SAMSON PERINCHERY, MUMBAI V. ASST CIT CEN CIR 18& 19, MUMBAI

ITA 1529/MUM/2014

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 3653 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 2 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-05-2016
• Appeal Filed By: Assessee
• Bench Allotted: E
• Assessment Year: 2009-2010
• Appeal Filed On: 05-03-2014
• Court: TRIBUNAL
• Department Lawyers: MANJUNATHA SWAMY; A K NAYAK MR SAMSON PEERIN
• Keywords: Unexplained investment; Income from undisclosed sources; Search and seizure; Source of fund; Capital receipt
• Section: 153A; 131; 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL E BENCH, MUMBAI BEFORE S/SHRI B.R. BASKARAN (AM) & AMARJIT SINGH (JM) I.T.A. NO. 488/MUM/2014 (ASSESSMENT YEAR 2009 - 10) MRS. PIEDADE PE R INCHERY A - 2, GODREJ RIVER SIDE FLAT NO. 303 GODREJ HILL BAR - WAY OFF. BHIWANDI MURBAD ROAD KALYAN WEST THANE, PIN - 421 301. PAN : AQMPP4927B VS. ACIT, CC - 18&19 CENTRAL RANGE - 4 AAYAKAR BHAVAN ROOM NO. 402 4 TH FLOOR M.K. ROAD MUMBAI - 400 020. ( APPELLANT ) ( RESPONDENT ) I.T.A. NO. 1528 /MUM/2014 (ASSESSMENT YEAR 2009 - 10) I.T.A. NO. 1529/MUM/2014 (ASSESSMENT YEAR 2009 - 10) SHRI SAMSON PE RINCHERY P AUL A - 2, GODREJ RIVER SIDE FLAT NO. 2 OFF. BHIWANDI MURBAD ROAD KALYAN WEST THANE, PIN - 421 301. PAN :ACWPP0166C VS. ACIT, CC - 18&19 CENTRAL RANGE - 4 AAYAKAR BHAVAN ROOM NO. 402 4 TH FLOOR M. K. ROAD MUMBAI - 400 020. ( APPELLANT ) ( RESPONDENT ) I.T.A. NO. 2581 /MUM/ 2014 (ASSESSMENT YEAR 2009 - 10 ) ACIT, CC - 18&19 CENTRAL RANGE - 4 AAYAKAR BHAVAN ROOM NO. 402 4 TH FLOOR M.K. ROAD MUMBAI - 400 020. VS. SHRI SAMSON PE R INCHERY P AUL A - 2, GODREJ RIVER SIDE FLAT NO. 2 OFF. BHIWANDI MURBAD ROAD KALYAN WEST THANE, PIN - 421 301. PAN :ACWPP0166C ( APPELLANT ) ( RESPONDENT ) ASSESSEE BY SHRI NEELKANTH KHANDELWAL DEPARTMENT BY SHRI MANJUNATHA SWAMY & SHRI A.K. NAYAK MR. SAMSON PEERINCHERY & MRS. PIEDADE PERINCHERY 2 DATE OF HEARING 7.4 . 201 6 DATE OF PRONOUNCEMENT 25 . 5 . 201 6 O R D E R PER B.R. BASKARAN, A M : - ALL THESE APPEALS WERE HEARD TOGETHER AND HENCE THEY ARE BEING DISPOSED OF BY THIS COMMON ORDER FOR THE SAKE OF CONVENIENCE. THE APPEALS NUMBERED AS 1528/MUM/2014 AND 2581/MUM/2014 ARE CR OSS APPEALS RELATING TO AY 2009 - 10 IN RESPECT OF THE ASSESSEE NAMED SHRI SAMSON PERINCHERY PAUL. THE OTHER TWO APPEALS RELATE TO THE PENALTY LEVIED U/S 271AAA OF THE ACT FILED BY THE RESPECTIVE ASSESSEES. SINCE THE ISSUES URGED IN THESE APPEALS ARISE OUT OF COMMON SET OF FACTS, THEY WERE HEARD TOGETHER . 