Income-tax Officer, V. Shri Sheetal P. Banthia, Raigad

ITA 156/PUN/2014

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 93705 (ITAT-PUNE)
• Duration Of Justice: 1 year(s) 3 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-04-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 13-04-2015
• Assessment Year: 2007-2008
• Appeal Filed On: 24-01-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: B C MALAKAR
• Assessee Lawyers: SUBODH RATNAPARAKHI
• Keywords: Income from undisclosed sources; Search and seizure; Benefit of exemption

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B, PUNE BEFORE SHRI R.K. PANDA, ACCOUNTANT MEMBER AND SHRI VIKAS AWASTHY, JUDICIAL MEMBER ITA NO.156/PN/2014 (ASSESSMENT YEAR : 2007-08) ITO, WARD-1, PANVEL .. APPELLANT VS. SHRI SHEETAL P. BANTHIA, 776, KESHAV ANAND NIWAS, M.G. ROAD, PANVEL, DIST : RAIGAD PAN NO. ABJPB0816F .. RESPONDENT APPLICANT BY : SHRI SUBODH RATNAPARAKHI DEPARTMENT BY : SHRI B.C. MALAKAR DATE OF HEARING : 13-04-2015 DATE OF PRONOUNCEMENT : 29-04-2015 ORDER PER R.K. PANDA, AM : THIS APPEAL FILED BY THE REVENUE IS DIRECTED AGAINST THE ORDER DATED 01-11-2013 OF THE CIT(A)-II, THANE RELATING TO ASSESSMENT YEAR 2007-08. 2. FACTS OF THE CASE, IN BRIEF, ARE THAT THE ASSESSEE IS AN INDIVIDUAL AND IS THE PROPRIETOR OF M/S. SHITAL JEWELLERS AT PANVEL AND ALSO PROPRIETOR OF M/S. KESHARCHAND ANANDRAM BANTHIA. THE RESIDENTIAL AND BUSINESS PREMISES OF THE ASSESSEE WERE SEARCHED U/S.132 OF THE I.T. ACT ON 04-10-2006 ALO NGWITH OTHER GROUP CASES. THE ASSESSEE FILED HIS RETURN OF INCOM E FOR THE IMPUGNED ASSESSMENT YEAR ON 31-08-2007 DECLARING A TOTAL INCOME OF RS.21,12,640/-. THE ASSESSMENT U/S.143(3) R.W.S.153B(B) OF THE ACT WAS COMPLETED ON 31-12-2008 2 DETERMINING TOTAL INCOME AT RS.21,12,640/. IN THE RETURN O F INCOME, THE ASSESSEE DISCLOSED INCOME WHICH WAS OFFERED FOR TAXATION AS DETAILED BELOW : INCOME FROM PROPRIETARY BUSINESS : RS.16,53,327/- (M/S. SHEETAL JEWELLERS RS.1,43,896/- & M/S. KESHARCHAND ANANDRAM BANTHIA RS.15,09,437/-) INCOME OFFERED AS PER STATEMENT U/S.132(4) : RS.5,00,000/- INCOME FROM OTHER SOURCE : RS. 64,419/- ------------------ TOTAL INCOME : RS.22,17,746/- LESS : DED. U/S.VIA : RS. 1,05,110/- ------------------ NET TAXABLE INCOME : RS.21,12,636/- ------------------ 3. DURING THE COURSE OF SEARCH AND SEIZURE ACTION EXCES S STOCK OF SILVER ARTICLES AMOUNTING TO RS.13,37,100/- WAS FOUN D. ACCORDINGLY, THE STATEMENT OF THE ASSESSEE U/S.132(4) WAS RECORDED WHEREIN HE HAD OFFERED THIS AMOUNT OF RS.13,37,100 /- AS UNDISCLOSED INCOME. THE ASSESSING OFFICER FURTHER NOTED THAT IN REPLY TO QUESTION NO.7 OF