Rajkumar Badgujar, Thane V. Income-tax Officer,

ITA 2029/PUN/2014

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 93972 (ITAT-PUNE)
• Duration Of Justice: 8 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-07-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 20-07-2015
• Assessment Year: 2006-2007
• Appeal Filed On: 14-11-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: K J KAWADE
• Keywords: Search and seizure; Document seized; Period of limitation; Source of fund; Block assessment; Documents seized
• Section: 143(3); 5(2); 153A; 131; 132; 139

Judgement Text

] ]] ] IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH A, PUNE ! ' , # $ BEFORE SHRI R.K. PANDA, AM AND SHRI VIKAS AWASTHY, JM ITA NOS.1766, 1767, 2028, 2029 & 2030/PN/2014 A. YS. : 2008-09, 2009-10, 2005-06, 2006-07 & 2010- 11 RAJKUMAR BADGUJAR, 204, PASHUPATINATH C-02 B WING, MAHADEV SANKALP COMPLEX, GANDHARE VILLAGE, NEAR KHADAKPADA CHOWK, KALYAN (WEST), THANE 421 301. PAN: AOMPB4099J .. APPELLANT VS. INCOME TAX OFFICER, CENTRAL-1, NASHIK. ... RESPONDENT / APPELLANT BY : SHRI PRAMOD SHINGTE / DEPARTMENT BY : SHRI RAJESH DAMOR & SHRI K.J. KAWADE / DATE OF HEARING : 20.07.2015 / DATE OF PRONOUNCEMENT: 29.07.2015 % / ORDER PER R.K. PANDA, AM : ALL THE FIVE CAPTIONED APPEALS PREFERRED RELATE TO THE SAME ASSESSEE FOR DIFFERENT ASSESSMENT YEARS. IN ALL THE APPEALS, TH E COMMON GRIEVANCE INVOLVED IS WRONGFUL IMPOSITION OF PENALTY BY THE ASSESSING OFF ICER UNDER SECTION 271(1)(C) OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT) CONSE QUENT TO THE ASSESSMENTS MADE BY HIM IN THE RESPECTIVE ASSESSMENT YEARS UNDER SEC TION 143(3) R.W.S. 153C OF THE ACT. SINCE THE ISSUE IS COMMON, A CONSOLIDATED ORD ER IS BEING PASSED FOR THE SAKE OF CONVENIENCE AND BREVITY. 2. THE BACKGROUND OF THE CAPTIONED APPEALS IN BRIEF ARE AS FOLLOWS. THE ASSESSEE IS AN INDIVIDUAL SHOWING INCOME DERIVED FR OM LIC COMMISSION AND OTHER 2 ITA NOS.1766, 1767, 2028, 2029 & 2030/PN/2014 SOURCES. A SEARCH AND SEIZURE ACTION UNDER SECTION 132 OF THE ACT WAS CONDUCTED ON 17.09.2010 IN ONE M/S SUYOJIT GROUP OF CASES. I T TRANSPIRES THAT DURING THE COURSE OF THE SEARCH UNDER SECTION 132 OF THE ACT A T THE RESIDENTIAL PREMISES OF SHRI ANAND KESHAV RAJEGAONKAR, ONE OF THE FOUNDERS OF M/ S SUYOJIT GROUP, CERTAIN INCRIMINATING DOCUMENTS AND DIARIES PERTAINING TO T HE ASSESSEE WERE SEIZED. AS A CONSEQUENCE, THE ASSESSING OFFICER INVOKED THE PROV ISIONS OF SECTION 153C OF THE ACT. FOR THIS PURPOSE, A SATISFACTION NOTE WAS STA TED TO HAVE BEEN RECORDED ON 30.07.2012 BY THE ASSESSING OFFICER OF THE SEARCHED PARTY AND ACCORDINGLY DOCUMENTS SEIZED WERE HANDED OVER TO THE ASSESSING OFFICER HAVING JURISDICTION OVER THE PRESENT ASSESSEE. A COPY OF THE IMPUGNED ORDER SHEET DATED 30.07.2012 NARRATING SATISFACTION WAS PLACED BEFORE US. THE D OCUMENTS AND DIARIES FOUND DURING THE SEARCH INTER-ALIA CONTAINED DETAILS OF CERTAIN CASH PAYMENTS MADE BY THE APPELLANT. IT APPEARS THAT THE INCRIMINATING MATER IAL SO FOUND SHOWED CERTAIN INCOME ARISING FROM SALE OF CERTAIN TENANCY RIGHTS, ETC. 3. THE DETAILS OF ORIGINAL RETURNS FILED, RETURNS F ILED UNDER SECTION 153C OF THE ACT, INCOME DECLARED, INCOME ASSESSED, PENALTY AMOU NT, ETC. FOR THE RESPECTIVE ASSESSMENT YEARS UNDER APPEAL ARE TABULATED BELOW : - ASST. YEAR/ITA NO. DT. OF RETURN U/S 139 DT. OF NOTICE U/S 153C DT. OF RETURN