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TMI Blog2016 (8) TMI 357X X X X Extracts X X X X X X X X Extracts X X X X ..... o tape was fixed so that the figures written in pencil cannot be tampered in the original documents those were seized. This fact of poor photocopying of the pencil written portion of the documents and therefore poor and illegible copied matter was not properly appreciated by the Ld. Assessing Officer and he levied penalty on the difference of ₹ 73,96,500/-. We also found that assessee otherwise arrived at unaccounted income of ₹ 51,54,000/- from the same seized material which was clearly legible after copying it and accordingly offered the same for taxation. The contention of assessee that this amount was unintentional and it had no intention to conceal the income before the Revenue. This contention of the assessee was not properly appreciated by the lower authorities. Similar addition of ₹ 25,93,263/- was made on the ground of unaccounted cash payment which was recorded to the tune of ₹ 41,43,263/- out of which assessee has surrendered only ₹ 15,50,000/-. The assessee has explained that it was due to mistake of Accountant as the entry was not properly appreciated by the lower authorities and they have also levied penalty with respect to these differen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... /4, the assessee had declared an income of ₹ 15,50,000/- as peak value arising from various cash receipts and payments for the period between August 2003 and October, 2003. However, the transactions appearing in the pages 1 to 56 of the seized documents were analyzed independently. During the course of assessment it was found that the total of undisclosed income from these pages was ₹ 41,43,263/-. Therefore, the difference of ₹ 25,93,263/- (Rs.41,43,263 ₹ 15,50,000/-) was added to the total income of the assessee as income from other sources. Penalty was levied by AO u/s.271(1)(c) of the I.T.Act in respect of the amount surrendered in the course of search as well as on the amount of additions made during the proceeding u/s.143(3) r.w.s.147 of I.T.Act. 4. By the impugned order the CIT(A) deleted the penalty with respect to the income offered during the course of search, which was incorporated in the return of income filed in pursuance to the notice u/s.153A after having the following observations :- 1.22 The appellant has disclosed this income in the return filed in response to notice u/s. 153A on 20.09.2007 and paid taxes on this income before filin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... undisclosed income and the specification by the assessee in such statement with regard to the manner in which such income had been derived; and the subsequent payment by the assessee of the tax on such undisclosed income together with interest. The words in para. (2), has been acquired out of his income which has not been disclosed in his return of income to be furnished before the expiry of time specified in sub-section (1) of section 139, is not to be read as referring to income so far not disclosed in respect of the previous year which is to end after the date of the search. The words used are income which has not been so far disclosed in his return of income . The additional words which refer to the time specified in section 139(1) are only a reiteration of the legal requirement regarding the time within which returns should normally be' filed. In cases where the assessee had not disclosed his income in the returns filed for the previous year which have ended prior to the date of the search and, in the statement given under section 132(4), the assessee admits the receipt of undisclosed income for those years and also specifies the manner in which such income had been de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... CIT Vs. Kanhaiyalal 299 ITR19, it is clear that the appellant is entitled to immunity provided in exception to explanation 5 to section 27I(1)(c) of the Income Tax Act as the appellant has disclosed his additional income during search and seizure operation under section 132(4) and paid taxes thereon. Thus the appellant fulfilled the condition of exception of Explanation 5 of Section 271(1)(c) of the income tax act. 1.28 In view of the above fact, it is clear that the appellant fulfilled the conditions stipulated in Explanation 5 to Section 271(1)(c) for availing immunity for levy of penalty. Therefore,' the. Assessing Officer is not justified in levy of penalty in respect of income surrendered amounting to ₹ 67,04,500/-. The Assessing Officer is directed to cancel the penalty on the income of ₹ 67,04,500/-. 5. We have considered rival contentions, carefully gone through the orders of authorities below and found that categorical finding has been recorded by CIT(A) to the effect that assessee has fulfilled all the conditions stipulated in Explanation 5 to Section 271(1)(c) for availing immunity for levy of penalty. The assessee has also paid taxes on this i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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