2017 (9) TMI 123 - SCH - Income Tax

Penalty u/s 271(1)(c) - Whether under Section 271(1)(c) as it stood prior to the insertion of Explanation 5 levy of penalty is automatic if return filed by the assessee under Section 153A of the Act discloses higher income than in the return filed under Section 139(1)? - Held that - As decided by HC 2017 (2) TMI 1002 - DELHI HIGH COURT once the assessee files a revised return under Section 153A for all other provisions of the Act the revised return will be treated as the original return filed under Section 139. When the A.O. has accepted the revised return filed by the assessee under Section 153A no occasion arises to refer to the previous return filed under Section 139 of the Act. For all purposes including for the purpose of levying penalty under Section 271(1)(c) of the Act the return that has to be looked at is the one filed under Section 153A. As for the relevant assessment years 2005-06 & 2006-07 no material was recovered during the search. Rather the assessee added Rs. 21, 65, 932/- in the return filed pursuant to notice under section 153A. That amount was not relatable to any sum recovered or article seized. Therefore the question of adding or not adding amounts after the search and falling within the mischief of Explanation 5 to Section 271 (1) (c) cannot arise in the facts and circumstances of this case. The Special Leave Petition is dismissed leaving the question of law open.