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TMI Blog2017 (9) TMI 1029X X X X Extracts X X X X X X X X Extracts X X X X ..... sued under section 153A, clearly goes to show the bona fides of the appellant, not warranting imposition of penalty under section 271 (l)(c) of the Act. See Alok Bhandari case [2017 (9) TMI 954 - ITAT DELHI] Also the amendment in Explanation 5A to Sec 271(1)(c) made effective by Finance Act, 2009 with retrospective effect from 01.06.2007 cannot be made applicable to assessee’s case because both original return and the revised return u/s 153A of the Act have been filed before the amended provisions were brought into the statute (which received assent of President on 13.8.2009). - Decided in favour of assessee. - ITA No. 5745/Del/2014 - - - Dated:- 15-9-2017 - SH. AMIT SHUKLA, JUDICIAL MEMBER AND SH. O.P. KANT, ACCOUNTANT MEMBER For The Appellant : S/sh. R.S. Ahuja Sh. Sahil Jain, CAs for The Respondent : Sh. R.C. Danday, Sr. DR ORDER PER O.P. KANT, A.M.: This appeal by the assessee is directed against order dated 09/07/2014 passed by the Commissioner of Income Tax (Appeals)- Central, Gurgaon [in short the CIT-(A) ] in relation to penalty under section 271(1)(c) of the Act for assessment year 2007-08. The grounds of appeal raised by the assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... alty. 3. Before us, the Ld. counsel submitted that in another cases of the group Sh. Alok Bhandari and Rajendra Bhandari, in identical circumstances the Tribunal has deleted the penalty under section 271(1)(c) of the Act. Accordingly, he submitted that issue in dispute is covered in the favour of the assessee. 4. On the other hand, learned Sr. DR relied on the order of the authorities below and submitted that the Explanation-5A to the section 271(1)(c) of the Act has been made effective retrospectively from 01/06/2007 and therefore assessee was liable for penalty under section 271(1)(c) of the Act. 5. We have heard the rival submissions and perused the relevant material on record. We find that in the case Alok Bhandari in ITA No.5747/Del/2014 for assessment year 2006-07 following grounds was taken before the Tribunal: ( A) That on the facts circumstances of the case the learned ITO the CIT(A) erred in: 1) Imposing penalty u/s 271(1) amounting to ₹ 2,69,000/- 2) Levying penalty in spite of the fact that law applicable for imposing the penalty u/s. 271(1)(c) is the law in force at the time of filing of original return. The original return was f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uary, 2008 and the due date expired prior to the date of search. However, the third condition, i.e., the appellant has not filed return of income for the said previous year, is not satisfied inasmuch as for the previous year relevant to the assessment year 2007-08, the appellant company has filed return of income under section 139(1) of the Act on 31.07.2007. In view of the aforesaid, deeming fiction enacted in the aforesaid Explanation 5A as on the statute on 03.03.2009, i.e., the date of filing in return of income under section 153 A of the Act, is not at all applicable to the facts of the appellant-company. Thus the Assessing Officer erred in imposing the penalty on the assessee. 5.1. The facts of the case in the present appeal in fact are that search and seizure operation under section 132 of the Act was carried out in the case of the appellant and its group concerns on 7th February, 2008. During the course of search statement of Sh. Dharmendra Bhandari, was recorded under section 132(4) of the Act wherein undisclosed income of ₹ 8,00,000/- was surrendered. Accordingly, based on the aforesaid disclosure made during the course of search and seizure operation, the app ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the assessee. The assessee can furnish the particulars of income in his return and everything would depend upon the IT return filed by assessee. This view gets supported by explanations 4 as well as 5 and 5A of Section 271. 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 the said survey. However, there cannot be any penalty only on surmises, conjectures and possibilities. Section 271(1 )(c) has to be construed strictly. Unless it is found that there is actually a concealment or non-disclosure of particulars of income, penalty cannot he imposed. There is no such concealment or non-disclosure as the assessee had made a complete disclosure in the IT return and offered the surrendered amount for the purposes of tax . iii) In CIT v. T.M. Abdul Hazeez CO. [2007J 293 ITR 384 (Mad.) in response to the notice under section 148, the. appellant filed the return of income 18.03.2004, admitting a total income of ₹ 2,71,960 which included additional income offered amounting to ₹ 1,82,000 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ;under section 148 was not filed after 'detection'. The return of income so filed was voluntary and had offered the additional income to buy peace of mind and to avoid litigation. In the aforesaid facts the Court held that during the course of assessment; the aforesaid explanation given by the appellant was neither rejected nor it was held to be mala fide. Further, the assessing authority had failed to take any objection that the. declaration of income made by the appellant in his revised return and in his explanation were not bona fide. Therefore, in view of the aforesaid finding, the Court held that the Tribunal was justified in upholding the order of the Commissioner of Income 8 tax (Appeals), whereby the penalty imposed under section 271(l)(c) of the Act by the Assessing Officer was ordered to be deleted. 5.4 Furthermore, levy of penalty has to be as per law applicable on the date of filing of the return and admittedly on 03.03.2009 when the return of income for assessment year 2006- 07 was filed by the appellant, the unamended provisions of Explanation 5A to section 271 (1 )(c) of the Act were on the statute. The question whether there was concealment of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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