Shri Sandip B. Padsala, Ahmedabad V. The ACIT, Central Circle 1(4), Ahmedabad

ITA 2295/AHD/2013

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 9679 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 3 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-12-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 01-12-2016
• Assessment Year: 2009-2010
• Appeal Filed On: 13-09-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Gift; Revised return; Bonafide mistake
• Section: 153A; 139

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD D BENCH BEFORE: SHR I R. P. TOLANI , JUDICIAL MEMBER AND SHRI AMARJIT SINGH, ACCOUNTANT MEMBER SANDIP B PADSALA, MOORTI BUNGALOW, 5, ASHOKNAGAR, NEAR SUNDERBAN, BEHIND ISRO, SATELLITE, AHMEDABAD - 380015 PAN: AEHPP3130K (APPELLANT) VS THE ACIT, CENTRAL CIRCLE 1(4), AHMEDABAD (RESPONDENT) REVENUE BY : S H RI JAMES KURIAN , SR. D . R. ASSESSEE BY: S H RI SAKAR SHARMA , A.R. DATE OF HEARING : 01 - 12 - 2 016 DATE OF PRONOUNCEMENT : 23 - 12 - 2 016 / ORDER P ER : AMARJIT SI NGH, ACCOUNTANT MEMBER : - THIS ASSESSEE S APPEAL FOR A.Y. 2009 - 10 , AR I SES FROM ORDER OF THE CIT(A) - I, AHMEDABAD DATED 27 - 06 - 2013 IN APPEAL NO. CIT(A) - I T A NO . 2295 / A HD/20 13 A SSESSMENT YEAR 200 9 - 10 I.T.A NO. 2295 /AHD/20 13 A.Y. 2009 - 10 PAGE NO SANDIP B PADSALA VS. ACIT 2 I/C C .1( 4 )/90/2012 - 13 , IN PROCEEDINGS UNDE R SECTION 271(1 ) (C) OF THE INCOME TAX ACT, 1961; IN SHORT TH E ACT . 2. THE ASSESSEE HAS RAISED FOLLOWING GROUNDS OF APPEAL: - THE LD. C.I.T(A) ERRED ON FACTS AND IN LAW IN CONFIRMING PENALTY U/S. 271(1)(C) AMOUNTING TO RS. 2,51,880/ - . 3. IN THIS CASE, RETURN OF INCOME DECLARING INCOME OF RS. 1,30,36,600/ - WAS F ILED ON 17 TH OCTOBER, 2011 IN RESPONSE TO NOTICE U/S. 153A. SUBSEQUENTLY, THE ASSESSEE HAS REVISED HIS DECLAR ED INCOME TO RS. 1,37,77, 640/ - ON 26.12.2011 THE ASSESSING OFFICER HAS STATED IN THE ASSESSMENT ORDER THAT PENAL PROCEEDINGS UNDER SECTION 271(1)( C) OF THE ACT WAS INITIATED SEPARATELY IN RESPECT OF THE ADDITIONAL INCOME DISCLOSED IN THE REVISED RETURN OF INCOME FILED ON 26.12.2011 THE ASSESSING OFFICER HAD IMPOSED PENALTY OF RS.2,51,880/ - VIDE ORDER U/S 271(1)(C) OF THE ACT PASSED ON 29.06.2012. IN THIS CONNECTION, THE ASSESSING O FFICER HAS INITIATED PENALTY PROCEEDINGS U/S. 271(1)(C) R.W.S. EXPLANATION 5A OF THE INCOME TAX ACT STATING THAT ASSESSEE HAS OFFERED THE ADDITIONAL INCOME AS RESULT