DCIT, Central Circle - 2(2), Kolkata, Kolkata V. Ambey Mining Pvt. Ltd., Kolkata

ITA 1607/KOL/2017

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 3223 (ITAT-KOLKATA)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-02-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2013-2014
• Appeal Filed On: 06-07-2017
• Court: TRIBUNAL

Judgement Text

, A , IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA BENCH A KOLKATA BEFORE SHRI J.SUDHAKAR REDDY, ACCOUNTANT MEMBER AND SHRI S.S.GODARA, JUDICIAL MEMBER ITA NO. 160 4 /KOL/ 201 7 & C.O. NO.96/KOL/2017 (A/O ITA NO. 1604/KOL/2017) ASSESSMENT YEAR: 2013-14 DCIT, CENTRAL CIRCLE-2(2), AAYAKAR BHAWAN, POORVA, - 107, SHANTIPALLY, KOLKATA- 700107 / V/S . AKA LOGISTICS PVT. LTD., 3 RD FLOOR, 8, BECK BAGAN ROW, KOLKATA-700017 [ PAN NO. AADCC 4844 N ] /APPELLANT .. / RESPONDENT/ CO-OBJECTOR ITA NO. 1607 /KOL/ 2017 & C.O. NO.97/KOL/2017 (A/O ITA NO. 1607/KOL/2017) ASSESSMENT YEAR: 2013-14 DCIT, CENTRAL CIRCLE-2(2), AAYAKAR BHAWAN, POORVA, - 107, SHANTIPALLY, KOLKATA- 700107 / V/S . AMBEY MINING PVT. LTD., 9 TH FLOOR, 8, A.J.C. BOSE ROAD, KOLKATA-700017 [ PAN NO. AAFCA 2578 R ] /APPELLANT .. / RESPONDENT/ CO-OBJECTOR ITA NO. 16 1 0 /KOL/ 2017 & C.O. NO.98/KOL/2017 (A/O ITA NO. 1610/KOL/2017) ASSESSMENT YEAR: 2013-14 DCIT, CENTRAL CIRCLE-2(2), AAYAKAR BHAWAN, POORVA, - / M/S CALCUTTA INDUSTRIAL SUPPLY CORP. 3 RD FLOOR, 4, ITA NO.1604, 1607 & 1610/KOL/201 & COS 96-98/K/2017 ASSESSMENT YEAR 2013-14 DCIT.CC-2(2), KOL. VS. AKA LOGISTICS P LTD., AMBEY MINING PVT. LTD. & M/S CALCUTTA INDUSTRIAL SUPPLY CROP. PAGE 2 107, SHANTIPALLY, KOLKATA- 700107 V/S . RIPPON STREET, KOLKATA-16 [ PAN NO. AACF 2065P ] /APPELLANT .. / RESPONDENT/ CO-OBJECTOR /BY ASSESSEE SHRI A.K. TIBREWAL, FCA # /BY REVENUE SHRI A.K. KAYAK, CIT-DR /DATE OF HEARING 28-01-2019 /DATE OF PRONOUNCEMENT 27-02-2019 /O R D E R PER S.S.GODARA, JUDICIAL MEMBER:- THE REVENUE AND ALL THREE ASSESSEES HAVE FILED THE IR MAIN APPEALS AND CORRESPONDING CROSS OBJECTION(S) AGAINST THE COMMIS SIONER OF INCOME TAX (APPEALS)-20, KOLKATAS SEPARATE ORDERS; ALL DATED 22.03.2017, PASSED IN CASE WENT IN ALL CASES NO.350, 726 & 344/CIT(A)-20/CC-2(2)/2015- 16 FOR ASSESSMENT YEAR 2013- 14; INVOLVING PENALTY PROCEEDINGS U/S271AAB OF THE INCOME TAX ACT, 1961; IN SHORT THE ACT. 2. WE NOTICE AT THE OUTSET THAT REVENUES INSTANT T HREE APPEAL(S) SUFFER FROM 25 DAYS DELAY IN FILING. IT HAS FILED SEPARATE CONDON ATION PETITION THEREIN ATTRIBUTING REASONS THEREOF TO COMPILATION OF NECESSARY DOCUMEN TS AND PROCEDURAL FORMALITIES AT VARIOUS DEPARTMENTAL LEVELS. THE ASSESSEES ARE FAIR ENOUGH IN NOT DISPUTING THE SAID PLEADINGS DURING THE COURSE OF HEARING. WE THEREFOR E CONDONE THE IMPUGNED IDENTICAL DELAY OF 25 DAYS IN FILING OF THESE THREE REVENUE S APPEALS TO BE NEITHER INTENTIONAL NOR DELIBERATE. THESE THREE APPEALS ARE NOW TAKEN U P FOR ADJUDICATION ON MERITS. 3. COMING TO MERITS, WE FIND THAT THE ASSESSING OFF ICER LEVIED THE IMPUGNED PENALT(IES) OF 45 LAC, 38.50 LAC AND 35.50 LAC IN CASE OF ALL THEE ASSESSEES CASES @ 10% OF ADDITIONAL INCOME DISCLOSURES AMOUNTING TO 4.5 CORRES, 4.02 CRORES AND ITA NO.1604, 1607 & 1610/KOL/201 & COS 96-98/K/2017 ASSESSMENT YEAR 2013-14 DCIT.CC-2(2), KOL. VS. AKA LOGISTICS P LTD., AMBEY MINING PVT. LTD. & M/S CALCUTTA INDUSTRIAL SUPPLY CROP. PAGE 3 3.55 CRORES; RESPECTIVELY. THE CIT(A) HAS DELETED F IRST AND THIRD PENALT(IES) IN ENTERITY AND RESTRICTED SECOND ONE TO THE TUNE OF 17 LAC IN HIS LOWER APPELLATE ORDER. THE REVENUE SEEKS TO REVIVE THE ASSESSING OFFICERS ACTION IN ALL OF ITS THREE APPEAL(S) WHEREAS THE ASSESSEES CORRESPONDING THREE CROSS OB JECTIONS SUPPORT THE CIT(A)S ORDER DELETING THE IMPUGNED PENALT(IES) IN FIRST AN D THIRD CASES AND FURTHER SEEKS TO DELETE THE REMAINING PENALTY OF 17 LAC IN SECOND ONE. BOTH THE LEARNED REPRESENTATI VES ARE AD IDEM DURING THE COURSE OF HEARING THAT THE INSTANT LIS COMPRISING OF THESE CASES CONTAIN IDENTICAL FACTS. WE THUS PROPOSE TO DISPOSE OF ALL THESE CASES VIDE ITS INSTANT COMMON ORDER. 4. A COMBINE PERUSAL OF THE CASE FILE(S) REVEALS TH AT THE DEPARTMENT HAD CARRIED OUT THE SEARCH IN QUESTION IN M/S BLA GROUP OF CASE S ON 20.12.2012. THE ASSESSEES AUTHORIZED PERSON(S) GOT RECORDED THEIR SEARCH STAT EMENT(S) U/S 132(4) OF THE ACT ADMITTING ADDITIONAL INCOMES OF 4.5 CRORES, 4.02 CRORES AND 3.55 CRORES; RESPECTIVELY. THERE IS NO DISPUTE THAT ALL THESE TH REE ASSESSEES DULY INCLUDED THE SAID ADDITIONAL INCOME IN THEIR RESPECTIVE RETURNS FILED POST SEARCH. THE ASSESSING OFFICER ASSESSED THE SAME WITHOUT MAKING ANY ADDITION IN CO NSEQUENTIAL ASSESSMENT FRAMED ON 06.06.2014. HE FURTHER INITIATED THE IMPUGNED SE C. 271AAB PENAL PROCEEDINGS IN ALL THREE ASSESSEES CASES QUANTUM PROCEEDINGS IN A LL CASES ATTAINED FINALITY AT THIS STAGE ITSELF. 5. WE NOW ADVERT TO IMPUGNED PENALT(IES) PROCEEDING S. THESE THREE ASSESSEES PLEADED BEFORE THE ASSESSING OFFICER THAT THEY HAD DECLARED THEIR RESPECTIVE ADDITIONAL INCOMES SUO MOTU AND SUBSTANTIATED THE MANNER OF HAVING DERIVED THE SAME FROM VARIOUS BUSINESS SUCH AS MINING, CIVIL CONSTRUCTION , TRANSPORTATION AND OTHER ACTIVITIES FOLLOWED BY DUE PAYMENTS OF TAX THEREUPON. THEY CLA IMED TO HAVE COMPLIED WITH ALL REQUISITES CONDITIONS ON THE PREMISE THAT NO PENALT Y WOULD BE LEVIED POST THE IMPUGNED SEARCH. WE FIND FROM THE ASSESSING OFFICER S IDENTICAL PENALTY ORDERS FORMING SUBJECT-MATTER OF THE INSTANT LIS THAT ALTHOUGH HE HAD ACCEPTED ALL OTHER FOREGOING CONTENTIONS ON MERITS, HE WAS OF THE VIEW THAT ASSESSEES HAD MADE THE IMPUGNED DISCLOSURES ONLY BECAUSE OF THE IMPUGNED S EARCH THOSE ON THEIR OWN. HE HELD THAT ALL THE THREE ASSESSEES ADDITIONAL INCOM ES DISCLOSURES HAD ARISEN FROM ITA NO.1604, 1607 & 1610/KOL/201 & COS 96-98/K/2017 ASSESSMENT YEAR 2013-14 DCIT.CC-2(2), KOL. VS. AKA LOGISTICS P LTD., AMBEY MINING PVT. LTD. & M/S CALCUTTA INDUSTRIAL SUPPLY CROP. PAGE 4 VARIOUS DOCUMENTS / TRANSACTIONS / EVIDENCE FOUND I N THE COURSE OF IMPUGNED SEARCH ONLY. ALL THIS MADE THE ASSESSING OFFICER TO LEVY T HE IMPUGNED PENALT(IES) OF 40.50 LAC, 40.20 LAC AND 35.50 LAC; RESPECTIVELY. 