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2013 (11) TMI 411 - AT - Income TaxPenalty u/s 271(1)(c) / 271AAA - Concealed income - Held that - 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 relevant assessment year. This is the time given for passing an assessment order. For the impugned assessment years, it is an admitted position that assessee had not filed any return of income within two years from the end thereof - 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 - The amounts so shown by her as other income was not a part of her regular accounts. Hence such amounts squarely came within the purview of concealed income - Sub-section (1) of Section 271AAA clearly mentions that said Section applies only to a specified previous year. Explanation (b) defines what is the specified previous year. Both the impugned assessment years does not fall within such definition. Relevant previous years were neither the year in which search was conducted, nor was an year to which time for filing return under Section 139(1) was still there. Decisions relied on by the ld. CIT (Appeals) to give relief to the assessee were entirely on different fact situation and not relatable to any case where Explanation 5A to Section 271(1) applied - Decided in favour of Revenue.
Issues Involved:
1. Legitimacy of penalties levied under Section 271(1)(c) of the Income-tax Act, 1961. 2. Applicability of Section 271AAA versus Section 271(1)(c) for search assessments. 3. Voluntariness of income disclosure by the assessee. 4. Justification of concealment of income. Detailed Analysis: 1. Legitimacy of Penalties under Section 271(1)(c): The primary issue revolves around the penalties levied on the assessee under Section 271(1)(c) of the Income-tax Act, 1961. The Revenue argued that the penalties were justified because the assessee had not filed returns within the prescribed time and had concealed income. The Assessing Officer (A.O.) considered the income disclosed by the assessee in the returns filed post-search as concealed income, leading to penalties of Rs. 3,00,100/- and Rs. 3,03,530/- for the respective assessment years. 2. Applicability of Section 271AAA versus Section 271(1)(c): The assessee contended that Section 271AAA should apply instead of Section 271(1)(c) since the search was initiated after June 1, 2007. However, the Tribunal clarified that Section 271AAA applies only to a "specified previous year," which does not include the assessment years in question. The Tribunal emphasized that Explanation 5A to Section 271(1) was applicable, which deems the income disclosed post-search as concealed if the returns were not filed within the stipulated time. 3. Voluntariness of Income Disclosure: The assessee argued that the income disclosed in the returns was voluntary and not due to any evidence found during the search. The CIT (Appeals) initially accepted this argument, stating that the income was declared voluntarily and not due to the detection of undisclosed income during the search. However, the Tribunal disagreed, noting that the income was disclosed only after the search and the assessee had failed to file returns within the prescribed time. The Tribunal concluded that the disclosure was not voluntary but compelled by the search. 4. Justification of Concealment of Income: The Tribunal examined whether the assessee had concealed income. The Revenue argued that the investments in immovable properties were detected during the search and would not have been disclosed otherwise. The Tribunal agreed, stating that the income disclosed post-search was not part of the regular accounts and thus constituted concealed income. The Tribunal also noted that the assessee had not filed returns within the time allowed under Section 139(1) or the extended time under Section 153(1), further justifying the penalties under Explanation 5A to Section 271(1). Conclusion: The Tribunal set aside the orders of the CIT (Appeals) and reinstated the penalties levied under Section 271(1)(c) for both assessment years. The appeals filed by the Revenue were allowed, reaffirming the penalties for concealment of income. Order Pronouncement: The order was pronounced in the Court on Tuesday, 30/04/2013, at Chennai.
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