OF SEARCH ACTION CONDUCTED IN THIS CASE . T HE ASS ESSEE HAS SUBMITTED BEFORE THE ASSESSING O FFICER THAT HE HAS OWNED LAND AT BEARING SURVEY NO. 437 AT VILLAGE NIKOL JOINTLY WITH HIS FATHER SHRI BHIKHABHAI PADSALA EACH HEAVING EQUAL SHARE OF LAND WHICH WAS SOLD IN THE YEAR UNDER CONSIDERATION . HE FURTHER STATE D THAT A T THE TIME OF FILING OF RETURN OF INCOME H E HAD COMPUTED LONG I.T.A NO. 2295 /AHD/20 13 A.Y. 2009 - 10 PAGE NO SANDIP B PADSALA VS. ACIT 3 TERM CAPITAL GAIN AS LONG TERM BECAUSE THIS LAND WAS ACQUIRED INITIALLY THROUGH BANAKHAT / AGREEMENT FOR SALE ON 1 ST NOV, 1994 . BUT FO R WHICH T HE PURCHASE DEED WAS REGISTERED ON 24 TH FEB , 2006. THE INCOME WAS OFFERED AS LONG TERM CAPITAL GAIN BECAUSE OF LOOKING TO THE HOLDING OF THE SAID LAND FOR THREE YEARS. T HE ASSESSEE HAS STATED THAT AFTERWARDS, HIS CHARTERED ACCOUNTANT WHO WAS HANDING THE TAXATION MATTER RENDERED HIS OPINION THAT TH E PERIOD OF HOLDING WAS REQUIRED TO BE CALCULATED FROM THE DATE OF REGISTRATION OF PURCHASE DOCUMENT AND NOT FROM THE DATE OF BANAKHAT . HE SUBMITTED THAT DUE TO THIS REASON HE HAS OFFERED THE INCOME AS SHORT TERM CAPITAL GAIN INSTEAD OF LONG TERM CAPITAL GAIN AND WITHDRAWN THE BENEFITS OF INDEXATION CLAIMED IN THE ORIGINAL RETURN BY REVISING IT ACCORDINGLY. HE HAS ALSO STATED THAT THIS WAS BONAFIDE MISTAKE WHICH HE HAD RECTIFIED BY REVISING THE RETURN OF INCOME. THE ASSESSING O FFICER HAS NOT ACCEPTED THE EXPLANATION OF THE ASSESSEE AND STATED THAT ASSESSEE HAS COMMITTED A DEFAULT WITHIN THE MEANING OF SECTION 271(1)(C) R.W.S. 5A OF THE ACT AND LEVIED THE PENALTY OF RS. 2,51,880 - . 4. AGGRIEVED AGAINST THE ORDER OF THE ASSESSING O FFICER, THE ASSESSEE HAS FILED BEFORE THE LD. COMMISSIONER OF INCOME TAX(A). THE LD. COMMISSIONER OF INCOME TAX(A) HAS CONFIRMED THE PENALTY. THE DECISION OF THE LD. COMMISSIONER OF INCOME TAX(A) IS REPRODUCED AS UNDER: - 4.23 WHEN DEALING WITH THE CASES WHERE EITHER NO SEAR CH WAS CONDUCTED OR A SEARCH WAS CONDUCTED PRIOR TO THE INSERTION OF EXPLANATION 5A TO SECTION 271(1 )(C) THE IDEA OF DELIBERATENESS IS IMPLICIT IN THE WORD 'CONCEAL'. IT WAS HELD BY SEVERAL COURTS THAT I.T.A NO. 2295 /AHD/20 13 A.Y. 2009 - 10 PAGE NO SANDIP B PADSALA VS. ACIT 4 CONCEALMENT IS NOT ACCIDENTAL OR INVOLUNTARY, IT IS PL ANNED AND VOLUNTARY. 