Shabbir T. Chass, Hyd, Hyderabad V. DCIT Circle-5(1), Hyderabad

ITA 1093/HYD/2011

• Counselvise Citation: [2011] 119 COUNSELVISE.COM (IT) 7128 (ITAT-HYDERABAD)
• Duration Of Justice: 5 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-11-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2004-2005
• Appeal Filed On: 06-06-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: B V PRASAD REDDY
• Assessee Lawyers: SYED JAMEELUDDIN
• Keywords: Search and seizure; Period of limitation
• Section: 132; 139

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH B, HYDERABAD BEFORE SHRI G.C.GUPTA, VICE PRESIDENT AND SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER ITA NO.1091/HYD/2011 : ASSESSMENT YEAR 2002-03 ITA NO.1092/HYD/2011 : ASSESSMENT YEAR 2003-04 ITA NO.1093/HYD/2011 : ASSESSMENT YEAR 2004-05 SHRI SHABBIR T.CHASS, HYDERABAD (PAN - AAIPC 2124 P) V/S DY. COMMISSIONER OF INCOME - TAX CIRCLE 5(1), HYDERABAD (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI SYED JAMEELUDDIN RESPOND ENT BY : SHRI B.V.PRASAD REDDY DATE OF HEARING 13 .10.2011 DATE OF PRONOUNCEMENT 22.112011 O R D E R PER CHANRA POOJARI, ACCOUNTANT MEMBER THESE THREE APPEALS BY THE ASSESSEE FOR THE ASSES SMENT YEARS 2002-03, 2003-04 AND 2004-05 ARE DIRECTED AGA INST THE ORDERS OF THE COMMISSIONER OF INCOME-TAX(APPEALS) V, HYDE RABAD DATED 19.4.2011. SINCE ISSUES INVOLVED IN ALL THESE APPE ALS ARE COMMON, THESE APPEALS ARE BEING DISPOSED OF, WITH THIS COMM ON ORDER FOR THE SAKE OF CONVENIENCE. 2. THE ONLY ISSUE INVOLVED IN THESE THREE APPEALS OF THE ASSESSEE RELATES TO LEGALITY AND VALIDITY OF THE PE NALTIES IMPOSED UNDER S.271(1)(C) OF THE ACT. 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE I S AN INDIVIDUAL. A SEARCH AND SEIZURE OPERATION UNDER S.132 OF THE ACT WAS CONDUCTED ON 5.6.2003. DURING THE SAID OPERATION, FIXED DEPOSITS BELONGING TO THE ASSESSEE AND MAINTAINED WITH INDIA N BANK, OSMAN ITA NO.1091-1093/HYD/2011 SHRI SHABBIR T.CHASS, HYDERABAD 2 GUNJ BRANCH, HYDERABAD WERE FOUND AND AN AMOUNT OF RS.30,94,157 WAS ALSO SEIZED. 3. IN RESPONSE TO NOTICE UNDER S.153A OF THE ACT, FOR THE ASSESSMENT YEAR 2002-03, ASSESSEE FILED HIS RETURN OF INCOME ON 9.2.2004 ADMITTING TOTAL INCOME OF RS.37,15,279, AS AGAINST INCOME OF RS.6,43,320 DISCLOSED IN THE RETURN ORIGINALLY FILE D EARLIER ON 28.2.2003. THE ADDITIONAL INCOME OF RS.30,71,958 OF FERED BY THE ASSESSEE FOR ASSESSMENT IN THE RETURN FILED ON 9.2 .2004 