Smt. Shashi Lohiya, JODHPUR V. DCIT, JODHPUR

ITA 123/JODH/2013

• Counselvise Citation: [2013] 140 COUNSELVISE.COM (IT) 70232 (ITAT-JODHPUR)
• Duration Of Justice: 6 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-09-2013
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 06-09-2013
• Assessment Year: 2006-2007
• Appeal Filed On: 06-03-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DEEPAK SEHGAL
• Assessee Lawyers: SHAILENDRA BARDIA
• Keywords: Loose papers; Document seized; Bonafide belief; Onus to prove; Revised return; Documents seized
• Section: 153A; 132; 15; 139

Judgement Text

IN THE INCOME TAX APPELALTE TRIBUNAL : JODHPUR BENC H : JODHPUR BEFORE SHRI HARI OM MARATHA, JUDICIAL MEMBER AND SHRI N.K. SAINI, ACCOUNTANT MEMBER. ITA NO. 123/JODH/2013 (A.Y. 2006-07) SMT. SHASHI LOHIYA, VS. DCIT, CENTRAL CIRCLE-1, C/O SHAILENDRA BARDIA, JODHPUR. CHARTERED ACCOUNTANTS, 53, NEHRU PARK, JODHPUR. PAN NO. AADPL3224E (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI SHAILENDRA BARDIA DEPARTMENT BY : SHRI DEEPAK SEHGAL - D.R. DATE OF HEARING : 06/09/2013. DATE OF PRONOUNCEMENT : 20/09/2013. O R D E R PER N.K.SAINI, A.M THIS IS AN APPEAL BY THE ASSESSEE AGAINST THE ORDE R DATED 02/01/2013 PASSED BY LD. CIT (A) CENTRAL, JAIPUR, R AJASTHAN. THE ONLY GRIEVANCE OF THE ASSESSEE IN THIS APPEAL RELATES TO THE CONFIRMATION OF THE PENALTY LEVIED BY THE ASSESSING OFFICER UNDER SECTI ON 271(1)(C) OF THE I.T. 2 ACT, 1961 (HEREINAFTER REFERRED TO AS ACT, FOR SH ORT) FOR A SUM OF RS. 6,34,930/-. 2 FACTS OF THIS CASE IN BRIEF ARE THAT ORIGINALLY NO RETURN WAS FILED BY THE ASSESSEE AS REQUIRED UNDER SECTION 139 OF THE A CT FOR THE ASSESSMENT YEAR UNDER CONSIDERATION. SUBSEQUENTLY, A SEARCH O PERATION UNDER SECTION 132 OF THE ACT WAS CARRIED OUT ON 18/07/200 7, WHEREIN DIFFERENT RESIDENTIAL AND BUSINESS PREMISES WERE COVERED AND CERTAIN INCRIMINATING DOCUMENTS WERE RECOVERED ALONG WITH CASH AND JEWELL ERY. DURING THE COURSE OF SEARCH OPERATION, FROM THE PREMISES OF SH RI OM PRAKASH LOHIYA AT B-136, PANCHWATI, KAMLA NEHRU NAGAR, JODHPUR CER TAIN INCRIMINATING DOCUMENTS BELONGING TO THE ASSESSEE WERE SEIZED. T HEREFORE, THE ASSESSING OFFICER AFTER RECORDING THE SATISFACTION/ REASONS IN WRITING ON 11/01/2008 ISSUED NOTICE UNDER SECTION 153C R.W.S. 153A OF THE ACT, ON THE SAME DAY, FOR A.Y. 2001-02 TO 2006-07, WHICH WE RE DULY SERVED UPON THE ASSESSEE ON 17/01/2008. IN RESPONSE TO THE SAI D NOTICE, THE ASSESSEE FILED RETURN OF INCOME DECLARING TOTAL INCOME OF RS . 21,93,833/- FOR THE A.Y 2006-07 ON 30/09/2008. THE ASSESSEE DECLARED I NCOME FROM BUSINESS AT RS. 17,79,890/-, WHICH INCLUDED THE INCOME OFFER ED FOR LEVY OF TAX AT RS. 14,50,000/-, WHICH WAS SURRENDERED IN RESPECT O F INVESTMENT OF RS. 3 9,00,000/- FROM UNDISCLOSED SOURCES TOWARDS PURCHAS E OF PLOTS AT TANWARA AS PER ANNEXURE-A, EXHIBIT 4, PAGE NOS. 1 T O 19 AND FURTHER INVESTMENT OF RS. 5,50,000/- FOR PURCHASE OF PLOT B , KHASRA NO. 751 & 759, PAL LINK ROAD, JODHPUR. BESIDES THE ABOVE, TH E ASSESSEE HAS DECLARED SHORT TERM CAPITAL GAIN OF RS. 9,881/- ON SALE OF SHARES AND LONG TERM CAPITAL GAIN OF RS. 3,87,731/- ON SALE OF PLOT AT 10/391, MILKMAN COLONY, PAL LINK ROAD, JODHPUR. THE ASSESSING OFFI CER FRAMED THE ASSESSMENT UNDER SECTION 153C R.W.S. 153A OF THE AC T ON 15/12/2008 AT A TOTAL INCOME OF RS. 21,93,833/-, WHICH WAS DECLARED BY THE ASSESSEE. THE ASSESSING OFFICER ALSO INITIATED PENALTY PROCEE DINGS UNDER SECTION 271(1)(C) R.W.S. 274 OF THE ACT FOR CONCEALING THE PARTICULARS OF INCOME BY NOT FILING THE RETURN UNDER SECTION 139 OF THE ACT . THE ASSESSING OFFICER OBSERVED THAT HAD THERE BEEN NO SEIZURE OF DOCUMENT S RELATING TO THE ASSESSEE THEN DEFINITELY THE ASSESSEE WOULD NOT HAV E DISCLOSED ANY INCOME AS WAS EVIDENT FROM THE FACT THAT SHE DID NO T FILE ANY RETURN TILL 31/03/2008 FOR ASSESSMENT YEAR UNDER CONSIDERATION. THE ASSESSING OFFICER ALSO POINTED OUT THAT THE ASSESSMENT ORDER HAD BECAME FINAL, SINCE NO APPEAL WAS PREFERRED BY THE ASSESSEE BEFOR E THE LEARNED CIT(A) CENTRAL JAIPUR. DURING THE PENALTY PROCEEDINGS, TH E ASSESSEE SUBMITTED TO THE ASSESSING OFFICER AS UNDER:- 4 WITH REFERENCE TO THE ABOVE, THE ASSESSEE SUBMITS AS BELOW FOR YOUR KIND PERUSAL AND SYMPATHETIC CONSIDERATION:- 1. THE ASSESSEE HAS NOT CONCEALED THE PARTICULARS OF HER INCOME OR FURNISHED INACCURATE PARTICULARS OF HER INCOME. 2. THE ASSESSEE FILED RETURN OF INCOME UNDER S. 15 3A DECLARING A TOTAL INCOME OF RS. 21,93,830/-. 3. THE ASSESSEE HAS BEEN ASSESSED AT THE SAME AMOU NT. THE DECLARED INCOME HAS BEEN DULY ACCEPTED BY YOU. 4. IT IS NOT CORRECT TO SAY THAT THE ASSESSEE WOUL D NOT HAVE FILED HER RETURN OF INCOME IF THERE WOULD NOT HAVE BEEN SEARCH. THE RET URN FOR THE RELEVANT ASSESSMENT YEAR COULD HAVE BEEN FILED UPTO 31/3/08. THE SEARCH AGAINST THE ASSESSEE WAS CONDUCTED ON 18/07/2007. A LOT OF TIME OF THE ASSESSEE WAS PUT INTO THE PROCEEDINGS AFTER SEARCH, IN TAKIN G PHOTO COPIES ETC. THE ASSESSEE NEVER HAD INTENTION TO CONCEAL THE INCOME BUT AFTER SEARCH HAVING TAKEN PLACE, SHE WANTED TO BE MORE PARTICULA R AND THEREFORE IT TOOK HER LONGER TIME TO FINALIZE THE RETURN. ON FACTS, IT CANNOT BE SAID THAT THE ASSESSEE HAS CONCEALED THE PARTICULARS OF HER INCOM E. 5. THE ASSESSEE HAS FULLY CO-OPERATED IN ALL THE P ROCEEDINGS. SHE HAS PAID THE DUE TAX WITH INTEREST. 6. IT MAY ALSO BE .INFORMED THAT THE ASSESSEE'S HUS BAND FILED A LETTER WITH THE ADI, INVESTIGATION, JODHPUR ON 24/01/2007 STATING T HAT HE IS PREPARED TO PAY TAX ON LEGITIMATE AND CORRECT AMOUNT OF INCOME AS MAY BE MUTUALLY DETERMINED ON AGREED BASIS. HE ALSO STATED THAT THE SAID LETTER BE TREATED AS STATEMENT UNDER S. 132(4) THERE BY ENTITLING TIR E ASSESSEE TO THE BENEFITS OF EXPLANATION 5 TO S. 271(1)(C) OF IT ACT, 1961. THE COPY OF THE SAID LETTER IS ENCLOSED. THE ASSES SEE HAVING BEEN ASSESSED ON THE RETURNED INCOME THERE IS NO JUSTIFICATION OF LEVY OF PENALTY EVEN IN VIEW OF THE ABOVE SAID LETTER. 7. THE RETURNED INCOME HAVING BEEN ACCEPTED, THERE IS NO JUSTIFICATION OF LEVY OF PENALTY. 8. THE ASSESSEE ALSO RELIES ON THE DECISION OF HON 'BLE ITAT, MUMBAI BENCH IN ACIT VS. VIP INDUSTRIES LTD. (2009) 122 TTJ (MUMBAI ) 289 WHEREIN IT WAS HELD THAT THE ASSESSEE AGREEING TO ADDITION UNDER S . 41(1) ON CREDITOR'S 5 CLAIM BECOMING BARRED BY LIMITATION, THERE IS NO CO NCEALMENT ATTRACTING PENALTY UNDER S. 271(1)(C). 9. THE ASSESSEE ALSO RELIES ON THE DECISION OF HON 'BLE SUPREME COURT IN CIT VS. SURESH CHANDRA MITTAL (2001) 251 ITR 9 (SC) WERE IN IT WAS HELD THAT THOUGH THE ASSESSEE SURRENDERED ADDITIONAL INCOME B Y WAY OF REVISED RETURNS AFTER PERSISTENT QUERIES BY AO ONCE THE REV ISED RETURNS HAVE BEEN REGULARIZED BY REVENUE THE EXPLANATION OF THE ASSES SEE THAT HE HAS DECLARED ADDITIONAL INCOME TO BUY PEACE TO COME OUT OF VEXED LITIGATION COULD BE TREATED AS BONA FIDE AND PENALTY UNDER S. 271( 1)(C) WAS NOT LEVIABLE 10. THE ASSESSEE ALSO RELIES ON THE DECISION OF IT AT, PUNE BENCH IN KANBAY SOFTWARE INDIA (P) LTD. VS. DEPUTY CIT (2009) 122 T TJ (PUNE) 721. THE RETURNED INCOME HAVING BEEN ACCEPTED, THERE IS NO C ONCEALMENT OF INCOME OR FURNISHING OF INACCURATE PARTICULARS OF INCOME. IT IS THEREFORE REQUESTED THAT THE PURPOSED PENALTY PROCEEDING MAY PLEASED BE DROPPED.' 