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2013 (4) TMI 938

..... e Respondent : Shri G. Baskar, Advocate ORDER PER ABRAHAM P. GEORGE, ACCOUNTANT MEMBER : These are appeals filed by the Revenue, directed against orders dated 20.11.2012 of Commissioner of Income Tax (Appeals)- II, Chennai, deleting penalties of ₹ 3,00,100/- and ₹ 3,03,530/- respectively, levied on the assessee under Section 271(1)(c) of Income-tax Act, 1961 (in short 'the Act'), for the impugned assessment years. 2. Facts apropos are that assessee was subjected to a search under Section 132 of the Act on 26.8.02008. For both the assessment years, no returns were filed by the assessee prior to the search. Returns were filed first time by the assessee on 15.6.2010 for the impugned assessment years, in pursuance of notice .....

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..... the assessment years under Section 153A read with Section 143(3) of the Act, accepting the returned income. As per the A.O., the income of ₹ 10,69,730/- returned by the assessee for assessment year 2006-07 included the investments of ₹ 10,19,330/- and the income of ₹ 10,80,070/- returned by the assessee for assessment year 2007-08 included the investments of ₹ 10,29,669/-, in immovable properties. 4. Thereafter, proceedings for penalty was initiated under Section 271(1)(c) of the Act, for both the years. Assessing Officer was of the opinion that the amounts mentioned by the assessee in the returns filed by her, pursuant to notices issued under Section 153C, were nothing but concealed income. When put on notice, repl .....

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..... 6. CIT(Appeals) was appreciative of the above contentions of the assessee. According to him, income was declared voluntarily by the assessee and such declaration was not due to detection of any undisclosed income, during the search proceedings. He thus deleted the penalty levied for both the assessment years. 7. Now before us, learned D.R., strongly assailing the orders of CIT(Appeals) for both the assessment years, submitted that assessee had not furnished her returns within the period prescribed under Section 153(1) of the Act. Assessee had failed to file her returns in the ordinary course. Hence, Explanation to Section 271(1) was attracted. Assessing Officer was satisfied that assessee had taxable income, which would not have been discl .....

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..... any levy of penalty under Section 271(1)(c) in respect of search assessments. Even otherwise, according to him, assessee had cooperated with the Department and there was no evidence to show that returned income reflected any concealed amounts. There was also no evidence to show that assessee had failed to file any particulars relevant to her assessments. Therefore, according to the learned A.R., ld. CIT(Appeals) was justified in deleting the penalty levied for both the years. 9. We have perused the orders and heard the rival submissions. There is no dispute that assessee had not filed returns of income within the time period allowed under Section 153(1) of the Act. The time period allowed under Section 153(1) is two years from the end of re .....

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..... ate of search, he shall, for the purposes of imposition of a penalty under clause (c) of subsection (1) of this section, be deemed to have concealed the particulars of his income or furnished inaccurate particulars of such income.] A reading of the above explanation in conjunctions with the facts of the given case, clearly show that each and every ingredient thereof stood satisfied. Assessee had not filed here return within the time allowed under Section 139(1) or the extended time mentioned in Section 153(1) of the Act. There was a search in assessee s case when investments in immovable properties were detected. In the returns filed subsequent to the search, assessee disclosed income to cover the source of such investments. There is much s .....

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..... n (1) of section 271 shall be imposed upon the assessee in respect of the undisclosed income referred to in sub-section (1). (4) The provisions of sections 274 and 275 shall, so far as may be, apply in relation to the penalty referred to in this section. Explanation.-For the purposes of this section,- (a) undisclosed income means- (i) any income of the specified previous year represented, either wholly or partly, by any money, bullion, jewellery or other valuable article or thing or any entry in the books of account or other documents or transactions found in the course of a search under section 132, which has- (A) not been recorded on or before the date of search in the books of account or other documents maintained in the normal course re .....

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