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TMI Blog2019 (3) TMI 329X X X X Extracts X X X X X X X X Extracts X X X X ..... on over and above the income declared by the assessee in the return filed under s.153A of the Act (notwithstanding the fact that such return filed after search includes additional nature based on incriminating material and oral evidence under s.132(4). Pertinently, the plea raised on behalf of the assessee, if admitted, would render provisions of Section 271AAA/271AAB of the Act otiose and infructuous as noted in the case of Vijay K. Shah (supra). Plea raised on behalf of the assessee that Section 153A of the Act opens with a non obstante clause as noted earlier, Section 271AAA and Explanation 5A to Section 271(1)(c) of the Act deems culpability in appropriate cases even before the return is filed in search cases. Therefore, substitution of return originally filed under s.139 of the Act by subsequent return under s.153A of the Act has no impact on the legal fiction towards concealment enjoined by Explanation 5A of the Act. Therefore, the non obstante provision in Section 153A of the Act does not come in the way of penalty proceedings in search cases at all. Thus, the plea of the assessee for applicability of penalty provisions qua the return of income which may hold good under the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t ₹ 10,10,310/- in compliance of the notice and incorporated disclosure of ₹ 7,78,750/- in the return of income filed in response to such notice under s.153A of the Act. The assessment was completed under s.153A of the Act and the income declared in the said return was assessed as such. The AO however, imposed penalty of ₹ 2,18,740/- (100% of the tax sought to be evaded) on the additional income of ₹ 7,78,750/- declared in pursuance of the search by invoking provisions of Section 271(1)(c) of the Act r.w. Explanation 5A thereto. 5. Aggrieved by the levy of penalty under s. 271(1)(c) of the Act by the AO, the assessee preferred appeal before the CIT(A). 6. The CIT(A) however sustained the action of the AO towards imposition of penalty. 7. Further aggrieved, the assessee preferred appeal before the Tribunal. 8. In the course of hearing, the learned AR for the assessee at the outset submitted that in all the captioned appeals, the penalty has been imposed only on account of difference between the income declared in the return originally filed prior to search qua the return filed subsequently in compliance of notice under s.153A of the Act in pursuance of se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y under s. 271(1)(c) of the Act on unaccounted income suo moto included in the return filed under s.153A of the Act is not justified. 9. The learned DR for the Revenue, on the other hand, relied upon the orders of the revenue authorities and also relied upon the decision of the Hon'ble High Court of Calcutta in the case of CIT vs. Prasanna Dugar 371 ITR 19 (Cal) in justification of the action of the Revenue. The learned DR further submitted that SLP against the aforesaid judgment of the Calcutta high Court also stands dismissed by the Hon'ble Supreme Court as reported in 373 ITR 681 (SC). 10. We have carefully considered the rival submissions. In terms of the plea raised, the central question that emerges for determination is whether penalty under s. 271(1)(c) of the Act can be imposed on additional income declared in the return filed by the assessee under s.153A of the Act vis-à-vis the income declared in the return filed under s.139(1) of the Act? The identical issue has been squarely considered by the co-ordinate bench in the case of same combination in Vijay K. Shah vs. ITO in IT(SS)A Nos.54 to 57/Ahd/2014 for AYs 2003-04 to 2006-07, order dated 13/04/2017 as pointed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is well defined and structured. As provided, it is available only in respect of such year where the due date of filing of the return has not expired before the date of search subject to fulfillment of conditions as contemplated in the said Explanation. 9.2. We shall now advert to the decision in the case of Kirit Dahyabhai Patel (supra) referred to and extensively relied upon on behalf of the assessee. We notice that in that case, the 'substantial question of law' framed for decision before the Hon'ble Gujarat High Court was confined to availability of immunity under clause(2) to Explanation-5 of Section 271(1)(c) in the facts of the case. For ready reference, it is reproduced hereunder:- "Whether in the facts and circumstances of the case, the Income Tax Appellate Tribunal was right in law in restoring the penalty imposed under Section 271(1)(c) of the Act holding that benefit under explanation 5 to Section 271(1)(c) of the Act would be available only for period where due date for filing the return under Section 139(1) of the Act had not expired?" In the context of above question posed, the Hon'ble Gujarat High Court after referring to series of decisions of various Courts ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to treat it to be the complete law declared by the Court. A judgment must be read as a whole and the observations from the judgment have to be considered in the light of questions which were presented before the Court. A decision of the Court takes its colour from its question in which it is rendered as enumerated in CIT vs. Sun Engineering works Pvt. Ltd. (1992) 198 ITR 297 (SC). Thus, context holds the key and the decision of the Court has to be read in the context of the facts involved therein and not on the basis of what logically flows there from. A stray sentence cannot be allowed to be put into service to draw a meaning which was never probably meant by the author himself. A judgment is not to be read as statute. Thus, in the light of question framed for decision by Hon'ble Gujarat High Court, we are inclined to hold that the abstract proposition of non-applicability of penalty proceedings in all circumstances (wherever undisclosed income has been included in the return filed post-search) is singularly misplaced and is not supported by the factual context in which the decision in Kirit Dahyabhai Patel(supra) was rendered." 11. In view of the aforesaid findings, we do not fi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly the claim of the assessee that once the assessee files a revised return under s.153A of the Act, the revised return will be treated as the original return filed under s.139 of the Act in so far all other provisions of the Act are concerned. As noted earlier, Section 271AAA and Explanation 5A to Section 271(1)(c) of the Act deems culpability in appropriate cases even before the return is filed in search cases. Therefore, substitution of return originally filed under s.139 of the Act by subsequent return under s.153A of the Act has no impact on the legal fiction towards concealment enjoined by Explanation 5A of the Act. Therefore, the non obstante provision in Section 153A of the Act does not come in the way of penalty proceedings in search cases at all. Thus, the plea of the assessee for applicability of penalty provisions qua the return of income which may hold good under the normal provisions will not apply to special provisions enacted in search cases. 14. Ostensibly, Explanation 5A of the Act has been inserted to specifically address the situation were consequent to a search, assets and valuables or undisclosed income in the form of entry in books, documents etc. is found an ..... X X X X Extracts X X X X X X X X Extracts X X X X
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