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TMI Blog2015 (9) TMI 133X X X X Extracts X X X X X X X X Extracts X X X X ..... of the case are that the a search was conducted at the premises of the assessee on 11.09.2008. The assessee during the course of search made a disclosure u/s 132(4) of the Act offering undisclosed income to the sum of Rs. 1,60,06,550/- for both the A. Yrs. 2008-09 and 2009-10, as on the date of search, the due date of filing the return of income i.e. (30.09.2008) had not expired for the A.Y. 2008-09 and as far as A. Yr.2009-10 is concerned, the assessee is entitled to make disclosure being the year of search. The assessee filed regular return of income for A.Y. 2008-09 on 31.03.2009 declaring taxable income of Rs. 7,21,387/-. This return was not filed within the time limit prescribed u/s 139(1) of the Act for A.Y. 2008-09 but however, was filed within the time limit prescribed u/s 139(4) of the Act. The assessee originally made 132(4) disclosure statement for assessment years put together to the tune of Rs. 1,60,06,550/ which was later rectified by the assessee by way of revised disclosure statement of realizing the genuine mistake committed by him in the statement filed originally. The revised disclosure statement for A.Y. 2008-09 was Rs. 27,88,222/- and for A.Y.2009-10 was Rs. 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... A. Yrs. 2008-09 and 2009-10 put together. In the said disclosure statement, the ld. AR had duly taken into account the seized materials and accordingly made disclosure at Rs. 27,88,222/- for A.Y. 2008-09 and the balance for A.Y. 2009-10. The assessee later on realizing the calculation mistake committed in the said disclosure statement made a revised disclosure as below :- A.Y. 2008-09 : Rs. 27,88,222/- A.Y. 2009-10 : Rs.1,59,71,000/- The ld. AR further argued that though there was 132(4) disclosure made in the covering letter to the tune of Rs. 1,60,06,550/- , in the Annexure-A attached to the disclosure petition, the fact of disclosure of Rs. 27,88,222/- and undisclosed cash found at Rs. 1,59,71,000/- (1,78,75,000 - 19,04,000) for A.Y. 2009-10 were duly reflected and hence it is to be construed as genuine mathematical mistake committed by the assessee and the assessee had no malafide intention to give a wrong disclosure statement in this regard. He also further argued that the workings for the revised disclosure made for A.Y. 2009-10 are as below :- Cash found during the search Rs.1,78,75,000 Less: Cash balance available as per regular Books of account Rs. 19,04 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ya Pearl' has been constructed by M/s. Adya Pearl Consortium (AOP) of which I am the authorized signatory. This disclosure has been made by me on the basis of the Page No.17 of the documents seized with Identification Mark ALT/21 from the business premises of M/s. Akshara Shelters Pvt. Ltd. and others at 'Supra Court', 35, Kavi Sabitri Pranna Chattopadhyay Road, Kolkata-26. I have also disclosed Rs. 30,000/- paid in cash for water connection at 41C & 41D, N.S.C. Bose Road, Kolkata-40 on the basis of the Page No.2 of the documents impounded with Identification Mark AG/5 from the business premises of M/s. Adya Towers Pvt. Ltd. and others at 35A, Dr. Sarat Banerjee Road, Kolkata-29 during the survey conducted therein on 11.09.2008. Thus, I have disclosed Rs. 27,88,222/- (Rs.27,58,222/- + Rs. 30,000/-) in my return of income filed for the A.Y. 2008-09. F.Y.2008-09 During the course of the search & seizure operation conducted u/s 132 in my residence at 5, Tilak Road, Kolkata-700029 on 11.09.2008, Rs. 1,78,75,000/- was found in cash. Out of the same Rs. 1,78,25,000/- was seized. Since Rs. 19,04,000/- only was the cash balance as per the regular cash books of my son Shri Yogesh Chandr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... existing tax liability in terms of section 132B of the Act read with Rule 112C of the Income Tax Rules. The ld. AR further argued that nowhere in the statute, the law prescribes the time limit within which the tax has to be paid. Hence, he argued that he has satisfied all the cumulative conditions contemplated in 271AAA(2) of the Act and accordingly claimed for immunity from levy of penalty u/s 271AAA of the Act. 6. In response to this, the ld. DR argued that the assesee had not clearly substantiated the manner of deriving the undisclosed income. This is evident from the fact that the assessee originally made disclosure statement u/s 132(4) to the tune of Rs. 1.6 crores and which was later on revised by him to Rs. 1.88 crores and he also argued that how the cash component in the construction business carried on by the assessee was derived by the assessee was not clearly substantiated before the AO. Accordingly he argued that clause (ii) of 271AAA(2) has not been satisfied by the assesee. He further argued that the taxes on the undisclosed income offered u/s 132(4) disclosure statement should have