Sh. Kulwant Singh, Mohali V. DCIT, Chandigarh

CO 16/CHANDI/2018

• Counselvise Citation: [2019] 115 COUNSELVISE.COM (IT) 4695 (ITAT-CHANDIGARH)
• Duration Of Justice: 11 month(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 20-03-2019
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2008-2009
• Appeal Filed On: 20-04-2018
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: CHANDER KANTA
• Assessee Lawyers: PANKAJ BHALLA CAS
• Keywords: Capital asset; Income from undisclosed sources; Search and seizure; Bonafide belief; Source of fund; Initiation of penalty proceedings; Bad and doubtful debts; Assessment record; Condonation of delay; Revised return; Capital Gains
• Section: 271(1)(c); 69C; 143(3); 153A; 143(1); 69B; 274; 69A; 139(1); 148; 132; 139

Judgement Text

, - , IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH, A, CHANDIGARH , . '.., # $, %& BEFORE SHRI SANJAY GARG, JUDICIAL MEMBER AND DR. B.R.R. KUMAR, ACCOUNTANT MEMBER ./ ITA NOS. 41 TO 44/CHD/2017 / ASSESSMENT YEARS : 2008-09, 2009-10, 2010-11 & 2012-13 THE DCIT, CENTRAL CIRCLE-1, CHANDIGARH SH. KULWANT SINGH. H.NO. 1047, SECTOR 71, MOHALI ./PAN NO: ABZPS4962R APPEAL AGAINST THE ORDER OF CIT(A)-3, GURGAON DA TED 28.10.2016 C.O. NOS. 16 TO 19/CHD/2018 (IN ./ ITA NOS. 41 TO 44/CHD/2017) / ASSESSMENT YEARS : 2008-09, 2009-10, 2010-11 & 2012-13 SH. KULWANT SINGH. H.NO. 1047, SECTOR 71, MOHALI THE DCIT, CENTRAL CIRCLE-1, CHANDIGARH ./PAN NO: ABZPS4962R APPEAL AGAINST THE ORDER OF CIT(A)-3, GURGAON DA TED 28.10.2016 ./ ITA NO. 387/CHD/2017 / ASSESSMENT YEAR : 2011-12 THE DCIT, CENTRAL CIRCLE-1, CHANDIGARH SH. KULWANT SINGH. H.NO. 1047, SECTOR 71, MOHALI ./PAN NO: ABZPS4962R APPEAL AGAINST THE ORDER OF CIT(A)-3, GURGAON DA TED 30.12.2016 C.O. NO. 30/CHD/2018 (IN ./ ITA NO. 387/CHD/2017) / ASSESSMENT YEAR : 2011-12 SH. KULWANT SINGH. H.NO. 1047, SECTOR 71, MOHALI THE DCIT, CENTRAL CIRCLE-1, CHANDIGARH ./PAN NO: ABZPS4962R APPEAL AGAINST THE ORDER OF CIT(A)-3, GURGAON DA TED 30.12.2016 ITA NOS.41 TO 44, 387, 45 TO 54/CHD/17 & CO 16-TO 3 0-CHD-2018- SHRI KULWANT SINGH & OTHERS, MOHALI 2 ./ ITA NOS. 51 TO 54/CHD/2017 / ASSESSMENT YEARS : 2007-08, 2009-10, 2010-11 & 2011-12 THE DCIT, CENTRAL CIRCLE-1, CHANDIGARH SMT. JASWANT KAUR H.NO. 1047, SECTOR 71, MOHALI ./PAN NO: ACLPK6637Q APPEAL AGAINST THE ORDER OF CIT(A)-3, GURGAON DA TED 28.10.2016 C.O. NOS. 26 TO 29/CHD/2018 (IN ./ ITA NOS. 51 TO 54/CHD/2017) / ASSESSMENT YEARS : 2007-08, 2009-10, 2010-11 & 2011-12 SMT. JASWANT KAUR H.NO. 1047, SECTOR 71, MOHALI THE DCIT, CENTRAL CIRCLE-1, CHANDIGARH ./PAN NO: ACLPK6637Q APPEAL AGAINST THE ORDER OF CIT(A)-3, GURGAON DA TED 28.10.2016 IN DIVISION BENCH, B, CHANDIGARH ./ ITA NOS. 45 TO 47/CHD/2017 / ASSESSMENT YEARS : 2008-09, 2009-10, & 2011-12 THE DCIT, CENTRAL CIRCLE-1, CHANDIGARH SMT. MANJIT KAUR, #201, SECTOR 16-A, CHANDIGARH ./PAN NO: AETPK0153M APPEAL AGAINST THE ORDER OF CIT(A)-3, GURGAON DA TED 28.10.2016 C.O. NOS. 20 TO 22/CHD/2017 (IN ./ ITA NOS. 45 TO 47/CHD/2017) / ASSESSMENT YEARS : 2008-09, 2009-10, & 2011-12 SMT. MANJIT KAUR, #201, SECTOR 16-A, CHANDIGARH THE DCIT, CENTRAL CIRCLE-1, CHANDIGARH ./PAN NO: AETPK0153M APPEAL AGAINST THE ORDER OF CIT(A)-3, GURGAON DA TED 28.10.2016 ./ ITA NOS. 48 TO 50/CHD/2017 / ASSESSMENT YEARS : 2008-09, 2010-11 & 2011-12 THE DCIT, CENTRAL CIRCLE-1, CHANDIGARH SH. PARAMJIT SINGH, H.N O.4197, SECTOR 68, MOHALI ./PAN NO: AEKPS5692A APPEAL AGAINST THE ORDER OF CIT(A)-3, GURGAON DA TED 28.10.2016 ITA NOS.41 TO 44, 387, 45 TO 54/CHD/17 & CO 16-TO 3 0-CHD-2018- SHRI KULWANT SINGH & OTHERS, MOHALI 3 C.O. NOS. 23 TO 25/CHD/2017 (IN ./ ITA NOS. 48 TO 50/CHD/2017) / ASSESSMENT YEARS : 2008-09, 2010-11 & 2011-12 SH. PARAMJIT SINGH, H.N O.4197, SECTOR 68, MOHALI THE DCIT, CENTRAL CIRCLE-1, CHANDIGARH ./PAN NO: AEKPS5692A APPEAL AGAINST THE ORDER OF CIT(A)-3, GURGAON DA TED 28.10.2016 /ASSESSEE BY : SH. PANKAJ BHALLA, CAS ! / REVENUE BY : SMT. CHANDERKANTA, SR.DR ' # $ /DATE OF HEARING : 15.02.2019 %&'( $ /DATE OF PRONOUNCEMENT : 20.03.2019 %' / ORDER PER SANJAY GARG, JUDICIAL MEMBER: THE CAPTIONED APPEALS BY THE REVENUE AND CORRESPOND ING CROSS OBJECTIONS BY THE ASSESSEE ARISE FROM THE COMMON OR DERS FOR DIFFERENT ASSESSMENT YEARS PASSED BY THE LD. COMMISSIONER O F INCOME TAX (A)-3, GURGAON [HEREINAFTER REFERRED TO AS CIT(A)] IN CA SE OF EACH OF THE ASSESSEE. 2. SINCE THE COMMON ISSUE RELATING TO THE LEVY OF THE U/S 271(1)(C) IS INVOLVED IN ALL THE APPEALS, HENCE, THESE WERE H EARD TOGETHER AND ARE BEING DISPOSED OF BY THIS COMMON ORDER. 3. THE BRIEF FACTS RELATING TO THE ISSUE UNDER CONS IDERATION ARE THAT THE ASSESSEES HERE-IN-ABOVE ARE THE PROMOTERS AND D IRECTORS OF M/S JANTA LAND PROMOTERS PVT LTD. THE ORIGINAL RETURNS U/S 139(1) OF THE INCOME-TAX ACT, 1961 (IN SHORT 'THE ACT') FOR DIFFE RENT ASSESSMENT ITA NOS.41 TO 44, 387, 45 TO 54/CHD/17 & CO 16-TO 3 0-CHD-2018- SHRI KULWANT SINGH & OTHERS, MOHALI 4 YEARS BY THE ASSESSEES WERE FILED WITHIN THE DUE DA TES PRESCRIBED FOR THE SAME, DETAILED AS UNDER: NAME OF THE ASSESSEE A.Y. DATE OF FILING KULWANT SINGH 2008-09 23.09.2008 KULWANT SINGH 2009-10 30.07.2009 KULWANT SINGH 2010-11 29.07.2010 KULWANT SINGH 2012-13 29.09.2012 KULWANT SINGH 2011-12 28.09.2011 MANJIT KAUR 2008-09 10.12.2008 MANJIT KAUR 2009-10 31.07.2009 MANJIT KAUR 2011-12 28.09.2011 PARAMJIT SINGH 2008-09 31.03.2009 PARAMJIT SINGH 2010-11 31.07.2010 PARAMJIT SINGH 2011-12 28.09.2011 JASWANT KAUR 2007-08 31.03.2008 JASWANT KAUR 2009-10 31.07.2009 JASWANT KAUR 2010-11 27.09.2010 JASWANT KAUR 2011-12 28.09.2011 THE ASSESSEES IN THEIR INCOME TAX RETURNS HAD DISCL OSED / OFFERED CERTAIN INCOMES AS DETAILED BELOW FOR DIFFERENT ASS ESSMENT YEARS AS UNDER THE HEAD INCOME FROM OTHER SOURCES WITH T HE REMARKS SUBJECT TO NO EXPLANATION AND PAID DUE TAXES THEREUPON. NAME OF ASSESSEE ASSESSMENT YEAR AMOUNT SH. KULWANT SINGH (M.D. OF M/S JANTA LAND PROMOTERS LTD AND M/S JLPL INFRASTRUCTURE) 2008-09 1,66,80,000/- 2009-10 1,93,00,000/- 2010-11 2,10,00,000/- 2011-12 39,00,12,600/- 2012-13 94,50,000/- 2013-14 4,70,00,000/- SH. PARAMJIT SINGH (DIRECTOR OF M/S JANTA LAND PROMOTERS LTD.,) 2008-09 2,50,000/- 2010-11 4,00,000/- 2011-12 2,29,000/- 2012-13 10,00,000/- ITA NOS.41 TO 44, 387, 45 TO 54/CHD/17 & CO 16-TO 3 0-CHD-2018- SHRI KULWANT SINGH & OTHERS, MOHALI 5 SMT. MAJIT KAUR (DIRECTOR OF JANTA LAND PROMOTERS LTD AND M/S JLPL INFRASTRUCTURE) 2008-09 90,00,000/- 2009-10 70,00,000/- 2011-12 2,23,00,000/- SMT. JASAWANT KAUR (W/O MR. KULWANT SINGH) 2007-08 2,50,000/- 2009-10 2,20,33,720/- 2010-11 60,00,000/- 2011-12 85,00,000/- 4. THEREAFTER , A SEARCH AND SEIZURE OPERATION WAS CARRIED OUT BY THE DEPARTMENT U/S 132 OF THE ACT ON 2.5.2012 AT TH E BUSINESS PREMISES OF THE AFORESAID JANTA GROUP AS WELL AS RE SIDENTIAL PREMISES OF THE PROMOTERS AND DIRECTORS OF THE COMPANY. IT I S PERTINENT TO MENTION HERE THAT ALL THE RETURNS UP TO ASSESSMENT YEAR 2011-12 WERE FILED BEFORE THE DATE OF SEARCH AND FOR ASSESSMENT YEAR 2012-13, THE DUE DATE FOR FILING THE RETURN U/S 139 OF THE ACT H AD NOT EXPIRED. IT IS FURTHER PERTINENT TO MENTION HERE THAT NO INCRIMINA TING MATERIAL WAS FOUND DURING THE SEARCH ACTION. THEREAFTER, THE ASS ESSEE AS PER PRESCRIBED PROCEDURE FILED THE RETURNS U/S 153A OF THE ACT WHICH WAS SAME / IDENTICAL TO THE ORIGINAL RETURNS OF INCOME FILED BY THE ASSESSEE U/S 139(1) OF THE ACT. THE ASSESSMENT U/S 153A OF THE ACT READ WITH SECTION 143(3) OF THE ACT WAS COMPLETED B Y THE ASSESSING OFFICER FOR ALL THE ASSESSMENT YEARS AS PER RETURNE D INCOME AND NO ADDITIONS ETC. WERE MADE. DURING THE ASSESSMENT PRO CEEDINGS, THE ASSESSING OFFICER HAD ASKED ABOUT THE SOURCES OF TH E AFORESAID INCOME OFFERED / DECLARED BY THE ASSESSEE REGARDING WHICH THE COMMON EXPLANATION GIVEN BY THE ASSESSEES WAS THAT THE SAM E WAS FROM SPECULATION IN THE SALE / PURCHASE OF THE AGRICULTU RAL LAND, HOWEVER, ITA NOS.41 TO 44, 387, 45 TO 54/CHD/17 & CO 16-TO 3 0-CHD-2018- SHRI KULWANT SINGH & OTHERS, MOHALI 6 NO RECORDS WERE BEING MAINTAINED BY THE ASSESSEE IN THIS REGARD AND THEREFORE, THE INCOME WAS OFFERED U/S 69A SUBJECT TO NO EXPLANATION. SINCE THE ASSESSEES COULD NOT SATISFA CTORILY EXPLAIN THE SOURCES OF INCOME, THE ASSESSING OFFICER, THEREFORE , INVOKED THE EXPLANATION 1 TO SECTION 271(1)(C) OF THE ACT AND INITIATED PENALTY PROCEEDINGS. THE ASSESSEE REITERATED THAT HE HAD NO RECORDS OR EVIDENCE RELATING TO THE SOURCE OF INCOME SO EARNE D. THEREFORE, THE ASSESSING OFFICER LEVIED THE PENALTY U/S 271(1)(C) OF THE ACT, OBSERVING AS UNDER:- 10. BASED ON ABOVE DISCUSSION THE FOLLOWING C ONCLUSIONS MAY BE DRAWN A. THE ASSESSEE HAS DEPOSITED VARIOUS AMOUNTS IN CASH IN HER HANK ACCOUNTS, OFFERED THE SAME IN HIS RETURN OF INCOME UNDER THE HEAD 'INCOME FROM OTHER 'SOURCES', HAS NOT SUBMITTED ANY EXPLANATION REGARDING THE SOURCE OF THE SAME EITHER DURING ASSESSMENT PROCEEDINGS OR CURRENT PENALTY PROCEEDINGS. B. THE CASE OF THE ASSESSEE IS COVERED UNDER EXPLANATION 1(A) OF 271(L)(C) OF THE I T ACT. AS WE LL AS VARIOUS JUDGMENTS OF SUPERIOR COURTS. 