2011 (6) TMI 462

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..... ssessing authority is also looked into. The fact that the assessee has not filed any return of income through its block return is a legal error but not a ground to impose penalty. The block assessment itself has been completed by the Assessing Officer by adopting the amount of capital gains offered by the assessee in its belated return filed immediately after the search operation. Therefore,if that amount of capital gains is impregnated in the block return filed by the assessee, the equation becomes complete. The only correction was calculating tax at 60 per cent instead of 20 per cent. Thus the only mistake committed by the assessee is that it acted a little over-smart and over-cautious, even though the endeavour of the assessee was not .....

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..... taxation. The assessee computed the tax liability at 20 per cent, which is normally applicable to long-term capital gains. The return filed by the assessee was anyhow belated. The Assessing Officer did not take into cognizance the belated return and completed the assessment accordingly. The assessee disclosed nil undisclosed income in the belated return filed by it on the ground that the capital gains have already been offered for taxation in the voluntary return filed immediately after the search. Therefore it is the case of the assessee that there is no case of non-disclosure of undisclosed income in the block return filed by the assessee. 4. We considered the matter. This is a unique case. Technically speaking, the return filed by the .....

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..... amount of capital gains is impregnated in the block return filed by the assessee, the equation becomes complete. The only correction was calculating tax at 60 per cent instead of 20 per cent. 6. If the assessee had not furnished its belated return immediately after the search, the assessee would have definitely offered the capital gains for taxation in its block return. If that amount is offered through the block return there would be no case of action to impose penalty. Therefore it is to be seen that the only mistake committed by the assessee is that it acted a little over-smart and over-cautious, even though the endeavour of the assessee was not productive. 7. In the facts and circumstances of the case we do not find the levy of pena .....

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