TMI Blog2015 (12) TMI 1114X X X X Extracts X X X X X X X X Extracts X X X X ..... any time limit during which the aforesaid amount i.e the amount of penalty with interest has to be paid. Admittedly when the assessee herein have paid the entire amount with interest, the Assessing Officer ought to have granted them immunity available under Section 271(1)(c ) of the Income Tax Act. For the foregoing reaons, the present appeals stand allowed. The order of the Tribunal is quashed and set aside. Consequently, the order of the CIT(A) is restored. The question of law involved in this appeals is answered in favour of the assesee and against the revenue. - Decided against revenue - ITA No. 1786 / /Kol/2009, ITA No. 1787 /Kol/ 2009 , ITA No. 1788 /Kol/ 2009, ITA No. 1521 / 20101522 / 2010, ITA No. 1523 / 2010, 1690 / 2009, 1691 / 2009 - - - Dated:- 4-12-2015 - Shri Mahavir Singh,Judicial Member, and Shri M. Balaganesh, Accountant Member For the Appellant Shri A.K Tibrewal, FCA, ld.AR For the Respondent: Smt. Ranu Biswas, JCIT, ld.DR ORDER SHRI M.BALAGANESH, AM : These appeals arise out of the common order passed by the Learned CIT(A) in Appeal Nos. 123 to 127/CC-XXIV/CIT(A)/C-III/08-09 for the Asst Years 2001-02 to 2005-06 dated 16.7.2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ourse of assessment proceedings and assessed income thereon are tabulated as below:- ASSESSMENT YEARS Particulars 2001-02 2002-03 2003-04 2004-05 2005-06 Income admitted u/s 139(1) 938390 412710 1791070 537940 604510 Disclosure made u/s 132(4) 0 0 1200000 1014333 221000 Income disclosed u/s 153A 938390 412710 2969070 1552273 825510 Additional income offered During asst proceedings 250000 472603 0 0 0 Income assessed u/s 153A 1188390 885313 2969070 1552273 825510 5. In the course of assessment proceedings, the assessee disclosed further income of ₹ 2,50,000/- and & ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o Section 271(1)( c) of the Act and hence is entitled for immunity from levy of penalty. Against this order, the revenue had preferred appeals before us for the Asst Years 2001-02 ; 2002-03 2003-04 and the same are numbered separately as mentioned hereinabove. To sum up, there are three appeals by the assessee as well as by the revenue for the Asst Years 2001-02 ; 2002-03 2003-04 totalling to six appeals and two appeals preferred by the revenue for the Asst Years 2004-05 2005-06. Since a consolidated order has been passed by the Learned CITA for all these years, we find that the appeals of the revenue need not be dismissed based on tax effect of each year. All these appeals are taken up together for the sake of convenience. 7. The Learned DR argued that but for the search, the assessee would not have come forward to disclose these undisclosed incomes and hence assessee has concealed the particulars of income and argued that penalty is leviable in terms of Explanation 5 to Section 271(1)(c ) of the Act. He further argued that, even assuming without conceding, immunity is available for the assessee in terms of Clause 2 of Explanation 5 to Section 271(1)(c ) of the Act, it is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... AR had filed some more paper books containing compilation of case laws on the impugned issue. 8.1. At the outset, we find that the appeals filed by the assessee for the Asst Years 2001-02 ; 2002-03 2003-04 in ITA Nos. 1786 to 1788/2009 are liable to be dismissed as infructuous in view of the fact that the assessee had obtained the required relief before the Learned CIT(A) in the order passed by him u/s 154 of the Act. These appeals were preferred by the assessee prior to the date of passing of order u/s 154 of the Act by the Learned CIT(A). Hence the appeals filed by the assessee for the Asst Years 2001-02 ; 2002-03 2003-04 are dismissed as infructuous. 8.2. It is relevant to reproduce Explanation 5 to Section 271(1)(c ) of the Act at this juncture :- Where in the course of a [ search initiated under section 132 before the 1st day of June, 2007], the assessee is found to be the owner of any money, bullion, jewellery or other valuable article or thing (hereafter in this Explanation referred to as assets) and the assessee claims that such assets have been acquired by him by utilising (wholly or in part) his income- (a) for any previous year which has ended before the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Act. 8.4. We find lot of force in the arguments of the Learned AR that the additional disclosure of ₹ 2,50,000/- and ₹ 4,72,603/- for the Asst Years 2001-02 2002-03 respectively was made before any detection by the department and was made voluntarily and hence the same has to be construed only as a revision of the disclosure statement u/s 132(4) of the Act as there was nothing contrary that