosed income of Rs. 14,83,845. The year-wise details of disclosed income in the hand of 'Shyam Biri Works' and 'M/s Shyam Biri Works (P) Ltd.' were as under: ------------------------....
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....essee furnished so-called revised returns of income in case of M/s Shyam Biri Works as well as Shyam Biri Works Private Ltd. The return of the firm were for the asst. yrs. 1983-84, 1984-85, 1985-86 whereas revised return in case of company, i.e., the assessee, were for the asst. yrs. 1987-88, 1988-89 and 1989-90. The computation of income as per revised return for the asst. yr. 1987-88 and 1988-89 was as under: Asst. yr. 1987-88 Rs. Profit as per P&L a/c 8,51,822 Add: (a) Depreciation for separate consideration 2,50,572 (b) Additional income disclosed under s. 132(4) 1,70,000 (c) Donation &....
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.... 22,662 --------- Total income 10,46,370 --------- Asst. yr. 19....
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....nbsp; 38,371 Deduction under s. 80HHA 7,417 45,788 --------- 23,31,601  ....
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....anding given by the authorised officer that assessee will not be subjected to penalty under s. 271(1)(c) and the prosecution. In view of these submissions, the assessee's counsel pleaded that it was not a fit case for imposition of penalty under s. 271(1)(c). 8. The learned Departmental Representative on the other hand disputed the submissions advanced by the assessee's counsel on the point of benefit available under cl. (2) of Expln. 5 to s. 271(1)(c). The learned Departmental Representative emphasised that the benefit under cl. (2) of Expln. 5 to s. 271(1)(c) are available only for the previous year during which the search action has taken place and for this purpose he strongly relied on the existence of words "Return of income to be furnished before expiry of time specified in cl. (a) or cl. (b) of sub-s. (1) of s. 139". The learned Departmental Representative submitted that immunity was available only with respect to the return which has not yet fallen due as per provisions of s. 139(1)(a) and 139(1)(b) which otherwise means that the immunity was available only for the period which fell under the definition of previous year during which search was conducted. According to him....
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....ter the date of the search, he shall, for the purposes of imposition of a penalty under cl. (c) of sub-s. (1) of this section, be deemed to have concealed the particulars of his income or furnished inaccurate particulars of such income, unless: (1) such income is, or the transactions resulting in such income are recorded: (i) in a case falling under cl. (a), before the date of the search; and (ii) in a case falling under cl. (b), on or before such date, in the books of account, if any, maintained by him for any source of income or such income is otherwise disclosed to the Chief CIT or CIT before the said date; or (2) he, in the course of the search, makes a statement under sub-s. (4) of s. 132 that any money, bullion, jewellery or other valuable article or thing found in his possession or under his control, has been acquired out of his income which has not been disclosed so far in his return of income to be furnished before the expiry of time specified in sub-s. (1) of s. 139 and also specifies in the statement the manner in which such income has been derived and pays the tax, together with interest, if any, in respect of such income." 11. After careful consideration....
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....envisaged under Expln. 5 to s. 271(1)(c) do not speak of "Voluntary Disclosure". The requirement of disclosure under these provisions is that the disclosure should have been "during the course of search" and voluntary or otherwise, do not come in picture. Since the CIT(A) as well as the AO have gone by the voluntary disclosure aspect of the case, we are of the opinion that both the them misdirected themselves while considering the assessee's claim of immunity available under Expln. 5 to s. 271(1)(c). 15. With regard to the assessee's claim that the disclosure was as a result of understanding given by the authorised officer that the assessee will not be subjected to penalty under s. 271(1)(c) or the prosecution, though there is no evidence on record to support the plea but the question No. 8 put by the authorised officer to Shri Uma Charan Gupta while recording his statement under s. 132(4) of the Act during the course of search at business premises of the assessee on 30th Nov., 1988, leads one to understand that the officer, if had not given any assurance, at least might have induced the assessee by explaining the immunity available under this clause. Whatever may have been the ....