2. THESE ASSESSEES WERE SUBJECTED TO SEARCH U/S 132 OF THE ACT ON 18.12.2008. DURING THE COURSE OF SEARCH PROCEEDINGS, THE REVENUE FOUND THAT THESE ASSESSEES HAVE MADE INVESTMENTS IN LARGE SCALE. THE AGGREGATE AMOUNT OF INVESTMENTS AS WELL AS OTHER DEPOSITS WAS ARRIVED AT RS.7.55 CRORES AND THE ASSESSEE SHRI SAMSON PERINCHERY AGREED TO OFFER THE SAME AS INCOME IN HIS HANDS AS WELL AS IN THE HANDS OF HIS FAMILY MEMBERS . HE ALSO MADE A REQUEST THAT THE TAX PAID BY THEM ALREADY IN THEIR REGULAR RETURN S OF INCOME BE GIVEN CREDIT. SUBSEQUENTLY THESE ASSESSEES FILED RETURNS OF INCOME FOR VARIOUS YEARS U/S 153A OF THE ACT. THE AO NOTICED THAT THE ADDITIONAL INCOME DECLARED BY THESE ASSESSEES WORK OUT TO ON LY RS.6.88 CRORES, RESULTING IN A DEFICIT OF RS.67.46 LAKHS . THE ASSESSEE SUBMITTED THAT THE TOTAL INVESTMENTS AGREED TO BE OFFERED BY HIM IS FULLY COVERED BY THE INCOME DECLARED IN THE RETURNS FILED U/S 153A OF THE ACT. THE ASSESSEE FURTHER SUBMITTED TH AT THE INCOME OF RS.11.55 LAKHS DECLARED BY HIM FOR AY 2002 - 03 SHOULD ALSO BE CONSIDERED AS ADDITIONAL DISCLOSURE. HE FURTHER SUBMITTED THAT THE ASSESSEE HAD DECLARED HIGHER INCOME TO THE TUNE OF RS.67.26 LAKHS IN AY 2008 - 09 IN VIEW OF THE SUMMONS RECEIVE D BY HIM U/S 131 OF THE ACT. THE ASSESSEE PLEADED THAT THE INCOME DECLARED IN BOTH THE ABOVE SAID YEARS WOULD COVER UP THE DEFICIENCY, IF ANY, POINTED OUT BY THE AO. HOWEVER, THE AO WAS NOT CONVINCED WITH THE SAID MR. SAMSON PEERINCHERY & MRS. PIEDADE PERINCHERY 3 EXPLANATION S AND ACCORDINGLY ASSESSED TH E DIFFERENCE OF RS.67.46 LAKHS AS INCOME OF THE ASSESSEE AS UNACCOUNTED INVESTMENT. 3. IN THE APPELLATE PROCEEDINGS, THE LD CIT(A) DELETED THIS ADDITION AND HENCE THE REVENUE HAS FILED THIS APPEAL BEFORE US. 4. WE HEARD THE PARTIES ON THIS ISSU E AND PERUSED THE RECORD. WE NOTICE THAT THE LD CIT(A) HAS GIVEN RELIEF TO THE ASSESSEE WITH THE FOLLOWING OBSERVATIONS: - 9.3 I HAVE HEARD THE APPELLANT IN THE MATTER. IT IS SUBMITTED THAT FOR THE CAPTIONED YEAR THE ASSESSING OFFICER HAS MADE ADDITION O F RS. 67,46,251/ - , THE DETAILS AND BASIS OF WHICH ARE SHOWN BELOW : - UNACCOUNTED INCOME ADMITTED : AT MUMBAI RS. 5,46,77,257 ] AT GOA RS. 1,73,50,502 ] AN S TO Q. 17 ON PAGE 3 OF THE TOTAL RS. 7,20,27,759 ] ASSESSMENT ORDER GIVEN TO THE CHART ERED ACCOUNTANT FOR PAYMENT OF TAXES CHEQUE RS. 13,00,000 ] CASH RS. 16,00,000 ] ANS TO Q. NO. 18 ON PAGE 4 OF THE TOTAL RS. 29,00,000 ] ASSESSMENT ORDER CASH FOUND AT MUMBAI RS. 4,20,000 ] AT GOA RS. 2,38,000 ] ANS TO