5. THE HON'BLE APEX COURT IN ONE OF ITS RECENT JUDGEMENTS IN THE CASE OF RELIANCE PETROPRODUCTS PVT LTD., (322 1TR 158) MADE THE FOLLOWING OBSERVATIONS: 8. THEREFORE, IT IS OBVIOUS THAT IT MUST BE SHOWN THAT THE CONDITIONS UNDER SECT ION 271(1 )(C) MUST EXIST BEFORE THE PENALTY IS IMPOSED. THERE CAN BE NO DISPUTE THAT EVERYTHING WOULD DEPEND UPON THE RETURN FILED BECAUSE THAT IS THE ONLY DOCUMENT, WHERE THE ASSESSEE CAN FURNISH THE PARTICULARS OF HIS INCOME. WHEN SUCH PARTICULARS ARE FO UND TO BE INACCURATE, THE LIABILITY WOULD ARISE. IN DILIP N. SHROFF V. JT. CIT [2007] 6 SCC 329, THIS COURT EXPLAINED THE TERMS 'CONCEALMENT OF INCOME' AND 'FURNISHING INACCURATE PARTICULARS'. THE COURT WENT ON TO HOLD THEREIN THAT IN ORDER TO ATTRACT THE PENALTY UNDER SECTION 271(L)(C), MENS REA WAS NECESSARY, AS ACCORDING TO THE COURT, THE WORD 'INACCURATE' SIGNIFIED A DELIBERATE ACT OR OMISSION ON BEHALF OF THE ASSESSEE. IT WENT ON TO HOLD THAT CLAUSE (HI) OF SECTION 271(1) PROVIDED FOR A DISCRETIONARY J URISDICTION UPON THE ASSESSING AUTHORITY, INASMUCH AS THE AMOUNT OF PENALTY COULD NOT BE LESS THAN THE AMOUNT OF TAX SOUGHT TO BE EVADED BY REASON OF SUCH CONCEALMENT OF PARTICULARS OF INCOME, BUT IT MAY NOT EXCEED THREE TIMES THEREOF. IT WAS POINTED OUT T HAT THE TERM 'INACCURATE PARTICULARS' WAS NOT DEFINED ANYWHERE IN THE ACT AND, THEREFORE, IT WAS HELD THAT FURNISHING OF AN ASSESSMENT OF THE VALUE OF THE PROPERTY MAY NOT BY ITSELF BE FURNISHING INACCURATE PARTICULARS. IT WAS FURTHER HELD THAT THE ASSESSE E MUST BE FOUND TO HAVE FAILED TO PROVE THAT HIS EXPLANATION IS NOT ONLY NOT BONAFIDE BUT ALL THE FACTS RELATING TO THE SAME AND MATERIAL TO THE COMPUTATION OF HIS INCOME WERE NOT DISCLOSED BY HIM. IT WAS THEN HELD THAT THE EXPLANATION MUST BE PRECEDED BY A FINDING AS TO HOW AND IN WHAT MANNER, THE ASSESSEE HAD FURNISHED THE PARTICULARS OF HIS INCOME. THE COURT ULTIMATELY WENT ON TO HOLD THAT THE ELEMENT OF MENS REA WAS ESSENTIAL. IT WAS ONLY ON THE POINT OF MENS REA THAT THE JU'DGMENT IN DILIP N. SHROFF'S CASE (SUPRA) WAS UPSET. IN DHARAMENDRA TEXTILE PROCESSORS ' CASE (SUPRA), AFTER QUOTING FROM SECTION 271 EXTENSIVELY AND ALSO CONSIDERING SECTION 271(L)(C), THE COURT CAME TO THE CONCLUSION THAT SINCE SECTION I.T.A NO. 2295 /AHD/20 13 A.Y. 2009 - 10 PAGE NO SANDIP B PADSALA VS. ACIT 5 271(L)(C) INDICATED THE ELEMENT OF STRICT LIABI LITY ON THE ASSESSEE FOR THE CONCEALMENT OR FOR GIVING INACCURATE PARTICULARS WHILE FILING RETURN, THERE WAS NO NECESSITY OF MENS REA. THE COURT WENT ON TO HOLD THAT THE OBJECTIVE B