9911796707
TMI Blog2012 (12) TMI 667X X X X Extracts X X X X X X X X Extracts X X X X ..... the statement of Mr. Anil Jain was recorded on oath under Section 132(4) of the Act on 17.02.2006. It was interalia deposed that unaccounted income of various years was invested, benami in the share capital of some companies. Shri Kahshinath Shukla, Director of the assessee company, also introduced unaccounted money benami name as share capital. The details of these were not known to him on the date of search. However, the total amount was quantified at Rs.15 crores. These details were furnished on 31.07.2006. 3. According to the statement, the assessee's benami share investment for the two years, i.e., assessment years 2005-06 and 2006-07, were shown at Rs.121 lakhs and Rs.521.95 lakhs respectively. The total unaccounted income for seven assesses of the group was shown as Rs.1522.98 lakh. Subsequent to the searches, a notice under Section 153A of the Act was issued to the assessee. In response, it was stated that the return filed under Section 139(1) may be treated as return under Section 153A. Assessment under Section 153A read with section 143(3) was completed on 31.12.2007, in which the surrendered amount of Rs.121 lakh was deducted from the loss of Rs.19,08,840/- shown in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wever, the department has erroneously levied penalty on the assessee, when assessee made all efforts to buy peace by surrendering the amount of income while search. 6. The assessee also contended that since penalty is in quasi-criminal form, it is the duty of the department to establish that the assessee has concealed income. Reliance has been placed on the judgment of T. Ashok Pai v.CIT reported in (292 ITR 11) (SC) 3. Thus, the revenue has not established that the assessee has deliberately concealed income. On the other hand, the assessee has surrendered the income. Thus, imposition of penalty on the assessee is bad in law. The assessee placed reliance on the judgment of CCE Vs. Pepsi Foods Limited reported in 2010 (260) ELT 481 (SC) where the Court held that it is essential to establish mens rea for purposes of levying penalty. In the instant case, the assessee has no motive to conceal income, nor has any intention to escape income from assessment. The same can be stated based on the fact that the assessee has disclosed and surrendered income on oath u/s 132(4) of the Act. Thus, there is no way that the assessee intended to conceal income which should attract penalty u/s 271(1) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat the surrender made by the assessee was retracted, and the mode and manner of earning the income has not been disclosed at any stage. Although, income was offered to tax on 14.12.2007, yet, that cannot obliterate the act of concealment, committed twice in filing return under Sections 139(1) and return u/s 153A for the reason that the assessee has used dilatory tactics in payment of tax and interest. Thus, no immunity accrues on the assessee from the liability. It is highlighted that the assessee in fact did not file any return, and only chose to revise the return originally filed, only on 14-12-2007, after declaring that its original return (of 31-10-2005) be treated as its response to the notice under Section 153A. In the facts of this case, the provision of clause (2) of Explanation 5 to Section 271 (1) (c) did not apply. 11. Before a further discussion, it would necessary to extract the relevant provision, i.e. Explanation 5 to Section 271 (1) (c); it is as follows: "Section 271. FAILURE TO FURNISH RETURNS, COMPLY WITH NOTICES, CONCEALMENT OF INCOME, ETC. (1) If the Assessing Officer or the Commissioner (Appeals) in the course of any p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... all, for the purposes of imposition of a penalty under clause (c) of sub-section (1) of this section, be deemed to have concealed the particulars of his income or furnished inaccurate particulars of such income, Unless, - (1) Such income is, or the transactions resulting in such income are recorded, - (i) In a case falling under clause (a), before the date of the search; and (ii) In a case falling under clause (b), on or before such date, in the books of account, if any, maintained by him for any source of income or such income is otherwise disclosed to the Chief Commissioner or Commissioner before the said date; or (2) He, in the course of the search, makes a statement under subsection (4) of section 132 that any money, bullion, jewellery or other valuable article or thing found in his possession or under his control, has been acquired out of his income which has not been disclosed so far in his return of income to be furnished before the expiry of time specified in sub-section (1) of section 139, and also specifies in the statement the manner in which such income has been derived a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rovided by Clause (2) to Explanation 5 in this case, was not available to the assessee. It has to be reiterated that the said provision is available, not merely when the assessee, in his statement offers or surrenders, to tax the amount in question which is later assessed, but also complies with the other conditions, of having filed the return. The allusion to Section 139 (1) is significant in this regard, because a notice and consequent search assessment pursuant to Section 153A stands excluded, altogether, by virtue of the non-obstante clause to the latter (Section 153A) provision. Even if the other view, more favourable to the assessee were to be taken, and for a moment, a return under Section 153A were to, arguendeo be assumed to be covered as one under Section 139 (1), the fact remains, that in this case, the assessee did not include it, pursuant to the notice issued, and instead chose to merely reiterate its return originally filed on 31-10-2005. 14. This Court is also of the opinion that a plain reading of Clause (2) to Explanation 5 (to Section 271 (1) (c)) altogether excludes its application to cases where returns are filed under Section 139 (1). This clause, in the opini ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