6. THESE THREE ASSESSEES PREFERRED THEIR RESPECTIVE APPEALS. THE CIT(A)S SEPARATE ORDERS UNDER CHALLENGE HAVE IN FIRST AND THIRD CASE S HAVE DELETED THE IMPUGNED PENALTY(IES) IN FULL WHEREAS HE HAS RESTRICTED THE PENALTY SUM OF 40.20 LAC IN SECOND ASSESSEES CASE TO THE EXTENT OF 17 LAC ONLY. WE DEEM IT APPROPRIATE AT THIS STAGE T O TREAT REVENUES APPEALS AND SECOND ASSESSEE AMBEY M INING PVT. LTD. CROSS OBJECTIONS I.E. ITA NO.1607/KOL/2017 AND C.O. NO.97 /KOL/2017 AS THE LEAD CASES COMPRISING CIT(A)S FOLLOWING DETAILED DISCUSSION:- 3. I HAVE CONSIDERED THE FINDING OF THE AO IN THE A SSESSMENT ORDER AND THE WRITTEN SUBMISSIONS AS WELL AS ORAL SUBMISSIONS MADE BY THE AR DURING THE APPELLATE PROCEEDINGS. 4. APPEAL ON GROUNDS NO 1, 2 AND 3 ARE AGAINST THE IMPOSITION OF PENALTY U/S 271AAB (1)(A). BRIEF FACTS OF THE CASE ARE THAT A) SEARCH AND SEIZURE PROCEEDINGS WERE CONDUCTED O N 20-12-2012 AND THEREAFTER AT THE RESIDENTIAL AS WELL AS BUSINESS P REMISES OF BLA GROUP. PANCHANAMA WAS ALSO DRAWN IN THE NAME OF THE ASSESS EE. B) DURING THE COURSE OF SEARCH PROCEEDING, WHILE MA KING THE STATEMENT U/S 132(4) OF THE ACT, AN AMOUNT OF RS4,02,00,000/- WAS OFFERED TO TAX IN THE HANDS OF ASSESSEE AS ADDITIONAL INCOME IN FY 2012-1 3. BREAK-UP OF DISCLOSURE OF RS.4,02,00,000/- CONSISTS OF FOLLOWING- CASH 17,00,000/- OTHERS 3,85,00,000/- TOTAL 4,02,00,000/- C) IN THE PREVIOUS YEAR RELEVANT TO THE ASSESSMENT YEAR 2013-14, THE ASSESSEE FILED ITS RETURN OF INCOME U/S 139 OF THE ACT ON 30 -09-2013 DECLARING TOTAL INCOME AT RS.6,75,85,9901 - AND THEREAFTER RETURN W AS REVISED ON 18-11-2013 DECLARING TOTAL INCOME AT RS.6,75,85,990/ -INCLUDIN G THE OFFERED INCOME OF RS.6,02,00,000/-. D) THE RETURN WAS SELECTED FOR SCRUTINY ASSESSMENT. COMPLIANCE TO NOTICES U/S 143(2) AND 142(1) WERE DULY MADE. ASSESSMENT ORDER FOR AY 2013-14 WAS PASSED U/S 143(3) ON 06-06-2014 AT A TOTAL INCOME O F RS.6,75,85,990/- I.E. ON RETURNED INCOME. E) PENALTY PROCEEDINGS WAS INITIATED SEPARATELY ON THE DISCLOSURE AMOUNT OF RS.4,02,00,000/- U/S 271AAB OF THE INCOME TAX ACT, 1961. ITA NO.1604, 1607 & 1610/KOL/201 & COS 96-98/K/2017 ASSESSMENT YEAR 2013-14 DCIT.CC-2(2), KOL. VS. AKA LOGISTICS P LTD., AMBEY MINING PVT. LTD. & M/S CALCUTTA INDUSTRIAL SUPPLY CROP. PAGE 5 F) DURING THE COURSE OF PENALTY PROCEEDING, IT HAD BEEN STATED THAT OUT OF SUCH OFFERING OF RS.4,02,00,000/-, AN AMOUNT OF RS.3,85, 00,000/- WAS NOT BACKED BY ANY EVIDENCE OF UNDISCLOSED INCOME OR ANY UNDISCLOS ED ASSETS / ITEMS THAT HAD BEEN FOUND / INVENTORISED BY THE DEPARTMENT. HENCE, SUCH SUO MOTO OFFERING OF RS.3,85,00,000/- DOES NOT COME UNDER THE PURVIEW OF ' UNDISCLOSED INCOME ' AS EXPLAINED IN EXPLANATION (C) OF SECTION 271AAB AND HENCE THE PENALTY PROVISION CANNOT BE INVOKED ON SUCH FIGURE OF RS.3,85,00,000/-. FURTHER, SUCH SUO MOTO OFFERING OF RS.3,85,00,000/- HAS BEEN MADE IN ORDER TO BUY PEACE, TO AVOID UNNECESSARY LONG DRAWN LITIGATI ONS WITH THE DEPARTMENT AND TO DEMONSTRATE UTMOST COOPERATIVE ATTITUDE WITH THE DEPARTMENT. G) HOWEVER, THE ASSESSING OFFICER DID NOT PAY ANY H EED TO SUCH SUBMISSION AND WENT ON TO PASS AN ORDER U/S 271AAB OF THE ACT CONSIDERING THE OFFERED AMOUNT OF RS.4,02,00,000/- AS UNDISCLOSED INCOME AN D IMPOSED A PENALTY OF RS.40,20,000/-. 5. BECAUSE OF THE ACT OF THE AO OF IMPOSING PENALTY U/S 271AAB(1)(A) IN THIS CASE, THIS APPEAL HAS BEEN FILED. IN THE PENALTY ORDER TH E AO HAS BROUGHT IT ON RECORD THAT THE CONTENTION OF THE ASSESSEE THAT THE AFORESAID A MOUNT OF RS.3,85,00,000/- IS NOT ' UNDISCLOSED INCOME ' IS CONTRARY TO THE FACT THAT THE SAID ADDITIONAL INCOME OF RS.3,85,00,000/- WAS OFFERED FOR TAXATION DURING TH E COURSE OF SEARCH OPERATION AND WAS SUBSTANTIATED BY THE ASSESSEE AS EARNED OUT OF THE BUSINESS IN WHICH THE ASSESSEE IS ENGAGED. BY DINT OF ASSESSES OWN SUBMISSIONS, TH E ASSESSEE WAS FOUND TO HAVE ACCUMULATED AN UNDISCLOSED INCOME OF RS.3,85,00,000 /- WHICH WAS NOT RECORDED ON OR BEFORE THE DATE OF SEARCH IN THE BOOKS OF ACCOUNT O R OTHER DOCUMENTS MAINTAINED IN THE NORMAL COURSE OF BUSINESS. BY VIRTUE OF THE VERY NA TURE OF DISCLOSURE BY THE ASSESSEE HIMSELF, THAT SUCH UNACCOUNTED INCOME WAS GENERATED OUT OF TRANSACTIONS IN BUSINESS IT WAS INVOLVED IN THE ADDITIONAL INCOME OF RS.3,85 ,00,000/- DISCLOSED ONLY DURING THE COURSE OF SEARCH & SEIZURE OPERATION PARTAKES THE C HARACTER OF UNDISCLOSED INCOME. 6. DURING THE APPELLATE PROCEEDINGS THE AR HAS MADE ORAL SUBMISSION AS WELL AS FILED A WRITTEN SUBMISSION ON THIS ISSUE WHICH IS AS UNDE R: AGGRIEVED BY THE SAID PENALTY ORDER OF THE ASSESSIN G OFFICER, WE HAVE FILED AN APPEAL BEFORE YOUR GOOD-SELF TO CONSIDER THE ABOVE MATTER IN THE PRINCIPLE OF NATURAL JUSTICE. WE RE-ITERATE THAT SUCH OFFERING O F RS.3,85,00,000/- WAS MADE SUO MOTO AND TO BUY PEACE AND WAS NOT BACKED BY ANY EVIDENCE OF UNDISCLOSED INCOME OR ANY UNDISCLOSED ASSETS / ITEMS THAT HAD B EEN FOUND / INVENTORISED BY THE DEPARTMENT AND AS SUCH NO PENALTY U/S 271AAB SH OULD BE IMPOSED. THE SIMILAR VIEW HAS ALSO BEEN EXPRESSED BY THE HON'BLE HIGH COURT OF GUJARAT IN THE CASE OF GIRISH DEVCHAND RAJANI [2013] 33 TAXMAN N.COM 174 (GUJARAT) WHERE IT HAD BEEN HELD THAT WHERE ASSESSEE TO BUY P EACE AND TO AVOID PROTRACTED LITIGATION FILED REVISED RETURN DISCLOSI NG ADDITIONAL INCOME, IMPOSITION OF PENALTY UNDER SECTION 271(I)(C) UPON ASSESSEE ON PLEA THAT HE HAD FURNISHED INACCURATE PARTICULARS OF INCOME WAS NOT JUSTIFIED. FURTHER, IN THE CASE OF PUNJAB TYRES [1986] 162 ITR 517 (MADHYA PRADESH), THE HON'BLE HIGH COURT OF MADHYA PRADESH ALSO HELD THAT WHEN SURRENDER IS MADE TO PURCHASE PEACE OR FOR OTHER SIMILAR REASON, SURREND ER CANNOT AMOUNT TO ADMISSION, CONSTITUTING EVIDENCE OF CONCEALMENT IN PENALTY PRO CEEDINGS. ITA NO.1604, 1607 & 1610/KOL/201 & COS 96-98/K/2017 ASSESSMENT YEAR 2013-14 DCIT.CC-2(2), KOL. VS. AKA LOGISTICS P LTD., AMBEY MINING PVT. LTD. & M/S CALCUTTA INDUSTRIAL SUPPLY CROP. PAGE 6 WE ALSO RELY ON THE JUDGEMENT OF THE SUPREME COURT OF INDIA IN THE CASE OF DILIP N. SHROFF V. JT. CIT (2007) 291 ITR 519 (SC) WHEREIN I T WAS HELD THAT IMPOSITION OF PENALTY IS NOT AUTOMATIC. LEVY OF PENALTY IS NOT ON LY DISCRETIONARY IN NATURE, BUT SUCH DISCRETION IS REQUIRED TO BE EXERCISED ON THE PART OF THE ASSESSING OFFICER, KEEPING THE RELEVANT FACTORS IN MIND. IN THIS REGARD, WE WOULD LIKE TO STATE THAT ASSESSM ENT HAS BEEN COMPLETED BASED ON THE EXPLANATIONS GIVEN AND DOCUMENTS PRODUCED DURING TH E COURSE OF ASSESSMENT WITHOUT MAKING ANY FURTHER ADDITION ON THE GROUND OF DISCLO SURE. WE HAD BEEN A CO-OPERATIVE ASSESSEE DURING THE COURSE OF ASSESSMENT PROCEEDING . 