ITO, Nashik V. Shri AMRITLAL MITHAILAL AGRAWAL, Nashik

ITA 1556/PUN/2013

• Counselvise Citation: [2015] 134 COUNSELVISE.COM (IT) 1162 (ITAT-PUNE)
• Duration Of Justice: 2 year(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-08-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 25-03-2015
• Assessment Year: 2005-2006
• Appeal Filed On: 05-08-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Business income; Search and seizure; Reasonable cause; Revised return
• Section: 40A(3); 153A; 148; 132; 144; 11; 139

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH A, PUNE , . . , ' # BEFORE MS. SUSHMA CHOWLA, JM AND SHRI R.K. PANDA, A M . / ITA NO.1556/PN/2013 $ % % / ASSESSMENT YEAR : 2005-06 THE INCOME TAX OFFICER, WARD 1(1), NASHIK. . / APPELLANT VS. SHRI AMRITLAL MITHAILAL AGRAWAL, KAUT GHAT, NEAR STATE BANK COLONY, MUMBAI AGRA ROAD, NASHIK 422001 PAN : AANPA7735K . RESPONDENT / APPELLANT BY : SHRI RAJESH DAMOR / RESPONDENT BY : SMT. DEEPA KHARE DATE OF HEARING : 08.07.2015 / DATE OF PRONOUNCEMENT: 31.08.2015 & / ORDER PER SUSHMA CHOWLA, JM: THIS APPEAL FILED BY THE REVENUE IS AGAINST THE ORD ER OF CIT(A)-I, NASHIK, DATED 02.05.2013 RELATING TO ASSESSMENT YEA R 2005-06 AGAINST PENALTY LEVIED UNDER SECTION 271(1)(C) OF THE ACT, 1961. 2. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL:- 1. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, AND IN LAW THE LEARNED CIT(A)-I, NASHIK IS JUSTIFIED IN CANCELLATI ON OF PENALTY AMOUNTING TO RS.15,04,889/- UNDER SECTION 271(1)(C) OF THE INCOM E TAX ACT, 1961 ON CONCEALMENT OF INCOME OF RS.44,70,860/-? ITA NO.1556/PN/2013 SHRI AMRITLAL MITHAILAL AGRAWAL 2 2. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW THE LEARNED CIT(A) IS JUSTIFIED IN CANCELLATION OF PENA LTY AMOUNTING TO RS.15,04,889/- ON THE GROUND THAT THE ASSESSEE HAS FILED RETURN, REVISED RETURN VOLUNTARILY? 3. THE LEARNED CIT (A) OUGHT TO HAVE UPHELD THE PEN ALTY ORDER AMOUNTING TO RS.15,04,889/-, UNDER SEC. 271 (1)(C) OF THE IT ACT 1961 PASSED BY THE ASSESSING OFFICER ITO WARD 1 (1), NASHIK. 4. IT IS THEREFORE PRAYED THAT THE ORDER OF THE LEA RNED CIT (A) BE VACATED AND THAT OF THE ASSESSING OFFICER ITO WARD 1 (1), NASHI K, BE RESTORED. 5. THE APPELLANT CRAVES LEAVE TO ADD, AMEND AND ALT ER ANY GROUND (S) OF APPEAL. 3. THE ISSUE ARISING IN THE PRESENT APPEAL IS AGAIN ST THE LEVY OF PENALTY UNDER SECTION 271(1)(C) OF THE ACT AT RS.15,04,889/ -. 4. BRIEFLY, IN THE FACTS OF THE PRESENT CASE, SEARC H UNDER SECTION 132 OF THE ACT WAS CARRIED OUT AT THE PREMISES OF THE ASSESSEE ON 21 ST SEPTEMBER, 2005. DURING THE COURSE OF SEARCH PROCEEDINGS, THE ASSESS EE DECLARED ADDITIONAL INCOME OF RS.42,85,129/- ON ACCOUNT OF VARIOUS UNRE CORDED TRANSACTIONS. THE ASSESSEE HAD ORIGINALLY FILED THE RETURN OF INCOME DECLARING TOTAL INCOME OF RS.8,34,501/- ON 31.10.2005 I.E. AFTER THE CONDUCT OF SEARCH OPERATION ON THE ASSESSEE ON 21.09.2005. THEREAFTER, NOTICE UNDER S ECTION 153A OF THE ACT WAS ISSUED UPON THE ASSESSEE ON 05.12.2005, REQUIRI NG THE ASSESSEE TO FILE THE RETURN OF INCOME WITHIN 30 DAYS I.E. BY 07.01.2 006. IN RESPONSE TO THE NOTICE UNDER SECTION 153A OF THE ACT, THE ASSESSEE FURNISHED THE RETURN ON 16.05.2006 DECLARING TOTAL INCOME OF RS.44,71,140/- FROM BUSINESS INCOME. THEREAFTER, THE ASSESSEE FURNISHED ONE REVISED RETU RN ON 18.12.2006 DECLARING TOTAL INCOME OF RS.45,69,270/- AND ANOTHER REVISED RETURN OF INCOME FURNISHED ON 10.09.2007 DECLARING TOTAL INCOME OF RS.51,19,63 0/-. THE ASSESSING OFFICER, DURING THE COURSE OF ASSESSMENT PROCEEDING S, NOTED THAT DURING THE COURSE OF SEARCH, DOCUMENTS SHOWING THE UNACCOUNTED PURCHASES AS WELL AS SALES TRANSACTIONS ENTERED INTO BY THE ASSESSEE WER E FOUND AND SEIZED. THE UNACCOUNTED PURCHASES TOTALING TO RS.1,57,70,278/- WERE MADE IN CASH AND ITA NO.1556/PN/2013 SHRI AMRITLAL MITHAILAL AGRAWAL 3 ASSESSING OFFICER ISSUED SHOW-CAUSE NOTICE TO THE A SSESSEE AS TO WHY 20% OF THE VALUE OF THESE PURCHASES SHOULD NOT BE DISALLOW ED UNDER THE PROVISIONS OF SECTION 40A(3) OF THE ACT. ANOTHER ISSUE NOTED BY THE ASSESSING OFFICER WAS THE EXPENDITURE IN CASH I.E. ON CONSUMABLES ON VARI OUS DATES TOTALING TO RS.4,86,038/-, WHICH WAS ALSO IN VIOLATION OF THE P ROVISIONS OF SECTION 40A(3) OF THE ACT. THE ASSESSING OFFICER