DEPUTY COMMISSIONER OF INCOME TAX, JAIPUR V. SHRI KAMAL SETHIA, JAIPUR

ITA 1498/JPR/2018

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 2724 (ITAT-JAIPUR)
• Duration Of Justice: 5 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-06-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2014-2015
• Appeal Filed On: 24-12-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: BK GUPTA
• Keywords: Income from undisclosed sources; Search and seizure; Document seized; Opportunity of being heard; Question of law; Initiation of penalty proceedings; Tangible material; Validity of assessment; Onus to prove; Revised return; Capital expenditure; Set aside
• Section: 271(1)(c); 143(3); 153A; 139(5); 205; 69B; 69; 132; 28; 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 B JAIPUR JH FOT; IKY JKO] U;KF;D LNL; ,OA JH FOE FLAG ;KNO] YS[KK LNL; DS LE{K BEFORE: SHRI VIJAY PAL RAO, JM & SHRI VIKRAM SINGH YADAV, AM VK;DJ VIHY LA-@ ITA. NO. 1498/JP/2018 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2014-15 DEPUTY COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-1, JAIPUR CUKE VS. SH. KAMAL SETHIA 801, WESTERN HEIGHT, S-21, SHYAM NAGAR, JAIPUR LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO.: AFEPS7265Q VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT VK;DJ VIHY LA-@ ITA. NO. 1499/JP/2018 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2014-15 DEPUTY COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-1, JAIPUR CUKE VS. SH. VIVEK SETHIA 801, WESTERN HEIGHT, S-21, SHYAM NAGAR, JAIPUR LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO.: ASPPS7131R VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT JKTLO DH VKSJ LS @ REVENUE BY : SHRI B. K. GUPTA (CIT) FU/KZKFJRH DH VKSJ L S@ ASSESSEE BY : SHRI ANIL GOYAL (CA) LQUOKBZ DH RKJH[ K@ DATE OF HEARING : 20/05/2019 MN?KKS'K.KK DH RKJH[ K@ DATE OF PRONOUNCEMENT : 07/06/2019 VKNS'K@ ORDER PER: VIKRAM SINGH YADAV, A.M. THESE ARE TWO APPEALS FILED BY THE REVENUE AGAINST THE ORDER OF LD. CIT(A)-4, JAIPUR DATED 01.10.2018 FOR AY 2014-1 5 WHEREIN THE LD. CIT(A) HAS DELETED THE LEVY OF PENALTY U/S 271(1)(C ) OF THE ACT. SINCE THE COMMON ISSUES ARE INVOLVED, BOTH THESE APPEALS WERE HEARD TOGETHER AND ARE BEING DISPOSED OFF BY THIS CONSOLI DATED ORDER. ITA NO. 1498 & 14 99/JP/2018 DCIT, JAIPUR VS. SH. KAM AL SETHIA, JAIPUR 2 ITA NO. 1498/JP/2018 2. WITH THE CONSENT OF BOTH THE PARTIES, THE CASE O F SH. KAMAL SETHIA IS TAKEN AS THE LEAD CASE FOR THE PURPOSES O F PRESENT DISCUSSION WHEREIN THE REVENUE HAS TAKEN THE FOLLOWING SOLE GR OUND OF APPEAL AS UNDER:- WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF T HE CASE AND IN LAW LD. CIT(A) IS JUSTIFIED IN DELETING THE PENALTY U/S 271(1)(C) OF RS. 1,23,40,919/- IMPOSED BY THE AO. 3. BRIEFLY STATED, THE FACTS OF THE CASE ARE THAT A SEARCH & SEIZURE ACTION U/S 132(1) OF THE ACT WAS CARRIED OUT ON 17. 12.2014 AT THE VARIOUS PREMISES OF VARDHAMAN GROUP AND THE ASSESSE E, BEING ONE OF THE MEMBERS OF THIS GROUP WAS ALSO COVERED BY SEARC H OPERATIONS. THE ASSESSEE IS A DIRECTOR IN TWO COMPANIES, NAMELY M/S RICHWELL ENTERPRISES PVT. LTD., AND M/S YASHRAJ COMMERCIAL C OMPLEX PVT. LTD. AND ALSO A PARTNER IN THE FIRMS, M/S VARDHAMAN BUIL DERS AND DEVELOPERS (28.00% SHARE), M/S SETHIA REAL ESTATE ( 33.33% SHARE) AND M/S MANGLAM VARDHMAN DEVELOPERS LLP (25.00% SHA RE). 4. THE ASSESSEE ORIGINALLY FILED HIS RETURN OF INCO ME U/S 139(1) ON 24.07.2014 DECLARING INCOME FROM HOUSE PROPERTY, RE MUNERATION AND INTEREST FROM THESE FIRMS AND INTEREST FROM BANK DU RING THIS YEAR TOTALING TO RS. 23,74,227/-. THEREAFTER, THE ASSESS EE FILED HIS REVISED RETURN OF INCOME U/S 139(5) ON 19.03.2015 DECLARING TOTAL INCOME OF RS. 3,85,78,660/- WHICH INCLUDES UNDISCLOSED INCOME OF RS. 3,63,07,500/- WHICH HAS BEEN ACCEPTED BY THE AS SESSEE IN HIS STATEMENT U/S 132(4) RECORDED DURING THE COURSE OF SEARCH. IN RESPONSE TO NOTICE U/S 153A OF THE ACT ISSUED TO TH E ASSESSEE ON 11.02.2015, THE ASSESSEE AGAIN FURNISHED HIS RETURN OF INCOME ON ITA NO. 1498 & 14 99/JP/2018 DCIT, JAIPUR VS. SH. KAM AL SETHIA, JAIPUR 3 27.03.2015 DECLARING TOTAL INCOME OF RS. 3,85,78,66 0/- WHICH IS AT THE SAME FIGURE AS PER THE REVISED RETURN FILED EARLIER ON 19.03.2015. THE ASSESSMENT U/S 143(3) READ WITH SECTION 153A WAS CO MPLETED ON 24.11.2016 AT ASSESSED INCOME OF RS. 3,85,78,660/-. THE PENALTY PROCEEDINGS U/S 271(1)(C) OF THE ACT WERE SEPARATEL Y INITIATED FOR CONCEALMENT OF INCOME/FURNISHING INACCURATE PARTICU LARS OF INCOME VIDE ISSUE OF SHOW CAUSE NOTICE DATED 24.11.2016. 5. DURING THE COURSE OF PENALTY PROCEEDINGS, A FRES H SHOW CAUSE NOTICE DATED 04.05.2017 WAS AGAIN ISSUED AND IN RES PONSE, THE ASSESSEE FILED HIS WRITTEN SUBMISSION. IN ITS SUBMI SSION, THE ASSESSEE SUBMITTED THAT GIVEN THAT HE HAS FILED HIS REVISED RETURN OF INCOME, THE CONCEALMENT OF INCOME, IF ANY HAS TO BE SEEN WITH R EFERENCE TO THE REVISED RETURN OF INCOME/RETURN FILED IN RESPONSE T O NOTICE U/S 153A AS THE ORIGINAL RETURN HAS BEEN REPLACED BY THE REVISE D RETURN. IT WAS SUBMITTED THAT THERE WAS NO CONCEALMENT OF INCOME A S THE INCOME DECLARED IN REVISED RETURN, AND ALSO IN RETURN FILE D IN RESPONSE TO NOTICE U/S 153A AND THE INCOME FINALLY ASSESSED BY THE AO ARE THE SAME. THE SUBMISSION SO FILED WAS NOT FOUND ACCEPTA BLE TO THE ASSESSING OFFICER. AS PER THE ASSESSING OFFICER, T HE CASE OF ASSESSEE IS COVERED UNDER EXPLANATION 5A TO SECTION 271(1)(C ) OF THE ACT. AS PER THE ASSESSING OFFICER, THE ASSESSEE FILED HIS O RIGINAL RETURN OF INCOME ON 24.07.2014 BEFORE THE DATE OF SEARCH ON 1 7.12.2014. THE ASSESSEE FILED HIS REVISED RETURN OF INCOME ON 19.0 3.2015 AFTER THE DATE OF SEARCH AND INCLUDED UNDISCLOSED INCOME OF RS. 3,63,07,550/- IN THE SAID RETURN. IT HAS BEEN C LEARLY STATED IN EXPLANATION 5A TO SECTION 271(1)(C) WHERE THE UNDIS CLOSED INCOME WAS NOT INCLUDED IN THE RETURN OF INCOME FILED FOR THE RELEVANT PREVIOUS YEAR BEFORE THE DATE OF SEARCH THEN, NOTWITHSTANDIN G THAT SUCH INCOME ITA NO. 1498 & 14 99/JP/2018 DCIT, JAIPUR VS. SH. KAM AL SETHIA, JAIPUR 4 IS DECLARED BY HIM IN ANY RETURN OF INCOME FURNISHE D ON OR AFTER THE DATE OF SEARCH, HE SHALL, FOR THE PURPOSES OF IMPOS ITION OF A PENALTY UNDER CLAUSE (C) OF SUB-SECTION (1) OF THIS SECTION , BE DEEMED TO HAVE CONCEALED THE PARTICULARS OF HIS INCOME OR FURNISHE D INACCURATE PARTICULARS OF SUCH INCOME WITH THE AMOUNT OF CONCE ALED INCOME BEING RS. 3,63,07,550/-. FURTHER, THE ASSESSING OFFICER R ELIED ON THE HONBLE SUPREME COURT DECISION IN CASE OF PRASANNA DUGAR VS . CIT [2016] 70 TAXMANN.COM 175 (SC), HONBLE PUNJAB AND HARYANA DE CISION IN CASE OF COMMISSIONER OF INCOME-TAX (CENTRAL), LUDHIANA V S. BANSAL ABUSHAN BHANDAR [2014] 42 TAXMANN.COM 9 (PUNJAB & H ARYANA) AND CHENNAI TRIBUNAL IN CASE OF ACIT, CENTRAL CIRCLE 11 (5) VS. SMT. J. MYTHILI. FINALLY, THE AO HAS GIVEN HIS CONCLUSIVE F INDING AT PARA 7 OF HIS PENALTY ORDER WHEREIN IT HAS BEEN STATED THAT IN VI EW OF THE ABOVE CITED AND FACTS AND LEGAL POSITION, THE ASSESSEE IS LIABLE FOR PENALTY U/S 271(1)(C) OF THE ACT ON ACCOUNT OF CONCEALMENT OF I NCOME AND ACCORDINGLY, THE PENALTY OF RS. 1,23,40,919/- WAS L EVIED U/S 271(1)(C) OF THE ACT. 6. BEING AGGRIEVED, THE ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE LD. CIT(A). AS PER LD. CIT(A), THE PRER EQUISITE FOR INVOKING OF EXPLANATION 5A TO SECTION 271(1)(C) IS THAT THE ASSESSEE SHOULD BE FOUND TO BE OWNER OF ANY MONEY, BULLION ETC. FOUND OR ENTRY IN BOOKS OF ACCOUNTS OR OTHER DOCUMENTS FOUND FROM THE OWNER SHIP OF THE ASSESSEE DURING THE COURSE OF SEARCH WHICH REPRESEN TS HIS UNDISCLOSED INCOME FOR ANY PREVIOUS YEAR WHICH HAS ENDED BEFORE THE DATE OF SEARCH AND WHERE THE RETURN OF INCOME FOR SUCH PREV IOUS YEAR HAS BEEN FURNISHED BEFORE THE DATE OF SEARCH BUT SUCH I NCOME HAS NOT BEEN DECLARED THEREIN. THEREFORE, THE PERQUISITE FO R INVOKING EXPLANATION 5A IS THAT THE ASSESSEE SHOULD BE FOUND TO BE OWNER OF ITA NO. 1498 & 14 99/JP/2018 DCIT, JAIPUR VS. SH. KAM AL SETHIA, JAIPUR 5 SUCH INCOME AS NARRATED THEREIN. THEN COMING TO TH E CONTENTION OF THE ASSESSEE THAT SINCE ADDITIONAL INCOME IS DECLAR ED IN THE RETURN FILED U/S 153A AND THERE BEING NO DIFFERENCE BETWEEN RETU RNED INCOME AND ASSESSED INCOME AND THEREFORE, NO PENALTY IS LEVIAB LE, THE LD. CIT(A) STATED THAT WHEN THE ADDITIONAL INCOME IS DECLARED AFTER SEARCH AND AFTER DETECTING UNDISCLOSED INCOME IN FORM OF MONEY , BULLION ETC FOUND OR ENTRY IN BOOKS OF ACCOUNTS OR DOCUMENTS ARE FOUN D AND THEREAFTER THE ASSESSEE DISCLOSES, AS PER EXPLANATION 5A TO 27 1 (1)(C), THEN SUCH INCOME DECLARED IN RETURN WHICH WAS NOT ORIGINALLY DECLARED BE DEEMED TO BE INCOME IN RESPECT OF WHICH PARTICULARS ARE CONCEALED. THEREFORE, CONTENTION SO RAISED WAS HELD NOT TENABL E AS ALSO THE CASE LAWS ARE NOT APPLICABLE AS THE SAME RELATES TO PERI OD PRIOR TO INSERTION OF EXPLANATION 5A. 7. THE LD. CIT(A) THEREAFTER HELD THAT THE AO BEFO RE APPLYING EXPLANATION 5A DID NOT EXAMINE WHETHER INCOME HAS B EEN SHOWN IN THE RETURN OF INCOME IS BASED ON ANY MONEY, BULLION , JEWELLERY, OR ANY ENTRY IN THE BOOKS HAVE BEEN FOUND BY WAY OF INCRIM INATING MATERIAL FOUND DURING THE COURSE OF SEARCH AND A PERUSAL OF THE ASSESSMENT ORDER AND THE PENALTY ORDER REVEALS THAT THE AO HAS MERELY ACCEPTED THE ADDITIONAL INCOME OFFERED BY THE APPELLANT AND NO FINDING HAS BEEN GIVEN BY THE AO AS TO HOW THE APPELLANT HAS EARNED ADDITIONAL INCOME QUA THE SEIZED MATERIAL FOUND DURING THE COURSE OF SEARCH. IN SUPPORT, RELIANCE WAS PLACED ON THE CO-ORDINATE BENCH IN CAS E OF RADHE SHYAM MITTAL WHEREIN IT WAS HELD THAT PENALTY U/S 271(1)( C) R.W. EXPLANATION 5A CANNOT BE LEVIED IF ADDITION IS NOT BASED ON ANY INCRIMINATING MATERIAL FOUND DURING THE COURSE OF SEARCH ON THE B ASIS OF ANY MONEY, BULLION, JEWELLERY, OR ANY ENTRY IN THE BOOKS. FURT HER, RELIANCE WAS PLACED ON THE CO-ORDINATE BENCH DECISION IN CASE OF AJAY TRADERS. IT ITA NO. 1498 & 14 99/JP/2018 DCIT, JAIPUR VS. SH. KAM AL SETHIA, JAIPUR 6 WAS FURTHER HELD BY THE LD CIT(A) THAT VOLUNTARY AC TION OF APPELLANT IN DECLARING ADDITIONAL INCOME ONCE IN THE REVISED RET URN AND AGAIN IN RESPONSE TO NOTICE U/S 153A DE HORS THE EVIDENCE FO UND AS A RESULT OF SEARCH CANNOT BE BRANDED AS CONCEALMENT OF INCOME S O AS TO LEVY PENALTY AND IT WOULD HAVE BEEN A DIFFERENT RESULT H AD THE INCOME OFFERED IS PURSUANT TO EVIDENCES FOUND AS A RESULT OF SEARCH. 