7. I HAVE CONSIDERED THE FINDINGS GIVEN BY THE AO IN THE PENALTY ORDER SUBMISSIONS MADE BY THE AR DURING THE APPELLATE PROCEEDING. I F IND THAT THE AO HAS TAKEN THE UNDISCLOSED INCOME OF THE ASSESSEE FOUND DURING THE SEARCH OPERATION U/S 132 (FOR WHICH EVIDENCES, DOCUMENTS/PAPERS, STOCK, CASH ETC WERE FOUND) ALONG WITH THE AMOUNT DECLARED SUO MOTO BY THE ASSESSEE (FOR WHICH NO EVIDENCE, PAPERS/ DOCUMENTS, STOCK, CASH ETC WERE FOUND DURING THE SEARCH OPERAT ION) IN ORDER TO BUY PEACE OF MIND AND AVOID ANY FURTHER LITIGATION. THE ASSESSEE HAS BROUGHT ON RECORD THE CASE LAW OF DILIP N SHROFF VS CIT (2007) 291 ITR 519 (SC). IN T HIS CASE LAW THE HON'BLE SUPREME COURT HAS HELD THAT IMPOSITION OF PENALTY IS NOT AU TOMATIC. LEVY OF PENALTY IS NOT ONLY DISCRETIONARY IN NATURE, BUT SUCH DISCRETION IS REQ UIRED TO BE EXERCISED ON THE PART OF THE ASSESSING OFFICER KEEPING THE RELEVANT FACTORS IN MIND. THE AR HAS ALSO BROUGHT ON RECORD THE CASE OF PUBJAB TYRES (PUBJAB TYRES [1 986] 162 ITR 517 (MADHYA PRADESH), THE HON'BLE HIGH COURT OF MADHYA PRADESH) IN WHICH IT WAS HELD THAT WHEN SURRENDER IS MADE TO PURCHASE PEACE OR FOR OTHER SI MILAR REASON, SURRENDER CANNOT AMOUNT TO ADMISSION, CONSTITUTING EVIDENCE OF CONCE ALMENT IN PENALTY PROCEEDINGS. THE AR HAS BROUGHT ON RECORD THE CASE LAW OF SUDHAR SAN SILK AND SAREES, 300 ITR 30 (SUPREME COURT) IN THIS CASE, THE HON'BLE SUPREME C OURT HAS HELD THAT IF THE APPELLANT OFFERS ANY AMOUNT FOR TAXATION FOR THE PURPOSE OF P URCHASING PEACE AND ASSESSMENT HAS BEEN MADE BASED UPON THE AFORESAID OFFERINGS, E VEN IF NO ASSURANCE IN WRITING IS GIVEN BY THE SEARCHING PARTY, IT MAY BE CLEARLY INF ERRED THAT SUCH AN INDUCEMENT MUST HAVE BEEN GIVEN BY THE SEARCHING PARTY. WHEN ONLY P ARTIAL EVIDENCE OR NO EVIDENCE IN SUPPORT OF CONCEALMENT WAS DETECTED DURING THE SEAR CH, WHY WOULD A PERSON GO TO OFFER A HIGHER AMOUNT UNLESS HE WAS PROMISED SOME R ECIPROCAL BENEFITS LIKE NOT BEING VISITED BY PENALTY. THUS, IT WAS HELD THAT WHERE AD DITIONS HAVE BEEN MADE BASED ON ASSESSEE'S OWN OFFERINGS, PENALTY PROVISION SHALL N OT LIE. I FIND THAT DURING THE SEARCH AND SEIZURE OPERATION U/S 132 IN THIS CASE EVIDENCES REGARDING CONCEALMENT/UNDISCLOSED INCOME IN THE FOR M OF CASH SEIZURE/PAPERS/DOCUMENTS/STOCK ETC WERE FOUND AND S EIZED OF THE VALUE OF RS.17,00,000/- ONLY. NOTHING INCRIMINATING/NO EVIDE NCES WERE FOUND REGARDING RS.3,85,00,000/- WHICH WAS OFFERED FOR TAXATION BY THE ASSESSEE SUO MOTO IN ORDER TO BUY PEACE OF MIND. I ALSO FIND THAT NEITHER THE OFF ICERS IN THE INVESTIGATION WING IN THE POST SEARCH INVESTIGATION NOR THE ASSESSING OFFICER DURING ASSESSMENT PROCESS FOUND ANY DISCRIMINATING EVIDENCE OF UNDISCIOSED INCOME OTHER THAN THE STATEMENT OF THE ASSESSEE FOR MAKING THE ADDITION OF RS.3,85,00,000/ -. ITA NO.1604, 1607 & 1610/KOL/201 & COS 96-98/K/2017 ASSESSMENT YEAR 2013-14 DCIT.CC-2(2), KOL. VS. AKA LOGISTICS P LTD., AMBEY MINING PVT. LTD. & M/S CALCUTTA INDUSTRIAL SUPPLY CROP. PAGE 7 FURTHER I FIND THAT THE AO HAS LEVIED PENALTY U/S 2 71AAB (1)(A). THIS SECTION READS LIKE SUM COMPUTED AT THE RATE OF TEN PER CENT OF TH E UNDISCLOSED INCOME OF THE SPECIFIED PREVIOUS YEAR . 8. THUS, IT IS CLEAR THAT IN ORDER TO LEVY PENALTY TWO THINGS ARE ESSENTIAL (1) UNDISCLOSED INCOME AND (2) SPECIFIED PREVIOUS YEAR. HERE IN THI S CASE RS.3,85,000/- WAS OFFERED FOR TAXATION BY THE ASSESSEE SUO MOTO IN THE STATEM ENT RECORDED AT THE TIME OF SEARCH. FROM THE THE RATIO DECIDED BY THE HON'BLE SUPREME COURT IN THE CASE OF SUDARSHAN SILK & SARIES (SUPRA), IT IS CLEAR THAT ONLY THE ST ATEMENT OF THE ASSESSEE WITHOUT ANY CORROBORATING EVIDENCE CANNOT BE THE ONLY BASIS FO R LEVYING PENALTY. HERE IT IS ALSO CLEAR THAT FROM THE STATEMENT OF THE ASSESSEE ONE C ANNOT POINT OUT WHICH AMOUNT OF UNDISCLOSED INCOME PERTAINS TO WHICH SPECIFIED PREV IOUS YEAR. IN THIS SITUATION, WHERE NOTHING IS CLEAR FROM ASSESSEE'S STATEMENT RECORDED AT THE LIME OF SEARCH, THE ACTION OF THE AO TO LEVY PENALTY U/S 271AAB(1)(A) ON THE AMOU NT OFFERED BY THE ASSESSEE SUO MOTO TO BUY PEACE OF MIND, CANNOT BE JUSTIFIED. THE HON'BLE SUPREME COURT HAS ALSO CATEGORICALLY DECIDED THE RATIO THAT PENALTY CANNOT BE LEVIED ON THE AMOUNT OFFERED BY THE ASSESSEE IN ORDER TO BUY PEACE OF MIND [IN THE CASE OF SUDARSHAN SILK & SARIES (SUPRA)]. THUS, RESPECTFULLY FOLLOWING THE RATIO DE CIDED BY THE HON'BLE SUPREME COURT, THE AO IS DIRECTED TO CALCULATE AND LEVY PENALTY U/ S 271AAB(1)(A) ON RS.17,00,000/- ONLY. ACCORDINGLY, ASSESSEE'S APPEAL ON GROUNDS NO 1, 2 AND 3 ARE PARTLY ALLOWED. 7. WE NOW COME TO REVENUES THREE APPEALS. LEARNED CIT-DR VEHEMENTLY CONTENDS DURING THE COURSE OF HEARING THAT CIT(A) H AS ERRED IN LAW AND ON FACTS IN REVERSING THE ASSESSING OFFICERS ACTION IMPOSING U /S 271AB PENALT(IES) BASED ON IMPUGNED SEARCH IN ALL THREE CASES. HE SUBMITS THAT THE PURPOSE OF ABOVE SPECIAL PROVISION IS TO PENALIZE THE ASSESSEES IN WHOSE CAS ES THE DEPARTMENT CARRIES OUT SEARCH ACTION U/S 132 OF THE ACT. MR.NAYAK SUBMITS THAT IT IS NOWHERE NECESSARY FOR THE ASSESSING OFFICER TO ESTABLISH A DIRECT LINK BETWEE N THE INCRIMINATING MATERIAL OR MONEY, BULLION, JEWELLERY OR BOOKS OF ACCOUNT SO AS TO PROVE UNDISCLOSED INCOME OF THE SEARCHED-ASSESSEE AS STIPULATED U/S 271AAB EXPL ANATION (C) OF THE ACT. HIS CONTENTION; IF TAKEN IN PLAIN TERMS, IS THAT THE IM PUGNED PENAL PROVISION COMES INTO PLAY THE MOMENT THE SEARCHED-ASSESSEE DECLARES ANY ADDITIONAL INCOME. THE REVENUE FURTHER PLEADS THAT IMPUGNED PENAL PROVISION AUTOMA TICALLY APPLIES IN A SEARCH INSTANCE INVOLVING DECLARATION OF ADDITIONAL INCOME AS PER HON'BLE APEX COURT [2018] 93 TAXMANN.COM 406 (SC) SANDEEP CHANDAK VS. PCIT C ONTAINING THE RELEVANT HEAD- NOTE TO THIS EFFECT. LEARNED CIT-DR CASE THEREFORE IS THAT HON'BLE APEX COURTS DECISION SETTLES THE LAW AND THEREFORE, WE OUGHT TO CONFIRM THE IMPUGNED PENALT(IES) IN ALL THREE CASES. 8. THESE THREE ASSESSEES PLACE A VERY STRONG RELIAN CE ON THE CIT(A)S FINDINGS THAT THE IMPUGNED PENALT(IES) COULD ONLY BE LEVIED IF T HE UNDISCLOSED INCOME IN ISSUE IS ITA NO.1604, 1607 & 1610/KOL/201 & COS 96-98/K/2017 ASSESSMENT YEAR 2013-14 DCIT.CC-2(2), KOL. VS. AKA LOGISTICS P LTD., AMBEY MINING PVT. LTD. & M/S CALCUTTA INDUSTRIAL SUPPLY CROP. PAGE 8 FOUND TO HAVE BEEN DERIVED FROM THE SPECIFIED CATEG ORIES OF ASSETS I.E. MONEY, BULLION, JEWELLERY, OTHER VALUABLE ARTICLES OR THINGS OR BOO KS OF ACCOUNT REVEALING ALIKE MATERIAL TO THIS EFFECT. MR.TIBREWAL SUBMITS THAT SEC. 271AA B EXPLANATION (C) DEFINES UNDISCLOSED INCOME OF THE SEARCHED-ASSESSEES ON THESE LINES ONLY. HE QUOTES TRIBUNALS VARIOUS CO-ORDINATE BENCHES DECISIONS IN ACIT VS. KANWAR SAIN GUPTA ITA NO.538/KOL/2017 DECIDED ON 29.06.2018, DCIT VS. LIL ADHAR AGARWALA ITA NO.1605/KOL/2017 & CO 99/KOL/2017 DECIDED ON 26.12. 