Q. NO. 19 ON PAGE NO. 4 TOTAL RS. 6,58,000 ] OF THE ASSESSMENT ORDER TOTAL DISCLOSURE (FROM ABOVE) RS. 7,55,85,759 (A) ADDITIONAL AMOUNTS DECLARED MR SAMSON PERINCHERY RS. 4,38,49,706 MRS. PIEDADE PERINCHERY RS. 2,49,89,820 (WIFE OF THE APPELLANT) RS. 6,88,39,526 (B) ADDITION MADE BY THE ASSESSING OFFICER RS. 67,46,233 (A - B) MR. SAMSON PEERINCHERY & MRS. PIEDADE PERINCHERY 4 IT IS REITERATED BY THE APPELLANT THAT RETURN OF INCOME WAS FILED PURSUANT TO NOTICE UNDER S. 153A IS NOT OVER AND ABOVE THE RETURN OF INCOME FILED UNDER S. 139(1). IT IS EMPHASIZED THAT THE RETURN FILED IN RESPONSE TO NOTICE UNDER S.153A INCLUDES RETURN OF INCOME ORIGINALLY FILED UNDER S. 139(1). THE APPELLANT SEEKS TO DEMONSTRATE THAT THE ENTIRE INCOME IS DISCLOSED AND TAXED, ON THE BASIS OF THE SAID FACTS AND FIGURES AS CULLED FROM THE RECORD. PARTICULARS MR . SAMSON P ERINCHERY MRS. PIEDADE PERINCHERY TOTAL PER APPELLANT (INCOME PER RETURN OF INCOME UNDER SECTION 153A) RS. 5,05,12,066 RS. 2,58,48,480 RS. 7,63,60,546 PER ASSESSING OFFICER (ONLY ADDITIONAL INCOME CONSID ERED THAT IS 153A - 139(1) RS. 4,38,49,706 RS. 2,49,89,820 RS. 6,88,39,526 IT IS POINTED OUT BY THE APPE LLANT THAT WHILE THE TOTAL ASSETS FOUND AND D ISCLOSED UNDER S. 132(4) AGGREGATES R S . 7,55,85,777, THE TOTAL INCOME RETURNED AGGREGATE TO RS. 7,63,60,54 6/ - (RS.5 , 05 , 12 , 066 + 2 , 58, 48, 480) AND THEREFORE FULL INCOME IS DISCLOSED AND TAXED. NO FURTHER AMOUNTS NEED TO BE BROUGHT TO TAX. ALL ASSETS FOUND IN SEARCH AND SEIZURE OPERATIONS RS 7,55,85,777 PARTICULARS MR. SAMSON PERINCHERY MRS. PIEDADE PERINCHERY TOTAL PER APPELLANT FOR INCOME TAX ASSESSMENT YEAR 2003 - 04 TO 2008 - 09 RS. 4,01,20,796 RS. 2,14,56,120 RS. 6,15,76,916 FOR INCOME TAX ASSESSMENT YEAR 2009 - 10 RS. 1,03,91,270 RS. 43,92,360 RS. 1,47,83,630 TOTAL RS. 7,63,60,546 FOR INCOME TAX ASSESSM ENT YEAR 2002 - 03 RS. 11,55,394 ON THE BASI S OF THE ABOVE FACTS AND FIGURES, IT IS SUBMITTED BY THE APPELLANT THAT THE IMPUGNED ADDITION NEEDS TO BE DELETED . MR. SAMSON PEERINCHERY & MRS. PIEDADE PERINCHERY 5 9.4 I HAVE VERY CAREFULLY CONSIDERED THE MATTER. THE CONTENTION RAISED BY THE APPELLANT BE FORE THE A.0 WAS THAT IN THE STATEMENT RECORDED UNDER S. 132(4), THE APPELLANT HAD DECLARED THAT THE DISCLOSURE AS MADE O F RS.7,55,85,777/ - INCLUDES THE SUMS ALREADY OFFERED TO TAX IN THE RETURNS AS FIRED UNDER S. 139(1 ) . THE A.0 HAD REJECTED THE CONTENTI ON STATING THAT NOWHERE IN THE STATEMENT RECORDED UNDER S.132(4), SUCH A CLAIM HAD BEEN MADE. IN THIS CONTEXT, I