ACIT, Nashik V. M/S VSG Health Care, Nashik

ITA 1604/PUN/2012

• Counselvise Citation: [2014] 120 COUNSELVISE.COM (IT) 8462 (ITAT-PUNE)
• Duration Of Justice: 2 year(s) 3 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-10-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 02-07-2014
• Assessment Year: 2008-2009
• Appeal Filed On: 26-07-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: A K MODI
• Keywords: Search and seizure; Document seized; Question of law; Tax effect; Documents seized
• Section: 143(3); 133A; 153A; 260A; 132; 139

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B, PUNE BEFORE SHRI R.S. PADVEKAR, JUDICIAL MEMBER AND SHRI R.K. PANDA, ACCOUNTANT MEMBER ITA NOS.1599 TO 1604/PUN/2012 (ASST. YEARS: 2003-04 TO 2008-09) ACIT, CENTRAL CIRCLE-1, NASHIK APPELLANT VS. M/S. VSG HEALTH CARE, DR. GANORKAR HOSPITAL, BEHIND MAHAMARG BUS STAND MUMBAI NAKA, NASHIK 422010 PAN:AADFV0850E RESPONDENT APPELLANT BY : SHRI A.K. MODI ASSESSEE BY : SHRI KISHORE PHADKE DATE OF HEARING : 14-10-2014 DATE OF PRONOUNCEMENT : 31-10-2014 ORDER PER R.S. PADVEKAR, JM: THIS BATCH OF SIX APPEALS ARE FILED BY THE REVENUE C HALLENGING THE IMPUGNED COMPOSITE ORDER OF THE LD. CIT(A)-I, NASHIK, DATED 18 -05-2012 FOR THE A.YS. 2003-04 TO 2008-09 AND THE MAIN GRIEVANCE OF THE REVENUE IS THA T THE LD. CIT(A) DELETED THE PENALTY LEVIED BY ASSESSING OFFICER U/S 271(1)(C) OF THE INCOME TAX ACT IN ALL THE ASSESSMENT YEARS. 2. THE GROUNDS TAKEN BY THE REVENUE ARE VERBATIM IN ALL THE APPEALS; WE, THEREFORE, PREFER TO REPRODUCE GROUNDS TAKEN BY THE REVENUE IN ASSESSMENT YEAR 2003-04. 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE T HE LEARNED CIT(A) ERRED IN DELETING PENALTY LEVIED UNDER SECTION 271(1)(C) OF THE ACT AMOUNTING TO RS.3,23,950/- WITHOUT APPRECIATING THE SETTL ED LEGAL POSITION THAT THE DIFFERENCE BETWEEN THE INCOME DISCLOSED U/S. 139(1 ) AND 153C OF THE ACT ATTRACTS PENALTY U/S. 271(1)(C) OF THE ACT PARTICULARLY WH EN SUCH A DIFFERENCE IS BASED ON INCRIMINATING SEIZED MATERIAL. 2 ITA NOS.1599 TO 1604/PN/12 M/S. VSG HEALTH CARE, NASHIK 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE T HE LEARNED CIT(A) ERRED IN NOT APPRECIATING THAT THE ADDITIONAL INCOME OF R S. 8,81,490/- WAS OFFERED ONLY IN THE RETURN FILED U/S. 153C OF THE ACT ON SPECIFI C ISSUE OF SUPPRESSED PROFESSIONAL RECEIPTS ON THE BASIS OF INCRIMINATING MATERIALS FO UND AND SEIZED DURING THE SEARCH. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE LEARNED CIT(A) ERRED IN APPLYING EXPLANATION 1 TO SECTION 271(L)(C) OF THE ACT INSTEAD OF EXPLANATION 5A OF THAT SECTION THUS RENDERING HIS DECI SION PERVERSE AND BAD IN LAW. 4. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE T HE LEARNED CIT(A) ERRED IN NOT APPRECIATING THE FACT THAT BUT FOR THE SEARC H OPERATIONS THE ASSESSEE WOULD NOT HAVE OFFERED ADDITIONAL INCOME IN THE RETURN FI LED U/S. 153C OF THE ACT. 3. THE REVENUE HAS ALSO FILED THE ADDITIONAL GROUNDS I N ALL THE APPEALS WHICH READ AS UNDER: (I) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE, THE LD. CIT(A) ERRED IN HOLDING THAT EXPLANATION-1 TO SECTION 271(1)(C) OF THE ACT, WAS NOT APPLICABLE IN THE CASE OF THE ASSESSEE, WITHOUT APPRECIATING THE FACT THAT THE EXPLANATION OFFERED BY THE ASSESSEE IN RESPECT OF THE ADDITIONA L INCOME INCLUDED IN THE RETURNS FILED UNDER SECTION 153C OF THE ACT, WAS SUCH THAT, IT WAS FOUND BY THE ASSESSING OFFICER TO BE UNSUBSTANTIATED. (II) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE, THE CIT(A) ERRED IN HOLDING THAT EXPLANATION-1 TO SECTION 271(1)(C) OF THE ACT, WAS NOT APPLICABLE IN THE CASE OF THE ASSESSEE, WITHOUT APPRECIATING THE FACT THAT THE EXPLANATION OFFERED BY THE ASSESSEE IN RESPECT OF THE ADDITIONAL INCOME INCLUD ED IN THE RETURNS FILED UNDER SECTION 153C OF THE ACT, WAS SUCH THAT, THE ASSESSE E FIRM HAD FAILED TO PROVE IT TO BE BONAFIDE. 