The ACIT, Central Circle-1, Surat V. M/s. Shrushti Corporation, Surat

ITA 1809/AHD/2014

• Counselvise Citation: [2018] 118 COUNSELVISE.COM (IT) 2226 (ITAT-SURAT)
• Duration Of Justice: 4 year(s) 2 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-09-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2011-2012
• Appeal Filed On: 13-06-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: P S CHAUDHARY
• Keywords: Income from undisclosed sources; Search and seizure
• Section: 132; 271(1)(c); 153A

Judgement Text

ACIT-CC-1 SURAT V. SHRUSHTI CORPORATION /I.T.A. NO.1809/AHD/2014/A.Y.11-12 PAGE 1 OF 12 , , INCOM TAX APPELLATE TRIBUNAL-SURAT-BENCH-SURAT . . , . . , BEFORE C .M. GARG, JM & O. P. MEENA, AM . . ./ I.T.A NO.1809/AHD/2014 / ASSESSMENT YEAR: 2011-12 THE ASSISTANT COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-1, SURAT. V. M/S. SHRUSHTI CORPORATION, A/2-101-102 MAHALAXMI ARCADE, ANAND MAHAL ROAD, ADAJAN, SURAT 395059. [PAN: AAHFM 6964 C] APPELLANT /RESPONDENT ASSESSEE BY SHRI P.S. CHAUDHARY, SR. D.R. REVENUE BY SHRI MANISH J. SHAH, ADVOCATE DATE OF HEARING 07.09.2018 DATE OF PRONOUNCEMENT 03 .10 .2018 /ORDER PER O. P. MEENA, AM : 1. THIS APPEAL AT THE INSTANCE OF THE REVENUE IS DIRECTED AGAINST AN ORDER DATED 14.03.2014 PASSED BY LEARNED COMMISSIONER OF INCOME TAX (APPEALS)- II, SURAT(IN SHORT THE CIT (A)) FOR THE ASSESSMENT YEAR 2011-12 IN RESPECT OF PENALTY LEVIED UNDER SECTION 271AAA OF THE ACT. ACIT-CC-1 SURAT V. SHRUSHTI CORPORATION /I.T.A. NO.1809/AHD/2014/A.Y.11-12 PAGE 2 OF 12 2. GROUND NO. 1: STATES THAT LD. CIT (A) ERRED IN LAW AND ON FACTS IN DELETING THE PENALTY OF RS. 50,00,000 IMPOSED UNDER SECTION 271AAA OF INCOME TAX ACT,1961 , IGNORING THE FACT THAT THE ASSESSEE HAS NOT SATISFIED THE CONDITIONS LAID DOWN IN SECTION 271AAA(2)(II) AND 271AAA(2)(III) OF THE ACT. 3. GROUND NO. 2 STATES THAT LD. CIT (A) HAS NOT APPRECIATED THAT SECTION 271AAA (2) CASTS ONUS ON THE ASSESSEE TO ADMIT, SPECIFY AND SUBSTANTIATE THE UNDISCLOSED INCOME AND PAY TAX AND INTEREST THEREON. THE INCOME TAX ACT DOES NOT CAST THE ONUS ON THE ASSESSING OFFICER TO ESTABLISH THE SOURCE OF UNACCOUNTED INCOME. 4. SUCCINCTLY, THE FACTS AS CULLED OUT FROM THE ORDER OF LOWER AUTHORITIES ARE THAT A SEARCH AND SEIZURE OPERATION WAS CONDUCTED ON 19.01.2011 IN THE CASE OF THE ASSESSEE KNOWN AS INFRASTRUCTURE GROUP OF SURAT AND THE CASE OF THE ASSESSEE WAS COVERED IN THE SAID ACTION. ACCORDINGLY, A NOTICE UNDER SECTION 153A WAS ISSUED AND IN COMPLIANCE THEREOF; RETURN OF INCOME WAS FILED BY THE ASSESSEE ON 22.09.2011 