RADHA GOVIND LASHKARI, Jaipur V. ACIT, Jaipur

ITA 141/JPR/2016

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 2086 (ITAT-JAIPUR)
• Duration Of Justice: 1 year(s) 3 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-05-2017
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: Not Allotted
• Assessment Year: 2010-2011
• Appeal Filed On: 16-02-2016
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: O P BHATEJA CIT DHK
• Assessee Lawyers: S R SHARMA
• Keywords: Business income; Income from undisclosed sources; Search and seizure; Revised return
• Section: 143(3); 153A; 139(5); 147; 27; 132; 139

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHE S, JAIPUR LQJH FNOK FLAG] U;KF;D LNL; ,OA JH FOE FLAG ;KNO] YS[KK LNL; DS LE{K BEFORE: SMT. DIVA SINGH, JM & SHRI VIKRAM SINGH YAD AV, AM VK;DJ VIHY LA-@ ITA NO.141/JP/16 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2010-11 SH.RADHA GOVIND LASHKARI, 16, SHUBHAM ENCLAVE, JAMNALAL BAJAJ MARG, C- SCHEME, JAIPUR CUKE VS. THE ACIT, CENTRAL CIRCLE-2, JAIPUR LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN NO. AAHPL2851M VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY : SHRI S. R. SHARMA (C.A.) JKTLO DH VKSJ LS@ REVENUE BY : SHRI O.P. BHATEJA (ADDL. CIT ) LQUOKBZ DH RKJH[K@ DATE OF HEARING : 23/ 03/2017 ?KKS'K .KK DH RKJH[K @ DATE OF PRONOUNCEMENT: 24/05/2017 VKNS'K@ ORDER PER SHRI VIKRAM SINGH YADAV, A.M. THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF LD.CIT(A) - 2, JAIPUR DATED 11.01.2016 FOR A.Y. 2010-11 CONFIRM ING THE LEVY OF PENALTY OF RS. 8,27,866/- IMPOSED BY THE AO U/S 271(1)(C) OF T HE I.T. ACT,1961. 2. BRIEFLY THE FACTS OF THE CASE ARE THAT THE ASSESSEE FILED HIS ORIGINAL RETURN OF INCOME U/S 139(1) OF THE ACT ON 30.07.201 0 FOR A.Y. 2010-11 DECLARING TOTAL INCOME OF RS. 1,22,06,480/-. THEREA FTER SEARCH AND SEIZURE OPERATION U/S 132 OF THE ACT WAS CARRIED OUT ON 30. 09.2010 AT THE BUSINESS AND RESIDENTIAL PREMISES OF THE ASSESSEE. DURING TH E COURSE OF SUCH SEARCH AGAINST THE ASSESSEE, THE AUTHORIZED OFFICER CONFRO NTED THE ASSESSEE WITH ITA NO. 141/JP/16 SHRI RADHA GOVIND LASHKARI,JAIPUR VS. ACIT CIRCLE-2,JAIPUR 2 NOTING OF SEIZED DOCUMENT IDENTIFIED AS AS-1PG 5 FO UND IN COURSE OF SEARCH CONDUCTED AGAINST SHRI D.D. MODI ON 24.08.2009 WHER EIN 25,000 GOVIND JI LASHKARI WAS NOTED. IN ITS SWORN STATEMENT RECORDE D ON OATH, ASSESSEE HAS STATED HE DOES NOT RECALL ANY SUCH ENTRY OR ANY SUC H TRANSACTION WHICH HAS BEEN MADE WITH SHRI D.D. MODI. HOWEVER, THE ASSESSE E OFFERED TO TAX RS. 25,00,000/- ON ACCOUNT OF SAID ENTRY FOR THE FINANC IAL YEAR 2009-10 FOR PEACE OF MIND AND AVOID LONG LITIGATION WITH THE DEPARTME NT AND AGREE TO PAY SELF ASSESSMENT TAX THEREON. THEREAFTER, ON 27.12.2010, ASSESSEE REVISED HIS ORIGINAL RETURN OF INCOME WHEREIN ADDITIONAL INCOME OF RS. 25,00,000/- WAS DISCLOSEDUNDER THE HEAD BUSINESS INCOME. THEREAFTE R, THE AO ISSUED NOTICE U/S 153A OF THE ACT ON 7.06.2011 AND IN COMPLIANCE THEREOF, THE ASSESSEE FILED RETURN OF INCOME ON 21.06.2011 DECLARING TOTA L INCOME OF RS. 1,47,06,480/- WHICH INCLUDES THE ADDITIONAL INCOME OF RS. 25,00,000/- DISCLOSED DURING THE SEARCH OPERATION AND ALSO IN THE REVISED RETURN OF INCOME FILED EARLIER ON 27.12.2010. THEREAFTER, TH E AO COMPLETED THE ASSESSMENT U/S 143 READ WITH SECTION 153A OF THE AC T MAKING FURTHER ADDITION OF RS. 1,79,178/- ON ACCOUNT OF ESTIMATED INTEREST EARNED @ 12% FROM DATE OF SEARCH TILL 31.03.2010 AND ALSO INITIATED PENALT Y PROCEEDINGS U/S 271(1)(C) OF THE ACT. 3. LATER ON, IN COURSE OF PENALTY PROCEEDINGS, ASSESSE E FILED HIS EXPLANATION IN RESPONSE TO SHOW CAUSE NOTICE DATED 05.11.2012 WHICH IS REPRODUCED IN PENALTY ORDER. THE LD. A.O. DID NOT F IND THE EXPLANATION OF ASSESSEE LEGALLY TENABLE AND AS PER DISCUSSION MADE BY A.O. IN PENALTY ORDER, THE SAME WERE REJECTED. THE LD. A.O. LEVIED PENALTY OF RS. 8,27,866/- U/S 271(1)(C) OF THE ACT, 1961 ON ADDITIONAL INCOME OF RS. 25,00,000/- AND ALSO ON ADDITION OF RS. 1,79,178/- BEING ESTIMATED INTER EST ON SAID ADDITIONAL INCOME OF RS. 25,00,000/-. THE LD. A.O. HELD THAT T HE CASE OF ASSESSEE FALLS WITHIN THE AMBIT OF EXPLANATION 5A TO SECTION 271(1 )(C) AND STATED THAT THE ITA NO. 141/JP/16 SHRI RADHA GOVIND LASHKARI,JAIPUR VS. ACIT CIRCLE-2,JAIPUR 3 EXPLANATION 5A LAYS DOWN ADDITIONAL CONDITIONS, WHI CH IF MET BY THE ASSESSEE, THEN THE DEEMING PROVISIONS OF SECTION 271(1)(C) CO MES INTO PLAY. ACCORDING TO THIS EXPLANATION, IF THE ASSESSEE IS FOUND TO BE OWNER OF ANY INCOME BASED ON ANY ENTRY IN ANY BOOKS OF ACCOUNT OR OTHER DOCUM ENTS OR TRANSACTIONS AND HE CLAIMS THAT SUCH ENTRY IN THE BOOKS OF ACCOUNT O R OTHER DOCUMENTS OR TRANSACTIONS REPRESENTS HIS INCOME (WHOLLY OR IN PA RT) FOR ANY PREVIOUS YEAR; WHERE THE RETURN OF INCOME FOR SUCH PREVIOUS YEAR H AS BEEN FURNISHED BEFORE THE SAID DATE BUT SUCH INCOME HAS NOT BEEN DECLARED THEREIN, THEN