3. THE ASSESSING OFFICER AFTER CONSIDERING THE SUBM ISSIONS OF THE ASSESSEE OBSERVED THAT NEITHER DURING THE COURSE OF SEARCH ANY DISCLOSURE HAD BEEN MADE BY THE ASSESSEE HERSELF IN HER STATEM ENT BECAUSE SHE HAD FILED A LETTER BY HER HUSBAND SHRI OM PRAKASH LOHIY A ADDRESSED TO ADIT (INVESTIGATION), JODHPUR DATED 22/01/2007, WHICH CO ULD NOT BE TREATED A STATEMENT UNDER SECTION 132(4) OF THE ACT AND EVEN IN THE STATEMENT OF SHRI OM PRAKASH LOHIYA (WHO IS HUSBAND OF THE ASSES SEE), RECORDED UNDER SECTION 132(4) OF THE ACT, THE MANNER IN WHICH INCO ME HAD BEEN DERIVED BY THE ASSESSEE, WHICH WAS BEING DISCLOSED IN THE R ETURN FILED UNDER SECTION 153C R.W.S. 153A OF THE ACT WAS NOT EXPLAIN ED. THE ASSESSING 6 OFFICER WAS OF THE VIEW THAT MERE FILING OF A GENER AL LETTER AFTER COMPLETION OF SEARCH ON 22/01/2007 BEFORE THE ADIT THAT HE WILL PAY TAX ON LEGITIMATE AND CORRECT INCOME AS MAY BE MUTUALLY DETERMINED ON AGREED BASIS WILL NOT GRANT IMMUNITY TO THE ASSESSE E FOR LEVY OF PENALTY UNDER EXPLANATION (5) OF SECTION 271(1)(C) OF THE A CT. THE ASSESSING OFFICER, THEREFORE, HELD THAT THE ASSESSEE HAD CONC EALED THE PARTICULARS OF HER INCOME BY WAY OF NOT FILING INCOME TAX RETUR N FOR THE A.Y. 2006-07 AS REQUIRED UNDER SECTION 139 OF THE ACT AND THE RE TURN WAS FILED ONLY AFTER SEIZURE OF THE DOCUMENTS AND AFTER ISSUANCE OF NOTICE UNDER SECTION 153C OF THE ACT R.W.S. 153A OF THE ACT AND THE SAID RETURN WAS NOT FILED WITHIN THE REQUIRED TIME OF 15 DAYS AND WAS ONLY FI LED ON 30/09/2008 I.E. AFTER A LAPSE OF MORE THAN A TIME PERIOD OF 08 MONT HS. ASSESSING OFFICER ACCORDINGLY, LEVIED A PENALTY OF RS. 6,34,913/- UND ER SECTION 271(1)(C) OF THE ACT. 4. BEING AGGRIEVED, THE ASSESSEE CARRIED THE MATTER TO THE LEARNED CIT(A) AND SUBMISSIONS MADE ARE INCORPORATED IN PAR A 4.4 OF THE IMPUGNED ORDER, WHICH ARE REPRODUCED VERBATIM AS UN DER:- WITH REFERENCE TO THE GROUNDS OF APPEAL AS ALREADY FURNISHED, THE ASSESSEE SUBMITS AS UNDER FOR YOUR KIND PERUSAL AND SYMPATHE TIC CONSIDERATION: 1. THE LEARNED DCIT WAS NOT JUSTIFIED ON FACTS AN D IN LAW IN IMPOSING PENALTY OF RS. 6,34,913/- UNDER S. 271 (1 ) (C) OF LNCOME-T AX ACT, 1961. 7 2. THE ASSESSEE HAS FILED RETURN OF INCOME UNDER S . 153C DECLARING THE TOTAL INCOME OF RS. 21,93,833/-. THERE WAS SOME DELAY IN FILING THE ORIGINAL RETURN AND IN THE MEAN TIME, THE SEARCH TOOK PLACE ON 18/01/2007, WHEREBY VARIOUS LOOSE PAPERS AND DOCUMENTS WERE SEI ZED. IT TOOK LOT OF TIME FIRSTLY IN TAKING THE PHOTOCOPIES AND THEREAFT ER PREPARING THE RETURN WITH UTMOST ACCURACY. THE ASSESSEE HAS BEEN ASSESS ED AT RETURNED INCOME. IT MAY BE MENTIONED THAT THE NOTICE UNDER S . 153C WAS ISSUED ON 18/ 1/2OO8. THUS, THERE WAS NO OPTION LEFT WITH TH E ASSESSEE EXCEPT TO FILE THE RETURN UNDER S. 153C. THEREFORE, ON FACTS , THERE WAS NO CONCEALMENT OF INCOME OR FURNISHING OF INACCURATE P ARTICULARS OF INCOME. 3.1 THE SEARCH WAS CONDUCTED AGAINST THE ASSESSEE ON 18 JANUARY, 2O07. THE HUSBAND OF THE ASSESSEE FILED A LETTER WITH THE ADI , INVESTIGATION, JODHPUR ON 24/01/2007 STATING THAT HE IS PREPARED TO PAY TA X ON LEGITIMATE AND CORRECT AMOUNT OF INCOME AS MAY BE MUTUALLY DETERMI NED ON AGREED BASIS. IT IS ALSO STATED THAT THE SAID LETTER BE TREATED AS STATEMENT UNDER S. 132(4) THEREBY ENTITLING THE ASSESSEE TO THE BEN EFITS OF EXPLANATION 5 TO SECTION 271(1)(C) OF ACT. THE COPY OF THE SAID LETT ER IS ENCLOSED. THE ASSESSEE HAVING BEEN ASSESSED AT THE RETURNED INCOME THERE IS NO JUSTIFICATION OF LEVY OF PENALTY EVEN IN VIEW OF TH E ABOVE SAID LETTER. 3.2 THE ID. DCIT HAS ERRED IN NOT GRANTING IMMUNI TY FROM PENALTY UNDER SECTION 227 (1 )(C) AVAILABLE TO THE APPELLANT IN T ERMS OF CLAUSE(2) OF EXPLANATION 5 TO SECTION 271(1)(C) OF THE ACT WHICH PROVIDES THAT AN ASSESSEE SHALL NOT DEEMED TO HAVE CONCEALED THE PAR TICULARS OF HIS INCOME OR FURNISHING INACCURATE PARTICULARS OF SUCH INCOME IF HE, IN THE COURSE OF THE SEARCH, MAKES A STATEMENT UNDER SUB- SECTION (4) OF SECTION 132 THAT ANY MONEY, BULLION, JEWELLERY OR OTHER VAL UABLE ARTICLE OR THING FOUND IN HIS POSSESSION OR, UNDER HIS CONTROL, HAS BEEN ACQUIRED OUT OF HIS INCOME WHICH HAS NOT