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TMI Blog2012 (12) TMI 667X X X X Extracts X X X X X X X X Extracts X X X X ..... ice under Section 153A was issued on 20-7-2006. It was only when assessment proceedings were taken up for consideration, did the assessee, by letter dated 14-8-2007, request, that its return, filed on 31-10-2005, be treated as its return filed in response to the notice under Section 153A. Much later, it sought to revise its computation, on 14-12-2007. Therefore, this Court is of the opinion that the “escape route”, provided by Clause (2) to Explanation 5 in this case, was not available to the assessee - the Tribunal did not commit any error of law appeal, being devoid of merits, is consequently dismissed. - ITA No. 170/2012 - - - Dated:- 12-12-2012 - S. Ravindra Bhat And R.V. Easwar, JJ. Appellant Rep. by : Sh. Anoop Sharma, Adv Respondent Rep. by : Sh. Sanjeev Sabharwal, Sr. Standing Counsel with Sh. Puneet Gupta, Jr. Standing Counsel. JUDGEMENT Per : S. Ravindra Bhat, J : 1. This is an assesse s appeal under Section 260-A of the Income Tax Act 1961 ( the Act ) assailing the order of the Income Tax Appellate Tribunal, Delhi Bench (ITAT) dated 25-3-2011 in ITA No. 701/D/09. The assessee urges that the substantial question which arises in this case, is th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... even the surrendered income would have escaped assessment. The CIT (A) and the ITAT successively rejected the assessee s appeals. 4. The primary contention of the assessee is that the case falls under Explanation 5(a)(1) to Section 271(1)(c) of the Act as the income mentioned therein or transactions were recorded in the books in the form of share capital of other concerns of the groups. The counsel for the assessee has relied on the case of Commissioner Of Income-Tax v. Chhabra Emporium, reported in 2003 (264) ITR 249 (Del). In that case, it was held that when surrender of the asset has been made on the date of search and when such surrender falls within the explanation 5 to section 271(1)(c) of the Act, the penalty was bound to be cancelled. 5. The assessee argued that since the undisclosed income was admitted in the statement given on 17.02.2006, i.e., the date of search, the same could not be included in the return which was filed on 12.01.2005 which was prior to the search. Moreover, no return was filed pursuant to the notice u/s 153A. Therefore, there is no question of retracting from the statement made on oath under section 132(4) and thus, no concealment of income is the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... CIT v. S. Kumar Ors, (2009) 120 TTJ (Bangalore) 361 where it was held that if the assessee surrenders undisclosed income and the assessee files return and pays taxes on it, then the penalty is not leviable. However, in the instant case, the assessee has not filed returns declaring the undisclosed income. The return filed under Section 139(1) did not include any such income, neither did the assessee file the returns after notice u/s 153A. Thus, it is not incorrect on the part of the Revenue to levy penalty on the assessee. It was also contended that immunity under Explanation 5 of Section 271(1) (c) cannot be availed by the assessee. Relying on the decision of CIT vs. S.D.V. Chandru 266 ITR 175 (Mad.), the Respondent argues that it is necessary for the assessee to declare the mode in which the income was acquired. In the instant case, leaving aside the mode of acquisition of income, even the return was not filed of the entire income before the search was made. Thus, immunity under this explanation cannot be granted to the assessee. 9. The Respondent also relied on the judgment in S. Kumar Ors. (Supra) on the issue of benami transaction. It is clear that the facts are distingu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or (B) 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 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 sub-section be deemed to represent the income in respect of which particulars have been concealed. . Explanation 5 : Where in the course of a search under section 132, the assessee is found to be the owner of any money, bullion, jewellery or other valuable article or thing (hereafter in this Explanation referred to as assets) and the assessee claims that such assets have been acquired by him by utilising (wholly or in part) his income, - (a) For any previous year which has ended before the date of the search, but the return of income for such year has not been furnished before the said date, or, where such return has been furnished before the said date, such income has not been declared therein; or (b) for any previous year which is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y under clause (2) of Explanation 5 to Section 271(1)(c): (i) the assessee must make a statement under Section 132(4) in the course of search stating that the unaccounted assets and incriminating documents found from his possession during the search have been acquired out of his income, which have not been disclosed in the return of income to be furnished before expiry of time specified in Section 139(1). (ii) the assessee should specify, in his statement under Section 132(4), the manner in which such income was earned. (iii) the should pay the tax together with interest, if any, in respect of such undisclosed income. 13. From the record, this Court notices that after the search, and the statement recorded under Section 132 (4), the assessee, on being issued with notice under Section 153A did not file any return. The notice under Section 153A was issued on 20-7-2006. It was only when assessment proceedings were taken up for consideration, did the assessee, by letter dated 14-8-2007, request, that its return, filed on 31-10-2005, be treated as its return filed in response to the notice under Section 153A. Much later, it sought to revise its computation, on 14-12- ..... X X X X Extracts X X X X X X X X Extracts X X X X
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