HAVE CAREFULL Y GONE THROUGH THE STATEMENT RECORDED FROM T HE APPELLANT UNDER S.132(4) OF THE ACT ON 18.12.2008, A COPY OF WHICH IS P LACED ON RE CORD. IT IS SEEN FROM THE SAID STATEMENT THAT IN RESPONSE TO QUESTION 20, THE APPELLANT HAD DECLARED AS UNDER: - Q.NO.20 AS YOU HAVE NOT SHOWN THESE BANK ACCOUNTS IN YOUR RETURN OF INCOME FOR A.Y 2007 - 08, WHY THE ABOVE TWO ASSETS OF RS. 29,00,000/, AND R S. 6,58,000/ - (AS PER QUESTION NO. 18 & 19) SHOULD NOT BE CONSIDERED AS YOUR UNDISCLOSED INCOME. ANS : I HAD ALREADY ACCEPTED OUR INVESTMENTS IN NSC/KVPS/ F.DS/MUTUAL FUNDS OF RS. 7,20,27.777/ - AS INCOME OF ME AND MY WIFE AND I ALSO ACCEPT MONEY OF RS. 29,00,000/ - GIVEN TO MR. PRABHAT L. SINGH AS MY ASSET AND R. 6,58,000/ - FOUND IN CASH AS ALSO MY ASSET. I AM AGREEING TO PAY THE TAX FOR THE SOURCE OF ALL THESE ASSETS WHICH IS CASH DEPOSITS IN MY VARIOUS BANK ACCOUNTS, IN VARIOUS NAMES OF MY FAMILY ME MBERS ACCORDING TO YEAR OF DEPOSIT. HOWEVER, I WANT TO REQUEST YOUR THAT SET OFF OF THE TAXES PAID BY ME AND M Y FAMILY MEMBERS IN THE RETURN FILED BEFORE THE DEPARTMENT FOR VARIOUS ASSESSMENT YEARS AGAINST THE TAX PAYABLE DETERMINED ON THE UNDISCLOSED INC OME OFFERED BY ME AS STATED ABOVE MAY BE ALLOWED TO ME. ON A CONSIDERATION OF THE SAID DECLARATION IN ANSWER TO QUESTION NO. 20 IT HAS TO BE STATED THAT THE CONTENTIONS AND SUBMISSIONS AS MADE BY THE APPELLANT THAT THE INCOME DECLARED UNDER S. 153A INC LUDES THE RETURN OF INCOME ORIGINALLY FILED UNDER S. 139(1) MERITS DUE CONSIDERATION. UNDOUBTEDLY IN THE STATEMENT UNDER OATH THE APPELLANT HAD STATED THAT HE BE GIVEN CREDIT FOR TAXES ALREADY PAID WHICH MEANS THAT THE INCOME PER 132(4) INCLUDES INCOME PER 139(1). THAT BEING SO THE A.0 ERRED IN STATING THAT NOWHERE IN THE STATEMENT RECORDED UNDER S. 132(4), SUCH A CLAIM HAD BEEN MADE. SINCE THE FACTS ON RECORD LEAD TO THE INFERENCE THAT SUCH A 'STATEMENT HAD BEEN MADE THAT THE APPELLANT BE GIVEN CREDIT FOR TAXES ALREADY PAID, WHILE GIVING THE STATEMENT UNDER S. 132(4), IT WOULD ONLY BE APPROPRIATE TO ALLOW THE CLAIM TO THE EXTENT TO WHICH TAXES HAD BEEN REMITTED. THE DETAILS OF THE TAXES REMITTED AS MR. SAMSON PEERINCHERY & MRS. PIEDADE PERINCHERY 6 PER THE RETURN OF INCOME FILED UNDER S. 139(1) IS PART OF T HE RECORD OF THE A.O. IT HAS TO BE STATED THAT THE APPELLANT HAS ALREADY GIVEN A STATEMENT UNDER OATH TO GIVE CREDIT FOR TAXES PAID, AND WHICH HAS NOT BEEN REJECTED, IN THE . INTEREST OF FAIR PLAY AND JUSTICE, IT HAS TO BE STATED THAT PER 132(4) INCLUDES IN COME PER 