Shri Prasanna Dugar, Kolkata V. A.C.I.T. CC - XXIV,Kol, Kolkata

ITA 1742/KOL/2012

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 78314 (ITAT-KOLKATA)
• Duration Of Justice: 1 year(s) 5 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-04-2014
• Appeal Filed By: Assessee
• Bench Allotted: C
• Assessment Year: 2008-2009
• Appeal Filed On: 29-11-2012
• Court: TRIBUNAL
• Department Lawyers: RANU BISWAS
• Assessee Lawyers: S M SURANA
• Keywords: Income from undisclosed sources; Document seized; Peak credit; Documents seized
• Section: 143(3); 153A; 131; 27; 132; 139

Judgement Text

, C , IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH: KOL KATA () BEFORE , /AND , ! ) [BEFORE SHRI MAHAVIR SINGH, JM & SHRI SHAMIM YAHYA, AM] ' / I.T.A NO.1742/KOL/2012 #$ %&/ ASSESSMENT YEAR: 2008-09 SHRI PRASANNA DUGAR VS. ASSISTANT COMMISSIONE R OF INCOME-TAX, (PAN: ADDPD0328A) C.C. XXIV, KOLKATA (() /APPELLANT ) (*+()/ RESPONDENT ) DATE OF HEARING: 03.04.2014 DATE OF PRONOUNCEMENT: 30.04.2014 FOR THE ASSESSEE: SHRI S. M. SURANA, ADVOCATE FOR THE REVENUE : SMT. RANU BISWAS, JCIT, SR. DR . / ORDER PER SHRI MAHAVIR SINGH, JM : THIS APPEAL BY ASSESSEE IS ARISING OUT OF ORDER OF CIT(A), CENTRAL-III, KOLKATA IN APPEAL NO. 31/CC-XXIV/CIT(A),C-III/11-12/KOL DATED 17.09.2 012. ASSESSMENT WAS FRAMED BY ACIT, CC-XXIV, KOLKATA U/S. 153A R.W.S. 143(3) OF T HE INCOME-TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT) FOR ASSESSMENT YEAR 2008- 09 VIDE HIS ORDER DATED 31.12.2010. PENALTY IN DISPUTE WAS LEVIED BY ACIT, CC-XXIV, KOL KATA U/S. 271(1)(C) OF THE ACT VIDE HIS ORDER DATED 24.06.2011. 2. THE ONLY ISSUE IN THIS APPEAL OF ASSESSEE IS AGA INST THE ORDER OF CIT(A) CONFIRMING THE LEVY OF PENALTY BY AO U/S. 271(1)(C) OF THE ACT. F OR THIS, ASSESSEE HAS RAISED FOLLOWING EFFECTIVE GROUND NOS. 2 TO 5 AS UNDER: 2. FOR THAT THE LD. CIT( A) ERRED IN CONFIRMING TH E PENALTY IMPOSED UNDER SEC. 271(1)(C) WHEN THERE WAS NO EVIDENCE FOR ANY CONCEALMENT, THE ASSESSEE HIMSELF MADE A DISCLOSURE IN THE COURSE OF SEARCH AND A BONAFIDE EXPLANATION WAS FAILED TO SHOW THAT THE ASSESSEE HAS NOT CONCEALED ANY INCOME OR PARTICULARS OF INCO ME. 3. FOR THAT THE LD. CIT(A) ERRED IN CONFIRMING THE PENALTY BECAUSE THE ASSESSEE ADMITTED THE INCOME IN THE RETURN U/S. 153A WHEN THERE WAS N O EVIDENCE OR DETECTION OF ANY CONCEALMENT OF ASSESSEES INCOME NOR ANY CONCEALMEN T WAS ESTABLISHED AND THE ADDITION WAS MADE OF THE AMOUNT DISCLOSED BY THE ASSESSEE HI MSELF IN ROUND SUM WITHOUT ANY FINDING IN THE ASSESSMENT ORDER. 2 ITA NO. 1742/K/2012 SHRI PRASANNA DUGAR, AY 2008-09 4. FOR THAT EVEN OTHERWISE NO PENALTY WAS IMPOSABLE WHEN THE INCOME WAS DULY DISCLOSED IN THE RETURN FILED UNDER SEC. 153A, THE EARLIER RE TURN WAS DULY ABATED AND THE DISCLOSURE WAS MADE TO BUY PEACE WITH THE CONDITION THAT NO PE NALTY SHALL BE IMPOSED. 5. FOR THAT ON THE FACTS AND CIRCUMSTANCES OF THE C ASE AND THE LAW INVOLVED THERE WAS NEITHER ANY CONCEALMENT NOR THERE WERE ANY FACT TO HOLD THAT THE ASSESSEE CONCEALED THE INCOME IN THE ORIGINAL RETURN FILED. THERE WAS NO J USTIFICATION FOR IMPOSING PENALTY. 3. BRIEFLY STATED FACTS ARE THAT A SEARCH AND SEIZU RE OPERATION WAS CARRIED OUT ON THE BUSINESS AND RESIDENTIAL PREMISES OF THE ASSESSEE G ROUP U/S. 132 OF THE ACT ON 03.02.2009. THE ASSESSEE DURING THE YEAR UNDER APPEAL DISCLOSED A S UM OF RS.70 LAKHS ON ACCOUNT OF PEAK CREDITS IN RESPECT OF CERTAIN TRANSACTIONS CARRIED OUT WITH M/S. J. J. GOLD HOUSE. THE ASSESSEE INCLUDED THIS INCOME IN HIS RETURN OF INCOME FILED ON 31.03. 2010. RELEVANT FINDING RECORDED BY AO IN HIS ASSESSMENT ORDER PASSED U/S. 153A READ WITH SEC TION 143(3) OF THE ACT DATED 31.2.2010 AS UNDER: THE ASSESSEE HAS DISCLOSED RS. 70 LAKHS ON ACCOUNT OF PEAK CREDIT IN RESPECT OF TRANSACTIONS WITH M/S. J. J. GOLD HOUSE (IMP-14). THE SAME HAS BEEN REFLECTED IN THE RETURN OF INCOME FILED BY THE ASSESSEE FOR THIS YEA R. IN THE RETURNED INCOME THE ASSESSEE HAS INCLUDED TH E SAME. THE RETURN FILED BY THE ASSESSEE IS ACCEPTED. 4. THE AO INITIATED PENALTY PROCEEDINGS U/S. 271(1) OF THE ACT. DURING THE PENALTY PROCEEDINGS BEFORE AO, ASSESSEE CONTENDED THAT THE DISCLOSURE WAS MADE VOLUNTARILY TO BUY PEACE AND THIS DISCLOSURE MADE DURING THE COURSE OF SEARCH DID NOT INCLUDE ANYTHING WHICH WAS DETECTED BY THE SEARCH PARTY. THE AO LEVIED THE PE NALTY BY STATING THAT EVEN THOUGH THE INCOME DECLARED WAS VOLUNTARY BUT THE DEEMING PROVISIONS O F EXPLANATION (5A) TO SECTION 271(1)(C) OF THE ACT WILL APPLY. FOR THIS, HE RECORDED THE FOLL OWING FINDINGS IN PENALTY ORDER PASSED U/S. 271(1)(C) OF THE ACT DATED 24.06.2011: IN THIS CASE, THE DATE OF SEARCH IS 3.02.2009 AND THE RELEVANT ASSESSMENT YEAR IS AY 21008-09. AS ALREADY DISCUSSED ABOVE, IT IS A FACT THAT THE INCOME OF RS.70,00,000/- HAS NOT BEEN DISCLOSED IN THE ORIGINAL RETURN OF INCOME FILED BY THE ASSESSEE U/S. 139 PRIOR TO THE DATE OF SEARCH. HENCE, EVEN THOUGH AN INCOME OF RS.70,00,000/- WAS VOLUNTARILY DECLARED AS UNDISCLOSED INCOME IN THE RETURN FILED U/S. 153A, THE DEEMING P ROVISIONS OF EXPLANATION 5A, AS REPRODUCED ABOVE, WOULD SQUARELY APPLY IN THE ASSES SEES CASE. IT FOLLOWING THAT FOR THE PURPOSES OF IMPOSITION OF PENALTY UNDER SECTION 271(1)(C), THE ASSESSEE WOULD BE DEEMED TO HAVE CONCEALED THE PART ICULARS OF ITS INCOME OR FURNISHED INACCURATE PARTICULARS OF SUCH INCOME WITH RESPECT TO THE AMOUNT OF RS.70,00,000/-. 3 ITA NO. 1742/K/2012 SHRI PRASANNA DUGAR, AY 2008-09 FOR ALL THE REASONS AND JUSTIFICATIONS OUTLINED IN THE PRECEDING PARAGRAPH, I AM OF THE VIEW THAT ASSESSEE HAS MADE CONCEALMENT OF INCOME O F RS.70,00,000/- AND THEREFORE, IT IS A FIT CASE FOR IMPOSITION OF PENALTY UNDER SECTION 27 1`(1)(C) OF THE ACT. CONSIDERING THE FACTS AND CIRCUMSTANCES OF THE CASE , I CONSIDER IT FIT, REASONABLE AND FAIR TO IMPOSE A PENALTY AMOUNTING TO 100% OF THE AMOUNT OF TAX SOUGHT TO BE EVADED. AGGRIEVED, ASSESSEE PREFERRED APPEAL BEFORE CIT(A). 5. CIT(A) CONFIRMED THE PENALTY LEVIED BY AO BY OBS ERVING AS UNDER: IN THE INSTANT CASE THE ASSESSMENT YEAR INVOLVED I S 2008-09. IN THE RETURN OF INCOME FILED U/S.139 THE APPELLANT HAD NOT DISCLOSED THE SAID IN COME OF RS.70,00,000/-. THE APPELLANTS CLAIM THAT THE SAID INCOME WAS VOLUNTARILY DISCLOSE D BY HIM U/S.132(4), EVEN THOUGH, NO INCRIMINATING DOCUMENT SUGGESTING ANY SUCH UNDISCLO SED INCOME WAS FOUND DURING THE SEARCH, IS DEVOID OF ANY MERIT ON THE FACTS OF THE CASE. IN THE WRITTEN SUBMISSIONS FILED BEFORE ME IT IS SPECIFICALLY STATED THAT THE AMOUNT OF RS.70,00,000/- WAS DISCLOSED TO COVER PURCHASE OF GOLD RECORDED IN A PAPER FOUND AND SEIZ ED IN THE COURSE OF SEARCH. EXPLANATION 5A PROVIDES THAT WHERE DURING THE SEARCH AN ASSESSE E IS FOUND TO BE OWNER OF, INTER ALIA, ANY INCOME BASED ON ANY ENTRY N ANY BOOKS OF ACCOU NT OR OTHER DOCUMENTS OR TRANSACTIONS AND HE CLAIMS THAT SUCH ENTRY IN THE BOOKS OF ACCOU NT OR OTHER DOCUMENTS OR TRANSACTIONS REPRESENTS HIS INCOME (WHOLLY OR IN PART) FOR ANY P REVIOUS YEAR WHICH HAD ENDED BEFORE THE DATE OF SEARCH WHERE THE RETURN OF INCOME FOR SUCH PREVIOUS YEAR HAD BEEN FURNISHED BEFORE THE SAID DATE BUT SUCH INCOME HAD NOT BEEN DECLARED THEREIN IN THAT CASE, NOTWITHSTANDING THAT SUCH INCOME WAS DECLARED BY HIM IN ANY RETURN OF INCOME FURNISHED ON OR AFTER THE DATE OF SEARCH, HE SHALL FOR THE PURPOSES OF IMPOSI TION OF A PENALTY U/S.271(1)(C), BE DEEMED TO HAVE CONCEALED THE PARTICULARS OF HIS INCOME OR FURNISHED INACCURATE PARTICULARS OF SUCH INCOME. THE APPELLANT HIMSELF HAS STATED THAT THE IMPUGNED AMOUNT OF RS.70,00,000/- WAS DISCLOSED BY HIM AS HIS UNACCOUNTED INCOME IN RESPECT OF PURC HASE OF GOLD RECORDED IN A PAPER FOUND AND SEIZED DURING THE COURSE OF SEARCH IN HIS CASE. THAT BEING SO, EVEN THOUGH HE HAD DECLARED THAT AMOUNT OF RS.70,00,000/- AS HIS INCOM E FOR THE ASSESSMENT YEAR UNDER APPEAL IN HIS RETURN OF INCOME FILED SUBSEQUENT TO SEARCH IN RESPONSE TO NOTICE U/S.153A, HE IS DEEMED TO HAVE CONCEALED THE PARTICULARS OF HIS INC OME OR FURNISHED INACCURATE PARTICULARS OF SUCH INCOME BY VIRTUE OF EXPLANATION 5A TO SECTI ON 271(1)(C). FOR THE REASONS DISCUSSED ABOVE IT IS HELD THAT THE A.O. HAD RIGHTLY IMPOSED PENALTY OF RS.23,65,926/- U/S.271(1)(C) IN THIS CASE, THEREFOR E, THE SAME IS CONFIRMED. AGGRIEVED, NOW ASSESSEE IS IN APPEAL BEFORE US. 6. WE HAVE HEARD RIVAL SUBMISSIONS AND GONE THROUGH FACTS AND CIRCUMSTANCES OF THE CASE. WE FIND THAT A SEARCH U/S. 132 OF THE ACT WAS CONDU CTED AT THE PREMISES OF THE ASSESSEE ON 03.02.2009 AND THE ASSESSEE MADE VOLUNTARY DISCLOSU RE U/S. 132(4) OF THE ACT DISCLOSING A SUM OF RS. 6 CRORES. THE SAID DISCLOSURE, AS PER THE SA ID DEPOSITION OF THE ASSESSEE RECORDED U/S. 131 OF THE ACT WAS BIFURCATED INTO 3 PERSONS I.E. OF RS .3,50,00,000/- WAS DISCLOSED IN THE NAME OF THE ASSESSEE, RS.2,25,00,000/- WAS DISCLOSED IN THE NAME OF ASSESSEES WIFE SMT. RAJSHREE 4 ITA NO. 1742/K/2012 SHRI PRASANNA DUGAR, AY 2008-09 DUGAR AND RS.25,00,000/- WAS DISCLOSED IN THE NAME OF THE LIMITED COMPANY VIZ. INDIAN GEM AND JEWELLERY (IMPERIAL) PVT. LTD. IN WHICH THE ASS ESSEE HAD SUBSTANTIAL INTEREST. THE ASSESSEES MAIN CONTENTION BEFORE US AS WELL AS BEFORE THE LOW ER AUTHORITIES WAS THAT NO CONCEALED INCOME WAS ESTABLISHED FROM ANY OF THE PAPERS AND DOCUMENT S FOUND IN THE COURSE OF SEARCH IN THE PANCHNAMA OF THE ASSESSEE OR IN ANY OTHER PANCHNAMA . THE ASSESSEE CONTENDED THAT THE ENTIRE DISCLOSURE WAS MADE VOLUNTARILY AND IN GOOD FAITH W HICH IS APPARENT FROM QUESTION AND ANSWER NO 22 IN THE STATEMENT RECORDED U/S. 131 OF THE ACT WHEREIN THE ASSESSEE CATEGORICALLY STATES THAT HE IS VOLUNTARILY DISCLOSING THE INCOME EVEN T HOUGH NO INCRIMINATING DOCUMENTS HAVE BEEN FOUND AND ALL THE PURCHASES AND SALES ARE CORRECTLY RECORDED AND THE DISCLOSURE WAS MADE JUST TO COVER THE PAPERS AND DOCUMENTS WHICH HE MAY NOT BE ABLE TO EXPLAIN. THE ASSESSEE BIFURCATED HIS OWN DISCLOSURE OF RS.3.50 LAKHS IN TWO PARTS I. E. RS.70,00,000/-FOR THE ASSESSMENT YEAR 2008-09 AND RS.2.80 LACS FOR ASSESSMENT YEAR 2009-1 0. SO FAR AS THE ASSESSEES DISCLOSURE OF RS.3.50 CRORES WAS CONCERNED, THE ASSESSEE HIMSELF GAVE THE FIGURE OF BIFURCATION OF SUCH DISCLOSURE IN THE FORM OF VALUATION OF GEMS AND JEW ELLERY RS.2.99 CRORES, S. DEBTORS RS.4600000/- AND CASH IN HAND RS.4 LAKHS VIDE QUEST ION NO.22. IN THE DISCLOSURE OF RS. 7000000/- FOR ASST. YEAR 2008-09 THE ASSESSEE COVER ED AN ENTRY OF PURCHASE OF GOLD BY THE COMPANY INDIAN GEMS AND JEWELLERY IMPERIAL P. LTD. EVEN THOUGH THERE WAS NO FINDING OF INVESTIGATION OR EVIDENCE THAT THE SAID AMOUNT WAS CONCEALED INCOME OF THE ASSESSEE. FINALLY IN QUESTION NO.23 THE ASSESSEE ALSO MADE THE FOLLOWING ANSWER TO A QUESTION AS PER DEPOSITION RECORDED BY THE HONBLE ADIT(INV): Q.NO.23: DO YOU WANT TO RECTIFY/MODIFY ANY STATEMEN T? ANS: NO, I HAVE NOT GIVEN ANY STATEMENT UNDER PRESS URE AND I DO NOT WANT TO RECTIFY/MODIFY THE ABOVE STATEMENTS MADE BY ME. I W ANT TO ADD THAT THE DISCLOSURE HAVE BEEN MADE BY THE DECLARANT KEEPING IN MIND THE EXPLANATION TO SEC. 271(1)(C), BUY PEACE AND LITIGATION AND THAT NO PENALTY U/S.27 1(1)(C) SHALL BE IMPOSED ON THE DECLARANTS. THE ASSESSMENTS FOR THESE ASST. YEAR 2008-09 AND 20 09-10 WERE THEREAFTER COMPLETED U/S. 153A/143(3) OF THE ACT AT RETURNED INCOME. THE MAIN CONTENTION OF THE ASSESSEE WAS THAT A.O. HAS ACCEPTED THE DISCLOSURE AS MADE BY THE ASS ESSEE WITHOUT ANY FINDING OR PROOF OR EVIDENCE THAT THERE WAS CONCEALED INCOME CONNECTED WITH ANY SEIZED PAPER EXCEPT THAT THE ASSESSEE HIMSELF OFFERED AN AMOUNT RECORDED IN A SI ZED PAPER FOUND IN THE COURSE OF SEARCH IN THE PANCHNAMA OF INDIAN GEM AND JEWELLERY IMPERI AL PVT. LTD. AS APPEARS FROM THE ASSESSMENT ORDER ITSELF. THERE IS NO FINDING OF ANY CONCEALMENT OR ANY DETECTION BY THE DEPARTMENT OF ANY CONCEALED INCOME. THE DISCLOSURES HAVE BEEN ACCEPTED ON THE BASIS OF THE ESTIMATED FIGURE GIVEN BY THE ASSESSEE HIMSELF. THERE IS NO FINDING THAT THE SEIZED 5 ITA NO. 1742/K/2012 SHRI PRASANNA DUGAR, AY 2008-09 PAPER HAD AN ENTRY OF RS. 70 LAKHS. THE O HAS EVEN NOT DISCUSSED THE CONTENTS OF SEIZED PAPER EITHER IN THE ASSESSMENT ORDER OR IN THE PENA LTY ORDER. FROM THE ABOVE DISCUSSION AND ARGUMENTS MADE BY ASSESSEE AND REVENUE, THE FOLLOWI NG FACTS EMERGE: (I) THE AO HAS ACCEPTED THAT THE ASSESSEE DULY MADE A D ISCLOSURE UNDER SEC. 132(4) ACCEPTING A DISCLOSURE OF ONE CRORE, (II) THAT THE AO HAS ACCEPTED THE DISCLOSURE IN TO AS AP PEARS IN THE ASSESSMENT ORDER AND HAS NOT PROVED THAT ANY INCRIMINATING DOCUMENT CONTAINE D ANY UNDISCLOSED INCOME, TO COMPUTE THE SAID INCOME OTHERWISE NOR HAS BROUGHT ON RECORD ANY EVIDENCE OF ANY CONCEALED INCOME. (III) THE AO HAS FOUND AS MENTIONED IN THE ASSESSMENT ORD ER FOR THE ASST. YEAR 2008- 09 THAT THE INCOME RETURNED UNDER SEC. 153A WAS CORRECT INCOME AND THAT THE ASSESSEE MADE TRUE AND CORRECT DISCLOSURE. (IV) THE AO HAS NOT FOUND FOR DEFINITE ANY UNDISCLOSED INCOME FROM THE SEIZED DOCUMENTS BUT ONLY OPINED THAT THE ASSESSEE HAS, IN THE DISCLOSUR E COVERED A PARTICULAR PAPER IN HIS DISCLOSURE STATEMENT. THIS SHOWS THAT THE AO ONLY S USPECTED THAT THE INCRIMINATING DOCUMENTS POINTED TOWARDS UNDISCLOSED INCOME BUT TH ERE WAS NO FINDING THAT IN FACT THERE WAS SOME UNDISCLOSED INCOME. (V) THE AO ALSO HAD NO IDEA FOR ANY UNDISCLOSED INCOME YEAR-WISE AND ACCEPTED THE FIGURES SUPPLIED BY THE ASSESSEE FOR THE PURPOSE OF INCLUSI ON OF THE SAME IN THE ASSESSMENT WHICH WERE DULY ADDED BY THE ASSESSEE HIMSELF IN THE RETU RN. IN FACT THE INCOME RETURNED U/S.153A WAS DULY ACCEPTED. 7. FROM THE ABOVE FACTS NOW WE HAVE TO ANALYZE EXPL ANATION 5A TO SECTION 271(1)(C) OF THE ACT I.E. THE DEEMING PROVISIONS FOR CONCEALMENT OF INCOME WILL APPLY OR NOT. NOW, THIS QUESTION HAS BEEN ANSWERED BY VARIOUS DECISIONS OF THIS TRIBUNAL AND THE RELEVANT DECISION OF MUMBAI BENCH IN THE CASE OF ITO VS. GOPE M ROCHLANI , THANE, ITA NO. 7737/MUM/2011 DATED 24.05.2013 HAS ANALYZED THE PROVISION AS UNDE R (PARA 14): 14. IN OUR CONSIDERED OPINION, ONCE THE LEGISLATUR E HAS NOT SPECIFIED THE DUE DATE AS PROVIDED IN SECTION 139(1) IN EXPLANATION 5A, THEN BY IMPLIC ATION, IT HAS TO BE TAKEN AS THE DATE EXTENDED UNDER SECTION 139(4). IN VIEW OF THE ABOVE, WE HOL D THAT THE ASSESSEE GETS THE BENEFIT/IMMUNITY UNDER CLAUSE (B) OF EXPLANATION TO SECTION 271(1)(C ) BECAUSE THE ASSESSEE HAS FILED ITS RETURN OF INCOME WITHIN THE DUE DATE AND, THEREFORE, THE PE NALTY LEVIED BY THE ASSESSING OFFICER CANNOT BE SUSTAINED ON THIS GROUND. EVEN THOUGH WE ARE NOT A FFIRMING THE FINDINGS AND THE CONCLUSIONS OF THE LEARNED COMMISSIONER (APPEALS), HOWEVER, AS PER THE DISCUSSION MADE ABOVE, PENALTY IS DELETED IN VIEW OF THE INTERPRETATION OF EXPLANATIO N 5A TO SECTION 271(1)(C). CONSEQUENTLY, THE GROUND RAISED BY THE REVENUE IS TREATED AS DISMISSE D. FURTHER, RECENTLY WE HAVE TAKEN A VIEW IN THE CASE OF AJIT KUMAR SURANA VS. ACIT, ITA NO 835/K/2013 & ORS. VIDE ORDER DATED 18.03.2014, WHER EIN EXPLANATION 5A WAS FOUND NOT TO BE APPLICABLE OR FOUND NOT APPLICABLE AS OPEN PRESUMIN G CONCEALMENT OR PRESUMING FURNISHING OF INACCURATE PARTICULARS OF INCOME WHICH ARE NOT COMI NG OUT AS SUCH FROM THE RETURN OF INCOME FILED VIS--VIS THE FINALLY ASSESSED INCOME. IT IS NECESSARY TO SEE WHETHER ANY OF THE DEEMING 6 ITA NO. 1742/K/2012 SHRI PRASANNA DUGAR, AY 2008-09 PROVISION AS SET OUT IN EXPLANATION TO SECTION 271( 1)(C) OF THE ACT WILL COME INTO PLAY OR NOT HAS BEEN ANSWERED IN PARA 36 AS UNDER: 36. THUS THERE IS AN ABSENCE OF A DISCERNABLE ELEM ENT OF CONCEALMENT IN THE ADDITIONS MADE. ONCE A CONCEALMENT OR FURNIS HING OF INACCURATE PARTICULARS IS NOT COMING OUT AS SUCH FROM THE RETU RNS FILED VIS-A-VIS THE FINALLY ASSESSED INCOME, IT BECOMES NECESSARY TO SE E WHETHER ANY OF THE DEEMING PROVISIONS SET OUT IN THE EXPLANATIONS TO S ECTION 271(1)(C) WILL COME INTO PLAY. AS ALREADY MENTIONED BY US AT PARA 31, EXPLANATION 5A CANNOT BE APPLIED SINCE THE THRESHOLD CONDITION FOR APPLYING SUCH EXPLANATION HAS NOT BEEN SATISFIED. LEAVING THE QUE STION WHETHER ANY OTHER EXPLANATORY CLAUSES CAN BE INVOKED IN A SEARC H CASE, ONCE EXPLANATION 5A IS FOUND NOT APPLICABLE OPEN, PRESUM ING IT CAN BE SO DONE, ONLY OTHER EXPLANATION THAT CAN BE CONSIDERED IN THE CIRCUMSTANCES OF THE CASE IS EXPLANATION ONE. AT THIS JUNCTURE, I T WILL BE WORTHWHILE TO HAVE A CAREFUL UNDERSTANDING OF THE JUDGMENT OF HON BLE APEX COURT IN THE CASE OF MAC DATA PVT. LTD. (SUPRA). IN THIS CAS E BEFORE HONBLE APEX COURT, THERE WAS A SURVEY IN THE SISTER CONCERN OF THE ASSESSEE CONCERNED ON 16.12.2003, WHEREIN CERTAIN DOCUMENTS WITH SHARE APPLICATION FORM, BANK STATEMENTS, MEMORANDUM OF ASSOCIATION OF COMPA NIES, AFFIDAVITS, COPIES OF INCOME TAX RETURNS, ASSESSMENT ALSO AND B LANK SHARE DOCUMENTS WERE IMPOUNDED. ASSESSEE FILED ITS RETURN MORE THAN 10 MONTHS AFTER THE SURVEY, TO BE PRECISE ON 27.10.2004. DESPITE THE SU RVEY IN THE SISTER CONCERN, IT DID NOT INCLUDE THE INCOME THAT IT SHOU LD HAVE, IN SUCH RETURN. ONLY WHEN THE ASSESSING OFFICER ISSUED A SHOW CAUSE NOTICE ON 22.11.2006, ASSESSEE CAME OUT WITH AN OFFER SURREND ERING INCOME OF RS.40.74 LAKH. ASSESSEE OFFERED NO EXPLANATION FOR THE SURRENDERED INCOME, BUT ONLY STATED THAT SUCH INCOME WAS BEING SURRENDERED TO AVOID LITIGATION, BUY PEACE AND TO CHANNELIZE ITS ENERGY AND RESOURCES TOWARDS PRODUCTIVE WORK AND FOR AMICABLE SETTLEMENT WITH TH E DEPARTMENT. IT WAS IN THESE CIRCUMSTANCES THAT THE APEX COURT HELD THA T SURRENDER WAS NOT VOLUNTARY. AT PARA NINE OF ITS JUDGMENT THEIR LORDS HIPS OBSERVED AS UNDER:- THE SURVEY WAS CONDUCTED MORE THAN 10 MONTHS BEFOR E THE ASSESSEE FILED ITS RETURN OF INCOME. HAD IT BEEN TH E INTENTION OF THE ASSESSEE TO