11. SUFFICIENT OPPORTUNITIES TO PRESENT HER CASE HA S BEEN AFFORDED TO THE ASSESSEE. THE REPLIES FILED BY THE ASSESSEE HAVE BEEN CONSIDERED AND FOUND TO BE NOT CORRECT. 11. BASED ON THE ABOVE DISCUSSION, I AM SATISFIED T HAT THIS IS A FIT CASE FOR IMPOSITION OF PENALTY IN TERMS OF SEC. 271(L)(C) OF THE I.T.ACT,1961. 5. BEING AGGRIEVED BY THE IDENTICAL PENALTIES LEVIED BY THE ASSESSING OFFICER FOR DIFFERENT ASSESSMENT YEARS, T HE ASSESSEES PREFERRED APPEALS BEFORE THE LD. CIT(A). THE LD. CI T(A) CONSIDERING ITA NOS.41 TO 44, 387, 45 TO 54/CHD/17 & CO 16-TO 3 0-CHD-2018- SHRI KULWANT SINGH & OTHERS, MOHALI 7 THE SUBMISSIONS OF THE ASSESSEES DELETED THE PENALT Y / PENALTIES SO LEVIED BY THE ASSESSING OFFICER U/S 271(1)(C) OF TH E ACT OBSERVING AS UNDER:- 4.1 I HAVE CONSIDERED THE APPELLANT SUBMISSIONS . PENALTY U/S 271(1) (C ) LEVIABLE FOR CONCEALMENT O F INCOME OR FOR FURNISHING INACCURATE PARTICULARS OF INCOME. THIS I S NOT A CASE OF CONCEALMENT OF INCOME AS HELD BY THE AO IN THE PENA LTY ORDER. 4.2 IN THIS REGARD, IT IS SEEN THAT THE AMOUNT ON WHICH PENALTY HAS BEEN IMPOSED BY THE AO HAS BEEN DECLARED BY THE APP ELLANT HIMSELF AS HIS INCOME UNDER THE HEAD INCOME SURRENDERED' D URING THE YEAR AMOUNTING RS. 1,66,80,000/-. 4.3 1 HAVE ALSO PERUSED THE ASSESSMENT ORDER IN THE APP ELLANT'S CASE FOR THE YEAR UNDER CONSIDERATION, IN WHICH THE ISSUE OF SURRENDERED INCOME HAS BEEN CONSIDERED BY THE AO AN D ACCEPTED. 4.4 THERE IS NO NET EFFECT OF THE AO'S ASSESSMENT ORDER PASSED AS THE RETURNED INCOME OF THE APPELLANT HAS BEEN ACCEP TED. IN THESE CIRCUMSTANCES, IT. CANNOT BE HELD AS A CASE OF FURN ISHING OF INACCURATE PARTICULARS OF INCOME, THOUGH NOT DISCUSSED BY THE ASSESSING OFFICER IN THE PENALTY ORDER. 4.5 PENALTY U/S 271(L) (C) IS LEVIABLE WITH REGARD TO ' THE TAX SOUGHT TO BE EVADED'. IN THE APPELLANT CASE, THE RETUNED INCO ME AND THE ASSESSED INCOME ARE SAME. THERE WAS NO TAX SOUGHT TO BE EVAD ED. 4.6 IT HAS BEEN HELD IN THE CASE OF B.C. SRINIVAS SHETT Y 128 ITR 294 (SC) THAT WHEN THE COMPUTATION PROVISIONS FAIL, THE CHARGING PROVISIONS CANNOT HE APPLIED.BY THE SAME LOGIC, WHEN THE COMPU TATION PROVISIONS U/S 271(L)(C) FAIL, THERE BEING NO TAX S OUGHT TO BE EVADED, PENALTY THERE UNDER CANNOT BE LEVIED EITHER, AS THE SAID PROVISION IS RENDERED UNWORKABLE. 4.7 PARA 8 OF THE ABOVE REFERRED JUDGMENT OF THE HON'BL E APEX IS REPRODUCED AS UNDER:- SECTION 45 CHARGES THE PROFITS OR GAINS ARISING FR OM THE TRANSFER OF A CAPITAL ASSET TO INCOME-TAX. THE ASSE T MUST BE ONE WHICH FALLS WITHIN THE CONTEMPLATION OF THE SECTION . IT MUST BEAR THAT QUALITY WHICH BRINGS S. 45 INTO PLAY. TO DETER MINE WHETHER THE GOODWILL OF A NEW BUSINESS IS SUCH AN ASSET, IT IS PERMISSIBLE, AS WE SHALL PRESENTLY SHOW, TO REFER T O CERTAIN OTHER SECTIONS OF THE HEAD ' CAPITAL GAINS '. SECTI ON 45 IS A CHARGING SECTION. FOR THE PURPOSE OF IMPOSING THE C HARGE, PARLIAMENT HAS ENACTED DETAILED PROVISIONS IN ORDER TO COMPUTE ITA NOS.41 TO 44, 387, 45 TO 54/CHD/17 & CO 16-TO 3 0-CHD-2018- SHRI KULWANT SINGH & OTHERS, MOHALI 8 THE PROFITS OR GAINS UNDER THAT HEAD. NO EXISTING P RINCIPLE OR PROVISION AT VARIANCE WITH THEM CAN BE APPLIED FOR DETERMINING THE CHARGEABLE PROFITS AND GAINS. ALL TRANSACTIONS ENCOMPASSED BY S. 45 MUST FALL UNDER THE GOVERNANCE OF ITS COMP UTATION PROVISIONS. A TRANSACTION TO WHICH THOSE PROVISIONS CANNOT BE APPLIED MUST BE REGARDED AS NEVER INTENDED BY S. 45 TO BE THE SUBJECT OF THE CHARGE. THIS INFERENCE FLOWS FROM TH E GENERAL ARRANGEMENT OF THE PROVISIONS IN THE I. T. ACT, WHE RE UNDER EACH HEAD OF INCOME THE CHARGING PROVISION IS ACCOM PANIED BY A SET OF PROVISIONS FOR COMPUTING THE INCOME SUBJEC T TO THAT CHARGE. THE CHARACTER OF THE COMPUTATION PROVISIONS IN EACH CASE BEARS A RELATIONSHIP TO THE NATURE OF THE CHAR GE. THUS, THE CHARGING SECTION AND THE COMPUTATION PROVISIONS TOG ETHER CONSTITUTE AN INTEGRATED CODE. WHEN THERE IS A CASE TO WHICH THE COMPUTATION PROVISIONS CANNOT APPLY AT ALL, IT IS E VIDENT THAT SUCH A CASE WAS NOT INTENDED TO FALL WITHIN THE CHA RGING SECTION. OTHERWISE, ONE WOULD BE DRIVEN TO CONCLUDE THAT WHILE A CERTAIN INCOME SEEMS TO FALL WITHIN THE CHARGING SECTION THERE IS NO SCHEME OF COMPUTATION FOR QUANTIFYING IT. THE LEGISLATIVE PATTERN DISCERNIBLE IN THE ACT IS AGAINST SUCH A CO NCLUSION. IT MUST BE BORNE IN MIND THAT THE LEGISLATIVE INTENT I S PRESUMED TO RUN UNIFORMLY THROUGH THE ENTIRE CONSPECTUS OF PROV ISIONS PERTAINING TO EACH HEAD OF INCOME. NO DOUBT THERE I S A QUALITATIVE DIFFERENCE BETWEEN THE CHARGING PROVISI ON AND A COMPUTATION PROVISION. AND ORDINARILY THE OPERATION OF THE CHARGING PROVISION CANNOT BE AFFECTED BY THE CONSTR UCTION OF A PARTICULAR COMPUTATION PROVISION. BUT THE QUESTION HERE IS WHETHER IT IS POSSIBLE TO APPLY THE COMPUTATION PRO VISION AT ALL IF A CERTAIN INTERPRETATION IS PRESSED ON THE CHARG ING PROVISION. THAT PERTAINS TO THE FUNDAMENTAL INTEGRALITY OF THE STATUTORY SCHEME PROVIDED FOR EACH HEAD. 4.8 IT HAS THUS, BEEN HELD BY THE APEX COURT THAT W HERE THE CHARGING PROVISIONS FAIL, THE PROVISIONS RELATING T O THE LEVY OF PENALTIES CONSEQUENT TO NON-COMPLIANCE WITH THE CHA RGING PROVISIONS MUST ALSO FAIL. 5.1 1 HAVE PERUSED THE JUDICIAL PRONOUNCEMENTS REL IED UPON BY THE AO AND THE SAME ARE FOUND NOT TO BE APPLICABLE IN THE CASE OF THE APPELLANT AS THE FACTS OF THE CASE ARE DIFFE RENT AS DISCUSSED HERE UNDER:- 5.1.1 INTEGRATED TECHNOLOGY SOLUTIONS (P) LTD . V/S ITO (2015) 55 TAXMANN.COM 338 (MUMBAITRIB.) IN THE ABOVE REFERRED CASE, THE ASSESSEE HAD CLAIME D BAD DEBTS IN THE ORIGINAL RETURN FILED AND THEREAFTER FILED REVISED RETURN AND WITHDREW CLAIM OF BAD DEBTS. THE AO ACCEPTED REVISED COMPUTA TION FILED DURING ASSESSMENT PROCEEDINGS AND ALSO LEVIED PENALTY U/S 271(L)(C). THUS THE FACTS OF THE CASE ARE DIFFERENT FROM THE A PPELLANT'S ITA NOS.41 TO 44, 387, 45 TO 54/CHD/17 & CO 16-TO 3 0-CHD-2018- SHRI KULWANT SINGH & OTHERS, MOHALI 9 CASE AS THE CLAIM MADE IN THE ORIGINAL RETURN WAS W ITHDRAWN IN THE REVISED RETURN FILED. 5.1.2 HAMIRPUR DISTT. COOPERATIVE BANK LTD VS DCIT [ 2012] 25 TAXINANN.COM 306 LACKHNOW- TRIB.} IN THE ABOVE REFERRED CASE, PENALTY WAS IMPOSED AS THE AMOUNT CLAIMED AS DEDUCTION BY THE ASSESSEE DID NOT EVEN QUALIFY T O BE REGARDED AS 'EXPENDITURE' THUS, THE FACTS OF THE CASE ARE COMPLETELY DIFFEREN T FROM THE CASE OF THE APPELLANT. 5.1.3 S. SATHYANARAYANAN VS ACIT [2014] 50 TAXMAUN.COM 200 {MADRAS} IN THE ABOVE REFERRED CASE, DURING THE COURSE OF SE ARCH CONDUCTED UNDER SECTION 132 IN THE BUSINESS PREMISES AND THE RESIDE NTIAL PREMISES OF THE FATHER OF THE ASSESSEE, CERTAIN AMOUNT OF CASH BOOK S OF ACCOUNT AND DOCUMENTS IN RESPECT OF THE ASSESSEE WERE SEIZED. T HE AO ISSUED NOTICES TO THE ASSESSEE FILED THE RETURN OF INCOME DISCLOSI NG CERTAIN INCOME. THE AO SCRUTINIZED THE ASSESSMENT AND IN RESPECT OF EAC H ASSESSMENT YEAR, THE ASSESSING OFFICER MADE ADDITONS AS UNDISCL OSED INCOME AND INITIATED PENALTY PROCEEDINGS. THE FACTS OF THE CASE ARE DIFFERENT AS IN THIS CASE DISCUSSED ABOVE, THE ASSESSEE HAD DISCLOSED THE SAID INCOME I N THE RETURN FILED IN RESPONSE TO THE NOTICE U/S 153C AFTER-CERTAIN AMOUN T OF CASH, BOOKS OF ACCOUNTS AND DOCUMENTS IN RESPECT OF ASSESSES WERE SEIZED DURING THE SEARCH AND WAS NOT A CASE OF VOLUNTARY DISCLOSURE A S IN THE CASE OF THE APPELLANT. 