DECLARING NET PROFIT OF RS.19,03,61,901/- INCLUDING UNDISCLOSED INCOME OF RS. 5,00,00,000/-. THE ASSESSMENT WAS SELECTED UNDER SCRUTINY BEING A SEARCH CASE AND ASSESSMENT WAS COMPLETED UNDER SECTION 143 (3) ON 26.03.2013 BY ASSESSING TOTAL INCOME AT RS.4,61,75,000/-. DURING THE ACIT-CC-1 SURAT V. SHRUSHTI CORPORATION /I.T.A. NO.1809/AHD/2014/A.Y.11-12 PAGE 3 OF 12 COURSE OF SEARCH AND SEIZURE OPERATION, A STATEMENT UNDER SECTION 132(4) OF THE ACT WAS RECORDED ON 21.01.2011 FROM SHRI ALPESHBHAI G. KOTADIYA, PARTNER OF THE ASSESSEE FIRM WHEREIN HE HAS DISCLOSED UNDISCLOSED INCOME OF RS. 5,00,00,000 ON ACCOUNT OF UNEXPLAINED INCOME IN THE ENTRIES NOTED IN SEIZED DIARY CONTAINING NAME OF PROJECT GREEN RESIDENCY AND 24 GREEN BUSINESS CENTER IN WHICH MONTH-WISE ENTRIES OF ON MONEY RECEIVED WERE RECORDED. THE ASSESSEE FIRM HAS SHOWN THE SAME IN THE RETURN OF INCOME FILED FOR YEAR UNDER CONSIDERATION AND PAID DUE TAX ON IT. THE PENALTY PROCEEDING UNDER SECTION 271AAA WERE ALSO INITIATED. THE AO REQUIRED TO THE ASSESSEE TO FURNISH EXPLANATION, WHICH WAS FURNISHED ON 11.04.2013 PART OF WHICH HE HAS REPRODUCED IN PENALTY ORDER. THE AO OBSERVED THAT DURING THE COURSE OF ASSESSMENT PROCEEDINGS, A LETTER DTD. 27.11.2012 WAS ISSUED TO THE ASSESSEE ASKING THE ASSESSEE TO SPECIFY THE UNDISCLOSED INCOME AND SUBSTANTIATE THE UNDISCLOSED INCOME AND MANNER IN WHICH THE OFFERED UNDISCLOSED INCOME OF RS.5 CRORES WAS DERIVED, BUT THE ASSESSEE DID NOT PROPERLY SUBSTANTIATE THE UNDISCLOSED INCOME AND MANNER OF EARNING THE SAID INCOME. THE AO OBSERVED THAT IN THE STATEMENT RECORDED UNDER SECTION 132(4), SHRI ALPESH G. KOTADIYA, HAS NOT SPECIFIED THE MANNER OF EARNING OF UNDISCLOSED INCOME. WHEN THE MANNER OF EARNING IS NOT SPECIFIED THEN THERE IS NO QUESTION OF SUBSTANTIATING THE ACIT-CC-1 SURAT V. SHRUSHTI CORPORATION /I.T.A. NO.1809/AHD/2014/A.Y.11-12 PAGE 4 OF 12 MANNER OF UNDISCLOSED INCOME. FURTHER, THE ASSESSEE HAS NOT PAID DUE TAX AT THE TIME OF FILING OF RETURN OF INCOME. THEREFORE, THE AO HELD THAT NOT A SINGLE CONDITION PRESCRIBED UNDER SECTION 271AAA HAS BEEN SATISFIED. THEREFORE, THE AO CONCLUDED THAT REQUISITE CONDITION OF SECTION 271AAA (2) ARE NOT SATISFIED, HENCE THE AO LEVIED THE PENALTY @10% AT RS.50, 00,000/- OF UNDISCLOSED INCOME OF RS.5 CRORES. 