4. THE FACTS WHICH ARE REVEALED FROM THE RECORD AS UN DER. THE ASSESSEE IS A PARTNERSHIP FIRM WHICH IS IN THE MEDICAL PROFESSION. T HE ASSESSEE FIRM IS HAVING TWO PARTNERS VIZ. DR. SANJAY PRABHAKAR GANORKAR AND DR. (MRS.) VIJAYA SANJAY GANORKAR, HAVING 50% SHAREHOLDING. THERE WAS A SEARCH AND SEIZUR E ACTION UNDER SECTION 132 OF THE ACT ON 16.01.2009 IN THE RESIDENTIAL PREMISES OF THE PARTNERS OF THE ASSESSEE FIRM. THE ASSESSING OFFICER HAS NOTED THAT DURING THE COURSE O F SEARCH AND SEIZURE OPERATION, DOCUMENTS BELONGING TO THE ASSESSEE FIRM FOUN D AND SEIZED. IT IS PERTINENT TO NOTE HERE THAT SIMULTANEOUSLY, THE SURVEY ACTION UN DER SECTION 133A OF THE ACT WAS ALSO CARRIED OUT IN THE HOSPITAL OWNED BY THE ASSESSEE F IRM VIZ. GANORKAR HOSPITAL, NASHIK AND CERTAIN BOOKS OF ACCOUNT AND DOCUMENTS WERE IMPOUNDED. THE ASSESSEE 3 ITA NOS.1599 TO 1604/PN/12 M/S. VSG HEALTH CARE, NASHIK FIRM WAS ISSUED NOTICE U/S 153C OF THE ACT. THE ASSESSEE F ILED THE RETURNS OF INCOME ON 12.06.2009. IT APPEARS THAT THERE WAS A REVISION OF I NCOME IMMEDIATELY ON THE NEXT DAY AS ASSESSEE ALSO OFFERED THE ADDITIONAL INCOME. THE FACTS AND FIGURES OF THE INCOME DECLARED BY THE ASSESSEE IN THE REGULAR RETURNS FILED U /S 139 OF THE ACT, ADDITIONAL INCOME DECLARED U/S 132 AND THE INCOME WHICH WAS SUBJ ECTED TO THE PENALTY U/S 271(1)(C) OF THE ACT CAN BE SUMMARIZED AS UNDER:- A.Y. INCOME SHOWN IN THE RETURNS FILED U/S 139 ADDITIONAL INCOME DECLARED IN SEARCH U/S 132 INCOME SHOWN IN THE RETURNS FILED U/S 153C ADDITION MADE IN THE ASSESSMENT U/S 143(3) R.W.S 153A INCOME ASSESSED U/S 143(3) R.W.S. 153C INCOME ON WHICH PENALTY U/S 271(L)(C) LEVIED PENALTY LEVIED. 2003 - 04 9,28,230 8,81,490 16,34,560 NIL 16,34,560 8,81,490 3,23,950 2004 - 05 18,15,900 5,10,537 23,26,440 64,432 23,90,872 510537 1,83,150 2005 - 06 19,48,940 4,84,540 24,33,480 1,71,059 26,04,539 4,84,540 1,74,180 2006 - 07 15,82,48 0 2,92,380 18,74,860 60,000 19,34,860 2,92,380 1,00,340 2007 - 08 28,22,327 3,15,750 31,39,740 NIL 31,39,740 3,15,750 1,06,280 2008 - 09 16,40,310 12,32,839 28,73,170 NIL 28,73,170 12,32,839 3,80,950 5. ON THE ADDITIONAL INCOME DECLARED BY THE ASSESSEE I N THE RETURN FILED U/S 153C OF THE ACT, THE ASSESSING OFFICER LEVIED THE PENALTIES U/S 271(1)(C) READ WITH EXPLANATION 5A OF THE ACT. BEFORE LEVY OF PENALTY, THE ASSESSING O FFICER SOUGHT THE EXPLANATION OF THE ASSESSEE. IN HIS EXPLANATION, THE ASSESSEE STATED BEFOR E THE ASSESSING OFFICER THAT EVEN THOUGH SOME DOCUMENTS WERE FOUND DURING THE COUR SE OF SEARCH, BUT NO QUANTIFICATION WAS MADE. THERE WAS A MIS-MATCH AS SOME ENTRIES WERE NOT RECORDED IN THE BOOKS OF ACCOUNT. THE ASSESSEE ALSO TOOK THE CONTENT ION THAT ASSESSEE HIMSELF SUO MOTU VOLUNTARILY OFFERED THE ADDITIONAL INCOME AS UN DISCLOSED INCOME AND IT IS NOTHING TO DO WITH ANY DOCUMENTS OR OTHER RECORD. THE EXPLA NATION OF THE ASSESSEE WAS NOT FOUND ACCEPTABLE BY THE ASSESSING OFFICER AND THE SAME W AS REJECTED. 6. THE ASSESSEE CHALLENGED THE PENALTY ORDERS BEFORE TH E CIT(A). BEFORE THE LD. CIT(A), THE ASSESSEE SUBMITTED THAT IN THE ASSESSMENT ORDERS, THE ASSESSING OFFICER HAS 4 ITA NOS.1599 TO 1604/PN/12 M/S. VSG HEALTH CARE, NASHIK NOT DISCUSSED ANYTHING ABOUT SEIZED DOCUMENTS. IT WAS AL SO CONTENDED THAT THE FIGURES OF THE ADDITIONAL INCOME DECLARED IN THE STATEMENT R ECORDED U/S 132(4) OF THE ACT WERE SHOWN IN RETURNS OF INCOME FILED IN RESPONSE TO NOTICE U/S 153C OF THE ACT. THE ASSESSEE ALSO TOOK THE CONTENTION THAT NO MONEY, BULLION , JEWELLERY, CASH OR OTHER VALUABLE ARTICLES WERE FOUND NOR ANY SUPPRESSED INCOME FOUND ON BASIS OF ANY ENTRY IN THE BOOKS OF ACCOUNT OR TRANSACTIONS IN THE COURSE OF SE ARCH. THE ASSESSEE CONTENTED THAT BY LEVYING THE PENALTY U/S 271(1)(C) OF THE ACT , THE ASSESSING OFFICER HAS MERELY CONSIDERED THE DIFFERENCE BETWEEN THE INCOME OFFERED IN THE ORIGINAL RETURN FILED BEFORE THE SEARCH U/S 139 OF THE ACT AND THE INCOME SHOWN IN THE RETURN U/S 153C OF THE ACT FILED AFTER THE SEARCH AND THERE IS NO CATEG ORICAL QUANTIFICATION VIS--VIS ANY ALLEGED SEIZED DOCUMENT. 