INCOME TAX ACT, 1961

Section 271(1)(c) Explanations 3 and 5A

Penalty under section 271(1)(c) - Concealment or furnishing of inaccurate particulars - AO levied penalty as regards income surrendered before search also -

Assessee filed revised return for assessment year 2006-07 on 28-11-2006 declaring income of Rs. 1,01,46,668. Subsequently, in response to notice under section 153A, it filed return on 12-8-2009 admitting income of Rs. 2,55,13,240 inclusive of additional income of Rs. 1,53,99000 by withdrawing claim of land development charges. Assessee's total income determined was Rs. 2,55,26,240 and AO levied penalty under section 271(1)(c) on the entire assessed income on the reasoning that but for search operation under section 132, assessee would not have disclosed the income filed in response to notice under section 153A. Tribunal confirmed this. Assessee's case was that Tribunal ignored return filed by assessee before date of search on 28-11-2006 declaring income of Rs. 1,01,46,668. No penalty could be levied on such voluntary income admitted by the assessee under section 139(1) prior to the date of search. Held: Tribunal not only committed some factual errors in respect of filing of return of income by assessee but also invoked Explanations 3 and 5A of section 271(1)(c) with respect to alleged non-filing return of income by assessee in pursuance of notice issued after search at business premises of assessee and such a revised return was filed by assessee voluntarily surrendering such income of Rs. 1,53,99,000 and while apparently surrendering all the income on its own by the assessee ought not to have attracted penalty for concealment under section 271(1)(c). Accordingly, matter was restored to Tribunal for adjudication afresh.

REFERRED :

FAVOUR : Matter remanded

A.Y. : 2006-07

SUBSCRIBE FOR FULL CONTENT