CONSEQUENTLY MADE T HE DISALLOWANCE UNDER SECTION 40A(3) OF THE ACT AT RS.31,54,056/- AND RS. 94,208/- RESPECTIVELY. ANOTHER DISALLOWANCE MADE IN THE HANDS OF THE ASSES SEE WAS ON ACCOUNT OF CREDIT TO THE CAPITAL ACCOUNT TOTALING RS.70,025/-. IN RESPECT OF UNRECORDED TRANSACTIONS, THERE WERE UNRECORDED PURCHASES TOTAL ING RS.1,58,70,607/- AGAINST WHICH UNRECORDED SALES WERE TUNE OF RS.1,75 ,68,472/- AND THE ASSESSING OFFICER PROPOSED G.P. ON SUCH UNRECORDED SALES AND ALSO THE AMOUNT REQUIRED FOR MAKING UNRECORDED PURCHASES BY WORKING OUT THE PEAK VALUE OF THE PURCHASES MADE. THE ASSESSING OFFICER ON VERIFICATION OF THE DETAILS OF DATE-WISE UNRECORDED PURCHASES NOTED THA T THE PEAK OF THE PURCHASES WORKED OUT TO RS.4,20,680/-. IN THE CASH FLOW STATEMENT, THE ASSESSEE HAD DECLARED OPENING CASH BALANCE OF RS.2, 34,949/- AND THE ASSESSING OFFICER ALLOWED THE CREDIT OF THE SAME, H OWEVER, THE BALANCE AMOUNT OF RS.1,85,731/- WAS ADDED TO THE TOTAL INCO ME OF THE ASSESSEE. 5. THE CIT(A) ALLOWED THE RELIEF TO THE ASSESSEE ON ACCOUNT OF FOLLOWING ISSUES : (I) DISALLOWANCE UNDER SECTION 40A(3) AT R S.31,54,056/- AND RS.94,208/-; AND, (II) THE CREDIT TO CAPITAL ACCOUN T OF RS.70,025/-. THE CIT(A), HOWEVER, UPHELD THE ADDITION ON ACCOUNT OF PEAK OF UNRECORDED PURCHASES OF RS.1,85,731/-. PURSUANT TO THE ORDER OF THE CIT(A) , THE ASSESSING OFFICER PASSED THE ORDER UNDER SECTION 271(1)(C) OF THE ACT HOLDING THE ASSESSEE TO HAVE CONCEALED THE PARTICULARS OF ITS INCOME. THE FIRST ISSUE CONSIDERED BY THE ASSESSING OFFICER IN THE PENALTY ORDER WAS THE ADDI TION MADE ON ACCOUNT OF PEAK OF UNRECORDED PURCHASES AT RS.1,85,731/-, SINC E THE ADDITION WAS ITA NO.1556/PN/2013 SHRI AMRITLAL MITHAILAL AGRAWAL 4 CONFIRMED BY THE CIT(A). THE ASSESSING OFFICER WAS OF THE VIEW THAT THE FACT OF CONCEALMENT OF INCOME WAS ESTABLISHED BEYOND DOU BT AND CONSEQUENTIALLY PENALTY UNDER SECTION 271(1)(C) OF THE ACT WAS LEVI ED ON SUCH INCOME. THE SECOND POINT NOTED BY THE ASSESSING OFFICER WAS THA T THOUGH DURING THE COURSE OF SEARCH AND SEIZURE OPERATIONS, THE ASSESS EE HAD DECLARED ADDITIONAL INCOME, HOWEVER, THE SAME WAS NOT DECLAR ED IN THE ORIGINAL RETURN OF INCOME FILED BY THE ASSESSEE UNDER SECTION 139(1 ) OF THE ACT. LATER ON, THE ASSESSEE FILED RETURN OF INCOME IN RESPONSE TO NOTI CE UNDER SECTION 153A OF THE ACT AND ALSO REVISED RETURN OF INCOME WHEREIN T HE LAST REVISED RETURN OF INCOME WAS FILED ON 10.09.2007 DECLARING TOTAL INCO ME OF RS.51,90,630/-. THE ASSESSING OFFICER WAS OF THE VIEW THAT THE PENALTY PROCEEDINGS WERE COVERED BY EXPLANATION 5 TO SECTION 271(1)(C) OF THE ACT AN D SINCE THE ASSESSEE HAD CONCEALED THE PARTICULARS OF INCOME TO THE EXTENT O F RS.42,85,129/-, IT WAS LIABLE FOR THE LEVY OF PENALTY UNDER SECTION 271(1) (C) OF THE ACT. CONSEQUENTLY, THE ASSESSING OFFICER LEVIED PENALTY ON PEAK OF UNR ECORDED PURCHASES OF RS.1,85,731/- AND VARIATION IN THE INCOME FURNISHED UNDER SECTION 139(1) AND UNDER SECTION 153A OF THE ACT AT RS.42,85,129/-. P ENALTY WAS LEVIED AT 100% OF THE TAX SOUGHT TO BE EVADED AT RS.15,04,889/-. 6. THE CIT(A) IN THE ORDER AGAINST LEVY OF PENALTY UNDER SECTION 271(1)(C) OF THE ACT HELD THAT WHERE THE ASSESSEE HAD FURNISH ED THE REVISED RETURN OF INCOME WITHIN ONE YEAR FROM THE END OF THE ASSESSME NT YEAR AND SINCE THE SAID REVISED RETURN WAS VALID RETURN UNDER SECTION 139(1), AND THE SUBSEQUENT REVISED RETURNS OF INCOME WERE FILED BEFORE THE COM MENCEMENT OF THE SCRUTINY ASSESSMENT, PENALTY UNDER SECTION 271(1)(C) OF THE ACT COULD NOT BE LEVIED ON THE ADDITIONAL INCOME DECLARED BY THE ASSESSEE IN T HE SAID RETURNS OF INCOME. RELIANCE IN THIS REGARD WAS PLACED ON THE RATIO LAI D DOWN BY THE PUNE BENCH OF THE TRIBUNAL IN CHANDAN K. SHEWANI VS. DCIT IN I TA NO.235 AND 236/PN/2010, ORDER DATED 29.08.2012 AND ALSO ITO VS . PRAKASH CHAMPALAL ITA NO.1556/PN/2013 SHRI AMRITLAL MITHAILAL AGRAWAL 5 KANKARIA IN ITA NO.1465 TO 1467/PN/2011, ORDER DATE D 22.03.2013. IT WAS ALSO NOTED BY THE CIT(A) THAT THE ASSESSING OFFICER HAD ACCEPTED THE INCOME DECLARED IN THE REVISED RETURN OF INCOME FILED BY T HE ASSESSEE AND HENCE THERE WAS NO JUSTIFICATION FOR LEVY OF PENALTY UNDER SECT ION 271(1)(C) OF THE ACT. IN RESPECT OF SECOND ADDITION OF RS.1,85,731/-, THE CI T(A) HELD THAT THERE WAS NO JUSTIFICATION IN LEVYING OF PENALTY UNDER SECTION 2 71(1)(C) OF THE ACT SINCE THE ASSESSING OFFICER HAS FAILED TO CONSIDER THE CASH B ALANCE ON THE DIFFERENT PEAK PURCHASES AND HAD ONLY REDUCED THE OPENING CASH BAL ANCE FROM THE SAID PEAK. 7. THE REVENUE IS IN APPEAL AGAINST THE ORDER OF TH E CIT(A). 