Sameer Balasaheb Ladkat, Pune V. ACIT Cent. Cir. 1(2), Pune

ITA 221/PUN/2011

• Counselvise Citation: 22124514 RSA 2011
• Duration Of Justice: 2 year(s) 2 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-04-2013
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 14-09-2012
• Assessment Year: 2002-2003
• Appeal Filed On: 23-02-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S K SINGH
• Keywords: Unexplained expenditure; Gift; Search and seizure; Document seized; Documents seized
• Section: 5(2); 153A; 148; 139

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B, PUNE BEFORE: SHRI G.S. PANNU, ACCOUNTANT MEMBER AND SHRI R.S. PADVEKAR, JUDICIAL MEMBER ITA NO.221/PN/2011 ASSESSMENT YEAR : 200 2 - 03 SAMEER BALASAHEB LADKAT BUNGLOW NO. 46, VARSHA/KHUSHBOO, KOREGAON PARK, PUNE VS. ACIT, CENTRAL CIRCLE-1(2), PUNE (APPELLANT) (RESPONDENT) PAN NO. AAGPL4129H APPELLANT BY: SHRI SHARAD SHAH RESPONDENT BY: SHRI S.K. SINGH DATE OF HEARING : 01-03-2013 DATE OF PRONOUNCEMENT : 30-04-2013 ORDER PER R.S. PADVEKAR, JM:- IN THIS APPEAL, THE ASSESSEE HAS CHALLENGED THE IMPUGNE D ORDER OF THE LD.CIT(A) CENTRAL, PUNE DATED 21-07-2010 FOR A.Y. 2002 -03 ARISING OUT OF THE PENALTY LEVIED BY THE ASSESSING OFFICER U/S.271( 1)(C) OF THE INCOME-TAX ACT. THE ASSESSEE HAS TAKEN FOLLOWING GROUNDS IN THE APPEAL: 1. THE HON'BLE A.O. ERRED IN [AND CIT(A) ERRED IN UPHOLDING ] LEVYING PENALTY U/S.271(1)(C) AMOUNTING TO RS.10,31,913/-. 2. THE PENALTY HAS BEEN LEVIED IGNORING THE IMMUNITY PROV IDE IN SECTION 271(1)(C). 3. THE PENALTY ORDER IS PASSED WITHOUT APPLICATION OF MI ND CONSIDERING THE FACT THAT ONE OF THE DECISIONS SUBMITTED FULLY COV ERS THE ISSUE AND IS AGAINST THE CONCLUSION DRAWN BY THE LEARNED A.O . THE LEARNED A.O. HAS NOT GIVEN ANY REASON ON WHAT BASIS THE SAID DECISION IS IGNORED BY HIM. 2. THE FACTS WHICH REVEALED FROM THE RECORD ARE AS UNDE R. THERE WAS A SEARCH AND SEIZURE OPERATION U/S.132 OF THE INCOME-TA X ACT WHICH WAS CARRIED OUT AT THE RESIDENTIAL PREMISES OF THE ASSESSEE O N 06-07-2006. THE SURVEY ACTION U/S.132A OF THE ACT WAS SIMULTANEOUSLY CARRIED OUT AT THE DIFFERENT BUSINESS PREMISES OF THE LADKAT GROUP. IN C ONSEQUENCE OF THE SEARCH AND SEIZURE OPERATION THE ASSESSEE WAS ISSU ED NOTICE U/S.153A OF THE INCOME-TAX ACT FOR FILING THE RETURN OF I NCOME AND 2 ITA NO.221/PN/2011, SAMEER BALASAHEB LADKAT, PUNE ACCORDINGLY THE ASSESSEE FILED THE RETURN OF INCOME DECLAR ING INCOME OF RS.60,580/- FOR THE A.Y. 2002-03. THE ASSESSING OFFICER HAS OBSERVED THAT DURING THE COURSE OF SEARCH AND SEIZURE OPERATION THE ASSESSEE HAS ADMITTED THE FOLLOWING UNDISCLOSED INCOME: SL. NO. DESCRIPTION/HEAD ADMITTED UNDISCLOSED INCOME A.Y. 1 UNACCOUNTED CASH LOAN AND INTEREST THEREON 34,02,000/ - 2002 - 03 2 UNACCOUNTED CASH LOAN AND INTEREST THEREON 1,06,300/ - 2003 - 04 3 UNEXPLAINED EXPENDITURE ON FOREIGN TOURS 2,00,000/ - 2007 - 08 3. THE ASSESSING OFFICER HAS FURTHER OBSERVED THAT IT WAS VERIFIED AS TO WHETHER THE ASSESSEE HAS OFFERED THE ABOVE MENTIONE D ADMITTED UNDISCLOSED INCOME IN THE RESPECTIVE ASSESSMENT YEARS. I T IS NOTED THAT THE ASSESSEE HAS ADMITTED AN ADDITIONAL INCOME OF RS.35,0 8,000/- IN A.Y. 2003-04. HOWEVER THE LOAN TRANSACTIONS ON THE BASIS OF WHICH THE ASSESSEE HAS ADMITTED AND DECLARED THE INCOME TO THE EXTENT OF RS.35,08,000/- ON THE BASIS OF SEIZED PAPER, THOSE TRANSAC TIONS WERE PERTAINING TO THE F.Y. 2002-03. THE ASSESSING OFFICER THE REFORE MADE ADDITION OF RS.34,02,000/- WHILE COMPLETING THE ASSESSMENT OF THE ASSESSEE FOR THE A.Y. 2002-03 AND ADDITION OF RS.1,06,300/- IN A.Y. 2003-04. THE ASSESSING OFFICER ALSO GAVE THE SET OFF OF RS. 34,02,000/- WHILE COMPLETING THE ASSESSMENT OF THE ASSESSEE FOR THE A .Y. 2003-04 AS ASSESSEE HAS ALREADY DECLARED THE SAID INCOME WHILE FILING T HE RETURN OF INCOME FOR A.Y. 2003-04. THE ASSESSING OFFICER INITIATED THE P ENALTY PROCEEDINGS U/S.271(1)(C) OF THE ACT ON ADDITION MADE OF RS.34 ,02,000/- IN A.Y. 2002-03 WHICH WAS OTHERWISE DECLARED BY THE ASSE SSEE FOR A.Y. 2003-04. THE ASSESSING OFFICER LEVIED THE PENALTY OF RS.10, 31,913/- BY LEVYING CHARGE FOR CONCEALING THE PARTICULARS OF INCOME AND FURNISHING THE INACCURATE PARTICULARS OF INCOME WITHIN THE MEANING OF S ECTION 271(1)(C) OF THE ACT. 3 ITA NO.221/PN/2011, SAMEER BALASAHEB LADKAT, PUNE 4. THE ASSESSEE CHALLENGED THE PENALTY ORDER BEFORE THE LD.CIT(A). THE BASIC CONTENTIONS OF THE ASSESSEE BEFORE THE LD.CIT(A ) WAS THAT HE WAS ENTITLED FOR THE IMMUNITY IN VIEW OF EXPLANATION 5(2) BELO W SECTION 271(1)(C) OF THE ACT AS THE ASSESSEE HAS DECLARED THE ADM ITTED INCOME AND ALSO PAID THE TAX FOR THE A.Y. 2003-04. HE FURTHER PLEADED BEFORE LD. CIT(A) THAT MERELY BECAUSE THE YEAR OF ASSESSABILITY IS C HANGED BY THE ASSESSING OFFICER THAT PER SE CANNOT BE DEPRIVED THE ASS ESSEE FROM CLAIMING THE IMMUNITY OF EXPLANATION 5(2) BELOW SECTION 271(1)(C) O F THE ACT. THE LD. CIT(A) EXHAUSTIVELY DEALT WITH PLEA OF THE ASSESSEE. WHETHER IN VIEW OF THE EXPLANATION 5(2) THE IMMUNITY CAN BE GIVEN TO THE ASSESSEE OR NOT AS THE INCOME ADMITTED DURING THE COUR SE OF SEARCH AND SEIZURE OPERATION THE ASSESSEE DECLARED THE SAID INCOME IN THE A.Y. 2003-04 AND ALSO PAID THE TAX ON THE SAID INCOME. THE L D. CIT(A) ALSO REFERRED TO THE DECISION OF THE HON'BLE JURISDICTIONAL HIG H COURT IN THE CASE OF SHERATON APPEARELS VS. ACIT 256 ITR 20 (BOM.) AS WELL AS THE DECISION OF THE ITAT AHMEDABAD IN THE CASE OF ACIT VS. KIR IT DAHYABHAI PATEL 125 TTJ (AHD) (TM). THE