8. IT WAS FURTHER HELD BY THE LD. CIT(A) THAT THE A O HAS SIMPLY OBSERVED IN THE ASSESSMENT ORDER NOTICE U/S 271(1) (C) IS BEING ISSUED. THERE IS NO FINDING AS TO WHETHER IT IS FO R CONCEALMENT OF PARTICULARS OF INCOME OR FURNISHING INACCURATE PART ICULARS OF INCOME AND THE SAME CANNOT BE CONSIDERED AS PROPER SATISFA CTION SO AS TO LEVY PENALTY U/S 271(1)(C). IN SUPPORT, THE RELIANCE WAS PLACED ON THE HONBLE KARNATAKA HIGH COURT IN THE CASE OF MANJUNA THA COTTON & GINNING FACTORY [2013] 359 ITR 565 AND RAJASTHAN HI GH COURT IN CASE OF SHEVETA CONSTRUCTION CO. PVT. LTD., IN ITA NO. 5 34/2008 AND VARIOUS CO-ORDINATE BENCH DECISIONS. 9. IT WAS FURTHER HELD BY THE LD. CIT(A) THAT THE L EVY PENALTY IS NOT AUTOMATIC AND SINCE THE PROVISIONS OF EXPLANATION 5 A HAVE BEEN INVOKED BY THE AO, THE SAID DEEMING PROVISIONS ARE TO BE STRICTLY CONSTRUED. FOR INVOKING EXPLANATION 5A FOR DEEMING EVEN WHEN INCOME BEING DECLARED IN THE RETURN FURNISHED AFTER SEARCH TO BE DEEMED TO BE CONCEALMENT OF PARTICULARS OF INCOME O R FURNISHING INACCURATE PARTICULARS, THE EARLIER PART OF SAID EX PLANATION SHOULD ALSO BE APPLICABLE. THE EARLIER PART PROVIDES THAT IN TH E COURSE OF SEARCH THE ASSESSEE SHOULD BE FOUND TO BE OWNER OF ANY MON EY, BULLION OR JEWELLERY ETC. OR ANY INCOME BASED ON ANY ENTRY IN BOOKS OF ACCOUNTS OR OTHER DOCUMENTS FOUND DURING SEARCH. SO LONG AS THIS PRE CONDITION ITA NO. 1498 & 14 99/JP/2018 DCIT, JAIPUR VS. SH. KAM AL SETHIA, JAIPUR 7 IS NOT FOUND TO BE SATISFIED, STRAIGHTWAY APPLYING EXPLANATION 5A BY DEEMING CERTAIN INCOME BEING DECLARED IN THE RETURN (FILED AFTER SEARCH ADMITTING ADDITIONAL INCOME) TO BE CONCEALED INCOME IS NOT ENVISAGED IN LAW. THE ONUS TO PROVE THAT CONDITION EXISTS FOR LEVY OF PENALTY IS UPON THE REVENUE. SINCE ON FACTS, THE SAID EXPLANAT ION 5A IS NOT HELD TO BE APPLICABLE AND SINCE THERE ARE NO OTHER PROVI SION TO HOLD THAT ADDITIONAL INCOME OFFERED IS CONCEALED INCOME OR DE EMED TO BE CONCEALED INCOME, THE LEVY OF PENALTY IS NOT TENABL E IN THE INSTANT CASE. 10. IT WAS FURTHER HELD BY THE LD. CIT(A) THAT AS P ER CLAUSE (B) OF EXPLANATION 5A, THE TERM USED IS DUE DATE AND NOT DUE DATE AS SPECIFIED U/S 139(1) AND THEREFORE, EVEN IF ASSESS EE FILES RETURN OF INCOME AFTER DATE OF SEARCH BUT WITHIN EXTENDED DUE DATE U/S 139(4) BY INCLUDING THE UNACCOUNTED INCOME ADMITTED DURING SEARCH OF HIS RETURN OF INCOME, DEEMING FICTION OF EXPLANATION 5A SHALL NOT BE ATTRACTED. IN SUPPORT RELIANCE WAS PLACED ON THE CO -ORDINATE BENCH DECISION IN CASE OF ITO VS. MR. GOPE M. ROCHLANI IN [2014] 40 TAXMANN.COM 46 FOLLOWED IN RAKESH NAIN TRIVEDI (201 5) 152 ITD 0869 (AMRITSAR) AND THEREAFTER AT PARA 8.7, THE LD. CIT( A) HAS GIVEN HIS CONCLUSIVE FINDINGS WHICH ARE REPRODUCED AS UNDER:- 8.7 THUS I AM OF THE VIEW THAT THE PENALTY IMPOSED BY THE AO IS NOT SUSTAINABLE FOR THE 3 REASONS DISCUSSED ABOVE. IN S HORT THE REASONS ARE:- 1. THAT EXPLN. 5A TO SECTION 271(1)(C) IS NOT APPLICAB LE AS THE ASSESSMENT ORDER IS SILENT ON DISCLOSURE BEING RELA TABLE TO SEIZED ASSETS OR INCRIMINATING TRANSACTIONS. ITA NO. 1498 & 14 99/JP/2018 DCIT, JAIPUR VS. SH. KAM AL SETHIA, JAIPUR 8 2. THAT THE ORDER PASSED U/S 143(3) RWS U/S 153A DOES NOT SPECIFY UNDER WHICH LIMB THE PENALTY IS INITIATED. NOR DOES NOTICE U/S 274 DO SO. 3. THAT THE APPELLANT HAS FIELD REVISED RETURN WITHIN TIME AVAILABLE U/S 139 HENCE EXPLN 5A TO SECTION 271(1)(C) IS NOT APPLICABLE. 11. IN THE ABOVE FACTUAL MATRIX, WE NOW REFER TO TH E CONTENTIONS ADVANCED BY BOTH THE PARTIES. FIRSTLY, WE REFER TO THE CONTENTIONS ADVANCED BY THE LD CIT DR. DURING THE COURSE OF HE ARING, THE LD. CIT DR SUBMITTED THAT FIRST OF ALL, GROUND CHALLENGING THE LEGALITY OF ORDER U/S 271(1)(C) OF ACT WAS ADMITTED BY THE LD. CIT(A) BY WAY OF AN ADDITIONAL GROUND WITHOUT GIVING AN OPPORTUNITY TO THE ASSESSING OFFICER. IT WAS SUBMITTED THAT THE ASSESSEE HAS NOT CHALLENGED BEFORE AO ABOUT NON-MENTIONING OF THE SPECIFIC LIMB FOR LE VY OF PENALTY IN THE SHOW CAUSE NOTICE ISSUED U/S 271(1)(C). FURTHER, TH E ASSESSEE HAS NOT RAISED ANY SPECIFIC GROUNDS OF APPEAL WHILE FILING THE APPEAL IN FORM NO. 35 AND THEREAFTER HAS TAKEN ADDITIONAL GROUND O F APPEAL DURING THE APPELLATE PROCEEDINGS. THE LD. CIT(A) HAS DECID ED THE ISSUE WITHOUT GIVING ANY OPPORTUNITY OF BEING HEARD TO TH E AO WHICH IS NOTHING BUT VIOLATION OF PRINCIPLE OF NATURAL JUSTI CE. IT WAS SUBMITTED THAT ON THIS GROUND ALONE, THE MATTER MAY PLEASE BE SET ASIDE TO THE FILE OF LD. CIT(A) WITH THE DIRECTION TO ADJUDICATE THE ISSUE AFTER GIVING A PROPER OPPORTUNITY OF BEING HEARD TO THE AO. 12. FURTHER, THE LD. CIT DR REFERRED TO THE THIRD M EMBER DECISION IN CASE OF HPCL MITTAL ENERGY LTD. VS. ADDL. CIT [2018 ] 97 TAXMANN.COM 3 (AMRITSAR-TRIB) WHEREIN AT PARA 21, IT WAS HELD A S UNDER:- ITA NO. 1498 & 14 99/JP/2018 DCIT, JAIPUR VS. SH. KAM AL SETHIA, JAIPUR 9 21. APART FROM THE ABOVE THREE SITUATIONS IN WHICH THE AO HAS CLEAR-CUT SATISFACTION, THERE CAN BE ANOTHER FO URTH SITUATION AS WELL. IT MAY BE WHEN IT IS DEFINITELY A CASE OF UNDER-REPORTING OF INCOME BY THE ASSESSEE FOR WHICH AN ADDITION/DIS ALLOWANCE HAS BEEN MADE, BUT THE AO IS NOT SURE AT THE STAGE OF INITIATION OF PENALTY PROCEEDINGS OF THE PRECISE CHARGE AS TO 'CONCEALMENT OF PARTICULARS OF INCOME' OR 'FURNISHING OF INACCUR ATE PARTICULARS OF INCOME'. IN SUCH CIRCUMSTANCES, HE MAY USE SLASH BETWEEN THE TWO EXPRESSIONS AT THE TIME OF INITIATION OF PE NALTY PROCEEDINGS. HOWEVER, DURING THE PENALTY PROCEEDING S, HE MUST GET DECISIVE, WHICH SHOULD BE REFLECTED IN THE PENA LTY ORDER, AS TO WHETHER THE ASSESSEE IS GUILTY OF 'CONCEALMENT O F PARTICULARS OF INCOME' OR 'FURNISHING OF INACCURATE PARTICULARS OF SUCH INCOME'. UNCERTAIN CHARGE AT THE TIME OF INITIATION OF PENALTY, MUST NECESSARILY BE SUBSTITUTED WITH A CONCLUSIVE D EFAULT AT THE TIME OF PASSING THE PENALTY ORDER. IF THE PENALTY I S INITIATED WITH DOUBT AND ALSO CONCLUDED WITH A DOUBT AS TO THE CON CEALMENT OF PARTICULARS OF INCOME OR FURNISHING OF INACCURATE P ARTICULARS OF SUCH INCOME ETC., THE PENALTY ORDER IS VITIATED. IF ON THE OTHER HAND, IF THE PENALTY IS INITIATED WITH AN UNCERTAIN CHARGE OF 'CONCEALMENT OF PARTICULARS OF INCOME/FURNISHING OF INACCURATE PARTICULARS OF INCOME' ETC., BUT THE ASSESSEE IS UL TIMATELY FOUND TO BE GUILTY OF A SPECIFIC CHARGE OF EITHER 'CONCEA LMENT OF PARTICULARS OF INCOME' OR 'FURNISHING OF INACCURATE PARTICULARS OF INCOME', THEN NO FAULT CAN BE FOUND IN THE PENALTY ORDER . 13. IT WAS SUBMITTED THAT THE SAID THIRD MEMBER DEC ISION HAS BEEN FOLLOWED BY THE JAIPUR BENCHES IN CASE OF RAJENDRA KUMAR GUPTA VS. DCIT IN ITA NO. 359/JP/2017 VIDE ORDER DATED 18.01. 2019 AND IN CASE ITA NO. 1498 & 14 99/JP/2018 DCIT, JAIPUR VS. SH. KAM AL SETHIA, JAIPUR 10 OF MAHESH KUMAR JAIN & OTHERS IN ITA NO. 630/JP/201 7 DATED 27.11.2017 AND OTHER CASES, THOUGH RELATED TO PENAL TY U/S 271AAB. FURTHER RELIANCE WAS PLACED ON THE THIRD MEMBER DEC ISION IN CASE OF GRASS FIELD FARMS & RESORTS (P.) LTD. VS. DCIT [201 6] 70 TAXMANN.COM 176. REGARDING THE DECISION OF HONBLE RAJASTHAN HIGH COURT IN CASE OF SHEVETA CONSTRUCTION CO. PVT VS. I TO, AS RELIED UPON BY THE LD. CIT(A), IT WAS SUBMITTED THAT IN CASE OF DINESH KUMAR VIJAY VS. ITO IN ITA NO. 58/JP/2016, THE JAIPUR TRIBUNAL HAS DISTINGUISHED THE SAID DECISION AND HAS HELD AS UNDER:- 14 IN CASE OF SHEVETA CONSTRUCTION (SUPRA), THE S UBSTANTIAL QUESTION OF LAW FOR CONSIDERATION BEFORE THE HONBL E RAJASTHAN HIGH COURT WAS WHETHER PENALTY FOR ALLEGED CONCEALM ENT OF INCOME OR FURNISHING INACCURATE PARTICULARS OF INCO ME BE LEVIED WHEN LEGALITY OF ASSESSMENT PROCEEDINGS ITSELF IS S UBJUDICE BEFORE THE HONBLE HIGH COURT AND THE QUESTION TO T HAT EFFECT HAS ALREADY BEEN ADMITTED IN QUANTUM APPEAL. IN THE PRESENT CASE, THE ASSESSEE HAS NOT MOVED ANY APPEAL AGAINST THE ASSESSMENT ORDER EVEN BEFORE THE LD.CIT(A) AND THER EFORE, THERE IS NO QUESTION OF ASSESSMENT PROCEEDINGS BEING SUBJ UDICE BEFORE THE HONBLE HIGH COURT. ACCORDINGLY, THE DEC ISION OF THE HONBLE HIGH COURT IN CASE OF SHEVETA CONSTRUCTION DOESNT SUPPORT THE CASE OF ASSESSEE. 15. IT IS THEREFORE A CASE WHERE THE SATISFACTION H AS BEEN RECORDED FOR BOTH THE LIMBS OF SECTION 271(1)(C) AN D FINALLY, THE PENALTY HAS BEEN LEVIED FOR VIOLATION OF BOTH THE L IMBS OF SECTION 271(1)(C) OF THE ACT. THE INITIATION OF PENALTY PRO CEEDINGS HAS HAPPENED BY RECORDING OF SATISFACTION IN THE ASSESS MENT ORDER AND THE ISSUANCE OF NOTICE U/S 274 IS THUS IN CONTI NUATION OF RECORDING OF SUCH SATISFACTION AND HAS THUS TO BE R EAD ALONG ITA NO. 1498 & 14 99/JP/2018 DCIT, JAIPUR VS. SH. KAM AL SETHIA, JAIPUR 11 WITH THE ASSESSMENT ORDER AND NOT DISJOINT OF THE A SSESSMENT ORDER. IT IS NOT A CASE WHERE THE PENALTY HAS BEEN INITIATED FOR ONE LIMB AND FINALLY LEVIED IN RESPECT OF ANOTHER L IMB. THE AO HAS BEEN CONSISTENT IN HIS APPROACH AND HIS ACTION DOESNT REFLECT ANY NON-APPLICATION OF MIND. IN LIGHT OF AB OVE DISCUSSIONS, WE THEREFORE DO NOT FEEL THERE IS ANY INFIRMITY IN THE INITIATION OF PENALTY PROCEEDINGS AS CONTENDED BY T HE LD. AR. THE ADDITIONAL GROUND OF APPEAL IS THUS DISMISSED. 