TMI Blog2010 (9) TMI 765X X X X Extracts X X X X X X X X Extracts X X X X ..... on of law has been referred for opinion of this court under section 256(1) of the Income-tax Act, 1961 (in short "the Act") by the Income-tax Appellate Tribunal, Amritsar Bench, Amritsar (hereinafter referred to as "the Tribunal") arising out of its order dated September 30, 1998, in I. T. A. No. 448(ASR)/1992 in respect of the assessment year 1989-90 : "Whether, on the facts and in the circumstances of the case, the learned Tribunal is justified in law in confirming the order of the Commissioner of Income-tax (Appeals) deleting the penalty of Rs.1,70,625 imposed under section 271(1)(c) of the Income-tax Act, 1961 ?" 2. The necessary facts for disposal of the reference may be noticed. Search and seizure operation was carried at th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rrender of Rs. 2 lakhs was covered under Explanation 5 to section 271(1)(c) whereas disclosure of Rs. 1,25,000 was reflected in the return of income filed by the assessee relating to the assessment year 1989-90. The relevant observations made in paragraphs 12 and 13 of the order of the Tribunal while upholding deletion of penalty, read thus : "12. Coming to the case of the appellant, the first disclosure of Rs.2 lakhs relates to stock and another disclosure of Rs. 1,25,000 is a general disclosure of income. At this stage, we have to give a proper meaning to 'other valuable articles or things'. Explanation 5 relates to money, bullion, jewellery or other valuable articles or things. We are of the opinion that the stock can be included und ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h the return of income. If in the return of income, there is no concealment all particulars of income are correct then there is no concealment, and the Assessing Officer does not get jurisdiction to impose penalty under section 271(1)(c). If during the year, due to survey action under section 133A or due to any other action, the appellant includes any income in his books of account and reflects the same in the return of his income, the Assessing Officer cannot invoke section 271(1)(c) under those situations. If he is not satisfied regarding the accuracy of such income he may use section 145 or 144, as the case may be, but under no circumstances he can invoke section 271(1)(c) under these circumstances. The entry of Rs. 1,25,000 has been ref ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eturn of income for such year has not been furnished before the said date or, where such return has been furnished before the said date, such income has not been declared therein ; or (b) for any previous year which is to end on or after the date of the search, then, notwithstanding that such income is declared by him in any return of income furnished on or after the date of the search, he shall, for the purposes of imposition of a penalty under clause (c) of sub-section (1) of this section, be deemed to have concealed the particulars of his income or furnished inaccurate particulars of such income, unless,- (1) such income is, or the transactions resulting in such income are recorded,- (i) in a case falling under clause (a), be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... together with interest if any on the said amount, he is granted an immunity for levy of penalty under section 271(1)(c) of the Act." 8. The Tribunal while upholding deletion of penalty on surrender of Rs. 2 lakhs has categorically recorded in paragraph 12 of the order that the surrender related to the stock which was included under the definition of "other valuable articles or things" and that the condition enumerated under Explanation 5 to section 271(1)(c) were fulfilled. It is also not disputed that the statement of the assessee was recorded under section 132(4) of the Act on the date of search. Therefore, the Tribunal was right in upholding order of the Commissioner of Income-tax (Appeals) cancelling penalty on Rs. 2,00,000. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f M/s. Bhandari Silk Store, Shri Vijay Kumar, partner further affirmed an addition of Rs. 1,25,000 (Rs.one lakh twenty-five thousand only). It means that the total addition which is to be made as on March 31, 1989, i.e., for the assessment year 1989-90 there will be an addition of Rs. 3,25,000 over and above the normal income which will accrue to the firm after the close of the books. This addition is subject to penalty under section 271(1)(c) and no prosecution." 10. It has been noticed by the Tribunal that the assessee had disclosed this amount at the time the search party was leaving the premises of the assessee at 2 a.m. on April 12, 1989. It was further recorded that the time for filing return of income for the assessment year 19 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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