LD.CIT(A) AFTER EXHAUSTIVELY DEALING WITH THE CONTENTION OF THE ASSESSEE IN RESPECT OF THE IMMUNITY TO BE GRANTED FOR LEVYING THE PENALTY UNDER EXPLANATION 5(2) BELOW SECTION 271(1)(C) OF THE ACT FINALLY CONCLUDED THAT THE ASSESSEE IS NOT ENTITLE D TO GET THE BENEFIT OF THE IMMUNITY AND HE CONCLUDED THAT THE ASSESS ES IN ALL RESPECT IS INCORRECT IN CLAIMING THE IMMUNITY AND THE ASSESSING OFFICE R WAS RIGHT IN LEVYING THE PENALTY U/S.271(1)(C) OF THE ACT. NOW THE ASS ESSEE IS IN APPEAL BEFORE US. 5. WE HAVE HEARD THE RIVAL SUBMISSIONS OF THE PARTIES AND PERUSED THE RECORD. THE A.R. ARGUES THAT ONLY ONE LIMB OF THE AR GUMENT HAS BEEN CONSIDERED BY THE LD.CIT(A) THAT IS IN RESPECT OF IMMUNITY U NDER EXPLANATION 5(2) BELOW SECTION 271(1)(C) OF THE ACT. HE ALSO TO OK US THROUGH THE IMPUGNED ORDER WHERE LD. CIT(A) HAS OBSERV ED THAT THIS ISSUE IS NOT IN DISPUTE AND THE PENALTY HAS NOT BEE N LEVIED BECAUSE THE APPELLANT HAS SHOWN THE INCOME IN A DIFFERENT YEAR. THE CHANGE OF 4 ITA NO.221/PN/2011, SAMEER BALASAHEB LADKAT, PUNE ASSESSMENT YEAR HAS NO IMPLICATION ON LEVY OF PENALTY . ON PERUSAL OF THE PENALTY ORDER IT VERY CLEARLY SHOWS THAT THE ASSESSIN G OFFICER AFTER MAKING A DETAIL DISCUSSION CONCLUDED THAT THE INCOME BEING A SSESSED IN THIS ASSESSMENT YEAR IS BASED ON DOCUMENT WHICH WAS SEIZ ED DURING THE SEARCH AND THE SAID INCOME WAS NOT SHOWN AND ASSES SED IN THE RETURN EARLIER FILED IN ANY ASSESSMENT YEARS. HE THEREFORE SUBMITS THAT THE ASSESSEE DECLARED THE ADMITTED INCOME IN THE RETURN FILED IN RESPONSE TO NOTICE U/S.153A AND EXPLANATION-5 BELOW SECTION 271(1)(C) HA S NO APPLICATION TO INCOME DECLARED BY THE ASSESSEE AS IT WAS NOT RELATING TO ANY MONEY, BILLION, JEWELLARY OR ANY OTHER PRECIOUS ARTICLE O R THINGS BUT ADMITTEDLY THE INCOME DECLARED BY THE ASSESSEE WAS IN R ESPECT OF ALLEGED UNRECORDED TRANSACTIONS OF THE LOANS AND INTEREST WHICH WERE FOUND NOTED IN THE SEIZED PAPERS. HE FURTHER SUBMITS THAT SO FAR AS EXPLANATION-5A BELOW SECTION 271(1)(C) IS CONCERNED, IT HAS NO APPLICABILITY FOR ASSESSMENT YEAR IN QUESTION I.E. A.Y. 2002-03 AND EXPLANATION-5 IS BROUGHT ON STATUTE W.E.F. 01-06-2007. HE PLACED HIS HEAVY RELIANCE ON THE DECISION OF THE ITAT, PUNE IN THE CA SE OF (I). CHANDAN K. SHEWANI ITA NOS. 235 AND 236/PN/2010 ORDER DATED 29- 08- 2012 AND (II) SMT. PRAMILA D. ASTEKAR AND ORS. VS. ITO (C)-II, PUNE ITA NOS. 354 TO 366/PN/2010 ORDER DATED 14-09-2012. HE S UBMITS THAT INCOME RETURNED BY THE ASSESSEE HAS BEEN ACCEPTED BY THE ASSESSING OFFICER WITHOUT ANY ADDITION AND IN THE PRESENT ASSESSMENT YEAR I.E A.Y.2002-03 THE ASSESSING OFFICER HAS BROUGHT TO TAX THE INCOME DECLARED BY THE ASSESSEE AND ALSO PAID THE TAX ON THE SAME IN THE A.Y. 2003-04. HE THEREFORE PLEADED TO DELETE THE PENALTY. PER CONTRA THE LD. DR SUPPORTED THE ORDERS OF THE AUTHORITIES BELOW. 