TMI Blog2014 (4) TMI 1259X X X X Extracts X X X X X X X X Extracts X X X X ..... DR ORDER PER BENCH ; This appeal of the assessee arises from the order of the CIT(A),-1, Ludhiana dated 30.10.2013 for the assessment year 2009-10. The assessee has raised following grounds of appeal: 1. That the order of the worthy CIT(A), Ludhiana, dated 30.10.2013 is against the law facts of the case. 2. That the worthy CIT(A). Ludhiana, was erred in law in confirming the penalty of ₹ 24,54,090/- u/s 271(1)(c) imposed by the A.O. ignoring the fact that the assessee has declared additional income in response to notice u/s 153A at ₹ 71,35,440/- and thereafter voluntarily revised return at an income of ₹ 76,35,440/- before the completion of the assessment u/s 153A of the Act. 3. That assessee request to add or amend any ground of appeal before the appeal is finally heard and disposed off. 2. The brief facts of the case are that during assessment, it was noticed that the assessee disclosed an additional income of ₹ 71,00,000/- through filing of revised return in response to notice u/s 153A. This income was not disclosed at the time of filing of original return u/s 139. The A.O. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... anation 5 to section 271(1)(c) to the effect that income disclosed must relate to the period for which time for filing return under section 139(1) was still available as on the date of search. It is apparent that the search in the case of the assessee took placed on 06.11.2009 and return in response to notice u/s 153A was filed by the assessee on 31.03.2011 declaring additional income of ₹ 71,00,000/- disclosed u/s 132(4) of the Act. The return for A.Y. 2009-10 u/s 39(1) had to be filed before the end of Financial Year i.e. 31.03.2010. The AO, therefore, highlighted that the case of the assessee was clearly attracting the provisions of section 271(1)(c ) explanation 5. The AO has also placed reliance on the decision of Surender Paul vs. CIT 287 ITR 223 wherein it has been clearly held as follows: The fact that the income referred to above is declared by the assessee in any return of income furnished by him on or after the date of search, will not provide the immunity to the assessee from imposition to the penalty under Section 271(1)(c) of the Act unless the conditions mentioned the statement under Section 132(4) of the Act, as well as the conditions as laid down i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ceedings. The assessee has highlighted the fact that he had made disclosure u/s 132(4) on the basis of incriminating documents found and seized during the course of search operation and consequently had filed return of income in response to notice u/s 143A wherein the said disclosure of ₹ 71,0,000/- had been disclosed. He further pleaded that the AO framed the assessment at returned income without any variation so there was no question of any concealed income. The appellant further placed reliance on the decision of the Hon ble High Court of Calcutta in the case of CIT vs. Suresh Chand Bansal 329 ITR 330. The AR further made a claim that the search assessments framed under the provision of section 153A, 153B and 153C were a complete code by themselves and could not be treated as continuance of normal assessment proceedings. He, therefore, pleaded that the concealment of income had to be seen with the reference to additional income brought to tax over and above income returned by the assessee in response to notice issued under section 153A/153X. It was therefore, proposed that the original return of income filed u/s 139 was of no relevance in deciding issue of concealment. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d that the surrender was without admitting any concealment. On appeal by the department, the High Court ( 87 DTR 172 (Delhi) reversed the Tribunal on the ground that as there was absolutely no explanation by the assessee for the concealed income of ₹ 40.74 lakhs, the first part of clause (A) of Explanation 1 to section 271(1)(c) is attracted. On appeal by the assessee to the Supreme Court held dismissing the appeal: The Tribunal has not properly understood or appreciated the scope of Explanation 1 to section 271(1)(c). The AO shall not be carried away by the plea of the assessee like voluntary disclosure , buy peace , avoid litigation , amicable settlement , etc. to explain away its conduct. The question is whether the assessee has offered any explanation for concealment of particulars of income or furnishing inaccurate particulars of income. Explanation to section 271(1)(c) raises a presumption of concealment, when a difference is noticed by the A.O. between reported and assessed income. The burden is then on the assessee to show otherwise, by cogent and reliable evidence. When the initiation onus placed by the explanation, has been discharged by him, the