THE STATEMENT, THE ASS ESSEE HAS ALSO ADMITTED UNDISCLOSED ADDITIONAL INCOME OF RS.5 LAKHS ON ACCOUNT OF CONSTRUCTION OF A HOUSE, KESHAVANAND NIWA S AND ACCORDINGLY THE TOTAL AMOUNT OF RS.18,37,100/- WAS DISCLOSE D U/S.132(4) OF THE I.T. ACT. THE ASSESSEE HAS ALSO DISCLOSE D ADMITTED INCOME OF RS.18,37,100/- IN THE RETURN OF INCOME FILED ON 31-08-2007. ON ACCOUNT OF INCOME DISCLOSED U/S.132(4) AN D FINALLY OFFERED FOR TAXATION IN THE RETURN OF INCOME AT RS.18,37,100/-, THE ASSESSING OFFICER INITIATED PENALTY PROCEEDINGS U/S.271(1)(C) OF THE I.T. ACT VIDE SHOW CAUSE NO TICE DATED 31-12-2008. SINCE THERE WAS NO COMPLIANCE ANOTHE R 3 NOTICE DATED 03-06-2009 WAS ISSUED. THE ASSESSEE IN RE SPONSE TO THE SAME VIDE REPLY DATED 10-06-2009 SUBMITTED ITS REPLY ACCORDING TO WHICH THE INCOME ADMITTED U/S.132(4) HAS BEEN SHOWN IN THE RETURN OF INCOME FILED ON 31-08-2007 WHICH HA S BEEN ACCEPTED IN THE ORDER PASSED U/S.143(3) R.W.S.153B (B). IT WAS FURTHER SUBMITTED THAT ON THE DATE OF SEARCH THE D UE DATE OF FILING OF RETURN FOR THE YEAR U/S.139(1) HAD NOT EXPIRED A ND THE INCOME ADMITTED HAS BEEN DULY DISCLOSED IN THE RETUR N OF INCOME. ALL CONDITIONS LAID DOWN IN EXPLANATION 5 TO SECTION 271(1)(C) WERE FULLY COMPLIED WITH. IT WAS ACCORDINGLY SUBMITTED THAT PENALTY U/S. 271(1)(C) OF THE ACT IS NOT ATTRACTED. 4. HOWEVER, THE ASSESSING OFFICER WAS NOT SATISFIED WITH THE EXPLANATION GIVEN BY THE ASSESSEE. ACCORDING TO THE ASS ESSING OFFICER THE ABOVE SAID UNDISCLOSED INCOME OF RS.18,37,100/- HAS BEEN ADMITTED BY THE ASSESSEE DURING THE COURSE O F SEARCH AND THEREFORE IT IS A FOOLPROOF CASE FOR LEVY OF PENALTY U/S. 271(1)(C) OF THE I.T. ACT. ACCORDING TO THE ASSESSING OFFICER THIS INCOME IS ADMITTEDLY UNACCOUNTED AND WAS OFFERED FOR TAXA TION ONLY ON CONFRONTING THE ASSESSEE DURING THE COURSE OF S EARCH ACTION. HAD THE SEARCH ACTION NOT TAKEN PLACE THIS INCOM E WOULD NOT HAVE COME TO THE LIGHT OF THE DEPARTMENT. THU S, IT IS A CLEAR CASE OF ADMITTED CONCEALMENT OF INCOME BY THE ASSESSEE. HOWEVER, THE ASSESSEE HAS NOT EXPLAINED THE MANNER IN W HICH SUCH INCOME WAS DERIVED IN THE STATEMENT RECORDED U/S.1 32(4) OF THE I.T. ACT. FURTHER, THE INCOME DISCLOSED DURING THE COURSE OF SEARCH WAS NOT RECORDED IN THE REGULAR BOOKS OF ACCO UNT TILL THE DATE OF SEARCH. RELYING ON VARIOUS DECISIONS THE AS SESSING OFFICER LEVIED PENALTY OF RS.6,21,700/- BEING THE MINIMUM PENALTY LEVIABLE U/S.271(1)(C) OF THE I.T. ACT. 4 5. BEFORE CIT(A) IT WAS ARGUED THAT PENALTY U/S.271(1)(C) OF THE I.T. ACT IS NOT ATTRACTED TO THE ASSESSEE AS THE DECLARATION MADE BY HIM IS COVERED BY CAUSE (2) TO EXPLANATION 5 TO S ECTION 