8. THE DEPARTMENTAL REPRESENTATIVE FOR THE REVENUE POINTED OUT THAT AS ON THE DATE OF SEARCH I.E. 21.09.2005, THE DUE DATE FOR FILING THE RETURN OF INCOME HAD NOT EXPIRED. THE ASSESSEE ON ITS OWN MO TION FURNISHED THE RETURN OF INCOME ON 31.10.2005 DECLARING TOTAL INCOME OF R S.8.34 LAKHS. HOWEVER, AFTER THE NOTICE ISSUED UNDER SECTION 153A OF THE A CT, THE ASSESSEE FURNISHED THE RETURN OF INCOME ON 16.05.2006 DECLARING TOTAL INCOME OF RS.44,70,860/- AND THEREAFTER FINALLY REVISED THE RETURN OF INCOME ON 18.12.2006 DECLARING TOTAL INCOME OF RS.51.91 LAKHS. IT WAS POINTED OUT BY THE LD. DEPARTMENTAL REPRESENTATIVE FOR THE REVENUE THAT THE REVISED RET URN OF INCOME FILED BY THE ASSESSEE INCORPORATED THE ADDITIONAL INCOME OFFERED BY THE ASSESSEE DURING THE COURSE OF SEARCH. HOWEVER, IN THE ORIGINAL RET URN OF INCOME FILED AFTER THE SEARCH, THIS INCOME WAS NOT INCLUDED. THE LD. DEPA RTMENTAL REPRESENTATIVE WAS OF THE VIEW THAT WHERE THE ASSESSEE HAD FAILED TO DISCHARGE ITS ONUS THOUGH DURING THE COURSE OF SEARCH IT HAD MADE THE DECLARATION, IT WAS A FIT CASE FOR LEVY OF PENALTY UNDER SECTION 271(1)(C) OF THE ACT. RELIANCE IN THIS REGARD WAS PLACED ON THE RATIO LAID DOWN IN DCIT VS . SHRI OMKARESHWAR R. ITA NO.1556/PN/2013 SHRI AMRITLAL MITHAILAL AGRAWAL 6 KALANTRI AND OTHERS IN ITA NO.1004/PN/2009 AND OTHE RS, ORDER DATED 05.02.2010. 9. THE LD. AUTHORIZED REPRESENTATIVE FOR THE ASSESS EE, IN REPLY, POINTED OUT THAT DURING THE COURSE OF SEARCH, THE ASSESSEE HAD MADE A DECLARATION TO OFFER ADDITIONAL INCOME, WHICH WAS OFFERED IN THE R ETURN OF INCOME FILED IN RESPONSE TO NOTICE UNDER SECTION 153A OF THE ACT, W HERE THE ASSESSEE INTENDING TO OFFER THE ADDITIONAL INCOME, THERE WAS NO CASE OF CONCEALMENT OF INCOME. IT WAS FURTHER POINTED OUT BY THE LD. AUTH ORIZED REPRESENTATIVE FOR THE ASSESSEE THAT THE ASSESSING OFFICER HAD ACCEPTE D THE DISCLOSED INCOME AND THERE WAS NO RELATION WITH THE ASSETS SEIZED AN D FOUND DURING THE COURSE OF SEARCH. IT WAS POINTED OUT BY THE LD. AUTHORIZE D REPRESENTATIVE FOR THE ASSESSEE THAT THE PUNE BENCH OF THE TRIBUNAL HAD HE LD THAT WHERE NO ASSETS WERE FOUND DURING THE COURSE OF SEARCH, THE EXPLANA TION 5 TO SECTION 271(1)(C) OF THE ACT WAS NOT APPLICABLE. RELIANCE IN THIS RE GARD WAS PLACED ON THE RATIO LAID DOWN IN ITO VS. PRAKASH CHAMPALAL KANKARIA AND OTHERS IN ITA NO.1465 TO 1467/PN/2011 AND OTHERS, ORDER DATED 22.03.2013. THE AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE FURTHER SUBMITTED T HAT THE RETURN OF INCOME FILED UNDER SECTION 153A OF THE ACT WAS THE RETURN OF INCOME FILED UNDER SECTION 139(1) OF THE ACT. IN RESPECT OF APPLICATI ON OF EXPLANATION 1 TO SECTION 271(1)(C) OF THE ACT, THE LD. AUTHORIZED REPRESENTA TIVE FOR THE ASSESSEE RELIED ON THE SUBMISSIONS MADE BEFORE THE LOWER AUTHORITIE S. 10. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSI ONS AND PERUSED THE RECORD. THE ISSUE ARISING IN THE PRESENT APPEAL IS IN RELATION TO THE LEVY OF PENALTY UNDER SECTION 271(1)(C) OF THE ACT. IN THE FACTS OF THE PRESENT CASE, SEARCH AND SEIZURE OPERATIONS WERE CARRIED OUT AT T HE PREMISES OF THE ASSESSEE, CONSEQUENT TO WHICH THE ADDITIONAL INCOME WAS OFFERED BY THE ASSESSEE. THE SEARCH OPERATIONS WERE CARRIED OUT A T THE PREMISES OF THE ITA NO.1556/PN/2013 SHRI AMRITLAL MITHAILAL AGRAWAL 7 ASSESSEE ON 21.09.2005. THE ORIGINAL RETURN OF INC OME WAS FILED BY THE ASSESSEE ON 31.10.2005 DECLARING TOTAL INCOME OF RS .8,34,501/- I.E. THE ADDITIONAL INCOME OFFERED DURING THE COURSE OF SEAR CH WAS NOT DECLARED IN THE ORIGINAL RETURN OF INCOME. THEREAFTER, NOTICE UNDE R SECTION 153A OF THE ACT WAS ISSUED TO THE ASSESSEE ON 05.12.2005 REQUISITIO NING THE ASSESSEE TO FURNISH THE RETURN OF INCOME WITHIN 30 DAYS I.E. BY 07.01.2006. CONSEQUENT THERETO, THE ASSESSEE FURNISHED THE RETURN OF INCOM E DECLARING TOTAL INCOME OF RS.44,71,140/- AND FINALLY REVISED RETURN OF INCOME WAS FILED ON 10.09.2007 DECLARING TOTAL INCOME OF RS.51,90,630/-. THE ASSE SSEE CONSEQUENTIALLY HAD DECLARED THE ADDITIONAL INCOME IN ITS RETURN OF INC OME, PURSUANT TO ISSUE OF NOTICE UNDER SECTION 153A OF THE ACT AND BY WAY OF REVISED RETURN. IT IS NOT THE CASE OF THE DEPARTMENT THAT THE ADDITIONAL INCOME D ECLARED BY THE ASSESSEE IN THE SEARCH PROCEEDINGS, HAS NOT BEEN OFFERED TO TAX BY THE ASSESSEE. THE SAID INCOME DECLARED BY THE ASSESSEE HAS BEEN ACCEP TED BY THE ASSESSING OFFICER THOUGH WITH SOME ADDITIONS ON CERTAIN ISSUE S, BUT NOT RELATING TO THE ADDITIONAL INCOME OFFERED BY THE ASSESSEE. 