TMI Blog2014 (1) TMI 1027X X X X Extracts X X X X X X X X Extracts X X X X ..... imposable when there is variation in assessed and return income. If there is no variation, there will be no concealment. When there is no concealment, question of levy of penalty u/s. 271(1)(c) will not arise. This is settled position of law - Where returned income filed under section 153A is accepted by the AO, there will be no concealment of income and, consequently, penalty u/s. 271(1)(c) cannot be imposed - Decided in favour of assessee. - I.T.A. Nos.5919 to 5925/Mum/2011 - - - Dated:- 8-1-2014 - Shri B. R. Mittal, JM And Shri N. K. Billaiya, AM,JJ. For the Appellant : Shri Vijay Mehta For the Respondent : Shri S. J. Singh ORDER Per N. K. Billaiya, AM: In all these assessment years, the assessee is in appeal against levy of penalty u/s. 271(1)(c) of the Act. As all these appeals were heard together, they are disposed of by this common order for the sake of convenience and brevity. 2. For the sake of clarity, our order is segregated into two parts (1) relates to the levy of penalty u/s. 271(1)(c) for assessment year 1999-2000 and the (2) part relates to levy of penalty u/s. 271(1)(c) for assessment years 2000-01 to 2005-06. ITA No. 5919/Mum/2011 - A.Y. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ccordingly no penalty should be levied. The AO was of the firm belief that for the year under consideration, the assessee has disclosed additional income of Rs. 13,93,000/- only after the concealment of income was detected from the incriminating documents pertaining to the assessee which were found and seized during the course of search on Vijay Group. Only after the search took place and the incriminating documents regarding concealed income were found that the assessee declared additional income in his return filed u/s. 148. The AO also rejected the contention of the assessee that the return u/s. 148 has been accepted by the Department therefore, no penalty is justified. The AO went on to levy penalty on income at Rs. 13,93,000/- and computed the penalty at Rs. 3,91,900/-. 5. The assessee carried the matter before the Ld. CIT(A) but without any success. The Ld. CIT(A) while confirming the penalty observed that the return filed u/s. 148 of the Act was not a voluntarily return and the income offered is unaccounted income which was not disclosed in the original return of income. 6. Aggrieved by this, the assessee is before us. The Ld. Counsel for the assessee strongly submitted ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... particular para 5.1, 5.2 and 5.3 read together would lead to the conclusion that at para-5.4, the AO has recorded the satisfaction for initiation of penalty proceedings in respect of the addition of Rs. 90,000/- only. Then at the concluding part of the assessment order, the AO has mentioned "issue notice u/s. 274 r.w. Section 271(1)(c) of the Act". The AO has nowhere recorded any satisfaction so far as additional income of Rs. 13,93,000/- is concerned. Our view is also fortified by Sec. 271(1)(B) which was inserted in the statute by the Finance Act 2008 with retrospective effect from 1.4.1989 which reads as under: "Where any amount is added or disallowed in computing the total income or loss of an assessee in any order of assessment or reassessment and the said order contains a direction for initiation of penalty proceedings under clause (c) of sub-section (1) of Sec. 271. Such an order of assessment or reassessment shall be deemed to constitute satisfaction of the AO for initiation of the penalty proceedings under the said clause (c)" 9. A perusal of the aforestated section clearly show that when any amount is added or disallowed then only a direction would suffice for the le ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... IT 40 SOT 543. It is the say of the Ld. DR that there is no immunity for penalty for those years in respect of which either due date for filing of return has not expired or assessment year relating to the search. The Ld. DR further contended that for those assessment years where return of income has been filed u/s. 139 of the Act prior to the date of search what the assessee is required is simply to declare the income in the returns to be filed in response to notice u/s. 153A of the Act. However, where returns of income were not due on the date of search, immunity will be available not on the basis of income declared in the return but on fulfilling the conditions mentioned in Explanation 5 or Explanation 5A of the I.T. Act According to the Ld. DR, this absurd interpretation is required to be avoided because penalty provisions are not to be so interpreted that it places dishonest assessees in advantageous position over honest assessee. It is the say of the Ld. DR that if no penalty is leviable on income disclosed in return of income filed in response to notice u/s. 153A, then all the assessees would be saved from penal provisions simply by disclosing the income in the return of inco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1(1)(c). It follows that the concealment of income has to be seen with reference to additional income brought to tax over and above income returned by the assessee in response to notice issued u/s. 153A. Accordingly, for the purpose of imposition of penalty u/s. 271(1)(c) resulting as a result of search assessments made u/s. 153A, the original return of income filed u/s. 139 cannot be considered. Further, in case of search initiated after 1.6.2003 a return of income is always filed on issue of notice u/s. 153A. As held above the penalty u/s. 271(1)(c) is impossible when there is variation in assessed and return income. If there is no variation, there will be no concealment. When there is no concealment, question of levy of penalty u/s. 271(1)(c) will not arise. This is settled position of law. The concept of voluntary return of income may be important in penalty proceedings initiated in course of normal assessment proceedings made u/s. 143(3) or 147 but not under section 153A. From above discussion it follows that where returned income filed under section 153A is accepted by the AO, there will be no concealment of income and, consequently, penalty u/s. 271(1)(c) cannot be imposed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... where in the course of search the assessee is found to be the owner of any money, bullion, jewellery or other valuable article or thing.................... In the present case, the assessee was not found to be the owner of any such things mentioned in Explanation-5 therefore explanation -5 does not apply on the facts of the case. The decisions relied upon by the Ld. DR relate to the cases where explanation-5/5A were applicable. Therefore, all the decisions relied on by the Ld. DR are misplaced. The DR has also referred to Sec. 271AAA but that section has been brought in statute by the Finance Act 2007 w.e.f 1.4.2007. Therefore, that section is not applicable in the present case. 15.2. Considering the facts under appeal with the judicial decisions relied upon and cited hereinabove, we do not find any substance for the levy of penalty u/s. 271(1)(c) of the Act. The AO is directed to delete the penalty so levied in all the assessment years under consideration. The appeals filed by the assessee for all the above assessment years are allowed. 17. Before closing, we find that the Tribunal has been very consistent in taking similar views as discussed hereinabove. The apprehension of t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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