INCOME TAX ACT, 1961

--Penalty under section 271(1)(c)Concealment Applicability of Explanation 5 to section 271(1)(c)--A survey and search and seizure action was conducted in assessee's business premises was conducted and statement on oath was recorded under section 132(4). It is to be noted that during search assessee declared unaccounted income which were invested in the benami share capital. The assessing officer issue notice under section 153A. The vide latter stated that return filed originally was to be treated as return under section 153A. The to came to conclusion that no undisclosed income was disclosed in the return but a revised nature was filed declaring undisclosed income only after statement recorded by the assessee under section 132(4) which was concealed by the assessee but only in proceeding under section 153A. The assessing officer thus levied penalty under section 271(1)(c). Assessment was accordingly framed by the assessing officer levying minimum penalty. Both the lower appellate authority dismissed appeal of assessee. Held: Where after the search, and the statement recorded under section 132(4), the assessee on being issued notice under section 153A did not file any return. The notice under section 153A was issued on 20-7-2006. It was only when assessment proceeding was taken up for consideration, did the assessee by letter dated 14-8-2007 request that its return filed own 31-10-2005 be treated as its return filed in response to notice under section 153A. Much later, it sought to revise its computation on 14-2-2007. Therefore, 'escape route' provided by clause (2) to Explanation 5 of section 271(10(c) in terms case was not avoidable to assessee.

After the search, and the statement recorded under section 132 (4), the assessee, on being issued with notice under section 153A did not file any return. The notice under section 153A was issued on 20-7-2006. It was only when assessment proceedings were taken up for consideration, did the assessee, by letter dated 14-8-2007, request, that its return, filed on 31-10-2005, be treated as its return filed in response to the notice under section 153A. Much later, it sought to revise its computation, on 14-12-2007. Therefore, this Court is of the opinion that the escape route, provided by clause (2) to Explanation 5 in this case, was not available to the assessee. It has to be reiterated that the said provision is available, not merely when the assessee, in his statement offers or surrenders, to tax the amount in question which is later assessed, but also complies with the other conditions, of having filed the return. The allusion to section 139 (1) is significant in this regard, because a notice and consequent search assessment pursuant to section 153A stands excluded, altogether, by virtue of the non-obstante clause to the latter (section 153A) provision. Even if the other view, more favourable to the assessee were to be taken, and for a moment, a return under section 153A were to, arguendeo be assumed to be covered as one under section 139 (1), the fact remains, that in this case, the assessee did not include it, pursuant to the notice issued, and instead chose to merely reiterate its return originally filed on 31-10-2005. This Court is also of the opinion that a plain reading of clause (2) to Explanation 5 (to section 271 (1) (c)) altogether excludes its application to cases where returns are filed under section 139 (1). This clause, in the opinion of the court, extends to those cases, falling in clause (b) of the excepted part, i.e. where the return of year is yet to be filed, in respect of a previous year, during which the search took place. This is because of the expression in his return of income to be furnished before the expiry of time specified in sub-section (1) of section 139..”. If Parliament had intended clause (2) (to Explanation 5) to cover all other categories, then, having regard to the structure and placement of the main provision, which is specially intended to cover search assessments, such intention would have been manifest if there were no reference to section 139 (1) and instead, section 153 A were to be used. That this is the correct position is also evident from the non obstante clause under section 153A, which was resorted to by the assessing officer in this case. [Para 14] In view of the above discussion, it is held that the Tribunal did not commit any error of law; no substantial question of law arises for consideration. The appeal, being devoid of merits, is consequently dismissed. [Para 15]