INCLUDES THE FOLLOWING ITEMS- (A) INDIAN BANK FDR RS. 28,00,000 (B) INTEREST ON FDR RS. 73,458 (C) PROFIT FROM OWN BUSINESS RS. 38,500 (D) CASH AS ON 10.09.2001 RS. 1,60,000 SIMILARLY, ASSESSEE FILED HIS RETURN OF INCOME FOR THE ASSESSMENT YEAR 2003-04, AFTER THE SEARCH OPERATION, ON 10.2.2004 A DMITTING TOTAL INCOME OF RS.22,13,460, WHICH INCLUDES ADDITIONAL I NCOME, NOT DISCLOSED IN THE RETURN FILED EARLIER, OF RS.15,21, 590, WHICH COMPRISED OF THE FOLLOWING THREE ITEMS- (A) INDIAN BANK FDR RS. 12,00,000 (B) INTEREST ON FDR RS. 1,99,090 (C) PROFIT FROM OWN BUSINESS RS. 1,22,500 FOR THE ASSESSMENT YEAR 2004-05, SIMILARLY, IN THE RETURN FILED IN RESPONSE TO NOTICE UNDER S.153A OF THE ACT, ASSESSE E ADMITTED TOTAL INCOME OF RS.10,68,560, WHICH INCLUDES ADDITIONAL I NCOME, NOT DISCLOSED EARLIER, OF RS.56,847, WHICH COMPRISED OF INTEREST ON FDR OF RS.18,000 AND PROFIT FROM OWN BUSINESS OF RS.38,847 . ITA NO.1091-1093/HYD/2011 SHRI SHABBIR T.CHASS, HYDERABAD 3 4. FOR ALL THE THREE YEARS UNDER CONSIDERATION, A SSESSMENTS WERE COMPLETED UNDER S.143(3) READ WITH S.153A OF T HE ACT, ON THE TOTAL INCOMES AS DISCLOSED IN THE RETURNS FILED IN RESPONSE TO NOTICE UNDER S.153A, AFTER THE SEARCH OPERATIONS TOOK PLAC E. WHILE THUS COMPLETING THE ASSESSMENT, THE ASSESSING OFFICER IN ITIATED PROCEEDINGS FOR LEVY OF PENALTY UNDER S.271(1)(C) OF THE ACT, T REATING THE ADDITIONAL INCOMES OFFERED IN THE RETURNS FILED SUBSEQUENT TO THE SEARCH, AS THE CONCEALED INCOME OF THE ASSESSEE. INITIALLY, PENA LTY PROCEEDINGS FOR ALL THE THREE YEARS WERE DROPPED FOR ALL THE THREE YEARS, ON 23.6.2005, VIDE ORDER SHEET ENTRIES MADE ON 26.3.2005. HOWEVE R, THE COMMISSIONER OF INCOME-TAX UPON EXAMINATION OF THE CASE RECORDS, VIDE HIS ORDERS DATED 6.3.2008 SET ASIDE THE ACTION OF THE ASSESSING OFFICER IN DROPPING OF PENALTY FOR ALL THE THREE YE ARS, AND REMITTED THE MATTER TO THE FILE OF THE ASSESSING OFFICER FOR FRE SH EXAMINATION. IT IS PERTINENT TO MENTION AT THIS JUNCTURE THAT THE ITAT , ON APPEAL, CONFIRMED THE ORDER OF THE COMMISSIONER OF INCOME-T AX PASSED UNDER S.263 OF THE ACT. 5. IN PURSUANCE OF THE DIRECTIONS OF THE COMMISS IONER OF INCOME-TAX, ASSESSING OFFICER INITIATED FRESH PENAL TY PROCEEDINGS, AND ULTIMATELY LEVIED MINIMUM PENALTIES, WITH REFERENCE TO THE ADDITIONAL INCOMES OFFERED BY THE ASSESSEE FOR ASSESSMENT IN T HE RETURNS FILED IN RESPONSE TO NOTICE UNDER S.153A OF THE ACT. THE PEN ALTIES UNDER S.271(1)(C) OF THE