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TMI Blog2013 (12) TMI 1603X X X X Extracts X X X X X X X X Extracts X X X X ..... u/s 143(3) r.w.s. 153A of the Act. Since the appeals relate to the assessees of the same group involving a common issue, they have been clubbed and a consolidated order is being passed for the sake of convenience and brevity. 2. The background of the captioned appeals can be briefly noted as follows. The captioned assessees belong to Chhoriya-Jain group of cases of Jalgaon and they are engaged in the business of land developers. A search and seizure action u/s 132 of the Act was conducted at the premises of the Chhoriya-Jain group of cases at Jalgaon on 22.08.2008. It transpires that during the course of search, certain incriminating documents and material was found and seized. Pertinently, the incriminating material so found showed earning of sale consideration for plots which was over and above the amounts 5 stated in the regular books of account. The material found during the course of search also revealed certain expenditures on purchase of land incurred by the assessee group which was not recorded in the regular books of account. Further, at the time of search, a statement u/s 132(4) of the Act was recorded wherein Mr. Kanhaiyalal D. Jain, head of the family declared a sum of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Act dated 27.12.2010 the Assessing Officer determined the total loss at Rs. 1,04,668/-, as returned by the assessee. Subsequently by way of an order dated 26.06.2011, assessee has been held guilty of concealment of income in terms of section 271(1)(c) of the Act with respect of a sum of Rs. 69,380/- being the difference between the amount of loss declared in the return filed u/s 153A(1)(a) of the Act and the loss declared in the return originally filed u/s 139 of the Act. The Assessing Officer was of the view that but for the action of the search, which revealed incriminating material, assessee would not have offered the reduced loss in the return filed u/s 153A(1)(a) of the Act and therefore the difference in loss declared between the two returns i.e. Rs. 69,380/- reflected concealed income within the meaning of section 271(1)(c) of the Act. In coming to such conclusion, Assessing Officer also relied upon the provisions of Explanation 5A to section 271(1)(c) of the Act and accordingly, levied penalty equivalent to 100% of the tax sought to be evaded on such concealed income, thereby determining a penalty of Rs. 20,810/-. 4. Now, we may set-out the manner in which the CIT(A) has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Act, assessee is found to be the owner of items specified in clauses (i) and (ii) thereof, for any previous year which has ended before the date of search and where the return of income for such previous year has been furnished before the said date but such income has not been declared or the due date of filing of the return of income for such previous year has expired but the assessee has not filed the return, then, notwithstanding that such income is declared in any return of income furnished on or after the date of search, assessee shall, for the purposes of imposition of a penalty under clause (c) of sub-section (1) to section 271 be deemed to have concealed the particulars of his income or furnished inaccurate particulars of such income. Ostensibly, in the present 8 case, search has been initiated after the 01.06.2007 and therefore the provisions of Explanation 5A to section 271(1)(c) of the Act govern the case of the assessee. The assessment year before us is 2004-05, where previous year has ended before the date of search and the impugned additional income (or reduced loss) in question was not declared in the return of income filed u/s 139 of the Act prior to the dat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n by the learned counsel appearing for the respondent-assessee before us at the time of hearing. 9. However, the learned Representative for the respondent-assessee has supported the conclusion of the CIT(A) by advancing certain other reasons, which can be summarized as follows. Firstly, it is submitted that in the present case the income declared in the return filed in response to notice issued u/s 153A(1)(a) of the Act has been assessed as such and there is no difference between the income returned and the income assessed in the assessment finalized u/s 143(3) r.w.s. 153A(1)(b) of the Act and in such a situation there can be no concealment or furnishing of inaccurate particulars of income within the meaning of section 271(1)(c) of the Act because any concealment/furnishing of inaccurate particulars of income has to be seen in the context of the income declared in the return of income filed. Secondly, it is canvassed by the learned counsel that the provisions of Explanation 5A to section 271(1)(c) of the Act are not applicable to the years for which the returns have been filed u/s 139 of the Act prior to 01.06.2007 and, the levy of penalty for such years be considered in the light ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... return of income has expired but assessee has not filed the return till the date of search, and, thus an assessment year for which assessee has filed return u/s 139 of the Act prior to the search and before 01.06.2007 would also be covered, if other conditions prescribed therein are satisfied. In 11 other words, Explanation 5A is available to the Assessing Officer in all cases, where a search has been initiated u/s 132 of the Act on or after the 1st day of June, 2007, and it is wrong on the part of the respondent-assessee to canvass that it is Explanation 5 and not Explanation 5A which would apply to years for which assessee has filed returns u/s 139 of the Act prior to the search and before 01.06.2007. We have also perused the judgment of the Hon'ble Supreme Court in the case of Brij Mohan (supra) which has been relied upon by the assessee for the proposition that for levying penalty for concealment, it is the law in force on the date of filing of return u/s 139 of the Act, which is relevant and not Explanation 5A, which was not on the statute as on the date of filing of return u/s 139 of the Act before the date of search. In the case before the Hon'ble Supreme Court, assessee was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... CIT(A) to hold that the provisions of Explanation 5A to section 271(1)(c) of the Act are inapplicable in the present case. On the contrary, as the aforesaid discussion shows, the case of the assessee is liable to be examined in terms of Explanation 5A to section 271(1)(c) of the Act and accordingly, the order of the CIT(A) on this aspect is set-aside and that of the Assessing Officer is restored. 12. At this stage, the learned Representative for the respondent-assessee also referred to a plea raised before the CIT(A), which according to him has not been adjudicated because the CIT(A) allowed relief on the basis of the proposition that Explanation 5A to section 271(1)(c) of the Act is inapplicable. According to the learned Representative, assessee has raised various Grounds of Appeal before the CIT(A) and which were also argued in extenso, as can be seen from copy of the written submissions made before the CIT(A), which have been placed in the Paper Book and such Grounds have not been considered and decided by the CIT(A). 13 13. On this aspect, we find that the assessee submitted before the CIT(A) that the Assessing Officer had not found anything adverse in the course of assessme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... income, if any, on which the penalty could be levied. 14. The learned Departmental Representative, on the other hand, appearing for the Revenue has opposed the plea of the assessee on the ground that the income declared in the statement u/s 132(4) of the Act has been duly declared by the assessee in the returns of income filed which have been subjected to tax and therefore, there is no scope left with the assessee to argue that the entire additional income cannot be taken as concealed income. 15. We have carefully considered the rival submissions on the said aspect. At the outset, we may state that we are not concerned with the merits of the plea raised by the assessee. The only point raised by the assessee is that the ground canvassed before the CIT(A) to the effect that the quantum of concealed income for the purposes of section 271(1)(c) of the Act could not be equated to the 'additional income', has not been addressed by the CIT(A). This is primarily for the reason that the CIT(A) has allowed relief to the assessee by setting-aside the penalty levied on a point of law canvassed before him, which we have already discussed in earlier paragraphs, wherein the stand of the CIT(A) ..... X X X X Extracts X X X X X X X X Extracts X X X X
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