271(1)(C) OF THE I.T. ACT WHICH EXCLUDES LEVY OF PENALTY IN CA SE OF SEARCH AND SEIZURE CASES. AS FAR AS THE ISSUE OF THE AS SESSEE HAVING NOT SPECIFIED THE MANNER IN WHICH INCOME HAS BEEN EARNED IT WAS ARGUED THAT EVEN IN SUCH EVENT THE ASSE SSEE WOULD BE ENTITLED TO THE BENEFIT OF EXCLUSION FROM LEVY OF PEN ALTY AS PROVIDED UNDER EXPLANATION 5 TO SECTION 271(1)(C) OF THE I.T. ACT. RELYING ON VARIOUS DECISIONS IT WAS ARGUED THAT PEN ALTY U/S.271(1)(C) OF THE I.T. ACT IS NOT LEVIABLE. 6. BASED ON THE ARGUMENTS ADVANCED BY THE ASSESSEE THE LD.CIT(A) CANCELLED THE PENALTY LEVIED U/S.271(1)(C) OF THE I.T. ACT. WHILE DOING SO, HE OBSERVED THAT THE ASSESSEE HAD DISCLOSED RS.13,37,100/- U/S.132(4) ON ACCOUNT OF EXCESS STO CK OF JEWELLERY AND RS.5 LAKHS ON ACCOUNT OF UNRECORDED INVESTMENT IN CONSTRUCTION OF A HOUSE. THUS, THE DISCLOSUR E WAS MADE ON ACCOUNT OF UNEXPLAINED ASSETS IN THE NATURE OF INVESTMENTS. THEREFORE, THE CASE OF THE ASSESSEE IS COV ERED BY THE PROVISIONS OF EXPLANATION 5 TO SECTION 271(1)(C) OF THE I .T. ACT. HOWEVER, SINCE THE FINANCIAL YEAR RELEVANT TO THE ASSESSMENT YEAR UNDER CONSIDERATION HAS NOT EXPIRED AS ON THE DATE OF SEARCH HE HELD THAT THE CASE OF THE ASSESSEE FALLS UNDER CLAUSE (B) TO EXPLANATION 5 AND EXCEPTION (2) PROVIDED THERE IN. HE FURTHER OBSERVED THAT IF THE ENTRIES RELATING TO THE UNDISCLOSED INCOME ARE NOT RECORDED IN THE BOOKS OF ACCO UNT AS ON THE DATE OF SEARCH, THEN AS PER CLAUSE (2) OF THE EXPLA NATION 5, THE INCOME DISCLOSED IN THE RETURN OF INCOME SHALL NOT BE 5 DEEMED TO BE THE CONCEALED INCOME IF A DISCLOSURE IS MADE U/S.132(4) AND TAX THEREON ARE PAID. HE ACCORDINGLY HELD THAT IN VIEW OF THE ABOVE LEGAL POSITION THE CONDITIONS FOR EXEMPT ION FROM PENALTY U/S. 271(1)(C) OF THE I.T. ACT RELATING TO THE DISCLOSURE U/S.132(4) IN RESPECT OF THE UNEXPLAINED ASSETS A ND PAYMENT OF TAX ARE SATISFIED. THEREFORE, THE OBSERVATION OF THE ASSESSING OFFICER THAT HAD THERE BEEN NO SEARCH ASSESSE E WOULD NOT HAVE DISCLOSED THE INCOME ARE IRRELEVANT. 7. SO FAR AS THE MANNER OF DISCLOSURE IS CONCERNED HE OBSERVED THAT MERELY BECAUSE THE MANNER IN WHICH THE INCOME WAS EARNED WAS NOT SPECIFIED, THE BENEFIT OF EXEMPTION FROM PENALTY AS PROVIDED IN EXPLANATION 5 TO SECTION 271(1)(C) CA NNOT BE DENIED. HE FURTHER NOTED THAT UNDER SIMILAR FACTS AND CIRCUMSTANCES IN THE CASE OF SHRI VILAS M. KATHORI A PERS ON IN THE ASSESSEES GROUP OF CASES THE PENALTY WAS CANCELLED BY THE CIT(A) AND THE ORDER OF THE CIT(A) HAS BEEN UPHELD BY THE TRIBUNAL. SIMILARLY, IN ANOTHER GROUP CONCERNS, THE PENALTY SO LEVIED BY THE ASSESSING OFFICER WAS CANCELLED BY THE CIT(A) AND THE