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2009 (11) TMI 558 - AT - Income TaxPenalty - search and seizure - the assessee, a partnership firm is engaged in the business as Katcha Artiya and derives income mainly from commission on sale of agricultural commodities -concealment of income - Held that: The authorized officer concluded the action taken under s. 132 of the Act without recording statement of the appellant during the course of search proceedings. No reasons are spell out, on record as to why the authorized officer did not record appellant's statement even on 13th Jan., 1995 when he resumed the proceedings under s. 132 of the Act. At least the appellant cannot be blamed for non-action on the part of the authorized officer. Explanation 5 to s. 271(1)(c) of the Act bestows immunity on the assessee for making a disclosure of his income in the manner as specified therein. There is, however, nothing in the hands of an assessee to compel authorized officer and require him to record a statement during the course of search. It was an act to be performed by the authorized officer as it was his legal duty to have recorded the statement, particularly when by non-recording of the statement under s. 132(4) of the Act, assessee is shown to have deprived of a benefit conveyed by Expln. 5 to s. 271(1)(c) of the Act. The expression 'may' as used in s. 132(4) of the Act in such a case needs to be read as 'shall'. Assessee has acted bona fidely in filing the return of his income by disclosing additional income that stood assessed without any variation. In a case like this, there being failure on the part of the authorized officer to record a statement under s. 132(4) of the Act in the course of search under s. 132 of the Act, the provision deeming concealment of the particulars of income for the purpose of imposition of penalty can neither be read in isolation nor taken as divorced from the obligatory statement to be recorded under s. 132(4) of the Act. It also cannot be read to the disadvantage of the appellant particularly when the assessee is shown to have made a substantive compliance of making the disclosure and bona fidely acting thereon as well.
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