14. FURTHER, RELIANCE WAS PLACED ON THE HONBLE HIG H COURT OF MADRAS IN CASE OF SUNDARAM FINANCE LTD. VS. CIT [20 18] 93 TAXMANN.COM 250(MADRAS) FOR THE PROPOSITION THAT TH IS ISSUE CAN NEVER BE A QUESTION OF LAW IN THE ASSESSEES CASE A S IT IS PURELY A QUESTION OF FACT. IT WAS FURTHER SUBMITTED THAT AS PER SECTION 271(1)(C), THE PENALTY MAY BE IMPOSED FOR FURNISHIN G INACCURATE PARTICULARS OF INCOME OR FOR CONCEALMENT OF INCOME AND AN OPPORTUNITY OF BEING HEARD IS TO BE AFFORDED TO THE ASSESSEE BE FORE LEVY OF PENALTY. IT MAY BE MENTIONED THAT THE TWO LIMBS MAY BE INDEP ENDENT OF EACH OTHER OR IN SOME CASES, THEY MAY BE OVER LAPPING. I N FACT, THE NOTICE WAS ISSUED FOR BOTH THE LIMBS AND THUS, NO PREJUDIC E WAS CAUSED TO THE ASSESSEE. IT IS NOT THE CASE, WHERE PENALTY WAS INITIATED FOR ONE LIMB AND LEVIED FOR OTHER LIMB. IT WAS ACCORDINGLY SUBMITTED THAT THE MERE FACT THAT THE PENALTY NOTICE DOES NOT MENTION THE SPECIFIC CHARGE FOR IMPOSITION OF PENALTY, THE SAME CANNOT BE A REA SON FOR INVALIDATING THE PENALTY PROCEEDINGS. 15. REGARDING THE FINDING OF THE LD. CIT(A) THAT TH E ASSESSMENT ORDER IS SILENT ON DISCLOSURE BEING RELATABLE TO SE IZED ASSETS OR INCRIMINATING TRANSACTIONS, IT WAS SUBMITTED BY THE LD. CIT(A) THAT THE ITA NO. 1498 & 14 99/JP/2018 DCIT, JAIPUR VS. SH. KAM AL SETHIA, JAIPUR 12 LD. CIT(A) HAS NOT CONSIDERED THE STATEMENT OF SH. VIVEK SETHIA AND SH. KAMAL SETHIA RECORDED DURING THE COURSE OF SEAR CH U/S 132(4) ON 17.12.2014/19.12.2014 WHEREIN SH. VIVEK SETHIA HAS MADE TOTAL DISCLOSURE OF RS. 20.10 CRORE ON THE BASIS OF A NUM BER OF INCRIMINATING DOCUMENTS FOUND DURING THE COURSE OF SEARCH. THE AB OVE DISCLOSURE WAS MADE BY SH. VIVEK SETHIA ON HIS OWN AND ON BEHA LF OF HIS FATHER SH. KAMAL SETHIA, WHICH HAS BEEN CONFIRMED BY SHRI KAMAL SETHIA ALSO. THE ABOVE DISCLOSURE OF RS. 20.10 CRORE INCLU DE DISCLOSURE OF UNDISCLOSED INCOME OF RS. 9.92 CR. EACH BY SH. VIVE K SETHIA AND SH. KAMAL SETHIA AND OUR REFERENCE WAS DRAWN TO QUESTIO N NO. 19,21,26,27,28,37 AND 39 OF THE STATEMENT RECORDED OF SH. VIVEK SETHIA U/S 132(4) OF THE ACT. 16. REGARDING THE FINDING OF THE LD. CIT(A) THAT TH E ASSESSEE REVISED ITS ROI WITHIN TIME AVAILABLE U/S 139, HENCE EXPLAN ATION 5A TO SECTION 271(1)(C) IS NOT APPLICABLE, IT WAS SUBMITTED THAT FIRST OF ALL, THE QUESTION COMES AS TO WHETHER THE ASSESSEE CAN REVIS ED ITS ROI. IT WAS SUBMITTED THAT THE ASSESSEE HAS FILED ITS ROI U/S 1 39 ON 27.07.2014. THEREAFTER, A SEARCH WAS CONDUCTED ON 17.12.2014 DU RING WHICH THE ASSESSEE HAS DECLARED UNDISCLOSED INCOME, ON THE BA SIS OF INCRIMINATING MATERIAL FOUND DURING THE SEARCH, IN HIS STATEMENT RECORDED U/S 132(4). THEREAFTER, A NOTICE U/S 153A WAS ISSUED TO THE ASSESSEE ON 11.02.2015 AND THE ASSESSEE HAS FILED R OI ON 19.03.2015 AND ON 27.03.2015 DECLARING THE TOTAL INCOME OF RS. 3,85,78,660/- INCLUDING UNDISCLOSED INCOME OF RS. 3,63,07,500/-. IT WAS SUBMITTED THAT U/S 139(5), ASSESSEE CAN REVISE RETURN OF INCO ME WHERE HE DISCOVERS ANY OMISSION OR ANY WRONG STATEMENT WHICH IS NOT THE CASE OF THE ASSESSEE. IT WAS SUBMITTED THAT NO COGNIZAN CE COULD BE GIVEN ITA NO. 1498 & 14 99/JP/2018 DCIT, JAIPUR VS. SH. KAM AL SETHIA, JAIPUR 13 TO THE REVISED ROI FILED ON 19.03.2015 I.E. AFTER T HE SEARCH AND ISSUE OF NOTICE U/S 153A OF THE ACT. 17. REGARDING THE FINDING OF THE LD. CIT(A) THAT EX PLANATION 5A TO SECTION 271(1)(C) CANNOT BE APPLIED TO THE FACTS OF INSTANT CASE IN VIEW OF THE TERM DUE DATE FOR FILING OF RETURN OF INCO ME AS USED IN CLAUSE (B) TO THE ABOVE EXPLANATION, IT WAS SUBMITTED THAT THE LD. CIT(A) HAS NOT EXAMINED CLAUSE (A) TO THE SAID EXPLANATION. R EFERRING TO CLAUSE (A) OF THE EXPLANATION 5A WHEREIN IT HAS BEEN STATE D THAT FOR A PREVIOUS YEAR WHICH HAS ENDED BEFORE THE DATE OF SE ARCH AND WHERE THE RETURN OF INCOME FOR SUCH PREVIOUS YEAR HAS BEE N FURNISHED BEFORE THE SAID DATE (DATE OF SEARCH) BUT SUCH INCOME HAS NOT BEEN DECLARED THEREIN, THEN NOTWITHSTANDING THAT SUCH INCOME IS D ECLARED BY THE ASSESSEE IN ANY RETURN OF INCOME FURNISHED ON OR AF TER THE DATE OF SEARCH, HE SHALL BE DEEMED TO HAVE CONCEALED THE PA RTICULARS OF INCOME OR FURNISHED INACCURATE PARTICULARS OF SUCH INCOME. IN THE INSTANT CASE, THE SEARCH WAS CONDUCTED ON 17.12.201 4 RELEVANT TO PREVIOUS YEAR 2013-14 WHICH HAS ENDED BEFORE THE DA TE OF SEARCH AND THE ASSESSEE HAS FILED ITS RETURN OF INCOME FOR THE RELEVANT ASSESSMENT YEAR ON 24.07.2014 WHEREIN HE HAS NOT DISCLOSED THE UNDISCLOSED INCOME OF RS. 3,63,07,500/- IN SUCH RETURN OF INCOM E AS THE TOTAL INCOME DECLARED THEREIN WAS ONLY RS. 22,71,160/-. T HEREFORE, IN VIEW OF THESE FACTS THE CLAUSE (A) TO EXPLANATION 5A IS CLEARLY APPLICABLE AND NOT CLAUSE (B) AS HELD BY THE LD. CIT(A). 18. REGARDING THE DECISION OF THE CO-ORDINATE BENCH IN CASE OF ITO VS. GOPE M ROCHLANI [2014] 49 TAXMANN.COM 46 (MUMBA I TRIB.) RELIED UPON BY THE LD. CIT(A), THE LD. CIT DR REFERRED TO THE HONBLE CALCUTTA HIGH COURT DECISION IN CASE OF CIT VS. PRASANNA DUG AR [2015] 59 ITA NO. 1498 & 14 99/JP/2018 DCIT, JAIPUR VS. SH. KAM AL SETHIA, JAIPUR 14 TAXMANN.COM 99 (CALCUTTA) WHEREIN THE SAID DECISION HAS BEEN DISTINGUISHED AND IT HAS BEEN STATED THEREIN THAT C LAUSE(B) SHALL NOT APPLY TO THOSE CASES WHERE THE ASSESSEE HAD FILED A RETURN BUT DID NOT DISCLOSE THE INCOME, AS IN THIS CASE, HIS CASE SHAL L BE COVERED BY CLAUSE (A), WHICH PROVIDES THAT WHERE THE RETURN OF INCOME FOR SUCH PREVIOUS YEAR HAS BEEN FURNISHED BEFORE THE SAID DA TE BUT SUCH INCOME HAS NOT BEEN DECLARED THEREIN. IT WAS FURTHE R SUBMITTED THAT THE SLP FILED BY THE ASSESSEE AGAINST THE ABOVE REF ERRED JUDGMENT OF HONBLE HIGH COURT HAS BEEN DISMISSED BY THE HONBL E SUPREME COURT IN PRASANNA DUGAR VS. CIT [2016] 70 TAXMANN.COM 175 (SC). IT WAS ACCORDINGLY SUBMITTED THAT THE CASE OF THE ASSESSEE IS CLEARLY COVERED UNDER EXPLANATION 5A TO SECTION 271(1)(C) AND THUS, THE ORDER OF AO MAY KINDLY BE RESTORED AND THE ORDER OF LD CIT(A) B E SET-ASIDE. 19. NOW, WE REFER TO THE REBUTTAL AND SUBMISSIONS O F THE LD AR. THE LD. AR SUBMITTED THAT THE ASSESSEE IS A PARTNER IN M/S SETHIA REAL ESTATE AND M/S MANGALAM VARDHAMAN DEVELOPERS LLP AN D DIRECTOR IN TWO COMPANIES, M/S RICHWELL ENTERPRISES PVT. LTD. A ND YASHRAJ COMMERCIAL COMPLEX PVT. LTD. THESE FIRMS/COMPANIES ARE IN THE BUSINESS OF CONSTRUCTION OF RESIDENTIAL COMPLEXES A ND OTHER RELATED ACTIVITIES AND THE ASSESSEE WAS NOT DOING ANY BUSIN ESS IN HIS INDIVIDUAL CAPACITY. THE ASSESSEE IN HIS RETURN OF INCOME HAS DECLARED INCOME FROM HOUSE PROPERTY, REMUNERATION AND INTEREST FROM THESE PARTNERSHIP FIRMS. A SEARCH WAS CONDUCTED ON THE AS SESSEE ON 17.12.2014 AND STATEMENT OF THE ASSESSEE WAS RECORD ED U/S 132(4) IN WHICH THE ASSESSEE HAS VOLUNTARILY SURRENDERED A SU M OF RS. 9,92,49,633/- FOR AY 2014-15. IT WAS FURTHER SUBMIT TED THAT THE ASSESSEE FILED ORIGINAL RETURN OF INCOME ON 24.07.2 014 BEFORE DATE OF SEARCH AND REVISED RETURN OF INCOME ON 19.03.2015 A ND RETURN IN ITA NO. 1498 & 14 99/JP/2018 DCIT, JAIPUR VS. SH. KAM AL SETHIA, JAIPUR 15 RESPONSE TO NOTICE U/S 153A ON 27.03.2015. THE ASSE SSING OFFICER COMPLETED THE ASSESSMENT WITHOUT MAKING ANY ADDITIO N IN THE INCOME OF THE ASSESSEE AND INCOME AS PER RETURN FILED IN R ESPONSE TO NOTICE U/S 153A WAS ACCEPTED. SEPARATELY, THE ASSESSING O FFICER INITIATED PENALTY PROCEEDINGS U/S 271(1)(C) AND HAS ISSUED SE PARATE NOTICES DATED 24.11.2016 AND 04.05.2017. THE ASSESSEE FILED HIS SUBMISSION VIDE LETTER DATED 23.05.2017. HOWEVER, NOT SATISFIE D WITH THE REPLY OF THE ASSESSEE, THE LD. AO IMPOSED PENALTY OF RS. 1,2 3,40,919/-. 20. IN THIS FACTUAL BACKGROUND, IT WAS SUBMITTED BY THE LD AR THAT ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE LD . CIT(A) WHO HAS SINCE DELETED THE PENALTY. THE LD. AR SUBMITTED THA T THE LD. CIT(A) HAS RIGHTLY DELETED THE PENALTY GIVEN THE FOLLOWING REA SONS NAMELY EXPLANATION 5A TO SECTION 271(1)(C) IS NOT APPLICAB LE AS THE ASSESSMENT ORDER IS SILENT ON DISCLOSURE BEING RELA TABLE TO SEIZED ASSETS OR INCRIMINATING TRANSACTIONS. SECONDLY, THE ORDER PASSED U/S 143(3) READ WITH 153A DOESNT SPECIFY UNDER WHICH L IMBS THE PENALTY IS INITIATED NOR DOES NOTICE U/S 274 DO SO AND LASTLY THE APPELLANT HAS FILED REVISED RETURN WITHIN TIME AVAILABLE U/S 139 AND HENCE EXPLANATION 5A TO SECTION 271(1)(C) IS NOT APPLICAB LE. 21. THE LD. AR SUPPORTED THE SAID FINDING OF THE L D. CIT(A) AND SUBMITTED THAT EXPLANATION 5A CAN BE INVOKED PROVID ED THE APPELLANT IS FOUND TO BE THE OWNER OF ANY MONEY, BULLION, JEW ELLERY OR ANY ENTRY IN THE BOOKS OF ACCOUNTS WHICH REPRESENTS HIS UNDIS CLOSED INCOME FOR ANY PREVIOUS YEAR WHICH HAS ENDED BEFORE THE DATE O F SEARCH AND WHERE THE RETURN OF INCOME FOR SUCH PREVIOUS YEAR H AS BEEN FURNISHED BEFORE THE SAID DATE BUT SUCH INCOME HAS NOT BEEN D ECLARED THEREIN. IN THOSE CASES ONLY THE PENALTY IS LEVIABLE. IT WAS ACCORDINGLY ITA NO. 1498 & 14 99/JP/2018 DCIT, JAIPUR VS. SH. KAM AL SETHIA, JAIPUR 16 SUBMITTED THAT THE PREREQUISITE FOR INVOKING OF EXP LANATION 5A IS THAT THE ASSESSEE SHOULD BE FOUND TO BE OWNER OF SUCH IN COME AS NARRATED THEREIN. IN THE PRESENT CASE, NO SUCH MONEY, BULLIO N, JEWELLERY OR ANY ENTRY IN ANY BOOKS OF ACCOUNTS OR DOCUMENTS HAVE BE EN UNEARTHED DURING THE COURSE OF SEARCH BASED ON ANY INCRIMINAT ING MATERIAL FOUND. IT WAS SUBMITTED THAT THERE WERE NO ENTRIES IN THE BOOKS OF ACCOUNT AS THE ASSESSEE WAS NOT MAINTAINING ANY BOOKS OF ACCOU NTS, AS HE WAS NOT DOING ANY BUSINESS IN HIS INDIVIDUAL CAPACITY. THEREFORE, THE PENALTY HAS BEEN IMPOSED ON THE ASSESSEE ONLY ON TH E BASIS OF STATEMENTS OF THE ASSESSEE RECORDED DURING THE COUR SE OF SEARCH. IT WAS FURTHER SUBMITTED THAT AO HAS NOWHERE DEMONSTRA TED IN THE ENTIRE QUANTUM AS WELL AS PENALTY ORDER THAT THE AS SESSEE WAS CONFRONTED WITH ANY INCRIMINATING MATERIAL FOUND DU RING THE SEARCH AND ON THE BASIS OF WHICH ANY UNDISCLOSED INCOME WA S FOUND AND DISCLOSED BY THE ASSESSEE. THE ASSESSEE SIMPLY IN O RDER TO BUY PEACE DISCLOSED THE ADDITIONAL INCOME IN HIS STATEMENT MA DE U/S 132(4) OF THE ACT WHICH WAS ACCEPTED BY THE AO PEACEFULLY WIT HOUT MAKING ANY FURTHER ADDITIONS. DRAWING REFERENCE TO THE ASSESSM ENT ORDER DATED 24.11.2016, THE LD. AR SUBMITTED THAT NO MENTION IN THE ORDER THAT THE DISCLOSURE MADE BY THE ASSESSEE PERTAINED TO ANY SE IZED ASSETS OR INCRIMINATING TRANSACTIONS AND NO INCRIMINATING DOC UMENTS FOUND AND CONSIDERED AT THE TIME OF ASSESSMENT. FURTHER REFER RING TO THE PENALTY ORDER U/S 271(1)(C), IT WAS SUBMITTED THAT THE AO H AS SIMPLY REPRODUCED THE PROVISIONS OF EXPLANATION 5A AND SOM E CASE LAWS AND NOT MENTION ABOUT ANY INCRIMINATING DOCUMENTS EVEN AT THE TIME OF PASSING THE PENALTY ORDER. FURTHER RELIANCE WAS PLA CED ON THE CO- ORDINATE BENCH DECISION IN CASE OF RADHA SHYAM MITT AL VS. DCIT (2017) 88 TAXMANN.COM 336 WHEREIN IT WAS HELD THAT PENALTY U/S 271(1)(C) READ WITH EXPLANATION 5A CANNOT BE LEVIED IF ADDITI ON IS NOT BASED ON ITA NO. 1498 & 14 99/JP/2018 DCIT, JAIPUR VS. SH. KAM AL SETHIA, JAIPUR 17 ANY INCRIMINATING MATERIAL FOUND DURING THE COURSE OF SEARCH ON THE BASIS OF MONEY, BULLION, JEWELLERY OR ANY ENTRY IN THE BOOKS OF ACCOUNT. FURTHER, RELIANCE WAS PLACED ON THE CO-ORDINATE BEN CH DECISION IN CASE OF AJAY TRADERS VS. DCIT (2017) 81 TAXMANN.COM 463, DILIP KEDIA V. ACIT (2013) 40 TAXMANN.COM 102 AND FINANCIAL TECHNO LOGIES I LTD. VS. ACIT (2015) 61 TAXMANN.COM 91 (MUMBAI ITAT). 