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TMI Blog2016 (3) TMI 149X X X X Extracts X X X X X X X X Extracts X X X X ..... 86 of 2004, 47 and 104 of 2005 as according to learned counsel for the parties, the identical questions of law and facts are involved therein. For brevity, the facts are being extracted from ITA No. 47 of 2005. 2. This appeal has been preferred by the assessee under Section 260A of the Income Tax Act, 1961 (in short the Act ) against the order dated 31.8.2004 (Annexure A-1) passed by the Income Tax Appellate Tribunal, Chandigarh Bench A , Chandigarh (hereinafter referred to as the Tribunal ) in ITA No. 494/CHD/2001 for the assessment year 1994-95. All the appeals were admitted by this Court vide order dated 9.5.2006 for consideration of the following substantial questions of law:- (i) Whether, the decision of ITAT and authorities below is perverse in view of the facts and circumstances of the case being that the seized assets were far more in value as compared to the tax liability due on returned income and the appellant had offered adjustment of those assets against his taxes due vide a note appended to return of income, thus the appellant cannot be penalized on the ground of non payment of taxes? (ii) Whether, the decision of ITAT and authorities below is perverse in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ; 11,13,739/- by presuming the business of jewellery as a joint business of the father and two brothers. The said assessment order was set aside by the Commissioner of Income Tax (Appeals) [for brevity the CIT(A) ] to be made de novo. Thereafter, the Assessing Officer vide order dated 31.1.2000 (Annexure A-2) framed the assessment accepting the returned/surrendered income at ₹ 4,70,000/-. The Deputy Commissioner of Income Tax, Investigation Circle 2(1), vide order dated 27.7.2000 (Annexure A-4) levied penalty of ₹ 1,87,040/- under Section 271(1)(c) of the Act for the assessment year 1994-95 on the amount disclosed under Section 132(4) read with Explanation 5 to Section 271(1)(c) of the Act. Feeling aggrieved, the assessee filed an appeal before the CIT(A) who vide order dated 27.3.2001 (Annexure A-5) dismissed the appeal. Against the order, Annexure A-5, the assessee filed an appeal before the Tribunal. The Tribunal vide order dated 31.8.2004 (Annexure A-1) upheld the order of the CIT(A) and dismissed the appeal. Hence, the present appeals. 4. Learned counsel for the assessee-appellant submitted that the Tribunal had decided the cases of the assessee whereby the rel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... section, be deemed to have concealed the particulars of his income or furnished inaccurate particulars of such income, unless, - (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 subsection (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. 8. Explanation 5 to Section 271(1)(c) of the Act creates a deeming fiction. The Apex Court in Gebilal Kanhaialal's case (supra) while interpreting the aforesaid explanation had comprehensively laid down as under:- Explanation 5 is a deeming provision. It provides that where, in the course of search under Section 132, the assessee is found to be the owner of unaccounted assets and the assessee claims that such assets have been acquired by him by utilizing, wholly or partly, his income for any previo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee has paid tax with interest upto the date of payment. The only condition which was required to be fulfilled for getting the immunity, after the search proceedings got over, was that the assessee had to pay the tax together with interest in respect of such undisclosed income upto the date of payment. Clause (2) did not prescribe the time limit within which the assessee should pay tax on income disclosed in the statement under Section 132 (4). 9. The Supreme Court in the above noted pronouncement had held that the following circumstances are required to be fulfilled by the assessee to claim benefit under Clause (2) of Explanation 5 to Section 271(1)(c) of the Act and seek immunity therefrom:- (i) 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). (ii) that the assessee should specify, in his statement under Section 132(4), the manner in which such income stood derived. (iii ..... X X X X Extracts X X X X X X X X Extracts X X X X
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