2015 (1) TMI 201 - GUJARAT HIGH COURT

Validity of restoration of penalty made by Tribunal – Availability of benefit of Explanation 5 - Whether the Tribunal was right in restoring the penalty imposed u/s 271(1)(c) holding that benefit under explanation 5 to Section 271(1)(c) of the Act would be available only for period where due date for filing the return u/s 139(1) of the Act had not expired – Held that:- In Commissioner of Income-Tax Versus SDV. Chandru [2003 (12) TMI 40 - MADRAS High Court] it has been held that in a case where the asseessee had not disclosed his income in the returns filed for the previous year which have ended prior to the date of the search and, in the statement given u/x 132(4) the assessee admitted the receipt of undisclosed income for those years and also specified the manner in which such income had been derived and thereafter pays the tax on that undisclosed income with interest, then such undisclosed income would get immunised from the levy of penalty.

Also in Commissioner Income Tax, Bilaspur CG. Versus Shri Abdul Rashid [2013 (5) TMI 328 - CHATTISGARH HIGH COURT] it has been held that in order to get the benefit of immunity under clause(2) of explanation5 to Section 271(1)(c) of the Income Tax Act, it is not necessary to file the return before the due date provided that the assessee had made a statement, during the search and explained the manner in which the surrendered amount was derived, and paid tax as well as interest on the surrendered amount - the view taken by the Tribunal is erroneous - the assessees had satisfied all the conditions which are required for claiming immunity from payment of penalty u/s 271(1) - the provision does not specify any time limit during which the aforesaid amount i.e. the amount of penalty with interest has to be paid - when the assessees have paid the entire amount with interest, the AO ought to have granted them immunity available u/s 271(1)(c) – Relying upon Assistant Commissioner of Income Tax, Udaipur Versus M/s. Gebilal Kanhaialal HUF, Through Karta, Udaipur [2012 (9) TMI 297 - SUPREME COURT] - the penalty u/s 271(1)(c) cannot be levied on the income shown in the return filed under Section 153A – the order of the Tribunal is set aside - Decided in favour of assessee.