Brief of the case:
In the case of DCIT Vs. Deepak Chaudhary Kolkata Bench of ITAT have held that the assessee has cumulatively satisfied all the conditions stipulated in Clause 2 of Explanation 5 to Section 271(1)( c) of the Act and hence entitled for immunity from levy of penalty for all the assessment years under appeal. ITAT further held that the assessee had made voluntary disclosure of Rs. 25,00,000/- for the Asst Year 2005-06 during the course of search assessment proceedings after filing the return u/s 153A of the Act but before any detection by the department. The expression ‘to be furnished’ mentioned in Clause 2 of Explanation 5 to Section 271(1)(c) has to be construed as ‘required to be furnished u/s 153A of the Act.
Facts of the case:
- A search and seizure operation was conducted on 23.8.2006 u/s 132 of the Act in the Builder group of cases. The assessee is one of the individuals belonging to this group.
- In the course of search, the assessee was found to be in possession of undisclosed income and accordingly the assessee gave disclosure statement u/s 132(4) offering substantial income.
- In the course of assessment proceedings, the assessee disclosed further income of Rs. 25,00,000/- for the AY 2005-06.
- AO levied penalty u/s 271(1)(c ) for the AYs 2002-03 to 2005-06 on the ground that the assessee would not have come forward with the disclosure of undisclosed income.
- At the time of filing of the disclosure statement, as well as in course of the assessment proceedings, detailed cash flow charts and explanations were filed substantiating the disclosure made pursuant to search.
Contention of the revenue:
If search was not conducted, the assessee would not have come forward to disclose these undisclosed incomes and hence assessee has concealed the particulars of income and argued that penalty is leviable in terms of Explanation 5 to Section 271(1)(c).
Contention of the assessee:
