TMI Blog2008 (3) TMI 379X X X X Extracts X X X X X X X X Extracts X X X X ..... e returns filed. Therefore, the Dy. Director of IT (Inv.) issued summons dt. 29th Oct., 1994 to the assessee asking the assessee to appear on 3rd Nov., 2004 and in the backside of the summons, the Dy. Director of IT (Inv.) mentioned that the assessee should bring the assessment details of various entities in the names of which the assessee made deposits in these two concerns. The assessee appeared before the Dy. Director of IT (Inv.) on 3rd Nov., 2004 and deposed that he had not disclosed to the Department the deposits made in these two concerns. The assessee paid tax of Rs. 25,00,000 on 3rd Nov., 2004 and Rs. 31,26,417 on 4th Nov., 2004 totalling to Rs. 56.26 lakhs on these fixed deposits and initially filed returns in the names of the assessee and his HUF for asst. yr. 2004-05 admitting the entire fixed deposits in the hands of these two entities. Later on, the HUF of the assessee filed a revised return admitting more income, as there were certain undisclosed deposits other than SRM Group of entities. The total deposits disclosed in the hands of these two entities ultimately worked out to Rs. 2.09 crores. Later on, the Department issued notices under s. 153C for asst. yrs. 1999-2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... st. yr. 2004-05 for assessee and his HUF might have been filed before the receipt of any notice from the Department. But the impugned penalties were on the basis of revised returns filed on 5th Dec., 2005 and all these returns were filed in pursuance of notice under s. 153C dt. 22nd Nov., 2005. Therefore, it is not factually correct to say that the assessee has filed the returns before getting notices from the Department; in fact they were filed only after receipt of notices. 6. The assessee further tried to draw parallel to Expln. 5 to s. 271(1)(c). On this point the learned CIT(A) agreed that, if a person is searched and during the course of the search, the searched person gives a statement under s. 132(4) that he had concealed the income and pays tax and interest, then penalty need not be imposed under Expln. 5 to s. 271(1)(c). In case of the assessee, there was neither a search nor a sworn statement under s. 132(4) of the Act. Hence, in these circumstances, the learned CIT(A) held that it may not be possible to hold that the assessee comes under Expln. 5 to s. 271 (1)(c). Thereafter, the learned CIT(A) referring to certain case law confirmed the levy of penalty after pointing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l of the assessee that no penalty can be imposed in this case as s. 271AAA was inserted w.e.f. 1st April, 2007 does not at all help the assessee as the same is applicable only in case of search that has been initiated under s. 132 on or after the 1st day of June, 2007. 10. Explanation 5 to s. 271 (1)(c) which is being relied upon by the learned counsel of the assessee is reproduced as under: "Explanation 5: Where in the course of a search under s. 132, the assessee is found to be the owner of any money, bullion, jewellery or other valuable article or thing (hereafter in this Explanation referred to as assets) and the assessee claims that such assets have been acquired by him by utilising (wholly or in part) his income,- (a) for any previous year which has ended before the date of the search, but the return of income for such year has not been furnished before the said date or, where such return has been furnished before the said date, such income has not been declared therein; or (b) for any previous year which is to end on or after the date of the search, then, notwithstanding that such income is declared by him in any return of income furnished on or after the date of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essee in this case is placing reliance upon Expln. 5(b)(2) above in s. 271(1)(c). We find that, at the threshold Expln. 5 states that, "Where in the course of the search under s. 132.........." Hence, it is abundantly clear that this Explanation is applicable only in cases where search under s. 132 has taken place. Again, Expln. 5(b)(2) at the threshold states that, "he, in the course of search makes a statement under sub-s. (4) of s. 132 that any money.........." and the section goes on to specify the procedure to be adopted where assessee can be relieved of the rigours of penalty. Admittedly, in this case there was no search under s. 132 in the case of the assessee. Only summons under s. 131(1) were issued by Dy. Director of IT. Since s. 132 was never invoked, there is no question of the case falling under Expln. 5 or the assessee complying with the provisions of Expln. 5(b)(2) above. 14. It is settled rule of interpretation that fiscal statutes must be strictly construed. Assumptions and presumptions are not permissible in a fiscal provision. In this regard, Hon'ble apex Court has held in the case of Goodyear India Ltd. vs. State of Haryana Anr. State of Maharashtr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r. State of Maharashtra Anr. that, "a precedent is an authority only for what it actually decides and not for what may remotely or even logically follow from it". 17. On the other hand, case law relied upon by the learned Departmental Representative are germane to the issue. Hon'ble Karnataka High Court in the case of K.L. Swamy vs. CIT has elaborated on the term, "voluntary" as under: "Assessees are entitled to a waiver of penalty only if they had made a disclosure by filing their returns voluntarily and in good faith. The term "voluntary" has to be understood as anything done intentionally and without coercion, compulsion or constraint coercion may in turn be direct or positive as in cases where physical force is used to compel an act against one's will or it may be implied. That would not however mean that a mere legal obligation to do something should constitute a constraint of the kind which would render any such action involuntary. It follows that the circumstances, conditions or constraints that make a disclosure under the Act "involuntary" must be constraints other than obligations that arise under the Act, requiring the assessee to take a particular action. The exp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... husudhanan vs. CIT (2001) 169 CTR (SC) 489 : (2001) 251 ITR 99 (SC), wherein it was held that the law declared by the Court in the case of Sir Shadi Lal Sugar General Mills Ltd. vs. CIT (1987) 64 CTR (SC) 199 : (1987) 168 ITR 705 (SC) was no longer applicable by reason of the addition of the Explanation to s. 271. That Explanation casts a burden on the assessee to show that the additional income that had not been disclosed was not due to fraud or neglect. In this case, the assessee offered no explanation at all except to assert that he disclosed the income only to buy peace with the Department and what was disclosed, in fact, was additional income. The reason for not having disclosed the income earlier was not stated. In these circumstances, the Tribunal was in error in setting aside the penalty. The question is answered in favour of the Revenue and against the assessee, in the light of the later decision of the three Judge Bench of the Supreme Court in the case of K.P. Madhusudhanan vs. CIT." 20. In the case of K.P. Madhusudhanan vs. CIT (2001) 169 CTR (SC) 489 : (2001) 251 ITR 99 (SC), the facts of the case were that for the asst. yr. 1986-87, the assessee, a partnership fi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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