U/S 153C INCOME DECLARED INCOME ASSESSED DT. OF ASST. ORDER U/S 143(3) R.W.S. 153C DT. OF PENALTY ORDER PENALTY AMOUNT 2005-06 ITA NO. 2028/PN/2014 - 30.07.2012 04.03.2013 RS.8,957 RS.8960 28.03.2013 14.08.2013 RS.914 2006-07 ITA NO. 2029/PN/2014 - 30.07.2012 04.03.2013 RS.43,857 RS.43,860 28.03.2 013 14.08.2013 RS.4,473 2008-09 ITA NO. 1766/PN/2014 02.11.2010 30.07.2012 REQUEST LETTER SUBMITTED TO TREAT THE ORIGINAL RETURN, AS RETURN FILED IN RESPONSE TO NOTICE U/S 153C RS.60,74,594 RS.60,74,590 28.03.2013 27.08.2013 RS. 20,44,361 2009-10 ITA NO. 1767/PN/2014 03.11.2010 30.07.2012 RS.78,43,431 RS.78,43,430 28. 03.2013 27.08.2013 RS.23,72,120 2010-11 ITA NO. 2030/PN/2014 02.11.2010 30.07.2012 RS.8,51,910 RS.08,51,910 28.0 3.2013 27.08.2013 RS.2,13,800 4. FROM THE ABOVE TABULATED STATEMENT, IT CAN BE SE EN THAT THE ASSESSING OFFICER HAS ACCEPTED THE RETURN FILED BY THE ASSESS EE IN TOTO AND THERE IS NO ENHANCEMENT IN THE RETURNED INCOME IN THE COURSE OF THE ASSESSMENT. THE ONLY 3 ITA NOS.1766, 1767, 2028, 2029 & 2030/PN/2014 CASE OF THE ASSESSING OFFICER FOR ALL THESE YEARS A RE THAT THE ASSESSEE HAS FILED RETURN OF INCOME SUBSEQUENT TO THE DATE OF SEARCH I .E. 17.09.2010 AND THEREFORE IT IS CONSEQUENT TO SEARCH. HENCE THE ENTIRE INCOME RETU RNED BY THE ASSESSEE UNDER SECTION 153C WAS TREATED AS CONCEALED INCOME AND PE NALTY UNDER SECTION 271(1)(C) WAS IMPOSED. 5. AGGRIEVED BY THE PENALTY ORDER OF THE ASSESSING OFFICER FOR ALL THESE RELEVANT YEARS, THE ASSESSEE FILED APPEAL BEFORE THE CIT(A). THE DETAILS OF RELEVANT ORDERS ARE TABULATED BELOW :- ASSESSMENT YEARS DATE OF PENALTY ORDER BY THE ASSESSING OFFICER DATE OF APPELLATE ORDER BY THE CIT(A) ITA NOS. 2005-06 14.08.2013 30.09.2014 ITA NO.2028/PN/2014 2006-07 14.08.2013 30.09.2014 ITA NO.2029/PN/2014 2008-09 27.08.2013 08.09.2014 ITA NO.1766/PN/2014 2009-10 27.08.2013 08.09.2014 ITA NO.1767/PN/2014 2010-11 27.08.2013 30.09.2014 ITA NO.2030/PN/2014 6. THE CIT(A) REITERATED THE FACTS AND SUBMISSIONS OF THE ASSESSEE AND CONFIRMED THE PENALTY ORDER. ACCORDING TO THE CIT( A), UNDISPUTEDLY, THE ASSESSEE FURNISHED THE RETURNS ONLY AFTER SEARCH AND THEREBY CONCEALED INCOME AND EVADED TAX IN TERMS OF SECTION 271(1)(C) R.W. EXPLANATION 5A THERETO. THE CIT(A) DID NOT ACCEPT THE CONTENTION OF THE ASSESSEE THAT THE INCO ME HAS BEEN OFFERED VOLUNTARILY IN VIEW OF THE SEIZURE OF VARIOUS PAPERS AND DOCUME NTS GIVING DETAILS OF UNACCOUNTED TRANSACTIONS. 7. AGGRIEVED BY THE ORDER OF THE LD. CIT(A), THE AS SESSEE IS IN APPEAL BEFORE US. 8. THE LD. AUTHORIZED REPRESENTATIVE FOR THE ASSESS EE CHALLENGED THE ACTION OF THE REVENUE AND TOOK STRONG EXCEPTION TO THE ORDERS OF THE AUTHORITIES BELOW. HE OBSERVED THAT THE RETURNS FOR ASSESSMENT YEARS 2008 -09, 2009-10 AND 2010-11 HAVE BEEN FILED UNDER SECTION 139 OF THE ACT LONG B EFORE THE DATE OF ISSUE OF NOTICE 4 ITA NOS.1766, 1767, 2028, 2029 & 2030/PN/2014 UNDER SECTION 153C AS TABULATED IN PARA 3 OF THIS O RDER. IT IS THE CASE OF THE ASSESSEE THAT AS REGARDS ASSESSMENT YEARS 2005-06 A ND 2006-07 ARE CONCERNED, THE RETURNS WERE NOT FIELD UNDER SECTION 139 AS THE SE WERE BELOW TAXABLE LIMIT. HOWEVER, THE RETURNS WERE FILED PURSUANT TO NOTICE UNDER SECTION 153C FOR NOMINAL INCOME OF RS.8,957/- AND RS.43,857/- FOR ASSESSMENT YEARS 2005-06 AND 2006-07 RESPECTIVELY. THE INCOME SO DECLARED WERE ACCEPTED AND ASSESSED AS SUCH. NO PENALTY