2012 (11) TMI 1271 - AT - Income Tax

Summary

Issues involved:
The judgment deals with the deletion of penalty u/s.271(1)(c) by CIT(A)-II, Ahmedabad in three identical cases following a search u/s.132 conducted on 15.11.2006.

Issue 1 - Deletion of penalty u/s.271(1)(c):
The appeals of the Revenue involved the common issue of the deletion of penalty levied u/s.271(1)(c) by CIT(A)-II, Ahmedabad in three cases. The disclosed income was declared at the time of search, taxed as per the return, and taxes were paid. The contention was that since the disclosure was made u/s.132(4) of the IT Act, no penalty should be levied. However, the AO imposed penalties which were contested by the assessee.

Issue 2 - Applicability of Explanation-5 to Section 271(1)(c):
The assessee submitted before the ld.CIT(A) that the disclosed income was included in the return of income and taxes were paid before filing the return. The ld.CIT(A) allowed the appeal and deleted the penalty based on the conditions satisfied under clause (2) of Explanation 5 to Section 271(1)(c) of the IT Act.

Decision:
After considering the submissions and case laws, the Tribunal held that the assessee fulfilled all conditions for immunity against penalty as per Explanation-5 to Section 271(1)(c) of the IT Act. The Tribunal approved the cancellation of penalty by ld.CIT(A) as a correct view, dismissing the grounds raised by the Revenue Department. Consequently, all three appeals of the Revenue were dismissed.