11. THE FIRST ISSUE WHICH ARISES BEFORE US IS WHERE THE ASSESSEE HAD DECLARED THE ADDITIONAL INCOME IN THE RETURN OF INC OME FILED PURSUANT TO ISSUE OF NOTICE UNDER SECTION 153A OF THE ACT, WHETHER TH E ASSESSEE CAN BE HELD TO DEFAULTED TO HAVE CONCEALED PARTICULARS OF INCOME A ND BY FURNISHING THE SAID ADDITIONAL INCOME IN THE ORIGINAL RETURN OF INCOME. WE FIND THAT SIMILAR ISSUE OF LEVY OF PENALTY UNDER SECTION 271(1)(C) OF THE ACT AROSE BEFORE THE TRIBUNAL IN PRAKASH CHAMPALAL KANKARIA (SUPRA) AND THE TRIBUNAL VIDE PARA 9 ONWARDS HELD AS UNDER :- 9. THE NEXT ISSUE WILL BE WHETHER IS THERE ANY PRO FIT AND JUSTIFICATION OF THE ASSESSING OFFICER TO LEVY THE PENALTY ON THE ASSESS EE U/S. 271(1)(C) OF THE ACT ON THE AMOUNT OF THE DIFFERENCE BETWEEN THE INCOME FINALLY DETERMINED INCLUDING THE INCOME OFFERED BY THE ASSESSEE IN THE RETURNS FILED IN RESPONSE TO NOTICE U/S.153A. THERE WILL BE TWO ASPECTS TO B E CONSIDERED WHETHER ITA NO.1556/PN/2013 SHRI AMRITLAL MITHAILAL AGRAWAL 8 PENALTY CAN BE LEVIED ON (1) THE ADDITIONAL INCOM E DECLARED BY THE ASSESSEE IN THE RETURNS U/S.153A AND ON (2) ADDITION MADE BY THE ASSESSING OFFICER WHILE COMPLETING ASSESSMENT. SO FAR AS THE FIRST A SPECT IS CONCERNED IT STANDS COVERED IN FAVOUR OF THE ASSESSEE BY THE DECISION O F THE ITAT PUNE, IN THE CASE OF CHANDAN K. SHEWANI VS. DY. CIT, PUNE, ITA N O. 235 AND 236/PN/2010 ORDER DT. 29-08-2012. THE TRIBUNAL EXPL AINED THE SITUATION IN WHICH NO PENALTY CAN BE LEVIED IF THE ASSESSEE HAS OFFERED ADDITIONAL INCOME WHICH IS ALSO IN CONSEQUENCE OF SEARCH ACTION AGAIN ST HIM IN THE RETURNS FILED U/S.153A OF THE ACT. THE OPERATIVE PART OF THE ORD ER IS AS UNDER: 8. WHILE DECIDING ASSESSEES APPEAL FOR A.YS. 19 99-2000 AND 2001-02, THE PENALTY LEVIED ON THE INCOME OFFERED T OWARDS THE PERSONAL EXPENDITURE OF THE ASSESSEE AND HIS DIVORC EE SISTER HAS BEEN DELETED. EVEN THOUGH THE PARLIAMENT HAS INSERTED E XPLANATION 5A TO SEC. 271(1)( C ), SAID EXPLANATION IS APPLICABLE I N RESPECT OF THE SEARCH INITIATED U/S. 132 ON OR AFTER 1 ST JUNE 2007. SECTION 5A IS INTRODUCED TO PATCH OUT THE LACUNAE IN THE EXISTING PROVISIONS MO RE PARTICULARLY TO OVERCOME THE JUDICIAL INTERPRETATION OF EXPLANATION -5. IF THE SEARCH IS INITIATED U/S. 132 ON OR AFTER 1 ST JUNE 2007 THEN THERE IS A LEGAL PRESUMPTION THAT ANY INCOME BASED ON ANY ENTRY IN T HE BOOKS OF ACCOUNT OR OTHER DOCUMENTS OR TRANSACTIONS, WHICH I S CLAIMED AS INCOME BY THE ASSESSEE, THE SAME WOULD BE TREATED A S DEEMED CONCEALMENT OF THE PARTICULARS OF INCOME OR FURNISH ING INACCURATE PARTICULARS OF INCOME. SO FAR AS THE PRESENT ASSES SEE IS CONCERNED, THE DATE OF SEARCH IS 15.6.2004 AND HENCE, EXPLANAT ION 5A TO SEC. 271(1)((C ) IS NOT APPLICABLE. IT IS WELL SETTLED RULE OF INTERPRETATION OF THE PENALTY PROVISIONS THAT THE SAME SHOULD BE STR ICTLY INTERPRETED AND THERE IS NO SCOPE FOR ANY PRESUMPTION FOR LEVY OF T HE PENALTY UNLESS STATUTE SPECIFICALLY PROVIDES SAME. 9. SO FAR AS THE EXPLANATION-3 TO SEC. 271(1)(C) IS CONCERNED, WHICH READS AS UNDER : EXPLANATION 3.- WHERE ANY PERSON FAILS, WITHOUT RE ASONABLE CAUSE, TO FURNISH WITHIN THE PERIOD SPECIFIED IN S UB-SECTION (1) OF SECTION 153 A RETURN OF HIS INCOME WHICH HE IS R EQUIRED TO FURNISH UNDER SECTION 139 IN RESPECT OF ANY ASSESS MENT YEAR COMMENCING ON OR AFTER THE 1 ST DAY OF APRIL, 1989, AND UNTIL THE EXPIRY OF THE PERIOD AFORESAID, NO NOTICE HAS BEEN ISSUED TO HIM UNDER CLAUSE (I) OF SUB-SECTION (1) OF SECTION 142 OR SECTION 148 AND THE ASSESSING OFFICER OR THE COMMISSIONER ( APPEALS) IS SATISFIED THAT IN RESPECT OF SUCH ASSESSMENT YEA R SUCH PERSON HAS TAXABLE INCOME, THEN, SUCH PERSONAL SHAL L, FOR THE PURPOSES OF CLAUSE (C ) OF THIS SUB-SECTION, BE DEE MED TO HAVE CONCEALED THE