- (1.) THE Court: This appeal is directed against a judgment and order dated 27th May, 2009 passed by the Income Tax Appellate Tribunal, Kolkata Bench upholding the decision of Commissioner (Appeal) that the Assessees are entitled to the benefit of immunity arising out of Explanation -5 to section 271(1)(c) of the Income Tax Act and the penalty levied by the Assessment Officer was unjustified. Aggrieved by the judgment and order of the Tribunal, the Revenue has come up in appeal.
(2.) MR . Sinha, learned Advocate appearing in support of the appeal submitted that the Assessee would not have disclosed the income, had the search not taken place. Therefore, the fact that the Assessee has sought to defraud the Revenue is self evident, and therefore, the decision holding that the Assessee is immune from penal provision is altogether bad.
(3.) MR . Poddar, learned Senior Advocate appearing for the Assessee respondent submitted that under Section 271 of the Income Tax Act penalty can be imposed provided the Assessee does not come within the exception clause beginning with the word Unless in Clause (b) of Explanation -5. He drew our attention to the last clause in Explanation -5 which reads as follows: "He, in the course of the search, makes a statement under sub -section (4) of Section 132 that any money, bullion, jewellery or other valuable article or thing found in his possession or under his control, has been acquired out of his income which has not been disclosed so far in his return of income to be furnished before the expiry of time specified in (') sub -section (1) of section 139 and also specifies in the statement the manner in which such income has been derived and pays the tax, together with interest, if any, in respect of such income.)" Mr. Poddar drew our attention to Paragraph -4 of the judgment wherein it is recorded that "During the course of search, statement of Shri Tejinder Singh Saini was recorded under section 132(4) of the Income Tax Act". He further submitted that there is, as such, no doubt that the statement contemplated by the aforesaid clause of the Explanation was duly made in course of the search. The statement made by the Assessee is on the record and has also been referred to by the Tribunal in Paragraph -4 of the judgment. As a matter of fact, the relevant part of the statement made by the Assessee has been quoted by the Tribunal from which it appears that the disclosure was made and recorded in question and answer form.;