5.1.4 MAK DATA (P) LTD VS. CIT-II {2013} 38 TAXMANN.COM 448 (SC) IN THIS CASE, THE APPELLANT FILED ITS RETURN DECLAR ING CERTAIN INCOME. DURING THE COURSE OF THE ASSESSMENT PROCEEDINGS, IT WAS NO TICED BY THE AO THAT CERTAIN DOCUMENTS WERE IMPOUNDED IN THE COURSE OF S URVEY PROCEEDINGS IN THE CASE OF SISTER CONCERN OF THE ASSESSEE. THEREAF TER, A SHOW CAUSE WAS ISSUED BY THE AO IN RESPONSE TO WHICH THE ASSESSEE MADE AN OFFER TO SURRENDER A SUM OF R.S. 40.74 LAKHS WITH A VIEW TO AVOID LITIGATION AND BAR PEACE. THE AO COMPLETED THE ASSESSMENT WHEREIN AMOUNT SURRENDERED WAS BROUGHT TO TAX UNDER THE HEAD INCOM E FROM OTHER SOURCES AND THEREAFTER PENALTY WAS IMPOSED U/S 27L (L) (C ). IT WAS HELD BY THE APEX COURT THAT THE SURRENDER OF INCOME ON THIS CASE IS NOT VOLUNTARY IN THE SENSE THAT THE OFFER O F SURRENDER WAS MADE IN VIEW OF DETECTION MADE BY THE AO IN THE SEARCH COND UCTED. CONSEQUENTLY, IT IS CLEAR THAT THE ASSESSEE HAD NO INTENTION TO DECL ARE ITS TRUE INCOME. THOUGH THE FACTS OF THE CASE ARE DIFFERENT AS THE A SSESSEE IN THE ITA NOS.41 TO 44, 387, 45 TO 54/CHD/17 & CO 16-TO 3 0-CHD-2018- SHRI KULWANT SINGH & OTHERS, MOHALI 10 REFERRED CASE FILED ITS RETURN DECLARING CERTAIN IN COME AND THEREAFTER SURRENDERED A SUM AFTER BEING CONFRONTED BY THE AO WITH DOCUMENTS IMPOUNDED IN THE SURVEY PROCEEDINGS AND THEREAFTER PENALTY IMPOSED, WHEREAS THE APPELLANT IN THE CASE UNDER CONSIDERATI ON HAD DISCLOSED INCOME IN THE RETURN FILED U/S 139. FURTHER, THE DECISION OF THE APEX COURT IN FACT SUP PORTS THE CASE OF THE APPELLANT AS THE INCOME SURRENDERED IN THE RETU RN FILED WAS VOLUNTARILY, SO AS TO DECLARE HIS TRUE INCOME. AS DISCUSSED ABOVE, IT HAS BEEN HELD IN THE CASE OF B.C. SRIMVAS SHETTY BY THE APEX COURT THAT WHEN THE COMPUTATION PROVISIONS FAIL, (THE CHARGING PROVISIONS CANNOT BE APPLIED. BY THE SAME LOGIC, WHEN THE COMPUTATION PROVISIONS U/S 271(L) FAIL, THERE BEIN G NO TAX SOUGHT TO BE EVADED, PENALTY THERE UNDER CANNOT HE LEVIED EITHER , AS THE SAID PROVISION IS RENDERED UNWORKABLE. THE COMPUTATION OF PENALTY WITH RESPECT TO THE TAX AT RS. 51,54,120/- IS THEREFORE CONTRARY TO THE PR OVISIONS OF INCOME TAX ACT. KEEPING IN VIEW THE AFORESAID FACTS, THE PENALTY IM POSED IN THIS CASE IS DELETED. THE GROUNDS OF APPEAL ARE HENCE ALLOWED. AS THE SIMILAR ISSUE IS INVOLVED IN ALL THE OTHER YEARS (AY) 2009- 10, A.Y 2011-12, AND AY 2012-13), THE PENALTY IMPOS ED IN ALL THESE YEARS IS ALSO DELETED. 6. AS A RESULT, THE APPEAL(S) OF THE APPELLANT ARC ALL OWED IN ALL THE YEARS UNDER CONSIDERATION I,E. AY 2008- 09, AY 2009- 10, AY 2010-11, AND AY 2012-13. 6. NOW REVENUE HAS COME IN APPEALS AGITATING THE AC TION OF THE CIT(A) IN DELETING THE PENALTIES, WHEREAS, THE ASSE SSEES APART FROM TAKING CERTAIN LEGAL GROUNDS/PLEAS HAVE ALSO FILED THE CROSS OBJECTIONS WITH CERTAIN ADDITIONAL GROUNDS IN SUPPORT OF THEIR CONTENTION THAT THE PENALTY OTHERWISE IS NOT LEVIABLE. 7. WE HAVE HEARD THE RIVAL CONTENTIONS AND HAVE ALS O GONE THROUGH THE RECORD. SO FAR AS THE APPEALS OF THE REVENUE ARE CONCERNED, THE LD. DR HAS NOT ONLY ADDRESSED THE ORAL ARGUMENTS B UT HAS ALSO SUBMITTED WRITTEN SUBMISSIONS. THE CRUX OF THE ARGU MENTS OF THE LD. DR HAS BEEN THAT HEAVY AMOUNTS WERE DEPOSITED IN TH EIR BANK ITA NOS.41 TO 44, 387, 45 TO 54/CHD/17 & CO 16-TO 3 0-CHD-2018- SHRI KULWANT SINGH & OTHERS, MOHALI 11 ACCOUNTS BY THE ASSESSEES AND THEN DECLARED IN THEI R RETURNS OF INCOME SPREAD OVER SIX YEARS TOTALING TO RS. 60.02 CRORES. THAT THE VOLUME OF TRANSACTIONS TO EARN RS. 60.02 CRORES WOULD BE MANY TIMES OF THIS AMOUNT. SUCH VOLUME OF TRANSACTIONS SPREAD OVER SIX YEARS UNDERTAKEN BY FOUR DIFFERENT INDIVIDUALS COULD NOT BE WITHOUT MAINTENANCE OF THE PROPER RECORDS. THEREFORE, THE E XPLANATION OF THE ASSESSEESE THAT THEY HAVE NOT MAINTAINED ANY ACCOUN TS IN THIS RESPECT WAS NOT BONAFIDE AND, THUS, THE ASSESSEES HAVE FAIL ED TO DISCLOSE TRULY AND FULLY ALL THE MATERIAL FACTS RELATING TO THE CO MPUTATION OF THEIR TOTAL INCOME. THUS, THE CONDITION LAID DOWN IN EXPL ANATION 1(B) TO SECTION 271(1)(C) OF THE ACT WAS NOT FULFILLED AND, THEREFORE, ASSESSING OFFICER HAS RIGHTLY IMPOSED / LEVIED PENA LTY. THAT AS PER EXPLANATION 1 TO SECTION 271(1)(C) OF THE ACT, IT WAS NOT NECESSARY FOR THE ASSESSING OFFICER TO ADD OR TO DISALLOW SOM ETHING TO ATTRACT THE PENALTY PROVISIONS. FURTHER, AS PER THE EXPLANA TION 4(C) READ WITH EXPLANATION I TO SECTION 271(1)(C) OF THE ACT, IT I S A CASE OF DEEMED TAX SOUGHT TO BE EVADED WHEREUPON THE ASSESSING OFF ICER RIGHTLY LEVIED THE IMPUGNED PENALTY. MOREOVER, THERE WAS NO EVIDENCE PRODUCED BY THE ASSESSEES TO PROVE THAT THE INCOME UNDISCLOSED IN THE RETURNS OF INCOME WAS EARNED IN THAT PARTICULAR YEA R. THAT THE ONUS WAS ON THE ASSESSEES TO TRULY AND FULLY DISCLOSED A LL THE MATERIAL FACTS RELATING TO THE COMPUTATION OF TOTAL INCOME, WHICH HAD NOT BEEN DISCHARGED BY THEM. 8. ON THE OTHER HAND, LD. COUNSEL FOR THE ASSESSEE HAS SUBMITTED THAT IT WAS NOT A CASE OF CONCEALMENT OR FURNISHING OF INACCURATE PARTICULARS OF INCOME. THAT ALL THE FACTS WITH REGA RD TO THE INCOME ITA NOS.41 TO 44, 387, 45 TO 54/CHD/17 & CO 16-TO 3 0-CHD-2018- SHRI KULWANT SINGH & OTHERS, MOHALI 12 WERE DECLARED IN THE ORIGINAL RETURN ITSELF. THAT E VEN OTHERWISE, NO CONCEALMENT OF INCOME WAS DETECTED BY THE ASSESSING OFFICER DURING THE COURSE OF ASSESSMENT PROCEEDINGS. THE RETURNED INCOME OF THE ASSESSEES WAS ACCEPTED AS SUCH, NOT ONLY IN THE ORI GINAL ASSESSMENT PROCEEDINGS CARRIED OUT EITHER U/S 143(1) OR 143(3) OF THE ACT BUT ALSO IN THE ASSESSMENT PROCEEDINGS CARRIED OUT U/S 153A OF THE ACT, EVEN, IN RESPECT OF THE SOME OF THE ASSESSMENT YEAR S I.E. ASSESSMENT YEARS 2007-08, 2008-09 AND 2009-10 STOOD COMPLETED AND HAD NOT ABATED AS ON THE DATE OF SEARCH ON 2.5.2012 AND SI NCE NO INCRIMINATING MATERIAL WAS FOUND DURING THE SEARCH ACTION, HENCE, THE ASSESSING OFFICER OTHERWISE WAS PRECLUDED FROM MAKI NG ANY ADDITION IN RESPECT OF THOSE ASSESSMENT YEARS IN THE ASSESSM ENT PROCEEDINGS CARRIED OUT U/S 153A OF THE ACT. THAT EXPLANATION 1 TO SECTION 271 WAS NOT APPLICABLE IN THE FACTS OF THE CASE. FURTHE R, THAT EVEN EXPLANATION GIVEN BY THE ASSESSEE THAT THE AFORESA ID ADDITIONAL INCOME WAS EARNED BY SPECULATION IN THE SALE / PURC HASE OF AGRICULTURAL LAND HAD BEEN DULY MENTIONED IN RULE 9 REPORT SUBMITTED BEFORE THE INCOME TAX SETTLEMENT COMMISSION (IN SHO RT ITSC). EVEN THE EXPLANATION REGARDING THE SOURCE AND MANNE R WAS ACCEPTED BY THE DEPARTMENT ALSO IN ONE OF THE CASE OF SHRI K ULWANT SINGH, ASSESSEE FOR ASSESSMENT YEAR 2013-14, WHEREIN, PENA LTY PROCEEDINGS INITIATED U/S 271AAA WERE DROPPED BY ACCEPTING THE ABOVE EXPLANATION REGARDING THE SOURCE OF INCOME FROM SPE CULATION IN PROPERTY BUSINESS AND AFTER DULY CONSIDERING THE OR DER OF THE ITSC AND RULE 9 REPORT. IT HAS BEEN SUBMITTED THAT, EVEN OTHERWISE, THE EXPLANATION RELATING TO THE SOURCE OF INCOME HAS NO ROLE TO PLAY IN ITA NOS.41 TO 44, 387, 45 TO 54/CHD/17 & CO 16-TO 3 0-CHD-2018- SHRI KULWANT SINGH & OTHERS, MOHALI 13 CONTEXT OF THE PROVISIONS OF SECTION 271(1)(C) OF T HE ACT. THAT THE PROVISIONS OF SECTION 271(1)(C) OF THE ACT ARE SINC E PENAL PROVISIONS THEY HAVE TO BE STRICTLY CONSTRUED. FURTHER, THAT T HE DISCLOSURE MADE BY THE ASSESSEES WAS VOLUNTARY DISCLOSURE AND NO CONCEALMENT WAS DETECTED BY THE DEPARTMENT. THAT EVEN OTHERWISE EXP LANATION 4 WAS NOT ATTRACTED IN THIS CASE. THAT THE PURPOSE OF EXP LANATION 4 OF SECTION 271(1)(C) WAS THAT THE QUANTUM OF PENALTY IMPOSABLE FOR CONCEALMENT OF INCOME SHOULD BE WITH REFERENCE TO T HE TAX SOUGHT TO BE EVADED INSTEAD OF INCOME CONCEALED. THAT TAX SOU GHT TO BE EVADED SHALL BE DIFFERENCE BETWEEN THE TAX DETERMINED IN R ESPECT OF TOTAL INCOME ASSESSED AND THAT TAX THAT WOULD HAVE BEEN P AYABLE, HAD THE INCOME, OTHER THAN THE CONCEALED INCOME, BEEN TOTA L INCOME. THAT IT WAS NEVER THE INTENTION OF THE PARLIAMENT TO INCLUD E DECLARED INCOME IN THE AMBIT OF CONCEALED INCOME FOR THE PURPOSE OF LEVY OF PENALTY U/S 271(1)(C) OF THE ACT. THE LD. COUNSEL FOR THE ASSESSEE, THEREFORE, HAS SUBMITTED THAT SINCE THE DECLARED INCOME AND AS SESSED INCOME IN THIS CASE WAS SAME AND THAT THE RETURNS FILED BY TH E ASSESSEES WERE UNDER THE SAME HEAD WITHOUT ANY CHANGE OF DISTURBAN CE, THE PENALTY U/S 271(1)(C) OF THE ACT WAS NOT WARRANTED IN THIS CASE. APART FROM THAT, THE COUNSEL HAS ALSO CONTENDED ON THE ADDITI ONAL GROUND REGARDING DEFECT IN THE NOTICE OF PENALTY TAKEN IN THE CROSS OBJECTIONS. 