EHIND ENACTMENT OF SECTION 271(1 )(C) READ WITH EXPLANATIONS INDICATED WITH THE SAID SECTION WAS FOR PROVIDING REMEDY FOR LOSS OF REVENUE AND SUCH A PENALTY WAS A CIVIL LIABILITY AND, THEREFORE, WILFUL CONCEALMENT IS NOT AN ESSENTIAL INGREDIENT FOR ATTRACTING CIVIL LIABILITY AS WAS THE CASE IN THE MATTER OF PROSECUTION UNDER SECTI ON 27 6C OF THE ACT. THE BASIC REASON WHY DECISION IN DILIP N. SHROFF'S CASE (SUPRA) WAS OVERRULED BY THIS COURT IN DHARAMENDRA TEXTILE PROCESSORS' CASE (SUPRA), WAS THAT ACCORDING TO THIS COURT THE EFFECT AND DIFFERENCE BETWEEN SECTION 271(1 )(C) AND SECTI ON 27 6C OF THE ACT WAS LOST SIGHT OF IN CASE OF DILIP N. SHROFF (SUPRA). HOWEVER, IT MUST BE POINTED OUT THAT IN DHARAMENDRA TEXTILE PROCESSORS' CASE (SUPRA), NO FAULT WAS FOUND WITH THE REASONING IN THE DECISION IN DILIP N. SHROFF'S CASE (SUPRA), WHERE T HE COURT EXPLAINED THE MEANING OF THE TERMS 'CONCEAL' AND 'INACCURATE'. IT WAS ONLY THE ULTIMATE INFERENCE IN DILIP N. SHROFF'S CASE (SUPRA) TO THE EFFECT THAT MENS REA WAS AN ESSENTIAL INGREDIENT FOR THE PENALTY UNDER SECTION 271(L)(C) THAT THE DECISION I N DILIP N. SHROFF'S CASE (SUPRA) WAS OVERRULED. 9. WE ARE NOT CONCERNED IN THE PRESENT CASE WITH THE MENS REA. HOWEVER, WE HAVE TO ONLY SEE AS TO WHETHER IN THIS CASE, AS A MATTER OF FACT, THE ASSESSEE HAS GIVEN INACCURATE PARTICULARS. IN WEBSTER'S DICTIO NARY, THE WORD 'INACCURATE' HAS BEEN DEFINED AS : 'NOT ACCURATE, NOT EXACT OR CORRECT; NOT ACCORDING TO TRUTH; ERRONEOUS; AS AN INACCURATE STATEMENT, COPY OR TRANSCRIPT.' WE HAVE ALREADY SEEN THE MEANING OF THE WORD 'PARTICULARS' IN THE EARLIER PART OF THIS JUDGMENT. READING THE WORDS IN CONJUNCTION, THEY MUST MEAN THE DETAILS SUPPLIED IN THE RETURN, WHICH ARE NOT ACCURATE, NOT EXACT OR CORRECT, NOT ACCORDING TO TRUTH OR ERRONEOUS. WE MUST HASTEN TO ADD HERE THAT IN THIS CASE, THERE IS NO FINDING THAT AN Y DETAILS SUPPLIED BY THE ASSESSEE IN ITS RETURN WERE FOUND TO BE INCORRECT OR ERRONEOUS OR FALSE. SUCH NOT BEING THE CASE, THERE WOULD BE NO QUESTION OF INVITING THE PENALTY UNDER SECTION 27L(L)(C) OF THE I.T.A NO. 2295 /AHD/20 13 A.Y. 2009 - 10 PAGE NO SANDIP B PADSALA VS. ACIT 6 ACT. A MERE MAKING OF THE CLAIM, WHICH IS NOT SUST AINABLE IN LAW, BY ITSELF, WILL NOT AMOUNT TO FURNISHING INACCURATE PARTICULARS REGARDING THE INCOME OF THE ASSESSEE. SUCH CLAIM MADE IN THE RETURN CANNOT AMOUNT TO THE INACCURATE PARTICULARS. ' 5.1 THE COURTS HAD