BEEN DISCLOSED SO FAR IN HIS R ETURN OF INCOME TO BE FURNISHED BEFORE THE EXPIRY OF TIME SPECIFIED IN SU B-SECTION (1) OF SECTION 139 AND ALSO SPECIFIES IN THE STATEMENT THE MANNER IN WHICH SUCH INCOME HAS BEEN DERIVED AND PAYS THE TAX, TOGETHER WITH IN TEREST, IF ANY, IN RESPECT OF SUCH INCOME. THE ASSESSEES HUSBAND HAV ING FILED THE LETTER IMMEDIATELY AFTER THE SEARCH, THE SAME MAY VERY WEL L BE TREATED AS STATEMENT AS MADE DURING THE COURSE OF THE SEARCH. IN GULABRAI V GANDHI VS. ASSISTANT COMMISSIONER OF INCOME TAX (2003) 79 TTJ (MUMBAI) 498, IT HAS BEEN HELD THAT ASSESSEE HA VING FULFILLED ALL THE REQUISITE CONDITIONS FOR AVAILING THE BENEFIT OF IM MUNITY UNDER EXPLAINATION 5 TO SECTION 271 (1)(C) BY MAKING A D ISCLOSURE IN HIS STATEMENT UNDER S. 132(4) CLARIFYING THAT THE UNDIS CLOSED INCOME WAS 8 REPRESENTED BY ASSETS IN THE FORM OF UNACCOUNTED CA SH AT RESIDENCE AND OTHER PLACES, UNACCOUNTED EXPENSES/INVESTMENT IN GO LD AND DIAMOND JEWELLERY, ETC. FOUND IN HIS POSSESSION AND SPECIFY ING THE SOURCE OF SUCH INCOME, PENALTY UNDER SECTION 271(1 )(C) COULD NOT BE LEVIED. SIMILARLY, IN CIT V. S.D.V. CHANDRU (2004) 266 IT R 175(MAD), IT WAS HELD THAT PARA (2) IN EXPLANATION 5 DOES NOT MAKE ANY DI STINCTION BETWEEN THE PREVIOUS YEAR WHICH HAS ENDED BEFORE THE DATE OF SE ARCH AND THE PREVIOUS YEAR WHICH IS TO END ON OR AFTER THE DATE OF SEARCH AND THEREFORE WHEN THE ASSESSEE FILED HIS RETURNS FOR EARLIER YEA RS ADMITTING A LARGER INCOME AND ALSO PAID TAX TOGETHER WITH INTEREST AFT ER HIS STATEMENT WAS RECORDED UNDER S. 132(4), HE WAS ENTITLED TO IMMUNI TY UNDER EXPLANATION 5 TO SECTION 271(1)(C) AND PENALTY WAS NOT LEVIABLE . LIKWISE, IN CIT VS. KANHAIYALAL (2008) 214 CTR (RA J) 611, IT WAS HELD THAT IMMUNITY UNDER EXPLANATION 5 TO S. 271(1)(C) IS NOT TAKEN AWAY FOR THE SIMPLE REASON THAT INCOME DISCLOSED BY THE ASSESSEE IN HIS STATEMENT UNDER S. 132(4) FOR A PARTICULAR YEAR WAS SPREAD OV ER IN THE RETURNS OF SEVERAL YEARS. THE ASSESSEE ALSO RELIES ON THE DECISION OF HON'BL E ITAT, MUMBAI BENCH IN ACIT VS. VIP INDUSTRIES LTD. (2009) 122 TTJ (MUM BAI) 289, WHEREIN IT WAS HELD THAT THE ASSESSEE AGREEING TO ADDITION UND ER S. 41(1) ON CREDITORS CLAIM BECOMING BARRED BY LIMITATION, THE RE IS NO CONCEALMENT ATTRACTING PENALTY UNDER S. 271(1)(C). 4.1 THE ASSESSEE, IN HER RETURN OF INCOME FILED UND ER SECTION L53A, HAS DECLARED A SUM OF RS. 21,93,83O/-. THE SAID INCOME WAS REGULAR INCOME DECLARED VOLUNTARILY AND NOT ON THE BASIS OF ANY SE IZED LOOSE PAPER OR DOCUMENT AS IS VERY MUCH EVIDENT FROM THE ASSESSMEN T ORDER. SHE HAS DULY PAID TAX ON THE SAID AMOUNT ON HER OWN VOLITIO N. THE ASSESSEE HAS BEEN ASSESSED ON THE RETURNED-INC OME AS SUCH ACCEPTING THE INCOME AS DECLARED BY HER IN THE RETU RNED SO FILED. HENCE, ON THE FACTS AND CIRCUMSTANCES OF CASE, THERE CANNO T BE SAID TO BE ANY CONCEALMENT OF INCOME OR FURNISHING INACCURATE PART ICULARS OF INCOME IN TERMS OF EXPLANATION 5 TO SECTION 271 (1)(C) OF ACT . 4.2 THE CASE OF THE ASSESSEE IS SQUARELY COVERED BY THE LANDMARK JUDGMENT OF THE SUPREME COURT IN CIT V. SURESH CHANDRA MITTA L (2001) 252 ITR 9 (SC), WHEREIN IT WAS HELD THAT WHERE THE ASSESSEE F ILED REVISED RETURNS SHOWING HIGHER INCOME AFTER SEARCH AND NOTICE FOR R EOPENING OF ASSESSMENT, TO PURCHASE PEACE AND AVOID LITIGATION AND DEPARTMENT SIMPLY RESTED ITS CONCLUSION ON THE ACT OF VOLUNTAR Y SURRENDER DONE BY THE 9 ASSESSEE IN GOOD FAITH, HIGH COURT WAS JUSTIFIED IN HOLDING THAT NO PENALTY COULD BE LEVIED. 