TMI Blog2019 (3) TMI 329X X X X Extracts X X X X X X X X Extracts X X X X ..... g the fact that such return filed after search includes additional nature based on incriminating material and oral evidence under s.132(4). Pertinently, the plea raised on behalf of the assessee, if admitted, would render provisions of Section 271AAA/271AAB of the Act otiose and infructuous as noted in the case of Vijay K. Shah (supra). Plea raised on behalf of the assessee that Section 153A of the Act opens with a non obstante clause as noted earlier, Section 271AAA and Explanation 5A to Section 271(1)(c) of the Act deems culpability in appropriate cases even before the return is filed in search cases. Therefore, substitution of return originally filed under s.139 of the Act by subsequent return under s.153A of the Act has no impact on the legal fiction towards concealment enjoined by Explanation 5A of the Act. Therefore, the non obstante provision in Section 153A of the Act does not come in the way of penalty proceedings in search cases at all. Thus, the plea of the assessee for applicability of penalty provisions qua the return of income which may hold good under the normal provisions will not apply to special provisions enacted in search cases. In view of the special p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y under s.139(1) of the Act at ₹ 2,31,560/-. Thereafter, a search was conducted under s.132 of the Act in the case of Dhanjimama group of cases on 03.07.2012 which included the assessee as well. Consequent to the search action, incriminating materials were found and a statement was recorded under s.132(4) of the Act wherein the assessee admitted certain additional income based on documents found during the course of search. A proceeding under s.153A was initiated as a consequence. The assessee filed return of income under s.153A of the Act at ₹ 10,10,310/- in compliance of the notice and incorporated disclosure of ₹ 7,78,750/- in the return of income filed in response to such notice under s.153A of the Act. The assessment was completed under s.153A of the Act and the income declared in the said return was assessed as such. The AO however, imposed penalty of ₹ 2,18,740/- (100% of the tax sought to be evaded) on the additional income of ₹ 7,78,750/- declared in pursuance of the search by invoking provisions of Section 271(1)(c) of the Act r.w. Explanation 5A thereto. 5. Aggrieved by the levy of penalty under s. 271(1)(c) of the Act by the AO, the asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not sustainable in law. The learned AR also relied upon the decision of the co-ordinate bench in the case of Dr. Naman A. Shastri vs. ACIT Ors. IT(SS)A No. 561/Ahd/2011 order dated 29.09.2015; Shree Ram Corporation vs. DCIT ITA No. 726/Ahd/2015 order dated 09.06.2015 and Arvindbhai V. Bhanusali vs. ACIT IT(SS)A No. 271/Ahd/2013 Ors. order dated 06.04.2017 to contend that Revenue is not entitled to impose penalty on income declared by the assessee himself under s.153A of the Act. It was thus submitted that the order of the CIT(A) sustaining the penalty under s. 271(1)(c) of the Act on unaccounted income suo moto included in the return filed under s.153A of the Act is not justified. 9. The learned DR for the Revenue, on the other hand, relied upon the orders of the revenue authorities and also relied upon the decision of the Hon ble High Court of Calcutta in the case of CIT vs. Prasanna Dugar 371 ITR 19 (Cal) in justification of the action of the Revenue. The learned DR further submitted that SLP against the aforesaid judgment of the Calcutta high Court also stands dismissed by the Hon ble Supreme Court as reported in 373 ITR 681 (SC). 10. We have carefully considered t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r s.153A including undisclosed income discovered in the course of search, the assessee gets indefeasible right to shun away penalty proceedings on such undisclosed income is squarely at loggerheads with deeming fiction created under Explanation-5 for this purpose. Needless to say, this generic proposition towards non-applicability of penalty on undisclosed income, if seen in affirmative, will render the legislative fiat under Explanation-5 relatable to search cases as otiose and infructuous. As can be seen, the benefit of immunity provided under Explanation-5 is well defined and structured. As provided, it is available only in respect of such year where the due date of filing of the return has not expired before the date of search subject to fulfillment of conditions as contemplated in the said Explanation. 9.2. We shall now advert to the decision in the case of Kirit Dahyabhai Patel (supra) referred to and extensively relied upon on behalf of the assessee. We notice that in that case, the substantial question of law framed for decision before the Hon ble Gujarat High Court was confined to availability of immunity under clause(2) to Explanation-5 of Section 271(1)(c) in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted, the law is codified for applicability of penalty in search cases. The legislature has made conscious distinction between the cases where the return of income has already been filed prior to search qua the cases where the return is yet to be filed and has put them on a different pedestal. It is trite law that a judgement cannot be read out of context in which the question arose for decision in that case. It is neither desirable nor permissible to pick out a word or a sentence from the judgment of a Court divorced from the context of the question in consideration and to treat it to be the complete law declared by the Court. A judgment must be read as a whole and the observations from the judgment have to be considered in the light of questions which were presented before the Court. A decision of the Court takes its colour from its question in which it is rendered as enumerated in CIT vs. Sun Engineering works Pvt. Ltd. (1992) 198 ITR 297 (SC). Thus, context holds the key and the decision of the Court has to be read in the context of the facts involved therein and not on the basis of what logically flows there from. A stray sentence cannot be allowed to be put into service to dra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on behalf of the assessee, if admitted, would render provisions of Section 271AAA/271AAB of the Act otiose and infructuous as noted in the case of Vijay K. Shah (supra). 13. We also take note of the plea raised on behalf of the assessee that Section 153A of the Act opens with a non obstante clause which seeks to exclude the application of, inter alia, Section 139 of the Act and thus, in effect, the revised return filed under s.153A of the Act takes place of the original return under s.139 of the Act for the purposes of all other provisions of the Act. It is consequently the claim of the assessee that once the assessee files a revised return under s.153A of the Act, the revised return will be treated as the original return filed under s.139 of the Act in so far all other provisions of the Act are concerned. As noted earlier, Section 271AAA and Explanation 5A to Section 271(1)(c) of the Act deems culpability in appropriate cases even before the return is filed in search cases. Therefore, substitution of return originally filed under s.139 of the Act by subsequent return under s.153A of the Act has no impact on the legal fiction towards concealment enjoined by Explanation 5A of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f hearing. All other decisions of co-ordinate bench have also been pursued but found to be of no significance for dealing with legal proposition in hand and facts in issue. 17. In view of the aforesaid findings, we do not find any merit in the plea of the assessee. No other plea has been raised on merits to absolve the assessee from imposition of penalty. Consequently, the appeal of the assessee in ITA No.159/Ahd/2017 for AY 2010-11 is dismissed. 18. All other captioned appeals also concern imposition of penalty under s.271(1)(c) of the Act on the income understated in the original income of return filed under s.139 of the Act prior to search qua the return of income filed under s.153A of the Act consequent to search. Thus, in parity with the legal issue discussed in ITA No. 159/Ahd/2017 (supra), we do not subscribe to the plea of the assessee for reversal of the action of the CIT(A). We thus decline to interfere with the action of the Revenue. Consequently, all the appeals in ITA Nos. 159 to 163/Ahd/2017 are dismissed. 19. In the combined result, all the appeals of the assessee are dismissed. This Order pronounced in Open Court on 28/02/2019 - - TaxTMI - TMITax ..... X X X X Extracts X X X X X X X X Extracts X X X X
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