ACT, THUS IMPOSED BY THE ASSESSI NG OFFICER, VIDE HIS SEPARATE ORDERS DATED 12.5.2009, FOR THE YEARS UNDE R CONSIDERATION ARE AS FOLLOWS- ASSESSMENT YEAR PENALTY IMPOSED 2002-03 9,40,000 2003 - 04 4,79,300 2004-05 18,760 ITA NO.1091-1093/HYD/2011 SHRI SHABBIR T.CHASS, HYDERABAD 4 6. ON APPEAL BEFORE THE CIT(A), THE ASSESSEE CONTE NDED THAT THE PENALTY ORDERS, THOUGH DATED 12.5.2009, HAVE BE EN BACK-DATED, AS THEY HAVE BEEN RECEIVED BY THE ASSESSEE ONLY ON 26. 6.2009, SO AS TO GET THE SAME SAVED FROM BEING TIME-BARRED, SINCE TH E LAST DATE FOR PASSING SUCH PENALTY ORDERS WAS 31.5.2009. IT WAS ALSO CONTENDED THAT THE NOTICE UNDER S.274 READ WITH S.271 HAS BEE N ISSUED AFTER THE COMPLETION OF THE ASSESSMENT, AND NOT DURING THE CO URSE OF ASSESSMENT PROCEEDINGS, AND ON THAT LEGAL GROUND A LSO, THE PENALTIES IMPOSED CANNOT BE SUSTAINED. ON THE MERITS, IT WAS THE CONTENTION OF THE ASSESSEE BEFORE THE CIT(A) THAT SINCE THE ASSES SEE HAS VOLUNTARILY DISCLOSED THE ADDITIONAL INCOMES, THERE WAS NO CON CEALMENT ON THE PART OF THE ASSESSEE AND HENCE ON THAT FACTUAL GROU ND ALSO, IMPUGNED PENALTIES CANNOT BE JUSTIFIED. THE CIT(A) DID NOT FIND FAVOUR WITH ANY OF THESE LEGAL OR FACTUAL CONTENTIONS. AFTER EXTRA CTING THE RELEVANT NOTING SHEET ENTRIES RELATING TO IMPOSITION OF PENA LTY, THE CIT(A) NOTED THAT THE SEQUENCE OF EVENTS AS EVIDENT FORM THOSE E NTRIES, CLEARLY INDICATE THAT THE ORDERS OF PENALTY WERE PASSED ON 12.5.2009 ONLY, AND THE ALLEGATION OF THE ASSESSEE OF THE ASSESSEE IS B ASED MERELY ON ACCOUNT OF DELAY IN THE SERVICE OF THE PENALTY ORDE R BY A FEW DAYS. JUST ON ACCOUNT OF SUCH DELAYS, FOR WHICH THERE COU LD BE MANY REASONS, ONE CANNOT CONCLUDE THAT THE ASSESSING OFFICER HAD DELIBERATELY BACK DATED THE ORDERS, AS FOR BACK DATING THE ORDERS, TH E ASSESSING OFFICER HAS TO CHANGE TOO MANY RECORDS, WHICH IS IMPOSSIBLE TO DO. HE ALSO FOUND THAT THE ASSESSMENT ORDERS CLEARLY INDICATE THE INITIATION OF THE PENALTY PROCEEDINGS DURING THE ASSESSMENT PROCEEDI NGS ITSELF, AND CONSEQUENTLY FOUND NO MERIT IN THE CONTENTION OF TH E ASSESSEE TO THE CONTRARY. EVEN ON THE FACTUAL GROUND, THE CIT(A) FOUND THAT THE ASSESSEE COULD NOT BE ACCEPTED TO HAVE OFFERED THE ADDITIONAL INCOMES FOR ASSESSMENT VOLUNTARILY, SINCE THE RETURNS DISC LOSING SUCH INCOMES HAVE BEEN FILED ONLY AFTER THE SEARCH ACTION TOOK P LACE ON THE PREMISES ITA NO.1091-1093/HYD/2011 SHRI SHABBIR T.CHASS, HYDERABAD 5 OF THE ASSESSEE. THE CIT(A) ACCORDINGLY CONFIRMED THE ORDERS OF PENALTY DATED 12.5.2009 PASSED BY THE ASSESSING OFF ICER FOR THESE THREE YEARS. 