22. IT WAS FURTHER SUBMITTED BY THE LD AR THAT PEN ALTY IS NOT AUTOMATIC AND THE SAME IS LEVIABLE ONLY WHEN IT IS SO PROVIDED. HOWEVER IT IS ALSO SETTLED LAW THAT DEEMING PROVISI ON ARE TO BE STRICTLY CONSTRUED. WHEN IN GENERAL, IT IS NOT FOUND TO BE A CASE OF CONCEALMENT OF INCOME BUT BY DEEMING PROVISION, CON CEALMENT IS TO BE PRESUMED, THEN ONLY IN THOSE CIRCUMSTANCES DEEMI NG PROVISION WILL APPLY. THE ONUS TO PROVE THAT CONDITION EXISTS FOR LEVY OF PENALTY IS UPON THE REVENUE. IT WAS FURTHER SUBMITTED THAT IN THE STATEMENT RECORDED U/S 132(4), THE ASSESSEE HAD MADE SURRENDE R OF INCOME ONLY TO BUY PEACE OF MIND AND WITH A VIEW TO COOPERATE W ITH THE INCOME TAX DEPARTMENT AND WITH THE CONDITION THAT NO PENAL TY WOULD BE IMPOSED ON HIM FOR THE INCOME SO SURRENDERED. DURIN G ASSESSMENT PROCEEDINGS ALSO THE ASSESSEE HAS FULLY COOPERATED WITH THE DEPARTMENT TO COMPLETE THE ASSESSMENT SMOOTHLY. THE DEPARTMENT SHOULD NOT HAVE IMPOSED PENALTY UPON HIM AFTER ACCE PTING THE CONDITIONAL SURRENDER OF INCOME. IT WAS FURTHER SUB MITTED THAT EVEN THERE IS NO REQUIREMENT OF PROVING MENS REA SPECIFI CALLY, IT IS CLEAR THAT THE WORD CONCEAL INHERENTLY CARRIED WITH IT THE REQ UIREMENT OF ESTABLISHING THAT THERE WAS A CONSCIOUS ACT OR OMIS SION ON THE PART OF THE ASSESSEE TO HIDE HIS TRUE INCOME. THUS, AS THE LAW STANDS, THE WORD CONCEAL IN SECTION 271(1)(C), WOULD REQUIRE TH E ASSESSING OFFICER TO PROVE THAT SPECIFICALLY THERE WAS SOME CONDUCT O N PART OF THE ITA NO. 1498 & 14 99/JP/2018 DCIT, JAIPUR VS. SH. KAM AL SETHIA, JAIPUR 18 ASSESSEE WHICH WOULD SHOW THAT THE ASSESSEE CONSCIO USLY INTENDED TO HIDE HIS INCOME. 23. FURTHER, THE RELIANCE WAS PLACED ON THE DECISI ON OF T. ASHOK PAI VS. CIT [2007] 292 ITR 11/161 TAXMANN 340 (SC), UNI ON OF INDIA VS. RAJASTHAN SPG. AND WVG. [2009] 180 TAXMANN 609 (SC) , CIT VS. SAS PHARMACEUTICALS [2011] 335 ITR 259/199 TAXMANN. 255 /11 TAXMANN.COM 207 (DELHI), RELIANCE PETRO PRODUCTS P. LTD 322 ITR 158 (SC), HINDUSTAN STEEL LTD. VS. STATE OF ORISSA [197 2] 83 ITR 26 (SC), DILIP N. SHROFF VS. JOINT COMMISSIONER OF INCOME-TA X, SPECIAL RANGE, MUMBAI [2007] 161 TAXMANN 218 (SC), SUDARSHAN SILK & SAREES VS. CIT (2008) 300 ITR 205 (SC), CIT VS. S.D.V. CHANDRU [2004] 266 ITR 175/136 TAXMAN 537 (MAD.), CIT VS. SURESH CHANDRA M ITTAL [2000] 241 ITR 124/[2002] 123 TAXMAN 1052 (MP), AND CIT VS . SURAJ BHAN [2007] 294 ITR 481/159 TAXMAN 26 (PUNJ. & HAR.) 24. IT WAS FURTHER SUBMITTED THAT THE ORDER PASSED U/S 143(3) R/W SECTION 153A DOES NOT SPECIFY UNDER WHICH LIMB THE PENALTY IS INITIATED. NOR DOES NOTICE U/S 274 DO SO. IT WAS SU BMITTED THAT FOR LEVY OF PENALTY U/S 271(1)(C), LD. AO HAS TO APPLY HIS M IND AND COME TO A CONCLUSION THAT WHETHER THE PENALTY IS BEING LEVIED FOR CONCEALMENT OF PARTICULARS OF INCOME OR FOR FURNISHING INACCURATE PARTICULARS OF INCOME. IT WAS SUBMITTED THAT THERE IS HEAVY ONUS ON THE LD . AO INITIATING PENALTY OF PROVING THE ASSESSEE GUILTY OF CONCEALME NT OF INCOME AS PENALTY PROCEEDINGS RESULT INTO UNDUE HARDSHIP FOR THE ASSESSEE. THUS IT IS INEVITABLE THAT THE AUTHORITY LEVYING PENALTY SHOULD BE FULLY SATISFIED AFTER PROPER APPLICATION OF MIND THAT IT IS A FIT CASE FOR LEVY OF PENALTY. IN THE ASSESSMENT ORDER DATED 24.11.2016 PASSED U/S 143(3) RWS 153A OF INCOME TAX ACT, LD. AO HAS JUST MENTIONED THAT ITA NO. 1498 & 14 99/JP/2018 DCIT, JAIPUR VS. SH. KAM AL SETHIA, JAIPUR 19 NOTICE U/S 271(1)(C) OF THE ACT IS BEING ISSUED, WI THOUT MENTIONING THE EXACT NATURE OF DEFAULT OF THE ASSESSEE. ATTENTION WAS ALSO DRAWN TOWARDS THE NOTICES DATED 24.11.2016 AND 04.05.2017 ISSUED BY THE LD. AO U/S 274 READ WITH SECTION 271(1)(C) AND IT W AS SUBMITTED THAT SAID NOTICE, LD. AO HAS NOT CLEARLY MENTIONED THE L IMB, ON THE BASIS OF WHICH, PENALTY WAS PROPOSED TO BE IMPOSED. LD. AO H AS SIMPLY ISSUED A PRE-PRINTED NOTICE WITHOUT STRIKING OFF THE UNNEC ESSARY PORTIONS OF THE NOTICE. IN SUPPORT, RELIANCE WAS PLACED ON THE HONBLE KARNATAKA HIGH COURT IN THE CASE OF MANJUNATHA COTTON & GINNI NG FACTORY [2013] 359 ITR 565 (KARNATAKA) WHICH HAS BEEN FOLLOWED BY HONBLE BOMBAY HIGH COURT IN CASE OF SH. SAMSON PERINCHERY (ITA NO . 1154,953,1097,1226 OF 2014 VIDE ORDER DATED 05.01. 2017 AND SSAS EMERALD MEADOWS [2016] 73 TAXMANN.COM 241 (KARNATAK A HIGH COURT). IT WAS FURTHER SUBMITTED THAT THE CO-ORDINA TE JAIPUR BENCHES IS ALSO FOLLOWING THE RATIO LAID DOWN THEREIN IN CASE OF SHANKAR LAL KHANDELWAL VS. DCIT (ITA NO. 878/JP/2013), RADHA MO HAN MAHESHWARI VS. DCIT (ITA NO. 773/JP/2013). FURTHER, RELIANCE WAS PLACED ON JUDGMENT OF THE HONBLE JURISDICTIONAL HI GH COURT IN CASE OF SHEVETA CONSTRUCTION CO. PVT. LTD. ITA NO. 534/2008 . 25. IT WAS FURTHER SUBMITTED THAT THERE WAS NO DIFF ERENCE IN THE INCOME DECLARED BY THE ASSESSEE IN THE RETURN FILED U/S 139(5)/153 AND THE INCOME FINALLY ASSESSED BY THE AO. THEREFOR E, THERE WAS NO CONCEALMENT OF INCOME BY THE ASSESSEE AS THE CONCEA LMENT HAS TO BE SEEN WITH REFERENCE TO THE REVISED RETURN OF INCOME /RETURN FILED IN RESPONSE TO NOTICE U/S 153A VIS A VIS THE ASSESSED INCOME. IT WAS SUBMITTED THAT AS PER THE CLAUSE (B) OF EXPLANATION 5A, A PENALTY CAN BE IMPOSED ON THE ASSESSEE IF THE DUE DATE FOR FILI NG OF RETURN OF INCOME FOR THE YEAR HAS EXPIRED BUT THE ASSESSEE HA S NOT FILED THE ITA NO. 1498 & 14 99/JP/2018 DCIT, JAIPUR VS. SH. KAM AL SETHIA, JAIPUR 20 RETURN. IT WAS SUBMITTED THAT EVEN IF THE INCOME DE CLARED DURING SEARCH IS DISCLOSED BY THE ASSESSEE IN RETURN OF IN COME FIELD ON OR AFTER DATE OF SEARCH, HE SHALL BE DEEMED TO HAVE CONCEALE D/FURNISHED INACCURATE PARTICULARS OF SUCH INCOME. HERE THE TER M USED IS DUE DATE AND NOT DUE DATE AS SPECIFIED U/S 139(1) AND ACCORD INGLY, EVEN IF ASSESSEE FILES RETURN OF INCOME AFTER DATE OF SEARC H BUT WITHIN EXTENDED DUE DATE U/S 139(5) BY INCLUDING THE UNACC OUNTED INCOME ADMITTED DURING SEARCH IN HIS RETURN OF INCOME, DEE MING FICTION OF EXPLN. 5A SHALL NOT BE ATTRACTED. IT WAS ACCORDINGL Y SUBMITTED THAT THE ASSESSING OFFICER HAS ACCEPTED THE REVISED RETURN F ILED BY THE ASSESSEE U/S 139(5) AND 153A, NO OCCASION ARISES TO REFER TO THE PREVIOUS RETURN FILED U/S 139(1). FOR ALL PURPOSES, INCLUDING FOR T HE PURPOSE OF LEVYING PENALTY U/S 271(1)(C), THE RETURN THAT HAS TO BE LO OKED AT IS THE ONE FILED U/S 139(5) AND SEC. 153A AND SECTION 139(5) A ND SECTION 153A IS IN THE NATURE OF A SECOND CHANCE GIVEN TO THE ASSES SEE, WHICH INCIDENTALLY GIVES HIM AN OPPORTUNITY TO MAKE GOOD OMISSION, IF ANY, IN THE ORIGINAL RETURN. ONCE THE ASSESSING OFFICER ACC EPTS THE REVISED RETURN/RETURN FILED U/S 153A, THE ORIGINAL RETURN U /S 139(1) ABATES AND BECOMES NON EST. THE CONCEALMENT HAS TO BE SEEN WIT H REFERENCE TO THE RETURN THAT IS FILED BY THE ASSESSEE. THUS, FOR THE PURPOSE OF LEVYING PENALTY U/S 271(1)(C), WHAT HAS TO BE SEEN IS WHETHER THERE IS ANY CONCEALMENT IN THE RETURN FILED BY THE ASSESSEE U/S 139(5) OR SEC. 153A, AND NO VIS--VIS THE ORIGINAL RETURN U/S 139( 1). IT WAS FURTHER SUBMITTED THAT NO PENALTY CAN BE IMPOSED ON THE ASS ESSEE AS PER CLAUSE (A) OF EXPLANATION 5A AS THE ASSESSEE HAD DE CLARED ALL THE INCOME IN THE REVISED RETURN FILED U/S 139(5) OF AC T WHICH WAS WELL WITHIN THE TIME LIMIT PRESCRIBED UNDER THE ACT. LEA RNED AO HAS ALSO ACCEPTED THE SAME INCOME WITHOUT MAKING ANY ADDITIO N. THEREFORE, THE ASSESSEE HAS FULLY COMPLIED WITH LAW BY DECLARI NG ENTIRE INCOME IN ITA NO. 1498 & 14 99/JP/2018 DCIT, JAIPUR VS. SH. KAM AL SETHIA, JAIPUR 21 RETURN FILED U/S 139(5) AND NO PENALTY CAN BE IMPOS ED UPON HIM BY INVOKING PROVISIONS OF EXPLANATION 5A OF SECTION 27 1(1)(C). REGARDING CLAUSE (B) OF EXPLANATION 5A, IN CASE OF PREVIOUS Y EAR HAS EXPIRED BUT THE ASSESSEE HAS NOT FILED THE RETURN, THEN EVEN IF THE INCOME DECLARED DURING SEARCH IS DISCLOSED BY THE ASSESSEE IN RETUR N OF INCOME FILED ON OR AFTER DATE OF SEARCH, HE SHALL BE DEEMED TO HAVE CONCEALED/FURNISHED INACCURATE PARTICULARS OF SUCH INCOME. HERE THE TERM USED IS DUE DATE AND NOT DUE DATE AS SPECIFIED U/S 139(1) AND ACCORDINGLY, EVEN IF ASSESSEE FILES RETURN OF INCOM E AFTER DATE OF SEARCH BUT WITHIN EXTENDED DUE DATE 139(5) BY INCLU DING THE UNACCOUNTED INCOME ADMITTED DURING SEARCH IN HIS RE TURN OF INCOME, DEEMING FICTION OF EXPLANATION 5A SHALL NOT BE ATTR ACTED. 26. FURTHER, THE LD AR PLACED RELIANCE ON THE CO-OR DINATE BENCH DECISION IN CASE OF ITO VS. MR. GOPE M. ROCHLANI IN [2014] 40 TAXMANN.COM 46, (MUMBAI), SANJEEV KUMAR AGARWAL VS. ACIT, NEW DELHI [2019] 101 TAXMANN.COM 223 (DELHI-TRIB.), IN CASE OF PRINCIPAL COMMISSIONER OF INCOME TAX -19 VS. NEERAJ JINDAL [2 017] 79 TAXMANN.COM 96 (DELHI) AND PREM ARORA VS. DCIT, [20 12] 149 TTJ (DEL) 590. 27. WE HAVE HEARD THE RIVAL CONTENTIONS AND GONE T HROUGH THE MATERIAL AVAILABLE ON RECORD. 