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2014 (10) TMI 576 - HC - Income TaxPenalty u/s 271(1)(c) – Explanation submitted by assessee satisfactory or not – 200% of penalty levied of the value of gold seized by AO which CIT(A) reduced to 100% - Value of gold treated as undisclosed income u/s 69A – Gold seized during search u/s 132 – Held that:- The assessee’s case falls into sub-clause (b) - by the time the search was undertaken, the assessee had time to file returns, and as a matter of fact, the returns were filed on 30.09.1986, wherein the income through which the seized gold was acquired, was also disclosed – relying upon Assistant Commissioner of Income Tax, Udaipur Versus M/s. Gebilal Kanhaialal HUF, Through Karta, Udaipur [2012 (9) TMI 297 - SUPREME COURT] - three conditions must be fulfilled by an assessee, before claiming the immunity under clause (2) of Explanation 5 to Section 271 of the Act - the search was made on 26.06.1985, and the returns were filed within time, on 30.09.1986 - There was no finding at any stage of the proceedings that the acquisition of the seized gold was during any earlier AY - the first condition can be deemed to have been complied with by the appellant - what is required in the context of clause (2) of Explanation 5 to Section 271 of the Act is making of a statement by the assessee and not the acceptability or otherwise of it - Since the assessee made the statement, this condition is complied with. The value of the seized gold was treated as income of the assessee and he paid thereon - the case fits into clause (2) of Explanation 5, which in turn, would bring about immunity to the appellant vis--vis Section 271 of the Act - The Tribunal proceeded on hyper- technicalities and acted as though every seizure must entail initiation of proceedings u/s 271 of the Act - Such an approach cannot be countenanced - the case of the assess is covered by clause (2) of Explanation 5 of Section 271 of the Act – thus, the order of the Tribunal is set aside – Decided in favour of assessee.
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