9. IN REBUTTAL OF THE ABOVE ARGUMENTS OF THE ASSESS EE, THE LD. DR HAS SUBMITTED THAT SINCE THE ASSESSEE HAD FAILED TO DISCLOSE THE SOURCE OF THE DECLARED INCOME, HENCE, THE ASSESSEE HAD CON CEALED THE PARTICULARS OF INCOME, THEREFORE, THE FIRST LIMB OF THE PROVISIONS OF ITA NOS.41 TO 44, 387, 45 TO 54/CHD/17 & CO 16-TO 3 0-CHD-2018- SHRI KULWANT SINGH & OTHERS, MOHALI 14 SECTION 271(1)(C) OF THE ACT WAS DULY ATTRACTED. F URTHER THAT AS PER THE EXPLANATION 4(C) READ WITH EXPLANATION I TO SEC TION 271(1)(C) OF THE ACT, THE INCOME, THE PARTICULARS RELATING TO W HICH HAS BEEN CONCEALED BY THE ASSESSEE, IS TO BE CONSIDERED FOR COMPUTING THE TAX SOUGHT TO BE EVADED. THAT THE ASSESSMENTS FOR THE ASSESSMENT YEARS 2010-11, 2011-12, AND 2012-13 WERE PENDING AS ON TH E DATE OF SEARCH AND, HENCE, THEY STOOD ABATED AND, THEREFORE, IN TH E ASSESSMENT FRAMED U/S 153A OF THE ACT, THE ASSESSING OFFICER W AS COMPETENT TO INITIATE THE PENALTY PROCEEDINGS. THAT A SPECIFIC QUERY WAS RAISED BY THE ASSESSING OFFICER WITH REGARD TO THE SOURCE OF INCOME DURING THE ASSESSMENT PROCEEDINGS AND UPON FAILURE OF THE ASSE SSEE TO EXPLAIN THE SOURCE, THE PENALTY PROCEEDINGS WERE RIGHTLY IN ITIATED FOR CONCEALMENT OF PARTICULARS OF INCOME. SO FAR AS TH E RULE 9 REPORT AND THE FINDINGS OF THE ITSC WAS CONCERNED, THE CAS E BEFORE THE ITSC WAS THAT OF THE COMPANY JANTA LAND PROMOTERS PVT LT D., AND NOT OF THE ASSESSEES IN THEIR INDIVIDUAL CAPACITY AND, HEN CE, ANY FINDINGS OR REPORT RELATING TO THE COMPANY WAS NOT APPLICABLE I N THE INDIVIDUAL CASE OF THE ASSESSEE. FINALLY, HAS BEEN SUBMITTED T HAT IF PLEA OF THE ASSESSEE FOR DELETING THE PENALTY ON VOLUNTARY DISC LOSURE WAS TO BE ACCEPTED, THAN IT WOULD BE UNFAIR ON THE PERSONS WH O HAVE AVAILED OF VOLUNTARY DISCLOSURE SCHEME SAID SUCH VDS-2016 AND PMGKY-2016 AS THEY HAD PAID PENALTY @ 25% AND 10% RESPECTIVELY FOR VOLUNTARY DISCLOSURE OF THEIR UNACCOUNTED INCOME IN THESE SCH EMES. FURTHER, IT WOULD ALSO BE UNFAIR TO THE PERSONS WHO HAVE DULY O FFERED THE TAXES ON THE MONEY DEPOSITED IN THE BANK U/S 69A OF THE A CT DURING DEMONETARIZATION AND HAD TO PAY TAX @ 60% PLUS SURC HARGE @ 25% ITA NOS.41 TO 44, 387, 45 TO 54/CHD/17 & CO 16-TO 3 0-CHD-2018- SHRI KULWANT SINGH & OTHERS, MOHALI 15 TOTALLING TO. 75% TAX U/S 115 BBE OF THE ACT, APART FROM PENALTY U/S 271 AAC OF THE ACT @ 10% W.E.F. 1.4.2017. FURTHER, THAT A SPECIFIC CHARGE WAS LEVIED BY THE ASSESSING OFFICER IN THE P ENALTY NOTICE REGARDING THE CONCEALMENT OF PARTICULARS OF INCOME AND, AS SUCH, THERE WAS NO DEFECT IN THE NOTICE. 10. WE HAVE HEARD THE RIVAL CONTENTIONS AND HAVE A LSO GONE THROUGH THE RECORD. SINCE THE LEGAL PLEA TAKEN BY THE COUNS EL FOR THE ASSESSES IN RELATION TO THE APPEALS RELATING UP TO ASSESSMEN T YEARS 2010-11 WHEREIN THE ORIGINAL ASSESSMENT PROCEEDINGS ALREADY STOOD COMPLETED AND NOT ABATED AS ON THE DATE OF SEARCH ACTION AND THAT NO INCRIMINATING MATERIAL FOUND DURING THE SEARCH ACTI ON GO TO THE ROOT OF THE CASE AND IS CRUCIAL TO DETERMINE THE VERY VA LIDITY OF THE INITIATION OF PENALTY PROCEEDINGS IN AN ASSESSMENT FRAMED U/S 153A OF THE ACT, HENCE THE SAME IS TAKEN FIRST FOR ADJUDICA TION. THE LD. COUNSEL FOR THE ASSESSEES IN THIS RESPECT HAS RELIE D UPON VARIOUS JUDICIAL DECISIONS INCLUDING THE DECISION OF THE H ON'BLE BOMBAY HIGH COURT IN THE CASE OF CIT VS. MURLI AGRO PROD UCTS PVT LTD, (2014) 49 TAXMAN.COM 172 (BOM.), ITA NO.36 OF 2009 AND IN THE CASE OF CIT VS. CONTINENTAL WAREHOUSING CORPORATION IT A NO. 523 OF 2013 REPORTED IN (2015) 279 CTR 0389 (BOMBAY) AND O F THE HON'BLE DELHI HIGH COURT IN THE CASE OF CIT VS. KABUL CHAW LA 234 TAXMAN 300 (DELHI) AND SUBSEQUENT DECISION OF THE DELHI HI GH COURT IN THE CASE OF PRINCIPAL CIT VS. MEETA GUTGUTIA PROP M/S FERNS N PETALS, ITA 306/2017 AND OTHERS DECIDED VIDE ORDER DATED 25.5.2017. TO SUBMIT THAT IF NO INCRIMINATING MATERIAL IS FOU ND DURING THE SEARCH ITA NOS.41 TO 44, 387, 45 TO 54/CHD/17 & CO 16-TO 3 0-CHD-2018- SHRI KULWANT SINGH & OTHERS, MOHALI 16 ACTION, THE ADDITION IN THE CASE OF ALREADY CONCLUD ED ASSESSMENT CANNOT BE MADE WHILE FRAMING ASSESSMENT U/S 153A OF THE ACT. THE LD. COUNSEL HAS SUBMITTED THAT SIMILAR PROPOSITION IN RELATION TO THE PENALTY PROCEEDINGS ALSO. THAT SINCE NO PENALTY PRO CEEDINGS WERE INITIATED DURING THE ORIGINAL ASSESSMENT PROCEEDING S AND THAT SINCE ORIGINAL ASSESSMENT PROCEEDINGS STOOD ALREADY COMPL ETED AS ON THE DATE OF SEARCH ACTION, THE ASSESSING OFFICER WAS PR ECLUDED FROM INITIATING ASSESSMENT PROCEEDINGS THEREBY LEVYING T HE PENALTY U/S 271(1)(C) OF THE ACT IN THE CASE OF ALREADY CONCLUD ED ASSESSMENT PROCEEDINGS BY WAY OF REVISITING THE ISSUES. 11. WE FIND FORCE IN THE ABOVE CONTENTIONS RAISED B Y THE LD. COUNSEL FOR THE ASSESSEES. ADMITTEDLY, THE RETURNS UP TO THE ASSESSMENT YEAR 2010-11 IN RELATION TO THE CAPTIONE D APPEALS WERE FILED BY THE ASSESSEE MUCH PRIOR TO THE DATE OF SEA RCH ACTION AND ON THE DATE OF SEARCH ACTION, THE ORIGINAL ASSESSMENT PROCEEDINGS ALREADY STOOD COMPLETED AND WERE NOT ABATED AND NO INCRIMIN ATING MATERIAL WAS FOUND DURING THE SEARCH ACTION. THE HON'BLE HIG H COURTS IN THE CASE OF CIT VS. MURLI AGRO PRODUCTS PVT LTD,(SUP RA) CIT VS. CONTINENTAL WAREHOUSING CORPORATION(SUPRA) CIT VS . KABUL CHAWLA (SUPRA) AND SUBSEQUENT DECISION OF THE DEL HI HIGH COURT IN THE CASE OF PRINCIPAL CIT VS. MEETA GUTGUTIA PROP M/S FERNS N PETALS, ITA 306/2017 AND OTHERS DECIDED VIDE ORDER DATED 25.5.2017, WHEREIN, THE HON'BLE COURTS HAVE BEEN UNANIMOUS TO HOLD THAT IF NO INCRIMINATING MATERIAL IS FOUND DURING THE SEARCH A CTION, THE ADDITION IN THE CASE OF ALREADY CONCLUDED THAT IN THE ABSENC E OF ANY ITA NOS.41 TO 44, 387, 45 TO 54/CHD/17 & CO 16-TO 3 0-CHD-2018- SHRI KULWANT SINGH & OTHERS, MOHALI 17 INCRIMINATING MATERIAL FOUND DURING THE SEARCH ACTI ON, NO ADDITION CAN BE MADE INTO THE INCOME OF THE ASSESSEE BY WAY OF REVISITING THE ISSUE IN THE CASE IN WHICH THE ORIGINAL ASSESSMENT STOOD COMPLETED. APPLYING THE SIMILAR PROPOSITION, EVEN WHEN THE ASS ESSING OFFICER IS PRECLUDED FROM MAKING ANY ADDITION IN THE ABSENCE O F ANY INCRIMINATING MATERIAL FOUND DURING THE SEARCH ACTI ON IN THE ASSESSMENT PROCEEDINGS CARRIED OUT U/S 153A OF THE ACT IN WHICH THE ORIGINAL ASSESSMENT PROCEEDINGS STOOD COMPLETED AND NOT ABATED, THE ASSESSING OFFICER, IN OUR VIEW, IS ALSO PRECLUDED F ROM INITIATE THE PENALTY PROCEEDINGS U/S 271(1)(C) OF THE ACT IN CAS E OF ALREADY CONCLUDED ASSESSMENT IN THE ABSENCE OF ANY INCRIMIN ATING MATERIAL FOUND DURING THE SEARCH ACTION. EVEN IT IS NOT THE CASE OF THE ASSESSING OFFICER THAT THERE WAS ANY ATTEMPT OR OVE RT ACT ON THE PART OF THE ASSESSEE TO EVADE PAYMENT OF DUE TAXES. UNDE R THE CIRCUMSTANCES, WE HOLD THAT THE ACTION OF THE ASSES SING OFFICER IN INITIATING THE PENALTY IN THE ASSESSMENT PROCEEDING S CARRIED OUT U/S 153A OF THE ACT WAS NOT JUSTIFIED AND THE CONSEQUEN TIAL LEVY OF PENALTY BEING ILLEGAL IS NOT SUSTAINABLE IN THE EYE S OF LAW FOR THE CASES RELATING UP TO AY 2010-11. WE ORDER ACCORDIN GLY. 12. ANOTHER LEGAL GROUND TAKEN BY THE ASSESSEE WHIC H GOES TO THE ROOT OF THE CASE IS THAT SO FAR AS THE ASSESSMENT Y EAR 2012-13 IS CONCERNED, THE ASSESSING OFFICER WAS NOT JUSTIFIED INITIATING OR LEVYING PENALTY U/S 271(1)(C) OF THE ACT. THAT FOR THE YEAR UNDER CONSIDERATION, THE PENALTY PROCEEDING , IF ANY, TH AT COULD BE INITIATED WAS TO BE UNDER THE PROVISIONS OF SECTION 271AAA OF THE ACT AS THE ASSESSMENT YEAR 2012-13, FALLS IN THE DEFINITION OF SPECIFIED PREVIOUS ITA NOS.41 TO 44, 387, 45 TO 54/CHD/17 & CO 16-TO 3 0-CHD-2018- SHRI KULWANT SINGH & OTHERS, MOHALI 18 YEAR AS DEFINED UNDER THE PROVISIONS OF SECTION 271 AAA OF THE ACT. THAT AS PER THE PROVISIONS OF SUB SECTION (3) OF SE CTION 271 AAA, NO PENALTY UNDER THE PROVISIONS OF CLAUSE (C) OF SUB S ECTION (1) OF SECTION 271 SHALL BE IMPOSED UPON THE ASSESSEE IN R ESPECT OF THE UNDISCLOSED INCOME REFERRED TO IN SUB SECTION (1) T O SECTION 271 AAA OF THE ACT. FOR THE SAKE OF CONVENIENCE, THE PROVISIONS OF SEC TION 271AAA ARE PRODUCED AS UNDER:- PENALTY WHERE SEARCH HAS BEEN INITIATED. 271AAA. (1) THE ASSESSING OFFICER MAY, NOTWITHSTAND ING ANYTHING CONTAINED IN ANY OTHER PROVISIONS OF THIS ACT, DIRECT THAT, IN A CASE WHERE SEARCH HAS BEEN INITIA TED UNDERSECTION 132 ON OR AFTER THE 1ST DAY OF JUNE, 2 007 BUT BEFORE THE 1ST DAY OF JULY, 2012, THE ASSESSEE SHAL L PAY BY WAY OF PENALTY, IN ADDITION TO TAX, IF ANY, PAYABLE BY HIM, A SUM COMPUTED AT THE RATE OF TEN PER CENT OF THE UNDISCLOSED INCOME OF THE SPECIFIED PREVIOUS YEAR. (2) NOTHING CONTAINED IN SUB-SECTION (1) SHALL APPL Y IF THE ASSESSEE, (I) IN THE COURSE OF THE SEARCH, IN A STATEMENT U NDER SUB- SECTION (4) OF SECTION 132, ADMITS THE UNDISCLOSED INCOME AND SPECIFIES THE MANNER IN WHICH SUCH INCOME HAS B EEN DERIVED; (II) SUBSTANTIATES THE MANNER IN WHICH THE UNDISCL OSED INCOME WAS DERIVED; AND (III) PAYS THE TAX, TOGETHER WITH INTEREST, IF ANY , IN RESPECT OF THE UNDISCLOSED INCOME. (3) NO PENALTY UNDER THE PROVISIONS OF CLAUSE (C) O F SUB- SECTION (1) OF SECTION 271 SHALL BE IMPOSED UPON TH E ASSESSEE IN RESPECT OF THE UNDISCLOSED INCOME REFER RED TO IN SUB-SECTION (1). (4) THE PROVISIONS OF SECTIONS 274 AND 275 SHALL, S O FAR AS MAY BE, APPLY IN RELATION TO THE PENALTY REFERRED T O IN THIS SECTION. EXPLANATION.FOR THE PURPOSES OF THIS SECTION, ITA NOS.41 TO 44, 387, 45 TO 54/CHD/17 & CO 16-TO 3 0-CHD-2018- SHRI KULWANT SINGH & OTHERS, MOHALI 19 (A) 'UNDISCLOSED INCOME' MEANS (I) ANY INCOME OF THE SPECIFIED PREVIOUS YEAR REPRESENTED, EITHER WHOLLY OR PARTLY, BY ANY MONEY, BULLION, JEWELLERY OR OTHER VALUABLE ARTICLE OR THI NG OR ANY ENTRY IN THE BOOKS OF ACCOUNT OR OTHER DOCUMENT S OR TRANSACTIONS FOUND IN THE COURSE OF A SEARCH UNDER SECTION 132, WHICH HAS (A) NOT BEEN RECORDED ON OR BEFORE THE DATE OF SEARCH IN THE BOOKS OF ACCOUNT OR OTHER DOCUMENTS MAINTAINED IN THE NORMAL COURSE RELATING TO SUCH PREVIOUS YEAR; OR (B) OTHERWISE NOT BEEN DISCLOSED TO THE PRINCIPAL CHIEF COMMISSIONER OR CHIEF COMMISSIONER OR PRINCIPAL COMMISSIONER OR COMMISSIONER BEFORE THE DATE OF SEARCH; OR (II) ANY INCOME OF THE SPECIFIED PREVIOUS YEAR REPRESENTED, EITHER WHOLLY OR PARTLY, BY ANY ENTRY IN RESPECT OF AN EXPENSE RECORDED IN THE BOOKS OF ACCO UNT OR OTHER DOCUMENTS MAINTAINED IN THE NORMAL COURSE REL ATING TO THE SPECIFIED PREVIOUS YEAR WHICH IS FOUND TO BE FALSE AND WOULD NOT HAVE BEEN FOUND TO BE SO HAD THE SEAR CH NOT BEEN CONDUCTED; (B) 'SPECIFIED PREVIOUS YEAR' MEANS THE PREVIOUS Y EAR (I) WHICH HAS ENDED BEFORE THE DATE OF SEARCH, BU T THE DATE OF FILING THE RETURN OF INCOME UNDER SUB-SECTI ON (1) OF SECTION 139 FOR SUCH YEAR HAS NOT EXPIRED BEFORE THE DATE OF SEARCH AND THE ASSESSEE HAS NOT FURNISHED T HE RETURN OF INCOME FOR THE PREVIOUS YEAR BEFORE THE S AID DATE; OR (II) IN WHICH SEARCH WAS CONDUCTED. 