7. THE LD. COMMISSIONER ACCEPTED THE EXPLANATION OF T HE ASSESSEE AND DELETED THE PENALTY IN ALL THE YEARS. THE OPERATIVE PART OF THE FINDING OF THE LD. CIT(A) IS AS UNDER: 7. I HAVE CAREFULLY CONSIDERED THE FACTS OF THE CA SE, THE ASSESSMENT ORDERS, THE IMPUGNED PENALTY ORDERS AND THE RIVAL SUBMISSIONS. THE A.O. HAS IMPOSED IMPUGNED PENALTIES BY INVOKING EXPLANATION-5A TO SE CTION 271(1)(C) OF THE ACT, RELEVANT PORTION OF WHICH READS AS UNDER: 'EXPLANATION 5A- WHERE IN THE COURSE OF SEARCH INIT IATED U/S.132 ON OR AFTER 1 ST DAY OF JUNE, 2007, THE ASSESSEE IS FOUND TO BE THE O WNER OF (I) ANY MONEY, BULLION, JEWELLERY OR OTHER VALUABLE ARTICLE OR THING ( HEREINAFTER IN THIS EXPLANATION REFERRED TO AS ASSETS) AND THE ASS ESSEE CLAIMS THAT SUCH ASSETS HAS BEEN ACQUIRED BY HIM BY UTILIZING (WHOLLY OR IN PAR T ) HIS INCOME FOR ANY PREVIOUS YEAR; OR (II) ANY INCOME BASED ON ANY ENTRY IN ANY BOOKS O F ACCOUNT OR OTHER DOCUMENTS OR TRANSACTIONS AND HE CLAIMS THAT SUCH ENTRY IN T HE BOOKS OF ACCOUNT OR OTHER DOCUMENTS OR TRANSACTIONS REPRESENTS HIS INCOME (WH OLLY OR IN PART) FOR ANY PREVIOUS YEAR'. IN THE CASE UNDER APPEAL NO MONEY, BULLION, JEWELLE RY OR OTHER VALUABLE ARTICLE IS INVOLVED BUT THE ADDITIONAL INCOME ON A/C' OF ESTI MATED SUPPRESSION OF PROFESSIONAL RECEIPTS, ALSO ON A/C OF ERRORS AND OM ISSION IN THE OPD AND IPD FEES. IN THIS CASE, THERE IS NO DIRECT OR INDIRECT LINKAG E BROUGHT ON RECORD WITH REFERENCE TO ANY OF THE SPECIFIED SEIZED MATERIALS, SO AS TO ESTABLISH THE CHARGE FOR WHICH THE PENALTY HAS-BEEN LEVIED. THEREFORE, THIS EXPLANATION 5A IS NOT APPLICABLE TO THE CASE UNDER APPEAL. THIS PROPOSITI ON OF LAW IS SUPPORTED BY THE RATIO LAID DOWN IN THE FOLLOWING DECISIONS: 5 ITA NOS.1599 TO 1604/PN/12 M/S. VSG HEALTH CARE, NASHIK 1) CIT VS. MOHANLAL SHARMA 281 ITR 384 (ALIA). 2) T. KODEESWARAN L/H OF LATE A. THANGAM VS. ITO 123 T TJ 230. 7.1 IN FACT EXPLANATION-1 IS APPLICABLE TO THE CASE UNDER APPEAL, THE RELEVANT PORTION OF WHICH IS REPRODUCED BELOW: 'EXPLANATION-1 - WHERE IN RESPECT OF ANY FACTS MATE RIAL TO THE COMPUTATION OF THE TOTAL INCOME OF ANY PERSON UNDER THIS ACT (A) SUCH PERSON FAILS TO OFFER AN EXPLANATION OR OFFERS AN EXPLANATION WHICH IS FOUND BY THE ASSESSING OFFICER OR THE COMMISSIONER APPEALS OR COMMISSIONER TO BE FALSE OR; (B) SUCH PERSON OFFERS AN EXPLANATION WHICH HE IS NOT A BLE TO SUBSTANTIATE AND FAILS TO PROVE THAT SUCH EXPLANATION IS BONAFIDE AN D THAT ALL THE FACTS RELATING TO THE SAME AND MATERIAL TO THE COMPUTATION OF HIS TOT AL INCOME 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 RESPECT OF WHICH PARTICULARS HAVE BEEN CONCEALED.' 7.2 IN THE CASE UNDER APPEAL, SHRI SANJAY P. GANORK AR, PARTNER OF THE APPELLANT FIRM VIDE STATEMENTS RECORDED ON 16/01/2009 AND 09/ 03/2009 HAS OFFERED THE PROFESSIONAL RECEIPTS AS INCOME ON A/C OF ESTIMATED SUPPRESSION OF PROFESSIONAL RECEIPTS, ALSO ON ACCOUNT OF ERRORS AND OMISSION IN THE OPD AND IPD FEES. THE EXPLANATION OFFERED BY THE APPELLANT IS PLAUSIBLE A ND HENCE BONAFIDE. FURTHER, THE EXPLANATION IS NOT FOUND TO BE FALSE. IN VIEW OF TH E ABOVE FACTS AND IN VIEW OF EXPLANATION-1 TO SECTION 271(1)(C) THE PENALTY IMPO SED BY THE A.O. IS NOT JUSTIFIED. THIS PROPOSITION OF LAW IS SUPPORTED BY THE FOLLOWI NG DECISIONS: 1) NATIONAL TEXTILES VS. CIT 249 ITR 125 (GUJ). 2) HERGEPALSINGH VS. CIT 258 ITR 85 ( P & H ). THE APPELLANT HAS OFFERED TO TAX THE ADDITIONAL INCO ME ON A/C OF ESTIMATED SUPPRESSION OF PROFESSIONAL RECEIPTS, ALSO ON A/C O F ERRORS AND OMISSION IN THE OPD AND IPD FEES DURING THE COURSE OF SEARCH AS ADDITIO NAL INCOME TO TAX. THE APPELLANT HAS ALSO PAID ALL THE TAXES. THE ABOVE EX PLANATION OF THE APPELLANT IS FOUND TO BE PLAUSIBLE AND BONAFIDE. THE EXPLANATION OFFERED BY THE APPELLANT IS NOT FOUND TO BE FALSE. IN VIEW OF THE ABOVE FACTS AND P ROVISIONS OF EXPLANATION-1 TO SECTION 271(1)(C), THE APPELLANT IS NOT LIABLE TO P ENALTY U/S. 271(1)(C). IN THIS CASE, THERE IS NO DIRECT OR INDIRECT LINKAGE BROUGHT ON R ECORD WITH REFERENCE TO ANY OF THE SPECIFIED SEIZED MATERIALS, SO AS TO ESTABLISH THE CHARGE FOR WHICH THE PENALTY