6. WE FIND THAT ADMITTEDLY THE ASSESSEE DECLARED THE INC OME TO THE EXTENT OF RS.60,580/- IN THE RETURN FILED IN RESPONSE TO NO TICE U/S.153A OF THE ACT FOR THE A.Y. 2002-03. THE ASSESSEE ALSO DECLARED INCOME TO T HE EXTENT OF RS.35,62,300/- IN THE A.Y. 2003-04 WHICH WAS ADMIT TED IN THE COURSE OF THE SEARCH AND SEIZURE OPERATION. WE FURTHER FIND THAT THE 5 ITA NO.221/PN/2011, SAMEER BALASAHEB LADKAT, PUNE ASSESSING OFFICER PARTIALLY TAXED THE INCOME OUT OF THE S AID INCOME DECLARED IN THE A.Y.2002-03 TO THE EXTENT OF RS. 34,02,000 /- AND BALANCE INCOME OF RS.1,06,300/- WAS TAXED IN THE A.Y. 2003-04. ON PERUSAL OF THE ASSESSMENT ORDER FOR A.Y. 2003-04 WE FIND THAT THE A SSESSING OFFICER HAS ALSO GIVEN THE SET-OFF OF THE INCOME WHICH WAS OTHERWIS E TAXED IN THE A.Y. 2002-03. THERE IS NO DISPUTE ABOUT THE BASIC FACT TH AT THE ASSESSEE HAS DECLARED THE INCOME IN THE RETURN FILED FOR THE A.Y. 200 3-04 AND HAS ALSO PAID THE TAX ON THE SAID INCOME WHICH WAS BROUGHT T O TAX AT RS.34,02,000/- FOR THE A.Y. 2002-03. IN THIS BACKGROUND, W E FIND THAT THE ISSUE HAS TO BE DECIDED IN FAVOUR OF THE ASSESSEE FO R THE FOLLOWING REASONS. 7. AS ARGUED BY THE LEARNED COUNSEL, EXPLANATION-5 BELO W SECTION 271(1)(C) HAS NO APPLICATION AT ALL TO THE INCOME DECLARED BY THE ASSESSEE. EXPLANATION-5 IS IN FORM OF LEGAL FICTION PRESUMING CONCEALMENT IN RESPECT OF INCOME DETECTED DURING THE COU RSE OF SEARCH WHICH IS SPECIFICALLY RELATING TO MONEY, JEWELLARY, BILLION OR LIK E VALUABLE OR PRECIOUS ITEMS. IN THE PRESENT CASE THE INCOME ADMIT TED AND DISCLOSED BY THE ASSESSEE PERTAINS TO CERTAIN UNACCOUNT ED LOAN TRANSACTIONS ON THE BASIS OF SEIZED DOCUMENTS. SO FAR AS THE EXPLANATION-5 BELOW SECTION 271(1)(C) IS CONCERNED AND BEIN G IT IS IN FORM OF LEGAL FICTION IT IS TO BE STRICTLY INTERPRETED CONSIDER ING OBJECT AND INTENTION OF THE PARLIAMENT TO INTRODUCE IT. THE NEXT QUE STION IS MERELY BECAUSE THE ASSESSING OFFICER HAS CHANGED THE ASSESSME NT YEAR TO TAX THE INCOME WAS DECLARED BY THE ASSESSEE IN THE A.Y. 2003 -4 BUT HAS BEEN TAXED IN THE A.Y. 2002-03 WHETHER THAT PER SE ATT RACTS THE PENAL CONSEQUENCE. THE LD. CIT(A) HIMSELF HAS OBSERVED THAT MER E CHANGE OF THE ASSESSMENT YEAR IS NOT THE BASIS FOR LEVY OF PENALTY AS IN THE PRESENT CASE. THE LAW IS WELL SETTLED BY THE ITAT PUNE IN THE CA SE OF CHANDAN K. SHEWANI (SUPRA). THE OPERATIVE PART OF THE TRIBUNAL ORDER IS AS UNDER : 7. WE FIND THAT THE A.O HAS LEVIED THE PENALTY FOR T HE A.YS. 1999-2000, 2000-01 AND 2001-02. WE FIND THAT IN THE PRE CEDING 6 ITA NO.221/PN/2011, SAMEER BALASAHEB LADKAT, PUNE THREE YEARS, THE PENALTY LEVIED BY THE A.O IS