ACTION HAS BEEN INITIATED FOR THE ASSESSMEN T YEAR 2007-08. ACCORDING TO HIM, ALL THESE RETURNS WERE VOLUNTARILY FILED WITHI N THE STATUTORY TIME LIMIT AVAILABLE TO THE ASSESSEE UNDER SECTION 139(1) AND/OR 139(4) OF THE ACT WITHOUT ANY IMPENDING STATUTORY NOTICE. THE SEARCH HAS BEEN CONDUCTED O N SOME OTHER UNCONNECTED PARTY NAMELY M/S SUYOJIT GROUP AND NOT UPON THE ASS ESSEE HIMSELF OR HIS FAMILY MEMBERS. THE ASSESSEE IS IN NO WAY PRIVY TO THE PU RPORTED SEIZURE OF DOCUMENTS PERTAINING TO HIM. THE LD. AUTHORIZED REPRESENTATI VE FOR THE ASSESSEE FURTHER CONTENDED THAT INVOCATION OF EXPLANATION 5A TO SECT ION 271(1)(C) IN HIS CASE IS PATENTLY WRONG AND NOT TENABLE LEGALLY. ACCORDING TO HIM, EXPLANATION 5A COMES INTO PLAY ONLY WHERE SEARCH ACTION IS CONDUCTED UND ER SECTION 132 OF THE ACT, WHICH IS NOT THE CASE HERE. THE ACTION UNDER SECTION 132 HAS BEEN TAKEN IN THE CASE OF SUYOJIT GROUP AND NOT THE ASSESSEE PER SE . WITHOUT PREJUDICE, HE CONTENDED IN ALTERNATIVE THAT IN RESPECT OF THE PERSON (OTHER TH AN SEARCHED PERSON), EXPRESSION IN THE COURSE OF SEARCH INITIATED UNDER S. 132 IN EXPLANATION 5A STANDS SUBSTITUTED AND CONSTRUED AS REFERENCE TO THE LATER DATE OF REC EIVING OF BOOKS OF ACCOUNT OR DOCUMENTS OR ASSET SEIZED OR REQUISITIONED ETC. BY THE ASSESSING OFFICER OF THE ASSESSEE IN VIEW OF FIRST PROVISO TO S. 153(C) INST EAD OF ACTUAL DATE OF SEARCH ON THE MAIN PERSON/ GROUP. THERE CAN BE NO QUARREL TO THE PROPOSITION THAT SECTION 153C IS THE SOURCE OF INVOKING EXPLANATION 5A IN THE CASE O F PERSON OTHER THAN THIRD PERSON WHICH IS THE PRESENT CASE. IN VIEW OF THE PLAIN AN D UNAMBIGUOUS LANGUAGE OF THE PROVISO TO SECTION 153C, THE DATE OF INITIATION OF SEARCH UNDER SECTION 132 FOR THE PURPOSE OF EXPLANATION 5A TO SECTION 271(1)(C) OF T HE ACT IS DEEMED TO BE THE DATE ON WHICH THE SEIZED MATERIAL AND INCRIMINATING DOCU MENTS, ETC. ARE HANDED OVER TO 5 ITA NOS.1766, 1767, 2028, 2029 & 2030/PN/2014 THE ASSESSING OFFICER OF THE THIRD PARTY HAVING JUR ISDICTION OVER HIM AND NOT THE DATE OF ACTUAL SEARCH ON THE SEARCHED PARTY PER SE . 9. TO ASSERT HIS SUBMISSIONS, THE LD. AUTHORIZED RE PRESENTATIVE FOR THE ASSESSEE RELIED UPON THE FOLLOWING DECISIONS :- (I) VIJAY M. VIMAWAL VS. ACIT, (2009) 124 TTJ 508 ( AHD); (II) SSP AVIATION LTD. VS. DCIT, (2012) 81 CCH 185 (DELHI); (III) DSL PROPERTIES (P.) LTD. VS. DCIT, (2013) 33 TAXMANN.COM 420 (DELHI); (IV) SHIKSHANA PRASARAKA MANDALI VS. CIT, 352 ITR 53 (BOM); AND, (V) ACIT VS. JUPITER DISTILLERY, (2012) 23 TAXMANN .COM 303 (AHD). 10. REFERRING TO THE DECISION OF THE HONBLE DELHI HIGH COURT IN THE CASE OF SSP AVIATION LTD. (SUPRA), THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE HONBLE HIGH COURT IN THE SAID DECISION HAS HELD IN THE CON TEXT OF SECTION 153C THAT IN THE CASE OF THE OTHER PERSON I.E. THE PERSON OTHER THAN THE ONE WHO WAS SEARCHED, THE DATE OF INITIATION OF SEARCH WILL BE THE DATE OF RE CEIVING BOOKS OF ACCOUNT OR DOCUMENTS, ETC. BY THE ASSESSING OFFICER HAVING JUR ISDICTION OVER SUCH OTHER PERSON. LIKEWISE, IN VIJAY M. VIMAWAL CASE (SUPRA) , IT IS OBSERVED BY THE AHMEDABAD TRIBUNAL THAT IN VIEW OF THE PROVISO TO S ECTION 153C, DATE OF SEARCH IS SUBSTITUTED BY THE DATE OF HANDING OVER OF THE DOCU MENTS BY THE ASSESSING OFFICER OF THE PERSONS SEARCHED TO THE ASSESSING OFFICER OF OTHER PERSON (PRESENT ASSESSEE). SIMILAR VIEW HAS BEEN TAKEN IN