9911796707
TMI Blog2013 (9) TMI 1076X X X X Extracts X X X X X X X X Extracts X X X X ..... 2007 and in response to such notice, the assessee filed the return of income declaring total income of Rs. 26,15,654 on 11th March, 2008. The assessment under s. 153A r/w s. 143(3) of the Act was completed on 11th Nov., 2008 on total income of Rs. 26,15,650, as the assessee had shown additional income of Rs. 21,78,477, therefore, such income was treated as concealed income within the meaning of s. 271(1)(c) of the Act and accordingly, penalty proceedings under s. 271(1)(c) of the Act were initiated. The assessee had not preferred any appeal against the assessment order and therefore, the assessed income of Rs. 26,15,650 has became final. During penalty proceedings, the assessee submitted his written submissions before the AO which are reproduced verbatim as under:- "With reference to the grounds of appeal as already furnished, the assessee submits as under for your kind perusal and sympathetic consideration:- 1. The assessee has not concealed the particulars of his income or furnished inaccurate particulars of his income. 2. The assessee has filed return of income under s. 153A declaring a total income of Rs. 26,15,650 and has been assessed at the same amount. The declared in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent, decree or order against which leave to appeal has been sought for, continues to be final, effective and binding as between the parties. Once leave to appeal has been granted, the finality of the judgment, decree or order appealed against is put in jeopardy though it continues to be binding and effective between the parties unless it is a nullity or unless the Court may pass a specific order staying or suspending the operation or execution of the judgment, decree or order under challenge." The copies of the above judgments are enclosed. It is therefore requested that the proposed penalty proceedings may please be dropped. The assessee is ready to submit further information evidence etc. if need be." The reliance was placed on the following case laws:- (1) K.Subramanian and Anr. us. Siemen's India Ltd. and Anr.(1985) 156 ITR 11 (Bom), (2) Smt. AngooriDevi vs. Chief Commr. (Admn.) (2005) 145 Taxman 64 (Attl (3) CIT vs. Darshan Talkies (1996) 217 ITR 744 (MP). 3. The AO after considering the submissions of the assessee observed that his case was not covered by the immunity granted from levy of penalty in Expln. 5 appended to s. 271(1)(c) of the Act. The AO obser ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... such income has been derived and pays the tax, together with interest, if any, in respect of such income. The assessee having filed the letter immediately after the search, the same may very well be treated as statement as made during the course of the search. 3.3 In Gulabrai V. Gandhi vs. Asstt. CIT (2003) 79 TTJ (Mumbai) 498, it has been held that assessee having fulfilled all the requisite conditions for availing the benefit of immunity under Expln. 5 to s. 271(1)(c) by making a disclosure in his statement under s. 132(4) that the undisclosed income was represented by assets in the form of unaccounted cash at residence and other places, unaccounted expenses/investment in gold and diamond jewellery, etc. found in his possession and specifying the source of such income, penalty under s. 27 l(1)(c) could not be levied. Similarly, in CIT vs. S.D.V. Chandm (2004) 266 ITR 175 (Mad), it was held that part (2) in Expln. 5 does not make any distinction between the previous year which has ended before the date of search and the previous year which is to end on or after the date of search and. therefore when the assessee filed his returns for earlier years admitting a larger income an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hort-term capital gain of Rs. 8,46,534. The difference of Rs. 2,20,175 was only on account of difference between the sale value and the value as adopted by Sub-Registrar considering the provisions of s. 50C. The assessee was not aware of the said provisions of law nor was guided about the same. The assessee, however, disclosed all the facts and there was no concealment. The assessee has been assessed at returned income of Rs. 26,15,650. Hence, there cannot be said to be any concealment of income. 5.2 The assessee also relies on the apex Court judgment in T. Ashok. Pai us. CJT (2007) 292 ITR 11 (SC), wherein it has been held that 'concealment' refers to a deliberate act on part of assessee; if explanation given by assessee with regard to mistake committed by him has been treated to be bona fide and it has been found as fact that he has acted on basis of wrong legal advice. Question of his failure to discharge his burden in terms of Explanation appended to s. 271(1)(c) would not arise. In view of above submission the assessee prays that the penalty as levied may please be deleted and the appeal of the assessee may please be allowed." 5. The assessee filed further submiss ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ay also be properly explained with sufficient effort or where no offer need be made, additional income is offered, there is an estimate of undisclosed income considered necessary for the purpose of avoiding uncertainties. Therefore, levy of penalty on such offer is not justified without detailed discussion of the documents and their explanation which compelled the offer of additional income Accordingly, the order of penalty is cancelled and, the appeal is allowed.' (para 4 to the judgment) 3. The assessee also relies on the decision of Tribunal Rajkot Bench in Shabbir Allauddin Latiwala vs. Dy. CIT (2011) 53 DTR (Rajkot)(Trib) 449, it was held as under:- 'We have noticed from the records that neither the assessee is in a position to establish that the additional income offered by him was a voluntary act on his side had nothing to do with the finding of search or the documents seized therefrom. On the other side there is a clear failure on the part of Revenue as well in identifying the very foundation on the basis of which the assessees have offered additional income in various years and to link such foundation with the documents or other records that might have been fou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ease be allowed. 6. Learned CIT(A) after considering the submissions of the assessee observed that original return of income was filed on 21st Oct., 2005 under s. 139(1) of the Act declaring an income of Rs. 4,95,479 subsequent to search under s. 132 of the Act on 18th Jan., 2007 and in compliance to the notice under s. 153A return of income was filed showing total income of Rs. 26,15,654 on 11th March., 2008, which was mainly on account of following reasons:- (i) During course of search as per page Nos. 16 and 17 of Annex. A, a photocopy of agreement was seized which indicated cash payment of Rs: 2,20,000 by the assessee to Shri. M.M. Mehta S/o Shri Jatan Raj Mehta on 31st March, 2005 towards leave and license regarding plot No. 21, Durgavihar Colony, Jodhpur. Admittedly such income/payment was of undisclosed nature and has not been shown in the regular books of accounts while filing the original return and therefore the appellant has shown such income in the return filed subsequent to search under s. 153A. (ii) The assessee has also shown another income of Rs. 16,80,000 which was stated to be unexplained cash in circulation out of books of accounts. (iii) In the original r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y the authorities below, but could not controvert this contention of the learned counsel for the assessee that no addition was made by the AO in the income declared by the assessee in his return filed in response to notice under s. 153A of the Act. 10. We have considered the submissions of both the parties and carefully gone through the material available on record. In the present case, it is an admitted fact that assessment was framed by the AO on the basis of return of income filed under s. 153A of the Act and the assessed income was the same as was declared by the assessee. However, penalty under s. 271(1)(c) of the Act was levied by the AO since there was difference in the income declared in the return of income filed under s. 139(1) and disclosed under s. 153A of the Act. The difference in those two incomes was mainly on account of cash, which was shown by the assessee as an income on account of unexplained cash in circulation out of the books of accounts. In this regard, it is noticed from the assessment order for the asst. yr. 2007-08 (copy of which is placed on record) that the AO accepted the cash available with the assessee by observing at p. 4 of the said order as under ..... X X X X Extracts X X X X X X X X Extracts X X X X
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