28. FIRSTLY, WE REFER TO THE CONTENTION OF THE LD. DR THAT THERE IS NO INFIRMITY IN THE PENALTY ORDER, SO PASSED BY THE AS SESSING OFFICER AS HELD BY THE LD. CIT(A) AS REGARDS RECORDING OF THE SATISFACTION. IN THIS REGARD, IT WAS SUBMITTED THAT FIRSTLY, THE SATISFAC TION WHILE PASSING THE ASSESSMENT ORDER IS CLEARLY DISCERNIBLE FROM THE AS SESSMENT ORDER AND ITA NO. 1498 & 14 99/JP/2018 DCIT, JAIPUR VS. SH. KAM AL SETHIA, JAIPUR 22 SECONDLY, WHILE PASSING THE PENALTY ORDER, THE AO H AS GIVEN A SPECIFIC FINDING REGARDING CONCEALMENT OF INCOME. THEREFORE, EVEN IF THE NOTICE U/S 271(1)(C) IS NOT SPECIFIC, THE SAME BY ITSELF W ILL NOT RESULT IN PENALTY ORDER BEING HELD AS BAD IN LAW. 29. IN THIS REGARD, WE REFER TO THE ASSESSMENT ORDE R PASSED U/S 143(3) READ WITH SECTION 153A OF THE ACT. IN PARA 2 OF THE ASSESSMENT ORDER, THE ASSESSING OFFICER HAS STATED THAT PURSUA NT TO SEARCH AND SEIZURE OPERATION CARRIED OUT ON 17.12.2014 AT THE VARIOUS PREMISES OF VARDHAMAN GROUP, THE BUSINESS/RESIDENTIAL PREMISES (801, WESTERN HEIGHT, S-21, SHYAM NAGAR, JAIPUR) OF THE ASSESSEE WAS ALSO COVERED AND THEREAFTER NOTICE U/S 153A WAS ISSUED TO THE AS SESSEE ON 11.02.2015 AND IN RESPONSE TO THE SAID NOTICE, THE ASSESSEE FURNISHED HIS RETURN OF INCOME ON 27.03.2015 DECLARING TOTAL INCOME OF RS. 3,85,78,660/-WHICH INCLUDES UNDISCLOSED INCOME OF R S. 3,63,07,500/- WHICH HAS BEEN ACCEPTED BY THE ASSESSEE HIMSELF DUR ING THE COURSE OF HIS STATEMENT U/S 132(4) OF THE ACT AND THEREFORE, PENALTY PROCEEDINGS U/S 271(1)(C) ARE BEING INITIATED SEPARATELY. THERE AFTER, TOWARDS THE END OF THE PARA 6 OF THE ASSESSMENT ORDER, THE AO H AS STATED THAT A NOTICE U/S 271(1)(C) IS BEING ISSUED. THEREFORE, WE FIND THAT THE PENALTY PROCEEDINGS HAVE BEEN INITIATED QUA THE UNDISCLOSED INCOME WHICH HAS BEEN ADMITTED BY THE ASSESSEE DURING THE COURSE OF SEARCH IN HIS STATEMENT U/S 132(4) OF THE ACT AND WHICH HA S SUBSEQUENTLY BEEN REPORTED TO TAX IN THE RETURN FILED IN RESPONS E TO NOTICE U/S 153A OF THE ACT. THE PENALTY PROCEEDINGS PROPOSED TO BE INITIATED IS THEREFORE QUA THE UNDISCLOSED INCOME ADMITTED DURING THE COURSE OF SEARCH AND NOT QUA THE ADDITION MADE WHILE PASSING THE ASSESSMENT ORDER U/S 143(3) READ WITH SECTION 153A OF THE ACT. THE FACT THAT THE AO WHILE PASSING THE ASSESSMENT ORDER HAS TAKEN NOT E OF SAID ITA NO. 1498 & 14 99/JP/2018 DCIT, JAIPUR VS. SH. KAM AL SETHIA, JAIPUR 23 DISCLOSURE OF THE UNDISCLOSED INCOME BY THE ASSESSE E IN HIS STATEMENT RECORDED U/S 132(4) DURING THE COURSE OF SEARCH WHI CH HAS BEEN SUBSEQUENTLY BEEN REPORTED TO TAX IN THE RETURN FIL ED U/S 153A IS THEREFORE CLEAR ENOUGH REFLECTION OF THE MIND OF TH E AO AND WHICH CLEARLY DEMONSTRATES THAT THE ASSESSING OFFICER AT THE TIME OF PASSING THE ASSESSMENT ORDER WAS SATISFIED THAT THE ASSESSE E IS LIABLE FOR PENALTY U/S 271(1)(C) OF THE ACT QUA THE UNDISCLOSE D INCOME. THEREFORE, AS FAR AS RECORDING OF SATISFACTION AT T HE TIME OF PASSING OF THE ASSESSMENT ORDER IS CONCERNED, WE FIND THAT THE SAME IS CLEARLY DISCERNABLE FROM THE READING OF THE ASSESSMENT ORDE R AND THERE IS A DIRECTION TO THIS EFFECT EVEN THOUGH THE AO HAS NOT SAID IN SPECIFIC TERMS THAT HE IS SATISFIED THAT THE PENALTY IS LEVI ABLE IN THE INSTANT CASE. 30. NOW COMING TO THE SECOND CONTENTION OF THE LD D R CHALLENGING THE FINDINGS OF THE LD. CIT(A) REGARDING THE SPECIF IC LIMB/CHARGE FOR LEVY OF PENALTY NOT DISCERNIBLE FROM THE ASSESSMENT ORDER AND ALSO FROM THE NOTICE ISSUED U/S 271 R/W 275 FOR LEVY OF PENALTY. IN THIS REGARD, WE REFER TO THE NOTICE ISSUED U/S 271 R/W 2 75 WHICH STATES THAT: WHEREAS IN THE COURSE OF ASSESSMENT PROCEEDINGS FO R AY 2014- 15, IT APPEARS THAT AS PER SECTION 274 AND 275 READ WITH SECTION 271(1)(C) YOU ARE LIABLE FOR PENALTY FOR CONCEALMEN T OF PARTICULARS OF INCOME/FURNISHING OF INACCURATE PART ICULARS OF INCOME IS CONCERNED, YOU ARE HEREBY REQUESTED TO AP PEAR AND SHOW CAUSE WHY AN ORDER SHOULD NOT BE MADE IMPOSING PENALTY U/S 271(1)(C) R/W 274 OF THE ACT. ITA NO. 1498 & 14 99/JP/2018 DCIT, JAIPUR VS. SH. KAM AL SETHIA, JAIPUR 24 WE THEREFORE FIND THAT WHILE ISSUING THE NOTICE U/S 271(1)(C), THE SPECIFIC CHARGE IN TERMS OF CONCEALMENT OF PARTICUL ARS OF INCOME OR FURNISHING OF INACCURATE PARTICULARS OF INCOME IS T HEREFORE NOT ASCERTAINABLE, HOWEVER, WHILE PASSING THE PENALTY O RDER, THE AO HAS STATED THAT IT IS A CASE OF DEEMED CONCEALMENT OF P ARTICULARS OF INCOME WITHIN THE MEANING OF EXPLANATION 5A TO SECTION 271 (1)(C) OF THE ACT AND THEREAFTER, AT PARA 7 OF THE PENALTY ORDER, HE HAS STATED HIS FINAL AND CONCLUSIVE FINDINGS THAT: IN VIEW OF ABOVE STATED FACTS AND LEGAL POSITION, THE ASSESSEE UNDER CONSIDERATION IS CLEARLY LIABLE FOR PENALTY U /S 271(1)(C) ON ACCOUNT OF CONCEALMENT OF INCOME AND ACCORDINGLY, P ENALTY U/S 271(1)(C) IS IMPOSED ON HIM.. WE THEREFORE FIND THAT WHILE PASSING THE PENALTY OR DER, THE AO HAS GIVEN A CLEAR AND SPECIFIC FINDING THAT IT IS A CAS E OF CONCEALMENT OF INCOME. AS WE HAVE HELD ABOVE, THE SATISFACTION WH ICH HAS BEEN RECORDED WHILE PASSING THE ASSESSMENT ORDER IS QUA THE UNDISCLOSED INCOME ADMITTED BY THE ASSESSEE DURING THE COURSE O F SEARCH AND THE AO WHILE PASSING THE PENALTY ORDER HAS GIVEN A CLEA R FINDING THAT THE EXPLANATION 5A TO SECTION 271(1)(C) IS CLEARLY ATTR ACTED IN THE INSTANT CASE AND ITS A CASE OF DEEMED CONCEALMENT OF INCOM E BY THE ASSESSEE. WE THEREFORE FIND THAT THERE IS A CLEAR A ND SPECIFIC FINDING ABOUT DEEMED CONCEALMENT OF INCOME BY THE ASSESSING OFFICER WHILE PASSING THE PENALTY ORDER. THEREFORE, EVEN THOUGH T HE NOTICE INITIATING PENALTY PROCEEDINGS IS NOT SO SPECIFIC ABOUT THE SP ECIFIC CHARGE, HOWEVER, IN THE PENALTY ORDER, THERE IS A CLEAR FIN DING IN TERMS OF CHARGE OF DEEMED CONCEALMENT WHICH HAS BEEN FASTENE D ON THE ASSESSEE BY THE ASSESSING OFFICER. THEREFORE, WE DO NOT SEE ANY INFIRMITY IN THE PENALTY ORDER SO PASSED BY THE ASS ESSING OFFICER AS FAR ITA NO. 1498 & 14 99/JP/2018 DCIT, JAIPUR VS. SH. KAM AL SETHIA, JAIPUR 25 AS THE ARGUMENT REGARDING SPECIFIC CHARGE NOT BEEN STATED WHILE INITIATING THE PENALTY PROCEEDINGS. IN THIS REGARD, WE REFER TO THE DECISION OF THE THIRD MEMBER IN CASE OF HPCL MITTAL ENERGY LTD (SUPRA) WHEREIN IT HAS BEEN HELD THAT UNCERTAIN CHARGE AT T HE TIME OF INITIATION OF PENALTY MUST NECESSARILY BE SUBSTITUTED WITH A C ONCLUSIVE DEFAULT AT THE TIME OF PASSING THE PENALTY ORDER AND WHERE THE SAME IS ULTIMATELY FOUND TO BE CORRECT, NO FAULT CAN BE FOUND WITH THE PENALTY ORDER. THE SAID DECISION THUS SUPPORTS THE CASE OF THE REVENUE AS IN THE INSTANT CASE, THE UNCERTAIN CHARGE AT THE TIME OF INITIATIN G THE PENALTY PROCEEDINGS HAS BEEN SUBSTITUTED WITH A SPECIFIC AN D CONCLUSIVE DEFAULT BY WAY OF CONCEALMENT OF INCOME. 31. IN THE INSTANT CASE, IT THEREFORE NEEDS TO BE D ETERMINED WHETHER THE ASSESSEE IS ACTUALLY GUILTY OF SPECIFIC CHARGE OF DEEMED CONCEALMENT OF INCOME BY VIRTUE OF EXPLANATION 5A T O SECTION 271(1)(C) OF THE ACT AS SO HELD BY THE ASSESSING OF FICER. IN THIS REGARD, WE REFER THE PROVISION OF EXPLANATION 5A TO SECTION 271(1)(C) OF THE ACT WHICH READS AS UNDER:- [EXPLANATION 5A - WHERE, IN THE COURSE OF A SEARCH INITIATED UNDER SECTION 132 ON OR AFTER THE 1ST DAY OF JUNE, 2007, THE ASSESSE E IS FOUND TO BE THE OWNER OF (I ) ANY MONEY, BULLION, JEWELLERY OR OTHER VALUABLE ART ICLE OR THING (HEREAFTER IN THIS EXPLANATION REFERRED TO AS ASSETS) AND THE ASSESSEE CLAIMS THAT SUCH ASSETS HAVE BEEN ACQUIRED BY HIM BY UTILISING (WHOLLY OR IN PART) HIS INCOME FOR A NY PREVIOUS YEAR; OR (II ) ANY INCOME BASED ON ANY ENTRY IN ANY BOOKS OF ACCOU NT OR ITA NO. 1498 & 14 99/JP/2018 DCIT, JAIPUR VS. SH. KAM AL SETHIA, JAIPUR 26 OTHER DOCUMENTS OR TRANSACTIONS AND HE CLAIMS THAT SUCH ENTRY IN THE BOOKS OF ACCOUNT OR OTHER DOCUMENTS OR TRANS ACTIONS REPRESENTS HIS INCOME (WHOLLY OR IN PART) FOR ANY PREVIOUS YEAR, WHICH HAS ENDED BEFORE THE DATE OF SEARCH AND, (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 FOR SUCH PREVIOUS YEAR HAS EXPIRED BUT THE ASSESSEE HAS NOT FILED THE RETURN, 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 C LAUSE (C) OF SUB- SECTION (1) OF THIS SECTION, BE DEEMED TO HAVE CONC EALED THE PARTICULARS OF HIS INCOME OR FURNISHED INACCURATE P ARTICULARS OF SUCH INCOME. 32. ON PERUSAL OF THE EXPLANATION 5A TO SECTION 271 (1)(C), IT LAYS DOWN THE FOLLOWING ESSENTIAL CONDITIONS WHICH NEEDS TO BE SATISFIED BEFORE THE ASSESSEE IS FASTENED WITH THE PENALTY U/ S 271(1)(C) OF THE ACT: (1) FIRSTLY, IT TALKS ABOUT A SITUATION WHERE THE S EARCH HAS BEEN INITIATED U/S 132 ON OR AFTER THE 1 ST DAY OF JUNE, 2007. IN THE PRESENT CASE, THE SEARCH HAS BEEN CONDUCTED ON THE ASSESSEE ON 17.12.2014. THEREFORE, THIS CONDITION IS SATISFIED IN THE INSTA NT CASE. (2) THE SECOND CONDITION IS THAT IN THE COURSE OF S EARCH SO CONDUCTED, THE ASSESSEE IS FOUND TO BE THE OWNER OF ANY MONEY, BULLION, JEWELLERY ITA NO. 1498 & 14 99/JP/2018 DCIT, JAIPUR VS. SH. KAM AL SETHIA, JAIPUR 27 OR OTHER VALUABLE ARTICLE OR THING AND THE ASSESSEE CLAIMS THAT SUCH ASSETS HAVE BEEN ACQUIRED BY HIM BY UTILIZING (WHOL LY OR IN PART) HIS INCOME FOR ANY PREVIOUS YEAR WHICH HAS ENDED BEFORE THE DATE OF SEARCH. IN THE INSTANT CASE, THERE IS NOTHING ON RE CORD WHICH DEMONSTRATES THAT ANY MONEY, BULLION, JEWELLERY OR OTHER VALUABLE ARTICLE OR THING HAS BEEN FOUND DURING THE COURSE O F SEARCH AND EVEN THIS IS NOT THE CASE OF THE REVENUE. THEREFORE, TH IS CONDITION IS NOT RELEVANT IN THE INSTANT CASE AND HAS NOT BEEN DEALT UPON BY US. (2A) THE SECOND ALTERNATE CONDITION IS THAT DURING THE COURSE OF SEARCH, THE ASSESSEE IS FOUND TO BE OWNER OF ANY IN COME BASED ON ANY ENTRY IN BOOKS OF ACCOUNTS OR OTHER DOCUMENTS OR TR ANSACTIONS AND THE ASSESSEE CLAIMS THAT SUCH ENTRY IN THE BOOKS OF ACC OUNTS OR OTHER DOCUMENTS OR TRANSACTIONS REPRESENT HIS INCOME WHOL LY OR IN PART FOR ANY PREVIOUS YEAR WHICH HAS ENDED BEFORE THE DATE O F SEARCH. WE FIND THAT THIS CONDITION IS RELEVANT IN THE INSTANT CASE AND WE WILL EXAMINE WHETHER THIS CONDITION IS SATISFIED OR NOT IN THE S UBSEQUENT PARAGRAPHS SHORTLY. (3) THE THIRD CONDITION IS THAT WHERE THE RETURN OF INCOME FOR SUCH PREVIOUS YEAR HAS BEEN FURNISHED BEFORE THE SAID DATE BUT SUCH INCOME HAS NOT BEEN