TAKEN DIVERGENT VIEWS ON THE ABOVE ISSUE AND EVEN IN THE CASE OF SEARCH WHEN INCOME TAX RETURN IS REVISED AFTER SEARCH HAVING TAKEN PLACE, CONCEALMENT OF INCOME HAS BEEN ATTRIBUTED DEPENDING UPON THE FACTS OF THE CASE, NATURE OF EVIDENCES FOUND AND THE EXPLANATION FURNISHED BY THE ASSESSEE. THERE ARE INSTANCES WHEN EVEN UNDER SUCH CIRCUMSTANCES, PENALTY FOR CONCEALMENT HAS BEEN DELETED BY THE COURTS. SOME OF THE CASE LAWS ON THIS ISSUE HAVING BOTH KIND OF INTERPRETATION ARE GIVEN BELOW: - 5.2 IN CIT VS SHYAMLAL M.SONI (2005) 144 TAXMAN 666 (MP), H IGH COURT HELD THAT NO PENALTY UNDER SECTION 271(L)(C) COULD BE LEVIED IN A CASE WHERE INCOME RETURNED IN REVISED RETURNS WAS ACCEPTED AND ASSESSED IN THE HANDS OF THE ASSESSEE EVEN THOUGH REVISED RETURNS WERE FILED AFTER 1 SEARCH AND SUBSEQUENT TO INQUIRIE S MADE BY THE DEPARTMENT DURING THE COURSE OF ASSESSMENT PROCEEDINGS. 5.3 IN DY. CIT VS S.KUMAR (2008) 15 DTK (BANG.), IT WAS HELD THAT THE ASSESSEE HAVING ADMITTED UNDISCLOSED INCOME REPRESENTING BOGUS GIFTS RECORDED IN THE BOOKS IN HIS STATEMENT UNDER S ECTION 132(4) DURING SEARCH AND DECLARED THE SAME IN RETURN UNDER SECTION 153A AND PAID TAXES THEREON, WAS ELIGIBLE FOR IMMUNITY FROM PENALTY UNDER SECTION 271(1 )(C) UNDER EXPLANATION 5 THEREOF. 5.4 IN CIT VS SURESH CHAND BANSAL (2009) 22 DTK 1 (CAL.), HI GH COURT HELD THAT DISCLOSURE OF ADDITIONAL INCOME AFTER SEARCH IN REVISED RETURN UNDER SECTION 153 A AND SUCH ADDITIONAL INCOME OFFERED BY THE ASSESSEE AFTER THE SEARCH HAVING BEEN ACCEPTED IN ITS ENTIRETY WITHOUT DETAILED DISCUSSION OF THE SEIZED DOCUMEN TS AND WITHOUT MAKING ANY ATTEMPT TO OBTAIN THE EXPLANATION OF THE ASSES SEE, PENALTY UNDER SECTION 271(1 )(C) IS NOT LEVIABLE. 5.5 IN DY. CIT VS K.NATARAJAN (2010) 34 DTK 414 (BANG.), IT WAS HELD THAT PENALTY UNDER SECTION 271(1 )(C) IS LEVIABLE IN RESPECT OF UNACCOUNTED SALES DETECTED ON THE BASIS OF DOCUMENTS FOUND DURING THE SEARCH AND UNACCOUNTED DEBTORS WHICH WERE NOT DECLARED IN THE STATEMENT UNDER SECTION 132(4). THE A.O. HAVING ESTIMATED THE I.T.A NO. 2295 /AHD/20 13 A.Y. 2009 - 10 PAGE NO SANDIP B PADSALA VS. ACIT 7 INCOME FROM SALE OF SCRAP AT 7 PER CENT AS AGAINST 5 PER CE NT SHOWN BY THE ASSESSEE, PENALTY IS LEVIABLE ONLY TO THE EXTENT OF NET PROFIT ESTIMATED AT 5 PER CENT BY THE ASSESSEE. IN VIEW OF THE EXPLANATION 5, NO PENALTY IS LEVIABLE IN RESPECT OF THE AMOUNT OF DEBTORS - ISJ DECLARED IN THE STATEMENT