was suggested in the penalty order u/s 271(1)(c ) of the Act with regard to the same. In this regard, it is relevant to place reliance on the decision of coordinate bench decision of this tribunal in the case of DCIT vs Shayam Sunder Beriwal (Kolkata Tribunal) in ITA Nos. 1061 , 1062 1063 / Kol / 2008 dated 31.10.2008 for the Asst Years 2003-04 , 2004-05 2005-06 , wherein it was held that :- In the present case, this is also not a case of Revenue that the higher income declared by the assessee during the course of re-assessment proceedings only after being appraised by the department since the assessee paid tax of such higher income which was disclosed vide filing the return in response to notice under section 153C and such higher income has been filed by the assessee s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd that this decision of Delhi Tribunal has been followed by this Tribunal in the case of DCWT vs Vivek Kr. Kathotia in WTA Nos. 02 to 08 / Kol / 2013 dated 15.5.2015, wherein it was held that :- That the concept of a voluntary return of income may be important in penalty proceedings initiated in the normal assessment proceedings u/s 143(3) or 147 of the Act but not u/s 153A of the Act. When accepted by the AO then there is no concealment of income and consequently penalty u/s 271(1)(c ) of the Act cannot be imposed. The concealment of income is to be determined with regard to the return of income in response to notice u/s 153A of the Act. Therefore, in the present circumstances and facts of the case once the returned wealth is accepted by the AO u/s 153A of the Act then there cannot be a case of concealment of income or furnishing inaccurate particulars of income. In the circumstances and facts of the case the decision in the case of Prem Arora vs DCIT (24 taxmann.com 260) (Delhi Tribunal) is squarely applicable in the present case, since in the present case the assessee has disclosed gold and diamond in the statement recorded u/s 132(4) of the Act during the search operation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... When the Assessing Officer starts scrutiny of the return and initiate assessment proceedings there is nothing concealed and the inaccuracy, if any, disappeared. Therefore the assessee cannot be held guilty of concealment. 20. A perusal of the provision of Section 271(1)(c ) read with Explanation 1 clearly show that it is in the course of any proceedings under the Act, assessment proceedings in this case, that the Assessing Officer is to be satisfied that the assessee has concealed the particulars of his income or furnished inaccurate particulars of such income . It is thus to be judged at this stage and if at this stage he has declared the correct income and / or furnished accurate particulars of his income then there is no scope, in our opinion, to arrive at the satisfaction by the Assessing Officer because at that stage there is no such concealment. It disappeared by an action of the Assessing Officer. In this case the assessee has no doubt did not show the amounts received as alleged gifts as his income,but no details of loans are given in the return nor any other particulars thereof given by the assessee at that stage, not to speak of inaccurate one. When the assessment was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rmation to call for specific information. The query Had you taken / given any loan / gift during the financial year under consideration ? itself suggests that the revenue was not sure enough whether any gift was there. Mere asking of a question or simply raising of an enquiry without anything further does not tantamount to detection of concealment. There was neither any detection, nor any information in the possession of the revenue, nor the manner of its communication to the assessee which might lead to a detection of concealment. 24. There was no specific provocation or an apprehension of detection prevailing at the time when the offer was made and in the absence of any such imminent fear from the side of the revenue, if the assessee came forward and paid the tax thereon by adding the same in the returned income, it has to be taken as a voluntary offer to tax. On the face of the evidence in the shape of confirmation letters, bank accounts, passport etc., in the hands of the assessee, it might be valid gift that would have convinced a reasonably minded person, specially a person exercising a judicial function. The accepted position of law is that merely because an assessee ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Act followed by filing of returns u/s 153A of the Act. Hence in these circumstances, this additional offer has to be construed only as a revision of original disclosure u/s 132(4) followed by filing of returns u/s 153A of the Act and it relates back to the said date. The case law relied upon hereinabove is squarely applicable to the assessee herein. 