SUCH INCOME IS DEEMED TO BE THE INCOME WHICH THE ASSESSE E HAS CONCEALED. AS PER THE AO, THE CASE OF THE ASSESSEE FALSE CLEARLY WITH IN THE AMBIT OF EXPLANATION 5A BECAUSE THE ASSESSEE SURRENDERED INCOME DURING THE COURSE OF SEARCH ON 30.05.2010 IN WHICH AN AMOUNT OF RS. 25 LAKHS WAS S URRENDERED AND THE RETURN OF INCOME DISCLOSING SUCH INCOME WAS FILED O N 27.12.2010 ( REVISED RETURN)/21.06.2011 (RETURN U/S 153A AFTER THE DUE D ATE OF FILING RETURN OF INCOME U/S 139(1) HAD ELAPSED ON 31.07.2010. THUS, IT IS A FACT THAT THE ASSESSEE DISCLOSED AN AMOUNT OF RS. 25 LAKHS IN THE RETURN FILED ON 27.12.2010, WHICH IS A RETURN FILED AFTER THE DATE OF SEARCH. THE SEARCH HAS BEEN INITIATED AFTER 1 ST JUNE, 2007. INCOME OF RS. 25 LAKHS PERTAINS TO PRE VIOUS YEAR 2009-10, WHICH HAS BEEN ENDED BEFORE THE DATE OF SEARCH. THE RETURN OF INCOME FOR THAT PREVIOUS YEAR HAS BEEN FURNISHED BE FORE 30.09.2010 BUT INCOME OF RS. 25 LAKHS HAS NOT BEEN DECLARED IN THA T RETURN THEN, NOTWITHSTANDING THAT INCOME OF RS. 25 LAKHS IS DECL ARED BY HIM IN ANY RETURN OF INCOME FURNISHED ON OR AFTER THE DATE OF SEARCH, THE ASSESSEE, FOR THE PURPOSE OF IMPOSITION OF PENALTY UNDER CLAUSE (C) O F THIS SECTION, IS HEREBY DEEMED TO HAVE CONCEALED THE PARTICULARS OF HIS INC OME OR FURNISHED INACCURATE PARTICULARS OF SUCH INCOME. BECAUSE ALL THE CONDITIONS LAID DOWN IN EXPLANATION 5A HAVE BEEN MET AND DEEMING PROVISIONS OF SECTION 271(1)(C) ARE CLEARLY APPLICABLE TO THE ASSESSEE. ITA NO. 141/JP/16 SHRI RADHA GOVIND LASHKARI,JAIPUR VS. ACIT CIRCLE-2,JAIPUR 4 IN VIEW OF ABOVE, IT WAS HELD BY THE AO THAT IT IS ESTABLISHED BEYOND DOUBT THAT ASSESSEE HAS FURNISHED INACCURATE AND/OR CONCE ALED PARTICULARS OF ITS INCOME TO THE EXTENT OF SURRENDER AND INTEREST EARN ED THEREON FOR RS. 26,79,178/- AND LEVIED PENALTY @ 100% OF TAX SOUGHT TO BE EVADED I.E. RS. 8,27,866/-U/S 271(1)(C) OF THE ACT. 4. BEING AGGRIEVED, THE ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE LD CIT (A) AGAINST THE SAID PENALTY ORDER AND FILED WR ITTEN SUBMISSION REPRODUCED IN APPEAL ORDER OF LD CIT(A). THE LD. CIT(A) RELYIN G ON PROVISIONS OF SECTION 153A, EXPL. 5A TO SECTION 271(1)(C) AND ON JUDGMEN T OF DELHI HIGH COURT IN CASE OF CIT-6 VS. USHA INTERNATIONAL LTD. 254 CTR 5 09 AND DECISION OF COORDINATE BENCH IN CASE OF RAJNISH VOHRA VS DCIT I TA NO. 516/CHD/2012 UPHELD THE LEVY OF PENALTY. THE OPERATIVE PART OF HIS ORDER READS AS UNDER:- 3.2.3. THE PROVISIONS OF SECTION 153A, 153B AND 15 3C OF THE ACT, ARE A COMPLETE CODE FOR ASSESSMENT WHEREIN SEARCH AND SEI ZURE HAS BEEN INITIATED AFTER MAY 31, 2003. THUS, THERE IS COMPLE TE DETACHMENT OF ASSESSMENT PROCEEDINGS UNDER SECTION 143 OR 147 FRO M SEARCH PROCEEDING UNDER SECTION 153A OF THE ACT. THEREFORE , ALL ASSESSMENT PROCEEDING IN THIS CASE WILL BE ABATED FROM THE DAT E OF SEARCH I.E., 30.09.2010 AND THOUGH ASSESSEE HAS REVISED HIS ORIG INAL RETURN U/S 139(4) OF THE ACT BY OFFERING ADDITION INCOME OF RS . 25 LAKHS TO THE TOTAL INCOME OFFERED EARLIER. IN THE COMPUTATION SH EET, ASSESSEE HAS MENTIONED RS. 25,00,000/- AS BUSINESS INCOME OFFER ED DURING SEARCH. THIS VOLUNTARY SURRENDER IS NOT SUO MOTO ACT BUT BE CAUSE OF SEARCH ACTION CONDUCTED U/S 132 OF THE ACT, ASSESSEE OFFER ED ADDITIONAL INCOME OF RS. 25,00,000/- FOR THE A.Y. 2010-11. 3.2.4 THEREFORE, AFTER THE CONDUCT OF SEARCH ON 30 .09.2010, THERE IS NO NEED FOR FILING OF BELATED RETURN/REVISED RETURN U/S 139(4) OF THE ACT BY OFFERING ADDITIONAL UNDISCLOSED INCOME OF RS. 25 LAKHS WHICH IS NOT RECORDED IN HIS REGULAR BOOKS OF ACCOUNTS, ACCORDIN GLY ASSESSEE WILL NOT BE ENTITLED FOR IMMUNITY PRESCRIBED IN SEC. 139(5) OF THE ACT. THEREFORE, THE SAID RETURN OF INCOME FILED ON 27.12.2010 BECOM ES NON EST. IN VIEW OF THESE FACTS, AO HAS CORRECTLY NOT TAKEN THIS REV ISED RETURN FILED ON ITA NO. 141/JP/16 SHRI RADHA GOVIND LASHKARI,JAIPUR VS. ACIT CIRCLE-2,JAIPUR 5 27.12.2010 INTO COGNIZANCE. HOWEVER, ON BEING CORNE RED AND ALSO CONTEMPLATING FUTURE ACTION OF PENALTY U/S 271(1)( C) OF THE ACT BY THE DEPT, ASSESSEE HAS TRIED TO TAKE SHELTER UNDER TH E GARB OF SEC 139(4) OF THE ACT SO AS TO GET IMMUNITY PRESCRIBED U/S 139 (5) OF THE ACT. BUT THIS ACT OF ASSESSEE IS OF NO USE BECAUSE SEARCH OP ERATION WAS CONDUCTED AGAINST THE ASSESSEE THEREFORE, IN VIEW O F THIS, ALL PROCEEDINGS OF ASSESSMENT/REASSESSMENT SHALL ABATE. 