THE CASE OF DSL PROPERTIES (P.) LTD. (SUPRA) . IN JUPITER DISTILLERY CASE (SUPRA) WHEREIN ON FACTS, THE ASSESSEE HAD SURRENDERED HUGE SUM DURING SURVEY/SEARCH AND SEIZU RE OPERATIONS WHILE FURNISHING ITS RETURN OF INCOME THE ASSESSEE HAD DE CLARED ITS INCOME INCLUDING THE AMOUNTS SO SURRENDERED. THE ASSESSING OFFICER IMPO SED THE PENALTY UNDER SECTION 271(1)(C) ON THE PREMISE THAT ASSESSEE HAD FURNISHE D INACCURATE PARTICULARS BY SUPPRESSING AND UNDERREPORTING THE INVESTMENTS IN B ANK ACCOUNTS AND ON ACCOUNT OF INCOME DEEMED TO HAVE ACCRUED TO IT. IT WAS HEL D BY THE TRIBUNAL IN THAT CASE THE ASSESSEE HAD VOLUNTARILY FURNISHED ITS RETURN O F INCOME BEFORE ISSUANCE OF 6 ITA NOS.1766, 1767, 2028, 2029 & 2030/PN/2014 NOTICE UNDER SECTION 153C AND HENCE THE IMPOSITION OF PENALTY UNDER SECTION 271(1)(C) IS NOT IN ACCORDANCE WITH LAW. 11. THE LD. AUTHORIZED REPRESENTATIVE FOR THE ASSES SEE ALSO CANVASSED THAT EXPRESSION DUE DATE REFERRED TO IN CLAUSE (B) OF EXPLANATION 5A TO SECTION 271(1)(C) OF THE ACT CANNOT BE READ AS DUE DATE A S PROVIDED IN SECTION 139(1) ALONE. IT CAN ALSO RATHER MEAN EXTENDED DATE OF FI LING OF RETURN OF INCOME AS PROVIDED UNDER SECTION 139(4) OF THE ACT. THEREFOR E, WHERE PURSUANT TO SEARCH PROCEEDINGS, ASSESSEE FILED HIS RETURN BEFORE EXPIR Y OF DUE DATE UNDER SECTION 139(4) INCLUDING CERTAIN ADDITIONAL INCOME, HE WAS ENTITLED TO CLAIM BENEFIT OF CLAUSE (B) OF EXPLANATION 5A TO SECTION 271(1)(C) OF THE A CT. FOR THIS PROPOSITION, HE RELIED UPON THE DECISION OF MUMBAI BENCH OF THE TRIBUNAL I N THE CASE OF ITO VS. GOPE M. ROCHLANI REPORTED IN (2014) 49 TAXMANN.COM 46 (MUM- TRIB.) (COPY PLACED IN FILE) AND THE DECISION OF HONBLE HIGH COURT OF GUJARAT I N THE CASE OF ITO VS. MUKTABEN J. PATIRA REPORTED IN (2014) 52 TAXMANN.COM 450 (GU J) IN THE CONTEXT OF OLD PROVISION OF BLOCK ASSESSMENT UNDER SECTION 158BB. 12. THE LD. AUTHORIZED REPRESENTATIVE FOR THE ASSES SEE ALSO PRESSED RELIANCE ON THE OBSERVATIONS MADE BY THE HONBLE BOMBAY HIGH COURT IN THE CASE OF SHIKSHANA PRASARAKA MANDALI VS. CIT (CENTRAL) REPOR TED IN (2013) 32 TAXMANN.COM 139 (BOM), WHEREIN THE HONBLE HIGH COURT INTER-ALIA OBSERVED THAT THE PERIOD OF LIMITATION UNDER SECTION 153C OF THE ACT ONLY COMME NCES FROM THE DATE THE DOCUMENTS ETC. ARE SENT TO THE ASSESSING OFFICER OF SUCH OTHER PERSON. DRAWING SUPPORT FROM SUCH CATEGORICAL ASSERTIONS MADE BY TH E JURISDICTIONAL HIGH COURT, THE LD. AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE EMPH ASIZED THAT THE AFORESAID OBSERVATIONS ALBEIT OBITER DICTA ALSO CLINCHES THE CASE OF THE ASSESSEE. 13. ON FACTS, THE LD. AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE REITERATED THAT IN SO FAR AS ASSESSMENT YEARS 2005-06 AND 2006-07 A RE CONCERNED, THE ASSESSEE 7 ITA NOS.1766, 1767, 2028, 2029 & 2030/PN/2014 WAS UNDER NO LEGAL OBLIGATION TO FILE THE RETURN UN DER SECTION 139(1) OR 139(4) OF THE ACT AS THE TAXABLE INCOME WAS BELOW THRESHOLD LIMIT . THE RETURNS FOR THESE YEARS WERE DULY FILED IN COMPLIANCE TO NOTICE UNDER SECTI ON 153C AND THE INCOMES DECLARED WHICH WERE BELOW THRESHOLD LIMIT WERE DULY ACCEPTED. IN SO FAR AS ASSESSMENT YEAR 2008-09 IS CONCERNED THE ASSESSEE A LTHOUGH FILED THE RETURN BELATEDLY UNDER SECTION 139(4) OF THE ACT, HOWEVER, THE REQUISITE ADVANCE TAX WAS PAID. HENCE NO MALAFIDE CAN BE ATTRIBUTED TO THE A SSESSEE IN ANY MANNER WHATSOEVER. 