9911796707
TMI Blog2016 (4) TMI 711X X X X Extracts X X X X X X X X Extracts X X X X ..... (3) That the ld. CIT(A) erred in allowing relief to the assessee by not considering the fact that the provisions of Clause (ii) of Sub- section (2) of Sec. 271AAA has not been fulfilled in the assessee's case. " 4. The brief facts of this case are that a search and seizure operation was conducted in the business premises of the assessee on 11.9.2009. In the course of search and seizure operation in the office premises of the assessee jointly held with M/s Salasar Stock Broking Ltd and M/s Krishna Trade & Commerce Pvt. Ltd, the following books and documents were found / seized :- Annexure with Date Description Found Seized 'A 'Dt.12-9-09 Books of a/cs SSB-1 to SSB-15 SSB-1 to SSB-15 'C' Dt. 12-9-09 Cash Rs. 14,82,430/- Rs.14.50 lakhs '2' Dt. 12-9-09 Inventory of Bank A/c 25 bank a/cs Not seized 'Á' dt. 7-11-09 CPU One One Pursuant to the search, notice u/s 153A of the Act was served upon the assessee. The assessee filed the return of income in response to notice issued u/s 153A of the Act on 31.5.2010 showing total income of Rs. 1,76,31,590/-. It was stated that M/s Elegant Share Broking Private Limited (PAN - AABCE4828J) was amalgamated with the asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1) of the Act but included only in the return filed u/s 153A of the Act. The penalty was also levied on the ground that but for the search, the assessee would not have come forward with the additional disclosure. Moreover, it was observed by the Learned AO that the assessee had not substantiated the manner in which the undisclosed income was derived by the assessee and accordingly held that assessee is not entitled for immunity from levy of penalty. 6. On first appeal, the assessee argued that the contention of the Learned AO that the disclosure made u/s 132(4) of the Act was not included in the return filed u/s 139(1) of the Act was not only factually incorrect but also misleading. It was argued that the search got concluded on 7.11.2009 being the last date of panchanama drawn by the authorized officer and the disclosure u/s 132(4) of the Act was made by the assessee on 7.11.2009 on which date, the return of income u/s 139(1) of the Act had already been filed. Hence the assessee cannot be expected to offer the additional income in the return filed u/s 139(1) of the Act. It was also argued that in order to avail the immunity provided in section 271AAA(2) of the Act, it is not nece ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the rival submissions and perused the materials available on record. We find that the assessee had not disclosed the additional income in the return filed u/s 139(1) of the Act. For this, we are in agreement with the argument of the Learned AR that the return u/s 139(1) of the Act was filed much earlier to the date of disclosure petition u/s 132(4) of the Act and hence the assessee cannot be expected to offer the additional income in the return u/s 139(1) of the Act. The assessee had made disclosure petition u/s 132(4) of the Act substantiating the reasons for offering the additional income . For the sake of convenience, the disclosure petition u/s 132(4) of the Act is reproduced hereunder:- Disclosure petition u/s 132(4) of the Act in the case of M/s Shree Salasar Properties & Finance Pvt Ltd To The Ld. A.D.LT. (Inv) Unit - III (4) Aayakar Bhawan Annexe P-13,Chowringhee Square, Kolkata - 700 069 Respected Sir, Re : Disclosure consequent to search and seizure operations carried out by the Income Tax Department on our premises on 11th September' 2009/12th September' 2009 We are a Non Banking Financial Company and we are into the business of financial ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . We find that the assessee had not retracted from the disclosure petition . We find that the assessee had duly offered the additional income of Rs. 1,75,00,000/- for the Asst Year 2009-10 in the return filed u/s 153A of the Act and paid taxes thereon. Hence we find that the assessee had duly satisfied all the three conditions contemplated in section 271AAA(2) for claiming immunity from levy of penalty. 8.3. We find from the profit and loss account of the assessee, this additional income of Rs. 1.75 crores is not found credited in the books of accounts of the assessee as the same does not belong to the assessee and infact pertains to the amalgamating company. Hence the same is offered only in the return of income by the assessee. It is also pertinent to note that this offer has been voluntarily by the assessee without any incriminating materials found during the course of search by the search party and no irregularities were found in the course of search on the aspect of share capital or loans which have been offered by the assessee company. Hence we hold that the same does not fall within the definition of 'undisclosed income'. We find that the expression 'undisclosed income' is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... settled that though the income is not disclosed in the return filed u/s 139(1) of the Act, but duly disclosed in the petition filed u/s 132(4) of the Act followed by the filing of return in response to section 153A of the Act and taxes paid thereon, then the assessee would not be invited with the levy of penalty. We find that if the argument of the Learned DR that since the assessee had not offered the said income in return filed u/s 139(1) of the Act thereby levy of penalty is in order is to be accepted, then it would make the immunity provisions contemplated u/s 271AAA(2) of the Act redundant. The legislature in its wisdom had given a thoughtful consideration on the facts and circumstances under which the assessee would not be invited with the levy of penalty pursuant to the search subject to fulfillment of certain conditions stipulated in the said section . Hence in view of the above, we hold that the levy of penalty is not automatic and assessee is clearly entitled for immunity from levy of penalty. 8.5. We also find that the decision of the Hon'ble Supreme Court in the case of Sudarshan Silks & Sarees vs CIT reported in (2008) 300 ITR 205 (SC) supports the case of the assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... en under section 132(4) read with section 271(1)(c) of the Act." The Learned CIT(A) deleted the levy of penalty u/s 271(1)(c ) of the Act. On second appeal by the revenue, the tribunal held as follows:- "Although there is nothing on record to show that he was given an assurance that no penalty would be levied, the fact however clearly suggest that such an inducement must have been given by the searching party. When only partial evidence in support of concealment for a very limited period was detected during the search, why would a man go to offer much higher amounts for a large number of years unless he was promised some reciprocal benefit like not being visited with penalty? The learned DR has tried to argue before us that a change of heart might have taken place as a result of which Sri Ramesh came forward with all the disclosures for different years voluntarily. But looking into the hard facts of life and the general experience of mankind, especially with regard to financial affairs, it would be difficult to accept such a proposition. Evidently, huge amount of unexplained investments including unexplained stock was found at the time of search. Ultimately, almost the same amou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... are therefore of the opinion that the case laws as cited by the Department, do not exactly support its case, so far as the present appeals are concerned. On the other hand, most of the judgments cited by the learned counsel for the assessee support the case of the assessee that on account of strong circumstantial evidences being there about inducement having been given by the departmental authorities for not levying penalty in case of disclosure of income over the earlier years, no penalty can actually be levied by the Department." These findings have been finally approved by the Hon'ble Supreme Court by observing as under:- 17. Accordingly, the orders under appeal are set aside and that of the CIT(Appeals) and Tribunal restored. It is held that in the facts and circumstances of the case, penalty under section 271(1)(c ) was not exigible. The appeals are accepted with costs. 8.6. We find that the following decisions support the case of the assessee :- a) Decision of co-ordinate bench of Cuttack Tribunal in the case of Pramod Kumar Jain vs DCIT reported in (2013) 33 taxmann.com 651 (Cuttack - Trib.) "6. We have heard the rival contentions and perused the material available ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