DELETED. THE MAJOR INCOME OFFERED FOR THE SAID YEARS WAS IN RESPECT OF THE PERSONAL EXPENDITURE OF THE ASSESSEE AND HIS DIVORCEE SISTER AS SOME ENTRIES WERE FOUND IN THE DIARY AND TO AVOID FUTURE PROBE B Y THE TAX SLEUTH, ASSESSEE OFFERED THE SAID AMOUNT AS THE UNDISCLOSED INCOME. IN THE PRESENT YEAR, IN ADDITION TO THE INCOME TOWARDS THE GIFT OF RS. 5,00,000/-, ASSESSEE ALSO OFFERED RS. 4,80,000/- TOWARDS PER SONAL & HOUSEHOLD EXPENDITURE. THE ASSESSEE ALSO DECLARED TH E INCOME FROM THE SHARE TRADING AND INCOME FROM CAPITAL GAIN. T HE ASSESSEE ALSO PAID TAXES ON THE INCOME DECLARED IN THE RETURN IN RESPONSE TO NOTICE U/S. 153A THOUGH THE INCOME OFFERED BY THE ASSESSEE IN RESPECT OF ALLEGED GIFT OF RS. 5,00,000/- AND HIS PERSONA L AND SISTER EXPENDITURE OF RS. 4,80,000/- WHICH MAY BE BASED ON SO ME ENTRIES IN THE DIARY BUT THE FACTS REMAINS THAT THE EXPLANAT ION -5 TO SEC. 271(1)(C ) HAS NO APPLICATION TO THE ASSESSEES CASE FOR THE A.Y. 2002-03 AS NO ADDITION IS MADE WHICH IS BASED ON ANY MONEY, GOLD, JEWELLERY ETC., FOUND DURING THE COURSE OF SEARCH. 8. WHILE DECIDING ASSESSEES APPEAL FOR A.YS. 1999-200 0 AND 2001-02, THE PENALTY LEVIED ON THE INCOME OFFERED TOWA RDS THE PERSONAL EXPENDITURE OF THE ASSESSEE AND HIS DIVORCEE SISTER HAS BEEN DELETED. EVEN THOUGH THE PARLIAMENT HAS INSERTED EXPLANATION 5A TO SEC. 271(1)( C ), SAID EXPLANATION IS APPLICABLE IN RE SPECT OF THE SEARCH INITIATED U/S. 132 ON OR AFTER 1 ST JUNE 2007. SECTION 5A IS INTRODUCED TO PATCH OUT THE LACUNAE IN THE EXISTING PROVISIONS MORE PARTICULARLY TO OVERCOME THE JUDICIAL INTERPRETATION OF EXPLANATION -5. IF THE SEARCH IS INITIATED U/S. 132 ON OR AFTER 1 ST JUNE 2007 THEN THERE IS A LEGAL PRESUMPTION THAT ANY INCOME BASED ON ANY ENTRY IN THE BOOKS OF ACCOUNT OR OTHER DOCUMENTS OR TRANSACT IONS, WHICH IS CLAIMED AS INCOME BY THE ASSESSEE, THE SAME WOULD BE T REATED AS DEEMED CONCEALMENT OF THE PARTICULARS OF INCOME OR FURNISHING INACCURATE PARTICULARS OF INCOME. SO FAR AS THE PRE SENT ASSESSEE IS CONCERNED, THE DATE OF SEARCH IS 15.6.2004 AND HENCE, EXPLANATION 5A TO SEC. 271(1)((C ) IS NOT APPLICABLE. IT IS WELL SETT LED RULE OF INTERPRETATION OF THE PENALTY PROVISIONS THAT THE SAME SHOULD BE STRICTLY INTERPRETED AND THERE IS NO SCOPE FOR ANY PRESUMPTION FOR LEVY OF THE PENALTY UNLESS STATUTE SPECIFICALLY PROVIDES SAM E. 9. SO FAR AS THE EXPLANATION-3 TO SEC. 271(1)(C) IS CO NCERNED, WHICH READS AS UNDER : EXPLANATION 3.