S. Sathyanarayanan v. The Assistant Commissioner of Income-tax, Central Circle-I(5), Chennai
[Citation -2014-LL-1112-23]

Citation 2014-LL-1112-23
Appellant Name S. Sathyanarayanan
Respondent Name The Assistant Commissioner of Income-tax, Central Circle-I(5), Chennai
Court HIGH COURT OF MADRAS
Relevant Act Income-tax
Date of Order 12/11/2014
Assessment Year 2006-07
Judgment View Judgment
Keyword Tags imposition of penalty • surrender of income • undisclosed income • source of income • unexplained cash • deemed dividend
Bot Summary: For Appellant : Mr.S.Sridhar For Respondent : Mr.T.R.Senthilkumar JUDGMENT The issue raised in the present appeal concerns with the imposition of penalty under Section 271(1)(c) of the Income Tax Act by the original authority against the assessee pertaining to the assessment year 2006-07, pursuant to a search operation conducted in the premises of Mr.K.Sundarraj, the father of the appellant, on 21.9.2005 and followed by an assessment order under Section 153C 2 read with Section 143(3) of the Income Tax Act, 1961 on 31.12.2007 relating to the deemed dividend of Rs.15,00,000/-. On perusal of the impugned order, we find that the Commissioner of Income Tax as well as the Tribunal were clear in holding that no explanation was offered by the appellant in respect of the issue raised before us and that fact is also not disputed by the appellant's counsel. In our view, since there is no explanation offered by the assessee, the provisions of Explanation-1 to Section 271(1) of the Act will not enure to the case of the appellant. In the present case, we find that the assessee had not offered any explanation either during the assessment proceedings or during the penalty proceedings regarding the unexplained cash deposits. The assessee had also not disclosed the said income in the return filed in response to the notice issued under Section 153C of the Income Tax Act. The findings of the Authorities below make it clear that there was no proper explanation given by the assessee with regard to the undisclosed income and the assessee had not given any details as to how he would fall within Explanation 1 to Section 271(1)(c) of 3 the Income Tax Act. Without any material, the assessee had merely stated that the source of income was from the business run by his father and the assessee will be no avail.


1 IN HIGH COURT OF JUDICATURE AT MADRAS DATED: 12.11.2014 CORAM HONOURABLE MR. JUSTICE R.SUDHAKAR AND HONOURABLE MR. JUSTICE R.KARUPPIAH Tax Case (Appeal) No.616 of 2013 S. Sathyanarayanan Appellant -vs- Assistant Commissioner of Income Tax Central Circle I(5) Income Tax Department Main Building IV Floor 121, M.G.Road Nungambakkam Chennai 600034 Respondent Memorandum of Grounds of Tax Case Appeal under Section 260A of Income Tax Act, 1961 against order of Income Tax Appellate Tribunal, Chennai 'B' Bench dated 18.3.2013 made in I.T.A.No.2301/Mds/2012 for assessment year 2006-07. For Appellant : Mr.S.Sridhar For Respondent : Mr.T.R.Senthilkumar JUDGMENT (Judgment of Court was delivered by R.SUDHAKAR, J.) issue raised in present appeal concerns with imposition of penalty under Section 271(1)(c) of Income Tax Act by original authority against assessee pertaining to assessment year 2006-07, pursuant to search operation conducted in premises of Mr.K.Sundarraj, father of appellant, on 21.9.2005 and followed by assessment order under Section 153C 2 read with Section 143(3) of Income Tax Act, 1961 on 31.12.2007 relating to deemed dividend of Rs.15,00,000/-. 2. Heard learned counsel for appellant and learned standing counsel for respondent. 3. On perusal of impugned order, we find that Commissioner of Income Tax (Appeals) as well as Tribunal were clear in holding that no explanation was offered by appellant in respect of issue raised before us and that fact is also not disputed by appellant's counsel. In our view, since there is no explanation offered by assessee, provisions of Explanation-1 to Section 271(1) of Act will not enure to case of appellant. Moreover, said issue had already been considered by us in assessee's own case in T.C.A.Nos.608 to 613 of 2013 dated 25.8.2014, wherein it has been held as follows:- ''10. In present case, we find that assessee had not offered any explanation either during assessment proceedings or during penalty proceedings regarding unexplained cash deposits. assessee had also not disclosed said income in return filed in response to notice issued under Section 153C of Income Tax Act. Also, findings of Authorities below make it clear that there was no proper explanation given by assessee with regard to undisclosed income and assessee had not given any details as to how he would fall within Explanation 1 to Section 271(1)(c) of 3 Income Tax Act. Without any material, assessee had merely stated that source of income was from business run by his father and assessee will be no avail. It is seen from order of Tribunal that assessee and his father are Directors of entity, namely, S&S Foundations P. Ltd. Hence, authorities were justified in rejecting such plea; in any event, penalty imposed is minimum that is required under Section 271(1)(c) of Income Tax Act. We also find that in view of detection made by Assessing Officer during search conducted in business premises and residential premises of father of assessee, offer of surrender of income was made. Hence, it cannot be said that surrender of income was voluntary.'' 4. In view of above, we find no merits in this tax case appeal. Accordingly, tax case appeal is dismissed. Consequently, M.P.No.1 of 2013 is also dismissed. No costs. Index : no (R.S.J.,) (R.K.,J.) Internet: yes 12.11.2014 ss To 1. Income Tax Appellate Tribunal Chennai 'B' Bench Chennai 4 2. Assistant Commissioner of Income Tax Central Circle I(5) Income Tax Department Main Building IV Floor No.121, M.G.Road Nungambakkam Chennai 600 034 5 R.SUDHAKAR, J. and R.KARUPPIAH,J. ss Tax Case (A) No.616 of 2013 12.11.2014 S. Sathyanarayanan v. Assistant Commissioner of Income-tax, Central Circle-I(5), Chennai
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