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TMI Blog2014 (2) TMI 131X X X X Extracts X X X X X X X X Extracts X X X X ..... e facts in brief giving rise to dispute in the present writ petition are as under. 4. Petitioner M/S Crossing Infracture Private Limited is engaged in business of real estate, developer, builder and colonizer. A search and seizure operation held on 6.2.2009 at petitioner's premises and its subsidiary companies under Section 132 of Act, 1961 in which valuable and documents/ papers were seized by Search Team. During the Course of search, petitioner made a statement under Section 132(4) of Act, 1961 offering income of Rs. 60 crore for assessment year 2009-10 (financial years 2008-09). The details of such offer are as under: Tentative trading results 35 crores Transaction of Sale/purchase of land 23.47 crores Other income 1.53 crore Copy of the said statement is on record as Annexure 1 to this writ petition. 5. Petitioner, thereafter filed returns of income in compliance of notice under Section 142 (1) of Act, 1961 declaring total income of Rs. 46,38,04,798/-. The department issued notice dated 24.12.2010 requiring petitioner to show cause as to why he filed return of Rs. 46.38 crores instead of 60 crores as stated in his statement under Section 132 (4) of Act, 1961, during the c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 271AAA of Act, 1961, but if the compliance is not satisfactory and shows that Assessee has followed a mischievous conduct, penalty would be justified and Sub-section (2) of Section 271AAA of Act, 1961 would not be attracted in such contingency. He placed before this Court the impugned orders passed by authorities below as also Apex Court's decision in Mak Data Private Limited Vs. Commissioner of Income Tax (2013) 358 ITR 593 (SC) and a Division Bench judgment of Delhi High Court in Shourya Towers P. Ltd. Vs. Deputy Commissioner of Income Tax (2013) 359 ITR 523 (Delhi). 10. It would be appropriate at this stage to have a glance over Section 271AAA (1) (2) and (3) of Act, 1971, which read as under: "271AAA. (1) The Assessing Officer may, notwithstanding anything contained in any other provisions of this Act, direct that, in a case where search has been initiated under section 132 on or after the 1st day of June, 2007, but before the 1st day of July 2012, the assessee shall pay by way of penalty, in addition to tax, if any, payable by him, a sum computed at the rate of ten per cent of the undisclosed income of the specified previous year. (2) Nothing contained in sub-section (1) s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ovided in Sub-section (2) of Section 271AAA are observed by Assessee, besides the fact, he shall absolve himself from the liability of penalty under Sub-section (1) of Section 271AAA, he will also legally escape from liability of penalty under Section 271 (1) (c) in respect to undisclosed income vide Sub-section (3) of Section 271AAA. 14. In the present case, for the assessment year 2009-10, petitioner had not filed regular return since the search and seizure operation was conducted on 6.2.2009 itself i.e. during the continuance of the Assessment Year concerned. In his statement under Section 132(4) of Act, 1961, he stated that the estimated tentative income on assumptive basis would be around 35 crore, but offered tax to an aggregate sum of Rs. 60 crores. He also claims to have specified the manner in which such income was derived and adduced documents to substantiate manner in which undisclosed income was derived. 15. It is true that in the regular return, which he filed for Assessment Year 2009-10, he disclosed income of Rs. 46.38 crore and odd (i.e., less than 60 crores, as admitted in his statement under Section 132(4) of Act, 1961) but then he filed a revised return after s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fied by Assessee or not except of saying that penalty notice under Section 271 (1) (c) and 271AAA be issued separately. There is no discussion with respect to Section 271AAA in the entire assessment order. 19. In the revisional order also CIT has affirmed ACIT's order without looking into these fact whether conditions under 271AAA (2) of Act, 1961 have been complied with or not. 20. Though no direct authority with reference to Section 271AAA (2) of Act, 1961 has been placed before this Court, but parties have placed authorities with reference to Section 271(1) (c), Explanation 5 (2) of Act, 1961. Section 271 also deals with the cases where an Assessee has failed, to furnish return, comply with notice and is guilty of concealment of income etc., and the penalty, he is liable to incur, for such lapses. However, Explanation 5 (2) thereof is in the nature of exception absolving an Assessee from liability of penalty and Clause 5 (2) relevant for the purpose of present case, reads as under: "Explanation 5.--Where in the course of a search initiated under section 132 before the 1st day of June, 2007, the assessee is found to be the owner of any money, bullion, jewellery or other valuab ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (2) of Explanation 5, the Court said that three conditions have to be satisfied by the Assessee for claiming immunity for payment of penalty thereunder. The Court then said: "The first condition was that 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 has not been disclosed in the return of income to be furnished before expiry of time specified in section 139(1). Such statement was made by the Karta during the search which concluded on 1-8-1987. It is not in dispute that condition No.1 was fulfilled. The second condition for availing of the immunity from penalty under section 271(1)(c) was that the assessee should specify, in his statement under section 132(4), the manner in which such income stood derived. Admittedly, the second condition, in the present case also stood satisfied. According to the Department, the assessee was not entitled to immunity under clause (2) as he did not satisfy the third condition for availing the benefit of waiver of penalty under section 271(1)(c) as the assessee failed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ivate Limited Vs. CIT (supra) there is no case set up by Assessee that he complied with the conditions provided in exception clause of Explanation 5 so as to escape from the liability of penalty. Therein, there was only a disclosure by Assessee of his concealed income but other conditions were not observed and at least the judgment does not show that those conditions were complied with, so as to attract the Exception clauses (1) and (2) of Explanation (5). The aforesaid judgment, in my view, would not help Revenue in any manner. 25. Similarly in Shourya Towers P. Ltd. (supra) also, the Court found that Assessee has not filed return declaring undisclosed income and, therefore, immunity against penalty cannot be granted. This is evident from following observations made by the Division Bench in the judgment: "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." 26. Further the Court said in para 13 of the judgment, as under: "Therefore, this Court is of the opinion that the "escape route", provided by Clause (2) t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch officer to the effect that the record of the officer concerned was not such as to justify his appointment "at this stage in preference to those selected", do not amount to "reasons for the proposed supersession" within the meaning of Clause 5. "Reasons", according to Beg J. (with whom Mathew J. concurred) "are the links between the materials on which certain conclusions are based and the actual conclusions". The Court accordingly held that the mandatory provisions of regulation 5(5) were not complied with by the Selection Committee. That an officer was "not found suitable" is the conclusion and not a reason in support of the decision to supersede him. True, that it is not expected that the Selection Committee should give anything approaching the judgment of a Court, but it must at least state, as briefly as it may, why it came to the conclusion that the officer concerned was found to be not suitable for inclusion in the Select List. In the absence of any such reason, we are unable to agree with the High Court that the Selection Committee had another "reason" for not bringing the appellant on the Select List." 31. The Apex Court in the case of Uma Charan Vs. State of Madhya Prad ..... X X X X Extracts X X X X X X X X Extracts X X X X
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