- WHERE ANY PERSON FAILS, WITHOUT REASO NABLE CAUSE, TO FURNISH WITHIN THE PERIOD SPECIFIED IN SUB -SECTION (1) 7 ITA NO.221/PN/2011, SAMEER BALASAHEB LADKAT, PUNE OF SECTION 153 A RETURN OF HIS INCOME WHICH HE IS RE QUIRED TO FURNISH UNDER SECTION 139 IN RESPECT OF ANY ASSESS MENT YEAR COMMENCING ON OR AFTER THE 1 ST DAY OF APRIL, 1989, AND UNTIL THE EXPIRY OF THE PERIOD AFORESAID, NO NOTICE HAS BE EN ISSUED TO HIM UNDER CLAUSE (I) OF SUB-SECTION (1) OF SECTION 142 OR SECTION 148 AND THE ASSESSING OFFICER OR THE COMMIS SIONER (APPEALS) IS SATISFIED THAT IN RESPECT OF SUCH ASSESS MENT YEAR SUCH PERSON HAS TAXABLE INCOME, THEN, SUCH PERSONAL SHA LL, FOR THE PURPOSES OF CLAUSE (C ) OF THIS SUB-SECTION, B E DEEMED TO HAVE CONCEALED THE PARTICULARS OF HIS INCOME IN RE SPECT OF SUCH ASSESSMENT YEAR, NOTWITHSTANDING THAT SUCH PERSO N FURNISHES A RETURN OF HIS INCOME AT ANY TIME AFTER T HE EXPIRY OF THE PERIOD AFORESAID IN PURSUANCE OF A NOTICE UNDER SECTION 148. THE SAID EXPLANATION PRESUMES THAT THERE IS A CONCEALM ENT OF PARTICULARS OF INCOME OR FILING OF THE INACCURATE P ARTICULARS OF INCOME IN THE SITUATION WHERE THE ASSESSEE DID NOT FILE RET URN OF INCOME U/S. 139 OR WITHIN THE TIME LIMIT PRESCRIBED U/S. 153(1) OF THE ACT BUT FILES THE RETURN OF INCOME IN RESPONSE TO NOTICE U/S. 148. THE SAID EXPLANATION IS ALSO SILENT IN THE SITUATION IF T HE ASSESSEE HAS NOT FILED THE RETURN OF INCOME FOR ANY PARTICULAR A.Y . BUT FILED THE RETURN OF INCOME FOR THE FIRST TIME IN RESPONSE TO NOTICE U/S. 153A, THEN WHAT WOULD BE THE LEGAL PRESUMPTION ? IN OUR OPI NION, EXPLANATION-3 HAS NO APPLICATION, WHEN THE RETURN I S FILED IN RESPONSE TO NOTICE U/S. 153A. WE, THEREFORE, HOLD THA T AS PER THE FACTS OF THIS CASE AND LAW APPLICABLE, THERE IS NO JU STIFICATION TO LEVY THE PENALTY FOR THE A.Y. 2002-03 IN THE INCOME DECLARE D BY THE ASSESSEE IN THE RETURN OF INCOME IN RESPONSE TO NOT ICE U/S. 153A EVEN FOR THE SAID INCOME IS BASED ON SOME ENTRIES F OUND IN THE DIARIES OR OTHER DOCUMENTS OR EVEN BANK ACCOUNT DUR ING THE COURSE OF SEARCH. WE, ACCORDINGLY DELETE THE PENALTY SUSTAIN ED BY THE LD CIT(A). 10. . . . . . .. . . . . . . . 11. . . . . . .. . . . . . . . 12. . . . . . . . . . . . . . 13. IN THE A.Y. 2003-04, IT IS ADMITTED FACTUAL POSITION THAT THE INCOME DECLARED BY THE ASSESSEE IN THE RETURN OF IN COME FILED IN RESPONSE TO NOTICE U/S. 153A IS RS. 37,99,170/-. IN THIS YEAR, THE ASSESSEE FILED THE RETURN OF INCOME ON 29.4.2005 I.E. WIT HIN 2 YEARS 8 ITA NO.221/PN/2011, SAMEER BALASAHEB LADKAT, PUNE FROM THE END OF THE A.YS. 2003-04 AS PER THE TIME LIMIT P RESCRIBED U/S. 153(1) FOR COMPLETING THE ASSESSMENT U/S. 143 O R 144 OF THE ACT. WHILE COMPLETING THE ASSESSMENT, THE A.O MADE THE MERE ADDITION OF RS. 50,000/- BUT OTHERWISE, THE RETURN OF IN COME WAS ACCEPTED. AS INTERPRETED BY THE DIFFERENT JUDICIAL P RONOUNCEMENT, THE EXPRESSION TAX SOUGHT TO BE EVADED APPEARING IN CLAUSE (C) IN SEC. 271(1) IS TO BE UNDERSTOOD AS A DIFFERENCE BETWE EN THE INCOME DECLARED BY THE