5. BEING, NOT SATISFIED, THE ASSESSEE FILED AN APPEAL BEFORE THE LD. CIT (A). THE LD. CIT (A) HAS CONSIDERED THE SUBMISSIONS OF THE ASSESSEE AND DELETED THE PENALTY IMPOSED U/S. 271AAA BY OBSERVING THAT UNDISCLOSED INCOME OF RS. 5 CRORES WAS ADMITTED BY THE ASSESSEE IN THE STATEMENT UNDER SECTION 132(4) RECORDED DURING SEARCH AS AN ADDITIONAL INCOME OF THE ASSESSEE. THERE WAS NO SPECIFIC QUESTION WAS ASKED BY THE AUTHORIZED OFFICER TO THE APPELLANT TO CLEARLY STAT THE MANNER IN WHICH SUCH INCOME WAS DERIVED. THE LD. CIT (A) HAS HELD THAT THE DECISION OF JURISDICTION HIGH COURT IN THE CASE OF CIT V. MAHENDRA C. SHAH [2008] 299 ITR 305(GUJ.) IS RELEVANT WHERE IT WAS HELD THAT WHEN UNDISCLOSED INCOME ADMITTED BY THE ASSESSEE HAS BEEN OFFERED TO TAX IN THE RETURN OF INCOME AND TAX THEREOF DULY PAID, THE PENALTY CANNOT BE LEVIED SPECIFICALLY IN ABSENCE OF ANY QUESTION ASKED IN THIS RESPECT BY THE AUTHORIZED OFFICER. THE CIT (A) HAS OBSERVED AS UNDER: ACIT-CC-1 SURAT V. SHRUSHTI CORPORATION /I.T.A. NO.1809/AHD/2014/A.Y.11-12 PAGE 5 OF 12 ON CAREFUL PERUSAL OF FACTS, IT IS OBSERVED THAT THERE WAS ADMISSION OF UNACCOUNTED INCOME BY THE MAIN PARTNER OF THE APPELLANT FIRM IN HIS STATEMENT U/S. 132(4) OF THE ACT. THE BASIS OF DECLARATION WAS ONE DIARY FOUND AND SEIZED WHICH CONTAINED THE NARRATIONS ABOUT THE UNACCOUNTED INCOME EARNED BY THE APPELLANT FIRM FROM ITS PROJECTS GREEN RESIDENCY & 24 GREEN BUSINESS CENTER AND THERE WAS A CLEAR MENTION OF MONTHLY RECEIPTS. THE MANNER OF EARNING THE SAID UNDISCLOSED INCOME WAS ON MONEY/ OTHER RECEIPTS FROM THE SAID PROJECTS. IT IS ALSO SEEN FROM THE PERUSAL OF STATEMENT U/S.132(4) OF THE ACT THAT THE AUTHORIZED OFFICER DID NOT ASK ANY SPECIFIC QUESTION REGARDING THE MANNER OF SAID UNDISCLOSED INCOME AND ITS SUBSTANTIATION. IN VIEW OF THE ABOVE I INTEND TO AGREE WITH THE A.R. THAT THE MANNER OF EARNING OF UNACCOUNTED INCOME WAS CLEARLY SPELL OUT IN THE STATEMENT U/S. 132(4) OF THE ACT. IT WAS SUBSTANTIATED BY THE DIARY AND ITS CONTENTS [BS AND BS-2 OF THE ANNEXURE TO THE PANCHANAAMA]. THERE ARE SEVERAL COURT DECISIONS IN SUPPORT OF THIS VIEW THAT IN ABSENCE OF CLEAR CUT QUERY OR SPECIFIC QUESTION FROM AUTHORIZED OFFICER DURING SEARCH REGARDING MANNER OF EARNING OF UNDISCLOSED INCOME, THE ASSESSEE WILL BE DEEMED TO HAVE COMPLIED WITH THE PROVISIONS OF SECTION 271AAA IF IN THE STATEMENT, THERE IS CLEAR ADMISSION OF UNACCOUNTED INCOME AND THERE IS SOME BASIS OF THE DECLARATION. OF COURSE, THE TAXES AND INTEREST ETC. ON THE DECLARED INCOME HAVE TO BE PAID. RELIANCE IS PLACED ON FOLLOWING COURT DECISIONS:- I) CIT V. MAHENDRA C SHAH 299 ITR 305 [GUJ. HC] THOUGH THAT JUDGEMENT WAS DELIVERED WITH REFERENCE TO PENALTY UNDER SECTION 271(1)(C) BUT THE VERDICT OF THE HON`BLE COURT ITS PARAMATERIA TO SECTION 271AAA II) CIT V. RADHAKISHAN GOYAL 278 