been paid by the assessee atleast at the time of filing of return of income. Whereas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the cash balance available in books on the date of search amounting to Rs. 19,04,000/-. These three figures have been duly considered in the revised disclosure statement made by the assessee which was also not retracted later on while filing the return of income in response to the notice issued u/s 153A of the Act for A.Y. 2008-09 and regular return filed for A.Y. 2009-10 being the year of search. Reliance in this regard is placed on the decision of CIT vs Careers Education and Infotech P. Ltd. (2011) 336 ITR 257 (P&H). The headnotes is reproduced herein below : "PENALTY - CONCEALMENT OF INCOME - SURRENDER OF INCOME DURING SURVEY - FINDING BY TRIBUNAL THAT THERE WAS NO MATERIAL FORM WHICH OCNEALMENT OF INCOME COULD BE INFERRED - PENALTY COULD NOT BE IMPOSED - INCOME-TAX ACT, 1961, s.271(1)(c). In every case where surrender is made an inference of concealment of income cannot be drawn under section 58 of the Indian Evidence Act, 1872. Where the assessee surrendered additional income during the course of an income-tax survey to buy peace with the Department and filed a revised return accordingly, and the Tribunal recorded a categorical finding that there was no material to infe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... income. We held that the statute does not prescribe any time limit for paying tax and interest on the undisclosed income offered by the assessee pursuant to the search. The law in this regard prescribes that tax and interest on undisclosed income is to be paid by the assessee. As long as the tax and interest has been duly paid by the assessee (in the instant case by way of an adjustment of seized cash), it is to be concluded in the interest of rendering substantial justice that the assessee had indeed complied with the provision of clause (iii) of 271AAA(2) of the Act in spirit. This issue has been duly adjudicated by the Hon'ble Apex Court in the case of ACIT vs M/s. Gebilal Kanhaialal (HUF) reported in (2012) 348 ITR 561 where the lordships have held as below :- "Three conditions have got to be satisfied by the assessee for claiming immunity from payment of penalty under clause (2) of Explanation 5 to section 271(1)(c). 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 ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... plated in 271AAA(2) of the Act. The levy of penalty u/s 271AAA cannot be made automatic pursuant to the search. We also find that the decision of the Hon'ble Apex court rendered in the case of MAK Data P. Ltd vs CIT reported in 358 ITR 593(SC) is also distinguishable in the facts and circumstances of the case as in the case before the Hon'ble Supreme Court the immunity clause provided in 271AAA(2) of the Act had not been discussed. We also hold that the reasoning of the assessee had to disclose the undisclosed income because of the search is also not in accordance with law. Reliance in this regard is placed on the decision of CIT vs Sas Pharmaceuticals 335 ITR 259 (Delhi). The Hon'ble Delhi High Court has held as under :- " 14. We may, first of all, reject the contention of the learned counsel for the revenue relying upon the expression in the course of any proceedings under this Act occurring in sub-section (1) of section 271 of the Act and contending that even during survey when it was found that the assessee had concealed the particular of his income, it would amount concealment in the course of any proceedings. The words in the course of any proceedings under this Act are pre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of tax. 17. We, thus, answer the questions as formulated above, in favour of the assessee and against the revenue finding no fault with the decisions of the Commissioner (Appeals) as well as the Tribunal. As a result, this appeal is dismissed." It is seen that even though the income of Rs. 27,88,222/- was not offered by him in the regular return filed by the assessee on 31.03.2009 for A.Y. 2008-09, it is of no consequence as in terms of 153A of the Act, it becomes a pending proceeding, which gets abated pursuant to the search. In other words, the ld. AR argued that ultimately what is relevant is only the return filed in response to 153A of the Act wherein the assessee had duly considered the income disclosed u/s 132(4) and ultimately the returned income has been accepted by the ld. AO and hence there is no concealment on the part of the assessee in the return u/s 153A of the Act . Similarly the ld. AR argued that in the return filed for A.Y. 2009-10, being the year of search, there was no discrepancy in the undisclosed income offered vis-à-vis 132(4) statement and ultimately the returned income was accepted by the ld. AO for A.Y. 2009-10 also. Hence there was no concealme ..... X X X X Extracts X X X X X X X X Extracts X X X X
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