4.3 THE CASE OF THE ASSESSEE IS ALSO COVERED BY T HE JUDGMENT OF THE MADHYA PRADESH HIGH COURT IN CIT V. SHYAMLA M. SONI (2005) 144 TAXMAN 666 (MP), IN WHICH IT HAS BEEN HELD PENALTY UNDER SECTI ON 271(1)(C) COULD NOT BE LEVIED IN THE CASE, WHERE THE INCOME RETURNED IN THE REVISED RETURN WAS ACCEPTED AND ASSESSED IN THE HANDS OF THE ASSES SEE THOUGH THE REVISED RETURNS WERE FILED AFTER SEARCH. THE ASSESSEE ALSO RELIES ON THE DECISION OF IT AT, PUNE BENCH IN KANBAY SOFTWARE INDIA (P) LTD. VS. DEPUTY CIT (2009) 122 T TJ (PUNE) 721, WHEREIN IT WAS HELD THAT THE RETURNED INCOME HAVING ACCEPTE D, THERE IS NO CONCEALMENT OF INCOME OR FURNISHING OF INACCURATE P ARTICULARS OF INCOME. THE ASSESSEE HAS ACTED BONAFIDELY WITHOUT ANY INTE NTION TO EVADE TAX. SHE HAS DECLARED THE INCOME IN HER RETURN FILED UND ER SECTION 153C ON HER OWN. THERE WAS NOT DELIBERATE ACT ON HER PART I N CONCEALING THE SAID INCOME. THE PRIMARY BURDEN OF FURNISHING INACCURAT E PARTICULARS OF INCOME IS ON REVENUE AND IT IS ONLY ON DISCHARGE O F PRIMARY BURDEN THAT SECONDARY BURDEN OF PROOF WOULD SHIFT ON THE ASSESS EE. BOTH CONCEALMENT AND FURNISHING INACCURATE PARTICULARS R EFER TO DELIBERATE ACT ON THE PART OF THE ASSESSEE. A MERE OMISSION OR NEG LIGENCE WOULD NOT CONSTITUTE A DELIBERATE ACT OF SUPPRESSION OF FACTS. BY REASON OF MERE CONCEALMENT OR FURNISHING OF INACCURATE PARTICULARS ALONE THE ASSESSEE DOES NOT IPSO FACTO BECOME LIABLE FOR PENALTY UNDER SECTION 271(1 )(C) AS THE CONCEALMENT PENALTY IS NOT AUTOMATIC. IN K.C. BUILDERS VS. ASSTT. CIT (2004) 265 ITR 56 2(SC), IT WAS HELD THAT MERE OMISSION FROM THE RETURN AN ITEM OF RECEIPT DO ES NEITHER AMOUNT TO CONCEALMENT NOR DELIBERATE FURNISHING OF INACCURATE PARTICULARS OF INCOME UNLESS AND UNTIL THERE IS SOME EVIDENCE TO SHOW OR SOME CIRCUMSTANCES FOUND FROM WHICH IT CAN BE GATHERED THAT THE OMISSI ON WAS ATTRIBUTABLE TO AN INTENTION OR DESIRE ON THE PART OF THE ASSESS EE TO HIDE OR CONCEAL THE INCOME SO AS TO AVOID THE IMPOSITION OF TAX THE REON, IT HAS TO BE PROVED THAT THE ASSESSEE HAS CONSCIOUSLY MADE THE C ONCEALMENT OR FURNISHED INACCURATE PARTICULARS OF HIS INCOME. THE ASSESSEE RELIES ON THE APEX COURT JUDGMENT IN T. ASHOK PAI V. CIT (2007) 292 ITR 77 (SC), WHEREIN IT HAS BEEN HELD TH AT CONCEALMENT REFEREES TO A DELIBERATE ACT ON PART OF ASSESSEE; I F EXPLANATION GIVEN BY ASSESSEE WITH REGARD TO MISTAKE COMMITTED BY HIM HA S BEEN TREATED TO BE BONAFIDE AND IT HAS BEEN FOUND AS FACT THAT HE H AS ACTED ON BASIS OF 10 WRONG LEGAL ADVICE. QUESTION OF HIS FAILURE TO DIS CHARGE HIS BURDEN IN TERMS OF EXPLANATION APPENDED TO SECTION 271(1)(C) WOULD NOT ARISE. THE LAW IS WELL SETTLED THAT AN ORDER IMPOSING PEN ALTY IS RESULT OF QUASI- CRIMINAL PROCEEDING AND PENALTY SHOULD NOT ORDINARI LY BE IMPOSED UNLESS THE OBLIGED EITHER ACTED DELIBERATELY IN DEFIANCE O F LAW OR WAS GUILTY OF CONDUCT, CONTUMACIOUS OR DISHONEST, OR ACTED IN CON SCIOUS DISREGARD OF ITS OBLIGATION. NO PENALTY SHOULD BE IMPOSED IF TH E ASSESSEE WAS ACTING IN HONEST AND GENUINE BELIEF IN A PARTICULAR MANNER. IN HINDUSTAN STEEL LTD. VS. STATE OF ORISSA (1972) 83 ITR 26 (SC), THE APEX COURT HAS HELD THAT PENALTY SHOULD NOT BE IMPOSED MERELY BECAUSE IT IS LAWFUL TO DO SO. WHETHER PENALTY SHOULD BE IMPOSED FOR FAILURE TO PE RFORM A STATUTORY OBLIGATION IS MATTER OF DISCRETION OF THE AUTHORITY TO BE EXERCISED JUDICIALLY AND ON A CONSIDERATION OF ALL THE RELEVA NT CIRCUMSTANCES. EVEN IF MINIMUM PENALTY IS PRESCRIBED, THE AUTHORITY COMPET ENT TO IMPOSE THE PENALTY, WHEN THERE IS A TECHNICAL OR VENIAL BREACH OF PROVISIONS OF THE ACT OF WHEN THE BREACH FLOWS FROM A BONAFIDE BELIEF TH AT THE OFFENDER IS NOT LIABLE TO ACT IN THE MANNER PRESCRIBED BY THE STATU TE. 6. IT IS FURTHER SUBMITTED THAT THE RETURN WAS FIL ED FOR THE FIRST TIME AND THE DELAY WAS DUE TO SEARCH ONLY. AS THE NOTICE UNDER S . 153C WAS ALREADY ISSUED THE RETURN WAS NECESSARILY UNDER S. 153C. T HIS HOWEVER DOES NOT MEAN THAT THE ASSESSEE HAS CONCEALED THE PARTICULAR S OF HER INCOME OR FURNISHED INACCURATE PARTICULARS OF INCOME. 