7. AGGRIEVED BY THE ORDERS OF THE CIT(A) IN THIS BEHALF, ASSESSEE PREFERRED THESE SECOND APPEALS BEFORE US. 8. LEARNED COUNSEL FOR THE ASSESSEE, REITERATING T HE CONTENTIONS URGED BEFORE THE LOWER AUTHORITIES, SUB MITTED THAT THE FACTS OF THE CASE CLEARLY PROVE THAT THE PENALTY OR DERS IN THESE CASES WERE ACTUALLY PASSED AFTER THE STATUTORY PERIOD OF LIMITATION WAS OVER, AND AS SUCH THE SAME ARE NON-EST IN THE EYE OF LAW. IT IS ALSO CONTENDED THAT THE PENALTY NOTICE WAS ORIGINALLY IS SUED ON 30.12.2004 AND AFRESH NOTICE UNDER S.274 READ WITH S.271 WAS A GAIN ISSUED ON 22.4.2009. SINCE INITIATION AND RE-INITIATION OF PE NALTY PROCEEDINGS IS NOT CONTEMPLATED BY LAW, THE IMPUGNED PENALTIES CAN NOT BE SUSTAINED. HE ALSO SUBMITTED THAT THE CIT(A) WAS NOT CORRECT I N HOLDING THAT THE ASSESSEES CASE IS NOT COVERED BY CLAUSE (2) OF EXP LANATION 5 TO S.271(1)(C) OF THE ACT, WHEN ALL THE CONDITIONS LAI D DOWN HAVE BEEN FULFILLED, ESPECIALLY WHEN SEVERAL DECISIONS WHICH ARE SQUARELY APPLICABLE TO THE FACTS OF THE CASE WERE CITED BEFO RE THE CIT(A). IT IS FURTHER CONTENDED THAT WHAT HAS BEEN DISCLOSED BY T HE ASSESSEE UNDER S.132(4) WAS MUCH MORE THAN WHAT WAS QUANTIFIED BY THE DDIT (INV) AND THAT TOO FOR MORE NUMBER OF YEARS. CONSEQUENTL Y, THE CIT(A) WAS NOT CORRECT IN HOLDING THAT THE DECISION OF APEX CO URT IN THE CASE OF SUDARSHAN SILKS AND SAREES V/S. CIT(300 ITR 205) IS NOT APPLICABLE TO THE FACTS OF THE PRESENT CASE. IN SUPPORT OF THES E CONTENTIONS, HE PLACED RELIANCE ON PLETHORA OF CASE-LAW, DULY FURNI SHING COPIES OF THE SAME IN THE PAPER-BOOK WHICH IS PLACED ON RECORD. ITA NO.1091-1093/HYD/2011 SHRI SHABBIR T.CHASS, HYDERABAD 6 9. LEARNED DEPARTMENTAL REPRESENTATIVE, ON THE OTH ER HAND, STRONGLY OPPOSING THE CONTENTIONS OF THE LEARNED DE PARTMENTAL REPRESENTATIVE COUNSEL FOR THE ASSESSEE, STRONGLY R ELIED ON THE ORDERS OF THE CIT(A). HE SUBMITTED THAT THE IMPUGNED ORDE RS OF PENALTY WERE PASSED WITHIN THE PERIOD OF LIMITATION PRESCRIBED B Y LAW, AND EVEN ON MERITS, IT IS A FIT CASE FOR LEVY OF PENALTY FOR AL L THE THREE YEARS. 9.1. FURTHER, LEARNED DEPARTMENTAL REPRESENTATIVE S UBMITTED THAT THE BENEFIT UNDER CLAUSE (2) TO EXPLN. 