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TMI Blog2014 (10) TMI 905X X X X Extracts X X X X X X X X Extracts X X X X ..... vied in respect of the returned income as there is no concealment proved, and we do so. Clubbing of interest income of the minor children in the hands of the assessee in view of the deeming provisions of section 64 - Held that:- Admittedly the assessee has not been able to substantiate his claim for the cancellation of penalty in respect of the interest income as also the interest income in respect of the minor children added in the hands of the assessee on account of the deeming provisions of section 64 of the Act. In these circumstances, though we may mention here that statutory deduction in respect of the interest income added has not been granted to the assessee in the quantum assessment. Still addition having been made and the assessee being unable to justify the reason for cancellation of the penalty in respect of the interest income as also the income arising from the minor children added in the hands of the assessee in view of the provisions of section 64 of the Act, the Assessing Officer is directed to restrict the levy of penalty to the interest income not declared, income arising from the minor children as also the interest on Fixed Deposits. The penalty levied in res ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he submission that there was a survey on the premises of the assessee and the said survey was converted into a search. It was the submission that in the course of search, statement under section 132(4) had been recorded from the assessee. In the said statement, the assessee had offered undisclosed income to an extent of ₹ 85,00,000/- spread over to the assessment years 2003-04 to 2009-10. The assessee had also explained the manner in which the income had been derived and on the basis of the disclosure in the statement under section 132(4) had paid the taxes together with interest in respect of the undisclosed income. Admittedly these facts remained undisputed and the same is also recorded in the order of the ld. CIT (Appeals). It was the submission by the ld. A.R. that consequently returns had been filed and taxes had been paid. It was the submission that during the course of assessment the Assessing Officer had on the basis of some seized documents extrapolated the assessee's turnover for the assessment year 2009-10 and had also made an addition representing an estimated profit on the extrapolated turnover. It was the submission that the assessee had accepted this additi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to a search. A perusal of the wordings of Explanation 5A to section 271(1)(c) shows that the wordings used are in the course of a search initiated under section 132 on or after the 1st day of June, 2007, the assessee is found to be the owner .This is not the case in the case of the assessee. The survey itself disclosed everything. That survey itself disclosed that the assessee was not maintaining books. The survey itself so found the Fixed Deposits, etc. It was only for the purpose of seizure and further investigation that the survey was converted into a search. The search did not come out with anything fresh. Consequently Explanation 5A to Section 271(1)(c) cannot be made applicable in the case of the assessee herein. It would be the regular provisions of Section 271(1)(c) of the Act, which would be applicable. True the search resulted in the notice under section 153A being issued to the assessee and the return being filed but that is only procedural and in any case the quantum assessment on the validity thereon is not in appeal. Once a notice under section 153A is issued, then the return filed in response to the notice under section 153A would be deemed to be a return furnished ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... confirming levy of penalty under section 271AAA, it was submitted by the ld. A.R. that the assessee having given the statement under section 132(4) admitting the undisclosed income and specifying the manner in which such income was derived and had also substantiated the said manner and taxes have been paid together with interest on the undisclosed income, no penalty was leviable in view of the provisions of section 271AAA(2) of the Act. 9. In reply, ld. CIT(D.R.) vehemently supported the order of the Assessing Officer and ld. CIT (Appeals). 10. We have considered the rival submissions. A perusal of the order of the Assessing Officer and ld. CIT (Appeals) for the assessment year 2009-10 clearly shows that the Assessing Officer is invoking the provisions of section 271AAA(4), Explanation (i)(B). A perusal of the order of the Assessing Officer shows that he is not disputing the applicability of the provisions of section 271AAA(2) of the Act. The sub-section referred to by the Assessing Officer does not include Explanation. Section 271AAA(4) referred to by the Assessing Officer only says that the provisions of sections 274 275 being in respect of the procedure and limitation a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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