2018, PCIT VS. SMT RITU SINGAL 92 TAXMANN.COM 224 (DEL) (2018) ACIT VS. MAR VEL ASSOCIATES [2018] 92 TAXMANN.COM 109 (VIZAG ITAT) DCIT VS. SUBHAS CHAND RA AGARWALA & SONS (HUF) ITA NO.1470/KOL/2015 AND MANY OTHER SIMILAR DECISIONS ECHOING THE VERY PRINCIPAL. THE ASSESSEE FURTHER PLEADED THAT WE ARE DEALING WI TH A PENALTY PROVISION IN THE FISCAL STATUTE WHICH CAN NEVER BE TAKEN AS AUTOMATIC. MR. TIBREWALS NEXT ARGUMENT SEEKS TO DISTINGUISH HON'BLE APEX COURTS (SUPRA) THAT THEIR LORDSHIPS HAVE NOWHERE HELD IMPOSITION THE IMPUGNED PENALTY TO BE AUTOMATIC FOL LOWING THE CORRESPONDING ASSESSMENT(S). HE THEREFORE URGES US TO CONFIRM THE CIT(A)S FINDINGS DELETING THE IMPUGNED PENALT(IES) FORMING SUBJECT-MATTER ALL THR EE REVENUES APPEALS. 9. WE HAVE GIVEN OUR THOUGHTFUL CONSIDERATION TO RI VAL CONTENTIONS. THERE IS HARDLY ANY DISPUTE BETWEEN THE PARTIES ABOUT THE BA SIC FACTS INTER ALIA THAT THE DEPARTMENT HAD CONDUCTED THE IMPUGNED SEARCH IN THE SE THREE ASSESSEES CASES WHEREIN THEY DECLARED THEIR RESPECTIVE ADDITIONAL I NCOMES THEY FILED THEIR RESPECTIVE RETURNS ACCORDINGLY INCLUDING SAID ADDITIONAL INCOM ES THEREIN. THE ASSESSING OFFICER ACCEPTED THE SAME IN CONSEQUENTIAL ASSESSMENTS. THE SOLE DISPUTE BETWEEN THE PARTIES HEREIN IS ABOUT OPERATION OF THE IMPUGNED PENAL PRO VISION I.E. SECTION 271AAB OF THE ACT. THE REVENUES CASE BEFORE US IS THAT IT AUTOMA TIC COMES INTO PLAY THE MOMENT THE SEARCHED-ASSESSEE MAKES ANY DISCLOSURE OF UNDISCLOS ED INCOME WHEREAS THE ASSESSEE PLEADS THAT THIS PENAL PROVISION APPLIES IN CASE TH E SEARCH ITSELF LEADS TO SOME SPECIFIED MATERIAL INDICATING UNDISCLOSED INCOME DEFINED IN S EC. 271AAB EXPLANATION (C) OF THE ACT. THE REVENUE ADMITTEDLY RAISES ITS ARGUMENT S AS PER HON'BLE APEX COURTS DECISION IN SANDEEP CHANDAK (SUPRA) DECLINING THE TAXPAYERS SPECIAL LEAVE PET ITION IN LIMINE CHALLENGING HON'BLE ALLAHABAD HIGH COURTS DECISIO N REVIVING THE PENALTY ITA NO.1604, 1607 & 1610/KOL/201 & COS 96-98/K/2017 ASSESSMENT YEAR 2013-14 DCIT.CC-2(2), KOL. VS. AKA LOGISTICS P LTD., AMBEY MINING PVT. LTD. & M/S CALCUTTA INDUSTRIAL SUPPLY CROP. PAGE 9 THEREIN. THE REVENUES CASE APPEARS TO BE CARRYING SUBSTANCE AB INITIO THAT AS PER HON'BLE APEX COURTS CLINCHING OBSERVATIONS WHILST DECLINING ASSESSEES SPECIAL LEAVE PETITION THAT NO GROUND WAS MADE OUT TO INTERFERE W ITH THE HON'BLE HIGH COURTS JUDGMENT UNDER CHALLENGE. IT DOES NOT STAND ON THE CORRECT SIDE OF LAW WHEN WE CAREFULLY STUDY IN ALL THESE LEGAL DEVELOPMENTS. WE FIND THAT THE TRIBUNALS CO-ORDINATE BENCHS ORDER IN SANDEEP CHANDAK VS. ACIT (2017) 185 TTJ 265 (LUC) HAD DELETED SEC. 271AAB PENALTY IN ISSUE PRIMARILY FOR THE REAS ONS THAT THE ASSESSING OFFICER SERVED ONLY U/S. 271(1)(C) PENALTY NOTICES, GRANTED VERY SHORT TIME TO THE TAXPAYER BEFORE LEVYING THE IMPUGNED PENALTY. IT THEN OBSERV ED THAT THE ASSESSING OFFICER HAD NOT APPLIED U/S 271AAB EXPLANATIONS CLAUSE (A) TO ( C) AS WELL IN THE GIVEN FACTS AND CIRCUMSTANCES. THE REVENUE PREFERRED ITS APPEAL BEF ORE HON'BLE ALLAHABAD HIGH COURT FINALLY CULMINATING IN JUDGMENT REPORTED AS (2018) 93 TAXMANN.405 (ALL) PCIT VS. SANDEEP CHADAK. IT RAISED THREE SUBSTANTIAL QUESTIO N OF LAW IN ITS APPEAL AS FOLLOWS:- (A) WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE C ASE AND IN LAW, THE LD. ITAT HAS ERRED IN NOT APPRECIATING THE FACTS THAT THE NOTICE WAS ISSUED FOR IMPOSITION OF PENALTY U/S. 271AAB AND NOT FOR IMPOSITION OF PENALTY U/S 2 71(A)(C) OF THE ACT.? (B) WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE C ASE AND IN LAW, THE LD. ITAT HAS ERRED IN NOT APPRECIATING THE FACTS THAT THE SPECIF IC CHARGE HAVE IN A STATEMENT UNDER SUB SECTION 4 OF SECTION 132 DURING THE COURSE OF S EARCH AND SEIZURE OPERATION ADMITTED UNDISCLOSED INCOME WAS MENTIONED IN THE NO TICE? (C) WHETHER THE BENEFIT OF SECTION 292BB WAS CORREC TLY DENIED TO THE AO/APPELLANT BY THE ITIAT? 10. IT IS IN THIS FACTUAL BACKDROP THAT HON'BLE HIG H COURT HAD HELD THAT THE ASSESSING OFFICER HAD ISSUED THE RELEVANT NOTICE U/S 271(1)(C ) R.W.S. 274 CONTAINING ALL PARTICULARS AND SECTION 292B OF THE ACT WOULD APPLY SINCE THE ASSESSEE HAD NEVER OBJECTED CORRECTNESS THEREOF BEFORE THE ASSESSING O FFICER IN CORRESPONDING PROCEEDINGS AND HAD IN FACT RESPOND TO THE NOTICE I N WRITING WITH AN UNDERTAKING THAT THIS WAS THE NOTICE ISSUED BY THE ASSESSING OFFICER U/S 271AAB OF THE ACT. IN OTHER WORDS, THE ASSESSEE HAD NOT CONTENDED THAT THE IMPU GNED NOTICE WAS ISSUED U/S 271(1)(C) R.W.S. 274 IN ITS REPLY AND WAS CLEAR THA T THE NOTICE WAS ISSUED TO LEVY PENALTY U/S 271AAB OF THE ACT. IT IS THUS CLEAR THA T THE CIT-DRS ARGUMENT THAT THE REVENUE HAS ALREADY SUCCEEDED ON THE ISSUE AS TO WH ETHER THE IMPUGNED PENALTY IS AUTOMATICALLY FLOWS THAN FROM THE ADDITIONAL INCOME DECLARATION MADE DURING SEARCH; ITA NO.1604, 1607 & 1610/KOL/201 & COS 96-98/K/2017 ASSESSMENT YEAR 2013-14 DCIT.CC-2(2), KOL. VS. AKA LOGISTICS P LTD., AMBEY MINING PVT. LTD. & M/S CALCUTTA INDUSTRIAL SUPPLY CROP. PAGE 10 DOES NOT FIND SUPPORT FROM THE HON'BLE HIGH COURTS DISCUSSION. WE THEREFORE GO BY VARIOUS CO-ORDINATE BENCHES DECISIONS (SUPRA) IN T HESE FACTS AND CIRCUMSTANCES TO CONFIRM THE CIT(A)S ACTION DELETING THE IMPUGNED P ENALT(IES) TO THE EXTENT INDICATED HEREINABOVE FORMING PART OF SUBJECT-MATTER OF ADJUD ICATION OF THESE THREE REVENUES APPEALS HOLDING THAT SEC. 271AAB COMES INTO PLAY IN CASE OF CORRESPONDING MATERIAL ONLY THAN AUTOMATIC IN CASE OF A SEARCH. WE WISH TO REITERATE HERE IN THESE FACTS THAT THE TRIBUNALS DECISIONS (SUPRA) HAVE ALREADY HELD THAT SEC. 271AAB PENALTY APPLIES IN CASE OF ADDITIONAL INCOME DEFINED UNDER EXPLANATION (C) OF THE ACT. WE THEREFORE DECLINE REVENUES THREE APPEALS. THE ASSESSEES CRO SS OBJECTIONS NO. 96 & 98/KOL/2017 SUPPORTING THE CIT(A)S ORDER TO THIS E XTENT ARE RENDERED INFRUCTUOUS. 