DECLARED THEREIN. THE PHRASE S UCH PREVIOUS YEAR REFERS TO THE PREVIOUS YEAR WHICH HAS ENDED B EFORE THE DATE OF SEARCH AND SUCH INCOME REFERS TO THE INCOME IN RE SPECT OF WHICH THE ASSESSEE IS FOUND TO BE OWNER BASED ON ANY ENTRY IN BOOKS OF ACCOUNTS OR OTHER DOCUMENTS OR TRANSACTIONS DURING THE COURSE OF SEARCH AND THE ASSESSEE CLAIMS THAT SUCH ENTRY IN T HE BOOKS OF ACCOUNTS OR OTHER DOCUMENTS OR TRANSACTIONS REPRESE NT HIS INCOME WHOLLY OR IN PART FOR SUCH PREVIOUS YEAR. THE PHRA SE SAID DATE REFER TO THE DATE OF SEARCH. THEREFORE, THIS CONDITION I S TO BE READ ALONG ITA NO. 1498 & 14 99/JP/2018 DCIT, JAIPUR VS. SH. KAM AL SETHIA, JAIPUR 28 WITH THE SECOND ALTERNATE CONDITION IN THE SENSE TH AT THE ASSESSEE HAS TO BE FOUND TO BE OWNER OF THE UNDISCLOSED INCOME A ND HE ADMITS THE SAME AND FURTHER, SUCH UNDISCLOSED INCOME HAS NOT B EEN DISCLOSED IN THE RETURN OF INCOME FILED BEFORE THE DATE OF SEARC H. IN THE INSTANT CASE, THE ASSESSEE HAS ORIGINALLY FILED HIS RETURN OF INCOME U/S 139(1) ON 24.07.2014 DECLARING TOTAL INCOME OF RS. 22,71,1 60/- AND THEREAFTER, THE SEARCH WAS CONDUCTED ON THE ASSESSE E ON 17.12.2014. THEREFORE, IT IS A CASE WHERE THE RETURN OF INCOME FOR SUCH PREVIOUS YEAR RELEVANT TO THE IMPUGNED ASSESSMENT YEAR HAS B EEN DULY FURNISHED BY THE ASSESSEE U/S 139(1) BEFORE THE DAT E OF SEARCH. IN THE SAID RETURN OF INCOME, THE UNDISCLOSED INCOME O F RS. 3,63,07,500/- AS PER STATEMENT U/S 132(4) HAS NOT BEEN INCLUDED A ND REPORTED BY THE ASSESSEE. IN THIS REGARD, THE CONTENTION OF THE LD AR IS THAT THE ASSESSEE HAD DECLARED THE UNDISCLOSED INCOME IN THE REVISED RETURN FILED U/S 139(5) ON 19.03.2015 WHEREIN HE HAS INCLU DED THE UNDISCLOSED INCOME OF RS. 3,63,07,500/. THEREFORE, THIS CONDITION IS NOT SATISFIED IN THE INSTANT CASE AND PENALTY SHOUL D NOT BE LEVIED. HOWEVER, WE ARE AFRAID, WE CANNOT ACCEDE TO THE SAI D CONTENTION OF THE LD. AR AS THIS CONDITION TALKS ABOUT FURNISHING OF INCOME BEFORE THE DATE OF SEARCH WHICH IS 17.12.2014 AND BEFORE THE S AID DATE OF SEARCH, THE ONLY RETURN WHICH HAS BEEN FILED IS ON 24.07.20 14 WHICH HAS BEEN FILED U/S 139(1) WHEREIN THE ASSESSEE HAS DISCLOSED THE TOTAL INCOME OF RS. 22,71,160/- AND HAS THEREFORE NOT INCLUDED THE UNDISCLOSED INCOME AS PER THE STATEMENT RECORDED U/S 132 (4) OF THE AC T. AT THE SAME TIME, AS WE HAVE STATED ABOVE, THIS CONDITION HAS T O BE READ ALONG WITH SECOND ALTERNATE CONDITION IN THE SENSE THAT T HE ASSESSEE HAS TO BE FIRSTLY FOUND TO BE OWNER OF THE UNDISCLOSED INC OME AND HE ADMITS THE SAME AND ONLY IN A SCENARIO WHERE THE SAME IS S ATISFIED, THE QUESTION OF DECLARING SUCH UNDISCLOSED INCOME IN TH E RETURN OF INCOME ITA NO. 1498 & 14 99/JP/2018 DCIT, JAIPUR VS. SH. KAM AL SETHIA, JAIPUR 29 WILL ARISE FOR CONSIDERATION. WHERE IT IS ULTIMATEL Y DETERMINED THAT THE ASSESSEE IS FOUND TO BE OWNER OF THE UNDISCLOSED IN COME, THE FACT THAT SUCH UNDISCLOSED INCOME HAS NOT BEEN DECLARED IN TH E RETURN OF INCOME FILED BEFORE THE DATE OF SEARCH, THIS CONDIT ION CAN BE SAID TO BE SATISFIED. (3A) NOW COMING TO THE THIRD ALTERNATE CONDITION, I T TALKS ABOUT A SITUATION WHERE THE ASSESSEE HAS NOT FILED HIS RETU RN OF INCOME AND DUE DATE FOR FILING THE RETURN OF INCOME FOR SUCH PREVIOUS YEAR HAS EXPIRED. IN THE INSTANT CASE, THE ASSESSEE HAS DUL Y FILED HIS RETURN OF INCOME, THEREFORE, THIS ALTERNATE THIRD CONDITION D OES NOT APPLY AT FIRST PLACE. THIS CONDITION CAN BE INVOKED AND EXAMINED O NLY IN A SCENARIO WHERE THE ASSESSEE HAS NOT FILED HIS RETURN OF INCO ME AT ALL FOR THE IMPUGNED ASSESSMENT YEAR AND ONLY IN THAT SCENARIO, THE VARIOUS CONTENTIONS RAISED BY THE LD. AR ARISE FOR CONSIDER ATION REGARDING THE CONCEPT OF THE DUE DATE OF FILING THE RETURN OF INC OME AND WHETHER REFERENCE TO DUE DATE HAS TO BE EXTENDED AS NOT LIM ITED TO DUE DATE AS SPECIFIED U/S 139(1) BUT THE EXTENDED DUE DATE U/S 139(5) WHEREIN THE ASSESSEE CLAIMED TO HAVE FILED HIS REVISED RETURN O F INCOME ON 19.03.2015. GIVEN THAT THE ASSESSEE HAS ALREADY FI LED THE RETURN OF INCOME U/S 139(1) ON 24.07.2014 BEFORE THE DATE OF SEARCH, THIS ALTERNATE THIRD CONDITION IS NOT APPLICABLE AND THU S, WE DONT SEE ANY NECESSITY TO EXAMINE THE AFORESAID CONTENTIONS SO R AISED BY THE LD AR IN THIS REGARD. 33. THEREFORE, WE AGREE WITH THE CONTENTION OF THE LD. DR THAT THE CLAUSE (A) AND NOT CLAUSE (B) OF THE THIRD CONDITIO N OF EXPLANATION 5A IS RELEVANT IN THE INSTANT CASE AND THE LD. CIT(A) HAS ERRED BY IGNORING CLAUSE (A) AND STRAIGHTAWAY EXAMINING CLAUSE (B) AN D HOLDING THAT THE APPELLANT HAS FILED REVISED RETURN WITHIN THE TIME AVAILABLE U/S 139(5) ITA NO. 1498 & 14 99/JP/2018 DCIT, JAIPUR VS. SH. KAM AL SETHIA, JAIPUR 30 AND THEREFORE, THE EXPLANATION 5A TO SECTION 271(1) (C) IS NOT APPLICABLE. THE QUESTION WHETHER CLAUSE (A) OF THE THIRD CONDITION OF EXPLANATION 5A IS SATISFIED IN THE INSTANT CASE WIL L HOWEVER DEPEND UPON SATISFACTION OF SECOND ALTERNATE CONDITION WHE RE IT IS ULTIMATELY DETERMINED THAT THE ASSESSEE IS FOUND TO BE OWNER O F THE UNDISCLOSED INCOME, THE FACT THAT SUCH UNDISCLOSED INCOME HAS N OT BEEN DECLARED IN THE RETURN OF INCOME FILED BEFORE THE DATE OF SE ARCH, THIS CONDITION CAN BE SAID TO BE SATISFIED. 34. NOW, COMING BACK TO THE SECOND ALTERNATE CONDI TION (PARA 32(2A) SUPRA), IT NEED TO BE EXAMINED WHETHER THE S AME IS SATISFIED IN THE INSTANT CASE OR NOT. ONLY IN A SCENARIO WHERE THIS CONDITION IS FINALLY HELD TO BE SATISFIED, THE LEVY OF PENALTY C AN BE HELD JUSTIFIED BY INVOKING EXPLANATION 5A TO SECTION 271(1)(C) AS ALL THE THREE CONDITIONS NEED TO BE NECESSARILY SATISFIED INDIVIDUALLY AS WE LL AS CUMULATIVELY. 35. THE SECOND ALTERNATE CONDITION, AS WE HAVE NOT ED IN PARA 32 (2A) ABOVE, HAS IN TURN, TWO LIMBS WHICH NE EDS TO BE SATISFIED CUMULATIVELY. THE FIRST LIMB PROVIDES THAT WHETHER DURING THE COURSE OF SEARCH, THE ASSESSEE IS FOUND TO BE OWNER OF ANY IN COME BASED ON ANY ENTRY IN BOOKS OF ACCOUNTS OR OTHER DOCUMENTS OR TR ANSACTIONS. THE SECOND LIMB STATES THAT THE ASSESSEE CLAIMS THAT SU CH ENTRY IN THE BOOKS OF ACCOUNTS OR OTHER DOCUMENTS OR TRANSACTION S REPRESENT HIS INCOME WHOLLY OR IN PART FOR ANY PREVIOUS YEAR WHIC H HAS ENDED BEFORE THE DATE OF SEARCH. THE FIRST LIMB RELATES TO FINDI NGS BY THE REVENUE DURING THE COURSE OF SEARCH THAT THE ASSESSEE IS TH E OWNER OF THE INCOME FOR THE RELEVANT PREVIOUS YEAR AND THE SECON D LIMB TALKS ABOUT THE CLAIM AND THE ADMISSION BY THE ASSESSEE THAT SU CH INCOME REPRESENTS HIS INCOME FOR THE SAID PREVIOUS YEAR. THEREFORE, THERE HAS ITA NO. 1498 & 14 99/JP/2018 DCIT, JAIPUR VS. SH. KAM AL SETHIA, JAIPUR 31 TO BE FINDING BY THE REVENUE THAT THE ASSESSEE IS T HE OWNER OF SUCH INCOME FOR THE RELEVANT PREVIOUS YEAR AND ACCEPTANC E/ADMISSION BY THE ASSESSEE THAT SUCH INCOME REPRESENT HIS INCOME WHOLLY OR IN PART FOR ANY PREVIOUS YEAR ENDED BEFORE THE DATE OF SEAR CH. FURTHER, SUCH FINDINGS AND ADMISSION SHOULD BE BASED ON ANY ENTRY IN BOOKS OF ACCOUNTS OR OTHER DOCUMENTS OR TRANSACTIONS FOUND D URING THE COURSE OF SEARCH. WHERE EITHER OF THE TWO LIMBS IS SATIS FIED AND OTHER LIMB IS NOT SATISFIED, THE PENALTY CANNOT BE LEVIED AS THE REQUIREMENT IS SATISFACTION OF BOTH THE LIMBS INDIVIDUALLY AND CUM ULATIVELY. 36. IN THAT CONTEXT, WE NEED TO EXAMINE THE FINDING S OF THE LD CIT(A) WHERE HE SAYS THAT THE DEEMING FICTION SO CR EATED BY THE EXPLANATION 5A HAVE TO BE READ STRICTLY AND WHERE T HE ASSESSEE IS NOT FOUND TO BE OWNER OF SUCH INCOME DURING THE COURSE OF SEARCH, MERELY BECAUSE UNDISCLOSED INCOME HAS BEEN DECLARED IN THE RETURN FILED AFTER SEARCH, ADMITTING SUCH UNDISCLOSED INCOME, THE DEEM ING FICTION CANNOT BE INVOKED. WE AGREE WITH THE SAID READING OF THE P ROVISIONS BY THE LD CIT(A) AS THE DEEMING PROVISIONS AND THAT TOO, IN T HE CONTEXT OF LEVY OF PENALTY SO CONTAINED IN EXPLANATION 5A TO SECTIO N 271(1)(C) HAVE TO BE READ STRICTLY AND ONLY IN A SCENARIO, THE CONDIT IONS SPECIFIED IN THE STATUE ARE SATISFIED, THE PENALTY CAN BE HELD JUSTI FIED. 37. FURTHER, THE LD CIT(A) HAS STATED THAT IN THE I NSTANT CASE, THE AO HAS NOT EXAMINED WHETHER INCOME HAS BEEN FOUND BY W AY OF ANY INCRIMINATING MATERIAL FOUND DURING THE COURSE OF S EARCH AND NO FINDING HAS BEEN RECORDED BY THE AO AS TO HOW THE A SSESSEE HAS EARNED ADDITIONAL INCOME QUA THE SEIZED MATERIAL FOUND DURING THE COURSE OF SEARCH. THE LD AR HAS SUPPORTED THE AFORE SAID FINDINGS OF THE LD CIT(A) IN HIS SUBMISSIONS. THE LD CIT DR HAS HOWEVER CONTESTED ITA NO. 1498 & 14 99/JP/2018 DCIT, JAIPUR VS. SH. KAM AL SETHIA, JAIPUR 32 THE SAID FINDINGS OF THE LD CIT(A) AND SUBMITTED TH AT THE LD CIT(A) HAS NOT CONSIDERED THE STATEMENT OF SHRI VIVEK SETHIA A ND SHRI KAMAL SETHIA RECORDED DURING THE COURSE OF SEARCH U/S 132 (4) WHEREIN THEY HAVE MADE A DISCLOSURE OF RS 20.10 CRORES (WHICH IN CLUDES DISCLOSURE OF RS 3.63 CRORES FOR THE IMPUGNED ASSESSMENT YEAR) ON THE BASIS OF A NUMBER OF INCRIMINATING DOCUMENTS FOUND DURING THE COURSE OF SEARCH. IT WAS FURTHER SUBMITTED BY THE LD CIT DR THAT THE POWERS OF THE LD CIT(A) ARE CO-TERMINUS WITH THAT OF THE AO AND IF T HE AO HAS NOT STATED THESE FACTS IN THE ASSESSMENT ORDER, HE CAN WELL CONSIDER THEM IN THE APPELLATE PROCEEDINGS. 38. WE, THEREFORE, FIND THAT THERE IS ATLEAST AN AC CEPTANCE BY THE REVENUE OF THE LEGAL PROPOSITION THAT THERE HAS TO BE FINDING BY THE AO TO THE EFFECT THAT THE ASSESSEE IS FOUND TO BE T HE OWNER OF SUCH INCOME FOR THE RELEVANT PREVIOUS YEAR AND ALSO THE ADMISSION/ACCEPTANCE BY THE ASSESSEE, AND MERELY BA SIS THE ADMISSION IN STATEMENT U/S 132(4) OR SUBSEQUENT ACC EPTANCE THEREOF BY THE ASSESSEE BY WAY OF INCLUDING THE UNDISCLOSED INCOME IN THE RETURN FILED AFTER THE DATE OF SEARCH, IS NOT SUFFI CIENT TO INVOKE THE DEEMING PROVISIONS OF EXPLANATION 5A OF THE ACT AS BOTH THE LIMBS NEEDS TO BE SATISFIED CUMULATIVELY. 