14. THE LD. DEPARTMENTAL REPRESENTATIVE FOR THE REV ENUE ON THE OTHER HAND CAME UP WITH EMPHATIC REITERATION OF MORE OR LESS W HAT WAS PORTRAYED BY THE CIT(A). HE, IN FURTHERANCE, INVITED OUR ATTENTION TO THE LEGAL POSITION AS LAID DOWN BY THE ITAT, PUNE BENCH IN THE CASE OF ACIT VS. CHHORIYA BUILDERS AND ASSOCIATES AND OTHERS (ITA NO.1389 & 1390/PN/2012 ORDER DATED 20.12.2013) . AS PER THE LD. DR, THE CLAUSE (II) IN EXPLANATION 5A IS APPLICABLE WHERE THE ASSESSEE ADMITS ADDITIONAL INCOME BASED ON THE INCRIMINATING DOCUME NTS AND TRANSACTIONS FOUND IN THE COURSE OF SEARCH. 15. THE LD. DEPARTMENTAL REPRESENTATIVE FOR THE REV ENUE FURTHER ASSERTED THAT IN THE ABSENCE OF SEARCH IN THE CASE OF SUYOJIT GRO UP, THE ASSESSEE WOULD HAVE NEVER DECLARED THE IMPUGNED INCOME WHICH IS NOTHING BUT CONCEALED INCOME. HE VEHEMENTLY ARGUED THAT FOR THE ASSESSMENT YEARS 200 5-06 AND 2006-07, THE INCOME OF THE ASSESSEE IS BELOW TAXABLE LIMIT AND T HEREFORE, THE ASSESSEE HAS NO KNOWN SOURCES OF INCOME. IT IS ONLY IN ASSESSMENT YEARS 2008-09, 2009-10 AND 2010-11, LARGE INCOME HAS BEEN DECLARED WHERE SPEAK ING DOCUMENTS BELONGING TO THE ASSESSEE OF CASH RECEIPTS OF HUGE AMOUNT WERE F OUND IN THE PREMISES OF THE SEARCHED PERSON. THE RETURN WAS FILED SUBSEQUENT T O THE DATE OF SEARCH ON SUYOJIT GROUP AFTER ACQUIRING THE KNOWLEDGE ABOUT THE SEIZU RE OF THE DOCUMENTS INCREMENTING THE SUBJECT ASSESSEE AND ITS RELATIVES AND CONCERNS. THE ASSESSEE 8 ITA NOS.1766, 1767, 2028, 2029 & 2030/PN/2014 HAS NOT OBJECTED TO THE CORRECTNESS OF THE INCOME D ETECTED FROM THE DOCUMENTS SEIZED IN THE HANDS OF THE SEARCHED PERSON UNDER SE CTION 132 OF THE ACT. IN THE CIRCUMSTANCES, THE ACTION OF THE ASSESSEE CANNOT BE TERMED VOLUNTARY AS PLEADED BY ASSESSEE. THE LD. DEPARTMENTAL REPRESENTATIVE F OR THE REVENUE FURTHER CONTENDED THAT EXPLANATION 5A TO SECTION 271(1)(C) IS SQUARELY APPLICABLE TO THE ASSESSEE IN VIEW OF THE PLAIN AND UNAMBIGUOUS LANGU AGE OF THE AFORESAID EXPLANATION R.W.S. 153C AND 153A OF THE ACT. IN TH E ALTERNATIVE, THE PENALTY IS EXIGIBLE EVEN UNDER THE NORMAL AND MAIN PROVISIONS OF SECTION 271(1)(C) R.W. EXPLANATION 1 OF THE ACT. FOR THIS PROPOSITION, HE SOUGHT TO RELY ON THE DECISION OF MUMBAI BENCH OF THE TRIBUNAL IN THE CASE OF HARISH P. MASHRUWALA VS. ACIT REPORTED IN 139 TTJ 563 (MUM) . IN THE AFORESAID DECISION, IT HAS BEEN HELD THAT MERELY BECAUSE THE CASE OF THE ASSESSEE IS NOT COVE RED BY ANY PARTICULAR EXPLANATION TO SECTION 271(1)(C) OF THE ACT, IT DOE S NOT MEAN THAT THE PENALTY CANNOT BE IMPOSED WHEN THERE IS NO DIFFICULTY OTHERWISE IN DETERMINING THE TAX SOUGHT TO BE EVADED. HE FURTHER STATED THAT THE EXPLANATIONS TO SECTION 271(1)(C) MERELY EXPLAINS AND IMPARTS CLARITY TO THE MAIN PROVISION. THE LD. DEPARTMENTAL REPRESENTATIVE THEREAFTER ADVERTED OUR ATTENTION TO PARA NO. 6.3 OF THE ORDER OF THE CIT(A) WHEREIN THE STATEMENT OF THE ASSESSEE WAS RE CORDED UNDER SECTION 131 ON 16.11.2010. AS PER REPLY TO QUESTION NO.10 IN THE STATEMENT, THE ASSESSEE HAS CATEGORICALLY ADMITTED THAT HE HAS NO KNOWLEDGE ABO UT THE INCOME TAX RETURNS AND THE IMPUGNED TRANSACTIONS OF TENANCY RIGHTS. HE HA S SIMPLY ADMITTED TO HAVE SIGNED ON DOTTED LINES AS REQUIRED BY HIS PARENTS. THIS CLEARLY SHOWS THAT THE ENTIRE TRANSACTIONS ARE UNACCOUNTED MONEY OF THE ASSESSEE FAMILY WHICH IS SOUGHT TO HAVE COVERED BY FILING RETURNS OF VARIOUS YEARS AFT ER THE SEARCH ACTION ALBEIT ON SUYOJIT GROUP WHICH HAD CLEAR REPERCUSSIONS ON ASSE SSEE AND HIS FAMILY. THE LD. DEPARTMENTAL REPRESENTATIVE ASSERTED THAT THE TEXT AND TENOR OF THE ORDER OF THE CIT(A) WOULD CLEARLY DEMONSTRATE THE CLANDESTINE NA TURE OF TRANSACTIONS EXECUTED BY THE ASSESSEE AND ITS FAMILY TO COVER UP THE UNAC COUNTED TRANSACTIONS INTENDED FOR TAX EVASION. 