3.2.6 IT IS A FACT THAT THE SATISFACTION FOR CONCEA LMENT OF PARTICULARS OF INCOME OR FURNISHING OF INACCURATE PARTICULARS OF I NCOME HAS TO COME FROM THE ASSESSMENT ORDER PASSED AS A CONSEQUENCE O F THE RETURN FILED UNDER SECTION 153A OF THE ACT. IN THIS CASE, THERE IS NO VARIATION TO THE RETURNED INCOME FILED U/S 153A OF THE ACT EXCEPT CO MPUTATION OF INTEREST RS. 1,79,178/- @ 12% FOR THE INTERVENING P ERIOD BETWEEN 24.08.2009 (DT OF SEARCH ON D.D. MODI) TILL 31.03.2 010 I.E., FOR 218 DAYS. I DO NOT FIND ANY INFIRMITY IN THIS AS THIS I S FAIR ESTIMATION FOR A LOAN ADVANCED @ 12% PA. MORE SO ASSESSEE HAS NOT PR EFERRED ANY APPEAL AGAINST THE ADDITION MADE IN THIS ASSESSMENT ORDER PASSED U/S 153A R.W.S. 143(3) OF THE ACT. IN VIEW OF THESE FAC TS, AO OBSERVED THAT ASSESSEES CASE WILL BE SQUARELY FALL UNDER EXPLANA TION 5A TO THE PROVISION OF SEC 271(1)(C) OF THE ACT. FURTHER, ASS ESSEE HAS ALSO FAILED TO EXPLAIN & SUBSTANTIATE PARTICULARS OF UNDISCLOSE D LOAN ADVANCED OF RS. 25 LAKHS. THEREFORE, FACTS OF CASE LAWS RELIED UPON BY THE ASSESSEE, IS OF NO USE. 3.2.7 NOW LET US EXAMINE EXPLANATION 5A TO SEC 271( 1)(C) OF THE ACT. EXPLANATION 5A.- WHERE, IN THE COURSE OF A SEARCH I NITIATED UNDER SECTION 132 ON OR AFTER THE 1 ST DAY OF JUNE, 2007, THE ASSESSEE IS FOUND TO BE THE OWNER OF: (I) ANY MONEY, BULLION, JEWELLERY OR OTHER VALUABLE ARTICLE OR THING (HEREAFTER IN THIS EXPLANATION REFERRED TO AS ASSET S) AND THE ASSESSEE CLAIMS THAT SUCH ASSETS HAVE BEEN ACQUIRED BY HIM B Y UTILISING (WHOLLY OR IN PART) HIS INCOME FOR ANY PREVIOUS YEAR; OR (II) ANY INCOME BASED ON ANY ENTRY IN ANY BOOKS OF ACCOUNT OR OTHER DOCUMENTS OR TRANSACTIONS AND HE CLAIMS THAT SUCH E NTRY IN THE BOOKS OF ACCOUNT OR OTHER DOCUMENTS OR TRANSACTIONS REPRESEN TS HIS INCOME (WHOLLY OR IN PART) FOR ANY PREVIOUS YEAR, WHICH HAS ENDED BEFORE THE DATE OF SEARCH, AND ITA NO. 141/JP/16 SHRI RADHA GOVIND LASHKARI,JAIPUR VS. ACIT CIRCLE-2,JAIPUR 6 (A) WHERE THE RETURN OF INCOME FOR SUCH PREVIOUS YEAR H AS BEEN FURNISHED BEFORE THE SAID DATE BUT SUCH INCOME HAS NOT BEEN DECLARED THEREIN; OR (B) THE DUE DATE FOR FILING THE RETURN OF INCOME FO R SUCH PREVIOUS YEAR HAS EXPIRED BUT THE ASSESSEE HAS NOT FILED THE RETU RN, THUS UNDER THE AMENDED PROVISIONS OF THE INCOME-TAX ACT, 1961 WITH RESPECT TO THE PENALTY IN CASES OF SEARCH AS APPLIC ABLE TODAY, THERE IS NO IMMUNITY AS SUCH, EVEN IF THE FULL DISCLOSURE OF SU CH INCOME IS MADE IN THE STATEMENT U/S 132(4) OF THE ACT AND ALSO TAXES HAS BEEN PAID THEREON. THE LEGISLATIVE LANGUAGE OF EXPLANATION 5A TO SECTION 271(1)(C) OF THE ACT, IS SUCH THAT IT PROVIDES NO ESCAPE ROUT E FROM LEVY OF PENALTY. THIS PROVISION IS DIRECTLY APPLICABLE TO THIS CASE WHERE THE ASSESSEE IS DULY DISCLOSING THE ADDITIONAL UNACCOUNTED INCOME A S ADMITTED IN STATEMENT U/S 132(4) OF THE ACT BY PAYING APPROPRIA TE TAX IN THE RETURN OF INCOME FILED U/S 153A OF THE ACT AND THE ASSESSM ENT U/S 153A R.W.S. 143(3) OF THE ACT, IS MADE WITHOUT ANY DEVIA TION FROM THE RETURNED INCOME EXCEPT INTEREST (EARNED @ 12% ON RS . 25 LAKHS MONEY ADVANCE) COMPUTED FOR THE INTERVENING PERIOD OF 228 DAYS. FACTS OF THIS CASE ARE THAT SINCE THE ASSESSEE OFFE RED THE SAID UNDISCLOSED INCOME IN THE REVISED RETURN AFTER THE SEARCH OPERATION I.E. ON BEING CORNERED BY THE DEPARTMENT, IT WAS A DELIB ERATE ACT OF CONCEALMENT OF INCOME AND ASSESSEE DEEMED TO HAVE C ONCEALED THE PARTICULARS OF INCOME FOR THE YEAR UNDER CONSIDERAT ION, AND IT SPOKE OF VOLUMES OF CONTRIVANCE BY THE ASSESSEE WITH APPAREN T ELEMENT OF MENS REA. THEREAFTER, WHERE IN PURSUANCE OF SEARCH OPER ATION, ASSESSEE HAS FILED HIS REVISED RETURN DECLARING HIGHER TAXABLE INCOME (RS. 25 LAKHS AS ADDITIONAL UNDISCLOSED INCOME), SINCE IT IS UNDI SPUTED THAT THE TIME OF FILING ORIGINAL RETURN ASSESSEE WAS AWARE OF CONCEA LMENT, IT HAS TO BE CONCLUDED THAT THERE WAS NO COMPLIANCE TO SEC. 139( 5) OF THE ACT AND THEREFORE, REVISED RETURN BEING FILED NON EST, AS C ONDUCT OF ASSESSEE CANNOT BE SAID TO BE BONAFIDE, THEREFORE, PENALTY O RDER SO PASSED HAS TO BE SUSTAINED . ITA NO. 141/JP/16 SHRI RADHA GOVIND LASHKARI,JAIPUR VS. ACIT CIRCLE-2,JAIPUR 7 ON SIMILAR FACTS, HONBLE GUJARAT HIGH COURT HAS SU STAINED PENALTY ORDER PASSED U/S 271 (1) (C) OF THE ACT IN CASE OF M/S SN ITA TRANSPORT (PVT.) LTD VS ACIT (2014) REPORTED IN 42 TAXMANN.COM 54/22 1 TAXMAN 21 (MAG) (GUJ) AND BHARATKUMAR G. RAJNI VS. DCIT (20 13) REPORTED IN 40 TAXMANN.COM 344 (GUJ). THEREFORE, IN VIEW OF FACTS AND CIRCUMSTANCES OF TH E CASE AS DISCUSSED ABOVE, CONCEALMENT OF INCOME CAME TO BE ESTABLISHED AND PENALTY U/S 271(1)(C) OF THE ACT HAS BEEN RIGHTLY LEVIED UPON T HE ASSESSEE. ACCORDINGLY AOS ACTION IS SUSTAINED. ASSESSEES AP PEAL IN GR. NO. 1 FAILS. 