I.T.A. No. 682(Asr.)/2013, (Assessment Year: 2009-2010). Case: Sh. Davinder Sapra Vs Asstt. Commr. of Income Tax, Central Circle-1, Jalandhar. ITAT (Income Tax Appellate Tribunal)
| Case Number | I.T.A. No. 682(Asr.)/2013, (Assessment Year: 2009-2010) |
| Counsel | For Appellant: Sh. Dinesh Sarna, Advocate and For Respondents: Sh. Mahavir Singh, DR |
| Judges | H.S. Sidhu, Member (J) and B.P. Jain, Member (A) |
| Issue | Income Tax Act |
| Judgement Date | April 08, 2014 |
| Court | ITAT (Income Tax Appellate Tribunal) |
Order:
(ITAT Amritsar Bench)
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This appeal of the assessee arises from the order of the CIT(A),-1, Ludhiana dated 30.10.2013 for the assessment year 2009-10. The assessee has raised following grounds of appeal:
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That the order of the worthy CIT(A), Ludhiana, dated 30.10.2013 is against the law & facts of the case.
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That the worthy CIT(A). Ludhiana, was erred in law in confirming the penalty of Rs. 24,54,090/- u/s. 271(1)(c) imposed by the A.O. ignoring the fact that the assessee has declared additional income in response to notice u/s. 153A at Rs. 71,35,440/- and thereafter voluntarily revised return at an income of Rs. 76,35,440/- before the completion of the assessment u/s. 153A of the Act.
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That assessee request to add or amend any ground of appeal before the appeal is finally heard and disposed off.
The brief facts of the case are that during assessment, it was noticed that the assessee disclosed an additional income of Rs. 71,00,000/- through filing of revised return in response to notice u/s. 153A. This income was not disclosed at the time of filing of original return u/s. 139. The A.O. has treated this sum of Rs. 71,00,000/- as assessee's income from undisclosed sources and initiated penalty proceedings u/s. 271(1)(c) by issuing notice under that section on 27.12.2011.
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The assessee on being confronted with the levy of penalty u/s. 271(1)(c) submitted his arguments before the Assessing Officer as under:
In response to penalty notice u/s. 271(1)(c) dated 25.04.2012, it is submitted that assessee filed his original return u/s. 139 declaring an income of Rs. 5,35,401/-. Search and seizure operation has been conducted at the residential as well as business premises of assessee on 06.11.2009. Thereafter, notice u/s. 153A was issued, in response to which assessee filed his revised Income Tax Return declaring an income of Rs. 76,35,440/-. While passing order u/s. 153A of the Act, your goodself accepted the return filed by the assessee.
Sir, it is requested that delay of 29 days may kindly be condoned.
I have considered the issue, the reasons given for delay in filing the appeal are reasonable and therefore, accepted. The delay is therefore, condoned. The proceedings in this case have been attended by Sh. Dinesh Sarna, AR on behalf of the appellant. The appellant has preferred following grounds of appeal:
i) That the order of the AO dated 25.06.2012 is against the law and facts of the case.
ii) That the AO was erred in law in imposing penalty of Rs. 24,54,090/- u/s. 271(1)(c) ignoring the fact that the assessee has declared additional income in the revised return filed before the completion of the assessment u/s. 153A of the Act.
iii) That assessee request to add or amend any ground of appeal before the appeal is finally heard and disposed of.
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The appellant is aggrieved against the order of the AO imposing penalty u/s. 271(1)(c) to the tune of Rs. 24,54,090/-. The AO has observed in para 2 of the penalty order that the assessee had disclosed an additional income of Rs. 71,00,000/- by filing the revised return in response to notice under section 153A and the said income had not been disclosed at the time of filing of original return u/s. 139.
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The AO read the provisions of explanation 5 to section 271(1)(c) wherein, on fulfillment of certain essential conditions, penalty u/s. 271(1)(c) was not imposable. The AO highlighted the requirement of explanation 5 to section 271(1)(c) to the effect that income disclosed must relate to the period for which time for filing return under section 139(1) was still available as on the date of search. It is apparent that the search in the case of the assessee took placed on 06.11.2009 and return in response to notice u/s. 153A was filed by the assessee on 31.03.2011 declaring additional income of Rs. 71,00,000/- disclosed u/s. 132(4) of the Act. The return for A.Y. 2009-10 u/s. 39(1) had to be filed before the end of Financial Year i.e. 31.03.2010. The AO, therefore, highlighted that the case of the assessee was clearly attracting the provisions of section 271(1)(c) explanation 5. The AO has also placed reliance on the decision of Surender Paul vs. CIT 287 ITR 223 wherein it has been clearly held as follows:
The fact that the income referred to above is declared by the assessee in any return of income furnished by him on or after the date of search, will not provide the immunity to the assessee from imposition to the penalty under Section 271(1)(c) of the Act unless the conditions mentioned the statement under Section 132(4) of the Act, as well as the conditions as laid down in Expln. 5, Sub-clause (2) to Section 271 are fulfilled.
3.1. The Ld. CIT(A) was of the opinion that in order to seek immunity under Expln. 5 to section 271(1)(c) of the Act, the assessee was required to fulfill the conditions as specified in Expln. 5, sub-cl.(2) to section 271(1)(c) of the Act as well as the conditions specified in his statement u/s. 132(4) of the Act while seeking Immunity from the Department. Ld. CIT(A) further stated that he has perused the provision of the Act, which was sought to be relied upon the assessee to escape the liability of the penalty u/s. 271(1)(c) of the Act and are of the opinion that the case of the assessee does not fall in any of the two exceptions carved out in the Expln. referred to above. Admittedly, the income which was surrendered by the assessee was not disclosed by him in his return of income before the search took placed. Return for the income for the assessment year in question was not filed within time and further the amount of tax due thereon...
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