11. WE NOW ADVERT TO SECOND ASSESSEES CROSS OBJECT ION NO.97/KOL/2017 CHALLENGING CORRECTNESS OF THE SUSTAINED PENALTY CO MPONENT TO THE EXTENT 17 LAC (SUPRA) BASED ON INCRIMINATING MATERIAL FOUND / SEI ZED DURING SEARCH. ITS FIRST ARGUMENT IS THAT THE RELEVANT PENALTY NOTICE NOWHERE INDICAT ED AS TO UNDER WHICH LIMB THE ASSESSING OFFICER HAD INITIATED THE IMPUGNED PENALT Y PROCEEDINGS IS NOT SUSTAINABLE. WE FIND THIS FIRST ARGUMENT TO BE DEVOID OF ANY MER IT SINCE THE ASSESSING OFFICER MADE IT CLEAR IN ASSESSMENT ORDER DATED 06.06.2014 THAT HE HAD ALREADY INITIATED U/S 271AAB PROCEEDINGS. HON'BLE ALLHABAD HIGH COURTS D ECISION (SUPRA) INVOLVED SUCH AN ISSUE WHEREIN THEIR LORDSHIPS MADE IT CLEAR THAT THESE PROCEEDINGS ARE AUTOMATIC IN CASE OF SEARCH FOLLOWED BY SEC. 132(4) STATEMENT I NVOLVING ADMISSION OF UNDISCLOSED INCOME. THE ASSESSEES FIRST ARGUMENT IS REJECTED T HEREFORE. 12. MR. TIBREWAL THEREAFTER FILES A WRITTEN NOTE RA ISING YET ANOTHER LEGAL PLEA AS FOLLOWS:- 4. PENALTY UNDER SECTION 271AAB COULD BE LEVIED ON ' UNDISCLOSED INCOME ' OF THE 'SPECIFIED PREVIOUS YEAR'. THE FIRST CLAUSE (I) REF ERS TO INCOME OF THE SPECIFIED PREVIOUS YEAR REPRESENTED BY - (I) ANY MONEY, BULLION, JEWELLERY OR OTHER VALUAB LE ARTICLE OR THING, OR (II) ANY ENTRY IN THE BOOKS OF ACCOUNTS OR OTHER DOCUMENTS OR TRANSACTIONS FOUND IN THE COURSE OF SEARCH U/S 132 OF THE ACT AN D WAS NOT RECORDED IN THE BOOKS OF ACCOUNTS OR OTHER DOCUMENTS OR TRANSACTIONS MAINTAI NED IN THE NORMAL COURSE RELATING TO SUCH PREVIOUS YEAR. ITA NO.1604, 1607 & 1610/KOL/201 & COS 96-98/K/2017 ASSESSMENT YEAR 2013-14 DCIT.CC-2(2), KOL. VS. AKA LOGISTICS P LTD., AMBEY MINING PVT. LTD. & M/S CALCUTTA INDUSTRIAL SUPPLY CROP. PAGE 11 THE SECOND CLAUSE (II) REFERS TO INCOME OF THE SPEC IFIED PREVIOUS YEAR REPRESENTED, EITHER WHOLLY OR PARTLY, BY AN ENTRY IN RESPECT OF AN EXPENSES RECORDED IN THE BOOKS OF ACCOUNTS OR OTHER DOCUMENTS MAINTAINED IN THE NORMA L COURSE RELATING TO THE SPECIFIED PREVIOUS YEAR WHICH IS FOUND TO BE FALSE AND WOULD NOT HAVE BEEN FOUND TO BE SO HAD THE SEARCH NOT BEEN CONDUCTED. 4.2 IT IS ALSO SUBMITTED THAT IN THE FIRST CLAUSE T HE UNDISCLOSED INCOME IS REPRESENTED BY AN ASSET OR AN ENTRY IN THE BOOKS OF ACCOUNTS OR DOCUMENTS MAINTAINED FOR SUCH PREVIOUS YEAR, WHEREAS IN THE SECOND CLAUSE THE UND ISCLOSED INCOME IS REPRESENTED BY SOME FALSE ENTRY OF EXPENSES RECORDED IN THE BOOKS OF ACCOUNTS OR DOCUMENTS OF THE SPECIFIED PREVIOUS YEAR. THUS IN CLAUSE (I) AND CLA USE (II) OF EXPLANATION (C) TO SECTION 271AAB TWO DIFFERENT WORDS BEING ' PREVIOUS YEAR ' AND 'SPECIFIED PREVIOUS YEAR' HAVE BEEN USED. IT IS SUBMITTED THAT WHEN DIFFERENT WORDS OR PHRASES ARE USED AT DIFFERENT PLACES MORE PARTICULARLY IN THE SAME SECT ION OF THE STATUTE, IT CARRIES DIFFERENT INTERPRETATION AND DIFFERENT MEANING OF THE SAME. D IFFERENT WORDS OR PHRASES USED AT DIFFERENT PLACES IN SECTION 271AAB HAVE BEEN HIGHLI GHTED TO EXPLAIN THE MEANING OF THE TWO PHRASES USED AT TWO PLACES. 4.3 THE APPELLANT REFERS TO THE JUDGEMENT OF HON'BL E ANDHRA PRADESH HIGH COURT IN THE CASE OF MADHUCON PROJECTS LTD. VS. CCE FOR SETT LEMENT COMMISSION [2016] 72 TAXMANN.COM 71 (AP), WHICH PROVIDES AT PARA 50 THAT TWO DIFFERENT EXPRESSIONS IN A STATUTE MUST BE CONSTRUED TO CARRY DIFFERENT MEANIN GS. 4.4 THE RELEVANCE OF THE PHRASE ' IN WHICH SEARCH WAS CONDUCTED ' USED IN DEFINITION OF ' SPECIFIED PREVIOUS YEAR ' WOULD BE FOUND FROM READING OF CLAUSE (II) OF EXPLANATION (C) BELOW SECTION 271AAB OF THE ACT. TH ERE THE WORDS ' SPECIFIED PREVIOUS YEAR ' HAS BEEN USED FOR THE PURPOSES OF LEVY OF PENALTY UNDER SECTION 271AAB OF THE ACT. THUS IF IT IS FOUND THAT THE ASS ESSEE HAS MADE SOME CLAIM OF BOGUS EXPENDITURE IN THE BOOKS OF ACCOUNTS OF THE YEAR IN WHICH SEARCH IS CONDUCTED AND/OR IN THE BOOKS OF ACCOUNTS OF THE PREVIOUS YEAR FOR W HICH THE PREVIOUS YEAR HAS ENDED BUT THE DUE DATE OF FURNISHING THE RETURN OF INCOME HAS NOT EXPIRED AND THE ASSESSEE HAS NOT FURNISHED THE RETURN OF INCOME, IN THOSE CA SES PENALTY COULD BE LEVIED IN AS MUCH AS THE PHRASE ' SPECIFIED PREVIOUS YEAR ' HAS BEEN USED IN CLAUSE (II) TO EXPLANATION (C) BELOW SECTION 271AAB OF THE ACT. 4.5 ON THE OTHER HAND THE WORDS SUCH PREVIOUS YEAR HAVE BEEN USED IN CLAUSE (I) OF EXPLANATION (C) TO SECTION 271MB OF THE ACT. THE WO RD ' PREVIOUS YEAR ' HAS BEEN DEFINED IN SECTION 3 OF THE INCOME TAX ACT, 1961 AS UNDER: '3. FOR THE PURPOSES OF THIS ACT, ' PREVIOUS YEAR ' MEANS THE FINANCIAL YEAR IMMEDIATELY PRECEDING THE ASSESSMENT YEAR: PROVIDED THAT, IN THE CASE OF A BUSINESS OR PROFESS ION NEWLY SET UP, OR A SOURCE OF INCOME NEWLY COMING INTO EXISTENCE, IN THE SAID FINANCIAL YEAR, THE PREVIOUS YEAR SHALL BE THE PERIOD BEGINNING WITH THE DATE OF SETTING UP OF THE BUSINESS OR PROFESSION OR, AS THE CASE MAY BE, THE DATE ON WHIC H THE SOURCE OF INCOME NEWLY COMES INTO EXISTENCE AND ENDING WITH THE SAID FINANCIAL YEAR.' THUS ' PREVIOUS YEAR ' AND 'SPECIFIED PREVIOUS YEAR' CARRY DIFFERENT MEA NINGS FOR TWO DIFFERENT SITUATIONS AS STATED HEREIN ABOVE. THE WO RDS 'PREVIOUS YEAR' HAS BEEN USED IN CLAUSE (I) OF EXPLANATION (B) OF SECTION 271AAB OF THE ACT TO MEAN THE PREVIOUS YEAR WHICH HAS ENDED BEFORE THE DATE OF SEARCH FOR WHICH THE RETURN OF INCOME HAS NOT ITA NO.1604, 1607 & 1610/KOL/201 & COS 96-98/K/2017 ASSESSMENT YEAR 2013-14 DCIT.CC-2(2), KOL. VS. AKA LOGISTICS P LTD., AMBEY MINING PVT. LTD. & M/S CALCUTTA INDUSTRIAL SUPPLY CROP. PAGE 12 BEEN FURNISHED BY THE ASSESSEE AND THE DUE DATE OF FURNISHING THE RETURN OF INCOME HAS NOT BEEN EXPIRED. IF THE STATUTE INTENDED TO LEVY P ENALTY UNDER SECTION 271AAB OF THE ACT IN RESPECT OF MONEY, BULLION, JEWELLERY OR OTHE R VALUABLE ARTICLE OR THING OR ANY ENTRY IN THE BOOKS OF ACCOUNTS OR OTHER DOCUMENT RE CORDED IN THE BOOKS OF ACCOUNTS IN RESPECT OF THE PREVIOUS YEAR IN WHICH SEARCH WAS CO NDUCTED THEN IN CLAUSE (I) OF EXPLANATION (B) OF SECTION 271MB THE WORDS ' SPECIFIED PREVIOUS YEAR ' WOULD HAVE BEEN USED WHICH WORDS HAVE BEEN USED IN CLAUSE (II) OF EXPLANATION (B) OF SECTION 271AAB OF THE ACT. 13. WE HAVE GIVEN OUR THOUGHTFUL CONSIDERATION TO R IVAL CONTENTIONS. IT TRANSPIRES FROM THE CASE FILE FIRST OF ALL THAT THE ASSESSEES AUTHORIZED SIGNATORY, SHRI NARAYAAN PRASAD AGARWALA HAD MADE THE IMPUGNED ADDITIONAL IN COME DISCLOSURE TO THE ADIT(INV) THAT THE SAID INCOME WAS IN THE NATURE OF CASH TO THE TUNE OF 17 LAC IN RELATION TO FINANCIAL YEAR 2012-13 CORRESPONDING T O THE IMPUGNED ASSESSMENT YEAR 2013-14. WE REITERATE THAT SEARCH IN ISSUE IS DATED 20.12.2012. THE ASSESSEES CASE ADMITTEDLY DOES NOT COME UNDER THE FORMER DEFINITIO N OF THE SPECIFIED PREVIOUS YEAR SINCE THE DUE DATE FOR FILING RETURN U/S. 139(1) OF THE ACT FOR PRECEDING ASSESSMENT YEAR 2012-13 HAD ELAPSED ON 30.09.2012.THE ABOVE CASH SU M; COMING UNDER THE CONNOTATION OF ANY MONEY U/S.271AAB EXPLANATION ( C)(I); STOOD ASSESSED IN THE IMPUGNED ASSESSMENT YEAR 2013-14. WE OBSERVE IN THE SE FACTS AND CIRCUMSTANCES THAT THE ASSESSEES ABOVE EXTRACTED ARGUMENT SEEKING TO TAKE ADVANTAGE OF THE SPECIFIED PREVIOUS YEAR DEFINITION VIS-A-VIS UNDISCLOSED INC OME DECLARED DOES NOT CARRY ANY SUBSTANCE. 