ITR 454 (ALLD) III) ASHOK KUMAR SHARMA V. DCIT 149 TTJ 33 [2012] ITAT CUTTACK IV) PRAMOD KUMAR JAIN V. DCIT 149 TTJ 36 ITAT CUTTACK V) SHILPA N GUPTA V. DCIT I.T.A.NO. 1784/A/2012 ITAT AHMEDABAD VI) SULOCHANADEVI A AGARWAL V. DCIT I.T.A.NO. 1052/A/2012 ITAT AHMEDABAD VII) DCIT CC-4, SURAT V. RIVAA EXPORTS LTD. SURAT I.T.A.NO. 2718 & 2719/A/2012 AS REGARDS PAYMENT OF TAXES, IT HAS BEEN ADMITTED BY THE AR THAT THE DUE TAXES AND INTEREST THEREON WAS NOT PAID BEFORE FILING OF RETURN OR WITHIN THE ACIT-CC-1 SURAT V. SHRUSHTI CORPORATION /I.T.A. NO.1809/AHD/2014/A.Y.11-12 PAGE 6 OF 12 TIME AS PER NOTICE U/S. 156. HOWEVER, THE SAME HAS BEEN PAID BEFORE THE CONCLUSION OF PENALTY PROCEEDINGS AND IT WAS OBSERVED THAT THERE IS NO OUTER LIMIT FOR PAYMENT OF TAXES AND INTEREST ON THE INCOME DECLARED U/S. 132(4) OF THE ACT. THE PROVISION OF SECTION 271AAA(2) ARE REPRODUCED AS UNDER: 271AAA (2) NOTHING CONTAINED IN THE SUB SECTION (1) SHALL APPLY IF THE SAME, I) IN THE COURSE OF SEARCH , IN A STATEMENT UNDER SUB-SECTION [4] OF SECTION 132 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 TAX, TOGETHER WITH INTEREST, IF ANY, IN RESPECT OF THE UNDISCLOSED INCOME. THE FACTS OF THE CASE REVEAL THAT THE CONDITIONS OF SECTION 271AAA (2) WHICH ARE NECESSARY FOR EXEMPTION FROM THE PENALTY HAVE BEEN FULFILLED IN THE CASE OF THE APPELLANT. THEREFORE, TAKING INTO ACCOUNT, THE ENTIRE FACTS AND CIRCUMSTANCES OF THE CASE AND LEGAL POSITION AS CITED ABOVE, I AM OF THE CONSIDERED VIEW THAT THE ASSESSING OFFICER WAS NOT JUSTIFIED IN LEVYING THE PENALTY UNDER SECTION 271AAA. THE SAME IS HEREBY DELETED. THE APPELLANT GETS RELIEF. 6. AGGRIEVED WITH THE ORDER, THE AO HAS FILED THIS APPEAL BEFORE THE TRIBUNAL. THE LD. SENIOR (DR) VEHEMENTLY SUPPORTED THE ORDER OF THE A.O. THE LD. SENIOR (DR) SUBMITTED THAT DURING SEARCH AND SEIZURE OPERATION, SHRI ALPESHBHAI G KOTADIYA HAS NOT SPECIFIED THE MANNER IN WHICH INCOME WAS EARNED AND HAS NOT GIVEN BIFURCATION OF UNDISCLOSED INCOME OF THE ASSESSEE, HENCE, CONDITION OF SECTION 271AAA ARE NOT SATISFIED, THUS, THE AO WAS RIGHT IN IMPOSING THE PENALTY ON THE ASSESSEE. ACIT-CC-1 SURAT V. SHRUSHTI CORPORATION /I.T.A. NO.1809/AHD/2014/A.Y.11-12 PAGE 7 OF 12 7. ON THE OTHER HAND, THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT, THE ASSESSEE HAS SURRENDERED THE AMOUNT DURING THE COURSE OF SEARCH AND ALSO DISCLOSED THE AMOUNT IN RETURN OF INCOME FILED AND PAID DUE TAXES WITH INTEREST BEFORE THE COMPLETION OF PENALTY PROCEEDINGS. DURING SEARCH, IN HIS STATEMENT RECORDED UNDER SECTION 132(4) DTD. 