139(1) TO THE EXTENT TAXES ALREADY PAID. TO THE SAID EXTENT THE APPELLANT WILL GET RELIEF. TO REITERATE IN ANSWER TO QUESTION NO.20, THE APPELLANT HAD REQUESTED THAT HE BE GIVEN SET OFF THE TAXES PAID BY HIM AND HIS FAMILY MEMBERS IN THE RETURNS F ILED BEFORE THE DEPARTMENT FOR VARIOUS ASSESSMENT YEARS AGAINST THE TAX PAYABLE DETERMINED ON THE UNDISCLOSED INCOME OFFERED BY HIM. AGAIN TO REITERATE THIS MEANS THAT INCOME AS PER RETURN OF INCOME UNDER S. 139(1) ON WHICH TAXES HAVE BEEN PAID BY THE ASSE SSEE AND HIS FAMILY MEMBERS + ADDITIONAL INCOME = RETURN OF INCOME PURSUANT TO NOTICE UNDER S. 153A. IT IS ORDERED ACCORDINGLY 5. HAVING HEARD RIVAL CONTENTIONS, WE ARE OF THE VIEW THAT THERE IS NO INFIRMITY IN THE DECISION RENDERED BY LD CIT(A) ON TH IS ISSUE. WE NOTICE THAT THE SEARCH OFFICIALS HAVE UNEARTHED VARIOUS TYPES OF INVESTMENTS, CASH AND DEPOSITS. UNDER THE INCOME TAX ACT, AN ASSESSEE IS REQUIRED TO DISCLOSE THE SOURCES THEREOF. FOR COMPUTING THE SOURCE, ONE IS REQUIRED TO TAKE INTO CONSI DERATION BOTH DECLARED AND UNDISCLOSED INCOME. HENCE, THERE IS MERIT IN THE CONTENTIONS OF THE ASSESSEE THAT THE AGGREGATE INCOME DISCLOSED IN RETURNS FILED U/S 153A OF THE ACT (INCOME RETURNED U/S 139(1) PLUS ADDITIONAL INCOME DECLARED ) SHOULD BE COMPARE D WITH THE AGGREGATE AMOUNT OF INVESTMENTS FOUND DURING THE COURSE OF SEARCH. EVEN IF WE ASSUME FOR A MOMENT THAT THE ASSESSEE HAS NOT EXPLAINED THE SOURCES OF INVESTMENTS, THE AO IS REQUIRED TO GIVE CREDIT FOR THE INCOME ALREADY DECLARED BY THE ASSESSEE IN THE RETURNS OF INCOME FILED FOR VARIOUS YEARS FOR THE PURPOSE OF ARRIVING AT UNDISCLOSED INVESTMENT . A PERUSAL OF THE ASSESSMENT ORDER WOULD SHOW THAT THIS ADDITION HAS BEEN MADE BY THE AO WITH THE DESCRIPTION UNACCOUNTED INVESTMENT, MEANING THEREBY THE AO HAS ALSO UNDERSTOOD THAT THE INVESTMENT IN WHICH SOURCES HAVE BEEN EXPLAINED SHOULD NOT BE ADDED. SINCE THE QUANTUM FOUND AT THE TIME OF SEARCH RELATE TO INVESTMENTS, WHAT IS REQUIRED TO BE ASSESSED IS ONLY THOSE PART OF INVESTMENTS , SOURCES OF WHI CH COULD NOT BE EXPLAINED TO THE SATISFACTION OF THE AO. FURTHER THE LD CIT(A) HAS FOUND OUT FROM THE ANSWERS GIVEN BY THE ASSESSEE THAT THE ASSESSEE HAD INTENDED TO INCLUDE THE INCOME DECLARED IN THE RETURNS FILED U/S 139(1) OF THE ACT IN THE DISCLOSURE A ND SUCH AN INTERPRETATION GIVEN BY LD CIT(A) IS WELL WITHIN THE SCHEME OF THE ACT. ACCORDINGLY, WE DO NOT FIND ANY INFIRMITY IN THE DECISION RENDERED BY LD CIT(A) ON THIS ISSUE. MR. SAMSON PEERINCHERY & MRS. PIEDADE PERINCHERY 