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TMI Blog2011 (7) TMI 1338X X X X Extracts X X X X X X X X Extracts X X X X ..... ve assessment years. While filing the revised return assessee referred to the disclosure of ₹ 50,00,000/- for A.Y. 2007-08 made in the statement recorded under section 132(4) on 15.03.2007 as additional income in the hands of the group concerns and individuals. The A.O. observed that it cannot be considered as income declared under section 132(4) as it was disclosed in the revised computation and not in the revised return. So he initiated penalty proceedings under section 271(1)(c). Before the A.O. assessee submitted that the non-disclosure was an unintentional mistake which was corrected by filing a revised statement of income. Relying of the decision of the Hon'ble Madras High Court in the case of A.V. Thomas and Co. vs. CIT 59 ITR 499 it was also submitted that penalty is not justified for commission of a bonafide mistake. A.O. did not accept the explanation of the assessee. He was of the opinion that the A.O. has no power to entertain the claim made by the assessee otherwise than by way of a revised return. Relying on the decision of the Hon'ble Supreme Court in the case of Goetze (India) Ltd. vs. CIT 284 ITR 323 he rejected the claim of the assessee. A.O. was of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... D.R. in reply, however, submitted that the assessee has filed return subsequent to the search which occurred on 18.01.2007 and the impounded documents were part of the material seized at the time of search itself. He then referred to the admission of ₹ 50,00,000/- for the later year and submitted that assessee has neither mentioned receipt of on-money in sale of property nor investment in purchases of property outside the books of account. Therefore the contention of the assessee that explanation 5 is applicable is not correct. It is further submitted that since assessee has not offered any income the same is to be considered for levy of penalty. He relied on the decision of the Hon'ble Kerala High Court in the case of P.C. Joseph Brothers vs. CIT 240 ITR 818 and the Hon'ble Bombay High Court in the case of Sheraton Apparels vs. ACIT 256 ITR 20 and the case of Indus Engineering Co. vs. ACIT 323 ITR 302 (Bom). The learned D.R. also relied on the decision of the Third Member in the case of ACIT vs. Kirit Dahyabhai Patel 121 ITD 159. The learned D.R. also submitted that the A.O. was generous enough not to initiate penalty proceedings on the entire income admitted in th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essee immediately after the search even before notice under section 153A was issued. As stated earlier the notice was issued on 07.12.2007 and the returns were filed on 31.03.2008, i.e. almost a year later to the said statement under section 132(4) was recorded. Assessee admitted the additional income of ₹ 50,00,000/-. The income which were offered in A.Y. 2003-04 at ₹ 18,50,000/- and the income offered in AY 2005-06 at ₹ 11,50,000/- were in addition to the above admitted income under section 132(4) which was offered in AY 2007-08. As seen from the assessment order of A.Y. 2005-06 assessee admitted an amount of ₹ 5,00,000/- on account of unexplained investment at the time of filing of the return itself. The A.O. vide para 2 of the assessment order stated that the amount of ₹ 5,00,000/- was undisclosed income on account of unexplained investment in the residential house and since this amount was not reflected in the original return of income (filed earlier to search) penalty under section 271(1)(c) was initiated separately. After this assessee admitted further amount of ₹ 11,50,000/- towards cash payment on the basis of agreement signed for GHP Co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... /impounded documents. This does not absolve the assessee of the failure to furnish correct incomes at the time of filing original return in the respective assessment years. It is an established law that the onus attached to the assessee with reference to original return cannot be avoided by filing revised return after detection by the revenue. This issue was elaborately discussed with reference to the proceedings under section 153A in the case of ACIT vs. Kirit Dahyabhai Patel 121 ITD 159 (Ahd) (TM) wherein assessee filed revised returns after seizure of documents during the course of search and since the returns were filed under section 153A these were accepted but penalty proceedings u/s 271(1)( c) were initiated. The contention that penalty proceedings cannot be initiated as incomes were filed voluntarily was not accepted. It was held that immunity under Explanation 5 to section 271(1)(c) was not available to assessee when returns were filed consequent to search and seizure proceedings. It was held as under: - Since a view had already been taken as to the availability of the immunity under the Explanation 5(2) to section 271(1)(c) by an order of the Ahmedabad Bench, that to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ons were disclosed in the course of search when these were not disclosed either in the original return or revised return and upheld levy of penalty, considering it as a case of concealment. Similar view was also expressed by the Hon'ble Bombay High Court in the case of Sheraton Apparels vs. ACIT 256 ITR 20 wherein Explanation 5 to 271(1)(c) was considered and held that the said Explanation cannot offer immunity from penalty. 9. As stated above in the case of the assessee the transactions are outside the books of account and the payments received and paid by the assessee were evidenced by the impounded documents. Though the copies were furnished to the assessee well before taking statement on 15.03.2007 u/s 132(4), assessee failed to offer them at that time or even in the returns filed in response to the notice under section 153A but admitted only in the course of assessment proceedings subsequently. In view of this, we are of the opinion that there is failure on the part of the assessee to disclose correct incomes at the time of filing not only original returns but also at the time of filing returns in response to notice under section 153A. As noted earlier the A.O. did inde ..... X X X X Extracts X X X X X X X X Extracts X X X X
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