|COURT:||Gujarat High Court|
|CORAM:||K. J. Thaker J, K. S. Jhaveri J|
|COUNSEL:||S. N. Soparkar|
|DATE:||December 3, 2014 (Date of pronouncement)|
|DATE:||April 25, 2015 (Date of publication)|
|FILE:||Click here to download the file in pdf format|
|S. 271(1)(c): Immunity against penalty under Expl 5 is available even in return is not filed provided a statement is made during the search, explaining the manner of deriving the income and due tax & interest thereon is paid|
Against the judgement of the Third Member of the Tribunal in ACIT vs. Kirit Dahyabhai Patel  121 ITD 159 (AHD.) (TM), the High Court had to consider the following question of law: “Whether in the facts and circumstances of the case, the Income Tax Appellate Tribunal was right in law in restoring the penalty imposed under Section 271(1)(c) of the Act holding that benefit under explanation 5 to Section 271(1)(c) of the Act would be available only for period where due date for filing the return under Section 139(1) of the Act had not expired?” HELD by the High Court reversing the Third Member:
In order to get the benefit of immunity under clause(2) of explanation5 to Section 271(1)(c) of the Income Tax Act, it is not necessary to file the return before the due date provided that the assessee had made a statement, during the search and explained the manner in which the surrendered amount was derived, and paid tax as well as interest on the surrendered amount. It is not relevant whether any return of income was filed by the assessee prior to the date of search and whether any income was undisclosed in that return of income. In view of specific provision of Section 153A of the I.T. Act, the return of income filed in response to notice under Section 153(a) of the I.T. Act is to be considered as return filed under Section 139 of the Act, as the Assessing Officer has made assessment on the said return and therefore, the return is to be considered for the purpose of penalty under Section 271(1)(c ) of the I.T. Act and the penalty is to be levied on the income assessed over and above the income returned under Section 153A, if any.
IT IS HIGH TIME HIGHLY SIMPLIFIED TAX LAW OR RULES MANUAL SHD BE MADE AVAILABLE TO THE REVENUE, AS THEIR KNOWLEDGE OF APPLICATION OF RULES OR SECTIONS IS INDEED LOW.. SEE HERE THE VERY TRIBUNAL ITSELF MADE MISTAKES, MEANS HOW COULD WE EXPECT THE AO BETTER THAN TRIBUNAL !
BUT ANY WAY WORST AFFECTED IS THE TAX PAYER AT THESE WORTHIES’ IGNORANCE!
Well, understanding of law and rules must be objective approached, but interference of subjectivity affects the understanding and causes unnecessary dispute in disregard of Art. 144 of Indian Constitution.