INCOME TAX ACT, 1961

Section 271(1)(c), Expln. 5

Penalty under section 271(1)(c) - Concealment or furnishing of inaccurate particulars - Undisclosed income unearthed during search - Declaration made under section 132(4) by duly substantiating manner in which such undisclosed income was derived; including those undisclosed income in the return filed under section 153A and the payment of taxes thereon

During search at assessee's premises certain dairies were found which admittedly contained certain transactions of undisclosed income. In the statement recorded under section 132(4) accepted to the contents of the dairies and related undisclosed income reflected thereon by duly substantiating the manner in which such undisclosed income was derived by him. AO framed assessment under section 153A and levied penalty as regards undisclosed income unearthed during search. Held: Undisputedly, assessee had duly disclosed transactions reflected in seized dairies in the returns filed pursuant to notice under section 153A and paid taxes thereon. Hence, all the three conditions for claiming immunity from levy of penalty viz. declaration made under section 132(4) by duly substantiating manner in which such undisclosed income was derived; including those undisclosed income in the return filed under section 153A and the payment of taxes thereon were duly complied with by assessee and hence, case of assessee fell within Explanation-5, Clause-2 of section 271(1)(c) and, therefore, no penalty was leviable.

Followed:Samson Perinchery ITA No. 1154/2014, dated 5-1-2017 : 2017 TaxPub(DT) 672 (Bom-HC).

REFERRED :

FAVOUR : In assessee's favour.

A.Y. : 2001-02 to 2007-08

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