9911796707
TMI Blog2018 (4) TMI 1995X X X X Extracts X X X X X X X X Extracts X X X X ..... gning any reason and merely on the basis of surrender made by the assessee initiated penalty proceedings. The amount of surrender was made by the assessee on the basis of certain loose papers found and seized during search operation upon tecpro group at Gurgaon. There is a further observation that these papers were dictated by the search team and further from the statement tendered by the assessee there is a condition that the surrender made by the assessee shall be without penal action by the Department whatsoever and the surrender was made to buy peace and to avoid litigation with the Department in the spirit of cooperation. As per case Suresh Chander Mittal [ 2001 (6) TMI 63 - SC ORDER ] we find merit in the conclusion drawn by the Ld. CIT (A) and confirm the same, resultantly the appeal of the Revenue is dismissed. - Shri Joginder Singh, Judicial Member And Shri P. Maharishi, Accountant Member For the Assessee : None. For the Revenue : Sh. Atiq Ahmad, Sr. DR. ORDER PER JOGINDER SINGH, J.M. The assessee is aggrieved by the impugned order dated 18.09.2015 of the Ld. First Appellate Authority, New Delhi, deleting the penalty amounting to Rs. 1,96,70,670/- u/s 271AAA, of the Inco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hal (supra) the Bench duly considered the decision in ACIT vs. Gebilal Kanhaialal (HUF) (2012) 210 taxman 244 (SC), CIT vs. Mahender Singh Shah (2008) 299 ITR 305 (Guj.), CIT vs. Radha Krishan Goel (2005) 278 ITR 454 (All.) alongwith other cases like Sita Ram Gupta vs. ACIT (2014) 48 taxmann.com 327 (Del.- Trib.), where the statement recorded u/s 132(4) and the assessee admitted that the said cash represents undisclosed income, the AO having completed assessment, passed a penalty order u/s 271AAA for default of not substantiating manner in which undisclosed income was derived, the penalty order was set aside. Identically in Crossings Infrastructure P. Ltd. vs. CIT (2014) 41 taxmann.com 474 (All.), where Revenue authorities, passed penalty order without showing as to how and in not manner conditions of section 271AAA(2) had not been complied with, imposed penalty. The penalty order was set aside. The Hon ble Gujarat High Court in CIT vs. Mahendra C. Shah (supra) held as under: 1. The Income-tax Appellate Tribunal, Ahmedabad Bench 'A' has referred the following question under Section 256(1) of the Income-tax Act, 1961 (the Act), at the instance of the Commissioner of Income-t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the statement recorded under Section 132(4) of the Act the assessee did not derive any immunity if the assessee failed to comply with the further requirement of the provisions, namely, payment of tax and interest at the time of filing of the return of income. That in fact the assessee had not even disclosed the amount declared in the statement in the original return of income filed on 17.10.1989 and had not even paid tax. The value of the diamonds seized at the time of search had been included in revised return of income for the first time on 27.09.1990 and tax had been paid only at that point of time. In the circumstances, it was contended that a default had already taken place vis-a-vis the original return of income and once income had been concealed at the time of filing of the original return of income, filing of revised income would not absolve the assessee from penal consequence. It was further submitted that once the declared amount had not been disclosed in the return of income originally filed and even payment of tax having not been made the assessee was not entitled to immunity provided by Explanation 5 to Section 271(1)(c) of the Act. It was urged that this was a case ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of tax and interest has to be understood latest at the point of time of filing of return of income considering the scheme of the Act as otherwise the Assessing Officer is entitled to come to the conclusion that not only was there concealment of income but the declaration made in the statement recorded under Section 132(4) of the Act was not bona fide as no tax had been paid at the time of filing of the return of income qua such declaration. 6. Explanation 5 operates in relation to the penalty leviable under Section 271(1)(c) of the Act and hence, the relevant extract of the provisions may be usefully reproduced: Failure to furnish returns, comply with notices, concealment of income, etc. 271.(1) If the [Assessing] Officer or the [Deputy Commissioner (Appeals)] [or the Commissioner (Appeals)] in the course of any proceedings under this Act, is satisfied that any personx x x x x x x x x x x x x x x (c) has concealed the particulars or his income or furnished inaccurate particulars of such income, he may direct that such person shall pay by way of penalty,- x x x x x x x x x x [(iii)] in the cases referred to in Clause (c), in addition to any tax payable by him, a sum which shall not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ome to be furnished before the expiry of time specified in Clause (a) or Clause (b) of Sub-section (1) of Section 139, and also specifies in the statement the manner in which such income has been derived and pays the tax, together with interest, if any, in respect of such income. 