The Tax Publishers2020 TaxPub(DT) 3722 (Jp-Trib)

INCOME TAX ACT, 1961

Section 271(1)(c)

When certain income is offered for tax in section 153A proceedings, then in absence of any incriminating document found in search, Explanation 5A to section 271(1)(c) is not applicable on such income.

Penalty under section 271(1)(c) - Leviability - Assessee offered certain income for tax in section 153A proceedings - Addition as undisclosed income---Absence of any incriminating document found in search

A search took place in case of assessee and in response to notice under section 153A, he filed return of income. However, during course of assessment proceedings under section 153A, the assessee filed a revised computation of income on the ground that there was a short-term capital gain on sale of immovable property, which was left to be included in the income by ''oversight''. AO framed order of assessment by including the said short-term capital gain as undisclosed income and imposed penalty under section 271(1)(c) by referring to Explanation 5A to section 271(1)(c). Held: There was no finding that short-term capital gain offered by assessee was as a result of any document/material/information found during course of search. Further, the dispute was not that the short-term capital gain earned by the assessee on sale of immovable property was not offered to tax by the assessee in his return of income, which was an admitted position but the question was whether such short-term capital gain on sale of immovable property was found ''during the course of search'' and obviously the answer to that was not in affirmative. Further, it is settled that when certain income is offered for tax in section 153A proceedings, then in absence of any incriminating document found in search, Explanation 5A to section 271(1)(c) is not applicable on such income. Accordingly, the penalty levied under section 271(1)(c) was deleted.

Relied:Price Waterhouse Coopers (P) Ltd. v. CIT, Kolkata--I (2012) 348 ITR 306 (SC) : 2012 TaxPub(DT) 2967 (SC) Sh. Yash Bhatia v. The DCIT, Central Circle, Kota. [ITA No. 1142/JP/19, dt. 9-1-2020] : 2020 TaxPub(DT) 0496 (Jp-Trib)Distinguished:Asstt. CIT v. S and P Foundation (P) Ltd. (2017) 189 TTJ 892 (Chen-Trib) : 158 DTR 118 (Chen-Trib) : 2017 TaxPub(DT) 2049 (Chen-Trib)

REFERRED :

FAVOUR : In assessee's favour

A.Y. : 2013-14

INCOME TAX ACT, 1961

Section 271(1)(c)

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