7. IT MAY FURTHER BE SUBMITTED THAT THE EXPLANATIO N 5 TO SEC. 271(1)(C) IS NOTAPPLICABLE. THE EXPLANATION 5 IS APPLICABLE IN RESPECT OF THE ADDITIONS IN THE INCOME ON ACCOUNT OF ANY MONEY, BULLION, JEW ELLERY OR OTHER VALUABLE ARTICLE OR THING. IN THE RELEVANT YEAR, THERE WAS NO DECLARATION BY THE ASSESSEE OR THE ADDITION BY THE LEARNED DCIT ON ACCOUNT OF ANY OF T HE ABOVE THINGS. THEREFORE, THE SAID EXPLANATION IS NOT APPLICABLE. THE ASSESSEE HAS NOT CONCEALED THE PARTICULARS OF HIS INCOME OR FURNISHED INACCURATE PARTICULARS HIS INCOME. THEREFORE, THERE IS NO JUSTIFICATION OF LEVY OF PENALTY. IN VIEW OF ABOVE SUBMISSION THE ASSESSEE PRAYS THAT THE PENALTY AS LEVIED MAY PLEASE BE DELETED AND THE APPEAL OF THE ASSESSEE MA Y PLEASE BE ALLOWED. 11 5. LEARNED CIT(A) AFTER CONSIDERING THE SUBMISSIONS O F THE ASSESSEE OBSERVED THAT NO REGULAR RETURN WAS FILED BY THE AS SESSEE BEFORE THE DATE OF SEARCH THOUGH THE RETURN HAD BECOME DUE BEFORE T HE DATE OF SEARCH. HE FURTHER OBSERVED THAT OUT OF INCOME OF RS. 21,93 ,833/-, THE MAJOR INCOME WAS ATTRIBUTABLE AND PERTAINING TO THE SEIZE D DOCUMENTS OR DUE TO ACTION UNDER SECTION 132 OF THE ACT. LEARNED C IT(A) POINTED OUT THAT AN INCOME OF RS.18,47,612/- WAS ATTRIBUTABLE TO SPE CIFIC SEIZED DOCUMENTS, THEREFORE, NO IMMUNITY COULD BE GRANTED UNDER EXPLANATION (5) OF SECTION 271(1)(C) OF THE ACT AS THERE WAS NO DISCLOSURE OF SUCH INCOME UNDER SECTION 132(4) OF THE ACT. LEARNED CI T(A) OBSERVED THAT PRIMA-FACIE, NO VALUABLE ASSET OR ARTICLE WAS FOUND FROM THE POSSESSION OF THE ASSESSEE AND NO DISCLOSURE OF INCOME WAS MADE U NDER SECTION 132(4) OF THE ACT IN AS MUCH AS, THE HUSBAND OF THE ASSESS EE SIMPLY FILED A LETTER STATING THEREIN THAT THE ASSESSEE WOULD LEGITIMATEL Y PAY CORRECT AMOUNT OF TAX AS MUTUALLY DETERMINED ON AGREED BASIS. LEA RNED CIT(A) OBSERVED THAT FURNISHING OF SUCH LETTER COULD NOT BE SAID TO BE A VALID DISCLOSURE UNDER SECTION 132(4) OF THE ACT THAT TOO BY THE HUS BAND OF THE ASSESSEE. HE ALSO OBSERVED THAT EVEN SUBSEQUENT TO SEARCH WHE N SUCH RETURN HAD BEEN FILED, IT WAS NOT THE CASE THAT ASSESSEE HAD V OLUNTARILY DISCLOSED SUCH INCOME WITHOUT ANY DETECTION BY THE DEPARTMENT AND THE REAL FACTS 12 WERE THAT THE ASSESSEE HAD COME FORWARD WITH SUCH I NCOME ONLY WHEN INCRIMINATING DOCUMENTS WERE FOUND AND SEIZED, WHIC H INDICATED EARNING OF INCOME TO SUCH AN EXTENT. THEREFORE, THE INCOME DISCLOSED BY THE ASSESSEE WOULD DEFINITELY REPRESENT CONCEALED INCOM E. RELIANCE WAS PLACED ON THE FOLLOWING CASE-LAWS:- I) NAVNIRMAN CO. VS. CIT (1984) 148 ITR 703 (MP) II) ACIT VS. RAMESHWAR & CO. (1980) 123 ITR 125 (AL LAHABAD) (III) BADRI PRASAD OM PRAKASH VS. CIT (1987) 163 IT R 440 (RAJ) (IV) KALIKUT TRADING CO. VS. CIT (1989) 178 ITR 430 (KERALA) (SLP FILED BY THE ASSESSEE WAS DISMISSED BY HON'BLE APEX COURT) (V) CHARUDUTT H. DANGAT VS. ITO (2010) 126 ITD 483 . (VI) ACIT VS. DEEPAK AGARWAL (2009) 17 DTR (LUCKNOW TRIB.) 220 LEARNED CIT(A) ALSO STATED THAT THE CASES RELIED B Y THE ASSESSEE WERE DISTINGUISHABLE ON FACTS. HE, THEREFORE, HELD THAT THE ASSESSEES CASE WAS DEFINITELY COVERED UNDER THE PROVISIONS OF SECTION 271(1)(C) OF THE ACT IN RESPECT OF UN-DISCLOSED INCOME OF RS. 2 1,93,830/-, WHICH WAS SHOWN BY THE ASSESSEE SUBSEQUENT TO THE SEARCH ACTI ON AND IN CONSEQUENCE TO SEIZED DOCUMENTS, THEREFORE, THE PEN ALTY IMPOSED BY THE 13 ASSESSING OFFICER AMOUNTING TO RS. 6,34,930/- WAS C ONFIRMED. NOW, THE ASSESSEE IS IN APPEAL. 