HAS BEEN LEVIED. IN VIEW OF THE ABOVE FACTS AND DI SCUSSION, I AM OF THE CONSIDERED VIEW THAT ON THE GIVEN FACTS AND THE POSITION OF LA W ON THE SUBJECT, THERE IS NO CONCEALMENT OF INCOME OR FURNISHING INACCURATE PART ICULARS OF INCOME, THEREFORE, THE A.O. IS NOT JUSTIFIED IN IMPOSING' PENALTIES OF RS.3,23,950/-, RS.1,83,150/-, RS.1,74,180/-, RS.1,00,340/-, RS.1,06,280/- AND RS. 3,80,950/- FOR A.YS. 2003-04, 2004-05, 2005-06, 2006-07, 2007-08 AND 2008-09 RESP ECTIVELY Y/S 271(1)(C) OF THE ACT. THE IMPUGNED PENALTY ORDERS U/S. 271(1)(C) ALL DATED 27/06/2011 IMPOSING PENALTIES OF RS.3,23,950/-, RS.1,83,150/-, RS.1,74,180/-, RS.1,00,340/-, RS.1,06,280/- AND RS.3,80,950/- FOR A.YS. 2003-04, 2004-05, 2005-06, 2006-07, 2007-08 AND 2008-09 RESPECTIVELY ARE, THEREFORE, CA NCELLED. ALL THE GROUNDS OF APPEAL ARE, THEREFORE, ALLOWED. 6 ITA NOS.1599 TO 1604/PN/12 M/S. VSG HEALTH CARE, NASHIK 8. NOW, THE REVENUE IS IN APPEAL BEFORE US. WE HAVE HEARD THE PARTIES ON THE ADMISSION OF ADDITIONAL GROUNDS. WE FIND THAT ADDITI ONAL GROUNDS TAKEN BY THE REVENUE ARE LEGAL GROUNDS AND THE SAME CAN BE DECIDED ON THE BASIS OF RECORD AVAILABLE BEFORE US AND NO FURTHER PROBE IS REQUIRED. WE, THEREFORE, FO LLOWING THE DECISION OF APEX COURT IN THE CASE OF NATIONAL THERMAL POWER CO. LTD. (1998) 2 29 ITR 383 (SC), ADMIT THE ADDITIONAL GROUNDS. 9. THE LD. COUNSEL TOOK THE OBJECTION FOR ADMITTING THE APPEALS FOR A.YS. 2004-05 TO 2007-08. HE SUBMITS THAT IN ALL THE ASSESSMENT YEARS W HICH ARE SUBJECT MATTER OF THE APPEALS, THE TAX EFFECT IS BELOW THE MONETARY LI MIT FIXED BY THE CENTRAL BOARD OF DIRECT TAXES, NEW DELHI VIDE INSTRUCTION NO.5 OF 201 4, DATED 10.07.2014. HE PLEADED FOR DISMISSING ALL THE APPEALS AS IN EACH ASSESSMENT YEAR, THE QUANTUM OF PENALTY LEVIED BY THE ASSESSING OFFICER IS LESS THAN RS.4 LACS. PER CONT RA, THE LD. DEPARTMENTAL REPRESENTATIVE POINTED OUT THAT INSTRUCTION NO.5 OF 2 014 IS ONLY APPLICABLE IN RESPECT OF THE APPEALS FILED ON OR AFTER 10.07.2014. HE FUR THER SUBMITTED IN THE SAID INSTRUCTION IN THE CASE OF COMPOSITE ORDER OF ANY APPELLATE AUTHO RITY, WHICH INVOLVES MORE THAN ONE ASSESSMENT YEAR AND COMMON ISSUES IN MORE THAN ONE ASSESS MENT YEARS, THEN THERE IS NO BAR TO THE REVENUE TO FILE THE APPEAL IN RESPECT OF ALL THE ASSESSMENT YEARS EVEN THOUGH, THE TAX EFFECT IS LESS THAN THE PRESCRIBED MONETARY LIMITS IN ANY OF THE YEARS. HE PLACED RELIANCE ON PARA NO.5 OF INSTRUCTIO N NO.5 OF 2014, DATED 10.07.2014. HE FURTHER CONTENDS THAT OTHERWISE ALSO, THERE IS A COM MON ISSUE INVOLVED IN ALL THE APPEALS WHETHER EXPLANATION 5A TO SECTION 271(1)(C) O F THE ACT IS APPLICABLE TO THE ASSESSEE OR NOT. HE SUBMITS THAT ASSESSEE CAN CLAIM THE BENE FIT OF THE INSTRUCTION IF THE CONDITIONS ARE FULFILLED. HE PLEADED FOR ADMITTING ALL THE APPEALS AND DECIDING SAME ON MERIT. 10. THE CENTRAL BOARD OF DIRECT TAXES HAS FROM TIME TO TIME ISSUED INSTRUCTIONS / CIRCULARS TO THE TAX AUTHORITIES FOR REDUCING THE LIT IGATION BY DIRECTING NOT TO FILE THE 7 ITA NOS.1599 TO 1604/PN/12 M/S. VSG HEALTH CARE, NASHIK APPEALS IN CASE OF SPECIFIC TAX EFFECT. SUCH INSTRUCTI ONS WERE ISSUED BEGINNING WITH THE INSTRUCTION NO.1979, DATED 27.03.2000 AND THOSE WERE REVISED FROM TIME TO TIME. IN THE PRESENT CASE, IT IS TRUE THAT IF WE CONSIDER THE TAX EFFECT WHICH HAS ALSO BEEN EXPLAINED BY THE CBDT IN INSTRUCTION NO.5, THEN THE PENALTY IN EACH ASSESSMENT YEAR IS BELOW RS.4 LACS. IT IS NECESSARY TO REPRODUCE THE RELE VANT PART OF THE INSTRUCTION NO.5 OF 2014 EXPLAINING TAX EFFECT AS WELL AS THE CONDITIONS I N RESPECT OF THE COMPOSITE ORDER PASSED BY THE TAX AUTHORITIES WHICH READS AS UNDER: 3. HENCEFORTH APPEALS SHALL NOT BE FILED IN CASES WHERE THE TAX EFFECT DOES NOT EXCEED THE MONETARY LIMITS GIVEN HEREUNDER:- S NO APPEALS IN INCOME - TAX MATTERS MONETARY LIMIT (IN RS) 1. BEFORE APPELLATE TRIBUNAL 4,00,000 / - 2. U/S 260A BEFORE HIGH COURT 10,00,000/ - 3. BEFORE SUPREME COURT 25,00,000/ - IT IS CLARIFIED THAT AN APPEAL SHOULD NOT BE FILED MERELY BECAUSE THE