14. LASTLY COMES ASSESSEES RELIANCE OF THIS TRIBUN AL CO-ORDINATE BENCHS DECISION IN SANJAY DATTATRAY KAKADE VS. ACIT ITA NO.932/PUN/2013 . LEARNED CO-ORDINATE BENCH DEALT WITH A SEARCH DATED 11.02.2009 CONCLUDED ON 0 3.04.2009 WHEREIN THE ASSESSING OFFICER HAD INVOKED SEC. 271AAA FOR ASSESSMENT YEAR 2009-10. THE LEARNED CO- ORDINATE BENCH HELD IN THESE FACTS AND CIRCUMSTANCE S THAT SPECIFIED PREVIOUS YEAR COULD NOT BE TAKEN TO BE ASSESSMENT YEAR 2009-10 AS FOLLOWS:- 2. BRIEFLY STATED, THE FACTS OF THE CASE ARE THAT A SEARCH AND SEIZURE ACTION U/S.132 OF THE ACT WAS TAKEN UPON THE ASSESSEE ON 11-02-2009. RETURN WAS FILED ON 30.09.2010 DECLARING TOTAL INCOME OF RS.26,21,24,080/-. THE AO ASSESSED THE TOTAL INCOME AT RS.28,20,70,090/-. PENALTY OF RS.57,70,620/- WAS IM POSED U/S.271 AAA ON THE UNDISCLOSED INCOME OF RS.5,77,06,205/-. THE ID. CIT (A) DISMISSED THE APPEAL OF THE ASSESSEE AND ALSO MADE AN ENHANCEMENT OF PENALTY ON A FURTHER INCOME OF ITA NO.1604, 1607 & 1610/KOL/201 & COS 96-98/K/2017 ASSESSMENT YEAR 2013-14 DCIT.CC-2(2), KOL. VS. AKA LOGISTICS P LTD., AMBEY MINING PVT. LTD. & M/S CALCUTTA INDUSTRIAL SUPPLY CROP. PAGE 13 RS.2,07,46,005/-, ON WHICH THE AO HAD CHOSEN NOT TO IMPOSE PENALTY UNDER THIS SECTION. AGGRIEVED THEREBY, THE ASSESSEE IS IN APPE AL BEFORE THE TRIBUNAL. 3. WE HAVE HEARD THE RIVAL SUBMISSIONS AND GONE THR OUGH THE RELEVANT MATERIAL ON RECORD. THE ASSESSEE RAISED CERTAIN GROUNDS IN THE MEMORANDUM OF APPEAL. THEREAFTER, CERTAIN ADDITIONAL GROUNDS WERE FILED AND EVENTUALL Y MODIFIED ADDITIONAL GROUNDS OF APPEAL WERE FILED, CHALLENGING THE IMPUGNED ORDER O N CERTAIN LEGAL ISSUES AS WELL AS ON MERITS. 4. WE WILL FIRST ESPOUSE THE LEGAL ISSUES URGED ON BEHALF OF THE ASSESSEE IN SERIATIM. THE FIRST LEGAL ISSUE TAKEN UP BY THE ID. AR IS THA T THE PENALTY U/S.271 AAA BE DELETED AS THE SAME CAN BE IMPOSED ONLY IN RESPECT OF 'SPEC IFIED PREVIOUS YEAR' AND THE ASSESSMENT YEAR 2009-10 UNDER CONSIDERATION, CANNOT BE SO CONSTRUED. IN HIS OPINION, THE ASSESSMENT YEAR 2008-09 WAS THE CORRECT 'SPECIF IED PREVIOUS YEAR' IN TERMS OF EXPLANATION (B)(I) TO SECTION 271AAA OF THE ACT AND FURTHER THAT SUB-CLAUSE (II) OF THE EXPLANATION (B) WAS NOT ATTRACTED IN THE PRESENT CA SE. THIS CONTENTION WAS STRONGLY COUNTERED BY THE ID. DR. 5. IT IS SEEN FROM THE ASSESSMENT ORDER THAT THE SE ARCH IN THIS CASE WAS INITIATED ON 11- 02-2009. THE ID. AR HAS INVITED OUR ATTENTION TOWAR DS THE LAST PANCHNAMA, A COPY OF WHICH HAS BEEN PLACED ON PAGE 19 ONWARDS OF THE PAP ER BOOK, WHICH IS DATED 03-04- 2009. THE DATES OF INITIATION AND CONCLUSION OF SEA RCH HAVE NOT BEEN DENIED ON BEHALF OF THE REVENUE. IT IS THUS PALPABLE THAT THE SEARCH IN THIS CASE COMMENCED ON 11-02- 2009, WHICH IS PRIOR TO THE CLOSURE OF THE FINANCIA L YEAR ENDING 31-03-2009 AND COMPLETED ON 03-04-2009, WHICH IS AFTER THE CLOSURE OF THE FINANCIAL YEAR ENDING 31- 03-2009. THE QUESTION WHICH LOOMS LARGE BEFORE US I S TO DETERMINE ' SPECIFIED PREVIOUS YEAR ' IN TERMS OF EXPL. (B)(I) TO SECTION 271 AAA OF TH E ACT, WHICH IN THE OPINION OF THE ID. AR SHOULD BE RECKONED FROM THE DATE OF COMM ENCEMENT OF SEARCH, I.E. 11-02- 2009, WHEREAS THE REVENUE IS CONTENDING THAT THE SA ME SHOULD BE CONSIDERED FROM 03- 04-2009, BEING THE DATE ON WHICH THE SEARCH WAS CON CLUDED. IN ORDER TO APPRECIATE THE RIVAL CONTENTIONS, IT WOULD BE APT TO NOTE DOWN THE DEFINITIONS CONTAINED IN EXPLANATION BELOW SUB-SECTION (4) OF SECTION 271AAA , WHICH READ AS UNDER :- 'EXPLANATION.-FOR THE PURPOSES OF THIS SECTION,- (A) ' UNDISCLOSED INCOME ' MEANS- (I) ANY INCOME OF THE SPECIFIED PREVIOUS YEAR REPRE SENTED, EITHER WHOLLY OR PARTLY, BY ANY MONEY, BULLION, JEWELLERY OR OTHE R VALUABLE ARTICLE OR THING OR ANY ENTRY IN THE BOOKS OF ACCOUNT OR OTHER DOCUMENTS OR TRANSACTIONS FOUND IN THE COURSE OF A SEARCH UNDER SECTION 132, WHICH HAS- (A) NOT BEEN RECORDED ON OR BEFORE THE DATE OF SEAR CH IN THE BOOKS OF ACCOUNT OR OTHER DOCUMENTS MAINTAINED IN THE NORMAL COURSE RELATING TO SUCH PREVIOUS YEAR; OR (B) OTHERWISE NOT BEEN DISCLOSED TO THE CHIEF COMMI SSIONER OR COMMISSIONER BEFORE THE DATE OF SEARCH; OR (II) ANY INCOME OF THE SPECIFIED PREVIOUS YEAR REPR ESENTED, EITHER WHOLLY OR PARTLY, BY ANY ENTRY IN RESPECT OF AN EXPENSE RECOR DED IN THE BOOKS OF ACCOUNT OR OTHER DOCUMENTS MAINTAINED IN THE NORMAL COURSE RELATING TO THE SPECIFIED PREVIOUS YEAR WHICH IS FOUND TO BE FALSE AND WOULD NOT HAVE BEEN FOUND TO BE SO HAD THE SEARCH NOT BEEN CONDUCTED; (B) ' SPECIFIED PREVIOUS YEAR ' MEANS THE PREVIOUS YEAR- ITA NO.1604, 1607 & 1610/KOL/201 & COS 96-98/K/2017 ASSESSMENT YEAR 2013-14 DCIT.CC-2(2), KOL. VS. AKA LOGISTICS P LTD., AMBEY MINING PVT. LTD. & M/S CALCUTTA INDUSTRIAL SUPPLY CROP. PAGE 14 (I) WHICH HAS ENDED BEFORE THE DATE OF SEARCH, BUT THE DATE OF FILING THE RETURN OF INCOME UNDER SUB-SECTION (1) OF SECTION 1 39 FOR SUCH YEAR HAS NOT EXPIRED BEFORE THE DATE OF SEARCH AND THE ASSES SEE HAS NOT FURNISHED THE RETURN OF INCOME FOR THE PREVIOUS YEAR BEFORE T HE SAID DATE; OR (II) IN WHICH SEARCH WAS CONDUCTED.]' (SOME PARTS ITALICIZED BY US) 6. SUB-SECTION (1) OF SECTION 271 AAA PROVIDES THAT PENALTY SHALL BE COMPUTED @ 10% OF THE UNDISCLOSED INCOME OF THE ' SPECIFIED PREVIOUS YEAR ' WHERE SEARCH IS INITIATED AFTER 01-06-2007 BUT BEFORE 01-07-2012. S UB-SECTION (3) OF SECTION 271 AAA PROVIDES THAT IN CASE PENALTY IS IMPOSED UNDER SUB- SECTION (1), THEN THE PROVISIONS OF SECTION 271(1)(C) SHALL NOT APPLY IN RESPECT OF SUC H UNDISCLOSED INCOME. WHEN WE CONSIDER THE PROVISIONS OF SECTION 271(1)(C) IN JUX TAPOSITION TO SECTION 271AAA, IT IS MANIFESTED THAT IN CASE OF A SEARCH, PENALTY IS IMP OSED U/S.271AAA ON THE UNDISCLOSED INCOME OF THE ' SPECIFIED PREVIOUS YEAR ' AND PENALTY U/S.271(1)(C) IS IMPOSED WITH REFERENCE TO OTHER YEARS COVERED UNDER SEARCH ASSESSMENTS. SEARCH IN THE EXTANT CASE WAS CONDUCTED IN THE YEAR 2009, WHI CH UNDOUBTEDLY FALLS WITHIN THE PERIOD STIPULATED IN SUB-SECTION (1) OF SECTION 271 AAA. IN SUCH A SCENARIO, PENALTY IS LIABLE TO BE IMPOSED ON UNDISCLOSED INCOME OF THE ' SPECIFIED PREVIOUS YEAR' U/S 271 AAA ALONE. THE AO HAS TREATED ASSESSMENT YEAR 2009-10 AS THE ' SPECIFIED PREVIOUS YEAR' AND IMPOSED THE INSTANT PENALTY. 