Tuesday 11 September 2012

S. 271(1)(c) Expl 5 immunity available even if tax not paid by due date of ROI

ACIT vs. M/s. Gebilal Kanhaialal HUF (Supreme Court)


In a s. 132 search and seizure operation, the assessee was found with unaccounted income of Rs. 42 lakhs. The assessee made a declaration u/s 132(4) and offered the said amount to tax. However, neither the return of income was filed, nor was the tax due on the surrendered income paid, on the due date (31.7.1987). The tax was paid during the assessment proceedings. The AO took the view that the assessee was not entitled to immunity from penalty under Explanation 5 to s. 271(1)(c) as it had not paid the tax due on the surrendered income by the due date. The CIT (A) reversed the AO. The Tribunal reversed the CIT (A). The High Court (270 ITR 523 (Raj)) reversed the Tribunal and upheld the assessee’s claim. On appeal by the department to the Supreme Court, HELD dismissing the appeal:

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