TMI Blog2012 (9) TMI 297X X X X Extracts X X X X X X X X Extracts X X X X ..... g documents found from his possession during the search have been acquired out of his income, which has not been disclosed in the return of income before expiry of time specified in Section 139(1), thus satisfying first condition - second condition was satisfied as the assessee had specified in his statement under Section 132(4), the manner in which such income stood derived - for satisfying third condition the only requirement stipulated for the assessee to "pay tax together with interest" as in the present case the assessee has paid tax with interest upto the date of payment, since Clause (2) did not prescribe the time limit within which the assessee should pay tax on income disclosed in the statement under Section 132(4) no default prove ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of income was not filed. It is important to note that although on August 1, 1987 the said Karta made a statement under Section 132(4) surrendering an amount of Rs. 42,32,000/-, the assessee chose not to file its return of income on due date, i.e., 31st July, 1987. Failure to file such return of income on 31st July, 1987 and failure to pay tax thereon is the main reason relied upon by the Department to deny to the assessee the benefit of immunity under clause (2) of Explanation 5 to Section 271(1)(c). The Karta also later on retracted his statement dated August 1, 1987. However, according to the Department, the assessee had complied with all the conditions of clause (2) of Explanation 5 except payment of tax in time [See page "G" of the pape ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... jewellery or other valuable article or thing found in his possession or under his control, has been acquired out of his income which has not been disclosed so far in his return of income to be furnished before the expiry of time specified in clause (a) or clause (b) of sub-section (1) of section 139, and also specifies in the statement the manner in which such income has been derived and pays the tax, together with interest, if any, in respect of such income." Explanation 5 is a deeming provision. It provides that where, in the course of search under Section 132, the assessee is found to be the owner of unaccounted assets and the assessee claims that such assets have been acquired by him by utilizing, wholly or partly, his income for any ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... which such income stood derived. Admittedly, the second condition, in the present case also stood satisfied. According to the Department, the assessee was not entitled to immunity under clause (2) as he did not satisfy the third condition for availing the benefit of waiver of penalty under Section 271(1)(c) as the assessee failed to file his return of income on 31st July, 1987 and pay tax thereon particularly when the assessee conceded on August 1, 1987 that there was concealment of income. The third condition under clause (2) was that the assessee had to pay the tax together with interest, if any, in respect of such undisclosed income. However, no time limit for payment of such tax stood prescribed under clause (2). The only requirement s ..... X X X X Extracts X X X X X X X X Extracts X X X X
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