UNDER SECTION 13 2(4) FOR WHICH THE TAX STANDS PAID. 5.6 IN ASSTT. CIT VS RUPESH BHOLIDAS PATEL (2008) 16 DTK 369 (AHD.), IT WAS HOWEVER, BEEN HELD THAT ASSESSMENT OF ASSESSEE HAVING ALREADY BEEN COMPLETED BEFORE THE DATE OF SEARCH ON A RETURN FILED UNDER SECTION 139, SAI D ASSESSMENT DID NOT ABATE AND RETURN FILED IN RESPONSE TO NOTICE U/S. 153A COULD NOT BE TREATED AS ONE FILED U/S. 139 SO AS TO EXTEND BENEFIT O F EXPLANATION 5 TO SECTION 271(1 )(C) TO THE ASSESSEE. 5.7 IN DY. CIT VS OMKARESHWAR R. KALANTRI (2010) 42 DTR 4 89 (PUNE), IT WAS HELD THAT THE ASSESSEE HAVING DISCLOSED ADDITIONAL INCOME DURING THE SEARCH AND IN THE RETURN FILED IN RESPONSE TO NOTICE U/S. 153 A WHICH WAS NEITHER RECORDED IN THE BOOKS OF ACCOUNT NOR DISCLOSED TO THE CIT/CHIEF CIT BEFORE THE SEARCH N OR THE SOURCE OF THE SAME WAS EXPLAINED, IMMUNITY UNDE R EXPLANATION 5 TO SECTION 271(1 )(C) IS NOT AVAILABLE TO THE ASSESSEE AND, THEREF ORE, PENALTY UNDER SECTION 271(1 )(C) IS \ ' LEVIABLE ON THE DIFFERENCE BETWEEN INCOME RETURNED IN THE ORIGINAL RETURN U/S. 139(1) AND IN THE RETURN U/S.153A. 5.8 IN CIT VS A. SREENIVASA PAI (2000) 242 ITR 29 (KER.), IT WAS HELD THAT PENALTY U/S. 271(1 )(C) WAS LEVIABLE IN RESPECT OF ADDITIONAL INCOME OFFERED BY THE ASSESSEE IN THE REVISED RETURN AS THE SAME WAS FILED ONLY AFTE R THE REVENUE HAD IMPOUNDED ASSESSEE'S BOOKS AND STARTED INQUIRIES. RETURN FILED SO AS TO INCLUDE CONCEALED INCOME CANNOT BE TREATED AS REVISED RETURN. 5.9 HOWEVER, RATIO OF THE ABOVE DECISIONS DOES NOT APPLY TO THE CASES COVERED UNDER EXPLANATION 5A TO S ECTION 271(1 )(C) AS THERE IS CONSIDERABLE CHANGE IN THE LANGUAGE OF EXPLANATION 5 AND 5A. AFTER THE INSERTION OF EXPLANATION 5A TO SECTION 271(1 )(C) THE IDEA OF DELIBERATENESS IMPLICIT IN THE WORD 'CONCEAL' DOES NOT HAVE TO BE ESTABLISHED ANY MORE. IN FACT THE DEEMING PROVISION CONTAINED IN THE EXPLANATION TAKES CARE OF THE SAME. THE DEEMING PROVISIONS OF THE EXPLANATION 5A TO SECTION 271(1 )(C) MAKES IT BECOMES CLEAR THAT IN CASES WHERE THE SEARCH OPERATIONS HAVE TAKEN PLACE AFTER 1.4.2007 I.T.A NO. 2295 /AHD/20 13 A.Y. 2009 - 10 PAGE NO SANDIP B PADSALA VS. ACIT 8 INCOMES DECLARED IN THE RETURN FILED IN RESPONSE TO NOTICE U/S 153A AND WHICH HAD NOT BEEN DISCLOSED IN THE RETURNS FILED PRIOR TO THE SEARCH ARE DEEMED TO BE CONCEALMENT WIT HIN THE MEANING OF SECTION 271(1 )(C). 