7. On a plain reading of the provision it becomes apparent that penalty for concealment of income is leviable if the Assessing Officer, in the course of any proceedings under this Act, is satisfied that any person has concealed the particulars of his income or furnished inaccurate particulars of his income. The computation of penalty has been provided in Clause (iii) which follows Section 271(1)(c) of the Act wherein one finds reference to the tax payable by the assessee. Thus, the provisions stipulate that in the first instance the Assessing Officer has to record his satisfaction as regards concealment of income in the course of a proceeding under the Act which is before the Assessing Officer i.e. assessment proceedings and then compute the amount of penalty leviable on the basis of the amount of tax sought to be evaded by reason of such concealment, which amount is in addition to the tax payable by the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation as regards income (represented by the asset found from possession of the assessee) and such income has not been disclosed till the date of search in the return of income which has to be furnished before the due date alongwith a further statement as to the manner in which such undisclosed income has been derived, coupled with payment of tax and interest. 10. The dispute between the parties in the present case centres round the fact that as to whether the assessee is entitled to immunity by virtue of Exception No. 2 in Explanation 5 to Section 271(1)(c) of the Act. According to the Revenue, all the conditions stipulated by the Second Exception have not been complied with by the assessee for becoming entitled to the immunity whereas the case of the assessee, as accepted by the Tribunal, is that all the conditions have been fulfilled and the assessee is entitled to immunity. 11. According to the Revenue, the statement made under Section 132(4) of the Act by the assessee, at the time of search, does not contain any averment as to the manner in which such income had been derived by the assessee. Furthermore, there is no payment of tax along with the return of income which was origi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sclosure in the return of income is relevant only for the purposes of avoiding the deeming fiction of concealment in relation to the previous year which has already ended before the date of search but return of income for such year had not been furnished, or where return has been filed such income has not been disclosed. In so far as a previous year which is to end on or after the date of search return of income would have hardly any relevance because the Explanation itself stipulates that regardless of such income having been declared in any return of income furnished on or after the date of search the assessee would become liable to imposition of penalty, the only exception being a declaration at the time of search. As to what that declaration has to be has already been examined hereinbefore and it is not necessary to repeat the same. 14. In the present case, admittedly the Assessment Year being 1988-89 and the search having taken place on 03.07.1987 the return of income was not due before 31.07.1988. Therefore, whether the income represented by the value of the asset was shown in the return of income or not became irrelevant once a declaration had been made about such income hav ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the effect that even if the statement does not specify the manner in which the income is derived, if the income is declared and tax thereon paid, there would be substantial compliance not warranting any further denial of the benefit under Exception No. 2 in Explanation 5 is commendable. 16. Hence, the Tribunal was justified in coming to the conclusion that in so far as the value of diamonds was concerned, the assessee having made a declaration under Section 132(4) of the Act and paid taxes thereon, had fulfilled all the conditions for availing the benefit of immunity from levy of penalty as provided under Explanation 5 to Section 271(1)(c) of the Act. In absence of any infirmity in the order of Tribunal on this count the question referred is answered in the affirmative i.e. in favour of the assessee and against the Revenue. 17. The reference stands disposed of accordingly. There shall be no order as to costs. 2.4 If the aforesaid judicial pronouncements are analyzed with the facts of the present appeal there is uncontroverted finding in the impugned order and also in the assessment order that in computation of income, attached with the return, the assessee declared the surrender ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