5. DURING THE COURSE OF HEARING, THE LD AR OF THE ASSE SSEE HAS SUBMITTED THAT IN RESPECT TO INCOME OF RS. 25.00 LACS INCLUDE D IN REVISED RETURN/RETURN FILED U/S 153A BY ASSESSEE, IN COURSE OF SEARCH IN CASE OF ASSESSEE, HE WAS CONFRONTED WITH A PAPER MARKET ANN. AS-1PAGE-5 ALLE GED TO HAVE BEEN SEIZED IN COURSE OF SEARCH FROM SHRI D.D. MODI ALLEGING TH AT AN ADVANCE OF RS. 25.00 LAC WAS MADE BY ASSESSEE TO HIM. THE PAPER CONTAINE D NO DATE ETC AND SIMPLY MENTION 25000 GOVINDJI LASHKARI. THE ASS ESSEE STATED THAT IT IS TRUE I AM KNOWN IN MARKET AS GOVIND LASHKARI AND IT IS A LSO TRUE THAT D.D. MODI IS MY MAIN FINANCE BROKER BUT I DID NOT REMEMBER ANY SUCH ENTRY AND NEITHER REMEMBER THAT I DID ANY CASH TRANSACTION WITH SHRI MODI. EVEN, HOWEVER I FOR MY PEACE OF MIND AND TO SAVE ME FROM LONG DEPARTMEN TAL PROCEDURE/LITIGATION I SURRENDER THIS AS MY ADDITIONAL BUSINESS INCOME F OR THE F.Y. 2009-10 FOR TAX AND WILL DEPOSIT SELF ASSESSMENT TAX THEREON. THE A SSESSEE THEREAFTER FILED REVISED RETURN WITHIN TIME ALLOWED U/S 139(5) OF I. T. ACT, 1961 DISCLOSING SAID AMOUNT OF RS. 25.00 LAC AS ITS INCOME FROM BUSINESS AND PAID TAX. IN RETURN FILED U/S 153A SAME INCOME WAS DISCLOSED. THE LD. A .O. THUS HAVE NO COGENT EVIDENCE OF SUCH ADVANCE AND ALSO MADE NO ENQUIRY B UT ADDITION GOT MADE ON ACCOUNT OF VOLUNTARILY DISCLOSURE OF SAID BUSINESS INCOME OF RS. 25.00 LAC AS STATED ABOVE. THUS THE ADDITION IS SOLELY ON VOLUNT ARY ADMISSION OF ASSESSEE IN GOOD FAITH TO BUY PEACE AND AVOID LITIGATION. IN CASE OF ASSESSEE NO ITA NO. 141/JP/16 SHRI RADHA GOVIND LASHKARI,JAIPUR VS. ACIT CIRCLE-2,JAIPUR 8 MATERIAL HAS BEEN FOUND CORROBORATING THE SAID ADVA NCE. IN CIT VS. SURESH CHAND MITTAL (2011)251 ITR 9 (SC), THE HONBLE SUPR EME COURT HELD THAT WHERE THE ASSESSEE FILED RETURNS SHOWING HIGHER INC OME AFTER SEARCH TO PURCHASE PEACE AND AVOID LITIGATION AND DEPARTMENT SIMPLY RESTED ITS CONCLUSION ON THE ACT OF VOLUNTARY SURRENDER BY THE ASSESSEE IN GOOD FAITH, HIGH COURT WAS JUSTIFIED IN HOLDING THAT NO PENALTY COULD BE LEVIED U/S 271(1)(C). 5.1 IT WAS FURTHER SUBMITTED THAT SECTION 153A DEAL S WITH THE PROVISION OF FRAMING THE ASSESSMENT IN THE CASE OF SEARCH AND SE IZURE ACTION MADE UNDER THE ACT. THE SECTION STARTS WITH A NON OBSTANTE CLA USE RELATING TO NORMAL ASSESSMENT PROCEDURE COVERED BY SECTION 139, 147, 1 48,149, 151 AND 153 IN RESPECT OF SEARCH MADE AFTER MAY 31, 2003. THE SECT ION, SO EXCLUDED RELATE TO FILING OF RETURNS, ASSESSMENT AND REASSESSMENT PROC EEDINGS. THE PROVISION OF SECTION 153A, 153B AND 153C ARE A COMPLETE CODE FOR ASSESSMENT WHEREIN SEARCH AND SEIZURE HAS BEEN INIT IATED AFTER MAY 31, 2003. THUS, THERE IS COMPLETE DETACHMENT OF ASSESSMENT PR OCEEDINGS UNDER SECTION 143 OR 147 FROM SEARCH PROCEEDING UNDER SECTION 153 A OF THE ACT. FOR THE PURPOSE OF IMPOSITION OF PENALTY UNDER SECT ION 271 (1)(C) RESULTING AS A RESULT OF SEARCH ASSESSMENT MADE UNDER SECTION 15 3A, THE ORIGINAL RETURN OF INCOME FILED UNDER SECTION 139 CANNOT BE CONSIDERED . THE AO HAS TO FRAME AN ASSESSMENT ON THE BASIS OF THE RETURN FILED UNDER S ECTION 153A. 5.2 IT WAS FURTHER SUBMITTED THAT THE PENALTY UNDER SECTION 271(1)(C) IS IMPOSSIBLE WHEN THERE IS VARIATION BETWEEN THE ASSE SSED AND RETURNED INCOME. IF THERE IS NO VARIATION, THERE WILL BE NO CONCEALMENT OR FURNISHING INACCURATE PARTICULARS OF INCOME. WHEN THERE IS NO CONCEALMENT OR FURNISHING ITA NO. 141/JP/16 SHRI RADHA GOVIND LASHKARI,JAIPUR VS. ACIT CIRCLE-2,JAIPUR 9 OF INACCURATE PARTICULAR OF INCOME THE QUESTION OF LEVY OF PENALTY UNDER SECTION 271(1)(C) OF THE ACT WILL NOT ARISE. WHERE THE RETURNED INCOME FILED UNDER SECTION 153A IS ACCEPTED BY THE AO, THERE WIL L BE NO CONCEALMENT OF INCOME OR FURNISHING OF INACCURATE PARTICULARS OF I NCOME AND CONSEQUENTLY PENALTY UNDER SECTION 271(1)(C) CANNOT BE IMPOSED. THE SATISFACTION FOR CONCEALMENT OF PARTICULARS OF INCOME OR FURNISHING OF INACCURATE PARTICULARS OF INCOME HAS TO COME FROM T HE ASSESSMENT ORDER PASSED AS A CONSEQUENCE OF THE RETURN FILED UNDER S ECTION 153A. SECTION 271(1)(C) DOES NOT AUTHORIZE THE AO TO COMP ARE THE RETURN FILED UNDER SECTION 139(1) AND UNDER SECTION 153A TO CONCLUDE T HAT THE ASSESSEE HAD FURNISHED FALSE PARTICULARS OF INCOME. WHEN AN ASS ESSMENT UNDER SECTION 143 (3) R.W.S. 153A IS MADE, THE FAULT HAD TO BE SEEN W ITH REFERENCE TO THE RETURN FILED UNDER SECTION 153A. NO PENALTY COULD BE IMPOS ED UNDER SECTION 271 (1) (C) OF THE ACT AS THERE WAS NO VARIATION IN THE INC OME RETURNED IN RESPONSE TO NOTICE UNDER SECTION 153A VIS-A VIS THE ASSESSMENT PASSED UNDER SECTION 143 (3) R.W.S. 153A OF THE ACT. THE ADDITION OF RS. 25.00 LAC MADE BY ASSESSEE IN R EVISED RETURN/RETURN U/S 153A WAS NOT BASED ON ANY INCRIMINATING MATERIAL FO UND IN CASE OF SEARCH IN HIS CASE BUT WAS INCLUDED VOLUNTARILY TO AVOID LITI GATION. THE ADDITION FOR ALLEGED INTEREST ON ALLEGED ADVANCE WAS ONLY ESTIMA TED WHICH WAS ALSO NOT BASED ON ANY INCRIMINATING MATERIAL SEIZED IN COURS E OF SEARCH. 