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2015 (12) TMI 699 - AT - Income TaxPenalty u/s 271(1)(c) - surrender of income - suo motu further income declared in the returns filed u/s 153A - Held that:- It is trite law that penalties should not be imposed unless the case falls under the four corners of law mandating the penalty. Thus such laws are to be strictly implemented. Adverting to explanation 5A to section 271(1)(c) if explicitly refers to “Where, in the course of a search initiated under section 132 on or after the 1st day of June, 2007, the assessee is found to be the owner of”.. It is not disputed that during the search assessee was not found to be owner of any gold, bullion, a/c books etc. as no incriminating material was discovered. This is further confirmed by the fact that much alleged pharmaceutical business was not found to be at all carried out by assessee and the additions stand deleted by ITAT. Explanation 5A has specific application, the contention of ld. DR. that penalty are sustainable due to the implication of word transaction mentioned in sub clause ii of explanation. 5A cannot be accepted. This is simply so as there is no mention of any specific transaction. Beside there should be any evidence found during the course of search. Thus in my considered view impugned penalties cannot be sustained under explanation 5A to section 271(1)(c). While interpreting proviso to sec. 153A, various judicial forums have held that additions in respect of finalized assessments cannot be made unless incriminating material is discovered during the course of search proceedings. In these circumstances impugned assessments for AY 2003-04, AY 2005- 06 being unabated, no additions could have been made in the absence of any incriminating material. Besides for AY 2006-07 also small penalty for house renovation expenses can be sustained on merits as no incriminating material, evidence or nature of renovation is ever inquired. Assessee’s affidavit also remains uncontroverted on record. Thus impugned penalties confirmed by the ld. CIT(A) u/s 271(1)(c) are deleted. - Decided in favour of assessee.
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