PARTICULARS OF HIS INCOME IN RESPECT OF SUCH ASSESSMENT YEAR, NOTWITHSTANDING THAT SUCH PERSON F URNISHES A RETURN OF HIS INCOME AT ANY TIME AFTER THE EXPIRY O F THE PERIOD AFORESAID IN PURSUANCE OF A NOTICE UNDER SECTION 14 8. THE SAID EXPLANATION PRESUMES THAT THERE IS A CONCE ALMENT OF PARTICULARS OF INCOME OR FILING OF THE INACCURATE P ARTICULARS OF INCOME IN THE SITUATION WHERE THE ASSESSEE DID NOT FILE RETUR N OF INCOME U/S. 139 OR WITHIN THE TIME LIMIT PRESCRIBED U/S. 153(1) OF THE ACT BUT FILES THE RETURN OF INCOME IN RESPONSE TO NOTICE U/S. 148. T HE SAID EXPLANATION IS ALSO SILENT IN THE SITUATION IF THE ASSESSEE HAS NOT FILED THE RETURN OF INCOME FOR ANY PARTICULAR A.Y. BUT FILED THE RETURN OF INCOME FOR THE FIRST ITA NO.1556/PN/2013 SHRI AMRITLAL MITHAILAL AGRAWAL 9 TIME IN RESPONSE TO NOTICE U/S. 153A, THEN WHAT WO ULD BE THE LEGAL PRESUMPTION ? IN OUR OPINION, EXPLANATION-3 HAS NO APPLICATION, WHEN THE RETURN IS FILED IN RESPONSE TO NOTICE U/S. 153A . WE, THEREFORE, HOLD THAT AS PER THE FACTS OF THIS CASE AND LAW APPLICAB LE, THERE IS NO JUSTIFICATION TO LEVY THE PENALTY FOR THE A.Y. 2002 -03 IN THE INCOME DECLARED BY THE ASSESSEE IN THE RETURN OF INCOME IN RESPONSE TO NOTICE U/S. 153A EVEN FOR THE SAID INCOME IS BASED ON SOME ENTRIES FOUND IN THE DIARIES OR OTHER DOCUMENTS OR EVEN BANK ACCOUNT DURING THE COURSE OF SEARCH. WE, ACCORDINGLY DELETE THE PENAL TY SUSTAINED BY THE LD CIT(A). 13. IN THE A.Y. 2003-04, IT IS ADMITTED FACTUAL POS ITION THAT THE INCOME DECLARED BY THE ASSESSEE IN THE RETURN OF IN COME FILED IN RESPONSE TO NOTICE U/S. 153A IS RS. 37,99,170/-. I N THIS YEAR, THE ASSESSEE FILED THE RETURN OF INCOME ON 29.4.2005 I. E. WITHIN 2 YEARS FROM THE END OF THE A.YS. 2003-04 AS PER THE TIME L IMIT PRESCRIBED U/S. 153(1) FOR COMPLETING THE ASSESSMENT U/S. 143 OR 1 44 OF THE ACT. WHILE COMPLETING THE ASSESSMENT, THE A.O MADE THE M ERE ADDITION OF RS. 50,000/- BUT OTHERWISE, THE RETURN OF INCOME WA S ACCEPTED. AS INTERPRETED BY THE DIFFERENT JUDICIAL PRONOUNCEMENT , THE EXPRESSION TAX SOUGHT TO BE EVADED APPEARING IN CLAUSE (C) IN SEC . 271(1) IS TO BE UNDERSTOOD AS A DIFFERENCE BETWEEN THE INCOME DECLA RED BY THE ASSESSEE IN THE RETURN OF INCOME AND INCOME FINALLY ASSESSED. AFTER INTRODUCTION OF SEC. 153A W.E.F. 1.6.2003, THERE IS NO SPECIFIC PENALTY PROVISION TO DEAL WITH THE ASSESSMENT FRAMES IN CON SEQUENCES OF SEARCH AND SEIZURE ACTION U/S. 132 OF THE ACT. EXC EPT RS. 75,807/- DECLARED BY THE ASSESSEE AS A CASH, THERE IS NO DEC LARATION BASED ON ANY MONEY, BULLION, JEWELLERY OR OTHER VALUABLE ART ICLES OR THING IN THE NATURE OF ASSETS. AS DISCUSSED IN THE ASSESSEES A PPEAL FOR A.Y. 2002-03, EXPLANATION 5A IS APPLICABLE FROM 1.6.2007 AND HENCE, IN THIS YEAR, WE ARE ONLY CONCERNED WITH EXPLANATION-5 AS T HE DATE OF SEARCH IS PRIOR TO 1.6.2007. EXCEPT THE ESTIMATED ADDITIO N OF RS. 50,000/-, NO ADDITION IS MADE BY THE A.O. THE A.O HAS ACCEPTED THE INCOME DECLARED BY THE ASSESSEE IN THE RETURN OF INCOME F ILED IN RESPONSE TO NOTICE U/SEC. 153A AND IN RESPECT OF SAID INCOME. E XPLANATION-5 CANNOT BE APPLIED. MOREOVER, NO OTHER INCOME IS AD DED WHICH IS BASED ON ANY INCRIMINATING MATERIAL WHICH CAN BE SU BJECTED TO THE PENAL CONSEQUENCES. IT IS TRUE THAT THE ASSESSEE F ILED THE RETURN OF INCOME FOR THE A.Y. 2003-04 ONLY AFTER SEARCH ACTIO N BY THE DEPARTMENT, BUT, AS THERE IS NO SPECIFIC PROVISION TO LEVY THE PENALTY ON THE INCOME DECLARED BY THE ASSESSEE IN THE RETURN F ILED IN RESPONSE TO NOTICE U/S. 153A, EXCEPT EXPLANATION-5, WE HAVE TO APPLY PROVISIONS OF SEC. 271(1)(C ) AS ARE APPLICABLE IN THE NORMAL ASS ESSMENTS. 10. THE ABOVE DECISION IS FOLLOWED IN THE CASE OF S MT. PRAMILA D. ASHTEKAR AND ORS. VS. ITO, CIRCLE-2, PUNE IN ITA NOS. 354 T O 358/PN/10, ITA NO. 359 TO 369/PN/10, ITA NOS. 363 TO 365/PN/10 AND ITA NO. 366 /PN/10 ORDER DT. 14-09-2012. THE OPERATIVE PART OF THE SAID DECISION IS AS UNDER: 5. WE HAVE ALSO HEARD THE LD. D.R., WHO SUPPORTED THE ORDERS OF THE AUTHORITIES BELOW. ON THE PERUSAL OF THE ASSESS MENT ORDERS IN ALL THESE APPEALS, IT IS ADMITTED FACT THAT THERE IS NO ADDITION OVER AND ABOVE THE INCOME DECLARED BY THESE ASSESSEES IN TH E RETURNS OF INCOME FILED IN RESPONSE TO NOTICES U/S. 153A OF TH E ACT. IT IS ALSO ADMITTED FACT THAT NO DECLARATION IS BASED ON ANY M ONEY, JEWELLERY, BULLION OR ANY OTHER VALUATION ARTICLES DETECTED OR SEIZED IN THE COURSE ITA NO.1556/PN/2013 SHRI AMRITLAL MITHAILAL AGRAWAL 10 OF THE SEARCH OPERATION. AT THE FIRST INSTANCE, TH E LD. COUNSEL PLEADED THAT THESE ASSESSEES ARE ENTITLED FOR THE IMMUNITY IN VIEW OF EXPL.