6 . LEARNED COUNSEL FOR THE ASSESSEE REITERATED THE S UBMISSIONS MADE BEFORE THE AUTHORITIES BELOW AND FURTHER SUBMITTED THAT SEARCH IN THIS CASE WAS CONDUCTED AGAINST THE ASSESSEE ON 18/01/20 07 AND THE PROCEEDINGS UNDER SECTION 153A OF THE ACT WERE INIT IATED, WHEREBY THE ASSESSEE FILED A RETURN OF INCOME BY DECLARING A TO TAL INCOME OF RS. 21,93,833/- FOR THE A.Y. 2006-07 ON 30/09/2008. HE FURTHER STATED THAT RETURN OF INCOME FOR THE RELEVANT YEAR COULD HAVE B EEN VERY WELL FILED AFTER 31/03/2008 AS BELATED RETURN UNDER SECTION 13 9(4) OF THE ACT INSTEAD OF FILING THAT BEFORE DUE DATE AS GIVEN IN SECTION 139(1) OF THE ACT. THEREFORE, THERE WAS SOME DELAY ON THE PART O F ASSESSEE IN FILING THE ORIGINAL RETURN, BUT IN THE MEANTIME, SEARCH OP ERATION TOOK PLACE, WHEREBY VARIOUS LOOSE PAPERS AND DOCUMENTS WERE SEI ZED. IT WAS FURTHER STATED THAT THE DELAY OCCURRED AS IT TOOK LOT OF TI ME IN TAKING PHOTOCOPIES AND THEREAFTER PREPARING THE RETURN WITH UTMOST ACC URACY. SINCE, NOTICE UNDER SECTION 153C WAS ISSUED ON 18/01/2008, THE AS SESSEE WAS LEFT WITH NO OPTION EXCEPT TO FILE THE RETURN UNDER SECTION 1 53 OF THE ACT. IT WAS CONTENDED THAT HAD THERE BEEN NO SEARCH UNDER SECTI ON 132 OF THE ACT, 14 THE ASSESSEE WOULD HAVE FILED THE PARTICULARS OF IN COME IN BELATED UNDER SECTION 139(4) OF THE ACT. THEREFORE, LEARNED CIT( A)S CONTENTION THAT NO REGULAR RETURN WAS FILED BEFORE THE DATE OF SEARCH WAS NOT CORRECT. IT WAS, ACCORDINGLY, SUBMITTED THAT THERE WAS NO CONCE ALMENT OF INCOME OR FURNISHING OF INACCURATE PARTICULARS OF INCOME, HEN CE, LEVY OF PENALTY WAS NOT JUSTIFIED. IT WAS CONTENDED THAT HUSBAND OF TH E ASSESSEE HAD FILED A LETTER WITH THE ADI (INVESTIGATION) JODHPUR ON 24/0 1/2007 STATING THAT THE ASSESSEE WAS PREPARED TO PAY TAX ON LEGITIMATE AND CORRECT AMOUNT OF INCOME AS MAY BE MUTUALLY DETERMINED ON AGREED BASI S TO AVOID LITIGATION. IT WAS ALSO STATED THAT THE SAID LETTE R BE TREATED AS STATEMENT UNDER SECTION 132(4) OF THE ACT THEREBY ENTITLING T HE ASSESSEE TO THE BENEFITS OF EXPLANATION (5) TO SECTION 271(1)(C) OF THE ACT. IT WAS FURTHER CONTENDED THAT CLAUSE (2) OF EXPLANATION 5 TO SECT ION 271(1)(C) OF THE ACT PROVIDES THAT AN ASSESSEE SHALL NOT DEEMED TO HAVE BEEN CONCEALED THE PARTICULARS OF HIS INCOME OR FURNISHING INACCURATE PARTICULARS OF SUCH INCOME, IF HE, IN THE COURSE OF SEARCH, MAKES A STA TEMENT UNDER SUB- SECTION (4) OF SECTION 132 THAT ANY MONEY, BULLION, JEWELLERY OR OTHER VALUABLE ARTICLE OR THING FOUND IN HIS POSSESSION O R UNDER HIS CONTROL, HAS BEEN ACQUIRED OUT OF HIS INCOME, WHICH HAS NOT BEEN DISCLOSED SO FAR IN HIS RETURN OF INCOME TO BE FURNISHED BEFORE THE EXP IRY OF TIME AND ALSO 15 SPECIFIES IN THE STATEMENT THE MANNER IN WHICH SUCH INCOME HAS BEEN DERIVED AND PAYS THE TAX, TOGETHER WITH INTEREST (I F ANY) IN RESPECT OF SUCH INCOME. IT WAS EMPHASIZED THAT PRIMA-FACIE NO ASSET OR VALUABLE ARTICLE WAS FOUND IN THE POSSESSION OF ASSESSEE AND THIS FACT HAD ALSO BEEN CONFIRMED BY THE LEARNED CIT(A). THEREFORE, C LAUSE (2) OF EXPLANATION 5 TO SECTION 271(1)(C) WAS NOT APPLICA BLE TO THE ASSESSEES CASE AND FURTHER, THE INCOME DECLARED BY THE ASSESS EE UNDER SECTION 153A OF THE ACT COULD NOT BE CONSTITUTED AS CONCEALED IN COME AS THE SAME WAS NOT DISCLOSED IN ANY RETURN, WHICH WAS DUE UNDER SE CTION 139(1) OF THE ACT. HOWEVER, THE ASSESSEE WAS HAVING OPTION TO DI SCLOSE THE SAME IN THE BELATED RETURN UNDER SECTION 139(4) OF THE ACT IF N O SEARCH WOULD HAVE CONDUCTED. THEREFORE, THERE WAS NO QUESTION OF CON CEALMENT OF INCOME AS WELL AS FURNISHING INACCURATE PARTICULARS OF INC OME AND THE LEVY OF PENALTY UNDER SECTION 271(1)(C) OF THE ACT WAS OUT RIGHTLY NOT JUSTIFIED. IT WAS FURTHER STATED THAT THE ASSESSEE HAD BEEN ASSES SED ON THE RETURN OF INCOME ONLY WHICH SHOWS THAT THE ASSESSEE HAD ACTED FAIRLY WITH NO INTENTION TO CONCEAL THE PARTICULARS OF INCOME. IT WAS POINTED OUT THAT THE ASSESSEE IN HER RETURN OF INCOME FILED UNDER SE CTION 153A OF THE ACT HAD DECLARED A SUM OF RS. 21,93,830/- AND THE SAME WAS VERIFIABLE FROM THE BOOKS OF ACCOUNTS. THE SAID INCOME WAS REGULAR INCOME DECLARED 16 VOLUNTARILY AND JUST BECAUSE THE SAID RETURN WAS FI LED