7. NOW THE QUESTION ARISES ABOUT THE DETERMINATION OF THE 'SPECIFIED PREVIOUS YEAR' AS PER SUB-CLAUSE (I) OF THE EXPLANATION (B) TO SECTIO N 271AAA, WHICH PROVIDES THAT A 'SPECIFIED PREVIOUS YEAR' MEANS A 'PREVIOUS YEAR' W HICH HAS ENDED BEFORE THE DATE OF SEARCH, BUT THE DATE OF FILING THE RETURN OF INCOME U/S.139(L) FOR SUCH YEAR HAS NOT EXPIRED BEFORE THE DATE OF SEARCH AND THE ASSESSEE HAS NOT FURNISHED HIS RETURN OF INCOME FOR THAT PREVIOUS YEAR BEFORE THE SAID DATE. THE CONTROVERSY IN THIS REGARD IS TO FIND OUT THE MEANING OF THE TERMS ' DATE OF SEARCH '. WHEREAS THE CASE OF THE ASSESSEE IS THAT THE EXPRESSION ' DATE OF SEARCH ' AS EMPLOYED IN EXPL. (B) (I) MEANS THE DATE OF INITIATION OR COMMENCEMENT OF SEARCH, THE REVENUE H AS CANVASSED A VIEW THAT IT REFERS TO THE DATE OF CONCLUSION OR COMPLETION OF SEARCH. IF WE CONSIDER THE DATE OF INITIATION AS THE DATE OF SEARCH, WHICH IN THE INSTANT CASE IS 11-02-2009, THEN THE ' SPECIFIED PREVIOUS YEAR ' WOULD BE THE PREVIOUS YEAR WHICH ENDED ON 31-03-2 008 AND THE RELEVANT ASSESSMENT YEAR WOULD BE 2008-09 AND IF WE GO WITH THE REVENUE AND TAKE THE DATE OF CONCLUSION OF SEARCH AS THE DATE OF SEA RCH, WHICH IS 3.4.2009, THEN THE ' SPECIFIED PREVIOUS YEAR ' WOULD BE THE PREVIOUS YEAR WHICH ENDED ON 31-03-2 009 AND THE RELEVANT ASSESSMENT YEAR WOULD BE 2009-10. 8. NORMALLY, THERE ARE THREE STAGES IN CASE OF A SE ARCH. FIRST IS THE INITIATION OF PROCESS OF SEARCH; SECOND IS THE INITIATION OF SEARCH; AND THIRD IS CONCLUSION OF SEARCH. SECTION 132(1) OF THE ACT PROVIDES THAT WHERE PRINCIPAL DIR ECTOR GENERAL ETC., IN CONSEQUENCE OF THE INFORMATION IN HIS POSSESSION, HAS REASON TO BELIEVE THE EXISTENCE OF ONE OF THE THREE CONDITIONS, SUCH AS, ANY PERSON IS IN POSSESS ION MONEY, BULLION, JEWELLERY OR OTHER VALUABLE ARTICLE OF THING ETC. AND SUCH MONEY , BULLION, JEWELLERY ETC., REPRESENTS EITHER WHOLLY OR PARTLY INCOME WHICH HAS NOT BEEN O R WOULD NOT BE DISCLOSED, THEN HE MAY AUTHORIZE ANY ADDITIONAL DIRECTOR ETC., BEING T HE AUTHORIZED OFFICER, TO ENTER AND SEARCH ANY BUILDING, PLACE, VESSEL ETC., WHERE HE H AS REASON TO SUSPECT THAT SUCH UNDISCLOSED MONEY, BULLION, JEWELLERY OR OTHER VALU ABLE ARTICLE OR THINGS ARE KEPT. THIS IS THE STAGE OF AUTHORIZATION OF SEARCH BY THE PRIN CIPAL DIRECTOR GENERAL ETC., WHICH IS ITA NO.1604, 1607 & 1610/KOL/201 & COS 96-98/K/2017 ASSESSMENT YEAR 2013-14 DCIT.CC-2(2), KOL. VS. AKA LOGISTICS P LTD., AMBEY MINING PVT. LTD. & M/S CALCUTTA INDUSTRIAL SUPPLY CROP. PAGE 15 THE FIRST STAGE IN OUR DISCUSSION, BEING, THE INITI ATION OF PROCESS OF SEARCH. PURSUANT TO SUCH FIRST STAGE, THAT IS, AUTHORIZATION OF SEARCH ACTION BY THE PRINCIPAL DIRECTOR GENERAL ETC., THE AUTHORIZED OFFICER PHYSICALLY ENT ERS THE BUILDING ETC. AND CARRIES OUT THE ACTUAL SEARCH. THIS IS THE SECOND STAGE IN OUR DISCUSSION, WHICH IS INITIATION OF SEARCH. WHEN THE ENTIRE SEARCH IS CONCLUDED BY THE AUTHORIZED OFFICER AND A FINAL PANCHNAMA IS DRAWN, THEN WE ENTER THE THIRD STAGE, THAT IS, THE SEARCH IS CONCLUDED. 9. THE LEGISLATURE HAS USED THE WORD ' SEARCH ' PRECEDED BY THE WORDS ' INITIATION OF ' OR ' CONCLUSION OF AT DIFFERENT PLACES TO CLEARLY CONVEY THAT IT IS R EFERRING TO THE DATE OF INITIATION OF SEARCH OR THE CONCLUSION OF SEARCH, A S THE CASE MAY BE. FOR EXAMPLE, SECTION 153A DEALING WITH ASSESSMENT IN CASE OF SEA RCH OR REQUISITION SPECIFICALLY USES THE EXPRESSION 'INITIATION OF SEARCH' IN SECOND PRO VISO TO SUB-SECTION (1). SIMILARLY, SECTION 153C DEALING WITH THE ASSESSMENT OF INCOME OF ANY OTHER PERSON USES THE EXPRESSION ' INITIATION OF SEARCH ' IN FIRST PROVISO TO SUB-SECTION (1). ON THE CONTR ARY, SECTION 153B(2) PROVIDES THAT THE AUTHORIZATION SHA LL BE DEEMED TO HAVE BEEN EXECUTED IN THE CASE OF SEARCH, ON THE 'CONCLUSION OF SEARCH' AS RECORDED IN THE LAST PANCHNAMA. SECTION 158BE SETTING OUT TIME LIMIT FOR COMPLETION OF BLOCK ASSESSMENT ALSO PROVIDES UNDER SUB-SECTION (2) THAT THE AUTHOR IZATION SHALL BE DEEMED TO HAVE BEEN EXECUTED IN THE CASE OF SEARCH ON THE ' CONCLUSION OF SEARCH '. THUS, IT IS OVERT THAT THE PARLIAMENT HAS RECOGNIZED THE EXPRESSION 'INITI ATION OF SEARCH' AS DISTINCT FROM ' CONCLUSION OF SEARCH ' AND USED SUCH EXPRESSIONS AT THE APPROPRIATE PLAC ES AS DEEMED NECESSARY. 10. REVERTING TO THE EXPLANATION TO CLAUSE (B)(I) T O SECTION 271AAA, WE FIND THAT THE LEGISLATURE HAS SIMPLY USED THE EXPRESSION ' DATE OF SEARCH ' AND THE SAME IS NOT QUALIFIED BY THE WORDS 'INITIATION OF' OR ' CONCLUSION OF '. THE 'SPECIFIED PREVIOUS YEAR' IN THE EXTANT CASE VARIES WITH PRE-FIXING OF THE WORDS ' INITIATION OF ' OR ' CONCLUSION OF ' TO THE WORD ' SEARCH ' AS USED IN THE PROVISION. THE WHEREAS THE ASSESSE E IS BATTLING FOR PRE-FIXING THE WORDS 'INITIATION OF' BEFORE THE WOR D ' SEARCH ' IN THE PROVISION, THE REVENUE IS STRONGLY PITCHING FOR USING THE WORDS ' CONCLUSION OF '. IN THE ABSENCE OF ANY EXPRESS USAGE OF THE APPROPRIATE PRE-FIX TO THE WORD 'SEARCH' IN THE LANGUAGE OF THE EXPLANATION (B)(I) TO SECTION 271AAA OF THE ACT, WE NEED TO DISCOVER THE SAME ON A HARMONIOUS READING OF THE PROVISION IN ENTIRETY. WH EN SO UNDERSTOOD AND ON TAKING A HOLISTIC VIEW OF THE MATER, IT TURNS OUT THAT THE L EGISLATURE INTENDED TO MEAN THE 'DATE OF SEARCH' IN SUB-CLAUSE (I) OF CLAUSE (B) OF THE EXPLANATION TO SECTION 271AAA AS THE ' DATE OF INITIATION OF SEARCH ' . WE FORTIFY OUR VIEW BY SIMULTANEOUSLY READING CLAUSES (A) AND (B) OF THE EXPLANATION TO SECTION 271AAA DEFINING ' UNDISCLOSED INCOME ' AND ' SPECIFIED PREVIOUS YEAR '. FIRSTLY, IT IS PERTINENT TO NOTE THAT SIMILAR EXPRESSION, NAMELY, ' BEFORE THE DATE OF SEARCH ' HAS BEEN USED IN BOTH THE CLAUSES, VIZ., (A) AND (B)(I) OF T HE EXPLANATION. WE HAVE SET OUT SUPRA THE DEFINITION OF ' UNDISCLOSED INCOME' IN THE EXPLANATION (A) IN TWO SUB-CLAUSES (I) AND (II), DEALING WITH BROADER CATEGORIES OF ANY IN COME REPRESENTED BY UNEXPLAINED ASSETS ETC. AND ANY INCOME REPRESENTED BY FALSE EXP ENSES. WE ARE RESTRICTING OURSELVES TO SUB-CLAUSE (I), WHICH DEFINES 'UNDISCLOSED INCOM E' TO MEAN ANY INCOME REPRESENTED BY ANY MONEY, BULLION, JEWELLERY ETC. FOUND IN THE