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TMI Blog2015 (9) TMI 1445X X X X Extracts X X X X X X X X Extracts X X X X ..... because as per the advice, the surrendered income was to be declared in the return to be filed under section 153A of the Act. The Assessing Officer levied the penalty under deeming provisions of Explanation 5 A to section 271(1)(c) of the Act, which in our view, is not applicable to the facts and circumstances of the case. - Decided in favour of assessee - ITA No. 350/Chd/2013 - - - Dated:- 9-9-2015 - SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND MS. ANNAPURNA MEHROTRA, ACCOUNTANT MEMBER Appellant by : Shri Sudhir Sehgal Respondent by : Shri Manjit Singh, DR ORDER PER BHAVNESH SAINI, J.M. : This appeal filed by the assessee is directed against the order of learned Commissioner of Income Tax (Appeals)(Central), Chandigarh dated 8.2.2013 for assessment year 2008-09, Challenging levy of penalty under section 271(1)(c) of the Income Tax Act, 1961 (in short the Act ). 2. The brief facts of the case are that the assessee derives income from House Property and share in the Partnership Firm. A search under section 132(1) of the Act was conducted on 15.07.2008 at the residences and office of the individual and group concerns of M/s B.R.S Institute of Medical ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ner in both an Audit Firm as well as Non Audit Firm. We are enclosing herewith the copies of Income Tax Returns as filed by the Partnership Firm in which the assessee is a partner for the AY 2008-09 and also the copies of Partnership Deed evidencing the share of the assessee in the firm. 7. The due dates for the filing of return have been prescribed in section 139 of the Act which is as follows: 139. [(1) Every persons,- (a) being a company [or a firm]; or (b) being a person other than a company [or a firm], if his total income or the total income of any other person in respect of which he is assessable under this Act during the previous year exceeded the maximum amount which is not chargeable to income-tax, shall, on or before the due date, furnish a return of his income or the income of such other person during the previous year, in the prescribed form and verified in the prescribed manner and setting forth such other particulars as may be prescribed Explanation 2.-In this sub-section, due date means,- (a) where the assessee [other than an assessee referred to in clause(aa)] is- (i) a company [***]; or (ii) a person (other than a compa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ulars of income by the assessee has to be in the income tax return filed by it. There is sufficient indication of this Court in the judgment in the case of Commissioner of Income Tax, Delhi-I Vs Mohan Das Hassa Nand 141 ITR 203 and in Reliance Petro products Put. Ltd (supra), the Supreme court has clinched this aspect, viz., the assessee can furnish the particulars of income in his return and everything would depend upon the income tax return filed by the assessee. This view gets supported by Explanation 4 as well as 5 and 5A of section 271 of the Act as contended by the learned counsel for the respondent. 16. No doubt, the discrepancies were found during the survey. This has yielded income from the assessee in the form of amount surrendered by the assessee. Presently, we are not concerned with the assessment of income, but the moot question is to whether this would attract penalty upon the assessee under provisions of section 271(l)(c) of the Act. Obviously, no penalty can be imposed unless the conditions stipulated in the said provisions are duly and unambiguously satisfied. Since the assessee was exposed during survey, may be, it would have not disclosed the income but for t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... me in the case of appellant was, accordingly, 30th of September, 2008, since the accounts of the firm are subject to audit u/s 44 AB. Therefore, till the accounts of the firm are finalized, the assessee cannot be expected to file the return of income and i.e. the time of filing the return had to be considered upto 30.09.2008. It was further submitted that the amount of ₹ 65,00,000/- could not be disclosed in the original return, though included in the return filed in response to notice u/s 153A as the seized materials were not available. That assessee was also not in the correct frame of mind, and was of the view that the additional income was to be surrendered u/s 153A as per the view of the counsel. 4. The learned CIT (Appeals), however, did not accept the contention of the assessee and dismissed the appeal of the assessee. His findings in paras 5 and 6 of the appellate order are reproduced as under : 5. I have considered the assessee's submissions and the impugned order. The AO has imposed the impugned penalty by not accepting the reply of the assessee and not considering the contention of the assessee that, being a partner in an audit firm and also in a no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... copy of Deed dated 1.4.2005 was furnished, the assessee was therefore required to furnish his return by 30.9.2008. Return was stated filed on 2.9.2008 as per ITRV-V copy with due acknowledgement. However this does not help as the surrender of additional income was disclosed in the return filed in response to notice u/s 153A. Though the return u/s 153 (1) (A) has been accepted by the department, importantly the additional income had not been shown in the return filed by the assessee u/s 139(1), even though the due date for filing of the return had not expires. The reasons for not having included the additional income in the return filed u/s 139 have not been elucidated by the assessee, excepting stating that the assessee was not in possession of seized materials, and had relied on his counsel. Hence it is apparent that had it not been for the search operation and questions raised during recording of the statement, there would have been no disclosure of additional income by the assessee. Hence I am of the opinion that the assessee has not sufficiently covered himself with the immunity conferred u/s 271 (1) (c) Explanation 5A. In other words, the appeal of the assessee is dismissed. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e due date of filing of the return cannot be 31.7.2008 and it would be 30.9.2008. This fact is admitted by the learned CIT (Appeals) in his findings. It is, therefore, clear that in the present case, at the time of search on 15.7.2008, the due date of filing of the return for assessment year under appeal i.e. 2008-09 had not expired because the due date of filing of the return was 30.9.2008. The I.T.A.T., Mumbai Bench in the case of Kshiti R. Maniar (supra) considered the application of Explanation 5-A to section 271(1)(c) of the Act and held that the deeming provisions of Explanation 5-A cannot be applied because at the time of search, the relevant previous year for the assessment year under appeal, the due date of filing of return of income had not expired. The findings of the Tribunal in paras 6 and 7 of the order are reproduced as under : 6. We have heard the rival contentions and have perused the findings of the Assessing Officer as well as the Commissioner (Appeals). In the present case, penalty has been levied by invoking the provisions of Explanation 5A to section 271(l)(c) (and not Explanation 5, as mentioned by the Assessing Officer). Explanation 5A, is a deeming pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ndly, the due date for filing of return of income for such previous year has not expired. If any case falls under these saving clauses, Explanation 5A cannot be invoked. 7. In the present case, the search had taken place on 19th June 2007. The due date for filing of return of income for the assessment year 2007-08, had not expired on the date of search as the due date of filing of return of income under section 139(1) was 31st July 2007 and due date under section 139(4) was 31st March 2008. Thus, in the present case, deeming provisions of Explanation 5A cannot be applied here because at the time of search, the relevant previous year for the assessment year 2007-08, the due date of filing of return of income had not expired. Whether the assessee had filed the return of income under section 139(1) or 139(4) after the date of search, will not be of much consequence because the income in question pertains to assessment year 2007-08 for which the due date had not expired at the time of search. The deeming provisions as given any Explanation 5A has to be strictly construed because one has to see what is the status of income on the date of search and not afterwards. The penalty in t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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