5 TO S. 272(1) ARE AVAILABLE ONLY FOR THE PREVIOUS YEAR DURING WHICH THE SEARCH ACTIO N HAS TAKEN PLACE AND FOR THIS PURPOSE HE STRONGLY RELIED ON THE EXIS TENCE OF WORDS RETURN OF INCOME TO BE FURNISHED BEFORE EXPIRY OF TIME SPECIFIED IN CLAUSE (A) OR CLAUSE (B) OF SUB S. (1) OF S.139. HE SUBMITTED THAT IMMUNITY WAS AVAILABLE ONLY WITH RESPECT OF THE RET URN WHICH HAS NOT YET FALLEN DUE AS PER THE PROVISIONS OF SECTION 139 (1)(A) AND 139 (1)(B) WHICH OTHERWISE MEANS THAT THE IMMUNITY WAS AVAILABLE ONLY FOR THE PERIOD WHICH FELL UNDER THE DEFINITION OF T HE PREVIOUS YEAR DURING WHICH SEARCH WAS CONDUCTED. 10. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND P ERUSED THE ORDERS OF THE LOWER AUTHORITIES, BESIDES GOING THRO UGH THE WRITTEN SUBMISSIONS AND OTHER MATERIAL FILED BY THE ASSESSE E IN THE PAPER- BOOKS BEFORE US. WE HAVE ALSO GONE THROUGH THE CASE -LAW RELIED UPON BY THE LEARNED COUNSEL FOR THE ASSESSEE IN SUPPORT OF VARIOUS CONTENTIONS. AS FOR THE CONTENTIONS OF THE ASSESS EE, WITH REGARD TO THE LIMITATION, WE FIND NO MERIT IN THE SAME. PLET HORAS OF DECISIONS HAVE BEEN RELIED UPON BY THE LEARNED COUNSEL FOR TH E ASSESSEE IN SUPPORT OF HIS CONTENTION THAT THE IMPUGNED PENALTY ORDER IS BARRED BY LIMITATION. HOWEVER, CRUX OF THE ASSESSEES CONTEN TION IS BASED ON THE FACT THE ORDER PURPORTEDLY PASSED ON 12.5.2009 WAS SERVED ON THE ITA NO.1091-1093/HYD/2011 SHRI SHABBIR T.CHASS, HYDERABAD 7 ASSESSEE ON 26.6.2009. IT IS THE CONTENTION OF THE ASSESSEE THAT FROM THE INORDINATE DELAY INVOLVED IN THE SERVICE OF THE ORDER DATED 12.5.2009, IT IS CLEAR THAT THE ORDER MUST HAVE BEE N PASSED ONLY AFTER THE PERIOD OF LIMITATION IS OVER ON 31.5.2009, BUT THE SAME HAVE BEEN BACK-DATED AS 12.5.2009, SO AS TO SAVE IT FROM BEIN G BARRED BY LIMITATION. THIS INORDINATE DELAY IN SERVING THE ORDER TO THE ASSESSEE COULD, AT BEST, GIVE RISE TO A SUSPICION, BUT IT CA NNOT BE CONCLUSIVELY SAID THAT THE ORDER WAS BACK DATED, IN THE ABSENCE OF ANY CORROBORATIVE EVIDENCE. IN THE PRESENT CASE, IN FAC T WAS PASSED ONLY BEFORE THE PERIOD OF LIMITATION WAS OVER, THAT IS 1 2.5.2009 AND WITHIN THE PERIOD OF LIMITATION ENDING ON 31.5.2009. AS C ORRECTLY OBSERVED BY THE CIT(A) IN PARA 4 OF HIS ORDER, SUCH DELAYS IN SERVICE OF NOTICES AND ORDERS ARE ROUTINE AND NATURAL, EVEN IF THEY ARE SE NT BY SPEED POST OR COURIER, AND MUCH CANNOT BE INFERRED BASED JUST ON SUCH DELAY IN SERVICE. THE CIT(A) HAS EXTRACTED ORDER SHEET ENTR IES FROM THE RECORD AND TOOK NOTE OF THE SEQUENCE OF EVENTS AND CONCLUD ED THAT IT IS ALMOST IMPOSSIBLE FOR THE ASSESSING OFFICER TO BACK DATE THE ORDER, SINCE THE ASSESSING OFFICER WOULD HAVE TO CHANGE TO O MANY RECORDS, WHICH IS AGAIN IMPOSSIBLE TO DO. WE ARE IN AGREE MENT WITH THE REASONING GIVEN BY THE CIT(A) FOR REJECTING THE CON TENTIONS OF THE ASSESSEE IN THIS BEHALF. WE ACCORDINGLY UPHOLD THE ORDER OF THE CIT(A) ON THE ASPECT OF LIMITATION. 