5.3 IN SUPPORT, THE LD AR RELIED ON THE FOLLOWING JUDICIAL PRONOUNCEMENTS: A) DCIT V. PURTI SAKHAR KARKHANA [2013] 35 TAXMANN. COM 594 (NAGPUR-TRIB) HELD AS UNDER: ITA NO. 141/JP/16 SHRI RADHA GOVIND LASHKARI,JAIPUR VS. ACIT CIRCLE-2,JAIPUR 10 SEARCH ASSESSMENTS MADE UNDER SECTION 153A CANNOT BE TREATED AS CONTINUANCE OF NORMAL ASSESSMENT PROCEEDINGS WHETHE R ABATED OR NOT AND, THEREFORE, IT WILL NOT BE JUSTIFIED TO REFER TO RET URNED INCOME UNDER SECTION 139 FOR PURPOSE OF IMPOSITION OF PENALTY UNDER SECTION 271 (1). WHERE RETURNED INCOME FILED UNDER SECTION 153A IS ACCEPTED BY ASSESSING OFFICER AND THERE IS NO VARIATION IS ASSESSED INCOM E AND RETURNED INCOME, PENALTY UNDER SECTION 271(1)(C) CANNOT BE IMPOSED. B) THE HONBLE HIGH COURT OF MADHYA PRADESH IN THE CASE OF CIT VS. SHYAMLAL M. SONI [2005] 276 ITR 156 (MP) HELD LAID DOWN AS UNDER: THAT NO PENALTY UNDER SECTION 271(1)(C) COULD BE L EVIED IN CASE, WHERE INCOME RETURNED IN REVISED RETURNS WAS ACCEPTED AND ASSESSED IN HANDS OF ASSESSEE EVEN THOUGH REVISED RETURNED WERE FILED AFTER SEARCH AND SUBSEQUENT TO INQUIRIES MADE BY DEPARTMENT DURING C OURSE OF ASSESSMENT PROCEEDINGS. C) THE HONBLE SUPREME COURT IN CASE OF CIT VS. SUR ESH CHAND MITTAL (2001) 251 ITR 9 (SC) HELD THAT WHERE ASSESSEE FILED REVIS ED RETURNS SHOWING HIGHER INCOME AFTER SEARCH TO PURCHASE PEACE AND TO AVOID LITIGATION PENALTY CANNOT BE LEVIED UNDER SECTION 271(1)(C) AS BURDEN OF PROV ING CONCEALMENT HAS NOT BEEN DISCHARGED. IN ABOVE REFERRED CASE, IN PENALTY PROCEEDINGS UNDE R SECTION 271, THE ASSESSEE CLAIMED THAT HE HAD OFFERED ADDITIONAL INC OME TO BUY PEACE OF MIND AND AVOID LITIGATION. PENALTY ORDERS WERE PASSED AN D THE COMMISSIONER (APPEALS) CONFIRMED THE ORDERS. BUT THE APPELLATE T RIBUNAL HELD THAT THE DEPARTMENT HAD NOT DISCHARGED ITS BURDEN OF PROVING CONCEALMENT AND HAD ITA NO. 141/JP/16 SHRI RADHA GOVIND LASHKARI,JAIPUR VS. ACIT CIRCLE-2,JAIPUR 11 SIMPLY RESTED ITS CONCLUSION ON THE ACT OF VOLUNTAR Y SURRENDER DONE BY THE ASSESSEE IN GOOD FAITH, AND THAT PENALTY COULD NOT BE LEVIED. ON A REFERENCE, THE MP HIGH COURT HELD THAT NO PENALTY COULD BE LEV IED FOR CONCEALMENT (SEE [200] 241ITR 124 (MP). THE DEPARTMENT PREFERRED APP EALS TO THE SUPREME COURT. THE SUPREME COURT DISMISSED THE APPEALS HOLD ING THAT NO INTERFERENCE WITH THE ORDER OF THE HIGH COURT WAS CALLED FOR (CI T VS. SURESH CHAND MITTAL ( 2001) 251 ITR 9 (SC). D) THE HONBLE RAJKOT TRIBUNAL IN THE CASE OF SHABB IR ALLAUDDIN LATIWALA VS. DCIT [2011] 16 TAXMAN.COM 177 (RAJKOT) HELD AS UNDER: WHEN THERE WAS NOTHING PLACED ON RECORD WHICH MIGH T EVEN REMOTELY INDICATE ABOUT SPECIFIC NATURE OF ADDITIONAL INCOME OFFERED BY ASSESSES WHILE FURNISHING RETURNS IN RESPONSE TO A NOTICE ISSUED U NDER SECTION 153A, AND THERE WAS NO DIRECT OR INDIRECT LINKAGE BROUGHT ON RECORD WITH REFERENCE TO ANY OF SPECIFIC SEIZED MATERIALS SO AS TO ESTABLISH CHARGE FOR WHICH PENALTY HAD BEEN LEVIED THEN PENALTY ORDER SHOULD BE SET AS IDE. 5.4 IN RESPECT OF ESTIMATED ADDITION OF RS. 197,178 /- ON SAID ALLEGED AMOUNT OF RS. 25.00 LACS, IT WAS SUBMITTED THAT THE ADDITION IS NOT BASED ON ANY INCRIMINATE DOCUMENT/PAPER FOUND IN COURSE OF S EARCH. THE ASSESSEE HAS NOT ADMITTED OR OWNED THE ALLEGED ADVANCE OF RS. 25 .00 LAKH TO SHRI D.D. MODI NOR ADMITTED RECEIPT OF ANY INTEREST THEREON. THUS THE ADDITION IS MERELY ON ESTIMATE AS PER OWN PERCEPTION OF LD. A.O. AND T HIS IS NEITHER A CONCEALMENT OF INCOME OR FURNISHING OF INACCURATE P ARTICULARS WITHIN THE MEANING OF SECTION 271(1)(C) OR ANY EXPLANATION THE REUNDER AS THERE WAS NO DIRECT OR INDIRECT LINKAGE BROUGHT OR RECORD WITH REFERENCE TO ANY SPECIFIC SEIZED MATERIAL FROM ASSESSEE AND SO LD. A.O. HAS N OT ESTABLISHED ANY CHARGE FOR WHICH PENALTY UNDER SECTION 271(1)(C) COULD BE LEVIED ON ASSESSEE. IN CIT ITA NO. 141/JP/16 SHRI RADHA GOVIND LASHKARI,JAIPUR VS. ACIT CIRCLE-2,JAIPUR 12 VS. DHILOON RICE MILLS (2002) 256 ITR 447 (PUNJ) IT WAS HELD THAT WHERE ADDITIONS WERE MADE ON ESTIMATE BASIS AND DEPARTMEN T FAILED TO PROVE CONCEALMENT OF INCOME PENALTY UNDER SECTION 271(1)( C) CANNOT BE LEVIED. IN CIT VS. SAS PHARMACEUTICALS (2011) 335 ITR 259 (DEL ) HELD THAT WHERE ADDITION ON SURMISES, CONJECTURES AND POSSIBILITIES ON ESTIMATE THERE COULD BE NO PENALTY UNDER SECTION 271(1)(C). 5.5 IT WAS FURTHER SUBMITTED THAT THE LD. CIT (A) R ELIED ON JUDGMENT IN CASE OF CIT-6 VS. USHA INTERNATIONAL LTD. 254 CTR 509 WH ICH IS DISTINGUISHABLE ON FACTS. IN THAT CASE IN SURVEY DISCREPANCY IN CASH, STOCK & RENOVATION DETAILS FOUND WHICH WERE FOUND WHICH WAS INCRIMINATING MATE RIAL WHILE IN CASE OF ASSESSMENT IN SEARCH NO MATERIAL WAS FOUND REGARDIN G ADVANCE OF RS. 25.00 LAC TO D.D. MODI OR EARNING OF ANY INTEREST THEREON . THE OTHER CASES CITED BY LD. CIT (A) IS CONCLUDING PART OF ORDER ALSO DISTIN GUISHABLE ON FACTS AS THEREIN ALSO SOME INCRIMINATING DOCUMENT/MATERIAL WAS FOUND WITH ASSESSEE IN SEARCH/SURVEY PROCEEDINGS WHICH IS NOT THE CASE OF ASSESSEE. THUS APPEAL ORDER OF CIT(A) IS NOT IN ACCORDANCE WITH LAW. IT WAS FURTHER SUBMITTED THAT THE LD. CIT (A) IN AP PEAL ORDER NOT APPRECIATED FACTS OF CASE IN CORRECT PERSPECTIVE. THE JUDGMENT RELIED BY LD. CIT (A) IS DISTINGUISHABLE ON FACTS AND DO NOT LAY DOWN THAT I N SUCH CASE PENALTY IS CERTAINLY LEVIABLE. THE JUDGMENT OF ITAT RELIED ON BY CIT (A) IS ALSO ON DIFFERENT FACTS FOR INVOKING EXPLANATION 5A ON ACCO UNT OF DISCLOSURE OF UNDISCLOSED