21.01.2013, SHRI ALPESH G KOTADIYA, PARTNER OF THE ASSESSEE FIRM, DECLARED RS. 5 CRORES ON BEHALF OF THE ASSESSEE FIRM AND STATED THAT UNACCOUNTED INCOME HAS BEEN NOTED ON THE FACE OF DIARY, WHICH CONTAINED THE NAME OF GREEN PROJECT 24 RESIDENCY BUSINESS CENTRE. THIS DIARY CONTAINED MONTH WISE ENTRIES OF UNACCOUNTED INCOME WHICH WERE RELATED TO UNACCOUNTED RECEIPTS FROM CONSTRUCTION BUSINESS ACTIVITY CARRIED OUT BY THE ASSESSEE IN THE NAME OF SHRUSTHI CORPORATION AS UNDER : GREEN RESIDENCY AS APRIL, 2010 RS. 2 CRORE, MAY,2010 RS. 1 CRORE , JUNE 2010 RS. 50 LACS, JULY, 2010 RS. 50 LACS, AUGUST. 2010 RS. 75 LACS AND SEP2010 RS. 25 LACS. THUS, SHRI KOTADIYA DECLARED RS. 5 CRORES AS ADDITIONAL INCOME OF THE ASSESSEE FIRM. AS REGARDS CONDITION OF PAYMENT OF TAXES ALONG WITH INTEREST, THE PROVISION DOES NOT SPECIFY THE OUTER LIMIT FOR PAYMENT OF TAX AND THE ASSESSEE HAS ALREADY PAID THE ENTIRE TAX BEFORE FINALIZATION OF PENALTY ORDER. THE ASSESSEE HAS EXPLAINED THE SOURCE OF INCOME DISCLOSED DURING THE COURSE OF SEARCH AND SEIZURE OPERATION. THE LD.COUNSEL HAS REFERRED THE PROVISIONS OF SECTION ACIT-CC-1 SURAT V. SHRUSHTI CORPORATION /I.T.A. NO.1809/AHD/2014/A.Y.11-12 PAGE 8 OF 12 271AAA (2) AND THUS CONTENDED THAT THE ASSESSEE HAS NOT ONLY DISCLOSED THE AMOUNT SURRENDERED UNDER SECTION 132(4) OF THE ACT IN THE RETURN OF INCOME FILE AND ALSO PAID DUE TAXES WITH INTEREST THEREFORE, THE CASE IS COVERED UNDER SUB- SECTION (2) OF SECTION 271AAA OF INCOME TAX ACT, 1961. THUS, THE LEARNED COUNSEL CONTENDED THAT PENALTY LEVIED BY THE AO IS NOT CORRECT AND THE LD. CIT (A) HAS CORRECTLY DELETED THE SAME. THE LEARNED COUNSEL ALSO SUPPORTED HIS VIEW BY PLACING RELIANCE ON FOLLOWING CASES ACIT V. GEBILAL KANHAILAL HUF [2007] 348 ITR 561(SC) WHEREIN THE HON`BLE SUPREME COURT INTERPRETING THE CLAUSE (2) OF EXPLANATION 5 TO SECTION 271(1) (C) WHICH IS PARAMATERIA WITH PROVISIONS OF SECTION 271AAA HELD THAT 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 ALSO STOOD FULFILLED. THE ASSESSEE HAS PAID TAX WITH INTEREST UP TO 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 UP TO 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 SECTION132 (4) . THE LEARNED COUNSEL FOR THE ASSESSEE FURTHER, PLACED RELIANCE IN THE CASE OF DCIT V. PIONEER ONLINE LTD. [2012] 52 SOT 94 (KOL), DCIT VS. TAPADIA AND ACIT-CC-1 SURAT V. SHRUSHTI CORPORATION /I.T.A. NO.1809/AHD/2014/A.Y.11-12 PAGE 9 OF 12 KALSIWAL ASSOCIATES I.T.A.NO. 1430/PN/2013, PUNE TRIBUNAL, DCIT V. SURYA ENCLAVE DEVELOPERS I.T.A.NO. 2092/AHD/2011 OF AHMEDABAD TRIBUNAL. 