TMI Blog2012 (8) TMI 1055X X X X Extracts X X X X X X X X Extracts X X X X ..... and served upon the assessee. In response to notice, the assessee filed return of income on 17/03/08 for all the four assessment years under consideration and offered additional income as under: - NUTAN GUPTA Chart of Additional Income offered by the Assessee in the returns of income filed u/s 153A S.No. Nature of Additional Income Offered AY 2001-02 AY 2003-04 AY 2004-05 AY 2006-07 1. Investment made in KVPs 38,000 42,000 190,000 2. Investment made in NSCs 217,100 3. Life Insurance Premia Paid (LIPs) 283,500 4. Deposits made in SB A/cs with Post Office 130,766 23,987 5. Interest accrued on KVPs 4,00 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tember, 1969. ii) Explanation 5 to sec. 271(1)(c) introduces the fiction of deemed concealment in the following situations: - (a) If the assets found during search action u/s 132 are claimed to represent the income fro any previous year which has ended before the date of search but the return for such year has not been furnished. (b) If the assets found during search action u/s 132 are claimed representing the income fro any previous year which has ended before the date of search and the return has been filed without declaring such income. (c) The previous year relatable to the valuables found represent is yet to end after the date of search and assessee declares such income in the return of income. Exceptions to be deemed concealment in above situations have also been provided in the Explanation 5. The exceptions can be summarized as under: (i) In the first two situation {i.e., (a) and (b)}, if the assessee shows that the income in question has been recorded in his books before the date of search, he cannot be deemed to be guilty of concealment; (ii) In the third situation {i.e., (c)}, if the assessee shows that the income in question has been recorded in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ers found during the search. 7. Ld. CIT(A) dismissed the assessee s appeal, inter-alia, observing as under: - The fact that the income surrendered by the appellant was on the basis of the documents/ papers found during the search is not in dispute. In such a situation, not withstanding the fact 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 section 271(1)(c), be deemed to have concealed the particulars of his income or furnished inaccurate particulars of such income except in cases were such transactions resulting in such income are recorded in the books of accounts maintained by him before the date of search. In order to avoid falling within the provisions of section 271(1)(c) the appellant not only has to establish that Explanation 5 is not applicable to the facts of this case, but he has also to establish that he does not fall within the entire provisions of section 271(1)(c). In Pradip Chandulal Patel vs. P.G. Karode [(1992) 197 ITR 385, 398 (Guj.)], it has been held that, in passing an order u/s 132(5), the Officer was right in coming to the conclusion that, independently of the said ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8 ITR 194 (Guj.). 9. Ld. Counsel submitted that in all the aforementioned decisions, it has been held that a document of title relating to an immovable property or FDRs issued by bank cannot be treated as deemed concealment income in view of Explanation 5 of section 271(1)(c). 10. Ld. DR relied on the order of ld. CIT(A) and submitted that Explanation 5 is clearly applicable to the assessee s case because the search took place on 22.11.2006. He submitted that KVPs and NSCs, LIPs are all covered within the phrase other valuable article or thing and, therefore, the penalty was leviable. 11. Ld. DR further submitted that return has been filed in consequence to search and, therefore, it cannot be held to be a voluntary return. In this regard he relied on the detailed findings of ld. CIT(A). 12. I have considered the submissions of both the parties and have perused the record of the case. 13. As far as assessee s contention regarding applicability of Explanation 5 to section 271(1)(c) for the period from 01/06/03 to 31/03/2007 after insertion of the words search initiated u/s 132 before first day of June, 2007 or to be limited only to the period from 01/04/2007 to 31/ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ovisions of rule 112A apply and the action of the department in retaining fixed deposit receipts and title deed for immovable property without issuing a notice under rule 112A is illegal, is not correct. Under clause (e) of sub-section (1) read with the provisions of sub-section (5) of section 132 the officer authorized u/s 132 can seize and retain for the purpose of sub-section (5) only those articles which fall within the category of money, bullion, jewellery or other valuation article or thing. Sub-section (5) says that all those specified articles are shortly referred to as assets . Rule 112A makes it clear that the show cause notice contemplated by it is required to be given only with reference to those specified assets in respect of which inquiry u/s 132(5) is contemplated. It is evident from the scheme of section 132(5) that the assets which are seized during the course of an authorized search under section 132 are expected to be retained only for the purpose of satisfying the tax liability of an assessee as ascertained from his undisclosed income. Therefore, by using the words valuable article or thing what the legislature has intended to imply is that the assets c ..... X X X X Extracts X X X X X X X X Extracts X X X X
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