onus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ting. The scope of section 271(1)(c) has also been elaborately discussed by the Hon ble Supreme Court in UOI vs. Dharmendra Textiles Processors 306 ITR 277 (SC) and CIT vs. Atul Mohan Bindal 317 ITR 1 (SC). The principle laid down by this court has been correctly followed by the Revenue and there is no illegality in the department initiating penalty proceedings in the instant case. 7. The perusal of the decision of Hon ble ITAT F Bench in the case of Prem Arora vs. DCIT relied upon by the AR shows that the same is in respect of search conducted on 22.11.2006 i.e. the period when explanation 5A to section 271(1)(c) has not been brought into a statute by the Finanace Act, 2007. In fact, the Hon ble Bench has made a clear distinction which has not been highlighted by the AR to make an attempt to take advantage of the said decision in his own case. The observations of the Hon ble Bench are as under: The scheme of assessment till insertion of explanation 5A and section 271AAA by the Finance Act, 2007 gave immunity to the assessee in respect of undisclosed income based on entries recorded in seized material. In the case of the assessee, the search was conducted o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... due date for filing the return of income for such year has expired and the assessee has not filed the return, then, notwithstanding 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 imposition of a penalty under clause (c) of sub-section (1) of this section, be deemed to have concealed the particulars of his income or furnished inaccurate particulars of such income. In view of the above detailed discussion and facts and circumstances of the case, the action of the AO in imposing penalty u/s 271(1)(c) is confirmed. 6. We have heard the rival contentions and perused the facts of the case. The penalty has been levied under section 271(1)(c) of the Act by the A.O. by invoking the provisions of Expln. 5 to section 271(1)(c), where immunity has been provided. But in the present case, the AO observed that the assessee has already filed his return under section 139 where ₹ 71,00,000/- has not been disclosed. Therefore, this clearly is a concealed income, which has been admitted by the assessee. On the contrary, the ld. CIT(A), Ludhiana has upheld the penalty imposed by the AO ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , then by implication, it has to be taken as the date extended u/s 139(4). In view of above, we hold that assessee get the benefit/immunity under clause (b) of Explanation to section 271(1)(c) because the assessee has filed its return of income within due date and therefore, the penalty levied by the AO cannot be sustained on this ground. Even though, we are not affirming the finding and the conclusion of the Ld. Commissioner (Appeals), however, as per the discussion made above, penalty is deleted in view of the interpretation of Explanation of 5A to section 271(1)(c). Consequently, ground raised by the revenue is treated as dismissed. 7. In the present case, the assessee has submitted the explanation with regard to the additional income of ₹ 71,00,000/- offered from business. The assessee was confronted with the chart containing the detail of properties alongwith sources of investment thereof. Once the assessee has offered explanation, which has been accepted by the A.O. and the assessee having paid taxes and interest thereon then there is no ground of penalty. Our views are supported by the decision of ACIT vs. Shri A.N. Annamalaisamy in ITA No.1634/Mds/2012 de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be strictly construed because one has to see what is the status of income on the date of search and not afterwards. The penalty in this case, cannot be levied under the main provision as the assessee has included this income in the return of income in response to notice under section 153A and which has been assessed also. There is no variation between the return of income and the assessed income, qua this addition. For levying the penalty in cases of search after 1st June 2007, the deeming provisions of Explanation 5A can only be invoked, which clearly carves out the exception in the cases where due date of filing of the return of income had not expired at the time of search. Thus, for levy of penalty under Explanation 5A, it has to be seen whether any assets or income found on the date of search has been acquired out of the previous year and not afterwards for which penalty can be levied or initiated under other provisions of section 271(1)(c). Thus, in our opinion, once the due date had not expired for filing the return of income for the assessment year 2007 08, at the time of search, penalty cannot be levied under the deeming provisions of Explanation 5A. Consequently, we set as ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