TAX EFFECT IN A CASE EXCEEDS THE MONETARY LIMITS PRESCRIBED ABOVE. FILING OF APPEAL IN SUCH CASES IS TO BE DECIDED ON MERITS OF THE CASE. 4. FOR THIS PURPOSE, TAX EFFECT MEANS THE DIFFEREN CE BETWEEN THE TAX ON THE TOTAL INCOME ASSESSED AND THE TAX THAT WOULD HAVE BE EN CHARGEABLE HAD SUCH TOTAL INCOME BEEN REDUCED BY THE AMOUNT OF INCOME IN RESP ECT OF THE ISSUES AGAINST WHICH APPEAL IS INTENDED TO BE FILED (HEREINAFTER R EFERRED TO AS DISPUTED ISSUES). HOWEVER THE TAX WILL NOT INCLUDE ANY INTEREST THEREO N, EXCEPT WHERE CHARGEABILITY OF INTEREST ITSELF IS IN DISPUTE. IN CASE THE CHAR GEABILITY OF INTEREST IS THE ISSUE UNDER DISPUTE, THE AMOUNT OF INTEREST SHALL BE THE TAX EFFECT. IN CASES WHERE RETURNED LOSS IS REDUCED OR ASSESSED AS INCOME, THE TAX EFFECT WOULD INCLUDE NOTIONAL TAX ON DISPUTED ADDITIONS. IN CASE OF PENAL TY ORDERS, THE TAX EFFECT WILL MEAN QUANTUM OF PENALTY DELETED OR REDUCED IN THE O RDER TO BE APPEALED AGAINST. 5. THE ASSESSING OFFICER SHALL CALCULATE THE TAX EFF ECT SEPARATELY FOR EVERY ASSESSMENT YEAR IN RESPECT OF THE DISPUTED ISSUES I N THE CASE OF EVERY ASSESSEE. IF, IN THE CASE OF AN ASSESSEE, THE DISPUTED ISSUES ARI SE IN MORE THAN ONE ASSESSMENT YEAR, APPEAL, CAN BE FILED IN RESPECT OF SUCH ASSES SMENT YEAR OR YEARS IN WHICH THE TAX EFFECT IN RESPECT OF THE DISPUTED ISSUES EXCEEDS THE MONETARY LIMIT SPECIFIED IN PARA 3. NO APPEAL SHALL BE FILED IN RESPECT OF AN A SSESSMENT YEAR OR YEARS IN WHICH THE TAX EFFECT IS LESS THAN THE MONETARY LIMIT SPECI FIED IN PARA 3. IN OTHER WORDS, HENCEFORTH, APPEALS CAN BE FILED ONLY WITH REFERENC E TO THE TAX EFFECT IN THE RELEVANT ASSESSMENT YEAR. HOWEVER, IN CASE OF A COM POSITE ORDER OF ANY HIGH COURT OR APPELLATE AUTHORITY, WHICH INVOLVES MORE THAN ON E ASSESSMENT YEAR AND COMMON ISSUES IN MORE THAN ONE ASSESSMENT YEAR, APP EAL SHALL BE FILED IN RESPECT OF ALL SUCH ASSESSMENT YEARS EVEN IF THE 'TAX EFFECT ' IS LESS THAN THE PRESCRIBED MONETARY LIMITS IN ANY OF THE YEAR[S), IF IT IS DEC IDED TO FILE APPEAL IN RESPECT OF THE YEAR(S) IN WHICH 'TAX EFFECT' EXCEEDS THE MONETARY L IMIT PRESCRIBED. IN CASE WHERE A COMPOSITE ORDER / JUDGMENT INVOLVES MORE THAN ONE ASSESSEE, EACH ASSESSEE SHALL BE DEALT WITH SEPARATELY. 8 ITA NOS.1599 TO 1604/PN/12 M/S. VSG HEALTH CARE, NASHIK 11. IN THE SAID INSTRUCTION, IT IS CLEARLY MENTIONED T HAT IN CASE OF COMPOSITE ORDER OF THE HIGH COURT OR APPELLATE AUTHORITY WHICH INVOLVE S MORE THAN ONE ASSESSMENT YEAR AND COMMON ISSUES, THEN THE APPEAL SHALL BE FILED IN RE SPECT OF ALL THE ASSESSMENT YEARS EVEN THOUGH THE TAX EFFECT IS LESS THAN RS.4 LACS. IN THE PRESENT CASE, TAX EFFECT IN RESPECT OF ALL THE APPEALS IS LESS THAN RS.4 LACS, BUT A S PER PARA NO.11 OF THE INSTRUCTION, THE SAID MONETARY LIMIT IS APPLICABLE I.E. RS.4 LACS T O THE APPEALS FILED ON OR AFTER 10.07.2014 BUT IN RESPECT OF APPEALS FILED BEFORE THE SAID DATE, THE MONETARY LIMIT IS TO BE CONSIDERED IN THE CONTEXT OF THE APPLICABLE CIRCU LAR. IN THE PRESENT CASE, COMPOSITE ORDER IS PASSED AND THERE IS ALSO A COMMON ISSUE. THESE AP PEALS WERE FILED BY THE REVENUE IN THE MONTH OF JULY, 2013. PRIOR TO THE IN STRUCTION NO.5 OF 2014, THERE WAS A INSTRUCTION NO.3 OF 2011 DATED 09.02.2011. AS PER IN STRUCTION NO.3 OF 2011, THE MONETARY LIMIT FOR FILING THE APPEALS IN THE TRIBUNA L WAS FIXED AT RS.3 LACS. IN THE PRESENT CASE IN TWO ASSESSMENT YEARS I.E. 2003-04 AND 200 8-09, THE TAX EFFECT IS MORE THAN RS.3 LACS AS MENTIONED HEREINABOVE. AS PER INSTRUC TION NO.5 OF 2014, IF THE APPEAL FILED PRIOR TO 10.07.2014, THEN THE MONETARY LIMIT APPLICABLE AT THE TIME OF FILING OF THE APPEAL IS TO BE CONSIDERED. 