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TMI Blog2019 (7) TMI 1511X X X X Extracts X X X X X X X X Extracts X X X X ..... ainst the assessee either in the assessment or penalty or the CIT (A) order referring to the incriminating documents. Thus the issue arises whether the penalty can be levied under section 271 (1) (c) r.w. explanation 5A of the Act merely based on the statement furnished under section 132(4) of the Act and without having found of any incriminating materials found in search. In this regard, we are inclined to refer to the order of ITAT in the case of Ajay Traders Vs. DCIT [ 2016 (6) TMI 422 - ITAT JAIPUR] no incriminating documents were found during the course of search, therefore, Explanation 5A to section 271(1)(c) is not applicable. Accordingly, the penalty was to be deleted. It is clear that there cannot be any penalty under explanat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in law and on facts in upholding penalty of ₹ 1,54,070/- levied u/s271(1)(c) without properly appreciating the facts of the assessee. 2. The levy of penalty is submitted in bad in law as the penalty notice dated 25/02/2015 issued is defective without specifying the nature of default for initiating penalty by simply mentioning Have concealed the particulars of your income or furnished inaccurate particulars of income. 3. The learned CIT(appeals) has erred in law and on facts in not considering the subsimmion dated 18/08/2015 and the decision of ITAT Delhi relied upon by the assessee in the case of Prem Arora and Pawerkumar Gupta and ignoring the fact that return income in response to notice u/s.153A is the asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Act voluntarily. 2) As per provision of section 271(1)(c) r.w.s. 153A of the Act for imposing of penalty, the return filed u/s 139 of the Act, has not to be considered. As such the return filed u/s 153A of the Act needs to be considered. 3) To impose the penalty, there should be additional income over and above the income declared in return filed u/s 153A of the Act which should be considered as concealment of income. 4) The provisions of section 153A of the Act exclude the assessment procedure covered under section 139,147,148,149,151 and 153 of the Act. Thus for penalty proceedings, the return filed u/s 153A of the Act should be considered and not the return filed u/s 139 of the Act. 2.3 However, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he search qua the undisclosed income declared by the assessee in the return of income filed in response to the notice under section 153A of the Act. Therefore there cannot be any penalty under section 271(1)(c) read with explanation 5Aof the Act. The learned AR in support of his claim relied on the judgment of Hon ble Gujarat High Court in the case of Kirit Dahyabhai Patel Vs. ACIT reported in 80 taxmann.com 162. 5. On the other hand, the Ld. DR vehemently supported the order of the authorities below. 6. We have heard the rival contentions of both the parties and perused the materials available on record. The issue in the instant case arises whether there will be any penalty under section 271(1)(c) of the Act on the inco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ons and he claims that such entry in the books of 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,- (a) where the return of income for such previous year has been furnished before the said date but such income has not been declared therein; or (b) the due date for filing the return of income for such previous year has expired but 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... impose penalty under section 271(1)(c). The Assessing Officer imposed the penalty by invoking the Explanation 5A to section 271(1)(c). For imposing the penalty under Explanation 5A on the basis of statement recorded during the course of search, it is necessary to be found incriminating documents and is to be considered at the time of assessment framed under section 153A. As no incriminating documents were found during the course of search, therefore, Explanation 5A to section 271(1)(c) is not applicable. Accordingly, the penalty was to be deleted. From the above order, it is clear that there cannot be any penalty under explanation 5A to section 271(1) of the Act until and unless the quantum addition is based on some incriminati ..... X X X X Extracts X X X X X X X X Extracts X X X X
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