13. A PERUSAL OF THE ABOVE PROVISIONS REVEALS SUB S ECTION (3) TO SECTION 271AA OF THE ACT BARS THE LEVY OF PENALTY U NDER THE PROVISIONS OF SECTION 271(1)(C) OF THE ACT IN RESPE CT OF UNDISCLOSED INCOME REFERRED TO IN SUB SECTION (1). THE UNDISCLO SED INCOME HAS ALSO BEEN DEFINED UNDER THE PROVISIONS OF SECTION 2 71AAA OF THE ACT, AS REPRODUCED ABOVE, WHICH REFER TO THE INCOME FOUN D DURING THE SEARCH ACTION BUT NOT RECORDED IN THE BOOKS OF ACC OUNT OR OTHERWISE NOT DISCLOSED BEFORE THE DATE OF SEARCH TO THE COMP ETENT INCOME-TAX ITA NOS.41 TO 44, 387, 45 TO 54/CHD/17 & CO 16-TO 3 0-CHD-2018- SHRI KULWANT SINGH & OTHERS, MOHALI 20 AUTHORITIES AS REFERRED TO IN THE PROVISIONS REPROD UCED ABOVE OF SECTION 271AAA. ADMITTEDLY, IN THIS CASE, NO INCRIM INATING MATERIAL WAS FOUND DURING THE SEARCH ACTION AND, HENCE, NO U NDISCLOSED INCOME OF THE ASSESSEE WAS FOUND DURING THE COURSE OF SEARCH. IN VIEW OF THIS, THE PROVISIONS OF SECTION 271AAA OF T HE ACT ARE NOT ATTRACTED IN THIS CASE. HOWEVER, IT IS PERTINENT T O MENTION HERE THAT DESPITE THE REVENUE AUTHORITIES HAVING NOT FOUND AN Y UNDISCLOSED INCOME OF THE ASSESSEE DURING THE SEARCH ACTION, TH E ASSESSEES IN THE RETURN OF INCOME FOR THE ASSESSMENT YEAR UNDER CONS IDERATION SUO MOTU DECLARED THE INCOME, WHICH THE ASSESSEES EXPLA INED TO HAVE EARNED FROM THE SPECULATION IN THE SALE AND PURCHAS E OF AGRICULTURAL LAND. HOWEVER, IT WAS STATED THAT NO RECORD WAS MAI NTAINED IN RESPECT OF THE AFORESAID PROPERTY TRANSACTIONS AND, HENCE, THE ASSESSEE HIMSELF OFFERED THE SAME UNDER THE HEAD INCOME FRO M OTHER SOURCES AND PAID THE TAXES AT THE MAXIMUM SLAB RATE. 14. IN VIEW OF THIS, THOUGH, WE ARE OF THE VIEW THA T THE LEGAL PLEA TAKEN BY THE ASSESSEE THAT THE PROVISIONS OF SECTIO N 271(1)(C) OF THE ACT ARE NOT ATTRACTED BECAUSE THE RELEVANT PROVISIO NS OF SECTION 271AAA WERE APPLICABLE, IS NOT TENABLE, YET WE ARE OF THE VIEW THAT OTHERWISE, THE PROVISIONS OF SECTION 271(1)(C) OF THE ACT ARE NOT ATTRACTED IN THIS CASE IN VIEW OF OUR DISCUSSION MA DE IN THE SUBSEQUENT PARAS TO THIS ORDER. 15. BEFORE PROCEEDINGS FURTHER, WE DEEM IT FIT TO FIRST DISCUSS THE RELEVANT PROVISIONS OF SECTION 271(1)(C) OF THE AC T AS THEY STOOD DURING THE RELEVANT PERIOD / ASSESSMENT YEAR UNDER CONSIDERATION. ITA NOS.41 TO 44, 387, 45 TO 54/CHD/17 & CO 16-TO 3 0-CHD-2018- SHRI KULWANT SINGH & OTHERS, MOHALI 21 271. (1) IF THE ASSESSING OFFICER OR THE COMMISSIONER (APPEALS) OR THE COMMISSIONER IN THE COURSE OF ANY PROCEEDINGS UNDER THIS ACT, IS SATISFIED THAT ANY PERSON . (C ) HAS CONCEALED THE PARTICULARS OF HI S INCOME OR FURNISHED INACCURATE PARTICULARS OF [SUCH INCOME, OR] HE MAY DIRECT THAT SUCH PERSON SHALL PAY BY WAY OF PENALTY, .. [( III) IN THE CASES REFERRED TO IN CLAUSE (C) OR CLAUSE (D), IN ADDITION TO TAX, IF ANY, PAYABLE BY HIM, A SUM WHIC H SHALL NOT BE LESS THAN, BUT WHICH SHALL NOT EXCEED THREE TIMES, THE AMOUNT OF TAX SOUGHT TO BE EVADED BY REASON OF THE CONCEALMENT OF PARTICULARS OF HIS INCOME OR FRINGE BENEFITS OR THE FURNISHING OF INACCURATE PARTICULARS OF SUCH INCOME OR FRINGE BENEFITS. EXPLANATION 1.WHERE IN RESPECT OF ANY FACTS MATER IAL TO THE COMPUTATION OF THE TOTAL INCOME OF ANY PERSON UNDER THIS ACT, (A ) SUCH PERSON FAILS TO OFFER AN EXPLAN ATION OR OFFERS AN EXPLANATION WHICH IS FOUND BY THE ASSESSING OFFICE R OR THE COMMISSIONER (APPEALS) OR THE COMMISSIONER TO BE FALSE, OR (B ) SUCH PERSON OFFERS AN EXPLANATION WH ICH HE IS NOT ABLE TO SUBSTANTIATE AND FAILS TO PROVE THAT SUCH EXPLANAT ION IS BONA FIDE AND THAT ALL THE FACTS RELATING TO THE SAME AND MATERIAL TO THE COMPUTATION OF HIS TOTAL INCOME HAV E BEEN DISCLOSED BY HIM, THEN, THE AMOUNT ADDED OR DISALLOWED IN COMPUTING T HE TOTAL INCOME OF SUCH PERSON AS A RESULT THEREOF SHALL, FOR THE P URPOSES OF CLAUSE (C) OF THIS SUB-SECTION, BE DEEMED TO REPRESENT THE INCOME IN RESPECT OF WHICH PARTICULARS HAVE BEEN CONCEALED. [EXPLANATION 3.WHERE ANY PERSON FAILS, WITHOUT RE ASONABLE CAUSE, TO FURNISH WITHIN THE PERIOD SPECIFIED IN SUB-SECTI ON (1) OF SECTION 153 A RETURN OF HIS INCOME WHICH HE IS REQUIRED TO FURNISH UNDER SECTION 139 IN RESPECT OF ANY ASSESSMENT YEAR COMMENCING ON OR AFTER THE 1ST DAY OF APRIL, 1989, AND UNTIL THE EXPIRY OF THE PERIOD AFORESAID, NO NOTICE HAS BEEN ISSUED TO HIM UNDER C LAUSE (I) OF SUB- SECTION (1) OF SECTION 142 OR SECTION 148 AND THE A SSESSING OFFICER OR THE COMMISSIONER (APPEALS) IS SATISFIED THAT IN RE SPECT OF SUCH ASSESSMENT YEAR SUCH PERSON HAS TAXABLE INCOME, THE N, SUCH PERSON SHALL, FOR THE PURPOSES OF CLAUSE (C) OF THIS SUB-S ECTION, BE DEEMED TO HAVE CONCEALED THE PARTICULARS OF HIS INCOME IN RES PECT OF SUCH ASSESSMENT YEAR, NOTWITHSTANDING THAT SUCH PERSON F URNISHES A RETURN OF HIS INCOME AT ANY TIME AFTER THE EXPIRY O F THE PERIOD AFORESAID IN PURSUANCE OF A NOTICE UNDER SECTION 14 8.] ITA NOS.41 TO 44, 387, 45 TO 54/CHD/17 & CO 16-TO 3 0-CHD-2018- SHRI KULWANT SINGH & OTHERS, MOHALI 22 EXPLANATION 4.FOR THE PURPOSES OF CLAUSE (III) OF THIS SUB-SECTION, THE EXPRESSION 'THE AMOUNT OF TAX SOUGHT TO BE EVAD ED', [( A) IN ANY CASE WHERE THE AMOUNT OF INCOM E IN RESPECT OF WHICH PARTICULARS HAVE BEEN CONCEALED OR INACCURATE PARTICULARS HAVE BEEN FURNISHED HAS THE EFFECT OF R EDUCING THE LOSS DECLARED IN THE RETURN OR CONVERTING THAT LOSS INTO INCOME, MEANS THE TAX THAT WOULD HAVE BEEN CHARGEAB LE ON THE INCOME IN RESPECT OF WHICH PARTICULARS HAVE BEE N CONCEALED OR INACCURATE PARTICULARS HAVE BEEN FURNI SHED HAD SUCH INCOME BEEN THE TOTAL INCOME; (B ) IN ANY CASE TO WHICH EXPLANATION 3 A PPLIES, MEANS THE TAX ON THE TOTAL INCOME ASSESSED [AS REDUCED BY THE AM OUNT OF ADVANCE TAX, TAX DEDUCTED AT SOURCE, TAX COLLECTED AT SOURCE AND SELF-ASSESSMENT TAX PAID BEFORE THE ISSUE OF NO TICE UNDER SECTION 148; (C ) IN ANY OTHER CASE, MEANS THE DIFFER ENCE BETWEEN THE TAX ON THE TOTAL INCOME ASSESSED AND THE TAX THAT WOULD HAVE BEEN CHARGEABLE HAD SUCH TOTAL INCOME BEEN REDUCED BY THE AMOUNT OF INCOME IN RESPECT OF WHICH PARTICULARS HA VE BEEN CONCEALED OR INACCURATE PARTICULARS HAVE BEEN FURNI SHED. 16. A PERUSAL OF THE ABOVE REFERRED TO SECTION 271( 1)(C) OF THE ACT REVEALS THAT THERE ARE TWO PARTS OF THIS SECTION. T HE FIRST PART SPEAKS ABOUT THE CHARGE WHICH MAY INVITE PENALTY I.E. A PE RSON HAS CONCEALED PARTICULARS OF HIS INCOME OR FURNISHED INACCURATE PARTICULARS OF INCOME, HE MAY BE DIRECTED TO PAY CE RTAIN SUM BY WAY OF PENALTY AS PENALTY. NOW, THE SECOND PART SPEAKS ABOUT THE QUANTUM OF AMOUNT PAYABLE. AS PER CLAUSE (III), THE ASSESSING OFFICER MAY DIRECT SUCH A PERSON AGAINST WHOM THE ABOVE CHA RGE IS ESTABLISHED TO PAY IN ADDITION TO THE TAX, IF ANY, PAYABLE A SUM WHICH IS NOT LESS THAN, BUT WHICH SHALL NOT EXCEED THREE TIMES, THE AMOUNT OF TAX SOUGHT TO THE EVADED BY A REASON OF SUCH CON CEALMENT OF PARTICULARS OF INCOME OR FURNISHING OF INACCURATE P ARTICULARS OF INCOME. ITA NOS.41 TO 44, 387, 45 TO 54/CHD/17 & CO 16-TO 3 0-CHD-2018- SHRI KULWANT SINGH & OTHERS, MOHALI 23 17. NOW, EXPLANATION 1 STRONGLY RELIED UPON BY THE LD. DR SPEAKS ABOUT OF DEEMING FICTION REGARDING THE CONCE ALMENT OF PARTICULARS OF INCOME WHICH SPEAKS THAT IF A PERSON FAILS TO OFFER AN EXPLANATION OR WHICH IS FOUND BY THE CONCERNED IN COME TAX AUTHORITIES TO BE FALSE OR SUCH PERSON COULD NOT SU BSTANTIATE IN RESPECT OF ANY FACT MATERIAL TO THE COMPUTATION OF HIS TOTAL INCOME, THEN THE AMOUNT ADDED OR DISALLOWED IN COMPUTING TO TAL INCOME OF SUCH PERSON AS A RESULT THEREOF, SHALL BE DEEMED TO REPRESENT THE INCOME IN RESPECT OF WHICH PARTICULARS HAVE BEEN CO NCEALED. FURTHER, AS PER THE EXPLANATION 3, WHERE A PERSON FAILS TO F URNISH WITHIN THE STIPULATED PERIOD HIS RETURN OF INCOME FOR ANY ASSE SSMENT YEAR AND THEREAFTER, THE CONCERNED INCOME TAX AUTHORITY, EIT HER THE ASSESSING OFFICER OR THE CIT (A) FINDS THAT IN RESPECT OF SUC H ASSESSMENT YEAR, SUCH PERSON HAS TAXABLE INCOME, THEN SUCH PERSON SH ALL BE DEEMED TO HAVE CONCEALED THE PARTICULARS OF HIS INCOME IN RES PECT OF SUCH ASSESSMENT YEAR, NOTWITHSTANDING THAT SUCH PERSON F URNISHES A RETURN OF HIS INCOME AT ANY TIME AFTER EXPIRY OF THE PERIO D AFORESAID IN PURSUANCE OF A NOTICE U/S 148 OF THE ACT. VIDE EXP LANATION 4, THE TERM THE AMOUNT OF TAX SOUGHT TO BE EVADED HAS BE EN DEFINED / EXPLAINED FOR THE PURPOSE OF COMPUTATION OF LEVY OF PENALTY. 