12. THE INSTRUCTIONS / CIRCULARS ISSUED BY THE CBDT FIXI NG MONETARY LIMIT / OR TAX EFFECT HAS COME BEFORE THE HONBLE JURISDICTIONAL HIG H COURT IN THE CASE OF CIT VS. POLYCOTT CORPORATION REPORTED IN 318 ITR 144 (BOM.) AND IT IS HELD AS UNDER:- HAVING CONSIDERED THE CONTENTIONS, IN OUR OPINION, THE INSTRUCTIONS CANNOT BE INTERPRETED AS A STATUTE THOUGH IT IS PURSUANT TO T HE POWER CONFERRED UNDER SECTION 268A OF THE INCOME-TAX ACT. WHAT THE COURT H AS TO CONSIDER IS THE PLAIN LANGUAGE OF THE PARAGRAPH AND THE OBJECT BEHIND THE SAID PROVISIONS. THE OBJECT APPEARS TO BE NOT TO BURDEN COURTS AND TRIBUNALS IN RESPECT OF MATTERS WHERE THE TAX EFFECT IS LESS THAN THE LIMIT PRESCRIBED. EVEN B EFORE THIS INSTRUCTION, THE CENTRAL BOARD OF DIRECT TAXES HAS BEEN ISSUING INSTRUCTION, THE LAST ONE BEING ON OCTOBER 24, 2005, WHERE THE MONETARY LIMIT HAS BEEN FIXED. IN THOSE INSTRUCTIONS THE ONLY EXCEPTION HAD BEEN THAT IN CASES INVOLVING SUBSTANT IAL QUESTION OF LAW OF IMPORTANCE AS WELL AS IN CASES WHERE THE SAME QUEST ION OF LAW WILL REPEATEDLY ARISE, EITHER IN THE CASE CONCERNED OR IN SIMILAR C ASE, APPEAL SHOULD BE FILED WITHOUT BEING HINDERED BY THE MONETARY LIMITS. THE PRESENT INSTRUCTIONS SEEMS EVEN TO LIMIT THE ISSUES IN SO FAR AS THE SAME QUES TION OF LAW OR RECURRING ISSUE EXCEPT TO THE EXTENT PROVIDED IN PARAGRAPH 5. 9 ITA NOS.1599 TO 1604/PN/12 M/S. VSG HEALTH CARE, NASHIK ON A PROPER READING OF PARAGRAPH 5 OF THE INSTRUCTI ONS IT WOULD BE CLEAR THAT A DUTY IS CAST ON THE ASSESSING OFFICER THAT EVEN IF THE DISPUTED QUESTIONS ARISE FOR MORE THAN ONE ASSESSMENT YEAR THEN AN APPEAL SHOULD BE FILED ONLY IN RESPECT OF THOSE YEARS WHERE THE MONETARY LIMIT AS SPECIFIED I N PARAGRAPH 3 OF THE INSTRUCTION. THE EXCEPTION, HOWEVER, IS CARVED OUT IN RESPECT OF A COMPOSITE ORDER OF THE HIGH COURT OR APPELLATE AUTHORITY. IN OTHER WORDS, WHERE THE HIGH COURT OR TRIBUNAL HAS PASSED A COMPOSITE ORDER IN RESPECT OF THE SAME ASSESSEE ON THE SAME QUESTION AND/OR ON DIFFERENT QUESTION AND FOR ONE OF THE ASSESSMENT YEARS, THE TAX EFFECT IS MORE THAN THE MONETARY LIMIT THEN THE APPEAL SHALL ALSO BE FILED IN RESPECT OF ALL THE ASSESSMENT YEARS. THE SUBMISSION ON BEHALF OF THE ASSESSEE IS THAT THE COMPOSITE ORDER MUST RELATE TO A COMMON IS SUE. WE BEG TO DISAGREE ON A PLAIN AND LITERAL CONSTRUCTION OF THE INSTRUCTION. THE EXPRESSION WHICH INVOLVES MORE THAN ONE YEAR' WOULD HAVE NO MEANING IF IT WAS RESTRICTED ONLY TO THE EXPRESSION 'COMMON ISSUES'. THE EXPRESSION, THEREFO RE, OF A COMPOSITE ORDER WILL HAVE TO BE READ TO MEAN AN ORDER IN RESPECT OF THE SAME ASSESSEE FOR MORE THAN ONE YEAR. AND DISPOSING OF SEVERAL APPEALS ON A COM MON QUESTION OF LAW BY THE APPELLATE AUTHORITY, CANNOT BE SAID TO BE A COMPOSI TE ORDER AS THE ORDER INVOLVES APPEALS BY DIFFERENT PERSONS, WHICH APPEALS FOR THE SAKE OF CONVENIENCE HAVE BEEN ONLY CLUBBED TOGETHER FOR THE PURPOSE OF DISPOSAL O N THAT ISSUE. IN OUR OPINION, THIS WOULD BE THE CORRECT READING OF PARAGRAPH 5 OF THE INSTRUCTION. 13. NOW WE EXAMINE THE PLEA OF THE ASSESSEE IN THE BACK DROP OF THE INSTRUCTION NO.3 OF 2011, DATED 09.02.2011. THE PARAGRAPH OF T HE 5 OF THE SAID INSTRUCTION READS AS UNDER: 5. THE ASSESSING OFFICER SHALL CALCULATE THE TAX EF FECT SEPARATELY FOR EVERY ASSESSMENT YEAR IN RESPECT OF THE DISPUTED ISSUES I N THE CASE OF EVERY ASSESSEE. IF, IN THE CASE OF AN ASSESSEE, THE DISPUTED ISSUES ARI SE IN MORE THAN ONE ASSESSMENT YEAR, APPEAL CAN BE FILED IN RESPECT OF SUCH ASSESS MENT YEAR OR YEARS IN WHICH THE TAX EFFECT IN RESPECT OF THE DISPUTED ISSUES EXCEEDS THE MONETARY LIMIT SPECIFIED IN PARA 3. NO APPEAL SHALL BE FILED IN RESPECT OF AN A SSESSMENT YEAR OR YEARS IN WHICH THE TAX EFFECT IS LESS THAN THE MONETARY LIMIT SPECI FIED IN PARA 3. IN OTHER WORDS, HENCEFORTH, APPEALS CAN BE FILED ONLY WITH REFERENC E TO THE TAX EFFECT IN THE RELEVANT ASSESSMENT YEAR. HOWEVER, IN CASE OF A COM POSITE ORDER OF ANY HIGH COURT OR APPELLATE AUTHORITY, WHICH INVOLVES MORE THAN ON E ASSESSMENT YEAR AND COMMON ISSUES IN MORE THAN ONE ASSESSMENT YEAR, APP EAL SHALL BE FILED IN RESPECT OF ALL SUCH ASSESSMENT YEARS EVEN IF THE 'TAX EFFECT ' IS LESS THAN THE PRESCRIBED MONETARY LIMITS IN ANY OF THE YEAR(S), IF IT IS DEC IDED TO FILE APPEAL IN RESPECT OF THE YEAR(S) IN WHICH 'TAX EFFECT' EXCEEDS THE MONETARY L IMIT PRESCRIBED. IN CASE WHERE A COMPOSITE ORDER/JUDGMENT INVOLVES MORE THAN ONE A SSESSEE, EACH ASSESSEE SHALL BE DEALT WITH SEPARATELY. 