MUMBAI BENCH OF THE TRIBUNAL HAS UPHELD THE ORDER OF THE CIT(A). IT WAS HELD BY THE MUMBAI BENCH OF THE TRIBUNAL T HAT IT IS INCUMBENT ON THE AUTHORISED OFFICER TO EXPLAIN THE PROVISIONS TO THE ASSESSEE WHILE RECORDING STATEMENT AND HE CANNOT STOP AT PARTICULAR STAGE SO AS TO PERMIT REVENU E TO TAKE ADVANTAGE OF LAPSE REGARDING MANNER OF EARNING. EVEN IF TH E STATEMENT DOES NOT SPECIFY THE MANNER IN WHICH THE INCO ME IS DERIVED, IT WOULD BE SUFFICIENT FOR IMMUNITY IF INCOME IS DECLARED AND TAX THEREON IS PAID. HE ACCORDINGLY HELD TH AT THE ASSESSEE IS ELIGIBLE FOR IMMUNITY CONTAINED IN THE PROVISIONS O F EXPLANATION 5 TO SECTION 271(1)(C) AND THEREFORE IT IS NOT A CASE 6 FOR IMPOSITION OF PENALTY. HE ACCORDINGLY CANCELLED THE PENA LTY LEVIED BY THE ASSESSING OFFICER AT RS.6,21,700/- U/S.271(1)(C) OF THE I.T. ACT. 8. AGGRIEVED WITH SUCH ORDER OF THE CIT(A) THE REVENUE IS IN APPEAL BEFORE US WITH THE FOLLOWING GROUNDS : 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, AND IN LAW, THE LD. CIT(A)-I, THANE HAS ERRED IN CANCELLING THE PENALTY U/S 271(1)(C) OF RS.6,21,700/-, WITHOUT APPRECIATING THE FACT THAT THE CONDITIONS LAID DOWN IN EXPLANATION-5 TO SECTION 271 (1)(C) HAVE NOT BEEN MET IN AS MUCH AS THE ASSESSEE IS NOT ABLE TO EX PLAIN THE MANNER IN WHICH THE INCOME DISCLOSED WAS EARNED BY HER . 2. THE APPELLANT PRAYS THE ORDER OF THE LD. CIT(A)-I , THANE, MAY BE VACATED AND THAT OF THE ASSESSING OFFICER BE REST ORED. 3. THE APPELLANT CRAVES LEAVE TO ADD, AMEND OR ALTER ANY GROUND/GROUNDS, WHICH MAY BE NECESSARY. 9. THE LD. DEPARTMENTAL REPRESENTATIVE STRONGLY SUPPOR TED THE ORDER OF THE ASSESSING OFFICER. HE SUBMITTED THAT SINC E THE ASSESSEE IN HIS STATEMENT RECORDED U/S.132(4) HAS NOT SP ECIFIED THE MANNER IN WHICH THE INCOME DISCLOSED HAS BEEN DERIVED AT AND HAS ALSO NOT FURNISHED ANY SATISFACTORY EXPLANATION REGARDING THE UNACCOUNTED INCOME, THEREFORE, THE LD.CIT(A ) WAS NOT JUSTIFIED IN CANCELLING THE PENALTY. HE SUBMITTED T HAT THE CONDITIONS AS LAID DOWN IN EXPLANATION 5 TO SECTION 271(1)(C) HAVE NOT BEEN FULFILLED. HE ACCORDINGLY SUBMITTED TH AT THE ORDER OF THE CIT(A) BE REVERSED AND THAT OF THE ASS ESSING OFFICER BE RESTORED. 10. THE LD. COUNSEL FOR THE ASSESSEE ON THE OTHER HAND STRONGLY RELIED ON THE ORDER OF THE CIT(A). HE SUBMITTED THAT UNDER IDENTICAL FACTS AND CIRCUMSTANCES OF THE CASE THE P ENALTY LEVIED BY THE ASSESSING OFFICER U/S.271(1)(C) IN THE HANDS OF T HE 7 FATHER OF THE ASSESSEE WAS CANCELLED BY THE CIT(A) AND ON FURTHER APPEAL BY THE REVENUE THE TRIBUNAL UPHELD THE OR DER OF THE CIT(A) AND DISMISSED THE APPEAL FILED BY THE REVENUE. THEREFORE, THIS BEING A COVERED MATTER THE ORDER OF THE CIT(A) SHOULD BE UPHELD AND THE GROUNDS RAISED BY THE REVENUE SHOULD BE DISMISSED. 