18. A PER CLAUSE (A) TO EXPLANATION 4, WHERE THE AM OUNT OF INCOME TAX IN RESPECT OF WHICH PARTICULARS HAVE BEEN CONC EALED OR INACCURATE PARTICULARS OF INCOME HAVE BEEN FURNISHE D, HAS THE EFFECT OF REDUCING THE LOSS DECLARED IN THE RETURN OR CONV ERTING THAT LOSS INTO TAXABLE INCOME, THEN THE TAX SOUGHT TO BE EVAD ED WILL THE AMOUNT ITA NOS.41 TO 44, 387, 45 TO 54/CHD/17 & CO 16-TO 3 0-CHD-2018- SHRI KULWANT SINGH & OTHERS, MOHALI 24 WHICH WOULD HAVE BEEN CHARGEABLE ON THE INCOME IN R ESPECT OF WHICH PARTICULARS HAVE BEEN CONCEALED OR INACCURATE PARTI CULARS OF INCOME HAVE BEEN FURNISHED HAD SUCH INCOME BEEN THE TOTAL INCOME; MEANING THEREBY THERE SHOULD BE A RESULTANT EFFECT OF REDUCING THE LOSS DECLARED OR CONVERTING THAT LOSS INTO INCOME B Y THE ACT OR OMISSION OF THE CONCERNED PERSON FOR CONCEALMENT O F INCOME OR FURNISHING OF INACCURATE PARTICULARS OF INCOME. THE N AS PER THE CLAUSE (B) OF EXPLANATION 4, WHEREIN, IN A CASE TO WHICH E XPLANATION 3 APPLIES I.E. WHERE THE CONCERNED PERSON FAILS TO FI LE WITHIN THE STIPULATED PERIOD A RETURN OF INCOME DESPITE HAVING TAXABLE INCOME, IN THAT CASE, THE TAX SOUGHT TO BE EVADED WILL BE THE TAX ON THE TOTAL INCOME ASSESSED BUT REDUCED BY THE AMOUNT OF ADVANC E TAX, TAX DEDUCTED AT SOURCE, TAX COLLECTED AT SOURCE AND SEL F-ASSESSMENT TAX PAID BEFORE THE ISSUE OF NOTICE U/S 148 OF THE ACT. AS PER THE ABOVE SAID PROVISION WHAT IS MATERIAL I S THE EVASION OF THE TAX AND IN THAT SCENARIO, IF A PERSON DOES N OT FILE A RETURN AND, HENCE, DOES NOT DISCLOSE HIS PARTICULARS OF INCOME AND MEANING THEREBY CONCEALED HIS PARTICULARS OF INCOME BUT IF HE BEFORE THE ISSUANCE OF NOTICE FOR THE REOPENING OF THE ASSESSM ENT U/S 148 OF THE ACT, HAD DEPOSITED DUE TAXES AND THE RESULTANT ADDI TION AFTER ASSESSMENT DOES NOT CREATE ANY LIABILITY TO PAY ANY FURTHER TAX, THERE WILL BE NO TAX SOUGHT TO BE EVADED. 19. NOW COMING TO THE RELEVANT CLAUSE (C) TO EXPLAN ATION 4, WHICH IS RESIDUARY CLAUSE WHICH SPEAKS THAT IN ANY OTHER CASE, THE DIFFERENCE BETWEEN THE TOTAL INCOME ASSESSED AND T HE TAX THAT WOULD ITA NOS.41 TO 44, 387, 45 TO 54/CHD/17 & CO 16-TO 3 0-CHD-2018- SHRI KULWANT SINGH & OTHERS, MOHALI 25 HAVE BEEN CHARGEABLE, HAD SUCH TOTAL INCOME BEEN RE DUCED BY THE AMOUNT OF INCOME IN RESPECT OF WHICH PARTICULARS H AVE BEEN CONCEALED WHICH MEANS THAT THE TAX PAYABLE ON THE I NCOME IN RESPECT OF WHICH PARTICULARS HAVE BEEN CONCEALED OR INACCUR ATE PARTICULARS OF INCOME FURNISHED. 20. A COLLECTIVE READING OF ALL THE THREE CLAUSES R EVEAL THAT FOR THE CALCULATION OF THE QUANTUM OF PENALTY, IT IS NOT TH E INCOME IN RESPECT OF WHICH PARTICULARS HAVE BEEN CONCEALED OR FURNISH ED OR INACCURATE PARTICULARS OF INCOME FURNISHED THAT IS RELEVANT BU T IT IS THE RESULTANT ADDITION TO THE INCOME OF THE ASSESSEE ON ACCOUNT O F SUCH CONCEALED PARTICULARS OF INCOME OR FURNISHING OF INACCURATE P ARTICULARS OF INCOME. IF DESPITE THE DETECTION OF CONCEALMENT OF INCOME OR FURNISHING OF INACCURATE PARTICULARS OF INCOME, IN THE RESULTANT EFFECT, THERE IS NO ADDITION INTO THE INCOME OF THE ASSESSEE OR THE ASSESSEE HAS ALREADY PAID TAXES ON SUCH INCOME IN RESPECT OF WHICH PARTICULARS HAVE BEEN CONCEALED OR INACCURATE PARTI CULARS OF INCOME HAVE BEEN FURNISHED, THEN, AS PER EXPLANATION 4, TH ERE WILL BE NO TAX SOUGHT TO BE EVADED AND THEREBY NO PENALTY WILL BE LEVIABLE U/S 271(1)(C) OF THE ACT. IN OUR VIEW, CLAUSE (C) TO E XPLANATION 4 IS A RESIDUARY CLAUSE AND CAN NOT BE SEGREGATED AND INDE PENDENTLY INTERPRETED IN DIVORCE TO CLAUSES (A) OR (B) OF EXP LANATION 4 TO GIVE GIVING IT AN ENTIRELY DIFFERENT MEANING AND ANY SUC H AN INTERPRETATION, WILL NOT BE A CORRECT INTERPRETATIO N OF THE STATUTORY PROVISION. A COLLECTIVE READING OF THE ENTIRE PROVI SIONS OF SECTION 271(1)(C) OF THE ACT REVEAL BEYOND DOUBT THAT WHAT IS MATERIAL IS THE RESULTANT ADDITION TO THE TAXABLE INCOME OF AN ASSE SSEE WHICH MAY ITA NOS.41 TO 44, 387, 45 TO 54/CHD/17 & CO 16-TO 3 0-CHD-2018- SHRI KULWANT SINGH & OTHERS, MOHALI 26 INVITE PENALTY UNDER THE RELEVANT PROVISIONS OF SEC TION 271(1)(C) OF THE ACT. THOUGH THE WORDS USED IN THE FIRST PART, I .E. CHARGING PROVISION ARE PARTICULARS OF INCOME, HOWEVER, FOR LEVY OF PENALTY IT IS NOT THE PARTICULARS OF INCOME BUT RATHER THE QUANTUM OF INCOME ITSELF, THAT IS ADDED TO THE TAXABLE INCOME OF THE ASSESSEE IS RELEVANT FOR THE PURPOSE OF CALCULATION OF THE AMOU NT OF PENALTY LEVIABLE AS PER THE AFORESAID PROVISION. EXPLANATI ON 4 TO SECTION 271(1)(C) WAS INTRODUCED VIDE TAXATION LAW AMENDME NT ACT, 1975. THE RELEVANT PART OF CIRCULAR NO. 204 DATED 24.7.19 76 GIVING EXPLANATORY NOTE ON THE AFORESAID INSERTED PROVISIO NS READS AS UNDER:- 61.11 NEW EXPLANATION 4 DEFINES THE AMOUNT OF TAX SOUGHT TO BE EVADED. ACCORDING TO THE DEFINITION, THIS EXPRESSION WILL ORDINARILY MEAN TH E DIFFERENCE BETWEEN THE TAX ON THE TOTAL INCOME ASSESSED AND THE TAX THAT WOULD HAVE BEEN CHARGEABLE HAD SUCH TOTAL INCOME BEEN REDUCED BY THE AMOUNT OF INCOME IN RESPECT OF WHICH PARTICULAR S HAVE BEEN CONCEALED. IN A CASE, HOWEVER, WHERE ON SETTING OFF THE CONCEALED INCOME AGAINST ANY LOSS INCURRED BY THE ASSESSEE UNDER OTHER HEAD OF INCOME OR BROUGHT FORWARD FROM EARLIER YEARS, THE TOTAL INCOME IS REDUCED TO A FIGURE LOWER THAN THE CONCEALED INCOME OR EVEN TO A MINUS FIGURE, THE TAX SOUGHT TO BE EVADED WILL MEAN THE TAX CHARGEABLE ON THE CONCEALED INCOME AS IF IT WERE THE TOTAL INCOME. ANOTHER EXCEPTION TO THE GENERAL DEFINITION OF THE EXPRESSION TAX SOUGHT TO BE EVADED GIVEN EARLIER IS A CASE TO WHICH EXPLANATION 3 APPLIES. HERE, THE TAX SOUGHT TO BE EVADED WILL BE THE TAX CHARGEABLE ON THE ENTIRE TOTAL INCOME ASSESSED. 21. EVEN IN THE EXPLANATION 1, WHAT IS RELEVAN T IS ANY FACT MATERIAL TO COMPUTATION OF TOTAL INCOME OF ANY PERSON REGARD ING WHICH SUCH PERSON FAILS TO OFFER AN EXPLANATION OR EXPLANATION WHICH IS FOUND TO BE FALSE BY THE INCOME-TAX AUTHORITIES OR AN EXP LANATION WHICH IS ITA NOS.41 TO 44, 387, 45 TO 54/CHD/17 & CO 16-TO 3 0-CHD-2018- SHRI KULWANT SINGH & OTHERS, MOHALI 27 NOT ABLE TO SUBSTANTIATE, THEN, THE AMOUNT ADDED OR DISALLOWED IN COMPUTING TOTAL INCOME OF SUCH PERSON AS A RESULT T HEREOF DEEMED TO REPRESENT THE INCOME IN RESPECT OF WHICH PARTICULAR S HAVE BEEN CONCEALED. SO, FIRSTLY WHAT IS RELEVANT IS THE MATE RIAL FACT TO THE COMPUTATION OF TOTAL INCOME. THE WORD COMPUTATION HERE IS RELEVANT WHICH MEANS THAT THE FACT MUST BE MATERIAL WHICH HA S THE EFFECT OF ANY ADDITION OR DISALLOWANCE IN THE INCOME TO BE COMPUT ED AFTER THE ASSESSMENT PROCEEDINGS AND IT HAS ALSO BEEN PROVIDE D THAT THE AMOUNT ADDED OR DISALLOWED INTO THE SELF-ASSESSED INCOME R EPRESENTS THE INCOME, PARTICULARS OF WHICH HAS BEEN CONCEALED AND FURTHER A COMBINED READING OF THE SUB SECTIONS (A), (B) (C) A ND EXPLANATION 4 WOULD SHOW THAT TAX SOUGHT TO BE EVADED IS THE TAX PAYABLE ON SUCH AMOUNT IN RESPECT OF WHICH PARTICULARS HAVE BEEN CO NCEALED. THE WORD EXPLANATION HERE IS NOT TO BE APPLIED BROADLY TO INCLUDE EXPLAN ATION REGARDING EACH AND EVERY FACT OR PARTICULARS OF INC OME SUCH AS THE SOURCE OF INCOME, MANNER OF EARING OF INCOME ETC., RATHER, THE WORD EXPLANATION HERE HAS A LIMITED SCOPE, WHEREBY, IT HAS RESTRICTED THAT THE OFFERING OF EXPLANATION THAT THE MATERIAL FACT WHICH HAD BEEN DETECTED BY THE ASSESSING OFFICER HAS A RESULT OF ADDITION OF DISALLOWANCE INTO THE INCOME OF THE ASSESSEE AND T HE ASSESSEE HAS NO EXPLANATION THAT WHY THE SAME BE NOT TREATED AS TAX ABLE INCOME OF THE ASSESSEE FOR THAT RELEVANT YEAR. THE WORDS PARTICU LARS OF INCOME THOUGH IN GENERAL WILL HAVE A WIDE AND BROADER ASPE CT AS TO OF THE RELEVANT PARTICULARS SUCH AS THE SOURCE OF INCOME, MANNER OF EARNING OF INCOME AND GENUINENESS OF TRANSACTION ETC., HOWE VER, THE SECOND PART OF THIS SECTION 271(1)(C) OF THE ACT HAS LIMIT ED THE ABOVE WIDER ITA NOS.41 TO 44, 387, 45 TO 54/CHD/17 & CO 16-TO 3 0-CHD-2018- SHRI KULWANT SINGH & OTHERS, MOHALI 28 SCOPE AND FOR THE PURPOSE OF COMPUTATION OF PENALTY , STRESS IS GIVEN ON THE RESULTANT ADDITION OF AN AMOUNT TO THE INCOM E OF THE ASSESSEE. THE TAX THEREUPON REPRESENTS THE TAX SOUGHT TO BE E VADED AND THE PENALTY CAN BE LEVIED UPON SUCH CONCEALED INCOME E QUAL TO A SUM WHICH MAY BE 100% OF 300% OF THE AMOUNT OF TAX SOU GHT TO BE EVADED. 