Explanation 5A to section 271(1)(c). The expression “due date” in Explanation 5A encompasses a belated return filed u/s. 139(4). Even a belated return filed u/s. 139(4) will be entitled to the benefit of immunity from penalty.
Facts: The assessee, a partner of the firm M/s. Madhav Constructions, in its return of income for assessment year 2008-09, filed u/s. 139(4), returned a total income of Rs. 1,31,19,140. The returned income included a sum of Rs. 1,25,00,000 declared by it in the statement recorded u/s. 132(4) of the Act in the course of search action on Madhav Group. In an order passed u/s. 143(3) r.w.s. 153A, the income returned by the assessee was accepted by the Assessing Officer (AO). Thereafter, the AO initiated proceedings u/s. 271(1)(c) on the ground that the income was offered only as a consequence of search and the return of income in which it was declared was filed after due date u/s. 139(1). He held that the assessee’s case was covered by Explanation 5A to section 271(1)(c). He rejected the assessee’s contention that the sum of Rs. 1,25,00,000 declared was offered voluntarily on an estimated basis and the same was accepted in the assessment order and hence the provisions of section 271(1)(c) are not applicable.
Aggrieved, the assessee preferred an appeal to the CIT(A) who allowed the appeal filed by the assessee on the ground that income was offered on an estimated basis and therefore the additional income so offered and accepted could not be held to be concealed income nor could it amount to furnishing of inaccurate particulars.
Aggrieved, the revenue preferred an appeal to the Tribunal.
Held:
In Explanation 5A, the legislature has not specified the due date as provided in section 139(1) but has merely envisaged the words “due date”. This “due date” can be very well inferred as due date of filing of return of income filed u/s. 139 which includes section 139(4). Where the legislature has provided the consequences of filing of return of income u/s. 139(4), then the same has also been specifically provided for eg., section 139(3). Thus, the meaning of the words “due date” sans any limitation or restriction as given in clause (b) of Explanation 5A cannot be read as “due date as provided in section 139(1)”. The words “due date” can also mean date of filing of the return of income u/s. 139(4).
The Tribunal also noted that in the context of sections 54F and 54(2), in the case of CIT vs. Rajesh Kumar Jalan (286 ITR 276)(Gau); CIT vs. Jagriti Aggarwal (339 ITR 610)(P & H) and CIT vs. Jagtar Singh Chawla (ITA No. 71 of 2012, order dated 20th March, 2013), it has been held that provisions of section 139(4) are actually an extension of due date of section 139(1) and therefore due date for filing return of income can also be reckoned with the date mentioned in section 139(4).
The Tribunal held that the assessee gets the benefit/ immunity under clause (b) of Explanation to section 271(1)(c), because the assessee has filed its return of income within “due date” and therefore, the penalty levied by the AO cannot be sustained on this ground. It held that it is not affirming the findings and conclusions of CIT (A). However, the penalty levied was deleted in view of the interpretation of Explanation 5A to section 271(1)(c).
The appeal filed by the revenue was dismissed.
