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2011 (6) TMI 462 - AT - Income TaxPenalty under section 158BFA - Undisclosed income - search u/s 132 - AO initiated proceedings under section 158BD - Assessee furnished return in response section 158BD notice declaring nil undisclosed income - capital gains being assessed in a block assessment at 60 per cent after the search action, the assessee had filed a voluntary return offering the capital gains at 20 per cent - Held that:- Assessee has not furnished any undisclosed income in the block return filed by it in pursuance of notice u/s 158BD is not a grievous mistake when the earlier belated return filed by the assessee and available in the files of the assessing authority is also looked into. The fact that the assessee has not filed any return of income through its block return is a legal error but not a ground to impose penalty. The block assessment itself has been completed by the Assessing Officer by adopting the amount of capital gains offered by the assessee in its belated return filed immediately after the search operation. Therefore,if that amount of capital gains is impregnated in the block return filed by the assessee, the equation becomes complete. The only correction was calculating tax at 60 per cent instead of 20 per cent. Thus the only mistake committed by the assessee is that it acted a little over-smart and over-cautious, even though the endeavour of the assessee was not productive. Penalty deleted. In favour of assessee.
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