11. THE NEXT CONTENTION OF THE ASSESSEE IS WITH RE GARD TO LEGALITY AND VALIDITY OF THE INITIATION OF THE PROC EEDINGS UNDER S.271(1)(C) OF THE ACT. WE FIND NO MERIT IN THE CO NTENTIONS OF THE ASSESSEE ON THIS ASPECT AS WELL. AS IS EVIDENT FRO M THE SEQUENCE OF EVENTS, PENALTY PROCEEDINGS INITIATED DURING THE AS SESSMENT PROCEEDINGS HAVE BEEN DROPPED ON 26.3.2005. HOWEVER , THE COMMISSIONER, EXERCISING HIS JURISDICTION UNDER S.2 63 OF THE ACT, VIDE ITA NO.1091-1093/HYD/2011 SHRI SHABBIR T.CHASS, HYDERABAD 8 HIS ORDER DATED 6.3.2008, SET ASIDE THE DROPPING OF PENALTY AND REMITTED THE MATTER TO THE FILE OF THE ASSESSING OF FICER FOR FRESH PROCEEDINGS. IT IS IN PURSUANCE OF THE DIRECTIONS OF THE COMMISSIONER, THE PENALTY PROCEEDINGS, WHICH GAVE RISE TO THE PRE SENT APPELLATE PROCEEDINGS BEFORE US, WERE INITIATED. THE SAID OR DER OF THE COMMISSIONER PASSED UNDER S.263 WAS SUBJECT MATTER OF APPEAL BEFORE THE TRIBUNAL, AND THE TRIBUNAL VIDE ITS ORDER DATED 24.10.2008 HAS UPHELD THE ACTION OF THE COMMISSIONER UNDER S.263 O F THE ACT. SINCE LEGALITY AND VALIDITY OF THE DIRECTIONS OF THE COMM ISSIONER UNDER S.263 OF THE ACT, HAS ALREADY BEEN UPHELD BY THIS TRIBUNA L IN THE EARLIER ROUND OF APPELLATE PROCEEDINGS AGAINST THE ORDER OF THE COMMISSIONER PASSED UNDER S.263 OF THE ACT, IT IS TOO LATE IN TH E DAY FOR THE ASSESSEE TO CONTEST THE LEGALITY AND VALIDITY OF THE PROCEED INGS INITIATED BY THE ASSESSING OFFICER UNDER S.271(1)(C) OF THE ACT, IN PURSUANCE OF THE DIRECTIONS OF THE COMMISSIONER. WE ACCORDINGLY, RE JECT THE CONTENTIONS OF THE ASSESSEE ON THIS ASPECT. 12. NOW, WE MAY DEAL WITH THE MERITS OF THE CASE WITH REGARD TO LEVY OF PENALTY UNDER S.271(1)(C) OF THE ACT. SO F AR AS THE ASSESSEES CLAIM OF IMMUNITY AVAILABLE UNDER CLAUSE (2) OF EXP LANATION 5 TO S.271(1) (C ) IS CONCERNED, WE CONSIDER IT NECESSAR Y TO CONSIDER THE RESPECTIVE STANDS OF THE PARTIES BY ANALYSING THE P ROVISIONS OF EXPLANATION WHICH ARE AS UNDER: EXPLANATION 5. WHERE IN THE COURSE OF A SEARCH U/S 132, THE ASSESSEE IS FOUND TO BE THE OWNER OF ANY MONEY, BUL LION, JEWELLERY OR OTHER VALUABLE ARTICLE OR THING (HEREA FTER IN THIS