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TMI Blog2015 (12) TMI 1813X X X X Extracts X X X X X X X X Extracts X X X X ..... d circumstances in which penalty u/s 271(1) of the Act imposed on the assessee by the AO are as follows :- The assessee filed the return of income for AY 2003-04 & 2004-05 disclosing total income of Rs. 8,43,300/- (including LTCG of Rs. 6,62,942/-) and Rs.l3,35,401/- (including Long Term Capital Gain (LTCG) of Rs. 9,66,102/-) on 30.9.2003 & 18.10.2004 respectively. On this LTCG on sale of shares, the assessee had paid tax @ 10% as per the provisions of section 112 of the Act. Thereafter a search was initiated in the premises of the assessee on 14/2/2008. No incriminating material was found in the course of search. Notice u/s 153A was issued in response to which the assessee filed return of income on 27.8.2009 for both the aforesaid AYs de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... en executed in the name of a different person yet, what has been done by the broker is not a concern of the assessee. The assessee pointed out that in support of the long term capital gain the assessee had submitted copies of purchase bills, copies of contract note for sale, copy of demat account. The assessee also pointed out that the entire sale proceeds was received through banking channels. The assessee pleaded that the fact that there was mismatch between the shares sold by the broker on enquiry from the stock exchange cannot be the basis to hold that the assessee is guilty of having furnished inaccurate particulars of income. It was submitted that the assessee agreed to taxing the long term capital gain under the head 'Income from oth ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) of the Act. It was submitted that in a proceeding u/s 153A of the Act, only income arising out of incriminating material found in the course of search can be brought to tax. It was submitted that even in respect of returns accepted u/s 143(1) of the Act, the same could be revisited in proceedings u/s 153A of the Act only if there are incriminating material found during the course of search. It was submitted by him that in the present case no incriminating material was found in the course of search and it was only a routine enquiry made by the AO in the assessment proceedings u/s 153A of the Act, consequent to which the impugned addition was made. It was submitted that the very addition made in the assessment proceedings was beyond the sco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... la (Supra), we are of the view that Ld. CIT(A) has rightly ITA NO. 39961De112011 deleted the additions in dispute. Accordingly, the issues in dispute are decided against the Revenue and in favour of the Assessee." In the given case, the assessment for the assessment years 2003-04 & 2004-05 stood concluded and were not pending on the date of search. Hence in the light of the above the AO was not empowered to disturb the concluded assessments and frame fresh assessments. The power of the AO to frame assessment u/s 153A of the Act is limited to the extent of income escaping assessment coming to the knowledge of the AO during the course of search. However, in the given case no material was found in course of search which would suggest that L ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... account or other documents or transactions represents his income (wholly or in part) for any previous year, which has ended before the date of search and the due date for filing the return of income for such year has expired and the assessee has not filed the return, then, notwithstanding that such income is declared by him in any return of income furnished on or after the date of search, he shall, for the purposes of imposition of a penalty under clause (c) of sub-section (1) of this section, be deemed to have concealed the particulars of his income or furnished inaccurate particulars of such income. " Explanation 5A to section 271(1)(c) of the Act, after its substitution by the Finance Act, 2009, w.r.e.f. 1.6.2007, read as follows: ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... led earlier in the regular course, the Assessee has not disclosed the income that has brought to tax in the assessment u/s 153A of the Act. Since the income already declared in the return u/s 139(1) of the Act includes the income assessed in the order of assessment u/s 153A of the Act, the provision of Explanation 5A would not be attracted in the present case. Therefore, no penalty can be imposed on the assessee. 8. The learned DR relied on the order of the AO/CIT(A). 9. We have given careful consideration to the rival submissions. It is not disputed before us that income returned by the assessee in the return of income u/s 139(1) of the Act, the return filed u/s 153A of the Act and the income brought to tax in the order of assessment u ..... X X X X Extracts X X X X X X X X Extracts X X X X
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