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2015 (5) TMI 423 - AT - Income TaxPenalty under section 271(1)(c) - disclosure of income during search operation - Held that:- As decided in case of S.D.V. Chandru [2003 (12) TMI 40 - MADRAS High Court] in a case where the assessee had not disclosed his income in the returns filed for the previous year which have ended prior to the date of the search and, in the statement given under Section 132(4) the assessee admitted the receipt of undisclosed income for those years and also specified the manner in which such income had been derived and thereafter pays the tax on that undisclosed income with interest, then such undisclosed income would get immunised from the levy of penalty. Respectfully following the esteemed views of Hon’ble jurisdictional High Court, we uphold the grievance of the assessee. In view of the fact that the income in question was covered by the declaration made in the statement recorded under section 132(4) and the tax thereon was duly paid by the assessee, the provisions of Explanation 5 to section 271(1)(c) of the Act will come into play on the facts of this case. Accordingly, as the assessee rightly contends, penalty under section 271(1)(c) can not be sustained in law. In any event, as held by the Hon’ble jurisdictional High Court above, the penalty under section 271(1)(c) of the Act can only be imposed in respect of an income over and above the income disclosed in the return filed under section 153A, and since the income in question was included in the return filed by the assessee under section 153A, the impugned penalty is unsustainable. For this reason also, the impugned penalties of ₹ 79,070/- for A.Y. 2003-04, ₹ 82,070/- for A.Y. 2004-05 and ₹ 65,025/- for the A.Y. 2005-06 are, therefore, deleted. The assessee gets the relief accordingly. - Decided in favour of assessee.
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