9 ITA NOS.1766, 1767, 2028, 2029 & 2030/PN/2014 16. THE LD. DEPARTMENTAL REPRESENTATIVE FOR THE REV ENUE NEXT CONTENDED THAT THE SEARCH WAS INITIATED UNDER SECTION 132 OF THE A CT AND THIS ASSESSEE AS A CONSEQUENCE OF THE SEARCH WAS FOUND TO BE THE OWNER OF THE INCOME IN TERMS OF CLAUSE (II) OF EXPLANATION 5A TO SECTION 271(1)(C) OF THE ACT. THE ASSESSEE FOR THE PURPOSES OF EXPLANATION 5A WOULD ALSO EXTEND TO THE OTHER PERSON (PRESENT ASSESSEE) IN VIEW OF THE SCHEME OF THE ACT. 17. THE LD. DEPARTMENTAL REPRESENTATIVE FURTHER ADV ANCED HIS ARGUMENT THAT MERELY BECAUSE THE RETURN FILED UNDER SECTION 153C HAS BEEN ACCEPTED IN THE COURSE OF THE ASSESSMENT MEANS NO DIFFERENT ON IMPO SITION OF PENALTY. THE PENALTY CAN BE LEVIED WHEN THE INCOME HAS NOT BEEN EITHER R ECORDED IN THE BOOKS OR WHERE THE DISCLOSURE IS NOT VOLUNTARY. HE RELIED UPON TH E DECISION OF HONBLE GUJARAT HIGH COURT IN THE CASE OF KIRIT DAYABHAI PATEL VS. ACIT IN ITA NO.1189 OF 201 0 ORDER DATED 03.12.2014 FOR THE AFORESAID PROPOSITION. TO SUM UP, THE LD. DEPARTMENTAL REPRESENTATIVE FOR THE REVENUE VEHEMENTLY URGED THA T ACTION OF THE CIT(A) IN CONFIRMING THE PENALTY IMPOSED BY THE ASSESSING OFF ICER FOR ALL THESE YEARS IS IN CONFORMITY WITH LAW AND IN THE FACTS OF THE CASE AN D PLEADED THAT THE AFORESAID ACTION OF THE CIT(A) SHOULD NOT BE DISTURBED. 17.1 THE LD. AUTHORIZED REPRESENTATIVE FOR THE ASSE SSEE IN HIS REJOINDER STATED THAT THE STATEMENT HAS BEEN RECORDED SUBSEQUENT TO THE FILING OF THE RETURN FOR ASSESSMENT YEAR 2008-09, 2009-10 AND 2010-11 AND TH EREFORE NOT RELEVANT AT ALL. 18. WE HAVE CAREFULLY CONSIDERED THE RELEVANT ORDER S OF THE AUTHORITIES BELOW AND MATERIAL PLACED ON RECORD AND ALSO DECISIONS CI TED BY THE RESPECTIVE PARTIES. THE PRIMARY QUESTION THAT ARISES FOR OUR CONSIDERAT ION IS WHETHER EXPLANATION 5A TO SECTION 271(1)(C) IS APPLICABLE IN THE FACTS OF THE CASE WHERE THE IMPUGNED RETURNS FOR THE VARIOUS ASSESSMENT YEARS HAVE BEEN FILED PR IOR TO ISSUANCE OF NOTICE UNDER SECTION 153C TO THE ASSESSEE. IT IS AN UNDISPUTED FACT THAT IN ALL THE ASSESSMENT 10 ITA NOS.1766, 1767, 2028, 2029 & 2030/PN/2014 YEARS IN APPEAL TOWARDS IMPOSITION OF PENALTY, THE RETURNED INCOME FILED HAS BEEN ACCEPTED AND ASSESSED AS SUCH WITHOUT ANY MODIFICAT ION. NO ADDITION HAS BEEN MADE TO THE INCOME OFFERED BY THE ASSESSEE IN ANY O F THESE YEARS. IT IS ALSO AN ADMITTED FACT THAT THE RETURNS FOR FIRST TWO YEARS IN APPEAL I.E. ASSESSMENT YEARS 2005-06 AND 2006-07 WERE NOT REQUIRED TO BE FILED S TATUTORILY UNDER THE NORMAL PROVISIONS OF THE ACT IN VIEW OF THE INCOME BEING L OWER THAN THE THRESHOLD LIMIT. THE RETURNS FOR THESE YEARS WERE FILED SHOWING MINISCUL E INCOME OF RS.8,957/- AND RS.43,857/- RESPECTIVELY IN COMPLIANCE OF NOTICE UN DER SECTION 153C. THEREFORE, THE REVENUE CANNOT POSSIBLY HAVE ANY GRIEVANCE FOR NON-DISCLOSURE OF ANY TAXABLE INCOME IN SO FAR AS THESE TWO ASSESSMENT YEARS ARE CONCERNED. 