MAKE FULL AND TRUE DISCLOSURE OF IT S INCOME, IT WOULD HAVE FILED THE RETURN DECLARING AN INCOME INC LUSIVE OF THE AMOUNT WHICH WAS SURRENDERED LATER DURING THE COURS E OF THE ASSESSMENT PROCEEDINGS. CONSEQUENTLY, IT IS CLEAR T HAT THE ASSESSEE HAD NO INTENTION TO DECLARE ITS TRUE INCOM E. IT IS THE STATUTORY DUTY OF THE ASSESSEE TO RECORD ALL ITS TR ANSACTIONS IN THE BOOKS OF ACCOUNT, TO EXPLAIN THE SOURCE OF PAYM ENTS MADE BY IT AND TO DECLARE ITS TRUE INCOME IN THE RETURN OF INCOME FILED BY IT FROM YEAR TO YEAR. THE AO, IN OUR VIEW, HAS RECO RDED A CATEGORICAL FINDING THAT HE WAS SATISFIED THAT THE ASSESSEE HAD CONCEALED TRUE PARTICULARS OF INCOME AND IS LIABLE FOR PENALTY PROCEEDINGS UNDER SECTION 271 READ WITH SECTION 274 OF THE INCOME TAX ACT, 1961. AS AGAINST THE ABOVE FACTS, IN THE CASE BEFORE US THERE WAS NO SURVEY OR SEARCH AT ANY PLACE, PRIOR TO THE DISCLOS URE OF THE BANK ACCOUNTS IN THE NAME OF FIVE PERSONS AS HIS OWN BY THE ASSESSEE ON 28.01.2010. THERE WAS ONLY AN ENQUIRY IN PROGRESS O N SUCH ACCOUNTS BY 7 ITA NO. 1742/K/2012 SHRI PRASANNA DUGAR, AY 2008-09 THE DEPARTMENT. WELL BEFORE ANY NOTICE WAS ISSUED B Y THE DEPARTMENT, ASSESSEE HAD COME UP WITH HIS DISCLOSURE AND FILED AN AFFIDAVIT BEFORE DDI(INVESTIGATION). EVEN EXPLANATION (1) TO SECTION 271(1)(C) COULD NOT HAVE BEEN APPLIED ON THE ASSESSEE SINCE ASSESSEE HA D OFFERED EXPLANATION AND FURNISHED ALL PARTICULARS OF THE INCOME DISCLOS ED BY HIM. AS ALREADY MENTIONED BY US, PARTICULARS OF EVERY ITEM OF INCOM E OFFERED BY THE ASSESSEE AND ADDED BY THE ASSESSING OFFICER IS CLEA RLY AVAILABLE IN THE ASSESSMENT ORDER FOR ASSESSMENT YEAR 2009-10, WHERE IN ASSESSING OFFICER HAS ELABORATELY ANALYZED THE INFORMATION AN D PARTICULARS GIVEN BY THE ASSESSEE, AS TO HOW THE CREDITS IN VARIOUS B ANK ACCOUNTS HAD COME IN. NONE OF SUCH EXPLANATION GIVEN BY THE ASSESSEE WERE FOUND TO BE UNTRUE OR INCORRECT. 8. IN VIEW OF THE ABOVE FACTUAL AND LEGAL POSITION, THE PENALTY CONFIRMED BY CIT(A) IS DELETED. WE ORDER ACCORDINGLY. 9. IN THE RESULT, APPEAL OF ASSESSEE IS ALLOWED. 10. ORDER IS PRONOUNCED IN THE OPEN COURT 30.04.201 4. SD/- SD/- , ! , (SHAMIM YAHYA ) (MAHAVIR SINGH) ACCOUNTANT MEMBER DATED: 30TH APRIL, 2014 ,- #./ 0 JD.(SR.P.S.) 1 *2 3 2%4- COPY OF THE ORDER FORWARDED TO: 1 . () / APPELLANT SHRI PRASANNA DUGAR, 52A, NEW ALIPORE , BLOCK-D, KOLKATA-53. 2 *+() / RESPONDENT ACIT, C.CXXIV, KOLKATA. 3 . # ( )/ THE CIT(A), KOLKATA 4. 5. # / CIT KOLKATA 2:; *# / DR, KOLKATA BENCHES, KOLKATA +2 */ TRUE COPY, #