INCOME ON FINDING OF SOME INCRIMINATING MATERIAL IN COURSE OF SEARCH OF ASSESSEE HIMSELF. IN THE SEARCH OF ASSESS EE NO INCRIMINATING MATERIAL WAS FOUND IN RESPECT OF SAID ALLEGED ADVAN CE OF RS. 25.00 LACS BUT SURRENDER WAS MADE ON ACCOUNT OF SOME DOCUMENTS ALL EGED TO HAVE BEEN SEIZED FROM THIRD PARTY SIMPLY TO BUY PEACE AND AVO ID LITIGATION. THUS THE SAID JUDGMENT CANNOT BE APPLIED IN CASE OF ASSESSEE. THE ORIGINAL RETURN WAS FILED ITA NO. 141/JP/16 SHRI RADHA GOVIND LASHKARI,JAIPUR VS. ACIT CIRCLE-2,JAIPUR 13 IN TIME AND REVISED RETURN WAS FILED WITHIN TIME AL LOWED U/S 139(5) SO LD. CIT (A) IS NOT CORRECT IN LAW TO HOLD REVISED RETURN AS NON-EST. 5.6 IT WAS FINALLY SUBMITTED THAT ON TOTALITY OF FA CTS AND IN LAW, NO PENALTY U/S 271 (1) (C) IS LEVIABLE ON ASSESSEE EITHER ON A CCOUNT OF INCLUDING OF RS. 25.00 LACS IN RETURN FILED BY ASSESSEE IN REVISED R ETURN FILED U/S 139 (5) OF ACT/ RETURN U/S 153A OR ON ADDITION OF RS. 1,79,198/- BE ING ESTIMATED ADDITION MADE BY LD A.O. ON ACCOUNT OF ESTIMATED INTEREST ON SAID ALLEGED AMOUNT OF RS. 25.00 LACS. THE APPEAL ORDER PASSED BY CIT (A) CONFIRMING THE PENALTY IS NOT CORRECT IN LAW AND ON FACTS AND, THEREFORE, PEN ALTY CONFIRMED BY HIM DESERVES TO BE DELETED. 6. THE LD DR IS HEARD WHO HAS VEHEMENTLY ARGUED THE M ATTER AND RELIED ON THE ORDER OF THE LOWER AUTHORITIES. HE HAS ALSO REFERRED TO THE DECISION OF HONBLE CALCUTTA HIGH COURT IN CASE OF CIT VS PRASA NNA DUGAR (59 TAXMANN.COM 99) AND IT WAS SUBMITTED THAT AN SLP FI LED AGAINST THE SAID DECISION HAS BEEN SUBSEQUENTLY DISMISSED BY THE HON BLE SUPREME COURT. 7. WE HAVE HEARD THE RIVAL CONTENTIONS AND PURSUED THE MATERIAL AVAILABLE ON RECORD. THE AO HAS INVOKED THE DEEMING PROVISIONS OF EXPLANATION 5A TO SECTION 271(1)(C) OF THE ACT TO LEVY PENALTY IN THE INSTANT CASE. SECTION 271(1)(C) OF THE ACT, BEING IN THE NATURE OF PENAL PROVISIONS REQUIRE A STRICT INTERPRETATION AND IT IS TO BE SEEN THAT THE INSTAN T CASE FALLS WITHIN THE FOUR CORNERS OF THE SAID PROVISIONS AND CONDITIONS LAID DOWN THEREIN ARE SPECIFICALLY FULFILLED. THEREFORE, IT WOULD BE RELEVANT TO EXAM INE THE CONDITIONS SPECIFIED IN EXPLANATION 5A WHICH READS AS UNDER: EXPLANATION 5A- WHERE, IN THE COURSE OF A SEARCH I NITIATED UNDER SECTION 132 ON OR AFTER THE 1 ST DAY OF JUNE, 2007, THE ASSESSEE IS FOUND TO BE THE OWNER OF: ITA NO. 141/JP/16 SHRI RADHA GOVIND LASHKARI,JAIPUR VS. ACIT CIRCLE-2,JAIPUR 14 (I) ANY MONEY, BULLION, JEWELLERY OR OTHER VALUABLE ARTICLE OR THING (HEREAFTER IN THIS EXPLANATION REFERRED TO AS ASSET S) AND THE ASSESSEE CLAIMS THAT SUCH ASSETS HAVE BEEN ACQUIRED BY HIM B Y UTILISING (WHOLLY OR IN PART) HIS INCOME FOR ANY PREVIOUS YEAR; OR (II) ANY INCOME BASED ON ANY ENTRY IN ANY BOOKS OF ACCOUNT OR OTHER DOCUMENTS OR TRANSACTIONS AND HE CLAIMS THAT SUCH E NTRY IN THE BOOKS OF ACCOUNT OR OTHER DOCUMENTS OR TRANSACTIONS REPRESEN TS HIS INCOME (WHOLLY OR IN PART) FOR ANY PREVIOUS YEAR, WHICH HAS ENDED BEFORE THE DATE OF SEARCH, AND (B) WHERE THE RETURN OF INCOME FOR SUCH PREVIOUS YEAR H AS BEEN FURNISHED BEFORE THE SAID DATE BUT SUCH INCOME HAS NOT BEEN DECLARED THEREIN; OR (B) THE DUE DATE FOR FILING THE RETURN OF INCOME FO R SUCH PREVIOUS YEAR HAS EXPIRED BUT THE ASSESSEE HAS NOT FILED THE RETU RN, THEN, NOTWITHSTANDING THAT SUCH INCOME IS DECLARED BY HIM IN ANY RETURN OF INCOME FURNISHED ON OR AFTER THE DATE OF SEARCH, HE SHALL, FOR THE PURPOSES OF IMPOSITION OF A PENALTY UNDER CLAUSE (C ) OF SUB-SECTION (1) OF THIS SECTION, BE DEEMED TO HAVE CONCEALED THE PA RTICULARS OF HIS INCOME OR FURNISHED IN ACCURATE PARTICULARS OF SUCH INCOME. 7.1 IN THE INSTANT CASE, IN THE COURSE OF SEARCH WH ICH HAS BEEN INITIATED UNDER SECTION 132 ON 30.09.2010, THE ASSESSEE HAS A DMITTED AND OFFERED TO TAX RS. 25,00,000/- FOR THE FINANCIAL YEAR 2009-10. THE SAID ADMISSION IS BASED ON SEIZED DOCUMENT IDENTIFIED AS AS-1PG 5 FOU ND IN COURSE OF SEARCH CONDUCTED AGAINST SHRI D.D. MODI ON 24.08.2009 WHER EIN 25,000 GOVIND JI LASHKARI WAS NOTED. THEREFORE, THE ASSESSEE IS FO UND TO BE THE OWNER OFINCOME OF RS 25 LACS BASED ON THE SAID ENTRY IN T HE DOCUMENTS SO SEIZED AND HE CLAIMS THAT SUCH ENTRY REPRESENTS HIS INCOME FOR THE FINANCIAL YEAR 2009-10. FURTHER, THE FINANCIAL YEAR 2009-10 HAS E NDED ON 31.03.2010 MUCH BEFORE THE DATE OF SEARCH WHICH HAPPENED ON 30.09.2 010. IN THE RETURN OF INCOME FURNISHED U/S 139(1) ON 31.07.2010 FOR THE S UCH FINANCIAL YEAR 2009- 10, SUCH INCOME HAS NOT BEEN DISCLOSED. SUCH INCOME HAS BEEN DISCLOSED ITA NO. 141/JP/16 SHRI RADHA GOVIND LASHKARI,JAIPUR VS. ACIT CIRCLE-2,JAIPUR 15 SUBSEQUENTLY IN THE REVISED RETURN FILED UNDER SECT ION 139(5) ON 27.12.2010 AND THEREAFTER, IN THE RETURN FILED PURSUANCE TO IS SUANCE OF NOTICE UNDER 153A ON 21.06.2011. NO SPECIFIC ARGUMENTS HAVE BEEN TAK EN BY THE LD AR TO DISPUTE THE APPLICABILITY OF EXPLANATION 5A IN THE INSTANT CASE. IN