COURSE OF A SEARCH WHICH HAS: (A) NOT BEEN RECORDED ON OR BEFORE THE DATE OF SEARCH I N THE BOOKS OF ACCOUNT OR OTHER DOCUMENTS MAINTAINED IN THE NORMAL COURSE RELATING TO SUCH PREVIOUS YEAR; OR (B) OTHERWISE NOT BEEN DISCLOSED TO THE CHIEF COMMISSIO NER OR COMMISSIONER BEFORE THE ITA NO.1604, 1607 & 1610/KOL/201 & COS 96-98/K/2017 ASSESSMENT YEAR 2013-14 DCIT.CC-2(2), KOL. VS. AKA LOGISTICS P LTD., AMBEY MINING PVT. LTD. & M/S CALCUTTA INDUSTRIAL SUPPLY CROP. PAGE 16 DATE OF SEARCH'. THE EXPRESSION 'BEFORE THE DATE OF SEARCH, IN EXPLANATION (B)(I) HAS ALSO BEEN USED WITHOUT ANY PRE-FIX OF 'INITIATION O F' OR 'CONCLUSION OF' . ON AN ANALYSIS OF THE EXPRESSION 'BEFORE THE DATE OF SEARCH ' IN THE DEFINITION OF ' UNDISCLOSED INCOME ', IT AMPLY TRANSPIRES THAT IT REFERS TO THE DATE O F ' INITIATION OF THE SEARCH '. OUR REASONING IS THAT PART (A) IN CLAUSE (I) OF THE EXPLANATION (A) REFERS TO THE UNDISCLOSED INCOME ETC. WHICH HAS NOT BEEN RECORDED IN THE BOOKS OF ACCOUNT BEFORE THE DATE OF SEARCH. IT NECESSARILY HAS TO BE AN INC OME WHICH IS NOT FOUND TO BE RECORDED AT THE TIME OF INITIATION OF SEARCH AND IT CANNOT BE AN INCOME WHICH IS NOT FOUND TO BE RECORDED AT THE TIME OF CONCLUSION OF S EARCH. ONCE AN ITEM OF INCOME NOT RECORDED IS FOUND AT THE TIME OF INITIATION OF SEAR CH, IT WILL REMAIN UNDISCLOSED EVEN IF THE ASSESSEE DURING THE COURSE OF SEARCH RECORDS IT IN ITS BOOKS OF ACCOUNT. IF WE INTERPRET IT AS REFERRING TO THE DATE OF CONCLUSION OF SEARCH, THEN ANYONE CAN EASILY GO SCOT FREE BY RECORDING IN HIS BOOKS OF ACCOUNT THE UNDISCLOSED INCOME FOUND DURING THE COURSE OF SEARCH, BEFORE THE CONCLUSION, THEREB Y MAKING IT AS DISCLOSED INCOME, WHICH PROPOSITION IS PATENTLY INCORRECT. ONCE AN IT EM OF INCOME IS FOUND, WHICH IS NOT RECORDED IN THE BOOKS OF ACCOUNT UP TO THE DATE OF INITIATION OF SEARCH, THE SAME HAS TO BE OBVIOUSLY CHARACTERIZED AS UNDISCLOSED INCOME. S IMILAR POSITION FOLLOWS BY READING PART (B) IN CLAUSE (I) OF THE EXPLANATION ( A), WHICH ALSO REFERS TO THE UNDISCLOSED ITEM OF INCOME WHICH HAS OTHERWISE BEEN NOT DISCLOSED TO THE PRINCIPAL CF. CIT ETC. ' BEFORE THE DATE OF SEARCH '. HERE AGAIN, IF WE CONSTRUE THE ' DATE OF SEARCH ' AS THE DATE OF CONCLUSION OF SEARCH, IT WOULD MEA N THAT ANY UNDISCLOSED INCOME FOUND DURING THE COURSE OF SEARCH WOULD BECO ME A DISCLOSED INCOME, IF THE ASSESSEE DISCLOSES IT TO THE COMPETENT AUTHORITY AT ANY TIME DURING THE CONTINUATION OF SEARCH. THUS, IF ANY INCOME BY WAY OF CERTAIN MONEY , BULLION, JEWELLERY ETC. IS FOUND DURING THE COURSE OF SEARCH WHICH HAS NOT BEEN RECO RDED IN THE BOOKS OF ACCOUNT, THE ASSESSEE CANNOT ESCAPE THE CLUTCHES OF SECTION 271A AA SIMPLY BY RECORDING OR DISCLOSING THE SAME AFTER THE INITIATION BUT BEFORE THE CONCLUSION OF SEARCH. OBVIOUSLY, THIS CANNOT BE THE INTENTION OF THE LEGISLATURE TO CONSTRUE THE EXPRESSION ' DATE OF SEARCH ' GIVEN IN CLAUSE (A) OF THE EXPLANATION TO MEAN TH E ' DATE OF CONCLUSION OF SEARCH '. IT HAS TO BE THE 'DATE OF INITIATION OF SEARCH' SO THAT ANY INCOME REPRESENTED BY ANY MONEY, BULLION, JEWELLERY ETC. FOUND IN THE COU RSE OF SEARCH BUT NOT RECORDED IN THE BOOKS IS CONSIDERED AS ' UNDISCLOSED INCOME' . THUS IT BECOMES CRYSTAL CLEAR THAT THE EXPRESSION ' BEFORE THE DATE OF SEARCH ' USED IN CLAUSE (A) OF THE EXPLANATION REFERS TO THE ' DATE OF SEARCH ' AS THE DATE OF ' INITIATION OF SEARCH ' AND NOT THE DATE OF ' CONCLUSION OF SEARCH '. AS THE SAME EXPRESSION OF ' BEFORE THE DATE OF SEARCH ' HAS BEEN USED IN THE DEFINITION OF ' SPECIFIED PREVIOUS YEAR ', WE HOLD THAT ON A TUNEFUL READING OF CLAUSES (A) AND (B) OF THE EXPLANATION T O SECTION 271AAA, THE ' DATE OF SEARCH ' IN THE EXPLANATION (B) IS ALSO THE ' DATE OF INITIATION OF SEARCH AND NOT THE ' DATE OF INITIATION OF SEARCH ' AS THE DATE OF SEARCH , THE ' SPECIFIED PREVIOUS YEAR ' IN TERMS OF SUB-CLAUSE (I) OF CLAUSE (B) OF EXPLANATIO N TO SECTION 271AAA BECOMES THE YEAR ENDING 31-03-2008, BEING, THE PREVIOUS YEAR WH ICH ENDED BEFORE THE DATE OF SEARCH ON 11-02-2009. GOING BY THIS INTERPRETATION OF THE PROVISION, THE A.Y. 2009-10 CANNOT BE CONSIDERED AS THE 'SPECIFIED PREVIOUS YEA R'. THE CONTENTION OF THE ASSESSEE IS, ERGO, UPHELD. 15. WE HAVE GIVEN OUR THOUGHTFUL CONSIDERATION TO A SSESSEES ABOVE LAST ARGUMENT. IT EMERGES FROM THE LEARNED CO-ORDINATE BENCHS DEC ISION THAT THE SAID ASSESSEE HAD MADE OUT A CASE OF NON-APPLICABILITY OF ASSESSMENT YEAR 2009-10 IN A SEARCH ITA NO.1604, 1607 & 1610/KOL/201 & COS 96-98/K/2017 ASSESSMENT YEAR 2013-14 DCIT.CC-2(2), KOL. VS. AKA LOGISTICS P LTD., AMBEY MINING PVT. LTD. & M/S CALCUTTA INDUSTRIAL SUPPLY CROP. PAGE 17 CONDUCTED ON 11.02.2009 WHEREAS THE INSTANT TAXPAYE RS CASE MAKES IT CLEAR THAT SPECIFIED PREVIOUS YEAR IN ITS CASE U/S. 271AAB E XPLANATION (B)(II) SQUARELY APPLIES IN GIVEN FACTS AND CIRCUMSTANCES OF THE CASE. WE WI SH TO REPEAT HERE AT THE COST OF BREVITY THAT IMPUGNED SEARCH IS DATED 20.12.2012. T HE ASSESSEES LAST DATE OF FILING RETURN U/S 139(1) WAS UPTO ON 30.09.2012. THE SPEC IFIED PREVIOUS YEAR THEREFORE HAS BEEN RIGHTLY TAKEN IN THE INSTANT CASE TO BE FINANC IAL YEAR 2012-13 UNDER THE ABOVE STATUTORY PROVISION. WE CONCLUDE IN THESE FACTS THA T CIT(A) HAS RIGHTLY SUSTAINED THE IMPUGNED PENALTY OF 17 LAC QUA THE IMPUGNED CASH SUM DECLARED DURING THE COURSE OF SEARCH AS UNDISCLOSED INCOME UNDER EXPLANATION ( C) OF THE ACT. THE SECOND ASSESSEES INSTANT CROSS OBJECTION 97/KOL/2017 CHAL LENGING CORRECTNESS OF CIT(A)S ACTION SUSTAINING PENALTY OF 17 LAC FAILS THEREFORE. 16. THESE THREE REVENUES APPEALS ITA NO.1604, 1607 & 1610/KOL/2017 ARE DISMISSED. THE FIRST AND LAST ASSESSEES TWO CROSS OBJECTION NOS. 96 & 98/KOL/2017 ARE DISMISSED AS RENDERED INFRUCTUOUS AND SECOND AS SESSEES CROSS OBJECTION NO.97/KOL/2017 IS DISMISSED. ORDERED ACCORDINGLY. ORDER PRONOUNCED IN OPEN COURT ON 27/02/2019 SD/- SD/- ( #) (+ #) (J.SUDHAKAR REDDY) (S.S.GODARA) ACCOUNTANT MEMBER JUDICIAL MEMBER *DKP-SR.PS , - 27/02/2019 / KOLKATA / COPY OF ORDER FORWARDED TO:- 1. /ASSESSEE-AKA LOGISTICS PVT. LTD. 3 RD FLOOR, 8, BECK BAGAN ROW, KOL-17/ AMBEY MINING PVT . LTD. 9 TH FL, 8 AJC BOSE ROAD, KOLKATA-17/ M/S CALCUTTA INDU STRIAL SUPPLY CORP. 3 RD FL, 4, RIPPON ST. KOL-16 2. /RESPONDENT-DCIT, C.C.-2(2) AAYAKAR BHAWAN, POORVA, 110, SHANTIPALLY KOLKATA-107 3. / 0 / CONCERNED CIT 4. 0 - / CIT (A) 5. 1 ++/ , / /DR, ITAT, KOLKATA 6. 5 / GUARD FILE. BY ORDER/ , SD/- / /,