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Issues involved: Appeal against penalty u/s 271(1)(c) on additional income offered in response to notice u/s 153A for Assessment Years 2005-06 and 2006-07.
ITA No.5658/Del/2012: The Appellate Authority confirmed penalty of Rs. 36,54,925/- u/s 271(1)(c) on additional income offered by the appellant, which was assessed protectively. The appellant argued that penalty cannot be imposed based on entries in seized documents. The Tribunal referred to previous cases and held that penalty cannot be imposed if the return of income filed u/s 153A is accepted by the Assessing Officer, as there will be no concealment of income. The penalty was deleted based on this reasoning. ITA No.5659/Del/2012: Similar to the first issue, the Appellate Authority confirmed penalty of Rs. 9,87,830/- u/s 271(1)(c) on additional income offered by the appellant. The Tribunal followed the same reasoning as in the previous case and deleted the penalty based on the acceptance of the return of income filed u/s 153A. The search operation u/s 132(1) was conducted on 22.11.2006, leading to the filing of return of income by the appellant in response to notice u/s 153A. The difference in income declared was due to additional undisclosed income from trading and commission on spices. The penalty u/s 271(1)(c) was imposed during the assessment u/s 153A, which was confirmed by the CIT (A). The Tribunal, relying on previous decisions, held that penalty cannot be imposed if the return of income filed u/s 153A is accepted, leading to the deletion of the penalties in both appeals. The Tribunal's decision was based on the interpretation of Explanation 5 of sec. 271(1) of the Act and the applicability of penalty provisions in cases of search assessments. The Orders under appeal were set aside, and the penalties were deleted in favor of the assessee. *Note: Separate judgment was not delivered by the judges.*
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