14. AS PER THE SAID INSTRUCTION ALSO, THE REVENUE IS AT LIBERTY TO FILE THE APPEAL IN THE CASE OF COMPOSITE ORDER OF THE APPELLATE AUTHORITY WH ICH INVOLVES MORE THAN ONE ASSESSMENT YEAR AND COMMON ISSUE IN MORE THAN ONE ASSESSMENT YEARS EVEN IF THE TAX EFFECT IS LESS THAN THE PRESCRIBED MONETARY LIMIT IN AN Y OF THE YEARS. WE, THEREFORE, HOLD 10 ITA NOS.1599 TO 1604/PN/12 M/S. VSG HEALTH CARE, NASHIK THAT ALL THE APPEALS ARE MAINTAINABLE AS THE FIRST APP ELLATE AUTHORITY HAS DISPOSED OFF THESE APPEALS BY THE COMPOSITE ORDER AND THERE IS ONE C OMMON ISSUE IN ALL THE APPEALS WHETHER EXPLANATION 5A TO SECTION 271(1)(C) OF THE A CT IS APPLICABLE OR NOT. 15. NOW WE PROCEED TO DECIDE THE CASE ON MERIT. THE LD. DEPARTMENTAL REPRESENTATIVE FOR THE REVENUE VEHEMENTLY ARGUES THAT THE LD. CIT HAS ERRED IN HOLDING THAT ONLY THE EXPLANATION 5 TO SECTION 271(1 )(C) IS APPLICABLE TO THE ASSESSEE. HE SUBMITS THAT THE ADDITIONAL INCOME DECLARED BY TH E ASSESSEE WAS BASED ON THE SEIZED MATERIAL FOR ALL THE ASSESSMENT YEARS AND HENCE EX PLANATION 5A TO SECTION 271(1)(C) OF THE I.T. ACT IS APPLICABLE TO THE ASSESSEE . HE REFERRED TO THE IMPUGNED ORDER, MORE PARTICULARLY PARA NO.7 AND SUBMITS THAT T HE LD.CIT(A) HAS NOT PROPERLY APPRECIATED THE FACTS AS WELL AS LAW AND HAS DELETED TH E PENALTY. HE PLEADED FOR RESTORING THE PENALTY ORDERS. 16. PER CONTRA THE LD. COUNSEL FOR THE ASSESSEE SUBMITS TH AT EXPLANATION 5A APPLIES ONLY IN THE CASES WHERE THE SEARCH IS INITIATED U/S.132 OF THE I.T. ACT. HE ARGUED THAT THERE IS NO SEARCH IN THE CASE OF THE PRESENT ASSESSEE BUT SURVEY ACTION U/S.133A WAS CARRIED OUT AND WHATEVER THE MATERIAL HAS BEEN RELIE D ON BY THE AO THAT MATERIAL WAS SEIZED IN THE SURVEY ACTION AND IT IS APPARENTLY CLEAR FROM THE FACT THAT OPD REGISTERS, X-RAY REGISTERS ETC., CANNOT BE IN THE RESIDENTIAL PRE MISES OF PARTNERS OF THE ASSESSEE AS THE SAID RECORD IS MAINTAINED AT THE HOSPITAL. HE REF ERRED TO THE ASSESSMENT ORDER AND SUBMITS THAT THE AO HAS NOT AT ALL CLARIFIED WHAT WAS T HE NATURE OF THE SEIZED MATERIAL AND ONLY REFERRED TO ANNEXURES. HE ARGUES THAT THE P ENALTY PROVISIONS IN THE TAX STATUTE HAVE TO BE GIVEN STRICT INTERPRETATION AND IT CANNOT BE APPLIED IN THE CASUAL MANNER THE WAY THE AO HAD APPLIED. HE ARGUED THAT THERE IS A CONFLICT IN THE FINDING OF FACTS BY THE AO, MORE PARTICULARLY IN THE ORDER SHEET WHICH IS FILED IN THE PAPER BOOK PAGE NO.2 AND IN WHICH IT IS STATED THAT THE DOCUME NTS IN THE FORM OF BILL BOOKS OF OPD PATIENTS OF THE ASSESSEE FIRM AND SEIZED FROM THE RESIDENT IAL PREMISES OF THE PARTNERS 11 ITA NOS.1599 TO 1604/PN/12 M/S. VSG HEALTH CARE, NASHIK OF THE ASSESSEE. BUT IN THE ASSESSMENT ORDER FOR 2003-04 I T IS MENTIONED THAT THE SAID DOCUMENTS WERE IMPOUNDED, I., ANNEXURES MARKED A9 AND A10 IN THE COURSE OF THE SURVEY ACTION U/S 133A OF THE ACT IN THE HOSPITAL PRE MISES OF THE ASSESSEE FIRM. HE PLEADED THAT THERE IS NO CLARITY IN RESPECT OF THE DO CUMENTS SEIZED WHETHER THOSE WERE SEIZED IN SURVEY ACTION OR SEARCH ACTION AND HENCE EX PLANATION 5A CANNOT BE APPLIED. HE SUBMITS THAT EVEN ASSUMING THAT ASSESSEE HAS OFFERED THE ADDITIONAL INCOME BUT THAT IS NOT BASED ON ANY ALLEGED SEIZED DOCUMENTS BUT I T WAS NOTICED BY THE ASSESSEE THAT AS SOME ENTRIES WERE MISSED BY THE STAFF TO BE ENTE RED IN THE ACCOUNTS AND HE OFFERED THE SAME SUO-MOTU. HE PLEADED FOR CONFIRMING THE ORDER OF THE LD.CIT(A). 