39. FURTHER, SUCH FINDINGS BY THE AO THAT THE ASSES SEE IS THE OWNER OF INCOME SHOULD BE BASED ON ANY ENTRY IN BOOKS OF ACCOUNTS OR OTHER DOCUMENTS OR TRANSACTIONS FOUND DURING THE COURSE O F SEARCH. THE ONLY FINDING THAT WE HAVE NOTED IN THE PENALTY ORDER IS THAT THE ASSESSEE HAS DECLARED UNDISCLOSED INCOME DURING THE COURSE O F SEARCH IN HIS STATEMENT U/S 132(4) AND THE SAME HAS BEEN ACCEPTED AND OFFERED TO TAX SUBSEQUENTLY IN THE RETURN OF INCOME SO FILED I N RESPONSE TO NOTICE ITA NO. 1498 & 14 99/JP/2018 DCIT, JAIPUR VS. SH. KAM AL SETHIA, JAIPUR 33 U/S 153A OF THE ACT. ADMITTEDLY AND UNDISPUTEDLY, THERE IS, HOWEVER, NO FINDING IN THE PENALTY ORDER TO THE EFFECT THAT THE ASSESSEE IS FOUND TO BE THE OWNER OF INCOME BASED ON ANY ENTRY IN BOO KS OF ACCOUNTS OR OTHER DOCUMENTS OR TRANSACTIONS FOUND DURING THE CO URSE OF SEARCH. IN OUR VIEW, THE PENALTY PROCEEDINGS, BEING INDEPENDEN T OF QUANTUM PROCEEDINGS, SUCH FINDINGS SHOULD NECESSARILY REFLE CT IN THE PENALTY ORDER AND IN ABSENCE THEREOF, ON THIS GROUND ITSELF , THE IMPUGNED PENALTY PROCEEDINGS DESERVE TO BE SET-ASIDE. 40. HAVING SAID THAT, SINCE THE LD CIT DR HAS DRAW N OUR REFERENCE TO STATEMENT OF THE ASSESSEE, SHRI KAMAL SETHIA AND HIS SON, SHRI VIVEK SETHIA RECORDED U/S 132(4) DURING THE COURSE OF SEARCH, WE REFER TO THESE STATEMENTS. AT THE OUTSET, WE MAY STATE TH AT THE STATEMENTS ALONE CANNOT BE HELD AS INCRIMINATING MATERIAL FOUN D DURING THE COURSE OF SEARCH. WHAT IS ESSENTIAL TO DETERMINE, AS MAND ATED BY THE CLEAR LANGUAGE SO PROVIDED IN THE EXPLANATION 5A TO SECTI ON 271(1)(C), IS THE BASIS OF SUCH STATEMENTS AND WHETHER THERE ARE ANY TANGIBLE MATERIAL BY WAY OF ANY ENTRY IN BOOKS OF ACCOUNTS, DOCUMENTS OR TRANSACTIONS WHICH HAVE BEEN FOUND DURING THE COURSE OF SEARCH A ND WHICH SUPPORT AND CORROBORATES SUCH STATEMENTS. 41. IN THE ASSESSEES STATEMENT RECORDED U/S 132(4 ) ON 19.12.2014, IN QUESTION NO. 4, THE ASSESSEES REFERENCE WAS DRA WN TO ANNEXURE-AS 1 TO 11 SEIZED DURING THE COURSE OF SEARCH IN RESPE CT OF WHICH SHRI VIVEK SETHIA, THE SON OF THE ASSESSEE, IN HIS SEPAR ATE STATEMENT RECORDED U/S 132(4), HAS ADMITTED AN AMOUNT OF RS. 20,10,07,385/- AS THE UNDISCLOSED INCOME FROM THEIR CONSTRUCTION BUSI NESS AND WHICH HAS NOT BEEN RECORDED IN THE BOOKS OF ACCOUNTS MAIN TAINED BY THEIR GROUP COMPANIES/FIRMS. IN RESPONSE, THE ASSESSEE HA S STATED THAT HE ITA NO. 1498 & 14 99/JP/2018 DCIT, JAIPUR VS. SH. KAM AL SETHIA, JAIPUR 34 HAS GONE THROUGH THE STATEMENT SO RECORDED OF HIS S ON, SHRI VIVEK SETHIA AND HE IS IN ACCEPTANCE WITH THE SAME AND BA SIS THE SAME, AN AMOUNT OF RS. 9,92,49,633/- WAS ADMITTED AS UNDISCL OSED INCOME FOR VARIOUS YEARS INCLUDING RS. 3,63,07,500/- WHICH HAS BEEN SURRENDERED FOR THE IMPUGNED ASSESSMENT YEAR. WHAT THE ASSESSE E THEREFORE HAS STATED IN HIS STATEMENT IS THAT THE DOCUMENTS FOUND DURING THE COURSE OF SEARCH RELATES TO THE UNDISCLOSED INCOME RELATIN G TO THE CONSTRUCTION BUSINESS AND WHICH HAS NOT BEEN RECORDED IN THE BOO KS OF ACCOUNTS OF THE COMPANIES/FIRMS. THE BASIS OF THE SAID STATEMEN T IS THE DOCUMENTS FOUND DURING THE COURSE OF SEARCH WHICH HAS BEEN EL ABORATELY DISCUSSED IN THE STATEMENT OF SHRI VIVEK SETHIA AS WE HAVE NOTED BELOW. 42. WE NOW REFER TO THE STATEMENT OF SH. VIVEK SETH IA RECORDED U/S 132(4) DURING THE COURSE OF SEARCH. IN RESPONSE TO QUESTION NO. 4 WHEREIN HIS SOURCE OF INCOME WAS ASKED, HE HAS SUBM ITTED THAT HIS SOURCE OF INCOME IS FROM INTEREST, REMUNERATION AND SALARY FROM THE FIRM/COMPANIES WHEREIN HE IS A DIRECTOR/PARTNER. I N RESPONSE TO QUESTION NO. 7, HE HAS STATED THAT THE VARDHAMAN GR OUP CARRIED OUT THE CONSTRUCTION ACTIVITIES THROUGH VARIOUS COMPANI ES AND FIRMS SUCH AS M/S SETHIA REAL ESTATE, M/S RICHWELL ENTERPRISES PVT. LTD., M/S MANGLAM VARDHMAN DEVELOPERS AND OTHERS. IN RESPONSE TO QUESTION NO. 12 WHEREIN HE WAS ASKED IN TERMS OF VARIOUS PRO JECTS BEING CARRIED OUT BY THESE COMPANIES AND THE FIRMS, HE HA S STATED THAT THE PROJECT SILVER CROWN HAS BEEN CARRIED OUT BY M/S SE THIA REAL ESTATE, PROJECT IMPERIAL HEIGHTS AND PROJECT HORIZON BY M/S RICHWELL ENTERPRISES AND PROJECT ARCADIA GREENS BY M/S MANGL AM VARDHAMAN DEVELOPERS. THE STATEMENT OF SHRI VIVEK SETHIA THUS CORROBORATES THE STATEMENT OF THE ASSESSEE, AS WE HAVE NOTED ABOVE, THAT THE ITA NO. 1498 & 14 99/JP/2018 DCIT, JAIPUR VS. SH. KAM AL SETHIA, JAIPUR 35 CONSTRUCTION BUSINESS WAS UNDERTAKEN BY THE COMPANI ES/FIRMS AND NOT BY THE ASSESSEE AND HIS SON IN THEIR INDIVIDUAL CAP ACITY. 43. NOW COMING TO THE SPECIFIC DISCLOSURE MADE BY SH. VIVEK SETHIA RELEVANT FOR THE IMPUGNED ASSESSMENT YEAR, WE REFER TO QUESTION NO. 26 WHEREIN THE ASSESSEE AND HIS SON HAVE SURRENDERE D AN AMOUNT OF RS. 7,05,00,000/-(RS 3,17,50,000). THE SAID SURREND ER IS BASIS A DOCUMENT SEIZED DURING THE COURSE OF SEARCH REFERRE D TO ANNEXURE-AS, EXHIBIT- 5, PAGE NO. 1/6. ON PERUSAL OF THE SAID S INGLE PIECE OF UNSIGNED AND LOOSE PAPER SO FOUND AND SEIZED DURING THE COURSE OF SEARCH, IT LIST DOWN CERTAIN EXPENSES AND OTHER PAY MENTS RECORDED ON VARIOUS DATES WITH THE HEADING M/S MANGLAM VARDHAM AN DEVELOPERS CASH ACCOUNT RELATING TO EXPENDITURE PERTAINING TO PROJECT ARCADIA GREENS BEING EXECUTED BY M/S MANGLAM VARDHAMAN DEVE LOPERS. SIMILARLY, WE REFER TO QUESTION NO. 31 WHICH RELATE S TO PROJECT HORIZON BEING CARRIED OUT BY M/S RICHWELL ENTERPRISES PVT. LTD. BASIS AN AGREEMENT DATED 06.09.2013 BETWEEN SH. SHYAMBABU DA NGAYACH AND M/S RICHWELL ENTERPRISES PVT. LTD WHEREIN THERE IS A MENTION OF CASH PAYMENT OF RS. 12 LACS TO THE SELLER, THE AMOUNT WA S SURRENDERED EQUALLY BY THE ASSESSEE AND HIS SON IN THEIR INDIVI DUAL HANDS. SIMILARLY, IN QUESTION NO. 33, THERE IS A SURRENDER OF RS. 28, 04,000/- IN RESPECT OF LAND PURCHASED AT VILLAGE UDAIPURIYA BASED ON AN AGREEMENT DATED 17.11.2013 BETWEEN M/S RICHWELL ENTERPRISES PVT. LT D AND SMT. SUGNI DEVI FOR PURCHASE OF AGRICULTURAL LAND AT VILLAGE U DAIPURIYA WHICH IS SIGNED BY THE SELLER SMT. SUGNI DEVI AND NOT BY THE ASSESSEE. SUBSEQUENTLY, THE SALE DEED DATED 18.11.2013 WAS RE GISTERED IN THE NAME OF THE COMPANY FOR RS. 10,21,000/-. SIMILARLY, IN QUESTION NO. 35 & 37, THERE ARE PAYMENTS TOWARDS PURCHASE OF LAND A T VILLAGE HATOZ FOR RS 11,11,000 AND MAHINGLAZ NAGAR FOR RS. 40,00, 000/- RESPECTIVELY ITA NO. 1498 & 14 99/JP/2018 DCIT, JAIPUR VS. SH. KAM AL SETHIA, JAIPUR 36 WHICH HAS BEEN SURRENDERED EQUALLY IN THE HANDS OF THE ASSESSEE AND HIS SON. 44. WE THEREFORE FIND THAT BASIS THE DOCUMENTS FOUN D AND SEIZED DURING THE COURSE OF SEARCH, READ ALONG WITH THE ST ATEMENTS SO RECORDED U/S 132(4), ALL THESE EXPENDITURE TOWARDS CAPITAL COST/PURCHASE OF LAND TOTALING RS 7,26,15,000 RELAT ES TO VARIOUS CONSTRUCTION PROJECTS BEING EXECUTED BY M/S MANGLAM VARDHAMAN DEVELOPERS AND M/S RICHWELL ENTERPRISES PVT. LTD. A ND EVEN THE LAND PURCHASE AGREEMENTS ARE IN THE NAME OF THESE COMPAN IES/FIRMS AND NOT IN THE INDIVIDUAL NAMES. WHAT THEREFORE HAS BE EN FOUND BY THE REVENUE DURING THE COURSE OF SEARCH BASIS THE DOCUM ENTS SO FOUND AND SEIZED IS THE UNDISCLOSED EXPENDITURE WHICH REL ATES TO THE CONSTRUCTION BUSINESS BEING UNDERTAKEN BY THESE COM PANIES/FIRMS AND WHICH HAS NOT BEEN RECORDED IN THE BOOKS OF ACCOUNT S OF THE COMPANIES/FIRMS BEFORE THE DATE OF SEARCH. THEREFO RE, IT IS CLEAR THAT BASIS THE DOCUMENTS SO FOUND AND SEIZED DURING THE COURSE OF SEARCH, THE ASSESSEE IS NOT FOUND TO BE THE OWNER OF ANY UN DISCLOSED INCOME. 45. GIVEN THAT THE ADMISSION AND SURRENDER HAS BEEN MADE BY THE ASSESSEE IN HIS INDIVIDUAL CAPACITY AND NOT BY THE COMPANIES/FIRMS, THE SECOND LIMB CAN ONLY BE SAID TO BE SATISFIED IN THE INSTANT CASE. AS WE HAVE STATED ABOVE, THE FIRST LIMB RELATES TO FINDIN GS BY THE REVENUE DURING THE COURSE OF SEARCH THAT THE ASSESSEE IS TH E OWNER OF THE INCOME FOR THE RELEVANT PREVIOUS YEAR AND THE SECON D LIMB TALKS ABOUT THE CLAIM AND THE ADMISSION BY THE ASSESSEE THAT SU CH INCOME REPRESENTS HIS INCOME FOR THE SAID PREVIOUS YEAR. THEREFORE, THERE HAS TO BE FINDING BY THE REVENUE THAT THE ASSESSEE IS T HE OWNER OF SUCH INCOME FOR THE RELEVANT PREVIOUS YEAR AND ACCEPTANC E/ADMISSION BY ITA NO. 1498 & 14 99/JP/2018 DCIT, JAIPUR VS. SH. KAM AL SETHIA, JAIPUR 37 THE ASSESSEE THAT SUCH INCOME REPRESENT HIS INCOME WHOLLY OR IN PART FOR ANY PREVIOUS YEAR ENDED BEFORE THE DATE OF SEAR CH. IN THE INSTANT CASE, THE FIRST LIMB IS NOT SATISFIED, THEREFORE, T HE PENALTY CANNOT BE LEVIED AS THE REQUIREMENT IS SATISFACTION OF BOTH T HE LIMBS INDIVIDUALLY AND CUMULATIVELY. 46. THE FACT THAT THE CONSTRUCTION BUSINESS AND V ARIOUS CONSTRUCTIONS PROJECTS WERE UNDERTAKEN BY THE COMPANIES/FIRMS AND NOT BY THE ASSESSEE AND HIS SON IN THEIR INDIVIDUAL CAPACITY I S AN ADMITTED POSITION WHICH HAS BEEN ACCEPTED AND ACKNOWLEDGED BY THE REV ENUE. ADMITTEDLY, THE ASSESSEE IS A PARTNER IN M/S MANGLA M VARDHMAN DEVELOPERS AND ALSO A DIRECTOR IN M/S RICHWELL ENTE RPRISES PVT. LTD. HOWEVER, BY MERELY BECOMING A PARTNER IN A FIRM OR A DIRECTOR IN THE COMPANY, THE TRANSACTIONS UNDERTAKEN BY THE FIRM/CO MPANIES WILL REMAIN THE TRANSACTIONS OF THE FIRM/COMPANIES EVEN THOUGH THE SAME HAVE BEEN EXECUTED/UNDERTAKEN BY THE PARTNER/DIRECT OR IN HIS FIDUCIARY CAPACITY. A PARTNER/DIRECTOR REPRESENTS THE INTERE ST OF THE FIRM/COMPANY HE IS REPRESENTING AND NOT HIS INDIVID UAL INTEREST. ONLY IN A SCENARIO, WHERE IT IS FOUND THAT HE IS USING S UCH FIDUCIARY CAPACITY FOR HIS PERSONAL AND INDIVIDUAL INTEREST, CORPORATE VEIL CAN BE LIFTED. IN THE INSTANT CASE, THIS IS NOT EVEN THE CASE OF THE REVENUE. THE REVENUE HAS ACCEPTED THE RETURN OF INCOME FILED BY THE ASSESSEE ORIGINALLY U/S 139(1) WHEREIN HE HAS DECLARED INCOM E FROM HOUSE PROPERTY, REMUNERATION AND INTEREST FROM THESE FIRM S AND THE SHARE IN THE PROFITS ON THE FIRM HAS BEEN CLAIMED AS EXEMPT. SUBSEQUENTLY, IN RESPONSE TO NOTICE U/S 153A, THE ASSESSEE HAS REITE RATED HIS INCOME AS PER THE ORIGINAL RETURN OF INCOME WHEREIN SHARE IN THE PROFITS OF THE FIRM HAS BEEN CLAIMED AS EXEMPT BESIDES THE AMOUNT SURRENDERED DURING THE COURSE OF SEARCH AND WHICH HAS BEEN ACCE PTED BY THE ITA NO. 1498 & 14 99/JP/2018 DCIT, JAIPUR VS. SH. KAM AL SETHIA, JAIPUR 38 