GEBILAL KANHAIALAL Vs. ASSISTANT COMMISSIONER OF INCOME

JUDGEMENT

(1.) THIS appeal was admitted in terms of following questions :

(2.) A search was carried out at the residential and business premises of the assessee on 29th July, 1987. During the course of search, assessee has surrendered a sum of Rs. 22,32,000 against the investment made in pawning business for various years as per slip found attached with the pawned ornaments and a sum of Rs. 20,00,000 (Rs. 9,00,000 for the asst. yr. 1987 -88 and Rs. 11,00,000 for the asst. yr. 1988 -89). On the basis of surrender, the assessment order under Section 143(3) of the IT Act has been passed and the AO taxed that.

(3.) THE case of the assessee is that during the course of search, assessee has surrendered Rs. 22,32,000, on that amount there should be no penalty in view of the Expln. 5 of Section 271(1)(c) of the Act. The penalty has been imposed on the ground that as tax has not been paid along with interest in time, the benefit of Expln. 5 of Section 271(1)(c) of the Act cannot be extended to the assessee.