TMI Blog2013 (5) TMI 328X X X X Extracts X X X X X X X X Extracts X X X X ..... clause (2) to explanation-5 were satisfied. Therefore assessee was entitled to the immunity. Thus, the appeal has no merit it is dismissed. - ITA No. 33 of 2004 - - - Dated:- 21-2-2013 - Shri Yatindra Singh, C.J. And Shri Pritinker Diwaker, JJ. For the Appellant : Shri Anand Dadaria For the Respondent : Shri Anup Majumdar JUDGMENT 1. The main point involved in the present case is, 'Whether in order to get benefit of immunity mentioned in clause (2) of explanation-5 of section 271(1)(c)1 of the Income. 271. Failure to furnish returns, comply with notices, concealment of income, etc. (1) If Assessing Officer or the Deputy Commissioner (Appeals) or the Commissioner (Appeals) in the course of any proceedings under this ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cted a search in the residential premises of Shri Abdul Rashid (the Assessee) in the month of August, 1992. During the search, the Assessee surrendered an amount of Rs. 8,50,000/- and made a statement on 11.09.1992 regarding the manner in which the surrendered income was derived in the previous year ending on 31.03.1992. 3. Subsequently, the Assessee also paid tax along with interest on the surrendered amount on 05.10.1992. 4. The due date for filing return under section 139(1) of the Act for the Assessee for the assessment year (AY) 1992-93 was 31.08.1992. However, the return for the same was filed belatedly on 19.08.1994. The return included the surrendered income. 5. The Assessing Officer (the AO) started the assessment proceedings ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wing substantial questions of law: (i) Whether on the facts and in the circumstances of the case, learned Income Tax Appellate Tribunal was justified in law in upholding the cancellation of penalty of Rs. 4,84,000/- levied under Section 271(1) (c) of the Income Tax Act, 1961? (ii) Whether on the facts and in the cir of the case, learned Income Tax Appellate Tribunal was justified in law in holding that explanation- 5 to Section 271(1)(c) squarely covered the case when the conditions stipulated in explanation-5 have not been fulfilled by the assessee? 10. Nevertheless, the only aspect of the aforesaid questions that has been argued by the counsel for the Department is mentioned in the first paragraph of the judgement. THE DECISION: N ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt contingencies, the section also provides immunity. These are mentioned in the clause (1) and (2) to the Explanation. The legal fiction can be done away with, in case the Assessee fulfills the conditions mentioned in either of them. 16. In the dissenting judgement of Haddock vs Haddock (201 (1906) US 562), Justice Holmes rightly observed that, 'Of course this is a pure fiction and fiction is always a poor ground for changing substantive rights.' 17. In fact, there was no concealment. It was because of the fiction of law provided in the Explanation that surrendered amount was treated to be the concealment. And if fiction is a poor ground for changing substantive rights then it should be strictly construed and immunity against the same, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g that the unaccounted assets and incriminating documents found from his possession during the search have been acquired out of his income, which has not been disclosed in the return of income to be furnished before expiry of time specified in s. 139(1); The second condition for availing of the immunity from penalty under s. 271(1)(c) is that the assessee should specify in his statement under s. 132(4), the manner in which such income stood derived; The third condition under cl. (2) is that the assessee had to pay the tax together with interest, if any, in respect of such undisclosed income. 21. In the Gebilal case, the Supreme Court has not mandated filing of return before the due date in order to get benefit of immunity under clause ..... X X X X Extracts X X X X X X X X Extracts X X X X
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