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09-01-2020, Mukesh Ramchandra Patel, Section 271(1)(c), Tribunal Ahmedabad

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2 weeks 1 day ago #12038 by amit
Section - 271(1)(c), 132, 153A, 271AAA
Order Date - 09-01-2020
Favouring - Assessee Partly allowed for statistical purposes
Court - Tribunal Ahmedabad
Appellant - Mukesh Ramchandra Patel
Respondent - DCIT
Citation - 120Taxpundit102
Appeal No. - ITA No. 1971/Ahd/2017
Asstt. Year - 2010-11



The assessee is in appeal before the Tribunal against the order of the learned CIT(A)-4, Ahmedabad dated 16th June 2017 passed for Assessment Year 2010-11. The assessee has taken three grounds of appeal, but his grievances revo ve around a single issue namely learned CIT(A) has erred in confirming penalty of Rs.23,47,735/- imposed by the Assessing Officer under Section 271(1)(c) of the Income-tax Act, 1961.

2. The brief facts of the case are that a search & seizure operation under Section 132 of the Income-tax Act was carried out at the residential premises of the assessee on 27.04.2011. During the course of search, certain incriminating loose-papers were found and seized vide Annexure-B1 to B3. A statement of the assessee under Section 132(4) of the Income-tax Act was recorded on 28.04.2011. He was confronted with the loose-papers and, in reply to question no.10, it was disclosed by the assessee that a land was sold for a consideration of Rs. 9,34,56,997/-; out of that, Rs.5,23,27,500/- was received through cheque and balance amount of Rs.4,11,29,497/- was received in cash. The assessee has 1/3rd share in the land and cash component falling to his share at Rs.1,13,96,770/- was admitted as his undisclosed income. In response to notice under Section 153A of the Act, assessee has filed his return and included the amount of Rs.1,13,96,770/- declared in the statement under Section 132(4) of the Income-tax Act. The return was accepted as it is and penalty proceedings were initiated by the learned Assessing Officer. The learned Assessing Officer has imposed penalty under Section 271(1)(c) of the Act vide order dated 25th September 2014 amounting to Rs.23,47,735/-. The learned Assessing Officer, while concluding as to how the penalty is imposable upon the assessee, considered theExplanation 5A appended to Section 271(1)(c) of the Act as well as the facts unearthed during the course of search. The observations of the learned Assessing Officer are worth to be noted which read as under:-

“3. In view of the noncompliance from the side of the assessee the matter needs to be decided on merits keeping in view the details and material available with this office. A careful consideration need to be made to verify whether th provisions of section 271(1)(c) and explanation 5A in particular as substituted by Finance (No.2) Act 2009 w.r.e.f. 01/06/2007 are attracted or not. For the sake of clarity the said explanation is reproduced here in below:

[Explanation 5A,— Where, in the course of a search initiated under section 132 on or after the 1st day of June, 2007, the assessee is found to be the owner of –

(i) any money, bullion, jewellery or other valuable article or thing (hereafter in this Explanation referred to as assets) and the assessee claims that such assets have been acquired by him by utilising (wholly or in part) his income for any previous year; or

(ii) any income based on any entry in any books of account or other documents or transactions and he claims that such entry in the books of account or other documents or transactions represents his income (wholly or in part) for any previous year, which has ended before the date of search and,—

(a) where the return of income for such previous year has been furnished before the said date but such income has not been declared therein; or

(b) the due date for filing the return of income for such previous year has expired but the assessee has not filed the return, then, notwithstanding that such income is declared by him in any return of income furnished on or after the date of search, he shall, for the purposes of imposition of a penalty under clause (c) of sub-section (I) of this section, be deemed to have oncealed the particulars of his income or furnished inaccurate pa ticulars of such income.] In the light of the above Explanation, the facts of this case are examined herein below in order to verity whether this case falls in the mischief of the said Explanation or not:

i) Search u/s.132 was initiated on 27/04/2011 i.e. after the 1st day of June 2007.

ii) The assessee was found to be the owner of undisclosed income which was based entries in the documents found in the course of search.

iii) The assessee had claimed that the same represented his income of Rs.1,13,96,773/ for the previous year relevant to A.Y. 2010-11.

iv) The relevant previous year has ended on 31/03/2010 i.e. before the date of search (27/04/2011).

v) The due date for filing the return of income for A.Y. 2010-11 has expired at the time of search.

vi) The income of Rs. 1,13,96,773/- was not declared by the assessee in his original return filed u/s,139 but the same has been declared by the assessee for the first time in his return filed on 30/03/2012 u/s. 153 A of the Act.

vii) The disclosure was not voluntary declaration but was made in consequence of the search initiated u/s 132 and was based on certain incrementing documents found at the time of search.

In the light of above narrated facts it is clear that as per the provisions of section 271(1)(c) explained vide Explanation 5A, as amended w.e.f. 01-06- 2007 by Finance Act 2009 the assessee has deemed to have concealed the

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