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TMI Blog2013 (1) TMI 285X X X X Extracts X X X X X X X X Extracts X X X X ..... mounting of Rs. 590.63 lakhs as his undisclosed income for the block period, which was spread over A.Ys. 2001-02 to 2007-08, vide returns of income filed u/s. 153A r.w s. 139(1) of the Act, filed subsequently on 28-08-2007. The aggregate returned income was in fact at Rs. 603.39 lakhs on account of some additional disclosure for A.Y 2007-08. The assessments were made accordingly for each of the years u/s.153A r.w.s. 143(3) of the Act, i.e., on the basis of the income as originally returned u/s. 139(1), and the additional income as per the disclosure pursuant to the search, being dated 20/6/2008 for A.Ys. 2004-05 and 2005-06. The assessee having returned a higher income only on the basis of search, and the materials found thereat, penalty proceedings u/s. 271(1)(c) of the Act on the additional income offered vide the disclosure petition/returns u/s. 153A were also initiated for all the years, it appears, up to A.Y. 2005-06; it being trite that the penalty for concealment and/or furnishing inaccurate particulars of income u/s. 271(1)(c) of the Act is to be with reference to the income and its particulars as returned originally (refer: CIT v. Onkar Saran & Sons [1992] 195 ITR 1). Pena ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he conditions of Explanation 5 to sec. 271 (1)(c) stood met in the instant case, he confirmed it to be so, i.e., conceded to the applicability of clause (2) of Explanation 5 to sec. 271(1)(c) for the relevant years. The ld. AR, on the other hand, would submit that there is no basis whatsoever for the Revenue's challenge. The ld. CIT(A) had declined relief in the first instance only on the basis that the entire admitted demand had not been paid by assessee, which finding was factually incorrect. The first appellate authority had called for a remand report from the AO, and only on the latter's confirmation that no demand, either as to tax or interest thereon, for the relevant years was outstanding as on the date of the appellate order, i.e., on 27-08-2009, rectified the said order in relation to these years; the same clearly bearing a factual mistake in this regard. 3.2 The hearing was closed at this stage, pronouncing the result of these appeals by the Revenue against it; it being the common contention of both the parties that the provision of Explanation 5 to section 271(1)(c) stood attracted and satisfied in the instant case for the relevant years. 4. We have heard the parties, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 sub-section (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 and pays the tax, together with interest, if any, in respect of such income." A bare reading of the provision would exhibit that clause 2 of Explanation 5 section 271(1)(c), i.e., the provision under which the assessee seeks immunity, and which has been found applicable in the instant case by the first appellate authority, is applicable only to cases where the due date for furnishing the return of income u/s. 139(1) of the Act has not expired as on the date of search, which in the instant case is 23-08-2006. Though, the ld. counsel, in this ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or to the confirmation of penalty by the first appellate authority on 27-08-2009, though it is not clear whether the same stood paid by the date of penalty order (26-12-2008) or subsequent thereto. The balance demand of Rs. 4,12,461/- and Rs. 8,17,864/- for A.Ys. 2004-05 & 2005-06 respectively, observed as outstanding as on 27-08-2009 by the ld. CIT(A) vide his order of even date, is, thus, per se not incorrect. As it appears, demand (liability) to that extent stands 'discharged' on rectifications under section 154 being effected by the AO subsequent to the assessments. The rectification order would stand to be merged with the respective assessment order, and thus have the effect of reducing the outstanding liability as on the date of the assessment (20-06-2008). As such, therefore, liability on account of tax and interest, to the extent of Rs. 9,20,284/-and Rs. 11,98,845/- was outstanding for payment for A.Ys. 2004-05and 2005-06 respectively as on the date of the assessment (20-06-2008), if not the date of levy of penalty u/s. 271(1)(c) for the said years (26-12-2008). The statute, in our clear view, provides a time-limit up to the date of filing the return u/s. 153A of the Act fo ..... X X X X Extracts X X X X X X X X Extracts X X X X
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