- SEC. 5 TO SEC. 271(1)(C ) OF THE ACT BECAUSE THE IN COME ADMITTED DURING THE COURSE OF THE SEARCH HAS BEEN DECLARED I N THE RETURN OF INCOME AS WELL AS THE TAX ON THE ADMITTED INCOME HA S ALSO BEEN PAID. THE SCOPE OF EXPLANATION-5 HAS BEEN CONSIDERED BY T HE ITAT, AHMEDABAD BENCH IN THE CASE OF ACIT VS. KIRIB DAYA BHAI PATEL, 121 ITD 159 (TM ) WITH SPECIFIC REFERENCE WHETHER THE I MMUNITY IS AVAILABLE FOR ALL THE ASSESSMENT YEARS OR ONLY FOR THE ASSESS MENT YEAR IN WHICH THE DATE OF FILING OF THE RETURN HAS BEEN EXPIRED A T THE TIME OF SEARCH OR FOR THE ASSESSMENT YEAR IN RESPECT OF WHICH, THE P REVIOUS YEAR WAS YET TO END ON THE DATE OF SEARCH. IN THIS CASE, SE ARCH WAS CONDUCTED ON 26 OCTOBER, 2005, HENCE, AT THE MOST, THE BENEFI T OF THE IMMUNITY CAN BE GIVEN FOR THE ASSESSMENT YEAR 2006-07. 6. WE FIND THAT THE ASSESSEES CASE IS OTHERWISE SQ UARELY COVERED VIDE THE DECISION OF ITAT, PUNE IN THE CASE OF CHAN DAN K. SHEWANI VS. DCIT, ITA NOS. 235 & 236/PN/2010. IN THE SAID CASE, THE ADDITIONAL INCOME WAS DECLARED DURING THE COURSE OF SEARCH TO COVER UP THE EXPENDITURE AS WELL AS DEPOSIT IN BANK A/CS. THE TRIBUNAL CONSIDERED THE EXPLANATIONS- 3, 5 & 5A TO SEC. 271( 1)(C ) OF THE ACT AND HELD AS UNDER : 8. WHILE DECIDING ASSESSEES APPEAL FOR A.YS. 199 9-2000 AND 2001-02, THE PENALTY LEVIED ON THE INCOME OFFER ED TOWARDS THE PERSONAL EXPENDITURE OF THE ASSESSEE AND HIS DI VORCEE SISTER HAS BEEN DELETED. EVEN THOUGH THE PARLIAMEN T HAS INSERTED EXPLANATION 5A TO SEC. 271(1)(C), SAID EXP LANATION IS APPLICABLE IN RESPECT OF THE SEARCH INITIATED U/S. 132 ON OR AFTER 1 ST JUNE 2007. SECTION 5A IS INTRODUCED TO PATCH OUT THE LACUNAE IN THE EXISTING PROVISIONS MORE PARTICULARL Y TO OVERCOME THE JUDICIAL INTERPRETATION OF EXPLANATION -5. IF THE SEARCH IS INITIATED U/S. 132 ON OR AFTER 1 ST JUNE 2007 THEN THERE IS A LEGAL PRESUMPTION THAT ANY INCOME BASED ON ANY ENTRY IN T HE BOOKS OF ACCOUNT OR OTHER DOCUMENTS OR TRANSACTIONS, WHIC H IS CLAIMED AS INCOME BY THE ASSESSEE, THE SAME WOULD B E TREATED AS DEEMED CONCEALMENT OF THE PARTICULARS OF INCOME OR FURNISHING INACCURATE PARTICULARS OF INCOME. SO FA R AS THE PRESENT ASSESSEE IS CONCERNED, THE DATE OF SEARCH I S 15.6.2004 AND HENCE, EXPLANATION 5A TO SEC. 271(1)((C ) IS NO T APPLICABLE. IT IS WELL SETTLED RULE OF INTERPRETATION OF THE PE NALTY PROVISIONS THAT THE SAME SHOULD BE STRICTLY INTERPRETED AND TH ERE IS NO SCOPE FOR ANY PRESUMPTION FOR LEVY OF THE PENALTY U NLESS STATUTE SPECIFICALLY PROVIDES SAME. 9. SO FAR AS THE EXPLANATION-3 TO SEC. 271(1)(C) IS CONCERNED, WHICH READS AS UNDER : EXPLANATION 3.- WHERE ANY PERSON FAILS, WITHOUT REASONABLE CAUSE, TO FURNISH WITHIN THE PERIOD SPE CIFIED IN SUB-SECTION (1) OF SECTION 153 A RETURN OF HIS I NCOME WHICH HE IS REQUIRED TO FURNISH UNDER SECTION 139 IN RESPECT OF ANY ASSESSMENT YEAR COMMENCING ON OR AFTER THE 1 ST DAY OF APRIL, 1989, AND UNTIL THE EXPIRY OF THE PERIOD AFORESAID, NO NOTICE HAS BEEN ISSUED TO HIM UNDER CLAUSE (I) OF SUB-SECTION (1) OF SECTION 142 OR ITA NO.1556/PN/2013 SHRI AMRITLAL MITHAILAL AGRAWAL 11 SECTION 148 AND THE ASSESSING OFFICER OR THE COMMISSIONER (APPEALS) IS SATISFIED THAT IN RESPECT OF SUCH ASSESSMENT YEAR SUCH PERSON HAS TAXABLE INCOME , THEN, SUCH PERSONAL SHALL, FOR THE PURPOSES OF CLAU SE (C ) OF THIS SUB-SECTION, BE DEEMED TO HAVE CONCEALED TH E PARTICULARS OF HIS INCOME IN RESPECT OF SUCH ASSESS MENT YEAR, NOTWITHSTANDING THAT SUCH PERSON FURNISHES A RETURN OF HIS INCOME AT ANY TIME AFTER THE EXPIRY O F THE PERIOD AFORESAID IN PURSUANCE OF A NOTICE UNDER SEC TION 148. THE SAID EXPLANATION PRESUMES THAT THERE IS A CONCE ALMENT OF PARTICULARS OF INCOME OR FILING OF THE INACCURATE P ARTICULARS OF INCOME IN THE SITUATION WHERE THE ASSESSEE DID NOT FILE RETURN OF INCOME U/S. 139 OR WITHIN THE TIME LIMIT PRESCRIBED U/S. 153(1) OF THE ACT BUT FILES THE RETURN OF INCOME IN RESPONSE TO NOTICE U/S. 148. THE SAID EXPLANATION IS ALSO SILENT IN THE SI TUATION IF THE ASSESSEE HAS NOT FILED THE RETURN OF INCOME FOR ANY PARTICULAR A.Y. BUT FILED THE RETURN OF INCOME FOR THE FIRST T IME IN RESPONSE TO NOTICE U/S. 153A, THEN WHAT WOULD BE THE LEGAL P RESUMPTION ? IN OUR OPINION, EXPLANATION-3 HAS NO APPLICATION, W HEN THE RETURN IS FILED IN RESPONSE TO NOTICE U/S. 153A. W E, THEREFORE, HOLD THAT AS PER THE FACTS OF THIS CASE AND LAW APP LICABLE, THERE IS NO JUSTIFICATION TO LEVY THE PENALTY FOR THE A.Y . 