17. IN THIS CASE ADMITTEDLY THERE IS NO SEARCH ACTION U /S.132(1) OF THE I.T. ACT BUT THE SURVEY ACTION WAS CARRIED OUT U/S.133A. IN THE ASSE SSMENT ORDER THE AO HAS NOTED THAT DURING THE COURSE OF SURVEY ACTION, ANNEXURES A9 AND A10 WERE SEIZED. IN THE ORDER SHEET PROCEEDINGS THE AO HAS NOTED THAT THOSE BIL L BOOKS WERE IMPOUNDED FROM THE PREMISES OF THE PARTNERS OF THE ASSESSEE FIRM AGAINST WHOM SEARCH ACTION U/S.132(1) WAS CARRIED OUT. EXPLANATION 5A TO SECTION 271(1)(C) READS AS UNDER : SECTION 271(1)(C) . . . . . . . . . . [EXPLANATION 5A.WHERE, IN THE COURSE OF A SEARCH I NITIATED UNDER SECTION 132 ON OR AFTER THE 1ST DAY OF JUNE, 2007, THE ASSESSEE IS FOUND TO BE THE OWNER OF (I) ANY MONEY, BULLION, JEWELLERY OR OTHER VALUABLE ARTICLE OR THING (HEREAFTER IN THIS EXPLANATION REFERRED TO AS ASSETS) AND THE ASS ESSEE CLAIMS THAT SUCH ASSETS HAVE BEEN ACQUIRED BY HIM BY UTILISING (WHOLLY OR I N PART) HIS INCOME FOR ANY PREVIOUS YEAR; OR (II) ANY INCOME BASED ON ANY ENTRY IN ANY BOOKS OF ACCOUNT OR OTHER DOCUMENTS OR TRANSACTIONS AND HE CLAIMS THAT SUCH ENTRY IN THE B OOKS OF ACCOUNT OR OTHER DOCUMENTS OR TRANSACTIONS REPRESENTS HIS INCOME (WH OLLY 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 YE AR HAS BEEN FURNISHED BEFORE THE SAID DATE BUT SUCH INCOME HAS NOT BEEN DECLARED THEREIN; OR (B) THE DUE DATE FOR FILING THE RETURN OF INCOME FO R SUCH PREVIOUS YEAR HAS EXPIRED BUT THE ASSESSEE HAS NOT FILED THE RETURN, 12 ITA NOS.1599 TO 1604/PN/12 M/S. VSG HEALTH CARE, NASHIK THEN, NOTWITHSTANDING THAT SUCH INCOME IS DECLARED BY HIM IN ANY RETURN OF INCOME FURNISHED ON OR AFTER THE DATE OF SEARCH, HE SHALL, FOR THE PURPOSES OF IMPOSITION OF A PENALTY UNDER CLAUSE (C) OF SUB-SEC TION (1) OF THIS SECTION, BE DEEMED TO HAVE CONCEALED THE PARTICULARS OF HIS INC OME OR FURNISHED INACCURATE PARTICULARS OF SUCH INCOME. 18. THE ABOVE EXPLANATION IS BROUGHT ON THE STATUTE B OOK TO COVER UP THE LACUNAE OF EARLIER EXPLANATION 5 WHICH WAS, AS INTERPRETED BY T HE COURTS/TRIBUNAL, APPLICABLE ONLY IN THE CASES WHERE MONEY, BULLION, JEWELLERY OR OTHER VALUABLES OR ARTICLES OR THINGS WERE FOUND. WE FIND THAT THERE IS CONTRADICTION ON THE FACTS BY THE AO HIMSELF. IN THE ASSESSMENT ORDER, THE AO HAS MENTIONED THAT BILL BOOK A9 AND A10 WERE IMPOUNDED DURING THE COURSE OF SURVEY ACTION U/S.133A OF THE ACT . IF THIS IS THE FACT, THEN EXPLANATION 5A TO SECTION 271(1)(C) IS NOT APPLICABLE AS IT IS CLEAR FROM THE WORDINGS OF THE SAID EXPLANATION WHICH ONLY APPLIES TO THE SEARCH INITIATED U/S.132 OF THE ACT. WE, THEREFORE, HOLD THAT THE AO WAS WRONG IN APPLYIN G EXPLANATION 5A FOR LEVYING PENALTY TO THE ASSESSEE. 19. IN THE PRESENT CASE, THE ADDITIONAL INCOME DECL ARED BY THE ASSESSEE FIRM IS NOT RELATED TO ANY MONEY, BULLION, JEWELLERY , CASH OR A NY OTHER VALUABLE ARTICLES. BUT AS PER THE REVENUE AUTHORITIES, THE SAME INCOME IS DECLARED B Y THE ASSESSEE AS PER THE OPD REGISTERS, VIZ-A-VIZ., THE BILL BOOKS SEIZED IN THE COU RSE OF THE SURVEY ACTION. THE ASSESSMENT ORDER IS SILENT IN RESPECT OF THE ALLEGED ENTRI ES FOUND IN THOSE DOCUMENTS OR REGISTERS. THE PENALTY PROVISIONS IN THE TAX STATUTE HA VE TO BE STRICTLY INTERPRETED AND ALL THE RELEVANT FACTS MUST BE BROUGHT ON RECORD BY T HE AO. THE FACTS RECORDED IN THE ASSESSMENT ORDER ALSO CANNOT BE DISCARDED EVEN IF IN THE SUBSEQUENT PENALTY ORDER AO STATES DIFFERENT FACTS WHICH ARE NOT THERE IN THE ASSESSM ENT ORDER. ONCE WE HOLD THAT EXPLANATION 5A CANNOT BE APPLIED TO THE ASSESSEE, THEN IN SUCH CASE, THERE IS NO PROVISION TO LEVY THE PENALTY ON THE DECLARED INCOME OF THE ASSESSEE IN THE RETURNS IN RESPONSE TO NOTICE U/S.153C OF THE ACT. IN OUR OPINIO N, AS THE SAID VIEW HAS BEEN TAKEN BY THE ITAT, PUNE AS HELD IN THE CASE OF CHANDAN J. S HEWANI VS. DCIT IN ITA NOS. 235 & 13 ITA NOS.1599 TO 1604/PN/12 M/S. VSG HEALTH CARE, NASHIK 236/PN/2010 ORDER DATED 29-08-2012. IN OUR OPINION , NO INTERFERENCE IS CALL FOR IN THE ORDER OF THE LD.CIT(A) FOR THE ABOVE RECORDED R EASONS. WE ACCORDINGLY CONFIRM THE ORDER OF THE LD.CIT(A) DELETING THE PENALTY IN ALL THE ASSESSMENT YEARS. 20. IN THE RESULT, REVENUES APPEALS ARE DISMISSED FOR A LL THE ASSESSMENT YEARS. ORDER PRONOUNCED IN THE OPEN COURT ON THIS THE 31 ST DAY OF OCTOBER, 2014. SD/- SD/- (R.K. PANDA) (R.S. PADVEKAR) ACCOUNTANT MEMBER JUDICIAL MEMBER PUNE, DATED 31 ST OCTOBER, 2014 GCVSR/SATISH COPY TO:- 1) DEPARTMENT, 2) ASSESSEE 3) THE CIT(A)-I, NASHIK 4) THE CIT-I, NASHIK 5) THE DR, B BENCH, I.T.A.T., PUNE 6) GUARD FILE BY ORDER //TRUE COPY// SENIOR PRIVATE SECRETARY ITAT, PUNE