LIGHT OF THESE UNDISPUTED FACTS, THE PROVISIONS OF EXPLANATI ON 5A ARE CLEARLY ATTRACTED IN THE INSTANT CASE. 7.2 NOW COMING TO THE OTHER CONTENTIONS RAISED BY T HE LD AR. FIRSTLY, THE LD AR HAS PLACED RELIANCE ON THE HONBLE SUPREME COURT DECISION IN CASE OF CIT VS SURESH CHAND MITTAL (SUPRA) FOR THE PROPOSITION THAT THERE WAS VOLUNTARY DISCLOSURE IN GOOD FAITH TO BUY PIECE AND AVOID LITIGATION AND THE SAME SHOULD NOT BE A BASIS FOR LEVY OF PENALTY. TH E SAID DECISION WAS RENDERED BY THE HONBLE SUPREME COURT MUCH PRIOR TO INSERTION OF EXPLANATION 5A BY THE LEGISLATURE IN THE STATUE BOOKS AND HENCE , DIDNT CONSIDER THE EXPLANATION 5A AND DOESNT HELP THE CASE OF THE ASS ESSEE IN THE INSTANT CASE. RECENTLY, IN THE CONTEXT OF EXPLANATION 5 TO SECTIO N 271(1)(C) OF THE ACT, SIMILAR CONTENTION CAME UP FOR CONSIDERATION BEFORE THE HONBLE DELHI HIGH COURT IN CASE OF PR CIT VS NEERAJ JINDAL 393 ITR 1 AND IT WAS HELD THAT EXPLANATION 5 WAS SPECIFICALLY INSERTED TO DEAL WIT H SUCH SITUATIONS WHERE HIGHER INCOME WAS DISCLOSED IN THE RETURN FILED CON SEQUENT TO SEARCH OPERATION, AND THE ASSESSEE BUT FOR SUCH EXPLANATIO N, CAN CONTEND THAT ADDITION MADE TO HIS INCOME IN THE RETURN FILED AFT ER THE SEARCH OPERATIONS WERE ONLY TO BUY PEACE AND DID NOT TANTAMOUNT TO CO NCEALMENT. HERE IT WOULD BE RELEVANT TO REFER TO PARA 24 OF THE SAID D ECISION OF HONBLE DELHI HIGH COURT WHICH READS AS UNDER: THE PURPOSE OF INSERTING EXPLANATION 5 IN THE STATU TE BOOKS WAS EXPLAINED BY THE SUPREME COURT IN K.P. MADHUSUDHANA N V. CIT [2001]251 ITR 99 (SC), WHEREIN THE COURT HELD (PAGE 104): LEARNED COUNSEL FOR THE ASSESSEE THEN DREW OUR ATT ENTION TO THE JUDGMENT OF THIS COURT IN SIR SHADILAL SUGAR AND GE NERAL MILLS LTD. V. CIT ITA NO. 141/JP/16 SHRI RADHA GOVIND LASHKARI,JAIPUR VS. ACIT CIRCLE-2,JAIPUR 16 [1987] 168 ITR 705 (SC). HE SUBMITTED THAT THE ASSE SSEE HAD AGREED TO THE ADDITIONS TO HIS INCOME REFERRED TO HEREINAB OVE TO BUY PEACE AND IT DID NOT FOLLOW THEREFROM THAT THE AMOUNT THAT WA S AGREED TO HE ADDED WAS CONCEALED INCOME. THAT IT DID NOT FOLLOW THAT THE AMOUNT AGREED TO BE ADDED WAS CONCEALED INCOME IS UNDOUBTE DLY WHAT WAS LAID DOWN BY THIS COURT IN THE CASE OF SIR SHADILAL SUGA R AND GENERAL MILLS LTD. V. CIT [1987] 168 ITR 705 (SC) AND THAT THEREF ORE, THE REVENUE WAS REQUIRED TO PROVE THE MENS REA OF A QUASI-CRIMI NAL OFFENCE. BUT IT WAS BECAUSE OF THE VIEW TAKEN IN THIS AND OTHER JUD GMENTS THAT THE EXPLANATION TO SECTION 271 WAS ADDED. THIS SHOWS THAT EXPLANATION 5 WAS SPECIFICALLY INSE RTED TO DEAL WITH THE SITUATION WHERE HIGHER INCOME WAS DISCLOSED IN THE RETURN FILED CONSEQUENT TO A SEARCH OPERATION, AND THE ASSESSEE CLAIMED THAT SUCH ADDITION OF INCOME DID NOT IMPLY THAT THERE WAS CON CEALMENT. IN OTHER WORDS, BUT FOR THE INSERTION OF EXPLANATION 5, IT W OULD BE OPEN TO THE ASSESSEE TO CONTEND THAT ADDITIONS MADE TO HIS INCO ME IN THE RETURN FILED AFTER THE SEARCH OPERATION, WERE ONLY TO BUY PEACE AND DID NOT TANTAMOUNT TO CONCEALMENT. THIS ALSO FLOWS FROM THE LANGUAGE OF EXPLANATION 5 ITSELF, WHEREIN THE WORDS USED BY THE LEGISLATURE ARE BE DEEMED TO HAVE CONCEALED THE PARTICULARS OF HIS INC OME, WHICH SHOWS THAT THERE IS A DEEMING FICTION BY VIRTUE OF WHICH SUCH ADDITIONAL INCOME IS CONSIDERED AS CONCEALMENT. IT SUCH ADDITIONS IN THE INCOME IN THE RETURN FILED CONSEQUENT TO A SEARCH, WERE TO AUTOMA TICALLY EVIDENCE CONCEALMENT UNDER SECTION 271(1)(C), THERE WOULD B E NO NEED FOR PARLIAMENT TO ENACT A DEEMING FICTION IN THE FORM O F EXPLANATION; SUCH A READING WOULD RENDER EXPLANATION 5 OTIOSE AND WITH OUT ANY PURPOSE. 7.3 FURTHER, THE LD DR HAS DRAWN OUR ATTENTION TO T HE DECISION OF HONBLE CALCUTTA HIGH COURT IN CASE OF CIT VS PRASANNA DUGAR (SUPRA) WHICH WAS RENDERED IN THE CONTEXT OF EXPLANATION 5A TO SE CTION 271(1)(C) OF THE ACT. IN THAT DECISION, THE HONBLE HIGH COURT HAS HELD T HAT THE TERM VOLUNTARY HAS TO SEEN IN THE CONTEXT OF STATEMENT NOT BEEN RE CORDED BY APPLYING FORCE. IT IS IN THAT SENSE A VOLUNTARY DISCLOSURE AND IT H AS BEEN CLARIFIED BY THE ASSESSEE THAT HE HAD NOT GIVEN ANY STATEMENT UNDER PRESSURE AND HE DIDNT WANT TO RECTIFY OR MODIFY THE STATEMENT MADE BY HIM . ITA NO. 141/JP/16 SHRI RADHA GOVIND LASHKARI,JAIPUR VS. ACIT CIRCLE-2,JAIPUR 17 7.4 IN VIEW OF THE ABOVE LEGAL PROPOSITION LAID DOW N BY THE HONBLE DELHI HIGH COURT AS WELL AS HONBLE CALCUTTA HIGH COURT, WE ARE UNABLE TO SUBSCRIBE TO THE VIEW THAT IN THE INSTANT CASE, SINCE THERE W AS VOLUNTARY DISCLOSURE IN GOOD FAITH TO BUY PIECE AND AVOID LITIGATION, THE S AME SHOULD NOT BE A BASIS FOR LEVY OF PENALTY AS SUBSCRIBING TO SUCH A VIEW W OULD MAKE EXPLANATION 5A OTIOSE WHICH HAS BEEN SPECIFICALLY INVOKED IN THE I NSTANT CASE. 7.5 NOW, COMING TO ANOTHER CONTENTION OF THE LD AR THAT FOR THE PURPOSE OF IMPOSITION OF PENALTY UNDER SECTION 271 (1)(C) RESU LTING AS A RESULT OF SEARCH