2002-03 IN THE INCOME DECLARED BY THE ASSESSEE IN THE RETURN OF IN COME IN RESPONSE TO NOTICE U/S. 153A EVEN FOR THE SAID INCO ME IS BASED ON SOME ENTRIES FOUND IN THE DIARIES OR OTHER DOCUM ENTS OR EVEN BANK ACCOUNT DURING THE COURSE OF SEARCH. WE, ACCORDINGLY DELETE THE PENALTY SUSTAINED BY THE LD CIT(A). 7. IN ALL THE APPEALS BEFORE US, EXPLANATION-3 CANN OT BE APPLIED, AS HELD IN THE CASE OF CHANDAN K. SHEWANI (SUPRA). SO FAR AS EXPLANATION 5A IS CONCERNED, IT IS BROUGHT ON THE S TATUTE BOOK W.E.F. 1.6.2007 I.E. FROM THE ASSESSMENT YEAR 2007-08 SO FAR AS THE ASSESSMENTS IN ALL THESE CASES ARE CONCERNED, NO AD DITION IS MADE BY THE ASSESSING OFFICER OVER AND ABOVE THE INCOME DEC LARED IN THE RETURNS OF INCOME FILED IN RESPONSE TO NOTICE U/S. 153A AS THE EXPRESSION TAX SOUGHT TO BE EVADED APPEARING IN CLAUSE (C) TO SEC. 271(1) IS TO BE UNDERSTOOD AS A DIFFERENCE BETWEEN THE INCOME DECLARED BY THE ASSESSEE IN THE RETURN OF INCOME AN D THE INCOME FINALLY ASSESSED. AFTER INTRODUCTION OF SEC. 153A W.E.F. 1.6.2003, THERE IS NO SPECIFIC PENALTY PROVISION TO DEAL WITH THE A SSESSMENTS FRAMED IN CONSEQUENCE OF SEARCH AND SEIZURE ACTION U/S. 132 O F THE ACT. IN THE PRESENT CASE, AS THE RETURNED INCOME AND INCOME ASS ESSED ARE THE SAME, OTHERWISE ALSO, NO PENALTY CAN BE LEVIED. WE , THEREFORE, HOLD THAT IN ALL THE APPEALS BEFORE US, THE ASSESSING OF FICER WAS NOT JUSTIFIED IN LEVYING THE PENALTY U/S. 271(1)(C ) OF THE ACT. WE, ACCORDINGLY, DELETE THE PENALTIES LEVIED BY THE ASSESSING OFFICE R IN ALL THE APPEALS FOR THE ABOVE MENTIONED REASONS. 11. ADMITTEDLY, SO FAR AS THE FIRST TWO ASSESSMENT YEARS ARE CONCERNED I.E. 2003-04 AND 2004-05 NO PENALTY CAN BE LEVIED AS HEL D IN THE CASE OF SHRI CHANDAN K. SHEWANI (SUPRA). THE SAME PRINCIPLES AR E ALSO APPLICABLE TO THE A.Y. 2006-07 HENCE WE HOLD THAT TO THE EXTENT OF TH E INCOME DECLARED BY THE ASSESSEE IN THE RETURNS FILED U/S.153A NO PENALTY I S LEVIABLE. ITA NO.1556/PN/2013 SHRI AMRITLAL MITHAILAL AGRAWAL 12 12. THE TRIBUNAL ALSO CONSIDERED WHETHER PENALTY UN DER SECTION 271(1)(C) OF THE ACT COULD BE LEVIED ON ADDITIONS MADE BY THE ASSESSING OFFICER AND IT WAS HELD AS UNDER :- 12. THE NEXT ASPECT WILL BE WHETHER THE PENALTY IS LEVIABLE ON THE ADDITION MADE BY THE ASSESSING OFFICER. CERTAINLY THIS ASPE CT IS TO BE EXAMINED IN VIEW OF EXPL.-1 TO SECTION 271(1)(C) OF THE ACT WHICH IS RE ADS AS UNDER: EXPLANATION 1. WHERE IN RESPECT OF ANY FACTS MAT ERIAL TO BE COMPUTATION OF THE TOTAL INCOME OF ANY PERSON UNDER THIS ACT,- (A) SUCH PERSON FAILS TO OFFER AN EXPLANATION OR OF FERS AN EXPLANATION WHICH IS FOUND BY THE [ASSESSING] OFFICER OR THE [COMMISSION ER (APPEALS)] [OR THE COMMISSIONER] TO BE FALSE, OR (B) SUCH PERSON OFFERS AN EXPLANATION WHICH HE IS N OT ABLE TO SUBSTANTIATE [AND FAILS TO PROVE THAT SUCH EXPLANATION IS BONA FIDE A ND THAT ALL THE FACTS RELATING TO THE SAME AND MATERIAL TO COMPUTATION OF HIS TOTAL I NCOME HAVE BEEN DISCLOSED BY HIM], THEN, THE AMOUNT ADDED OR DISALLOWED IN COMPUTING T HE TOTAL INCOME OF SUCH PERSON AS A RESULT THEREOF SHALL, FOR THE PURPOSES OF CLAUSE(C) OF THIS SUB- SECTION, BE DEEMED TO REPRESENT THE INCOME IN RESP ECT OF WHICH PARTICULARS HAVE BEEN CONCEALED. 