7 6. IN THE ASSESSEES APPEAL, IT IS PRAYED THAT THE INCOME RELATING TO KISA N VIKAS PATRA (KVP) AND REFUND OF LIC AMOUNT SHOULD BE EXCLUDED FROM THE TOTAL INCOME. IT APPEARS THAT THE ASSESSEE HAD BEEN OFFERING INTEREST INCOME FROM KVP ON ESTIMATED BASIS AND DURING THE YEAR UNDER CONSIDERATION, THE INTEREST INCOME OFFERED HAS EXCE EDED ACTUAL AMOUNT OF INTEREST. ACCORDINGLY IT IS PRAYED THAT THE EXCESS PORTION OF INTEREST INCOME SHOULD BE EXCLUDED FROM THE TOTAL INCOME. IT IS FURTHER SUBMITTED THAT THE ASSESSEE HAS WRONGLY OFFERED LIC REFUND, A CAPITAL RECEIPT, AS HIS INCOME AND A CCORDINGLY IT IS PRAYED THAT THE SAME MAY BE EXCLUDED. 7. IT IS SETTLED LAW THAT THE TAX CAN BE COLLECTED ONLY ON THE REAL INCOME. THE EXCESS INTEREST CANNOT BE SUBJECTED TO TAX, EVEN IF THE ASSESSEE HAD OFFERED THE SAME. SIMILARLY THE CAPITAL RECEIP TS CANNOT BE TAXED EXCEPT WITH THE AUTHORITY OF LAW. SINCE BOTH THE CONTENTIONS HAVE BEEN RAISED FOR THE FIRST TIME BEFORE US, WE DEEM IT PROPER TO RESTORE THE SAME TO THE FILE OF THE AO FOR EXAMINATION OF THE SAME. ACCORDINGLY WE RESTORE BOTH THESE ISSU ES TO THE FILE OF THE AO, WHO MAY TAKE APPROPRIATE DECISION IN ACCORDANCE WITH THE LAW AFTER PROVIDING ADEQUATE OPPORTUNITY TO THE ASSESSEE. 8. THE REMAINING TWO APPEALS RELATE TO THE PENALTY LEVIED U/S 271AAA OF THE ACT. THE AO LEVIED PENALTY ON THE REASONING THAT THE ASSESSEES HAVE NOT SPECIFIED THE MANNER IN WHICH THE UNDISCLOSED INCOME WAS GENERATED AND FURTHER THE ASSESSEES HAVE FAILED TO PAY THE TAX ON THE ADDITIONAL INCOME. IT IS PERTINENT TO NOTE THAT THE PROVISIONS OF SEC. 271AAA(2) SPECIFIE S THREE CONDITIONS, WHICH ARE REQUIRED TO BE SATISFIED IN ORDER TO ESCAPE FROM PENALTY UNDER THAT SECTION. ACCORDING TO AO, THE ASSESSEES HAVE NOT SATISFIED TWO CONDITIONS. IN THE APPELLATE PROCEEDINGS, THE LD CIT(A) EXAMINED THE REPLIES GIVEN BY THE ASSE SSEE IN THE SWORN STATEMENT AND NOTICED THAT THE ASSESSEE HAS STATED HIS SOURCES OF INCOME AS BROKERAGE AND COMMISSION INCOME. ACCORDINGLY HE HELD THAT THE CONDITION RELATING THE SOURCES OF INCOME HAS BEEN SATISFIED. WITH REGARD TO THE PAYMENT OF TAXES, T HE ASSESSEE HAD REQUESTED THE AO TO ENCASH KISAN VIKAS PATRAS AND THE SAME WAS NOT FOUND TO BE SUFFICIENT BY THE TAX AUTHORITIES TO COMPLY WITH THE CONDITIONS SPECIFIED IN SEC. 271AAA OF THE ACT. ACCORDINGLY, THE LD CIT(A) CONFIRMED THE PENALTY MR. SAMSON PEERINCHERY & MRS. PIEDADE PERINCHERY 8 LEVIED U/S 271AAA OF THE ACT. THUS THE LD CIT(A) HAS HELD THAT THE ASSESSEE HAS NOT SATISFIED ONE CONDITION, MEANING THEREBY, THERE IS NO DISPUTE THAT THE ASSESSEES HAVE SATISFIED OTHER TWO CONDITIONS. IN THE CASE OF MRS. PEIDADE PERINCHERY, THE LD CIT(A) DISMISSED THE APPEAL FOR NON - APPEARANCE. 