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2008 (3) TMI 422 - KERALA HIGH COURTPenalty- Concealment- The assessee claimed immunity from penalty because of filing of return and payment of tax on the income declared. However, the Assessing Officer noticed that there is concealment of income by virtue of operation of Explanation 5 to section 271(1)(c) of the Act. However, he limited the penalty levied under section 271(1)(c) of the Act to the minimum amount. Even though the assessee filed an appeal against the penalty order, the same was rejected by the first appellate authority, namely, the Commissioner of Income-tax (Appeals). However, on second appeal by the assessee, the Tribunal cancelled the penalty on the assumption that prior to the due date for filing of return. Held that- if the assessee in the course of search does not disclose income and offer payment, the assessee is deemed to have concealed particulars of income even in the course of search. Obviously, there is concealment of income by the assessee by virtue of operation of Explanation 5 to section 271(1)(c) of the Act because the assessee not only did not disclose income in the course of search. The reference by answering the question referred in favour of the Revenue and against the assessee.
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