22. SO FAR AS THE ARGUMENTS OF THE LD. DR THAT S UCH AN INTERPRETATION WOULD DEFEAT THE PURPOSE OF PROVISIO NS OF SECTION 115BBE SUBSTITUTED BY TAXATION LAW (2 ND AMENDMENT) ACT, 2016 W.E.F. 1.4.2017 AND SECTION 271AAC OF THE ACT W.E.F . 1.4.2017. IN OUR VIEW, THE ABOVE CONTENTION OF THE LD. DR IS NO T TENABLE. THE RELEVANT SECTION 115 BBE AND SECTION 271AAC FOR THE SAKE OF CONVENIENCE ARE REPRODUCED AS UNDER;- 115BBE. (1) WHERE THE TOTAL INCOME OF AN ASSESSEE, (A) INCLUDES ANY INCOME REFERRED TO IN SECTION 68, SECTION 69, SECTION 69A, SECTION 69B, SECTION 69C OR SECTIO N 69D AND REFLECTED IN THE RETURN OF INCOME FURNISHED UNDER S ECTION 139; OR (B) DETERMINED BY THE ASSESSING OFFICER INCLUDES A NY INCOME REFERRED TO IN SECTION 68, SECTION 69, SECTION 69A, SECTION 69B, SECTION 69C OR SECTION 69D, IF SUCH INCOME IS NOT COVERED UNDER CLAUSE (A), THE INCOME-TAX PAYABLE SHALL BE THE AGGREGATE OF (I) THE AMOUNT OF INCOME-TAX CALCULATED ON THE IN COME REFERRED TO IN CLAUSE (A) AND CLAUSE (B), AT THE RATE OF SIX TY PER CENT; AND (II) THE AMOUNT OF INCOME-TAX WITH WHICH THE ASSES SEE WOULD HAVE BEEN CHARGEABLE HAD HIS TOTAL INCOME BEEN REDU CED BY THE AMOUNT OF INCOME REFERRED TO IN CLAUSE (I). (2) NOTWITHSTANDING ANYTHING CONTAINED IN THIS ACT, NO DEDUCTION IN RESPECT OF ANY EXPENDITURE OR ALLOWANCE 16 [OR SET OFF OF ANY LOSS] SHALL BE ALLOWED TO THE ASSESSEE UNDER ANY PROVISIO N OF THIS ACT IN ITA NOS.41 TO 44, 387, 45 TO 54/CHD/17 & CO 16-TO 3 0-CHD-2018- SHRI KULWANT SINGH & OTHERS, MOHALI 29 COMPUTING HIS INCOME REFERRED TO IN CLAUSE (A) 16A [AND CLAUSE (B)] OF SUB-SECTION (1). SECTION 271AAC 271AAC. (1) THE ASSESSING OFFICER MAY, NOTWITHSTANDING ANY THING CONTAINED IN THIS ACT OTHER THAN THE PROVISIONS OF SECTION 271AAB, DIRECT THAT, IN A CASE WHERE THE INCOME DETERMINED INCLUDES ANY INCOME REFERRED TO IN SECTION 68, SECTION 69, SECTI ON 69A, SECTION 69B, SECTION 69C OR SECTION 69D FOR ANY PREVIOUS YE AR, THE ASSESSEE SHALL PAY BY WAY OF PENALTY, IN ADDITION TO TAX PAY ABLE UNDER SECTION 115BBE, A SUM COMPUTED AT THE RATE OF TEN PER CENT OF THE TAX PAYABLE UNDER CLAUSE (I) OF SUB-SECTION (1) OF SECT ION 115BBE: PROVIDED THAT NO PENALTY SHALL BE LEVIED IN RESPECT OF INCO ME REFERRED TO IN SECTION 68, SECTION 69, SECTION 69A, SECTION 69B, SECTION 69C OR SECTION 69D TO THE EXTENT SUCH INCOME HAS BEEN INCLUDED BY THE ASSESSEE IN THE RETURN OF INCOME FU RNISHED UNDER SECTION 139 AND THE TAX IN ACCORDANCE WITH TH E PROVISIONS OF CLAUSE (I) OF SUB-SECTION (1) OF SECTION 115BBE HAS BEEN PAID ON OR BEFORE THE END OF THE RELEVANT PREVIOUS YEAR. (2) NO PENALTY UNDER THE PROVISIONS OF SECTION 270A SHALL BE IMPOSED UPON THE ASSESSEE IN RESPECT OF THE INCOME REFERRED TO IN SUB-SECTION (1). (3) THE PROVISIONS OF SECTIONS 274 AND 275 SHALL, A S FAR AS MAY BE, APPLY IN RELATION TO THE PENALTY REFERRED TO IN THI S SECTION. 23. PRIOR TO SUBSTITUTION OF SUB SECTION (1) OF SECTION 115BBE W.E.F. 14.2017, THE SECTION 115 BBE WAS INSERTED B Y FINANCE ACT 2012 W.E.F. 1.4.2013, WHICH READS AS UNDER:- (1) WHERE THE TOTAL INCOME OF AN ASSESSEE INCLUDES ANY INCOME REFERRED TO IN SECTION 68, SECTION 69, SECTION 69A, SECTION 69B, SECTION 69C OR SECTION 69D, THE INCOME-TAX PAYABLE SHALL BE THE AGGREGATE OF ( A ) THE AMOUNT OF INCOME-TAX CALCULATED ON INCOME RE FERRED TO IN SECTION 68, SECTION 69, SECTION 69A, SECTION 69B , SECTION 69C OR SECTION 69D, AT THE RATE OF THIRTY PER CENT; AND ( B ) THE AMOUNT OF INCOME-TAX WITH WHICH THE ASSESSEE WOULD HAVE BEEN CHARGEABLE HAD HIS TOTAL INCOME BEEN REDUCED B Y THE AMOUNT OF INCOME REFERRED TO IN CLAUSE ( A ). 16. INSERTED BY FINANCE ACT, 2016 W.E.F, 1-4-2017 16A INSERTED BY FINANCE ACT, 2018 W.E.F. 1-4-2017 ITA NOS.41 TO 44, 387, 45 TO 54/CHD/17 & CO 16-TO 3 0-CHD-2018- SHRI KULWANT SINGH & OTHERS, MOHALI 30 24. IT IS PERTINENT TO MENTION HERE THAT PRIOR TO 1.4.2013, THERE WAS NO SECTION 115BBE. SECTION 115 BBE WAS INSERTED VID E FINANCE ACT 2012 TO TAX THE INCOME REFERRED TO IN SECTION 68, 69, 69A, 69 B, 69 C OR 69D AT A FLAT RATE OF 30%. PRIOR TO 1.4.2013, A NY UNEXPLAINED INCOME OF THE ASSESSEE EITHER OFFERED BY HIMSELF OR DETECTED BY THE ASSESSING OFFICER ARE TO BE TAXED AS PER THE NORMAL RATE AS PRESCRIBED FROM TIME TO; TIME. HOWEVER, DURING THE PERIOD OF D EMONETARIZATION IN THE YEAR 2017, IT WAS NOTICED THAT THE ASSESSEES HA D STARTED TAKING BENEFIT OF THE PROVISIONS OF SECTIONS 68, 69, 69A AND STARTED DEPOSITING THEIR UNACCOUNTED FOR / UNDISCLOSED INC OME IN THE BANK ACCOUNT DECLARING THE SAME AS THEIR INCOME OF THE A SSESSMENT YEAR UNDER CONSIDERATION IN THE RETURN OF INCOME AND PAY ING TAXES @ 30% AS PROVIDED U/S 115BBC OF THE ACT, ACT OF THE ASSE SSEE WAS TAKEN AS CONTRIBUTORY FACTOR IN FAILURE OF THE VOLUNTARY DIS CLOSURE SCHEME. HENCE, TO CURB THIS PRACTICE, THE GOVERNMENT SUBSTI TUTED SUB SECTION (1) OF SECTION 115 BBE TO PROVIDE THAT WHEREIN IN THE RETURN OF INCOME FURNISHED BY THE ASSESSEE, THE TOTAL INCOME OF AN ASSESSEE INCLUDES AN INCOME REFERRED TO IN SECTIONS 68, 69, 69A, 69B AND 69 C OR SECTION 69D, OR OTHERWISE ADDED OR DETERMINED BY THE ASSESSING OFFICER DURING THE ASSESSMENT PROCEEDINGS UNDER THE ABOVE PROVISIONS, THEN THE TAX AT THE FLAT RATE OF 60% WILL BE PAYABL E ON SUCH AN INCOME DISCLOSED OR DETERMINED. FURTHER TO MARK A DIFFERE NCE BETWEEN THE SELF-DECLARED INCOME IN THE AFORESAID PROVISIONS AN D THE CASES WHERE THE ASSESSING OFFICER DETERMINED /DETECTED SUCH IN COME IN THE AFORESAID SECTIONS 68, 69, 69A, 69B AND 69 C OR SEC TION 69D, THE PENALTY PROVISIONS OF SECTION 271AAC COMES INTO OP ERATION WHICH ITA NOS.41 TO 44, 387, 45 TO 54/CHD/17 & CO 16-TO 3 0-CHD-2018- SHRI KULWANT SINGH & OTHERS, MOHALI 31 PROVIDES THAT IF SUCH AN INCOME IS SUO MOTO DECLARE D BY THE ASSESSEE IN HIS RETURN, THEN NO PENALTY IS LEVIABLE AND IF I T IS OTHERWISE DETECTED BY THE ASSESSING OFFICER, IN ADDITION TO T HE TAX PAYABLE U/S 115BBC, SUCH AN ASSESSEE WILL BE LIABLE TO PAY PENA LTY EQUAL TO A SUM COMPUTED @ 10% OF THE TAX PAYABLE ON SUCH UNEXPLAIN ED INCOME AS PER THE PROVISIONS OF SECTION 115BBE OF THE ACT. A CUMULATIVE READING OF SECTION 271(1)(C) READ WITH SECTION 115 BBE AND 271AAC, WOULD REVEAL THAT IT IS NOT BARRED UNDER THE ACT FO R AN ASSESSEE TO DECLARE AN INCOME IN HIS RETURN AS AN UNEXPLAINED INCOME. IT MAY OTHERWISE BE DETECTED OR FOUND BY THE ASSESSING OFF ICER ALSO DURING THE ASSESSMENT PROCEEDINGS. PRIOR TO 1.4.2013, THE TAX ON SUCH UNEXPLAINED INCOME EITHER DECLARED BY THE ASSESSEE OR DETECTED BY THE ASSESSING OFFICER WAS PAYABLE AT A NORMAL RATES APP LICABLE. HOWEVER, IF SUCH AN UNEXPLAINED INCOME WAS DECLARED BY THE ASSESSEE HIMSELF IN A RETURN FILED U/S 139(1) OF THE ACT, AND THEN N O PENALTY WAS LEVIABLE. HOWEVER, IF SUCH AN UNEXPLAINED INCOME IS DETERMINED BY THE ASSESSING OFFICER ON ACCOUNT OF CONCEALMENT OF MATERIAL FACTS OR ON ACCOUNT OF FURNISHING OF INACCURATE PARTICULARS OF INCOME RELATING TO THE COMPUTATION OF INCOME WHICH HAS THE RESULTAN T EFFECT OF SOME ADDITION INTO THE TAXABLE RETURNED INCOME THEN THE PENALTY IS LIABLE TO BE IMPOSED AND COMPUTED TAKING INTO CONSIDERATION T HE AMOUNT OF TAX SO PAYABLE BY THE ASSESSEE ON THE SUCH UNEXPLAINED INCOME DETECTED OR ADDED BY THE INCOME TAX AUTHORITIES. 