SUBSEQUENT TO SEARCH IT COULD NOT BE DEEMED TO BE ON THE BASIS OF ANY SEIZED LOOSE PAPERS OR DOCUMENTS AND AS THE ASSESSEE HAD DULY PA ID TAX ON THE ENTIRE AMOUNT ON HER OWN VOLITION AND ASSESSMENT WAS FRAME D ON THE SAME INCOME AND THERE WAS NO ADDITIONAL INCOME AS IDENTI FIED BY THE ASSESSING OFFICER. THEREFORE, IT CANNOT BE SAID TO BE ANY CO NCEALMENT OF INCOME OR FURNISHING OF INACCURATE PARTICULARS OF INCOME IN T ERMS OF EXPLANATION 5 TO SECTION 271(1)(C) OF THE ACT. IT WAS ALSO STATED TH AT THE ISSUE INVOLVED IN THIS CASE IS SQUARELY COVERED BY THE DECISION DATED 19/07/2010 OF ITAT JODHPUR BENCH, JODHRPUR IN THE ASSESSEES HUSBAND C ASE I.E. SHRI OM PRAKASH LOHIYA IN ITA NO. 189 & 310/JU/2010 FOR THE A.Y. 2006-07. THEREFORE, THE LEVY OF PENALTY WAS NOT JUSTIFIED. 7. IN HIS RIVAL SUBMISSIONS, LD. D.R. SUPPORTED THE ORDERS PASSED BY THE AUTHORITIES BELOW, BUT COULD NOT CONTROVERT THIS CO NTENTION OF THE LEARNED COUNSEL FOR THE ASSESSEE THAT THE INCOME DECLARED B Y THE ASSESSEE UNDER SECTION 153A OF THE ACT WAS ACCEPTED AND THERE WAS NO CONCEALMENT OF INCOME. 8. WE HAVE CONSIDERED THE SUBMISSIONS OF BOTH THE P ARTIES AND CAREFULLY GONE THROUGH THE MATERIAL AVAILABLE ON RE CORD. IN THE PRESENT CASE, IT IS AN ADMITTED FACT THAT ASSESSEE DID NOT FILE HER RETURN OF INCOME 17 UNDER SECTION 139(1) OF THE ACT BEFORE THE SEARCH T OOK PLACE. HOWEVER, THE TIME WAS AVAILABLE TO FILE THE RETURN BELATEDLY UNDER SECTION 139(4) OF THE ACT, IF NO SEARCH WOULD HAVE CONDUCTED. IN THE INSTANT CASE, NEITHER ANY DOCUMENT PERTAINING TO THE INCOME OF THE ASSESS EE NOR ANY LOOSE PAPER OR DOCUMENT WAS FOUND IN THE POSSESSION OF TH E ASSESSEE, WHATEVER WAS FOUND THAT WAS IN POSSESSION OF HUSBAND OF THE ASSESSEE-SHRI OM PRAKASH LOHIYA, WHO VIDE LETTER DATED 24/01/2007 I. E. AFTER THE SEARCH CONDUCTED ON 18/01/2007, INFORMED THE ADIT (INVESTI GATION), JODHPUR THAT THE ASSESSEE IS PREPARING TO PAY TAX ON LEGITI MATE AND CORRECT AMOUNT OF INCOME AS MAY BE MUTUALLY DETERMINED ON A GREED BASIS TO AVOID LITIGATION AND ALSO REQUESTED THAT THE SAID L ETTER BE TREATED AS STATEMENT UNDER SECTION 132(4) OF THE ACT. THE AS SESSEE DECLARED THE INCOME OF RS. 21,93,833/- IN HER RETURN OF INCOME U NDER SECTION 153A OF THE ACT. THE SAID INCOME WAS ACCEPTED BY THE ASSES SING OFFICER AND NO OTHER INCOME WAS IDENTIFIED PERTAINING TO THE ASSES SEE. IN THE PRESENT CASE, TIME WAS AVAILABLE TO THE ASSESSEE TO FILE RE TURN OF INCOME UNDER SECTION 139(4) OF THE ACT AND NO RETURN WAS FILED U NDER SECTION 139(1) OF THE ACT. THEREFORE, IT CANNOT BE SAID THAT THE ASS ESSEE CONCEALED ANY INCOME OR FURNISHED INACCURATE PARTICULARS OF INCOM E PARTICULARLY WHEN THE INCOME DECLARED BY THE ASSESSEE WAS ACCEPTED BY THE ASSESSING 18 OFFICER. THE CONTENTION OF THE LEARNED COUNSEL FOR THE ASSESSEE IS THAT THE INCOME DECLARED UNDER SECTION 153A FOR A SUM OF RS. 21,93,830/- WAS VERIFIABLE FROM THE BOOKS OF ACCOUNTS AND THE ASSES SEE HAVING OPTION TO DISCLOSE THE SAME IN BELATED RETURN UNDER SECTION 1 39(4) OF THE ACT , IF NO SEARCH WOULD HAVE CONDUCTED WAS NOT REBUTTED. THER EFORE, CONSIDERING THE TOTALITY OF THE FACTS AS DISCUSSED HEREINABOVE, WE ARE OF THE VIEW THAT THE ASSESSEE WAS HAVING THE IMMUNITY IN TERMS OF EX PLANATION 5 TO SECTION 271(1)(C) OF THE ACT AND THE PENALTY UNDER SECTION 271(1)(C) OF THE ACT LEVIED BY THE ASSESSING OFFICER AND SUSTAINED BY TH E LEARNED CIT(A) WAS NOT JUSTIFIED. WE THEREFORE, DELETE THE SAME. 9. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED . (ORDER PRONOUNCED IN THE COURT ON 20 TH SEPTEMBER, 2013). (HARI OM MARATHA) (N.K.SAINI) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 20 TH SEPTEMBER, 2013. VR/- COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE LD.CIT 4. THE CIT(A) 5. THE D.R ASSISTANT REGISTRAR, ITAT, JODHPUR.