11. WE HAVE CONSIDERED THE RIVAL ARGUMENTS MADE BY BOTH THE SIDES, PERUSED THE ORDERS OF THE ASSESSING OFFICER AND THE CIT(A) AND THE PAPER BOOK FILED ON BEHALF OF THE ASSESSEE. WE HAVE ALSO CONSIDERED THE VARIOUS DECISIONS CITED BEFORE U S. IN THIS CASE A SEARCH AND SEIZURE ACTION U/S.132 OF THE I.T . ACT WAS CONDUCTED AT THE RESIDENTIAL-CUM-BUSINESS PREMISES OF THE ASSESSEE ON 04-10-2006. DURING THE COURSE OF SEARCH T HE STATEMENT OF THE ASSESSEE WAS RECORDED U/S.132(4) WHERE IN HE HAS OFFERED AN AMOUNT OF RS.13,37,100/- BEING EXCESS STOC K OF SILVER ARTICLES FOUND DURING THE COURSE OF SEARCH AND SEIZU RE ACTION AND FURTHER ADMITTED UNDISCLOSED ADDITIONAL INCOME OF RS.5 LAKHS ON ACCOUNT OF CONSTRUCTION OF A HOUSE. THE ASSESSEE FILED HIS RETURN OF INCOME ON 31-08-2007 DECLARING TOTAL INC OME OF RS.21,2,670/- WHICH INCLUDED THE INCOME DECLARED DURING THE SEARCH AND WHICH WAS ACCEPTED BY THE ASSESSING OFFIC ER IN THE ORDER PASSED U/S.143(3) R.W.S. 153B(B) OF THE I.T. ACT ACCEPTING THE RETURNED INCOME. THE ASSESSING OFFICER LEVIED PENALTY U/S.271(1)(C) OF THE I.T. ACT ON THE GROUND THAT ALTHOUGH THE TIME FOR FILING OF THE RETURN U/S.139(1) WAS AVAILABLE BUT APPARENTLY THE INTENTION OF THE ASSESSEE WA S NOT TO DISCLOSE UNACCOUNTED INCOME VOLUNTARILY. HAD THERE BE EN NO SEARCH, THE ASSESSEE WOULD NOT HAVE DISCLOSED SUCH ADDIT IONAL INCOME AND ASSESSEE HAS NOT EXPLAINED THE MANNER IN WHI CH 8 SUCH INCOME WAS DERIVED IN THE STATEMENT RECORDED U/S.1 32(4). THE ASSESSING OFFICER ACCORDINGLY LEVIED PENALTY OF RS.6,12,700/- U/S.271(1)(C) OF THE I.T. ACT. IN APPEAL THE LD.CIT(A) CANCELLED SUCH PENALTY ON THE GROUND THAT ASSE SSEE IS ELIGIBLE FOR IMMUNITY CONTAINED IN PROVISIONS OF EXPLANATION 5 TO SECTION 271(1)(C) OF THE I.T. ACT. WHILE DOING SO, HE ALSO RELIED ON THE DECISIONS OF THE COORDINATE BENCHES OF THE TRIBUNAL IN OTHER RELATED CASES OF THE SAME GROUP. 12. WE FIND AN IDENTICAL ISSUE HAD COME UP BEFORE THE MUMBAI BENCH OF THE TRIBUNAL IN THE CASE OF SHRI PANNALAL K. BANTHIA, FATHER OF THE ASSESSEE WHEREIN PENALTY LEVIED BY THE ASSESSING OFFICER U/S.271(1)(C) WAS CANCELLED BY THE CIT(A). ON FURTHER APPEAL BY THE REVENUE THE TRIBUNAL VIDE ITA NO.6145/MUM/2010 ORDER DATED 25-07-2012 FOR A.Y. 2009-1 0 UPHELD THE ORDER OF THE CIT(A) AND DISMISS THE APPEAL FILED B Y THE REVENUE BY OBSERVING AS UNDER : 7. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND ALSO PERUSED THE RELEVANT MATERIAL ON RECORD. IT IS OBSERVE D THAT IN HIS STATEMENT RECORDED DURING THE COURSE OF SEARCH U/S.132( 4), THE UNDISCLOSED INCOME FOUND AS A RESULT OF SEARCH WAS SURREND ERED BY THE ASSESSEE AND AFTER PAYMENT OF TAX IN RESPECT OF S UCH INCOME, THE SAME WAS DULY DECLARED BY THE ASSESSEE IN TH E RETURN OF INCOME FOR THE YEAR UNDER CONSIDERATION. IN THE A SSESSMENT COMPLETED U/S.143(3) R.W.S. 153B(B) OF THE ACT, THE I NCOME SO DECLARED IN THE RETURN OF INCOME BY THE ASSESSEE WAS AC CEPTED BY THE AO. SUBSEQUENTLY, THE AO HOWEVER INITIATED PENAL TY PROCEEDINGS U/S.271(1)(C) AND ALSO IMPOSED PENALTY UNDE R THE SAID PROVISION DENYING THE IMMUNITY CLAIMED BY THE ASS ESSEE AS PER THE RELEVANT PROVISIONS CONTAINED IN EXPLANATION 5 ON THE GROUND THAT IN HIS STATEMENT RECORDED U/S.132(4), THE MANNER IN WHICH UNDISCLOSED INCOME HAD BEEN EARNED WAS NOT SPECI FIED BY THE ASSESSEE AS REQUIRED BY THE PROVISIONS OF EXPLANATION 5. IT IS OBSERVED THAT A SIMILAR ISSUE HAD COME UP FOR CONSIDERAT ION BEFORE THE HON'BLE GUJARAT HIGH COURT IN THE CASE OF CIT VS. MAHENDRA C. SHAH (SUPRA) WHEREIN PENALTY U/S.271(1)(C) WAS LEVIED BY THE AO BY DENYING THE BENEFIT OF EXPLANAT ION 5 FOR THE REASON THAT THE ASSESSEE HAD NOT EXPLAINED IN THE STATE MENT RECORDED U/S.132(4), THE MANNER IN WHICH UNDISCLOSED I NCOME WAS DERIVED AND THE PENALTY IMPOSED BY THE AO WAS HELD TO BE UNSUSTAINABLE BY THE HON'BLE GUJARAT HIGH COURT ALLOW ING THE 9 BENEFIT OF IMMUNITY TO THE ASSESSEE AS PROVIDED UNDER EXPLANATION 5 TO SEC.271(1)(C) BY OBSERVING AS UNDER: 'INSOFAR AS THE ALLEGED FAILURE ON THE PART OF THE ASSE SSEE TO SPECIFY IN THE IN THE STATEMENT U/S 132(4) REGARDING THE MANN ER IN WHICH SUCH INCOME HAS BEEN DERIVED, SUFFICE IT TO STATE THAT WHEN THE STATEMENT IS BEING RECORDED BY THE AUTHORIZED OFFICER IT 5 ITA 6145/MUM/2010 SHRI PANNALAL K. BANTHIA IS INCUMBENT UPON THE AUTHORIZED OFFICER TO EXPLAIN THE PROVISIONS OF EXPL. 5 IN ENTIRETY TO THE ASSESSEE CONCERNED AND THE AUTHORIZED OFFICER CANNO T STOP SHORT AT A PARTICULAR STAGE SO AS TO PERMIT THE REVENUE TO TAKE ADVANTAGE OF SUCH A LAPSE IN THE STATEMENT. THE REASON IS NOT FAR TO SEEK. IN FIRST INSTANCE, THE STATEMENT IS BEING RECORDED IN THE QUESTION AND ANSWER FORM AND THERE WOULD BE NO OCCASIO N FOR AN ASSESSEE TO STATE AND MAKE AVERMENTS IN THE EXACT FORMAT STIPULATED BY THE PROVISIONS CONSIDERING THE SETTING IN WHICH SUCH STATEMENT IS BEING RECORDED. SECONDLY, CONSIDERING THE SOCIAL ENVIRONMENT IT IS NOT POSSIBLE TO EXPECT FROM AN ASSES SEE, WHETHER LITERATE OR ILLITERATE, TO BE SPECIFIC AND T O THE POINT REGARDING THE CONDITIONS STIPULATED BY EXCEPTION NO. 2 WHILE MAKING STATEMENT UNDER S. 132(4). THE VIEW TAKEN BY T HE TRIBUNAL TO THE