EXPLANATION REFERRED TO AS ASSETS) AND THE ASSESSE E CLAIMS THAT SUCH ASSETS HAVE BEEN ACQUIRED BY HIM BY UTILISING (WHOLLY OR IN PART) HIS INCOME: A) FOR ANY PREVIOUS YEAR WHICH HAS ENDED BEFORE THE DATE OF THE SEARCH, BUT THE RETURN OF INCOME FOR SUCH YEAR HAS NOT BEEN FURNISHED BEFORE THE SAID DATE OR, WHERE SUCH RETUR N HAS BEEN ITA NO.1091-1093/HYD/2011 SHRI SHABBIR T.CHASS, HYDERABAD 9 FURNISHED BEFORE THE SAID DATE, OR SUCH INCOME HAS NOT BEEN DECLARED THEREIN; OR B) FOR ANY PREVIOUS YEAR WHICH IS TO END ON OR AFTE R THE DATE OF THE SEARCH; THEN, NOTWITHSTANDING THAT SUCH INCOME IS DECLARED BY HIM IN ANY RETURN OF INCOME FURNISHED ON OR AFTER THE DATE OF THE SEARCH, HE SHALL FOR THE PURPOSES OF IMPOSITION OF A PENALTY U NDER CLAUSE (C ) OF SUB-S(1) OF THIS SECTION, BE DEEMED TO HAVE CONC EALED AND PARTICULARS OF HIS INCOME OR FURNISHED INACCURATE P ARTICULARS OF SUCH INCOME, UNLESS; (1) SUCH INCOME IS, OR THE TRANSACTIONS RESULTING I N SUCH INCOME ARE RECORDED (I) IN A CASE FALLING UNDER CLAUSE (A), BEFORE THE DATE OF THE SEARCH; AND (II) IN A CASE FALLING UNDER CLAUSE (B), ON OR BEFO RE SUCH DATE, IN THE BOOKS OF ACCOUNT, IF ANY MAINTAINED BY HIM FOR ANY SOURCE OF INCOME OR SUCH INCOME IS OTHERWISE DISCLOSED TO THE CHIEF CIT OR CIT BEFORE THE SAID DATE OR (2) HE, IN THE COURSE OF THE SEARCH, MAKES A STATE MENT UNDER SUB SECTION (4) OF SECTION 132 THAT ANY MONEY, BULL ION, JEWELLERY OR OTHER VALUABLE ARTICLE OR THING FOUND IN HIS POS SESSION OR UNDER HIS CONTROL, HAS BEEN ACQUIRED OUT OF HIS INCOME WH ICH HAS NOT BEEN DISCLOSED SO FAR IN HIS RETURN OF INCOME TO BE FURNISHED BEFORE THE EXPIRY OF TIME SPECIFIED IN SUB SECTION (1) OF SECTION 139 AND ALSO SPECIFIES IN THE STATEMENT THE MANNER IN WHICH SUCH INCOME HAS BEEN DERIVED AND PAYS THE TAX, TOGE THER WITH INTEREST, IF ANY, IN RESPECT OF SUCH INCOME. AFTER CAREFUL CONSIDERATION OF CLAUSE (2), WHAT WE ARE ABLE TO UNDERSTAND IS THAT THE WORDS RETURN OF INCOME TO BE FURNISHED BEFORE THE EXPIRY OF TIME SPECIFIED IN CLAUSES (A) AND (B) OF SUB SECTION (1) OF S. 139 , CANNOT BE READ WITHOUT THE WORDS INCOME WHICH HAS NOT BEEN DISCLOSED SO FAR IN HIS RETURN OF INCOME PRECEDING THE AFORESAID WORDS AND IF WE READ THE COMPLETE SENTENCE WHICH IS COMPR ISING OUT OF WORDS HAS BEEN ACQUIRED OUT OF HIS INCOME WHICH HAS NOT BEEN DISCLOSED SO FAR IN HIS RETURN OF INCOME TO BE FURNISHED BEFORE THE EXPIRY OF TIME ITA NO.1091-1093/HYD/2011 SHRI SHABBIR