CA Saurabh Chokhra
Brief of the case:
The ITAT Visakhapatnam held that the amendment in Explanation 5A to Sec 271(1)(c) even when made effective by Finance Act ,2009 with retrospective effect from 01.06.2007 cannot be made applicable to assessee’s case because both original return and the revised return u/s 153A of the Act have been filed before the amended provisions were brought into the statute (which received assent of President on 13.8.2009).
Facts of the case:
- A search was carried out u/s 132(4) in assessee’s residential and business premises on 16.11.2007. During the course of search proceedings, the department found incriminating materials which reveals undisclosed income of the assessee in the form of investments in immovable properties and other group companies. When the said documents were confronted to the assessee, the assessee has admitted undisclosed income of Rs.7.6 crores.
- Consequent to search, the assessee has filed revised return of income for the assessment year 2005-06 to 2008-09 disclosing undisclosed income admitted during the course of search proceedings and paid tax before filing return of income.
- Subsequently, the assessment was completed u/s 143(3) r.w.s. 153A of the Act determining total income on estimation basis and levied concealment penalty u/s 271(1)(c) on the ground that the assessee has deliberately concealed particulars of income or furnished inaccurate particulars of income and offered additional income only on search action.
- CIT(A) appeal also agreed with the view taken by AO , however , provided relief on the quantum of penalty. Aggrieved assessee is in appeal before ITAT.
Contention of the Assessee:
It was contended by the assessee that explanation 5A as it stood at the time of search applies only to a non-filer assessee who was searched uls L32 of the Act, but not for the assessee’s who had filed their returns u/s 139(1) of the Act.
Question to be decided:
Whether the AO was right in levying penalty under the provisions of explanation 5A of section 271(1)(c) of the Act or the amended provisions of explanation 5A of section 271(1)(c) of the Act, by the Finance Act, 2009, with retrospective effect from 01.6.2007 is applicable to the facts of the present case?
Held by ITAT Visakhapatnam:
