Sri Naresh Chandra Agarwallla., Kolkata V. A.C.I.T.Cir - XII, Kol., Kolkata

ITA 1773/KOL/2012

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 99715 (ITAT-KOLKATA)
• Duration Of Justice: 2 year(s) 8 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-08-2015
• Appeal Filed By: Assessee
• Bench Allotted: A
• Next Hearing Date: 10-10-2013
• Assessment Year: 2008-2009
• Appeal Filed On: 04-12-2012
• Court: TRIBUNAL
• Department Lawyers: AMITAVA BHATTACHARJEE
• Assessee Lawyers: S M SURANA
• Keywords: Search and seizure; Document seized; Revised return; Documents seized
• Section: 143(3); 153A; 131; 132; 139

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, BENCH A KOLKATA [BEFORE HON BLE SHRI MAHAVIR SINGH, JM & SHRI M.BALAGANESH, AM ] ITA NO S . 1773 & 1774/KOL/2012 ASSESSMENT YEAR S : 2008 - 09 & 2009 - 10 SRI NARESH CHANDRA AGRAWALLA - VERSUS - A.C.I.T., CENTRAL CIRCLE - XII, KOLKATA KOLKATA (PAN: ACWPA 9166 D) FOR THE APPELLANT: SHRI S.M.SURANA, ADVOCATE FOR THE RESPONDENT: SHRI AMITAVA BHATTACHARJEE , JCIT ,SR.DR DATE OF HEARING : 18 .08 .2015 . DATE OF PRONOUNCEMENT : 20.08.2015. ORDER PER SHRI M.BAL AGANESH, AM THESE APPEAL S OF ASSESSEE ARISE OUT OF THE ORDER OF LD. CIT(A) - CENTRAL - II, KOLKATA IN APPEAL NO . 72 / CC - XII/ CIT(A) - C - II / 11 - 12 DATED 14.09.2012 PASSED FOR A.Y.2008 - 09 AND APPEAL NO.73/CC - XII/CIT(A) - C - II/11 - 12 DATED 14.09.2012 PASSED F OR A.Y.2009 - 10 CONFIRMING THE LEVY OF PENALTY U/S 271AAA OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT ). THE ISSUE INVOLVED IN BOTH THESE APPEALS ARE IDENTICAL IN NATURE IN RESPECT OF LEVY OF PENALTY U/S 271AAA OF THE ACT AND HENCE THE Y ARE TAKEN UP TOGETHER AND DISPOSED OFF BY A COMMON ORDER FOR THE PURPOSE OF CONVENIENCE. 2. THE ONLY ISSUE TO BE DECIDED IN THESE APPEALS IS AS TO WHETHER THE LD. CIT(A) IS RIGHT IN CONFIRMING THE LEVY OF PENALTY U/S 271AAA OF THE ACT IN THE FACTS AND CIRCUMSTANCES OF THE CASE. 3. THE BRIEF FACTS OF THE CASE ARE THAT THE A SEARCH WAS CONDUCTED AT THE PREMISES OF THE ASSESSEE ON 11.09.2008. THE ASSESSEE DURING THE COURSE OF SEARCH MADE A DISCLOSURE U/S 132(4) OF THE ACT OFFERING UNDISCLOSED INCOME TO T HE SUM OF ITA NOS.1773&1774/KOL/2012 SRI NARESH CHANDRA AGRAWALLA A.YR S . 2008 - 09 & 2009 - 10 2 RS.1,60,06,550/ - FOR BOTH THE A.YRS.2008 - 09 AND 2009 - 10 , AS ON THE DATE OF SEARCH, THE DUE DATE OF FILING THE RETURN OF INCOME I.E. (30.09.2008) HAD NOT EXPIRED FOR THE A.Y.2008 - 09 AND AS FAR AS A.YR.2009 - 10 IS CONCERNED , THE ASSESSEE IS ENTITLE D TO MAKE DISCLOSURE BEING THE YEAR OF SEARCH. THE ASSESSEE FILED REGULAR RETURN OF INCOME FOR A.Y.2008 - 09 ON 31.03.2009 DECLARING TAXABLE INCOME OF RS.7,21,387/ - . THIS RETURN WAS NOT FILED WITHIN THE TIME LIMIT PRESCRIBED U/S 139(1) OF THE ACT FOR A.Y.200 8 - 09 BUT HOWEVER, WAS FILED WITHIN THE TIME LIMIT PRESCRIBED U/S 139(4) OF THE ACT. THE ASSESSEE ORIGINALLY MADE 132(4) DISCLOSURE STATEMENT FOR ASSESSMENT YEARS PUT TOGETHER TO THE TUNE OF RS.1,60,06,550/ WHICH WAS LATER RECTIFIED BY THE ASSESSEE BY WAY O F REVISED DISCLOSURE STATEMENT OF REALIZING THE GENUINE MISTAKE COMMITTED BY HIM IN THE STATEMENT FILED ORIGINALLY. THE REVISED DISCLOSURE STATEMENT FOR A.Y.2008 - 09 WAS RS.27,88,222/ - AND FOR A.Y.2009 - 10 WAS RS.1,59,71,000/ - . HOWEVER, IN THE RETURN FILED B Y THE ASSESSEE FOR A.Y.2008 - 09 IN RESPONSE TO NOTICE U/S 153A OF THE ACT PURSUANT TO THE SEARCH, THE ASSESSEE HAD DULY DISCLOSED THIS INCOME WHICH HE HAD ORIGINALLY DISCLOSED U/S 132(4) OF THE ACT IN THE SUM OF RS.27,88,222/ - . IN OTHER WORDS, IN THE RETURN FILED IN RESPONSE TO NOTICE U/S 153A OF THE ACT THE ASSESSEE HAD DISCLOSED TAXABLE INCOME OF RS.35,64,390/ - WHICH INCLUDES RS.27,88,222/ - ADMITTED BY HIM IN SEC. 132(4) DISCLOSURE STATEMENT. THE ASSESSMENT WAS ULTIMATELY COMPLETED U/S 153A R.W.S. 143(3) OF THE ACT ON 31.12.2010 FOR A.Y.2008 - 09 ASSESSING THE TAXABLE INCOME AT RS.35,64,390/ - . SIMILARLY FOR A.Y.2009 - 10 THE ASSESSEE FILED RETURN OF INCOME ON 30.03.2010 DECLARING TAXABLE INCOME OF RS.1,64,70,993/ - WHICH ADMITTEDLY INCLUDES INCOME OF RS.1,59,71 , 000/ - DISCLOSED BY HIM U/S 132(4 ) OF THE ACT DURING THE SEARCH PROCEEDING S . THE ASSESSMENT U/S 143(3) OF THE ACT FOR A.Y.2009 - 10 WAS COMPLETED BY THE LD. AO ON 31.12.2010 ACCEPTING THE INCOME RETURNED OF RS.1,64,70,993/ - . THE LD. AO PROCEEDED TO LEVY PENA LTY U/S 271AAA OF THE ACT FOR BOTH THE YEARS ON THE GROUND THAT THE ASSESSEE S CASE DOES NOT FALL UNDER SUB - SECTION (2) OF SECTION 271AAA OF THE ACT AS CUMULATIVE CONDITIONS STIPULATED THEREIN ARE NOT SATISFIED BY THE ASSESSEE. AGGRIEVED , THE ASSESSEE CHA LLENGED THIS I SSUE BEFORE THE LD. CIT(A), WHO CONFIRMED THE ACTION OF THE LD. AO BY STAT ING THAT THE ASSESSEE HAS NOT CLEARLY SUBSTANTIATED THE MANNER IN WHICH HE HAS DERIVED THE UNDISCLOSED INCOME. HE FURTHER CONCLUDED THAT THE ITA NOS.1773&1774/KOL/2012 SRI NARESH CHANDRA AGRAWALLA A.YR S . 2008 - 09 & 2009 - 10 3 ASSESSEE HAS NOT PAID THE T AX TOGETHER WITH THE INTEREST ON THE UNDISCLOSED INCOME DISCLOSED BY HIM U/S 132(4) OF THE ACT AND NO FURTHER EVIDENCE WERE PRODUCED BY THE ASSESSEE EITHER BEFORE AO OR BEFORE HIM AS PROOF FOR PAYMENT OF TAX AND ACCORDINGLY THE ASSESSEE IS NOT EN TITLED F OR IMMUNITY FROM LEVY OF PENALTY U/S 271AAA (2) OF THE ACT. AGGRIEVED, THE ASSESSEE CHALLENGED THIS ISSUE BEFORE THIS TRIBUNAL FOR BOTH THE YEARS. 4. SHRI S.M.SURANA, ADVOCATE, THE LD. AR APPEARED ON BEHALF OF THE ASSESSEE AND SHRI AMITAVA BHATTCHARJEE, JCIT, SR.DR, THE LD. DR APPEARED ON BEHALF OF THE REVENUE. 5. THE LD. AR ARGUED THAT PURSUANT TO THE SEARCH CONDUCTED IN THE PREMISES OF THE ASSESSEE ON 11.09.2008, THE ASSESSEE HAD MADE A DISCLOSURE STATEMENT U/S 132(4) OF THE ACT OFFERING RS.1,60,06,550 / - AS UNDISCLOSED INCOME FOR BOTH THE A.YRS. 2008 - 09 AND 2009 - 10 PUT TOGETHER. IN THE SAID DISCLOSURE STATEMENT , THE LD. AR HAD DULY TAKEN INTO ACCOUNT THE SEIZED MATERIALS AND ACCORDINGLY MADE DISCLOSURE AT RS.27,88,222/ - FOR A.Y.2008 - 09 AND THE BALANCE FOR A.Y.2009 - 10. THE ASSESSEE LATER ON REALIZING THE CALCULATION MISTAKE COMMITTED IN THE SAID DISCLOSURE STATEMENT MADE A REVISED DISCLOSURE AS BELOW : - A.Y.2008 - 09 : RS. 27,88,222/ - A.Y.2009 - 10 : RS.1,59,71,000/ - THE LD. AR FURTHER ARGUED THAT THOUGH THERE WAS 132(4 ) DISCLOSURE MADE IN THE COVERING LETTER TO THE TUNE OF RS.1,60,06,550/ - , IN THE ANNEXURE - A ATTACHED TO THE DISCLOSURE PETITION , THE FACT OF DISCLOSURE OF RS.27,88,222/ - AND UNDISCLOSED CASH FOUND AT RS.1,59,71,000/ - (1,78,75,000 19,04,0 00) FOR A.Y.2009 - 10 WERE DULY REFLECTED AND HENCE IT IS TO BE CONSTRUED AS GENUINE MATHEMATICAL MISTAKE COMMITTED BY THE ASSESSEE AND THE ASSESSEE HAD NO MALAFIDE INTENTION TO GIVE A WRONG DISCLOSURE STATEMENT IN THIS REGARD. HE ALSO FURTHER ARGUED THAT T HE WORKINGS FOR THE REVISED DISCLOSURE MADE FOR A.Y.2009 - 10 ARE AS BELOW : - CASH FOUND DURING THE SEARCH RS.1,78,75,000 ITA NOS.1773&1774/KOL/2012 SRI NARESH CHANDRA AGRAWALLA A.YR S . 2008 - 09 & 2009 - 10 4 LESS: CASH BALANCE AVAILABLE AS PER REGULAR BOOKS OF ACCOUNT RS. 19,04,000 CASH OFFERED AS UNDISCLOSED INCOME FOR A.Y.2009 - 10 R S.1,59,71,000 THE LD. AR FURTHER VEHEMENTLY ARGUED THAT THE CONTENTION S RAISED BY THE LD. AO AS TO ASSESSEE NOT SUBSTANTIATING THE MANNER IN WHICH THE UNDISCLOSED INCOME WAS DERIVED AND THE CONTENTION OF THE LD. CIT(A) AS TO ASSESSEE NOT PAYING THE TAX TO GETHER WITH THE INTEREST OF THE UNDISCLOSED INCOME OFFERED ALONG WITH THE RETURN OF INCOME, ARE UNWARRANTED. IN THIS REGARD , THE LD. AR REFERRED TO THE RELEVANT PAGE OF THE ASSESSMENT ORDER I.E. PAGES 2 AND 3 OF THE ASSESSMENT ORDER WHEREIN IN PARA - 4 , IN R ESPONSE TO THE SPECIFIC QUERY RAISED BY THE LD. AO ASKING THE ASSESSEE TO SUBSTANTIATE THE MANNER IN WHICH THE ASSESSEE HAS DERIVED THE UNDISCLOSED INCOME AND THE REPLIES FILED BY THE ASSESSEE THEREON. THEY ARE REPRODUCED HEREIN FOR THE SAKE OF CONVENIENCE : - IV . IN THE COURSE OF THE SEARCH AND SEIZURE OPERATION, THE ASSESSEE, VIDE HIS DISCLOSURE PETITION FILED BEFORE THE ADIT (INVESTIGATION), UNIT - III(4), KOLKATA HAD DISCLOSED AN AMOUNT OF RS.1,60,06,550/ - BEING HIS UNDISCLOSED INCOME DURING THE F.Y. 2007 - 08 RELEVANT TO THE ASSESSMENT YEAR 2008 - 09. DURING THE COURSE OF THE ASSESSMENT PROCEEDINGS, A STATEMENT OF THE ASSESSEE WAS RECORDED U/S 131 OF THE ACT ON 10.11.2010. IN HIS STATEMENT, IN REPLY TO QUESTION NO.2, WHILE EXPLAINING THE BASIS, WORKING AND TH E MANNER IN WHICH THE SAID INCOME DISCLOSED WAS EARNED, SHRI NARESH CHANDRA AGRAWALLA STATED AS UNDER : - FIRST OF ALL, LET ME STATE THAT THERE WAS A MISTAKE IN THE COMPUTATION OF UNDISCLOSED INCOME IN MY DISCLOSURE PETITION FILED BEFORE THE ADIT (INVESTI GATION), UNIT - III(4), KOLKATA WHEREBY I HAD DISCLOSED RS.1,60,06,550/ - IN AGGREGATE DURING THE FINANCIAL YEARS 2007 - 08 AND 2008 - 09. HOWEVER, I HAVE DETECTED THE SAID MISTAKE AND SUBSEQUENTLY DISCLOSED RS.27,88,222/ - IN MY RETURN OF INCOME FILED U/S 153A FO R THE A.Y.2008 - 09 (RELEVANT TO THE F.Y. 2007 - 08) AND RS.1,59,71,000/ - IN MY RETURN OF INCOME FILED U/S 139 FOR THE A.Y.2009 - 10 (RELEVANT TO THE F.Y.2008 - 09). I HAVE THUS DISCLOSED RS.1,87,59,222/ - IN AGGREGATE INSTEAD OF RS.1,60,06,550/ - DISCLOSED BY ME EA RLIER. I AM EXPLAINING THE BASIS, WORKING AND THE MANNER IN WHICH THE SAID INCOME DISCLOSED WAS EARNED AS FOLLOWS : - F.Y.2007 - 08 I HAVE DISCLOSED RS.27,58,222/ - BEING CASH PAID TO LAND SELLER FOR PURCHASE OF LAND AT 279A, N.S.C.BOSE ROAD, KOLKATA - 47 W HERE THE PROJECT ADYA PEARL HAS BEEN CONSTRUCTED BY M/S.ADYA PEARL CONSORTIUM (AOP) OF WHICH I AM THE AUTHORIZED SIGNATORY. THIS DISCLOSURE HAS BEEN MADE BY ME ON THE BASIS OF THE PAGE NO.17 OF THE DOCUMENTS SEIZED WITH IDENTIFICATION MARK ALT/21 FROM TH E BUSINESS PREMISES OF M/S. AKSHARA SHELTERS PVT. LTD. AND OTHERS AT SUPRA COURT , 35, KAVI SABITRI PRANNA CHATTOPADHYAY ROAD, KOLKATA - 26. I HAVE ALSO DISCLOSED RS.30,000/ - PAID IN CASH FOR WATER CONNECTION AT 41C & 41D, N.S.C.BOSE ROAD, KOLKATA - 4 0 ON THE BASIS OF THE PAGE NO.2 OF THE DOCUMENTS IMPOUNDED WITH IDENTIFICATION MARK AG/5 FROM THE BUSINESS PREMISES OF M/S. ADYA TOWERS PVT. LTD. AND OTHERS AT 35A, DR.SA RAT BANERJEE ROAD, KOLKATA - 29 DURING THE SURVEY CONDUCTED THEREIN ON 11.09.2008. ITA NOS.1773&1774/KOL/2012 SRI NARESH CHANDRA AGRAWALLA A.YR S . 2008 - 09 & 2009 - 10 5 THUS, I HAVE DISCLOSED RS.27,88,222/ - (RS.27,58,222/ - + RS.30,000/ - ) IN MY RETURN OF INCOME FILED FOR THE A.Y.2008 - 09. F.Y.2008 - 09 DURING THE COURSE OF THE SEARCH & SEIZURE OPERATION CONDUCTED U/S 132 IN MY RESIDENCE AT 5, TILAK ROAD, KOLKATA - 700029 ON 11.09.2008, RS.1,78,75,000/ - WAS FOUND IN CASH. OUT OF THE SAME RS.1,78,25,000/ - WAS SEIZED. SINCE RS.19,04,000/ - ONLY WAS THE CASH BALANCE AS PER THE REGULAR CASH BOOKS OF MY SON SHRI YOGESH CHANDRA AGRAWALLA (RS.3,65,000/ - ) AND MY DAUGHTER - IN - L AW SMT. MONA AGRAWALLA (RS.15,39,000/ - WHO RESIDE WITH ME, I HAD DISCLOSED RS.1,59,71,000/ - (RS.1,78,75,000/ - MINUS RS.19,04,000/ - ) AS MY UNDISCLOSED INCOME IN MY DISCLOSURE PETITION ON THIS ACCOUNT. I HAVE ALSO DISCLOSED THE SAME AMOUNT IN MY RETURN OF IN COME FILED U/S 139 FOR THE A.Y.2009 - 10. THE SAID CASH BOOKS WILL BE PRODUCED BEFORE YOU AND CASH FLOW STATEMENTS OF SHRI YOGESH CHANDRA AGRAWALLA AND SMT. MONA AGRAWALLA FOR THE PERIOD FROM 01.04.2008 TO 11.09.2008 SHALL ALSO BE FURNISHED TO YOU FOR YOUR N ECESSARY VERIFICATION. I