8. WE HAVE HEARD THE RIVAL SUBMISSIONS, GONE THROUGH THE ORDERS OF THE LOWER AUTHORITIES, AND PERUSED THE MATERIAL AVAILABLE ON RECORD. WE FIND THAT DURING THE COURSE OF SEARCH AND SEIZURE OPERATION CARRIED ON IN THE CASE OF THE ASSESSEE, A STATEMENT UNDER SECTION 132(4) OF THE ACT WAS RECORDED ON 21.01.2011 FROM SHRI ALPESH G KOTADIYA, WHEREIN IN REPLY TO QUESTION NO. 13,14 & 15 , HE ON BEHALF OF THE ASSESSEE-FIRM HAD MADE A DISCLOSURE OF ADDITIONAL INCOME OF RS. 5 CRORES, BY STATING THAT THE AMOUNT MENTIONED IN SEIZED DIARY IS CONTAINING ON MONEY RECEIVED FROM PROJECT GREEN RESIDENCY AND 24 GREEN BUSINESS CENTER AND REPRESENT ANY UNACCOUNTED INCOME DERIVED FROM OUR BUSINESS ACTIVITY OF ABOVE SAID PROJECTS. THE LD. CIT (A) APPEAL OBSERVED THAT THE BASIS OF DECLARATION WAS ONE DIARY FOUND AND SEIZED WHICH CONTAINED THE NARRATIONS ABOUT THE UNACCOUNTED INCOME EARNED BY THE APPELLANT FIRM FROM ITS PROJECTS GREEN RESIDENCY & 24 GREEN BUSINESS CENTER AND THERE WAS A CLEAR MENTION OF MONTHLY RECEIPTS. THE MANNER OF EARNING THE SAID UNDISCLOSED INCOME WAS ON MONEY AND OTHER RECEIPTS FROM THE SAID PROJECTS. WE ARE ALSO OF THE VIEW THAT THE ASSESSEE HAS ALREADY DISCLOSED UNDISCLOSED INCOME IN SEARCH PROCEEDING AND SPECIFIED MANNER IN WHICH THE SAID INCOME DERIVED BY ACIT-CC-1 SURAT V. SHRUSHTI CORPORATION /I.T.A. NO.1809/AHD/2014/A.Y.11-12 PAGE 10 OF 12 CLAIMING THAT SAID INCOME WAS EARNED FROM BUSINESS ACTIVITIES. THE PERUSAL OF STATEMENT U/S. 132(4) OF THE ACT SHOWS THAT THE AUTHORIZED OFFICER DID NOT ASK ANY SPECIFIC QUESTION REGARDING THE MANNER OF SAID UNDISCLOSED INCOME. WE FIND THAT THE HON`BLE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT V. MAHENDRA C. SHAH [2008] 299 ITR 305(GUJ.) HAS HELD THAT WHEN UNDISCLOSED INCOME ADMITTED BY THE ASSESSEE HAS BEEN OFFERED TO TAX IN THE RETURN OF INCOME AND TAX THEREOF DULY PAID, THE PENALTY CANNOT BE LEVIED SPECIFICALLY IN ABSENCE OF ANY QUESTION ASKED IN THIS RESPECT BY THE AUTHORIZED OFFICER. THUS, THE ASSESSEE HAD DISCLOSED THE INCOME UNDER SECTION 132(4) AND DISCLOSED THE SAME IN THEIR RETURN OF INCOME FILED. WE ALSO NOTE THAT THE ASSESSEE HAS PAID DUE TAXES WITH INTEREST THEREON. THE LEARNED COUNSEL FOR THE ASSESSEE HAS RELIED ON THAT JUDGEMENT OF HON`BLE SUPREME COURT IN THE CASE OF ACIT V. GEBILAL KANHAILAL HUF [2007] 348 ITR 561(SC) WHEREIN THE HON`BLE SUPREME COURT INTERPRETING THE CLAUSE (2) OF EXPLANATION 5 TO SECTION 271(1) (C) WHICH IS PARAMATERIA WITH PROVISIONS OF SECTION 271AAA AND HELD THAT 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 