19. AS REGARDS ASSESSMENT YEARS 2008-09, 2009-10 AN D 2010-11 ARE CONCERNED IT IS AGAIN AN UNDISPUTED FACT THAT RETURNS HAVE BE EN FILED UNDER SECTION 139 PRIOR TO THE ISSUE OF NOTICE UNDER SECTION 153C BUT SUBSEQUE NT TO THE SEARCH CONDUCTED IN THE CASE OF SUYOJIT GROUP. NO MATERIAL HAS BEEN BR OUGHT ON RECORD TO INDICATE THAT THE PRESENT ASSESSEE WAS PRIVY TO THE SEIZED MATERI AL ALLEGEDLY INCRIMINATING THE ASSESSEE. IT CAN ALSO BE SEEN THAT THE STATEMENT R ECORDED UNDER SECTION 131 IS ALSO SUBSEQUENT TO THE DATE OF FILING OF RETURN UND ER SECTION 139 BY THE ASSESSEE FOR THESE ASSESSMENT YEARS. THE RETURNS FILED PRIOR TO THE ISSUANCE OF NOTICE UNDER SECTION 153C WERE ADOPTED AS RETURN IN PURSUANCE TO THE AFORESAID NOTICE. 20. IN THE FACTS OF THE CASE, WE FIND OURSELVES COM PLETELY IN AGREEMENT WITH THE CONTENTIONS OF THE ASSESSEE THAT NO INCOME CAN BE A LLEGED TO BE UNDISCLOSED QUA THE RETURNS OF INCOME FILED. THE ALLEGATION OF CON CEALMENT/FURNISHING OF INACCURATE PARTICULARS OF INCOME CAN ORDINARILY ARISE ONLY QUA THE RETURN OF INCOME WHICH IN THE INSTANT CASE WAS FILED MUCH BEFORE HAVING BEEN CALL ED UPON TO DO SO UNDER SECTION 153C OF THE ACT. IT IS DIFFICULT TO INFER THE ALLE GED CONCEALMENT IN THE GIVEN FACTS OF THE CASE. A PLAIN READING OF EXPLANATION 5A WOULD SHOW THAT THE EXPLANATION IS TRIGGERED ONLY WHEN SEARCH IS INITIATED UNDER SECTI ON 132 OF THE ACT. WHEN READ IN 11 ITA NOS.1766, 1767, 2028, 2029 & 2030/PN/2014 CONJUNCTION WITH SECTION 153C OF THE ACT RELEVANT T O THE PRESENT ASSESSEE, IT IS SELF EVIDENT FROM THE PROVISO THERETO THAT THE DATE OF I NITIATION OF SEARCH UNDER SECTION 132 STANDS MODIFIED AND SUBSTITUTED AS THE DATE OF RECEIPT OF BOOKS OF ACCOUNT OR DOCUMENTS, ETC. SEIZED BY THE ASSESSING OFFICER HAV ING JURISDICTION OVER THE PRESENT ASSESSEE. THE IMPUGNED DATE OF RECEIPT OF SEARCH M ATERIAL IS 30/07/2012. THE INCOME ALLEGED TO HAVE BEEN EVADED GIVING RISE TO C ONSEQUENCE OF PENALTY FOR ALL THESE YEARS IN APPEAL (EXCEPT ASSESSMENT YEARS 2005 -06 AND 2006-07) IS ALREADY ON THE RECORD OF THE REVENUE MUCH PRIOR TO THIS DAT E. THE PROPOSITION OF LAW THAT DATE OF SEARCH STANDS SUBSTITUTED BY THE DATE OF HA NDING OVER OF THE DOCUMENTS BY THE ASSESSING OFFICER OF THE PERSON SEARCHED TO THE ASSESSING OFFICER OF THE OTHER PERSON (PRESENT ASSESSEE) IS CLEARLY SUPPORTED BY T HE SEVERAL DECISIONS CITED ON BEHALF OF THE ASSESSEE AND ANALYZED IN PARA NO.10 O F THE ORDER EARLIER. AS REGARDS THE RETURN FILED BELATEDLY UNDER SECTION 139(4), WE AGAIN DO NOT FIND ANY LEGAL INFIRMITY WITH THE CONTENTIONS OF THE ASSESSEE. RE SPECTFULLY FOLLOWING THE RATIO OF DECISIONS IN THE CASE OF GOPE M. ROCHLANI (SUPRA) AND MUKTABEN J. PATIRA (SUPRA) , WE OBSERVE THAT THE RETURNS HAVE BEEN FILED WITHIN PERMISSIBLE EXTENDED TIME LIMIT AND THEREFORE NO ADVERSE INFERENCE IS CALLED FOR UN DER SECTION 271(1)(C) OF THE ACT. THE ASSESSEE HAVING FILED THE RETURN WITHIN DUE DAT E UNDER SECTION 139(4) BEFORE THE INITIATION OF SEARCH UNDER SECTION 132 (AS UNDE RSTOOD EARLIER WITH REFERENCE TO FIRST PROVISO TO SECTION 153C) THE ASSESSEE CANNOT BE STATED TO BE COVERED WITHIN THE MISCHIEF OF EXPLANATION 5A TO SECTION 271(1)(C) . 