ASSESSEE IN THE RETURN OF INCOME AN D INCOME FINALLY ASSESSED. AFTER INTRODUCTION OF SEC. 153A W.E.F. 1.6.20 03, THERE IS NO SPECIFIC PENALTY PROVISION TO DEAL WITH THE ASSES SMENT FRAMES IN CONSEQUENCES OF SEARCH AND SEIZURE ACTION U/S. 132 O F THE ACT. EXCEPT RS. 75,807/- DECLARED BY THE ASSESSEE AS A CASH , THERE IS NO DECLARATION BASED ON ANY MONEY, BULLION, JEWELLERY OR OT HER VALUABLE ARTICLES OR THING IN THE NATURE OF ASSETS. AS DISCUS SED IN THE ASSESSEES APPEAL FOR A.Y. 2002-03, EXPLANATION 5A IS APP LICABLE FROM 1.6.2007 AND HENCE, IN THIS YEAR, WE ARE ONLY CONC ERNED WITH EXPLANATION-5 AS THE DATE OF SEARCH IS PRIOR TO 1.6.200 7. EXCEPT THE ESTIMATED ADDITION OF RS. 50,000/-, NO ADDITION IS MADE BY THE A.O. THE A.O HAS ACCEPTED THE INCOME DECLARED BY THE ASSE SSEE IN THE RETURN OF INCOME FILED IN RESPONSE TO NOTICE U/SEC. 1 53A AND IN RESPECT OF SAID INCOME. EXPLANATION-5 CANNOT BE APPLI ED. MOREOVER, NO OTHER INCOME IS ADDED WHICH IS BASED ON ANY INCR IMINATING MATERIAL WHICH CAN BE SUBJECTED TO THE PENAL CONSEQUEN CES. IT IS TRUE THAT THE ASSESSEE FILED THE RETURN OF INCOME FO R THE A.Y. 2003-04 ONLY AFTER SEARCH ACTION BY THE DEPARTMENT, BUT, AS TH ERE IS NO SPECIFIC PROVISION TO LEVY THE PENALTY ON THE INCOM E DECLARED BY THE ASSESSEE IN THE RETURN FILED IN RESPONSE TO NOTICE U /S. 153A, EXCEPT EXPLANATION-5, WE HAVE TO APPLY PROVISIONS OF SEC. 271 (1)(C ) AS ARE APPLICABLE IN THE NORMAL ASSESSMENTS. 8. THE DECISION IN THE CASE OF SHRI CHANDAN K. SHEWANI (SUP RA) WAS SUBSEQUENTLY FOLLOWED BY THE TRIBUNAL IN THE CASE OF SMT . PRAMILA D. ASHTEKAR AND ORS. (SUPRA). IN THE SAID CASE ALSO THE INC OME DECLARED BY THE RESPECTIVE ASSESSEES IN THE RETURN FILED IN CONSEQUEN CE OF NOTICE ISSUED U/S.153A WAS ACCEPTED. THERE WAS NO ADDITION BUT THE ASSESSING OFFICER LEVIED THE PENALTY ON THE ENTIRE INCOME DECLARED BY THE ASSESSEE IN THE RETURNS FILED U/S.153A OR IN SOME CASES ON THE AMO UNT OF THE DIFFERENCE BETWEEN THE INCOME DECLARED IN THE ORIGINAL RETU RNS FILED U/S.139 AND RETURNS FILED U/S.153A FOLLOWING THE DECISION IN THE CASE OF 9 ITA NO.221/PN/2011, SAMEER BALASAHEB LADKAT, PUNE CHANDAN K. SHEWANI (SUPRA) THE TRIBUNAL DELETED THE PENALT IES AND HELD AS UNDER: 7. IN ALL THE APPEALS BEFORE US, EXPLANATION-3 CANNOT BE APPLIED, AS HELD IN THE CASE OF CHANDAN K. SHEWANI (SUPRA). S O FAR AS EXPLANATION 5A IS CONCERNED, IT IS BROUGHT ON THE ST ATUTE BOOK W.E.F. 1.6.2007 I.E. FROM THE ASSESSMENT YEAR 2007-08 SO FAR A S THE ASSESSMENTS IN ALL THESE CASES ARE CONCERNED, NO ADDITI ON IS MADE BY THE ASSESSING OFFICER OVER AND ABOVE THE INCOME DECLARED IN THE RETURNS OF INCOME FILED IN RESPONSE TO NOTICE U/S. 1 53A AS THE EXPRESSION TAX SOUGHT TO BE EVADED APPEARING IN CLAUSE (C) TO SEC. 271(1) IS TO BE UNDERSTOOD AS A DIFFERENCE BETWEEN T HE INCOME DECLARED BY THE ASSESSEE IN THE RETURN OF INCOME AN D THE INCOME FINALLY ASSESSED. AFTER INTRODUCTION OF SEC. 153A W.E. F. 1.6.2003, THERE IS NO SPECIFIC PENALTY PROVISION TO DEAL WITH T HE ASSESSMENTS FRAMED IN CONSEQUENCE OF SEARCH AND SEIZURE ACTION U/S. 132 OF THE ACT. IN THE PRESENT CASE, AS THE RETURNED INCOME AND INCOME ASSESSED ARE THE SAME, OTHERWISE ALSO, NO PENALTY CAN BE LEVIED. WE, THEREFORE, HOLD THAT IN ALL THE APPEALS BEFORE US, T HE ASSESSING OFFICER WAS NOT JUSTIFIED IN LEVYING THE PENALTY U/S . 271(1)(C ) OF THE ACT. WE, ACCORDINGLY, DELETE THE PENALTIES LEVIED BY THE ASSESSING OFFICER IN ALL THE APPEALS FOR THE ABOVE MENTIONED REASON S. 9. IN THE PRESENT CASE, THERE IS NO DISPUTE ABOUT THE FACT THAT NO ADDITION IS MADE BY THE ASSESSING OFFICER OTHER THAN THE D ECLARED INCOME IN THE RETURN FILED U/S.153A. WE FIND THAT THE ASSESSING OFFIC ER HAS BROUGHT TO TAX PART OF THE INCOME DECLARED BY THE ASSE SSEE IN THIS YEAR WHICH WAS DECLARED IN THE A.Y. 2003-04 AND ON WHICH THE A SSESSEE HAS ALSO PAID THE TAX. WE, THEREFORE, APPLYING THE PRINCIPLES LA ID DOWN IN THE CASE OF CHANDAN K. SHEWANI (SUPRA) AS WELL AS SMT. PRAMILA D. ASHTEKAR AND ORS. (SUPRA) HOLD THAT THERE IS NO JUSTIFICATION TO LEVY THE PENALTY MERELY BECAUSE THE YEAR OF ASSESSIBILITY OF THE INCOME HA S BEEN CHANGED WHICH OTHERWISE HAS BEEN DECLARED BY THE ASSESSEE IN RE TURN FILED U/S.153A OF THE ACT AND HAS ALSO PAID THE TAX ON THE SA ID INCOME. WE FURTHER HOLD THAT EXPLANATION-5 BELOW SECTION 271(1)(C) HAS NO APPLICABILITY FOR PRESUMING THAT THE ASSESSEE HAD CONCEALED THE 10 ITA NO.221/PN/2011, SAMEER BALASAHEB LADKAT, PUNE PARTICULARS OF HIS INCOME OR FURNISHED INACCURATE PARTICULAR S OF INCOME AS ADMITTEDLY THE INCOME DECLARED BY THE ASSESSEE DURIN G THE COURSE OF SEARCH HAS NO RELATION TO ANY MONEY, BILLION, JEWELLARY O R OTHER VALUABLE ARTICLES OR THINGS BUT IT IS IN RESPECT OF DIARY/PAPER SEIZE D. SO FAR AS THE ISSUE OF THE IMMUNITY IS CONCERNED THERE IS NO NECESSITY TO CONSIDER THE SAID LIMB EMBEDDED IN EXPLANATION-5 BELOW SECTION 271(1)(C) AS EXPLANATION-5 ITSELF HAS NO APPLICATION TO THE CASE OF ASSE SSEE. WE THEREFORE, DELETE THE ENTIRE PENALTY LEVIED BY THE ASSESSIN G OFFICER AND CONFIRMED BY THE LD. CIT(A). 10. IN THE RESULT, THE ASSESSEES APPEAL IS ALLOWED. PRONOUNCED IN THE OPEN COURT ON 30-04-2013 SD/- SD/- (G.S. PANNU) (R.S. PADVEKAR) ACCOUNTANT MEMBER JUDICIAL MEMBER RK/PS PUNE, DATED: 30 TH APRIL, 2013 COPY TO 1 ASSESSEE 2 DEPARTMENT 3 THE CIT(A ) CENTRAL, PUNE 4 THE DGIT(INV.), PUNE 5 THE DR, ITA T, B BENCH, PUNE . 6 GUARD FILE. //TRUE COPY// BY ORDER PRIVATE SECRETARY INCOME TAX APPELLATE TRIBUNAL PUNE