ALSO STOOD FULFILLED. THE ASSESSEE HAS PAID TAX WITH INTEREST UP TO 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 ACIT-CC-1 SURAT V. SHRUSHTI CORPORATION /I.T.A. NO.1809/AHD/2014/A.Y.11-12 PAGE 11 OF 12 ASSESSEE HAD TO PAY THE TAX TOGETHER WITH INTEREST IN RESPECT OF SUCH UNDISCLOSED INCOME UP TO 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 SECTION132 (4) . THUS, THE ASSESSEE HAS SATISFIED THE CONDITION OF PAYMENT OF TAXES. IT IS ALSO RELEVANT TO MENTION THAT THE INCOME DECLARED BY THE ASSESSEE HAS BEEN DULY ACCEPTED BY THE AO AND NO ADDITION HAS BEEN MADE. IN VIEW OF THESE CIRCUMSTANCES, WE ARE OF THE CONSIDERED OPINION THAT THE ASSESSEE HAD DULY FULFILLED THE CONDITION LAID DOWN UNDER SECTION 271AAA (2) OF THE ACT, THEREFORE, NO PENALTY IS EXIGIBLE. WE ALSO FIND THAT THE ASSESSEE MADE DISCLOSURE DURING SEARCH AND SPECIFIED MANNER IN WHICH INCOME WAS EARNED AS NOTINGS IN THE DIARY PERTAINED TO CONSTRUCTION BUSINESS ACTIVITY RECEIPTS WHICH WERE NOT DISCLOSED, HENCE, BY ADMITTING SAME AS UNACCOUNTED IN THE STATEMENT UNDER SECTION 132(4) RECORDED FROM SHRI ALPESH G KOTADIYA, PARTNER OF THE ASSESSEE FIRM., THE MANNER HAS BEEN EXPLAINED. OUR VIEW IS ALSO SUPPORTED BY DECISION OF COORDINATED BENCH IN THE CASE OF DCIT V. PIONEER ONLINE LTD. [2012] 52 SOT 94 (KOL), TAPADIA AND KALSIWAL ASSOCIATES I.T.A.NO. 1430/PN/2013, PUNE TRIBUNAL, DCIT V. SURYA ENCLAVE DEVELOPERS I.T.A.NO. 2092/AHD/2011 OF AHMEDABAD TRIBUNAL. IT IS NOT A CASE OF REVENUE THAT THE ASSESSEE HAS NOT SATISFIED THE MANNER IN WHICH INCOME IS DERIVED AND THE ASSESSEE HAS NOT PAID ACIT-CC-1 SURAT V. SHRUSHTI CORPORATION /I.T.A. NO.1809/AHD/2014/A.Y.11-12 PAGE 12 OF 12 TAXES WITH INTEREST ON UNDISCLOSED INCOME. THEREFORE, CASE OF ASSESSEES FALL EXACTLY WITHIN PURVIEW OF SUB-SECTION (2) OF SECTION 271AAA. THEREFORE, THE PROVISIONS CONTAINED IN SUB-SECTION (1) OF SECTION 271AAA ARE NOT APPLICABLE. IN VIEW OF THIS MATTER, THE LD. CIT (A) HAS CORRECTLY DELETED THE PENALTY LEVIED BY THE AO. IN THE LIGHT OF ABOVE FACTS AND JUDICIAL DECISIONS AS RELIED BY THE ASSESSEE, WE DO NOT FIND ANY INFIRMITY OF THE ORDER OF LD. CIT (A). ACCORDINGLY, THE GROUNDS OF APPEAL OF THE REVENUE ARE DISMISSED. 9. IN THE RESULT, APPEAL OF REVENUE IS DISMISSED. 10. THE ORDER PRONOUNCED IN THE OPEN COURT ON 03.10.2018. SD/- SD/- (C.M. GARG) (O.P.MEENA) JUDICIAL MEMBER ACCOUNTANT MEMBER SURAT: DATED: 3 RD OCTOBER, 2018 /OPM COPY OF ORDER SENT TO- ASSESSEE/AO/PR. CIT/ CIT (A)/ ITAT (DR)/GUARD FILE OF ITAT. BY ORDER / / TRUE COPY / / ASSISTANT REGISTRAR, SURAT