25. IT IS PERTINENT TO MENTION HERE THAT EVEN THO UGH, THE GOVERNMENT NOTICED THAT THE AFORESAID PROVISIONS OF SECTIONS 6 8, 69A, 69B, 69C AND 69D CAN BE MISUSED BY THE ASSESSEES TO CIRCUMVE NT THE VOLUNTARY ITA NOS.41 TO 44, 387, 45 TO 54/CHD/17 & CO 16-TO 3 0-CHD-2018- SHRI KULWANT SINGH & OTHERS, MOHALI 32 DISCLOSURE SCHEME AND TO GET THEIR INCOME INTO ROT ATION / ACCOUNTED FOR BY PAYING 30% TAX AND DECLARING THE SAME UNDER THE AFORESAID SECTIONS IN THE RETURN OF INCOME YET, THE GOVERNME NT STILL HAS NOT COME WITH THE PENALTY PROVISIONS IN RESPECT OF SUCH VOLUNTARILY DECLARED INCOME IN THE RETURN OF INCOME, RATHER HAS CHOSEN TO ENHANCE THE TAX RATE FORM 30% TO 60%. THE PENALTY U/S 271 AAC OF THE ACT IS LEVIABLE ONLY IF SUCH AN INCOME IS NOT DECLARED IN THE RETURN OF INCOME. IN VIEW OF OUR ABOVE DISCUSSION OF THE MAT TER, SINCE IN THESE CASES THE ASSESSE HAVE DECALED THE INCOME IN QUESTI ON IN THE RETURN OF INCOME ITSELF, THE TAX AT THE MAXIMUM RATE SLAB DUL Y PAID THEREUPON, THE RETURNED INCOME ACCEPTED AS SUCH WITHOUT ANY AD DITION ON THIS ISSUE, HENCE, THERE WAS AMOUNT OF TAX SOUGHT TO BE EVADED, HENCE, IT CANNOT BE SAID TO BE A FIT CASE FOR LEVY OF PENALTY U/S 271(1)(C) OF THE ACT. 26. EVEN OTHERWISE, A PERUSAL OF CLAUSE (III) TO S ECTION 271(1) REVEALS THAT AS PER THE RELEVANT PROVISIONS, THE ASSESSING OFFICER MAY DIRECT A PERSON WHO AS PER CLAUSE (C) HAS CONCEALED THE PART ICULARS OF INCOME OR FURNISHED INACCURATE PARTICULARS OF SUCH INCOME TO PAY BY WAY OF PENALTY, A SUM WHICH SHALL NOT BE LESS THAN BUT WHI CH SHALL NOT EXCEED THREE TIMES, THE AMOUNT OF TAX SOUGHT TO BE EVADED BY REASON OF THE CONCEALMENT OF PARTICULARS OF HIS INCOME. SO AS PE R THE ABOVE PROVISIONS FOR THE LEVY OF PENALTY THERE MUST BE SO ME AMOUNT OF TAX SOUGHT TO BE EVADED WHICH SHOULD BE BY REASON OF TH E CONCEALMENT OF PARTICULARS OF INCOME OR FURNISHING OF INACCURATE P ARTICULARS OF INCOME OF SUCH INCOME BY THE ASSESSEE. HENCE, IF THERE IS NO AMOUNT OF TAX SOUGHT TO BE EVADED BY REASON OF CONCEALMENT OF PAR TICULARS OF INCOME ITA NOS.41 TO 44, 387, 45 TO 54/CHD/17 & CO 16-TO 3 0-CHD-2018- SHRI KULWANT SINGH & OTHERS, MOHALI 33 OR INACCURATE PARTICULARS OF INCOME, THE PENALTY C ANNOT BE COMPUTED OR TO SAY THAT THE PENALTY UNDER THE PROVISIONS WIL L BE NIL. IT IS PERTINENT TO MENTION HERE THAT EXPLANATION1 TO SEC TION 271(1)(C) OF THE ACT ALSO PROVIDES THAT IF A PERSON FAILS TO OFF ER AN EXPLANATION OR EXPLANATION OFFERED IS FOUND TO BE FALSE BY THE INC OME-TAX AUTHORITY OR HE FAILS TO SUBSTANTIATE SUCH EXPLANATION, AND T HAT FAILS TO PROVE THE SUCH EXPLANATION IS BONAFIDE, THEN THE AMOUNT ADDE D OR DISALLOWED IN COMPUTING THE TOTAL INCOME OF SUCH PERSON AS A RESU LT THEREOF, SHALL FOR THE PURPOSE OF CLAUSE (C) BE DEEMED TO REPRESE NT THE INCOME IN RESPECT OF WHICH PARTICULARS HAVE BEEN CONCEALED. I T BECOMES CLEAR FROM THE READING OF EXPLANATION -1 THAT THERE MUST BE SOME ADDITION OR DISALLOWANCE IN COMPUTING THE TOTAL INCOME OF SU CH PERSON IN RESPECT TO WHICH IT IS DEEMED THAT HE HAS EVADED TH E PAYMENT OF TAX FOR COMPUTING THE PENALTY SO LEVIABLE. . HOWEVER, IF THERE IS NO ADDITION TO THE INCOME OF THE ASSESSEE EITHER BY WA Y OF THE POSITIVE ADDITION OR BY WAY OF REDUCING THE LOSSES ETC., THE N THERE MAY BE NO AMOUNT OF TAX WHICH THE ASSESSEE WHICH CAN BE SAID TO BE SOUGHT TO BE EVADED BY THE ASSESSEE, THEN UNDER THE CIRCUMSTANCE S, THERE WILL NOT BE ANY PENALTY LEVIABLE OR PAYABLE BY THE ASSESSEE AS PER THE PROVISIONS OF THE ACT AND IN THE CIRCUMSTANCES, NO PENALTY WILL BE LEVIABLE U/S 271(1)(C) OF THE ACT. 27. EVEN OTHERWISE, THE LD. COUNSEL FOR THE ASSESSE ES HAS INVITED OUR ATTENTION TO THE PAGES 59, 67, 69, OF PAPER BOO K-2 AND PAGES 114, 153, 190 AND 227 OF PAPER BOOK-I TO SHOW THAT THE ASSESSEES NOT ONLY EXPLAINED TO THE ASSESSING OFFICER DURING THE ASSES SMENT PROCEEDINGS ITA NOS.41 TO 44, 387, 45 TO 54/CHD/17 & CO 16-TO 3 0-CHD-2018- SHRI KULWANT SINGH & OTHERS, MOHALI 34 REGARDING THE SOURCE, MODE AND MANNER OF EARNING OF THE AFORESAID INCOME I.E. FROM SPECULATION / SALE AND PURCHASE IN THE AGRICULTURE LAND AND IN THE RESPECTIVE REPLIES OF THE ASSESSEE S GIVEN TO THE ASSESSING OFFICER WHICH WERE NOT ONLY THE PART OF T HE ASSESSMENT RECORDS BUT ALSO THE PART OF THE RULE 9 REPORT SUBM ITTED BY THE ASSESSING OFFICER BEFORE THE INCOME TAX SETTLEMENT COMMISSION DURING THE COURSE OF PROCEEDINGS U/S 245D (4)OF THE ACT IN THE CASE OF M/S JANTA LAND PROMOTERS LTD. THE LD. COUNSEL FO R THE ASSESSEE HAS ALSO INVITED OUR ATTENTION TO THE PENALTY ORDER OF THE ASSESSING OFFICER PASSED IN THE CASE OF ASSESSEE MR. KULWANT SINGH FOR THE ASSESSMENT YEAR 2013-14, WHEREBY, THE ASSESSING OFF ICER HAD INITIATED THE PROCEEDINGS U/S 271AAA OF THE ACT, HO WEVER, THE SAME WERE DROPPED ACCEPTING THE EXPLANATION OF THE ASSES SEE. A PERUSAL OF THE RELEVANT DOCUMENTS AND REPLIES FILED BY THE AS SESSEES BEFORE THE ASSESSING OFFICER, IT REVEALS THAT RESPECTIVE ASSES SEES THOUGH HAVE DULY EXPLAINED THE SOURCE, MADE AND MANNER OF THE E ARNING OF INCOME WHICH HAS BEEN DISCLOSED BY THE ASSESSEE IN THE RET URN OF INCOME, HOWEVER, THEY COULD NOT SUBSTANTIATE THE SAID EARNI NG OF INCOME WITH DOCUMENTARY EVIDENCE. AT THE SAME TIME, EVEN THE AS SESSING OFFICER HAS NOT BROUGHT OR PUT IN ANY CASE THAT THE INCOME IN QUESTION DECLARED BY THE ASSESSEES WAS NOT FROM THE SOURCES, MODE AND MANNER EXPLAINED, RATHER, THE SOURCE OF INCOME WAS FROM SO ME OTHER TRANSACTIONS TO THE KNOWLEDGE OF THE ASSESSING OFF ICER. IT IS A CASE WHERE THE ASSESSEES COULD NOT PROVE BY EVIDENCE THE SOURCE OF INCOME EARNED, HOWEVER, AT THE SAME TIME THE ASSESSING OFF ICER HAS ALSO NOT DISAPPROVED THE EXPLANATION GIVEN BY THE ASSESSEES. FOR INVOKING THE ITA NOS.41 TO 44, 387, 45 TO 54/CHD/17 & CO 16-TO 3 0-CHD-2018- SHRI KULWANT SINGH & OTHERS, MOHALI 35 PENAL PROVISIONS OF SECTION 271(1)(C) OF THE ACT, THERE MUST BE AN OVERT ACT ON THE PART OF THE ASSESSEE OF CONCEALMEN T OF INCOME OR FURNISHING OF INACCURATE PARTICULARS OF INCOME. SIN CE THE EXPLANATION GIVEN BY THE ASSESSEES HAS NOT BEEN PROVED TO BE FA LSE OR OTHERWISE DISAPPROVED BY THE ASSESSING OFFICER, HENCE, UNDER THE CIRCUMSTANCES, IT CANNOT BE SAID THAT THE ASSESSEES HAVE CONCEALED THE PARTICULARS OF INCOME OR FURNISHED INACCURATE PARTICULARS OF INCOM E SO AS TO ATTRACT THE PROVISIONS OF SECTION 271(1)(C) OF THE ACT. THE ASSESSES, THEMSELVES, DECLARED INCOME IN QUESTION AND PAID TH E DUE TAXES. THERE WAS NO DIFFERENCE BETWEEN THE OFFERED INCOME AND T HE TAXED INCOME. THE HON'BLE CALCUTTA HIGH COURT IN THE CASE OF COM MISSIONER OF INCOME TAX KOLKATA-II VS. PALANI INVESTMENT & INDUS TRIES CORPORATION LTD., (2016) 67 TAXMAN.COM 60 HAS HELD THAT THE DISCLOSURE AND CONCEALMENT CANNOT COEXIST. THAT WHE N A FINDING IS RECORDED THAT THE ASSESSEE HAS INDEED DISCLOSED, TH EN THE CONCLUSION AS REGARDS CONCEALMENT IS BAD. EVEN IT CANNOT BE SA ID THAT THE ASSESSEE FURNISHED INACCURATE PARTICULARS OF INCOME . THERE WAS NO MATERIAL ON RECORD TO INDICATE THAT THE PARTICULARS FURNISHED BY THE ASSESSEE WERE FACTUALLY INCORRECT. UNDER THE CIRCUM STANCES, EVEN OTHERWISE, ON MERITS, THE PENALTY U/S 271(1)(C) OF THE ACT IS NOT ATTRACTED IN THIS CASE. IN VIEW OF THE DISCUSSION MADE ABOVE, WE DO NOT FIN D ANY MERIT IN THE APPEALS OF THE REVENUE, THE SAME ARE ACCORDI NGLY DISMISSED. NOW COMING TO THE CROSS OBJECTION FILED BY THE ASSE SSES. ITA NOS.41 TO 44, 387, 45 TO 54/CHD/17 & CO 16-TO 3 0-CHD-2018- SHRI KULWANT SINGH & OTHERS, MOHALI 36 C.O. NOS. 16 TO 19/CHD/2018, 26 TO 29/CHD/2018, 30/ CHD/2018 & 20 TO 22/CHD/2018 AND 23 TO 25/CHD/2018: 28. SO FAR AS THE CROSS OBJECTIONS, AS TAKEN BY THE ASSESSEES FOR RELEVANT ASSESSMENT YEARS ARE CONCERNED, THE SAME A RE DELAYED BY 378 TO 429 DAYS. SEPARATE APPLICATIONS HAVE BEEN FILED FOR THE CONDONATION OF DELAY, WHEREIN, IT HAS BEEN PLEADED THAT SINCE THE ASSESSEES HAD ALREADY RAISED THE LEGAL GROUNDS UNDE R RULE 27 OF THE INCOME TAX APPELLATE TRIBUNAL RULES, 1963, HENCE, T HE ASSESSEES WERE UNDER BONAFIDE BELIEF THAT THEY NEED NOT REQU IRED TO FILE THE SEPARATE CROSS OBJECTIONS. 29. WE ARE NOT CONVINCED WITH THE ABOVE EXPLANATION GIVEN BY THE ASSESSEES FOR CONDONATION THE LONG DELAY RANGING FR OM 378 DAYS TO 429 DAYS IN FILING THE PRESENT CROSS OBJECTIONS. MO REOVER WE HAVE ALREADY DEALT WITH THE LEGAL OBJECTIONS TAKEN BY TH E ASSESSEES WHICH GO TO THE ROOT OF THE CASE WHILE ADJUDICATING THE A PPEALS OF THE DEPARTMENT. HOWEVER, WE DO NOT DEEM IT FIT AT THIS STAGE TO LOOK IN THE ISSUES RAISED BY THE ASSESSEES WHICH REQUIRES EXAMINATION OF FACTUAL ASPECTS OF THE CASE. THE APPLICATIONS OF TH E ASSESSEES FOR CONDONATION OF DELAY IN FILING THE CROSS OBJECTIONS , ARE, THEREFORE, DISMISSED AND CONSEQUENTLY THE CROSS OBJECTIONS FIL ED BY THE ASSESSEES ARE DISMISSED. HOWEVER, THE DISMISSAL OF THE CROSS OBJECTIONS FILED BY THE ASSESSEES WILL NOT HAVE ANY BEARING ON OUR ADJUDICATION GIVEN ON THE LEGAL ISSUES RAISED BY TH E ASSESSES WHILE DECIDING THE APPEALS OF THE REVENUE. ITA NOS.41 TO 44, 387, 45 TO 54/CHD/17 & CO 16-TO 3 0-CHD-2018- SHRI KULWANT SINGH & OTHERS, MOHALI 37 IN VIEW OF THIS, ALL THE APPEALS OF THE REVENUE AND CROSS OBJECTIONS FILED BY ASSESSEES ARE HEREBY DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 20.03.2019. SD/- SD/- ( ' . . , # $ / B.R.R. KUMAR) %& / ACCOUNTANT MEMBER ( / SANJAY GARG ) / JUDICIAL MEMBER )* /DATE: 20.03.2019 . . &) * +, -, / COPY OF THE ORDER FORWARDED TO : 1. . / THE APPELLANT 2. */. / THE RESPONDENT 3. ' 0 / CIT 4. ' 0 ( )/ THE CIT(A) 5. ,12 * 3 , $ 3 , 45627 / DR, ITAT, CHANDIGARH 6. 26 8# / GUARD FILE &) ' / BY ORDER, 9 ! / ASSISTANT