T.CHASS, HYDERABAD 10 SPECIFIED IN CLAUSE (A) OR (B) OF SUB SECTION (1) O F SECTION 139, IT IS ABUNDANTLY CLEAR THAT EXISTENCE OF WORDS CL. (A) O R CL. (B) OF SUB SECTION (1) OF S. 139 DO NOT REFER ONLY TO THE RET URN OF INCOME TO BE FURNISHED, RATHER THEY REFER ALSO TO THE RETURN OF INCOME WHICH HAS HAVE BEEN FURNISHED THOUGH OF COURSE THE RETURNS SO FURNISHED WERE TO BE FURNISHED IN VIEW OF CLAUSES (A) AND (B) OF SUB SECTION (1) OF SECTION 139, MEANING THEREBY THAT THIS CLAUSE REFERS TO THE RETURNS ALREADY HAVING BEEN FURNISHED AS WELL AS THE RETURNS WHICH ARE YET TO BE FURNISHED. HAD IT NOT BEEN THE CASE, THEN WORDS, W HICH HAS NOT BEEN DISCLOSED SO FAR SHOULD NOT HAVE BEEN IN THE PROVIS IONS. EXISTENCE OF THESE WORDS CLEARLY LEADS ONE TO UNDERSTAND THAT TH IS CLAUSE IS APPLICABLE TO THE RETURNS ALREADY FURNISHED AS WELL AS TO THE RETURNS TO BE FURNISHED THOUGH OF COURSE SUCH RETURNS SHOULD H AVE BEEN FURNISHED UNDER CLAUSE (A) AND (B) TO SUB S. (1) OF S. 139. 13. IN VIEW OF THE ABOVE INTERPRETATION OF CLAUSE (2), WE ARE OF THE OPINION THAT THE INTERPRETATION PUT BY THE LEAR NED DEPARTMENTAL REPRESENTATIVE IS NOT ACCEPTABLE AND CONSEQUENTLY, WE HOLD THAT IMMUNITY AVAILABLE UNDER CLAUSE (2) WAS FOR THESE ASSESSMENT YEARS. SO FAR AS ASSESSEES CASE IS CONCERNED IT IS AN ADM ITTED FACT THAT THE ASSESSEE HAS DISCLOSED AN ADDITIONAL INCOME AND, TH EREFORE, THE ASSESSEE IS ENTITLED TO THE IMMUNITY AVAILABLE UNDE R CLAUSE (2) OF EXPLANATION 5 OF S.271(1)(C) OF THE ACT FOR ALL THE SE ASSESSMENT YEARS. CONSEQUENTLY, WE CANCEL THE PENALTIES FOR LEVIED BY THE ASSESSING OFFICER AND CONFIRMED BY THE CIT(A), FOR ALL THE TH REE YEARS, ACCEPTING THE CONTENTIONS OF THE ASSESSEE ON THIS ASPECT. IN THIS VIEW OF THE MATTER, WE ARE NOT INCLINED TO GO INTO THE MERITS O F THE PENALTY LEVIED FOR ALL THE THREE YEARS. ITA NO.1091-1093/HYD/2011 SHRI SHABBIR T.CHASS, HYDERABAD 11 13. IN THE RESULT, ALL THE THREE APPEALS OF THE A SSESSEE ARE PARTLY ALLOWED. ORDER PRONOUNCED IN THE COURT ON 22 ND NOVEMBER, 2011 SD/- SD/- (G.C.GUPTA) (CHANDRA POOJARI) VICE PRESIDENT. ACCOUNTANT MEMBER. DT/- 22ND NOVEMBER, 2011 COPY FORWARDED TO: 1. SHRI SHABBI R T.CHASS, C/O. SHRI SYED JAMEELUDDIN, INCOME - TAX CONSULTANT, 16-87-302, ERRAM COTTAGE AZAMPURA , HYDERABAD ` 2. DY. COMMISSIONER OF INCOME - TAX CIRCLE 5(1) 3. COMMISSIONER OF INCOME - TAX(APPEALS) V, HYDERABAD 4. COMMISSIONER OF INCOME - TAX V, HYDERABAD 5. THE D.R., ITAT, HYDERABAD. B.V.S.