ASSESSMENT MADE UNDER SECTION 153A, THE ORIGINAL RE TURN OF INCOME FILED UNDER SECTION 139 CANNOT BE CONSIDERED. IN OUR VIEW , THE SAID ISSUE IS NO MORE REST INTEGRA. CONSIDERING THE NON-OBSTANTE CL AUSE UNDER SECTION 153A WHICH EXCLUDES THE APPLICATION OF SECTION 139, THE RETURN FILED PURSUANT TO NOTICE UNDER SECTION 153A TAKES THE PLACE OF THE OR IGINAL RETURN FOR THE PURPOSES OF ALL THE PROVISIONS OF THE ACT INCLUDING LEVY OF PENALTY UNDER SECTION 271(1)(C) OF THE ACT. IN THE INSTANT CASE, THERE IS NO DISPUTE IN THIS REGARD AS THE AO HAS NOT COMPARED THE INCOME RETURN ED UNDER SECTION 139(1) AND INCOME RETURNED UNDER SECTION 153A. EVEN THE L D CIT(A) HAS ACCEPTED THE SAME WHERE HE STATES THAT THE PROVISIONS OF SEC TION 153A, 153B AND 153C ARE A COMPLETE CODE FOR ASSESSMENT WHEREIN THE SEAR CH AND SEIZURE HAS BEEN INITIATED AFTER MAY 31, 2003 AND COMPLETE DETACHMEN T OF ASSESSMENT PROCEEDINGS UNDER SECTION 143 OR 147 FROM SEARCH PR OCEEDINGS UNDER SECTION 153A OF THE ACT. THE SAID CONTENTION THEREFORE DOE SNT SUPPORT THE CASE OF THE ASSESSEE. 7.6 NOW, COMING TO ANOTHER CONTENTION OF THE LD AR THAT THE PENALTY UNDER SECTION 271(1)(C) IS IMPOSSIBLE ONLY WHERE THERE IS VARIATION BETWEEN THE ASSESSED AND RETURNED INCOME. WHERE THE RETURNED IN COME FILED UNDER SECTION ITA NO. 141/JP/16 SHRI RADHA GOVIND LASHKARI,JAIPUR VS. ACIT CIRCLE-2,JAIPUR 18 153A IS ACCEPTED BY THE AO, THERE WILL BE NO CONCEA LMENT OF INCOME OR FURNISHING OF INACCURATE PARTICULARS OF INCOME AND CONSEQUENTLY PENALTY UNDER SECTION 271(1)(C) CANNOT BE IMPOSED. TO APPRECIATE THIS CONTENTION, IT WOULD BE RELEVANT TO REFER TO EXPLANATION 4 TO SECTION 27 1(1)(C) WHICH DEFINES THE TERM TAX SOUGHT TO BE EVADED. IT CONTAINS THREE C LAUSES WHICH ARE APPLICABLE IN DIFFERENT SITUATION. IN THE CASE OF THE ASSESSE E, THE CLAUSE (C) IS CLEARLY ATTRACTED WHICH PROVIDES THAT IN ANY OTHER CASE, MEANS THE DIFFERENCE BETWEEN THE TAX ON THE TOTAL INCOME ASSESSED AND TH E TAX THAT WOULD HAVE BEEN CHARGEABLE HAD SUCH TOTAL INCOME BEEN REDUCED BY THE AMOUNT OF INCOME IN RESPECT OF WHICH PARTICULARS HAVE BEEN CO NCEALED OR INACCURATE PARTICULARS HAVE BEEN FURNISHED. 7.7 IN THE INSTANT CASE, IT IS NO DOUBT TRUE THAT T HE RETURNED INCOME UNDER SECTION 153A HAS BEEN ACCEPTED (EXCEPT FOR AN AMOUN T OF RS 197,178) AND ASSESSED AS SUCH BY THE AO. WHAT IS HOWEVER RELEVA NT TO EXAMINE IS THE DIFFERENCE BETWEEN THE AMOUNT OF INCOME ASSESSED AN D AMOUNT OF INCOME IN RESPECT OF WHICH PARTICULARS HAVE BEEN DEEMED TO HA VE BEEN CONCEALED INVOKING THE PROVISIONS OF EXPLANATION 5A. IN THE INSTANT CASE, THE PARTICULARS WHICH HAVE BEEN DEEMED TO HAVE BEEN CONCEALED AMOUN TS TO RS 25 LACS AND ON SUCH AMOUNT, THE PENALTY HAS BEEN RIGHTLY LEVIED BY THE AO. THEREFORE, THIS CONTENTION OF THE LD AR DOESNT SUPPORT THE AS SESSEE. 7.8 NOW COMING TO LEVY OF PENALTY ON ADDITION OF RS 197,178 IS CONCERNED, WE FIND THAT THE AO HAS APPLIED THE SAME ANALOGY AS APPLIED IN CASE OF SURRENDER OF RS 25 LACS AND INVOKED EXPLANATION 5A TO LEVY THE PENALTY. WE ARE OF THE VIEW THAT THE ADDITION IS BASED ON PUREL Y ESTIMATED BASIS WHERE THE AO HAS WORKED OUT INTEREST INCOME ON SAID LOAN AMOU NT OF RS 25 LACS ADVANCED TO SHRI D.D. MODI, AND THERE IS NO MATERIA L TO SUPPORT EITHER THE CHARGING OF INTEREST OR THE RATE AT WHICH SUCH INTE REST HAS BEEN CHARGED WHICH ITA NO. 141/JP/16 SHRI RADHA GOVIND LASHKARI,JAIPUR VS. ACIT CIRCLE-2,JAIPUR 19 HAS BEEN FOUND DURING THE COURSE OF SEARCH. IN THE RESULT, IT CANNOT BE SAID TO BE CASE OF CONCEALMENT OF INCOME AND THE PENALTY TO THIS EXTENT STAND DELETED. 7.9 WE MAY ADD THAT WE HAVE ALSO GONE THROUGH THE O THER DECISIONS RELIED UPON BY THE LD AR. IN OUR VIEW, THE SAID DECISIONS ARE CLEARLY DISTINGUISHABLE ON FACTS AND DOESNT THE SUPPORT THE CASE OF THE AS SESSEE. 7.10 IN LIGHT OF ABOVE DISCUSSIONS AND IN THE ENTIR ETY OF FACTS AND CIRCUMSTANCES OF THE CASE, WE HEREBY UPHELD THE LEV Y OF PENALTY ON RS 25 LACS UNDER THE DEEMING PROVISIONS OF EXPLANATION 5A TO S ECTION 271(1)(C) OF THE ACT. THE APPELLANT THEREFORE GETS PARTIAL RELIEF O N RS 197,178 AND GROUND OF APPEAL TAKEN BY THE APPELLANT IS THUS PARTLY ALLOWE D. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 24/05/2017. SD/- SD/- (DIVA SINGH ) (VIKRAM SINGH YADAV) U;KF;D LNL;@ JUDICIAL MEMBER YS[KK LNL;@ ACCOUNTANT MEMBER JAIPUR DATED:- 24/05/2017 SANTOSH* VKNS'K DH IZFRFYFI VXZSF'KR@ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ@ THE APPELLANT- SHRI RADHA GOVIND LASHKARI, JAIPUR. 2. IZR;FKHZ@ THE RESPONDENT- THE ACIT,CENTRAL CIRCLE-2, JAIPUR 3. VK;DJ VK;QDR@ CIT 4. VK;DJ VK;QDRVIHY@ THE CIT(A) 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ@ DR, ITAT, ITA NO. 141/JP/16 SHRI RADHA GOVIND LASHKARI,JAIPUR VS. ACIT CIRCLE-2,JAIPUR 20 6. XKMZ QKBZY@ GUARD FILE (ITA NO.141/JP/2016) VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASSISTANT. REGISTRAR.