TMI Blog2016 (10) TMI 590X X X X Extracts X X X X X X X X Extracts X X X X ..... e imposed u/s 271(1)(c ) of the Act. In view of the above we are in agreement with the arguments advanced by the ld.AR that the penalty as imposed by the AO and upheld by the ld. CIT(A) was wrong and against the provisions of law - Decided in favour of assessee - I.T.A. No. 5179/Mum/2012 - - - Dated:- 14-10-2016 - Shri Mahavir Singh, JM And Shri Rajesh Kumar, AM Assessee by : Shri Vijay Mehta Revenue by : Shri B S Bist ORDER Per Rajesh Kumar, AM This is an appeal filed by the assessee challenging the order dated 3.07.2012 passed by the ld.CIT(A)-41, Mumbai upholding the penalty imposed u/s 271 (1)(c) r.w.s274 of the Income Tax Act, 1961 which pertains to assessment year 2004-05. 2. The issue raised is against the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eized paper as annexure A/2 page 16 and 17 which related to cash payments made to Bajrang and M/s M M Industries during current financial year. The assessment was framed u/s 143(3) was completed on 27.11.2006 assessing the total income at ₹ 8,14,95,450/-. After the search the assessment was completed u/s 143(3) r.w.s. 153A of the Act vide order dated 31.12.2009 assessing the total income at ₹ 8,18,70,760/- and accordingly, the AO initialed penalty proceedings under section 271(1)(c) of the Act. The AO, thereafter imposed penalty of ₹ 9,71,319/- at the rate of 100% of the tax sought to be evaded on ₹ 28,71,601/- by rejecting the submissions and arguments of the assessee as made during the course penalty proceedings an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ued under section 153A of the Act and accordingly the taxes were paid thereon. The ld. AR vehemently submitted that it was a case of non disclosure of income but the disclosure was made during the statement under section 132(4) of the Act and this amount was disclosed in the return of income filed in response to notice issued u/s 153A and due taxes were paid and therefore penalty was not leviable. The ld. AR submitted that the ld. CIT(A) has erred in law and on facts by holding that the assessee was not entitled for immunity as per Explanation -5 to section 271 (1)( c ) and wrongly relied on the decision in the case of Ajit B Zota V/s ACIT (40 SOT 543). In defence the ld. AR strongly relied on the following decisions : A) Prem Arora V/s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arch operation on the assessee. 7. Now, the issue before us is whether the income which is declared by the assessee in the return of income u/s 153A on which due taxes have been paid is liable for penal action u/s 271(1)( c ) of the Act or not. 8. The AO, in this case, has imposed the penalty on the ground that the assessee has concealed income by filing inaccurate particulars of income in respect of an amount of ₹ 18,50,000/- being undisclosed income as per seized material titled as Annexure A/2 pages, 16 and 17 which is related to payment made to Bajrang and M/s M M Industries during current financial year i.e 2003-04 relevant to the assessment year 2004-05. The First Appellate Authority upheld the penalty on undisclosed incom ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... possession of assessee - Assessee had drawn cash flow statement for entire period of six years in order to determine undisclosed income based on seized material for each of six assessment years Whether penalty under section 271(1)(c) cannot be imposed by invoking Explanation 5 in assessment year 2004-05 in respect of cash found in previous year relevant to assessment year 2007-08, merely on presumption that assessee might have been in possession of cash throughout period covered by search assessments - Held, yes [In favour of assessee] Words and Phrases : Word 'pending' occurring in the second proviso to section 153A and words 'all other provisions of this Act shall apply to the assessment made under this section' a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 181 of 2010 along with Tax Appeals Nos. 1182 of 2010 and 1185 of 2010, order dated 3.12.2014 has held that for all practical purposes return filed in response to notice u/s 153A of the Act has to be as return furnished u/s 139(1) of the Act and therefore, if, any undisclosed income as admitted by the assessee in the statement recorded under section 132(4) of the Act during the course of search operation is offered in the said return and due taxes were paid which were duly accepted by the AO then no penalty could be imposed u/s 271(1)(c ) of the Act. In view of the above discussion and ratio laid down in the various decision of the Tribunal and also the Hon ble Gujarat High Court, we are in agreement with the arguments advanced by the ld.AR ..... X X X X Extracts X X X X X X X X Extracts X X X X
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