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TMI Blog2010 (2) TMI 738X X X X Extracts X X X X X X X X Extracts X X X X ..... notice under section 153A, such income has not been disclosed and the reason for such non-disclosure is stated to be non-availability of copy of legible seized documents - When interest income itself is not disclosed, there is no question of holding that all the facts relating to the interest income and material to the computation of income was disclosed by the assessee. Thus, the assessee in the present case has failed to discharge obligations laid upon him by Explanation 1 to section 271(1)(c). - Decided against the assessee X X X X Extracts X X X X X X X X Extracts X X X X ..... er:- "P.P. Bindra 50, Defence Colony Market, New Delhi [Assessment year 1998-99] Sr. No. FDR No. and Date Bank Amount Period [Month] A.Y. 1998-99 Interest 1999-2000 (AY) 1. 627151 of 17-1-1998 SB of Patiala 500000 15 10150 53235 2. 627152 " " " " " " 3. 627153 " " " " " " 4. 627150 " " " " " " 5. 627154 " " 550000 " 11200 58470 6. 627335 of 22-4-1998 " 100000 12 - 10285 7. 627336 " " 400000 12 - 41140 8. 1424 of 1-1-1998 Ambience Leasing Ltd. 1000000 36 3750 164599 89300 487434" 4. For assessment year 1999-2000, the interest was declared as calculated in the above chart amounting to Rs. 1,64,599. As FDR had matured on 31-12-2000, interest of Rs. 2,01,943 had accrued in respect of assessment year 2000-01 and interest finally received by the assessee during assessment year 2001-02 is Rs. 1,51,458 for the period up to 31-12-2000. In response to notice issued under section 153A for filing the return, the assessee did not disclose the abovementioned interest. However, during the course of assessment proceedings, as mentioned in the impugned assessment order, the assessee had filed revised computation of income in which ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ht of a number of High Court and Supreme Court judgments." Assessment year : 2001-02:- "In this connection it is submitted that the assessee had declared income of Rs. 96,000 in response to the notice under section 153A of the Act when the assessee did not have the photocopies of the entire seized record. After going through the photocopies of the seized record, the assessee had found three omissions. Firstly, the short-terms capital gain of Rs. 32,675 had been omitted in the original return. Similarly the interest income of Rs. 1,78,554 from the Bank FDR and theinterest income of Rs. 1,51,458 from Ambience Leasing Ltd. had been omitted. The assessee had, therefore, filed revised statement of total income at Rs. 4,46,690 voluntarily before the initiation of any enquiries or issue of any questionnaire. It would be appreciated that in case of photocopies, so the seized record had been available at the time of filing the original return, the assessee would have filed the total income Rs. 4,46,690 which had been shown in the revised statement of total income on his own voluntarily. In view of this fact, the assessee is not liable for penalty under section 271(1)(c) of the Act in th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tax along with interest was paid immediately on 3-10-2007. It was submitted that even after the search, the Assessing Officer could not make any addition bas ed on seized material or statements recorded which clearly shows that the assessee was always filing his return and the mistake did not occur by an intention and it was only due to the fact that the entire seized material was not available. Reliance was placed on the decision in the case of CIT v. Suresh Chand Bansal [2009] 223 CTR (Cal.) 128 where in search under section 153A, the income was revised and additional income was accepted, penalty levied was held not justified. 9. Considering all these submissions, the CIT(A) observed that disclosure of interest income earned by the assessee from M/s. Ambience Leasing Ltd. had nothing to do with the seized material since the assessee was having an FDR with M/s. Ambience Leasing Ltd. which was appearing in the balance sheet of the assessee, therefore, interest on the same could have been offered in the original return itself. Having not offered the said interest income in the original return, the assessee got another opportunity to offer the same while filing the return of incom ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Therefore, the assessee was unable to return his income correctly in response to notice for filing the return under section 153A. Referring to the reply of the assessee filed before the Assessing Officer, it was submitted that in the absence of legible copies of seized material the assessee could not file correct income and upon coming to know that interest income has been omitted to be filed, a revised computation of income was filed voluntarily and, therefore, there was no concealment on the part of the assessee. It is a case of omission on account of non-availability of seized record and, therefore, ld. CIT(A) was not right in upholding the penalty to the extent of 100 per cent of the tax sought to be evaded. 12. On the other hand, it was submitted by ld. DR that the assessee in earlier years has been regularly offering the interest income in respect of FDR held by him from M/s. Ambience Leasing Ltd. For this purpose, he referred to the returns of income filed by the assessee in respect of assessment years 1998-99 and 1999-2000 wherein interest on accrual basis from M/s. Ambience Leasing Ltd. was disclosed. He submitted that no part of FDR copy can be said to be illegible. He ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... have been disclosed by him, then, the amount added or disallowed in computing the total income of such person as a result thereof shall, for the purposes of clause (c) of this subsection, be deemed to represent the income in respect of which particulars have been concealed." 15. Explanation 1 to section 271(1)(c) describes that where in respect of any facts material to the computation of total income of any person under Income-tax Act, the assessee fails to offer an explanation or offers an explanation which is found by the Assessing Officer to be false or such person offers an explanation which he is not able to substantiate and fails to prove that such explanation is bona fide and that all the facts relating to the same and material to the computation of his total income were disclosed by him, in that circumstances the amount added or disallowed in computing the total income of such person as a result thereof shall, for the purposes of clause (c) of section 271(1) be deemed to represent the income in respect of which particulars have been concealed. 16. Viewing the above provision in the light of the facts of the present case, it is observed that it is a case where the asses ..... X X X X Extracts X X X X X X X X Extracts X X X X
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