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TMI Blog1988 (10) TMI 2X X X X Extracts X X X X X X X X Extracts X X X X ..... ectors (accused Nos. 2 and 3), for the sale of the vacant site on August 7, 1979. As per the agreement, the sale consideration was Rs. 3,89,025. Subsequent to the sale transaction, it so happened that the Income-tax Department made a search of the business premises of the first accused company and the residential premises of the second and third accused as well as the premises of the petitioner (fourth accused). During the search of the petitioner's premises, it was found that the petitioner had received a sum of Rs. 1,65,975 as on-money over and above the sale price, viz., Rs. 3,89,025, as found mentioned in the sale agreement. This on-money of Rs. 1,65,975 was not only not brought on record by the petitioner, but it was also not found mentioned in the income-tax return filed by the petitioner. So also is the case with regard to accused Nos. 1 to 3 in the sense that they did not also bring the excess money paid by them in the accounts, nor did they file their income-tax return specifying the on-money paid to the petitioner. Hence, the Department prosecuted the petitioner as well as accused Nos. 1 to 3 before the court below for the various offences under the Indian Penal Code as w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... days of such seizure, the person makes a full and true disclosure of his income to the Commissioner, such person shall, for the purposes of clause (b) of this sub-section (namely, sub-section (iii), be deemed to have made, prior to the detection by the Income-tax Officer of the concealment of particulars of income or of the inaccuracy of particulars furnished in respect of such income, voluntarily and in good faith, a disclosure of such particulars." This Explanation 2, which was inserted by the Taxation Laws (Amendment) Act, 1984, with effect from October 1, 1984, has been deleted by the Finance Act, 1985. There is no manner of doubt whatever that this Explanation 2 was in force at the time when the search and seizure was effected by the Income-tax Department from the premises of the petitioner leading to the launching of prosecution against her. It is clear from Explanation 2 as stated above, that the Taxation Laws (Amendment) Act, 1984, amended the provisions of section 273A of the Act, to provide that where books of account, cash, jewellery, etc., are seized during search carried out under section 132 of the Act, the assessee shall be deemed to have made a full and true discl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rovision, it is crystal clear that the section starts with a non obstante clause, namely, "notwithstanding anything contained in this Act . . ." The Commissioner has the power of discretion under the section to reduce or waive penalty in certain cases. He has power to reduce or waive penalty if the assessee makes a full and true disclosure of his income voluntarily and in good faith prior to the detection by the Assessing Officer. The sort of immunity was also provided by the provision of Explanation 2 to section 273A then in existence. Normally, if a detection is made by the Assessing Officer of the escape of income particulars or concealment of income by the assessee, then the power of discretion vested in the Commissioner to reduce or waive the penalty in respect of such escaped income is not there in the sense that there is absence of provision to exercise such discretion. The Legislature thought it fit to introduce Explanation 2 to section 273A in the year 1,984 that, even in respect of escaped or concealed income detected by the Assessing Officer during the course of search, the power of the Commissioner to exercise his discretion in the matter of waiver or reduction of penal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onary power of waiver or reduction of the penalty imposed or imposable on the assessee under clause (iii) of sub-section (1)(c) of section 271, then it goes without saying that the assessee shall not be proceeded against for an offence under section 276C or section 277 of the Act. The immunity, if at all, is granted only by the provisions of sub-section (1A) of section 279. This provision grants immunity as stated earlier only in respect of two offences under sections 276C and 277 of the Act. So far as the petitioner is concerned, as adverted to earlier, she had been prosecuted not only for the offences under sections 276C and 277 of the Act, but also for other offences under section 278 of the Act as well as under section 120B read with section 420 of the Indian Penal Code. As a matter of fact, the Commissioner, in this case, had not at all passed any order under section 273A regarding reduction or waiver of penalty in respect of the concealed income of on-money to the extent of Rs. 1,65,975. Once the order is not passed by the Commissioner, the question of immunity from prosecution, as provided under section 279(lA) in respect of offences under sections 276C and 277, may not at a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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