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2019 (10) TMI 79 - AT - Income TaxPenalty u/s 271(1)(c) - additional income declared by the assessee in the return of income filed in response to notice u/s 153A on account of interest on FDR - HELD THAT:- The assessee has been regularly filing return of income u/s 139(1) of the Act and declaring income from house property and income from other sources. Though, there was a search in case of Moti Sons group on 31/10/2012, however, there was no incriminating material either found or seized disclosing any undisclosed income of the assessee as a result of search and seizure action. The assessee was covered by the search carried out u/s 132(1) and consequently the A.O. was bound to issue notice u/s 153A for all the six assessment years immediately preceding assessment year relevant to the previous year in which search is conducted. In response to the notice u/s 153A, the assessee filed return and declared additional income on account of interest on FDR. When there was no incriminating material found or seized during the course of search disclosing any undisclosed income on account of interest on FDR then the suo moto declaration of such income in the return of income filed U/s 153A of the Act would not attract the penal provision U/s 271(1)(c) of the Act. Assessee not declared the said interest income in the return of income filed U/s 153A of the Act then even if the A.O. in the course of assessment proceedings, detected such interest income on FDR and made addition on account of the interest on FDR, the addition so made by the A.O. would not sustain or survive due to the reason that the assessment for five assessment years out of the six under consideration were not pending as on the date of search and consequently the A.O. would have no jurisdiction to make the addition in absence of any incriminating material found or seized during the course of search revealing such income. Hence, when the addition on account of interest on FDR is not sustainable in law then the suo moto declaration of the income by the assessee would not amount to furnishing of inaccurate particulars of income or concealment of particulars of income rather it would be a bonafide explanation/cause for not furnishing income in the return of income filed U/s 139(1) - Penalty levied U/s 271(1)(c) of the Act for all the six years is deleted. - Decided in favour of assessee.
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