REVENUE. SIMILARLY, THE LD AR HAS STATED AT THE BA R THAT THE RETURN OF INCOME OF M/S MANGLAM DEVELOPERS FOR AY 2014-15 HAS BEEN ACCEPTED BY THE REVENUE AS CARRYING ON THE BUSINESS OF CONST RUCTION OF RESIDENTIAL COMPLEXES AND OTHER RELATED ACTIVITIES AND ALSO THE FACT THAT THE ASSESSEE IS A PARTNER IN THAT FIRM. SIMILARLY, THE RETURN OF INCOME OF M/S RICHWELL ENTERPRISES FOR AY 2014-15 HAS BEEN ACCEPTED AS CARRYING ON THE BUSINESS OF CONSTRUCTION OF RESIDEN TIAL COMPLEXES AND OTHER RELATED ACTIVITIES AND ALSO THE FACT THAT THE ASSESSEE IS A DIRECTOR IS SAID COMPANY. WE THEREFORE FIND THAT THE ASSESSE E AND HIS SON WERE NOT DOING ANY CONSTRUCTION BUSINESS IN HIS INDIVIDU AL CAPACITY RATHER THE BUSINESS OF CONSTRUCTION OF RESIDENTIAL COMPLEX AND OTHER RELATED ACTIVITIES HAVE BEEN CARRIED OUT BY THE COMPANIES/F IRMS WHEREIN THE ASSESSEE AND HIS SON WERE PARTNER/DIRECTOR. THEREF ORE, BASIS THE STATEMENTS OF THE ASSESSEE AND HIS SON, OTHER DOCUM ENTS/TRANSACTIONS FOUND DURING THE COURSE OF SEARCH AND EVEN AS PER T HE TAX FILINGS WHICH HAVE BEEN ACCEPTED BY THE REVENUE, WE FIND TH AT THAT IT IS THE COMPANIES/ FIRMS AND NOT THE ASSESSEE AND HIS SON W HICH ARE FOUND TO BE THE OWNER OF THE UNDISCLOSED INCOME. THE FACT TH AT THE ASSESSEE AND HIS SON HAVE DECLARED THE UNDISCLOSED INCOME IN THEIR INDIVIDUAL RETURN OF INCOME AND HAVE PAID TAXES THEREON AND TH E FACT THAT THE REVENUE HAS ALSO ACCEPTED THE SAME, THE SAME IS TRU E AS FAR AS THE QUANTUM PROCEEDINGS ARE CONCERNED AND WHICH HAS NOW ATTAINED FINALITY, HOWEVER, WHEN IT COMES TO PENALTY PROCEED INGS, THE PROVISIONS HAVE TO BE READ STRICTLY AND ONLY WHERE THE CONDITIONS SPECIFIED THEREIN ARE SATISFIED, THE PENALTY CAN BE HELD JUSTIFIED. 47. LOOKING AT THE MATTER FROM ANOTHER PERSPECTIVE, AS WE HAVE NOTED ABOVE, BASIS THE DOCUMENTS FOUND AND SEIZED D URING THE COURSE OF SEARCH, READ ALONG WITH THE STATEMENTS SO RECORD ED U/S 132(4), ITA NO. 1498 & 14 99/JP/2018 DCIT, JAIPUR VS. SH. KAM AL SETHIA, JAIPUR 39 WHAT HAS BEEN FOUND IS THE EXPENDITURE TOWARDS CAPI TAL COST/PURCHASE OF LAND RELATING TO VARIOUS CONSTRUCTION PROJECTS B EING EXECUTED BY M/S MANGLAM VARDHAMAN DEVELOPERS AND M/S RICHWELL ENTER PRISES PVT. LTD THE QUESTION THAT ARISES FOR CONSIDERATION IS WHETH ER THE SAID EXPENDITURE TOWARDS CAPITAL COST/PURCHASE OF LAND, REPRESENTS OR DEEMED TO REPRESENT INCOME IN THE HANDS OF THE ASSE SSEE. IN CASE OF SHRI RAJENDRA KUMAR GUPTA (SUPRA), RELIED UPON BY THE LD CIT DR, THE BENCH HAD AN OCCASION TO EXAMINE IN CONTEXT OF DEFI NITION OF UNDISCLOSED INCOME SO DEFINED IN SECTION 271AAB WHE THER CASH ADVANCES FOR PURCHASE OF LAND REPRESENTS INCOME BY WAY OF ANY ENTRY IN THE BOOKS OF ACCOUNT OR OTHER DOCUMENTS OR TRANS ACTIONS FOUND IN THE COURSE OF A SEARCH UNDER SECTION 132. IN THE SA ID DECISION, IT WAS HELD AS UNDER: 21. DURING THE COURSE OF SEARCH, A NOTE BOOK (DIA RY) HAS BEEN FOUND REFERRED TO AS ANN. AS WHEREIN THERE ARE CERTAIN NOTINGS RELATING TO CASH ADVANCES GIVEN TO VARIOUS PERSONS TOTALING TO RS 82,80,000. REFERRING TO THE STATEMENT OF THE ASSESSEE IN RESPECT OF THESE NOTIN GS RECORDED U/S 132(4), LD CIT(A) HAS GIVEN A FINDING THAT THE ASSESSEE HAS GIVEN A GENERALIZED STATEMENT WITH OUT SPECIFYING THE COMPLETE PARTICULARS OF PERSONS TO W HOM LOANS WERE GIVEN AND ALSO FAILED TO SUBSTANTIATE TH E SAME. THE SAID FINDINGS HAVE NOT BEEN DISPUTED BY THE REV ENUE AND THEREFORE, MERELY BASED ON SURRENDER AND GENERA LIZED STATEMENT OF THE ASSESSEE, IN ABSENCE OF ANYTHING S PECIFIC TO CORROBORATE SUCH ENTRIES, CAN IT BE SAID THAT SU CH ENTRIES/NOTINGS REPRESENT UNDISCLOSED INCOME OF THE ASSESSEE. AS PER THE DEFINITION OF UNDISCLOSED INC OME U/S 271AAB, THE SAID CASH ADVANCES CANNOT BE STATED TO BE ITA NO. 1498 & 14 99/JP/2018 DCIT, JAIPUR VS. SH. KAM AL SETHIA, JAIPUR 40 INCOME WHICH IS REPRESENTED BY ANY MONEY, BULLION, JEWELLERY OR OTHER VALUABLE ARTICLE OR THING. WHETHER IT CAN THEN BE SAID THAT SUCH UNDISCLOSED CASH ADVANCES REPRESENTS INCO ME BY WAY OF ANY ENTRY IN THE BOOKS OF ACCOUNT OR OTHER DOCUM ENTS OR TRANSACTIONS FOUND IN THE COURSE OF A SEARCH UNDER SECTION 132. A CASH ADVANCE PER SE REPRESENTS AN OUTFLOW OF FUND S FROM THE ASSESSEES HAND AND AN INCOME PER SE REPRESENTS AN INFLOW OF FUNDS IN THE HANDS OF THE ASSESSEE. THEREFORE, ONC E THERE IS AN INFLOW OF FUNDS BY WAY OF INCOME, THERE CAN BE SUBS EQUENT OUTFLOW BY WAY OF AN ADVANCE TO ANY THIRD PARTY. G IVING AN ADVANCE AND INCOME THUS CONNOTES DIFFERENT MEANING AND CONNOTATION AND THUS CANNOT BE USED INTER-CHANGEABL Y. IN THE DEFINITION OF UNDISCLOSED INCOME, WHERE IT TALKS AB OUT INCOME BY WAY OF ANY ENTRY IN THE BOOKS OF ACCOUNT OR OTHE R DOCUMENTS OR TRANSACTIONS FOUND IN THE COURSE OF A SEARCH UND ER SECTION 132, WHAT PERHAPS HAS BEEN ENVISAGED BY THE LEGISL ATURE IS AN INFLOW OF FUNDS IN THE HANDS OF THE ASSESSEE WHICH HAS BEEN FOUND BY WAY OF ANY ENTRY IN THE BOOKS OF ACCOUNTS OR OTHER DOCUMENTS, AND WHICH HAS NOT BEEN RECORDED BEFORE T HE DATE OF SEARCH IN THE BOOKS OF ACCOUNTS OR OTHER DOCUMENTS MAINTAINED BY THE ASSESSEE IN THE NORMAL COURSE AND NOT VICE-V ERSA. WE ARE ALSO CONSCIOUS OF THE FACT THAT THERE ARE DEEMING P ROVISIONS IN TERMS OF SECTION 69 AND 69B WHEREIN SUCH AMOUNTS MA Y BE DEEMED AS INCOME IN ABSENCE OF SATISFACTORY EXPLANA TION. IN OUR VIEW, THE DEEMING FICTION SO ENVISAGED UNDER SE CTION 69 AND SECTION 69B CANNOT BE EXTENDED AND APPLIED AUTO MATICALLY IN CONTEXT OF SECTION 271AAB. IT IS A WELL-SETTLED LEGAL PROPOSITION THAT THE DEEMING PROVISIONS ARE LIMITED FOR THE PURPOSES THAT HAVE BEEN BROUGHT ON THE STATUTE BOOK AND HAVE ITA NO. 1498 & 14 99/JP/2018 DCIT, JAIPUR VS. SH. KAM AL SETHIA, JAIPUR 41 THEREFORE TO BE APPLIED IN THE CONTEXT OF PROVISION S WHEREIN THEY HAVE BEEN BROUGHT ON THE STATUE BOOK AND NOT OTHERW ISE. IN THE INSTANT CASE, THE DEEMING PROVISIONS CONTAINED IN SECTION 69 AND SECTION 69B COULD HAVE BEEN APPLIED IN THE CONT EXT OF BRINGING TO TAX SUCH INVESTMENTS TO TAX IN THE QUAN TUM PROCEEDINGS, THOUGH THE FACT OF THE MATTER IS THAT THE AO HAS NOT EVEN INVOKED THE SAID DEEMING PROVISIONS IN THE QUANTUM PROCEEDINGS. THEREFORE, EVEN ON THIS ACCOUNT, THE D EEMING FICTION CANNOT BE EXTENDED TO THE PENALTY PROCEEDIN GS WHICH ARE SEPARATE AND DISTINCT FROM THE ASSESSMENT PROCEEDIN GS AND MORE SO, WHERE THE PROVISIONS OF SECTION 271AAB PRO VIDE FOR A SPECIFIC DEFINITION OF UNDISCLOSED INCOME. WHERE A SPECIFIC DEFINITION OF UNDISCLOSED INCOME HAS BEEN PROVIDED IN SECTION 271AAB, BEING A PENAL PROVISION, THE SAME MUST BE S TRICTLY CONSTRUED AND IN LIGHT OF SATISFACTION OF CONDITION S SPECIFIED THEREIN AND IT IS NOT EXPECTED TO EXAMINE OTHER PRO VISIONS WHERE THE SAME HAS BEEN DEFINED OR DEEMED FOR THE PURPOSE S OF BRINGING THE AMOUNT TO TAX. IN LIGHT OF THE SAME, THE UNDISCLOSED INVESTMENT BY WAY OF ADVANCES CAN BE SU BJECT MATTER OF ADDITION IN THE QUANTUM PROCEEDINGS, AS T HE SAME HAS BEEN SURRENDERED DURING THE COURSE OF SEARCH IN THE STATEMENT RECORDED U/S 132(4) AND OFFERED IN THE RETURN OF IN COME, HOWEVER THE SAME CANNOT BE SAID TO QUALIFY AS AN UN DISCLOSED INCOME IN THE CONTEXT OF SECTION 271AAB READ WITH T HE EXPLANATION THERETO AND PENALTY SO LEVIED THEREON D ESERVED TO BE SET-ASIDE. 48. THOUGH THE SAID DECISION HAS BEEN RENDERED IN C ONTEXT OF SECTION 271AAB, WE BELIEVE THAT THE DEFINITION OF U NDISCLOSED INCOME ITA NO. 1498 & 14 99/JP/2018 DCIT, JAIPUR VS. SH. KAM AL SETHIA, JAIPUR 42 SO FAR AS IT IS RELEVANT IN THE PRESENT CONTEXT IS SIMILARLY WORDED. IN EXPLANATION 5A TO SECTION 271(1)(C), IT TALKS ABOUT WHERE IN COURSE OF SEARCH INITIATED UNDER SECTION 132 ON OR AFTER 1 ST DAY OF JUNE, 2007, THE ASSESSEE IS FOUND TO BE THE OWNER OF ANY INCOME BASED ON ANY ENTRY IN ANY BOOKS OF ACCOUNT OR OTHER DOCUMENTS OR TRANSACTIONS AND IN SECTION 271AAB, IT TALKS ABOUT ANY INCOME OF TH E SPECIFIED PREVIOUS YEAR REPRESENTED WHOLLY OR PARTLY BY ANY ENTRY IN T HE BOOKS OF ACCOUNTS OR OTHER DOCUMENTS OR TRANSACTIONS FOUND D URING THE COURSE OF SEARCH U/S 132 AND THEREFORE THE REASONING APPL IED THEREIN APPLIES EQUALLY IN THE INSTANT CASE AND THEREFORE, CAPITAL EXPENDITURE AND PAYMENT TOWARDS PURCHASE OF LAND CANNOT BE HELD AS UNDISCLOSED INCOME IN THE HANDS OF THE ASSESSEE. 49. IN LIGHT OF ABOVE DISCUSSIONS AND IN THE ENTIRE TY OF FACTS AND CIRCUMSTANCES OF THE CASE, WE ARE OF THE CONSIDERED VIEW THAT THE ASSESSEE CANNOT BE FASTENED WITH THE PENALTY SO ENV ISAGED UNDER EXPLANATION 5A TO SECTION 271(1)(C) AND THE ORDER O F THE LD CIT(A) DIRECTING DELETING OF PENALTY IS UPHELD FOR THE REA SONS AS STATED ABOVE. THE MATTER IS DECIDED IN FAVOUR OF THE ASSESSEE AND AGAINST THE REVENUE. ITA NO. 1499/JP/2018 50. BOTH THE PARTIES FAIRLY SUBMITTED THAT THE FAC TS AND CIRCUMSTANCES OF THE CASE ARE EXACTLY IDENTICAL AS IN ITA NO. 1498/JP/2018 AND HAVE REITERATED THE SUBMISSION MAD E THEREIN. THEREFORE, OUR FINDINGS AND DIRECTION CONTAINED IN ITA NO. 1498/JP/2018 SHALL APPLY EQUALLY IN THE INSTANT CAS E AND THE ORDER OF ITA NO. 1498 & 14 99/JP/2018 DCIT, JAIPUR VS. SH. KAM AL SETHIA, JAIPUR 43 THE LD CIT(A) IS UPHELD DIRECTING DELETION OF PENAL TY. THE MATTER IS DECIDED IN FAVOUR OF THE ASSESSEE AND AGAINST THE R EVENUE. IN THE RESULT, BOTH THE APPEALS FILED BY THE REVENU E ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 07/06/2019. SD/- SD/- FOT; IKY JKO FOE FLAG ;KNO (VIJAY PAL RAO) (VIKRAM SINGH YADAV) U;KF;D LNL;@ JUDICIAL MEMBER YS[KK LNL;@ ACCOUNTANT MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 07/06/2019. *GANESH KR VKNS'K DH IZFRFYFI VXZSFKR@ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ@ THE APPELLANT- DCIT, CENTRAL CIRCLE-1, JAIPUR 2. IZR;FKHZ@ THE RESPONDENT- SH. KAMAL SETHIA, JAIPUR & SH. VIVEK SETHIA, JAIPUR 3. VK;DJ VK;QDR@ CIT 4. VK;DJ VK;QDR@ CIT(A) 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ@ DR, ITAT, JAIPUR. 6. XKMZ QKBZY@ GUARD FILE { ITA NO. 1498 & 1499/JP/2018} VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASST. REGISTRAR