21. THE SECOND DEFENSE OF THE REVENUE THAT NOTWITHS TANDING NON-APPLICABILITY OF EXPLANATION 5A, THE ASSESSEE IN ANY CASE IS SQUAREL Y COVERED BY THE MAIN SUBSTANTIVE PROVISION OF SECTION 271(1)(C) DEHORS VARIOUS EXPLANATIONS IS NOT FOUND TO BE IMPRESSIVE. WE ARE NOT IMPRESSED BY THIS ARG UMENT TOO. IN OUR HUMBLE UNDERSTANDING, EXPLANATION 1 TO SECTION 271(1)(C) I S NOT ATTRACTED IN A CASE WHERE THERE IS NO ADDITION MADE IN THE ASSESSMENT. THE E XPLANATION 4 WHICH EXPLAINS THE MEANING OF THE PHRASE AMOUNT OF TAX SOUGHT TO BE E VADED IS ALSO NOT WORKABLE IN 12 ITA NOS.1766, 1767, 2028, 2029 & 2030/PN/2014 THE FACTS OF THE CASE AS THERE IS NO DIFFERENCE BET WEEN THE RETURNED INCOME AND ASSESSED INCOME. WE ARE CONSCIOUS THAT THE SEIZED MATERIAL IN THE HANDS OF SEARCHED PERSON (SUYOJIT GROUP) GIVES PLAUSIBLE DOU BTS THAT THE ASSESSEE MAY POSSIBLY BE INVOLVED IN CLANDESTINE TRANSACTIONS WH ICH MIGHT HAVE LED TO EVASION OF TAXES BUT WE CANNOT IGNORE THE REALITY THAT THE INC OME HAS BEEN OFFERED BEFORE ANY STATUTORY CORRESPONDENCE WITH THE ASSESSEE. THE PE NAL PROVISION CAN BE INVOKED ONLY WHEN THE FACTUM OF CONCEALMENT ETC. QUA THE RETURN IS DEMONSTRABLE IN ACCORDANCE WITH LAW. THE RELIANCE PLACED BY THE LD . DEPARTMENTAL REPRESENTATIVE ON THE RATIO LAID DOWN BY THE HONBLE GUJARAT HIGH COURT IN THE CASE OF KIRIT DAHYABHAI PATEL (SUPRA) , IS APPARENTLY MISPLACED. THIS WAS THE CASE PERTA INING TO EXPLANATION 5 (OLD) TO SECTION 271(1)(C) WITH REFER ENCE TO SECTION 153A IN THE CASE OF SEARCHED PARTY WHERE THE RETURN WAS FILED PURSUA NT TO NOTICE ISSUED UNDER SECTION 153A. IT WAS HELD BY THE HONBLE GUJARAT HIGH COURT THAT THE ASSESSEE IS ENTITLED TO BENEFIT OF OLD PROVISIONS OF EXPLANATIO N 5(2) TO SECTION 271(1)(C) IN THE FACTS OF THAT CASE. IN THE PRESENT CASE, AS WE NOT ED EARLIER, THE RETURN HAS BEEN FILED BEFORE ISSUANCE OF NOTICE AND NO CONCEALMENT ETC. HAS BEEN DETECTED QUA THE RETURN. THE PLEA OF THE REVENUE THAT THE SUBSTANTI VE PROVISION OF SECTION 271(1)(C) IS SUFFICIENT TO IMPOSE PENALTY THEREFORE DO NOT HO LD WATER. THE QUESTION OF CONCEALMENT/FURNISHING INACCURATE PARTICULARS OF IN COME ENVISAGED IN THE SUBSTANTIVE PROVISIONS WILL BE POSSIBLE ONLY WHEN E ITHER (I) RETURN HAS NOT BEEN FILED AT ALL OR (II) RETURN HAS BEEN FILED AFTER DETECTIO N OF CONCEALMENT IN THE HANDS OF THE ASSESSEE OR (II) THE RETURN HAS BEEN FILED BUT ADDI TIONAL INCOME IS DETECTED AND ASSESSED OVER AND ABOVE THE RETURNED INCOME. 22. SINCE WE HOLD THAT SECTION 271(1)(C) AND EXPLAN ATION 5A THERETO IS NOT APPLICABLE IN THE FACTS OF THE CASE, THEREFORE, WE ARE NOT INCLINED TO ADDRESS THE ISSUE WHETHER EXPLANATION 5A IS APPLICABLE AT ALL I N THE CASE OF PERSON OTHER THAN SEARCHED PERSON. 13 ITA NOS.1766, 1767, 2028, 2029 & 2030/PN/2014 23. IN VIEW OF THE ABOVE, THERE BEING NO DIFFERENCE IN THE RETURNED INCOME AND ASSESSED INCOME, AND CONSIDERING THE FACT THAT THE RETURNS WERE FILED BY THE ASSESSEE PRIOR TO ISSUE OF ANY STATUTORY NOTICE OR SUMMON, THEREFORE, THE PENALTY IN OUR OPINION IS NOT EXIGIBLE. THE ACTION OF THE REV ENUE, THUS, CANNOT BE APPROVED. THE GROUNDS RAISED BY THE ASSESSEE ARE ACCORDINGLY ALLOWED. 24. IN THE RESULT, ALL THE APPEALS FILED BY THE ASS ESSEE ARE ALLOWED. ORDER PRONOUNCED ON THIS 29 TH DAY OF JULY, 2015. SD/- SD/- ( VIKAS AWASTHY ) ( R.K. PANDA ) # / JUDICIAL MEMBER / ACCOUNTANT MEMBER PUNE ; DATED : 29 TH JULY, 2015. %&'#()!*!+( / COPY OF THE ORDER IS FORWARDED TO : 1) THE ASSESSEE; 2) THE DEPARTMENT; 3) THE CIT(A)-I, NASHIK; 4) THE CIT-I, NASHIK; 5) THE DR A BENCH, I.T.A.T., PUNE; 6) GUARD FILE. %, / BY ORDER , ' # //TRUE COPY// $ %& # '( / SR. PRIVATE SECRETARY ) '* , / ITAT, PUNE