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TMI Blog2017 (3) TMI 1043X X X X Extracts X X X X X X X X Extracts X X X X ..... the original return filed under section 139 (1) of the Act and the return filed in response to section 153A of the Act, the assessee is deemed to have concealed the income. We do not find any scope of any explanation to be given by the assessee when explanation 5A of the Act has been invoked. Thus in our considered opinion the Ld.AO was correct in levying the penalty under section 271 (1) (c) by invoking Explanation 5A of the Act. However he cannot include such income/loss that was already declared in the original return of Income. The capital loss of ₹ 1,45,77,465/- that was declared by assessee should be excluded while calculating the penalty. Accordingly we set aside the issue back to the files of AO for re-computing the as per law ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed to the assessee on 25/08/2010, which was duly served upon the assessee, and the assessee was directed to furnish true and correct return of income for the year under consideration. 2.3 The return of income under section 153A was filed by the assessee on 19/10/2010 declaring total loss of ₹ 20,450/-. During the assessment proceedings, the Ld. AO observed that the returned loss declared in the return of income under section 153A was less than that of the loss declared in the original return filed under section 139(1) of the Act. The Ld. AO accepted the return filed in view of notice issued under section 153A of the Act and recorded his satisfaction regarding the suppression of income by the assessee to an extent of ₹ 1,45,57 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nly inadvertent mistake while filing the return of income under Section 139(1) of the Income Tax Act, 1961 which has rectified in the return of income filed under Section 153A by the assessee company. 2.5 The Ld. AO levied penalty of ₹ 53,26,776/- for concealment of income of ₹ 1,45,57,015/-in the original return filed under section 139(1) of the Act, as the assessee is covered under Explanation 5A to the provisions of section 271(1)(c) of the Act. 3. Aggrieved by the order of the Ld.AO, the assessee preferred an appeal before the Ld. CIT (A). The Ld. CIT (A) held as under: 4.8 In the appellant's case it is seen that loss of ₹ 1,45,77,465/- under the head long term capital gain was reflected both in the r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation 5A to section 271(1)(c) is a deeming provision which has been inserted w.r.e.f. 01/6/2007. As per explanation 5A, assessee to has concealed particulars of income, as the assessee had concealed its true income/loss in the returns filed under section 139(1). He submitted that, the deeming provision of Explanation 5A to section 271(1)(c) of the act are attracted. He further submitted that all the three conditions are fulfilled as per Explanation 5A to Section 271(1)(c) i.e., search conducted on or after 01/6/2007, unaccounted income disclosed by the assessee pursuant to returns filed under section 153A, which has not been disclosed in the original return filed on 28/10/2005. 6. On the contrary the Ld. AR submitted that the loss of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... section 139 and section 153A of the Act, it appears that the assessee had carried forward the business loss amounting to ₹ 1,25,527/-. The Ld.AR has not presented before us complete audited financial statements filed along with the return of income under section 139 and section 153A of the Act. At this juncture we do not wish to analyse whether the expenditure that has been shown as deferred revenue expenditure in the computation annexed to the returns filed under section 153A, relates to the year under consideration 7.3. Be that as it may such omission or non-inclusion of the deferred revenue expenditure in the original return by the assessee was discovered at the time when the assessment proceedings were going on, post search. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pective effect from 1/06/2007, and is applicable, where search has been initiated under section 132 on or after 1st day of June 2007. The Ld. AO has levied penalty under section 271 (1) (c ) by invoking deeming Explanation 5A. Under such difference in the factual position the decision of Hon ble Supreme Court in Price Waterhouse Cooper Pvt.Ltd., (supra) cannot be applied to the facts in hand before us. 7.6. It is observed that Ld. CIT (A), has been deleted penalty by holding that the conditions laid down to satisfy the requirement of furnishing inaccurate particulars has not been fulfilled to levy the penalty under section 271 (1) (c ) of the Act. From the computation of penalty in the penalty order it is observed that the Ld. AO has s ..... X X X X Extracts X X X X X X X X Extracts X X X X
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