13. ADMITTEDLY, DURING THE COURSE OF SEARCH AND SEI ZURE ACTION UNRECORDED SALES WERE DETECTED. ASSESSEE CAME FORWARD WITH OF FERING ADDITIONAL INCOME BY WAY OF PROFIT ELEMENT IN THE UNRECORDED SALES. HE OFFERED THE PROFIT @ 5% BUT THE ASSESSING OFFICER ESTIMATED PROFIT ELEMENT BY ADOPT ING DIFFERENT PERCENTAGE. NO SPECIFIC EXPLANATION IS OFFERED BY THE ASSESSEE ON AMOUNT OF THE ENHANCED INCOME BUT THE FACT REMAINED THAT ULTIMATELY IT IS OFF SHOOT OF SEARCH AND SEIZURE OPERATION IN WHICH UNRECORDED SALES WERE DETECTED. ONCE THE ADDITION IS MADE BY THE ASSESSING OFFICER TO THE RETURNED INCOME EVE N WHICH IS FILED U/S.153A AND IF THE ASSESSEE DID NOT GIVE THE SATISFACTORY EXPLA NATION IN THAT CASE IT IS TO BE HELD THAT THE ASSESSEE HAS CANCELLED THE PARTICULAR S OF INCOME TO THE EXTENT OF THE ADDITION MADE BY THE ASSESSING OFFICER AS IN TH E PRESENT CASE. WE THEREFORE PARTLY UPHOLD THE PENALTY LEVIED BY THE ASSESSING O FFICER MORE PARTICULARLY ON THE ADDITION TO THE TOTAL INCOME BY ENHANCING THE PROFI T ELEMENT IN THE UNRECORDED SALES AND ACCORDINGLY TO THAT EXTENT PENALTY IS CON FIRMED. SO FAR AS A.Y. 2006-07 IS CONCERNED ENHANCEMENT MADE BY THE ASSESSING OFFI CER IS IN RESPECT OF THE DISALLOWANCE OF THE INTEREST ON ADHOC BASIS THE SAI D DISALLOWANCE HAS NO DIRECT NEXUS WITH ANY SEARCH AND SEIZURE OPERATION. HENCE , ON THE ADDITION OF RS. 50,000/- ALSO NO PENALTY IS JUSTIFIED. WE THEREFOR E PARTLY UPHOLD ORDER OF THE LD. CIT(A) FOR THE A.YS. 2002-03 AND 2004-05 AND DIRECT THE ASSESSING OFFICER TO RECOMPUTE THE PENALTY IN THE LIGHT OF ABOVE OBSERVA TIONS. IN RESPECT OF A.Y. 2006-07, THE ORDER OF THE LD. CIT(A) IS CONFIRMED. 13. THE FACTS ARISING IN THE PRESENT APPEAL BEFORE US ARE SIMILAR TO THE FACTS BEFORE THE TRIBUNAL IN PRAKASH CHAMPALAL KANKARIA ( SUPRA). AS IN THE FACTS OF THE CASE BEFORE THE TRIBUNAL, THE ASSESSEE BEFORE U S HAD ALSO DECLARED ITA NO.1556/PN/2013 SHRI AMRITLAL MITHAILAL AGRAWAL 13 ADDITIONAL INCOME IN ITS RETURN OF INCOME FILED PUR SUANT TO ISSUE OF NOTICE UNDER SECTION 153A OF THE ACT AND THE SAID INCOME OFFERED HAS BEEN ACCEPTED IN TOTO BY THE ASSESSING OFFICER. THE LD. DEPARTMENTAL REP RESENTATIVE FOR THE REVENUE, ON THE OTHER HAND, STRONGLY OBJECTED THE O RDER OF THE CIT(A) IN DELETING THE PENALTY ON THE SURMISE THAT THE ASSESS EE HAD NOT OFFERED ADDITIONAL INCOME IN THE RETURN OF INCOME FILED UND ER SECTION 139(1) OF THE ACT, WHICH WAS FILED AFTER THE DATE OF SEARCH, SINCE THE TIME FOR FILING THE RETURN OF INCOME HAD NOT EXPIRED. WE FIND NO MERIT IN THE SA ID STAND TAKEN BY THE LD. DEPARTMENTAL REPRESENTATIVE FOR THE REVENUE AND IN VIEW OF THE ASSESSEE HAVING DECLARED THE ADDITIONAL INCOME IN ITS RETURN OF INCOME, WHICH WAS FILED PURSUANT TO ISSUE OF NOTICE UNDER SECTION 153A OF T HE ACT, AND SUCH ADDITIONAL INCOME HAVING BEEN ACCEPTED BY THE ASSESSING OFFICE R IN TOTO , THERE IS NO MERIT IN THE LEVY OF PENALTY UNDER SECTION 271(1)(C ) OF THE ACT. HOWEVER, IN RESPECT OF THE ADDITIONS MADE BY THE ASSESSING OFFI CER I.E. ON PEAK AVAILABLE FOR MAKING CASH PURCHASES OUT OF BOOKS OF ACCOUNT, WHEREIN PENALTY WAS LEVIED BY THE ASSESSING OFFICER ON ADDITION OF RS.1 ,85,731/-, THE ASSESSEE HAVING CONCEALED ITS PARTICULARS OF INCOME IN THIS REGARD AND IN VIEW OF THE RATIO LAID DOWN IN PRAKASH CHAMPALAL KANKARIA (SUPR A), WE REVERSE THE ORDER OF THE CIT(A) AND UPHOLD THE ORDER OF THE ASSESSING OFFICER IN THIS REGARD IN LEVYING PENALTY ON SUCH ADDITION OF RS.1,85,731/-. THE LD. DEPARTMENTAL REPRESENTATIVE FOR THE REVENUE PLACED RELIANCE ON T HE RATIO LAID DOWN IN SHRI OMKARESHWAR R. KALANTRI AND OTHERS (SUPRA), WE FIND NO MERIT IN THE SAID RELIANCE, AS THE PROPOSITION LAID DOWN IN THAT CASE WAS THE APPLICATION OF EXPLANATION 5 TO SECTION 271(1)(C) OF THE ACT WHERE THE ASSETS WERE FOUND IN THE POSSESSION OF THE ASSESSEE AND THE ASSESSEE HAD FAILED TO OFFER ANY EXPLANATION BUT IT HAD OFFERED THE VALUE OF THE SAI D ASSETS AS ADDITIONAL INCOME, THE TRIBUNAL HELD THAT THERE WAS JUSTIFICAT ION FOR LEVY OF PENALTY UNDER SECTION 271(1)(C) OF THE ACT. HOWEVER, IN THE CASE OF THE ASSESSEE NO ASSETS WERE FOUND, THOUGH THE ASSESSEE HAD DECLARED ADDITI ONAL INCOME. HENCE, ITA NO.1556/PN/2013 SHRI AMRITLAL MITHAILAL AGRAWAL 14 THERE WAS NO MERIT IN THE LEVY OF PENALTY UNDER SEC TION 271(1)(C) OF THE ACT. THE GROUNDS OF APPEAL RAISED BY THE REVENUE ARE DIS MISSED. 14. IN THE RESULT, THE APPEAL OF THE REVENUE IS DIS MISSED. ORDER PRONOUNCED ON THIS 31 ST DAY OF AUGUST, 2015. SD/- SD/- ( R.K. PANDA ) ( SUSHMA CHOWLA ) ' / ACCOUNTANT MEMBER / JUDICIAL MEMBER / PUNE ; DATED : 31 ST AUGUST, 2015 . SUJEET & ' ()*+ ,+) / COPY OF THE ORDER IS FORWARDED TO : THE APPELLANT; THE RESPONDENT; & & ' () THE CIT(A)-I, NASHIK; & & ' / THE CIT-I, NASHIK; *+, --./, & ./ , 1 / DR A, ITAT, PUNE; ,23 4 / GUARD FILE. &$ / BY ORDER * - // TRUE COPY // 567 -8 .9 / SR. PRIVATE SECRETARY & ./ ,