8.5. We find that the assessee had made a disclosure statement u/s 132(4) of the Act after the search offering undisclosed income, explaining the manner in which such income was derived and paid taxes thereon together with interest. We also find that the Learned CIT(A) had given a categorical finding that the assessee had indeed demonstrated the manner of deriving the undisclosed income in his disclosure petition u/s 132(4) of the Act. The assessee also duly offered the said undisclosed income in the returns filed in response to notice under section 153A of the Act and assessments completed accordingly. We hold that the expression to be furnished in Clause 2 of Explanation 5 to Section 271(1)(c ) of the Act has to be understood as required to be furnished which in turn has to be understood as a return required to be furni ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re, the aforesaid expression to be furnished has to be interpreted as required to be furnished . Only in that case the section will make a meaning otherwise the section does not make any meaning. We are supported in our view by the Judgement of the Madras High Court in the case of CIT vs S.D.Chandru reported in (2004) 266 ITR 175 (Mad)wherein a Division Bench opined that The additional words which refer to the time specified in section 139(1) are only a reiteration of the legal requirement regarding the time within which returns should normally be filed. In that view of the matter, the question proposed by Revenue is answered in the affirmative and in favour of the assessee. The appeal is thus disposed of. 8.6. We hold that the immunity provided in Clause 2 of Explanation 5 to section 271(1)(c ) of the Act is available to all the assessment years prior to the year of search if the conditions stipulated thereon are satisfied. Reliance in this regard is placed on the decision of the Jurisdictional High Court in the case of CIT vs Ramesh Chand Goyal in G.A.No. 2347 of 2010 in ITAT No. 181 of 2010 dated 11.8.2010 , wherein the question raised before their Lordships and de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s Shri Samit Roy in ITA 354 of 2009 dated 3.9.2015, wherein the questions raised before their Lordships and their decision rendered thereon is as below:- (a) WHETHER on the facts and in the circumstances of the case the Income Tax Appellate Tribunal erred in law in upholding the order of Commissioner of Income Tax (Appeal) holding their amounts disclosing after search, which was not previously offered to tax is not a concealment on the part of the respondent / assessee ? (b) WHETHER on the facts and in the circumstances of the case the Income Tax Appellate Tribunal erred in law in upholding the order of Commissioner of Income Tax (Appeal) holding the Assessing Officer was not justified in levying penalty under section 271(1)(c ) of the Income Tax Act, 1961 for the Assessment Years 2003-04 to 2005-06 ? Since both the questions are covered by the judgements passed by this Court in ITA 39 of 2010 (Commissioner of Income Tax , Central I, Kolkata vs Amardeep Singh Dhanjal) and in ITA 330 of 2009 (Commissioner of Income Tax, Central III, Kolkata vs Brijendra Gupta), both the questions are answered in the negative, against the revenue and in favour of the assessee. The appeal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under section 271(1)(c ) of the I.T.Act and the penalty is to be levied on the income assessed over and above the income returned under section 153A, if any. 14. Further, in the present case, it appears from the record that the assesses had satisfied all the conditions which are required for claiming immunity from payment of penalty under section 271(1)(c )of the Act. The provsion does not specify any time limit during which the aforesaid amount i.e the amount of penalty with interest has to be paid. Admittedly when the assessee herein have paid the entire amount with interest, the Assessing Officer ought to have granted them immunity available under Section 271(1)(c ) of the Income Tax Act. 18. For the foregoing reaons, the present appeals stand allowed. The order of the Tribunal is quashed and set aside. Consequently, the order of the CIT(A) is restored. The question of law involved in this appeals is answered in favour of the assesee and against the revenue. D. Gujarat High Court in the case of CIT vs Mahendra C Shah reported in (2008) 299 ITR 305 (Guj) , it was held that :- The assessee having made a declaration u/s 132(4) and paid taxes thereon had fulfilled all the c ..... X X X X Extracts X X X X X X X X Extracts X X X X
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