WOULD LIKE TO STATE HERE THAT DURING THE COURSE OF THE SEARCH CONDUCTED IN MY RESIDENCE ON 11.09.2008, CERTAIN LOOSE DOCUMENTS WERE FOUND AND SEIZED WITH IDENTIFICATION MARK VAR/5. PAGE NOS.7,8,9,10,12 AND 13 OF VAR/5 RE VEAL CASH RECEIPTS OF RS.5,45,000/ - (IN AGGREGATE) BY ME AS LOAN NOT RECORDED IN MY REGULAR BOOKS OF ACCOUNTS. THESE RECEIPTS ARE INCLUDED IN THE CASH FOUND AND DISCLOSED BY ME. FURTHER, IN REPLY TO QUESTION NO.4, WHILE EXPLAINING THE CONTENTS OF PAGE 21 O F THE SEIZED DOCUMENTS ALT/15, SHRI NARESH CHANDRA AGRAWALLA STATED AS UNDER : - DURING THE F.Y. 2007 - 08, I AND MY GROUP/FAMILY SEPARATED AWAY FROM M/S. AKSHARA HIGHRISE PVT. LTD. IN WHICH I WAS A DIRECTOR DUE TO SOME DISPUTES. FOR THIS, THE NET WORTH OF M/S AKSHARA HIGHRISE PVT. LTD. WAS WORKED OUT TO RS.68,03,117/ - AS APPEARS FROM THIS PAGE NO0.21 OF ALT/15. I RECEIVED 1/3 RD SHARE OF THE SAME, I.E., RS.22,67,672/ - (RS.60,000/ - IN CHEQUE AND RS.22,07,672/ - IN CASH) ON BEHALF OF MY GROUP/FAMILY DURING THE F.Y. 2007 - 08 ITSELF FROM SHRI PRAKASH CHANDRA AGRAWALLA AND HIS GROUP WHICH IS KNOWN AS THE AKSHARA GROUP . I WOULD LIKE TO STATE HERE THAT THIS AMOUNT OF RS.22,07,672/ - IS PART OF THE AMOUNT OF RS.27,58,222/ - DISCLOSED BY ME AS EXPLAINED IN MY REPLY TO YOUR QUESTION NO.2 ABOVE. THE LD. AR FURTHER ARGUED THAT THE ASSESSEE HAD DULY SUBSTANTIATED THE MANNER OF DERIVING THE UNDISCLOSED INCOME FOR BOTH THE YEARS AND IN RESPECT OF PAYMENTS OF TAX THEREON , THE LD. AR STATED THAT THE SEIZED CASH OF R S.1,78,75,000/ - HAS BEEN DULY ADJUSTED BY THE COMMISSIONER OF INCOME TAX VIDE COMMUNICATION BY THE C.I.T. TO A.C.I.T., CENTRAL CIRCLE - XII, KOLKATA IN F.NO.A - 13/10 - 11/CIT(C - II)/KOL/AKSHARA/2010 - 11 DATED 10.02.2012 RELEASING THE BALANCE AMOUNT OF RS.58,51,34 4/ - , AFTER ADJUSTMENT OF THE SEIZED CASH TOWARDS THE EXISTING TAX LIABILITY IN TERMS OF SECTION 132B OF THE ACT READ WITH RULE 112C OF THE INCOME TAX RULES. THE LD.AR FURTHER ARGUED THAT NOWHERE IN THE STATU T E , THE LAW PRESCRIBES THE TIME LIMIT WITHIN WHI CH THE TAX HAS TO BE PAID. HENCE, HE ARGUED THAT HE HAS SATISFIED ALL THE ITA NOS.1773&1774/KOL/2012 SRI NARESH CHANDRA AGRAWALLA A.YR S . 2008 - 09 & 2009 - 10 6 CUMULATIVE CONDITIONS CONTEMPLATED IN 271AAA(2) OF THE ACT AND ACCORDINGLY CLAIMED FOR IMMUNITY FROM LEVY OF PENALTY U/S 271AAA OF THE ACT. 6. IN RESPONSE TO THIS, THE LD. DR ARGUE D THAT THE ASSESEE HAD NOT CLEARLY SUBSTANTIATED THE MANNER OF DERIVING THE UNDISCLOSED INCOME. THIS IS EV IDENT FROM THE FACT THAT THE ASSESSEE ORIGINALLY MADE DISCLOSURE STATEMENT U/S 132(4) TO THE TUNE OF RS.1.6 CRORES AND WHICH WAS LATER ON REVISED BY H IM TO RS.1.88 CRORES AND HE ALSO ARGUED THAT HOW THE CASH COMPONENT IN THE CONSTRUCTION BUSINESS CARRIED ON BY THE ASSESSEE WAS DERIVED BY THE ASSESSEE WAS NOT CLEARLY SUBSTANTIATED BEFORE THE AO. ACCORDINGLY HE ARGUED THAT CLAUSE (II) OF 271AAA(2) HAS N OT BEEN SATISFIED BY THE ASSESEE. HE FURTHER ARGUED THAT THE TAXES ON THE UNDISCLOSED INCOME OFFERED U/S 132(4) DISCLOSURE STATEMENT SHOULD HAVE BEEN PAID BY THE ASSESSEE ATLEAST AT THE TIME OF FILING OF RETURN OF INCOME. WHEREAS IN THE INSTANT CASE, THE A SSESSEE DID NOT BOTHER TO DO SO AND THE SEIZED CASH OF RS.1,78,25,000/ - WAS ADJUSTED BY THE DEPARTMENT AGAINST THE EXISTING TAX LIABILITY WHICH INCLUDES TAX LIABILITY DETERMINED PURSUANT TO THE SEARCH. ASSESSMENT WAS COMPLETED IN THE ASSESSEE S CASE ON 31. 12.2010 AND SEIZED CASH WAS ADJUSTED TOWARDS EXISTING TAX LIABILITY THE BALANCE MONEY WAS REFUNDED TO THE ASSESSEE ON 10.02.2012 . ACCORDINGLY, HE ARGUED THAT THE CLAUSE (III) MENTIONED IN 271AAA(2) IS NOT SATISFIED BY THE ASSESSEE. HE FURTHER ARGUED THAT U NLESS THE CUMULATIVE CONDITIONS CONTEMPLATED IN 271AAA(2) ARE SATISFIED BY THE ASSESSEE, NO IMMUNITY FROM LEVY OF PENALTY CAN BE GRANTED TO THE ASSESSEE. ACCORDINGLY, HE PRAYED FOR CONFIRMATION OF THE ORDERS OF THE LOWER AUTHORITIES. 7. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIALS AVAILABLE ON RECORD. IT IS NOT IN DISPUTE THAT THE ASSESSEE HAD INITIALLY MADE A DISCLOSURE STATEMENT U/S 132(4) OF THE ACT PURSUANT TO THE SEARCH CONDUCTED ON 11.09.2008 TO THE TUNE OF RS. 1,60,06,550/ - FOR A.YRS . 2008 - 09 AND 2009 - 10 PUT TOGETHER. IT IS ALSO NOT IN DISPUTE THAT THE ASSESSEE ON REALIZING CERTAIN CALCULATION MISTAKE IN THE SAID DISCLOSURE STATEMENT CAME FORWARD TO FILE A REVISED DISCLOSURE STATEMENT TO THE TUNE OF RS.1.88 CRORES AS BELOW : - A.Y. 200 8 - 09 : RS. 27,88,222/ - ITA NOS.1773&1774/KOL/2012 SRI NARESH CHANDRA AGRAWALLA A.YR S . 2008 - 09 & 2009 - 10 7 A.Y.2009 - 10 : RS.1,59,71,000/ - RS.1,87,59,222/ - IT IS ALSO NOT IN DISPUTE THAT THERE WAS A SEIZURE OF CASH BY THE DEPARTMENT AT THE TIME OF SEARCH TO THE TUNE OF RS.1,78,25,000/ - . IT IS SEEN THAT THE ASSESSEE HAD FILED REGUL AR RETURN OF INCOME FOR A.Y.2008 - 09 ON 31.03.2009. THE DUE DATE OF FILING THE RETURN OF INCOME FOR 2008 - 09 IS 30.09.2008 AND ADMITTEDLY THE SEARCH HAPPENED ON 11.09.2008 AND HENCE WE CAN CONCLUDE THAT ON THE DATE OF SEARCH THE DUE DATE OF FILING THE RETUR N OF INCOME HAD NOT EXPIRED FOR A.Y.2008 - 09. HENCE THE ASSESSEE IS ENTITLED TO MAKE DISCLOSURE STATEMENT U/S 132(4) OF THE ACT AND CLAIM IMMUNITY PROVIDED IN 271AAA(2) OF THE ACT PROVIDED THE CUMULATIVE CONDITIONS CONTEMPLATED THEREIN ARE SATISFIED BY THE ASSESSEE. IT IS ALSO SEEN THAT THOUGH THE ASSESSEE HAD INITIALLY MADE A DISCLOSURE STATEMENT OF RS.1.60 CRORES IN THE COVERING LETTER BUT IN ANNEXURE - A TO THE SAID COVERING LETTER HE HAD IN FACT MENTIONED THE FIGURE OF RS. 1,78,75,000 / - (BEING CASH FOUND) ; RS.27,88 ,222/ - AMOUNT OFFERED FOR A.Y.2008 - 09 AND THE CASH BALANCE AVAILABLE IN BOOKS ON THE DATE OF SEARCH AMOUNTING TO RS.19,04,000/ - . THESE THREE FIGURES HAVE BEEN DULY CONSIDERED IN THE REVISED DISCLOSURE STATEMENT MADE BY THE ASSESSEE WHICH WAS ALS O NOT RETRACTED LATER ON WHILE FILING THE RETURN OF INCOME IN RESPONSE TO THE NOTICE ISSUED U/S 153A OF THE ACT FOR A.Y.2008 - 09 AND REGULAR RETURN FILED FOR A.Y.2009 - 10 BEING THE YEAR OF SEARCH. RELIANCE IN THIS REGARD IS PLACED ON THE DECISION OF CIT VS CAREERS EDUCATION AND INFOTECH P.LTD. (2011) 336 ITR 257 (P&H). THE HEADNOTES IS REPRODUCED HEREIN BELOW : PENALTY CONCEALMENT OF INCOME SURRENDER OF INCOME DURING SURVEY FINDING BY TRIBUNAL THAT THERE WAS NO MATERIAL FORM WHICH OCNEALMENT OF INCOME COULD BE INFERRED PENALTY COULD NOT BE IMPOSED INCOME - TAX ACT, 1961, S.271(1)(C). IN EVERY CASE WHERE SURRENDER IS MADE AN INFERENCE OF CONCEALMENT OF INCOME CANNOT BE DRAWN UNDER SECTION 58 OF THE INDIAN EVIDENCE ACT, 1872. WHERE THE ASSESSEE SURREND ERED ADDITIONAL INCOME DURING THE COURSE OF AN INCOME - TAX SURVEY TO BUY PEACE WITH THE DEPARTMENT AND FILED A REVISED RETURN ACCORDINGLY, AND THE TRIBUNAL RECORDED A CATEGORICAL FINDING THAT THERE WAS NO MATERIAL TO INFER CONCEALMENT OF INCOME OR FURNISHIN G OF INACCURATE PARTICULARS : ITA NOS.1773&1774/KOL/2012 SRI NARESH CHANDRA AGRAWALLA A.YR S . 2008 - 09 & 2009 - 10 8 HELD ACCORDINGLY, THAT PENALTY COULD NOT BE IMPOSED UNDER SECTION 271(1)(C) OF THE INCOME - TAX ACT, 1961. IT IS ALSO HELD BY THE HON BLE APEX COURT IN THE CASE OF CIT VS. SURESH CHAND RA MITTAL [2001] 251 ITR 9 (SC) WHEREIN TH EIR LORDSHIPS HAVE OBSERVED THAT WHERE THE ASSESSEE HAS FILED A REVISED RETURN SHOWING HIGHER INCOME AND THE ASSESSEE HAS SURRENDERED THE INCOME AFTER PERSISTENT QUERIES BY THE ASSESSING OFFICER AND WHERE THE REVISED RETURN HAS BEEN REGULARIZED BY THE RE VENUE, THE EXPLANATION OF THE ASSESSEE THAT HE HAS DECLARED THE ADDITIONAL INCOME TO BUY PEACE OF MIND AND TO COME OUT OF VEXED LITIGATION COULD BE TREATED AS BONA FIDE, ACCORDINGLY THE LEVY OF PENALTY U/S 271(1)(C) WAS HELD TO BE NOT JUSTIFIED. IN THE I NSTANT CASE BEFORE US, AS PER THE DISCLOSURE MADE BY THE ASSESSEE THE RETURN WAS FILED WHICH HAS BEEN ACCEPTED AS IT IS , WITHOUT MAKING ANY ALTERATIONS THEREIN NOR WAS THERE ANY ADVERSE OBSERVATION IN THE ASSESSMENT ORDER , WITH REGARD TO ANY DISCREPANCY TO CORRELATE THE SAME WITH THE AMOUNT OF DISCLOSURE. HENCE WE FIND THAT THERE WAS NO MALAFIDE INTENTION ON THE PART OF THE ASSESSEE TO CONCEAL THE FIGURES FROM THE DEPARTMENT WHILE GIVING THE DISCLOSURE STATEMENT U/S 132(4) OF THE ACT. NOW IT IS TO BE SEEN THAT WHETHER THE ASSESSEE HAD SATISFIED THE CUMULATIVE CONDITIONS CONTEMPLATED IN 271AAA(2) OF THE ACT. FOR THE SAKE OF CONVENIENCE THE PROVISIONS ARE REPRODUCED HEREIN : - 271 AAA (2) NOTHING CONTAINED IN SUB - SECTION 91) SHALL APPLY IF THE ASSESSEE, - ( I ) IN THE COURSE OF THE SEARCH, IN A STATEMENT UNDER SUB - SECTION (4) OF SECTION132,ADMITS THE UNDISCLOSED INCOME AND SPECIFIES THE MANNER IN WHICH SUCH INCOME HAS BEEN DERIVED; ( II ) SUBSTANTIATES THE MANNER IN WHICH THE UNDISCLOSED INCOME WAS DERIVED; AND ( III ) PAYS THE TA X, TOGETHER WITH INTEREST, IF ANY, IN RESPECT OF THE UNDISCLOSED INCOME. IT IS SEEN FROM THE RECORDS THAT THE ASSESSEE HAD CLEARLY SUBSTANTIATED THE MANNER OF D ERIVING UNDISCLOSED INCOME AS COULD BE SEEN FROM THE REPLIES TO QUESTION NO.2 AND 3 REPRODUC ED HEREIN ABOVE AND EVEN IN THE DISCLOSURE STATEMENT THE ASSESSEE HAD CLEARLY STATED THE MANNER OF DERIVING THE UNDISCLOSED INCOME AND THE APPLICATION OF THE SAME THEREON. NOW THE ONLY POINT WHICH IS TO BE ADDRESSED IS THAT WHETHER THE TAX HAS BEEN PAID I N TIME BY THE ASSESSEE ON THE UNDISCLOSED INCOME. WE HELD THAT THE STATUTE DOES NOT ITA NOS.1773&1774/KOL/2012 SRI NARESH CHANDRA AGRAWALLA A.YR S . 2008 - 09 & 2009 - 10 9 PRESCRIBE ANY TIME LIMIT FOR PAYING TAX AND INTEREST ON THE UNDISCLOSED INCOME OFFERED BY THE ASSESSEE PURSUANT TO THE SEARCH. THE LAW IN THIS REGARD PRESCRIBES THAT TAX AN D INTEREST ON UNDISCLOSED INCOME IS TO BE PAID BY THE ASSESSEE. AS LONG AS THE TAX AND INTEREST HAS BEEN DULY PAID BY THE ASSESSEE (IN THE INSTANT CASE BY WAY OF AN ADJUSTMENT OF SEIZED CASH) , IT IS TO BE CONCLUDED IN THE INTEREST OF RENDERING SUBSTANTIAL JUSTICE THAT THE ASSESSEE HAD INDEED COMPLIED WITH THE PROVISION OF CLAUSE (III) OF 271AAA(2) OF T HE ACT IN SPIRIT. THIS ISSUE HAS BEEN DULY ADJUDICATED BY THE HON BLE APEX COURT IN THE CASE OF ACIT VS M/S.GEBILAL KANHAIALAL (HUF) REPORTED IN (2012) 348 IT R 561 WHERE THE LORDSHIPS HAVE HELD AS BELOW : - THREE CONDITIONS HAVE GOT TO BE SATISFIED BY THE ASSESSEE FOR CLAIMING IMMUNITY FROM PAYMENT OF PENALTY UNDER CLAUSE (2) OF EXPLANATION 5 TO SECTION 271(1)(C). THE FIRST CONDITION WAS THAT THE ASSESSEE MUST MAKE A STATEMENT UNDER SECTION 132(4) IN THE COURSE OF SEARCH STATING THAT THE UNACCOUNTED ASSETS AND INCRIMINATING DOCUMENTS FOUND FROM HIS POSSESSION DURING THE SEARCH HAVE BEEN ACQUIRED OUT OF HIS INCOME, WHICH HAS NOT BEEN DISCLOSED IN THE RETURN OF IN COME TO BE FURNISHED BEFORE EXPIRY OF TIME SPECIFIED IN SECTION 139(1). SUCH STATEMENT WAS MADE BY THE KARTA DURING THE SEARCH WHICH CONCLUDED ON AUGUST 1, 1987. IT IS NOT IN DISPUTE THAT CONDITION NO.1 WAS FULFILLED. THE SECOND CONDITION FOR AVAILING OF T HE IMMUNITY FROM PENALTY UNDER SECTION 271(1)(C) WAS THAT THE ASSESSEE SHOULD SPECIFY, IN HIS STATEMENT UNDER SECTION 132(4), THE MANNER IN WHICH SUCH INCOME STOOD DERIVED. ADMITTEDLY, THE SECOND CONDITION, IN THE PRESENT CASE ALSO STOOD SATISFIED. ACCORDI NG TO THE DEPARTMENT, THE ASSESSEE WAS NOT ENTITLED TO IMMUNITY UNDER CLAUSE (2 ) AS HE DID NOT SATISFY THE THIRD CONDITION FOR AVAILING THE BENEFIT OF WAIVER OF PENALTY UNDER SECTION 271(1)(C) AS THE ASSESSEE FAILED TO FILE HIS RETURN OF INCOME ON 31 ST JU LY, 1987 AND PAY TAX THEREON PARTICULARLY WHEN THE ASSESSEE CONCEDED ON AUGUST 1, 1987 THAT THERE WAS CONCEALMENT OF INCOME. THE THIRD CONDITION UNDER CLAUSE (2) WAS THAT THE ASSESEE HAD TO PAY THE TAX TOGETHER WITH INTEREST, IF ANY, IN RESPECT OF SUCH UND ISCLOSED INCOME. HOWEVER, NO TIME LIMIT FOR PAYMENT OF SUCH TAX STOOD PRESCRIBED UNDER CLAUSE (2). THE ONLY REQUIREMENT STIPULATED IN THE THIRD CONDITION WAS FOR THE ASSESSEE TO PAY TAX TOGETHER WITH INTEREST . IN THE PRESENT CASE, THE THIRD CONDITION A LSO STOOD FULFILLED. THE ASSESSEE HAS PAID TAX WITH INTEREST UPTO THE DATE OF PAYMENT. THE ONLY CONDITION WHICH WAS REQUIRED TO BE FULFILLED FOR GETTING THE IMMUNITY, AFTER THE SEARCH PROCEEDINGS GOT OVER, WAS THAT THE ASSESSEE HAD TO PAY THE TAX TOGETHER WITH INTEREST IN RESPECT OF SUCH UNDISCLOSED INCOME UPTO THE DATE OF PAYMENT. CLAUSE (2) DID NOT PRESCRIBE THE TIME LIMIT WITHIN WHICH THE ASSESSEE SHOULD PAY TAX ON INCOME DISCLOSED IN THE STATEMENT UNDER SECTION 132(4). IT IS SEEN FROM THE ASSESSMENT ORDER THAT THE LD. AO HAD STATED THAT THE ASSESSEE HAD NO OPTION BUT TO ACCEPT THE TRUTH AND COME FORWARD WITH THE DISCLOSURE AND HENCE CONCLUDED THAT BUT FOR THE SEARCH THE ASSESSEE WOULD NOT HAVE COME FORWARD WITH THE OFFER OF UNDISCLOSED INCOME AND ON THAT GROUND LEVY OF PENALTY IS JUSTIFIED. WE FIND THAT IF THIS ARGUMENT OF THE LD. AO IS TO BE APPRECIATED , THEN THE VERY PURPOSE OF ITA NOS.1773&1774/KOL/2012 SRI NARESH CHANDRA AGRAWALLA A.YR S . 2008 - 09 & 2009 - 10 10 PROVIDING IMMUNITY U/S 271AAA(2) OF THE ACT GETS DEFEATED. THE LEGISLATURE IN ITS WISDOM HAD PROVIDED FOR GRANTING IMMUNITY FROM LEVY OF PENALTY IN CERTAIN CIRCUMSTANCES AS CONTEMPLATED IN 271AAA(2) OF THE ACT. THE LEVY OF PENALTY U/S 271AAA CANNOT BE MADE AUTOMATIC PURSUANT TO THE SEARCH. WE ALSO FIND THAT THE DECISION OF THE HON BLE APEX COURT RENDERED IN THE CASE OF MAK DAT A P.LTD VS CIT REPORTED IN 358 ITR 593 (SC) IS ALSO DISTINGUISHABLE IN THE FACTS AND CIRCUMSTANCES OF THE CASE AS IN THE CASE BEFORE THE HON BLE SUPREME COURT THE IMMUNITY CLAUSE PROVIDED IN 271AAA(2) OF THE ACT HAD NOT BEEN DISCUSSED. WE ALSO HO LD THAT THE REASONING OF THE ASSESSEE HAD TO DISCLOSE THE UNDISCLOSED INCOME BECAUSE OF THE SEARCH IS ALSO NOT IN ACCORDANCE WITH LAW. RELIANCE IN THIS REGARD IS PLACED ON THE DECISION OF CIT VS SAS PHARMACEUTICALS 335 ITR 259 (DELHI). THE HON BLE DELHI HIGH COUR T HAS HELD AS UNDER : - 14. WE MAY, FIRST OF ALL, REJECT THE CONTENTION OF THE LEARNED COUNSEL FOR THE REVENUE RELYING UPON THE EXPRESSION IN THE COURSE OF ANY PROCEEDINGS UNDER THIS ACT OCCURRING IN SUB - SECTION (1) OF SECTION 271 OF THE ACT AND CONTENDIN G THAT EVEN DURING SURVEY WHEN IT WAS FOUND THAT THE ASSESSEE HAD CONCEALED THE PARTICULAR OF HIS INCOME, IT WOULD AMOUNT CONCEALMENT IN THE COURSE OF ANY PROCEEDINGS. THE WORDS IN THE COURSE OF ANY PROCEEDINGS UNDER THIS ACT ARE PREFACED BY THE SATISFACTI ON OF THE AO OR THE COMMISSIONER OF INCOME TAX (APPEALS). WHEN THE SURVEY IS CONDUCTED BY A SURVEY TEAM, THE QUESTION OF SATISFACTION OF AO OR THE COMMISSIONER (APPEALS) OR THE COMMISSIONER DOES NOT ARISE. WE HAVE TO KEEP IN MIND THAT IT IS THE AO WHO INIT I ATED THE PENALTY PROCEEDINGS AND DIRECTED THE PAYMENT OF PENALTY. HE HAD NOT RECORDED ANY SATISFACTION DURING THE COURSE OF SURVEY. DECISION TO INITIATE PENALTY PROCEEDINGS WAS TAKEN WHILE MAKING ASSESSMENT ORDER. IT IS, THUS, OBVIOUS THAT THE EXPRESSION IN THE COURSE OF ANY PROCEEDINGS UNDER THIS ACT CANNOT HAVE THE REFERENCE TO SURVEY PROCEEDINGS, IN THIS CASE. 15. IT NECESSARILY FOLLOWS THAT CONCEALMENT OF PARTICULARS OF INCOME OR FURNISHING OF INACCURATE PARTICULAR OF INCOME BY THE ASSESSEE HAS TO BE I N THE INCOME TAX RETURN FILED BY IT. THERE IS SUFFICIENT INDICATION OF THIS IN THE JUDGMENT OF THIS COURT IN THE CASE OF CIT V. MOHAN DAS HASSA NAND (1983) 141 ITR 203 (DEL) AND IN RELIANCE PETROPRODUCTS PVT. LTD. (SUPRA), THE SUPREME COURT HAS CLINCHED TH IS ASPECT, VIZ., THE ASSESSEE CAN FURNISH THE PARTICULARS OF INCOME IN HIS RETURN AND EVERYTHING WOULD DEPEND UPON THE INCOME TAX RETURN FILED BY THE ASSESSES. THIS VIEW GETS SUPPORTED BY EXPLANATION 4 AS WELL AS 5 AND 5A OF SECTION 271 OF THE ACT AS CON TENDED BY THE LEARNED COUNSEL FOR THE RESPONDENT. 16. NO DOUBT, THE DISCREPANCIES WERE FOUND DURING THE SURVEY. THIS HAS YIELDED INCOME FROM THE ASSESSEE IN THE FORM OF AMOUNT SURRENDERED BY THE ASSESSEE. PRESENTLY, WE ARE NOT CONCERNED WITH THE ASSESSMEN T OF INCOME, BUT THE MOOT QUESTION IS TO WHETHER THIS WOULD ATTRACT PENALTY UPON THE ASSESSEE UNDER THE PROVISIONS OF SECTION 271(1)(C) OF THE ACT. OBVIOUSLY, NO PENALTY CAN BE IMPOSED UNLESS THE CONDITIONS STIPULATED IN THE SAID PROVISIONS ARE DULY AND UN AMBIGUOUSLY SATISFIED. SINCE THE ASSESSEE WAS EXPOSED DURING ITA NOS.1773&1774/KOL/2012 SRI NARESH CHANDRA AGRAWALLA A.YR S . 2008 - 09 & 2009 - 10 11 SURVEY, MAY BE, IT WOULD HAVE NOT DISCLOSED THE INCOME BUT FOR THE SAID SURVEY. HOWEVER, THERE CANNOT BE ANY PENALTY ONLY ON SURMISES, CONJECTURES AND POSSIBILITIES. SECTION 271(1)(C) OF THE ACT HAS TO BE CONSTRUED STRICTLY. UNLESS IT IS FOUND THAT THERE IS ACTUALLY A CONCEALMENT OF NON - DISCLOSURE OF THE PARTICULARS OF INCOME, PENALTY CANNOT BE IMPOSED. THERE IS NO SUCH CONCEALMENT OR NON - DISCLOSURE AS THE ASSESSEE HAD MADE A COMPLETE DISCLOSURE I N THE INCOME TAX RETURN AND OFFERED THE SURRENDERED AMOUNT FOR THE PURPOSE OF TAX. 17. WE, THUS, ANSWER THE QUESTIONS AS FORMULATED ABOVE, IN FAVOUR OF THE ASSESSEE AND AGAINST THE REVENUE FINDING NO FAULT WITH THE DECISIONS OF THE COMMISSIONER (APPEALS) AS WELL AS THE TRIBUNAL. AS A RESULT, THIS APPEAL IS DISMISSED. IT IS SEEN THAT EVEN THOUGH THE INCOME OF RS.27,88,222/ - WAS NOT OFFERED BY HIM IN THE REGULAR RETURN FILED BY THE ASSESSEE ON 31.03.2009 FOR A.Y.2008 - 09, IT IS OF NO CONSEQUENCE AS IN TERM S OF 153A OF THE ACT, IT BECOMES A PENDING PROCEEDING, WHICH GETS ABATED PURSUANT TO THE SEARCH. IN OTHER WORDS, THE LD. AR ARGUED THAT ULTIMATELY WHAT IS RELEVANT IS ONLY THE RETURN FILED IN RESPONSE TO 153A OF THE ACT WHEREIN THE ASSESSEE HAD DULY CONSI DERED THE INCOME DISCLOSED U/S 132(4) AND ULTIMATELY THE RETURNED INCOME HAS BEEN ACCEPTED BY THE LD. AO AND HENCE THERE IS NO CONCEALMENT ON THE PART OF THE ASSESSEE IN THE RETURN U/S 153A OF THE ACT . SIMILARLY THE LD. AR ARGUED THAT IN THE RETURN FILED FOR A.Y.2009 - 10, BEING THE YEAR OF SEARCH, THERE WAS NO DISCREPANCY IN THE UNDISCLOSED INCOME OFFERED VIS - - VIS 132(4) STATEMENT AND ULTIMATELY THE RETURNED INCOME WAS ACCEPTED BY THE LD.AO FOR A.Y.2009 - 10 ALSO. HENCE THERE WAS NO CONCEALMENT FOR THIS YEA R. IN VIEW OF THE AFORESAID FACTS AND CIRCUMSTANCES AND IN VIEW OF THE JUDICIAL PRECEDENTS RELIED UPON, WE HOLD THAT THE ASSESSEE HAD CUMULATIVELY SATISFIED THE THREE CONDITIONS CONTEMPLATED IN SECTION 271AAA(2) OF THE ACT AND ACCORDINGLY IS ELIGIBLE FOR I MMUNITY FROM LEVY OF PENALTY. THIS GROUND OF APPEAL IS ALLOWED. 8 . IN THE RESULT THE APPEAL S OF THE ASSESSEE ARE ALLOWED. ORDER PRONOUNC ED IN TH E COURT . SD/ - SD/ - [MAHAVIR SINGH] [M.BALAGANESH] JUDICIAL MEMBER ACCO UNTANT MEMBER DATE : 20.08.2015. R.G .(.P.S.) ITA NOS.1773&1774/KOL/2012 SRI NARESH CHANDRA AGRAWALLA A.YR S . 2008 - 09 & 2009 - 10 12 COPY OF THE ORDER FORWARDED TO : 1 . SHRI NARESH CHANDRA AGRAWALLA, CHANDRA BHAWAN 5, TILAK ROAD, KOLKATA - 700029. 2 A.C.I.T., CENTRAL CIRCLE - XII, KOLKATA. 3 . THE CIT - CENTRAL - II, KOLKATA 4. THE CIT(A) - CENTRAL - II , KOLKATA. 5 . DR, KOLKATA BENCHES, KOLKATA TRUE COPY , BY ORDER, DEPUTY /ASST. REGISTRAR , ITAT, KOLKATA BENCHES