9. WE HAVE HEARD THE PARTIES ON THIS ISSUE. SINCE THE PENALTY U/S 271AAA HAS BEEN LEVIED ON IDENTICAL SET OF FACTS IN BOTH THE CASES , WE PREFER TO DISPOSE BOTH THE APPEALS INSTEAD OF SENDING THE APPEAL OF MRS. PEIDADE PERINCHERY TO THE FILE OF THE LD CIT(A) . ACCORDING TO THE LD CIT(A), THESE ASSESSES HAVE NOT SATISFIED THE CONDITIONS SPECIFIED IN SEC. 271AAA WITH REGARD TO THE PAYMENT OF TAXES, I.E, THE ABOVE SAID SECTION SPECIF IES THAT THE ASSESSEE SHOULD PAY THE TAX TOGETHER WITH INTEREST, IF ANY, IN RESPECT OF UNDISCLOSED INCOME. THE FACTS OF THE CASE WOULD SHOW THAT THE UNDISCLOSED INCOME DECLARED BY THE ASSESSEE CONSISTED OF INVESTMENT IN SHARES, MUTUAL FUNDS AND GOVERNMENT SECURITIES. THE CASH AND BANK BALANCES AVAILABLE WITH THE ASSESSEE WERE NOT SUFFICIENT TO PAY THE TAXES ON UNDISCLOSED INCOME. HENCE THE ASSESSEE HAS FILED AN APPLICATION WITH THE AO, REQUESTING HIM TO ENCASH THE KISAN VIKAS PATRAS AND TO ADJUST THE PROCEEDS THEREOF AGAINST THE TAX PAYABLE BY THE ASSESSEE ON THE DISCLOSED INCOME. IT IS A SETTLED PROPOSITION OF LAW THAT A PERSON CANNOT BE FORCED TO DO IMPOSSIBILITY. SINCE THE ASSESSEE WAS NOT HAVING LIQUID FUNDS TO PAY THE TAXES, HE HAD NO OTHER OPTION, BUT TO ENCASH THE SECURITIES. ACCORDIN GLY, HE HAS REQUESTED THE AO. IN OUR VIEW, THE REQUEST SO MADE BY THE ASSESSEE AND SUBSEQUENT ENCASHMENT OF THE SECURITIES SATISFIES THE CONDITIONS PRESCRIBED IN SEC. 271AAA OF THE ACT FOR PAYMENT OF TAX. ACCORDINGLY, WE MODIFY THE ORDER OF LD CIT(A) AND HOLD THAT THE ASSESSEES HAVE SATISFIED THE CONDITION RELATING TO PAYMENT OF TAX ALSO. ACCORDINGLY WE DIRECT THE AO TO DELETE THE PENALTY LEVIED U/S 271AAA OF THE ACT IN BOTH THE CASES UNDER CONSIDERATION. 10. IN THE RESULT, THE APPEAL FILED BY THE R EVENUE IN ITA NO.2581/MUM/2014 IS DISMISSED. THE APPEAL OF THE ASSESSEE IN ITA NO.1528/MUM/2014 IS TREATED AS ALLOWED AND REMAINING TWO APPEALS OF THE ASSESSEE ARE ALLOWED. MR. SAMSON PEERINCHERY & MRS. PIEDADE PERINCHERY 9 ORDER HAS BEEN PRONOU NCED IN THE OPEN COURT ON 25 .5 .2016 . SD/ - SD/ - (AMARJIT SIN GH ) (B.R.BASKARAN ) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI ; DATED : 25 / 5 /20 1 6 COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) 4. CIT 5. DR, IT AT, MUMBAI 6. GUARD FILE. BY ORDER, //TRUE COPY// ( DY./ASSTT. REGISTRAR) ITAT, MUMBAI PS