EFFECT THAT EVEN IF THE STATEMENT DOES NO SPECI FY THE MANNER IN WHICH THE INCOME IS DERIVED, IF THE INCOME IS DEC LARED AND TAX THEREON PAID, THERE WOULD SUBSTANTIAL COMPLIANCE NOT WARRANTING ANY FURTHER DENIAL OF THE BENEFIT UNDER EXCEPTION N O. 2 IN EXPL. 5 IS COMMENDABLE. HENCE, THE TRIBUNAL WAS JUSTIFIED IN COM ING TO THE CONCLUSION THAT INSOFAR AS THE VALUE OF DIAMONDS WAS CON CERNED, THE ASSESSEE HAVING MADE A DECLARATION UNDER S. 132(4) A ND PAID TAXES THEREON, HAD FULFILLED ALL THE CONDITIONS FOR A VAILING THE BENEFIT OF IMMUNITY FROM LEVY OF PENALTY AS PROVIDED UNDER EXPI. 5 TO S. 271(1)(C).' 8. TO THE SIMILAR EFFECT IS THE DECISION OF HON'BLE ALLAHABAD HIGH COURT IN THE CASE OF CIT VS. RADHA KISHAN GOEL ( SUPRA) WHEREIN IT WAS HELD THAT MUCH IMPORTANCE SHOULD NOT B E ATTACHED TO THE STATEMENT ABOUT THE MANNER IN WHICH UNDISCLOSED INCOME HAS BEEN DERIVED AND MERE NON-STATEMENT OF THE MANNER IN WHICH SUCH INCOME WAS DERIVED WOULD NOT MAKE EXPLANATION 5( 2) TO SEC.271(1)(C) OF THE ACT INAPPLICABLE. KEEPING IN VI EW THE DECISION OF HON'BLE GUJARAT HIGH COURT IN THE CASE OF MAHENDR A C. SHAH (SUPRA) AS WELL AS THAT OF ALLAHABAD HIGH COURT IN THE CASE OF RADHA KISHAN GOEL (SUPRA) AND 6 ITA 6145/MUM/2010 SH RI PANNALAL K. BANTHIA HAVING REGARD TO THE FACTS OF TH E CASE, WE ARE OF THE VIEW THAT THE PENALTY IMPOSED BY THE AO U/S.27 1(1)(C) WAS RIGHTLY CANCELLED BY THE LD. CIT (A) ALLOWING THE B ENEFIT OF IMMUNITY CONTAINED IN THE PROVISIONS OF EXPLANATION 5 TO SEC.271(1)(C). IN THAT VIEW OF THE MATTER, WE UPHOLD THE IMPUGNED ORDER OF THE LD. CIT (A) CANCELLING THE PENALTY LEV IED BY THE AO AND DISMISS THIS APPEAL FILED BY THE REVENUE. 9. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSED. 13. SINCE THE FACTS OF THE INSTANT CASE ARE IDENTICAL TO T HE FACTS OF THE CASE DECIDED BY THE MUMBAI BENCH OF THE TRIB UNAL, THEREFORE, RESPECTFULLY FOLLOWING THE DECISION OF THE MUMBAI 10 BENCH OF THE TRIBUNAL AND IN VIEW OF THE DETAILED DISCUSSION BY THE LD.CIT(A) WE FIND NO INFIRMITY IN THE ORDER OF THE CIT(A) CANCELLING THE PENALTY LEVIED U/S.271(1)(C) OF THE I.T. ACT. ACCORDINGLY, THE ORDER OF THE CIT(A) IS UPHELD AND THE GRO UNDS RAISED BY THE REVENUE ARE DISMISSED. 14. IN THE RESULT, THE APPEAL FILED BY THE REVENUE IS DISMISSED. PRONOUNCED IN THE OPEN COURT ON 29-04-2015. SD/- SD/- (VIKAS AWASTHY) (R.K. PANDA) JUDICIAL MEMBER ACCOUNTANT MEMBER SATISH PUNE DATED: 29 TH APRIL, 2015 COPY OF THE ORDER FORWARDED TO : 1. ASSESSEE 2. DEPARTMENT 3. CIT(A)-II, THANE 4. CIT-II, THANE 5. THE D.R, B PUNE BENCH 6. GUARD FILE BY ORDER // TRUE COPY // ASSISTANT REGISTRAR ITAT, PUNE BENCHES, PUNE