Explanation 5 to S.271(1)(c) cannot be invoked to levy penalty on income disclosed during survey u/s 133A:

A survey u/s 133A took place at the assessee firm’s premises during the course of which certain excess stock and excess cash were found. AO levied penalty on the said amounts representing unaccounted stock and unaccounted cash by invoking Explanation 5 to S.271(1)(c). On appeal, the Hon’ble ITAT observed that the assessee firm had furnished its return of income which included the unaccounted income on account of excess stock and excess cash. Tax arising thereon was duly paid and the said return of income was accepted u/s 143(3). Further, the said disclosure was made during the course of survey u/s 133A and not during the course of search u/s 132. Explanation 5 can be invoked in case of search initiated u/s 132 and not in case of survey u/s 133A. Further, the said amounts were included in the return of income and the said return was accepted by AO. Hence, it cannot be said that the assessee had concealed its income or furnished inaccurate particulars of income. Also, there cannot be any concealment prior to furnishing return of income. In light of the above, the penalty was deleted.

[BHARAT STEEL SUPPLIERS VS. ACIT – ITA NOS.1546-47/Ahd/2010]