5.10 THE HON'BLE DELHI HIGH COURT COURT IN THE CASE OF CIT V S. USHA INTERNATIONAL LTD. HAS UPHELD THE IMPOSITION OF PENALTY U/S 271(L)(C) DESPITE THE FACT THAT THE REVISED RETURN FILED INCLUDED THE INCOME ON WHICH THE PENALTY WAS LEVIED OBSERVING AS UNDER: 'THE MERE FACT THAT A REVISED RETURN MAS FILED WITHDRAWING A CLAIM OR OFFERING ADDITIONAL INCOME BEFORE ISSUE OF A FORMAL NOTICE BY THE AO DOES NOT NECESSARILY MEAN THAT THE RETURN IS VOLUNTARY. THE FILING OF A REVISED RETURN DOES NOT EXPATIATE THE CONTUMACIOUS CONDUCT, IF ANY, ON THE PART OF THE ASSESSEE IN NOT HAVING DISCLOSED THE TRUE INCOME IN THE ORIGINAL RETURN. AT THE SAME TIME, IT CANNOT BE SAID THAT THE REVISED RETURN IS OF NO CONSEQUENCE AT ALL. THE ORIGINAL RETURN CANNOT BE CONSIDERED IN ISOLATION WITHOUT REFERENCE TO THE CONDUCT OF THE ASSESSEE SUBSEQU ENT TO THE FILING OF THE ORIGINAL RETURN. THE QUESTION WHETHER A REVISED RETURN IS 'VOLUNTARY' OR NOT HAS TO BE DECIDED IN THE LIGHT OF THE ENTIRE MATERIAL BROUGHT ON RECORD AND WHETHER THE REVISED RETURN WAS FILED WHEN THE ASSESSEE IS CORNERED BY THE EVID ENCE OR MATERIAL COLLECTED BY THE REVENUE AUTHORITIES OR BEFORE THAT STAGE. ON FACTS, THE REVISED RETURN WAS FILED BY THE ASSESSEE ONLY WHEN IT WAS CORNERED AND THE INCOME TAX AUTHORITIES HAD COLLECTED MATERIAL ON THE BASIS OF WHICH IT COULD BE SAID THAT T HE CLAIM FOR DEDUCTION WAS FALSE OR BOGUS. THE FILING OF THE REVISED RETURN IS THUS AN ACT OF DESPAIR AND THE ASSESSEE CAN GAIN NOTHING FROM IT. ' 5.11 WHEN THE PRESENT CASE IS EXAMINED IN VIEW OF THIS LEGAL POSITION, IT IS FOUND THAT IN THIS CASE APPELLA NT FAILED TO OFFER ANY EXPLANATION REGARDING NOT INCLUSION OF THE INCOME DECLARED IN THE RETURN OF INCOME FILED IN RESPONSE TO NOTICE U/S 153A IN THE RETURN FILED PRIOR TO THE SEARCH. AS MENTIONED EARLIER, IN THIS CASE THE RETURNS FILED BY THE APPELLANT F OR THE YEAR DID NOT INCLUDE AN INCOME OF RS. 7,41,040/ - , BUT THIS INCOME WAS ONLY DECLARED IN THE REVISED RETURN OF INCOME FILED AFTER THE SEARCH. 5.12 THUS IT IS CLEAR THAT THE APPELLANT HAD CONCEALED THE TRUE AND FULL PARTICULARS OF INCOME IN THE RETURN S FILED PRIOR TO THE SEARCH. IT I.T.A NO. 2295 /AHD/20 13 A.Y. 2009 - 10 PAGE NO SANDIP B PADSALA VS. ACIT 9 WOULD BE A TRAVESTY OF TRUTH AND JUSTICE TO EXPRESS A VIEW TO THE CONTRARY. THE APPELLANT DELIBERATELY CHOSE NOT TO INCLUDE THE INCOME WHICH IT HAD EARNED IN THE RETURNS OF INCOME FILED PRIOR TO THE SEARCH AND ONLY INCLUDED THEM IN THE RETURNS OF INCOME FILED A FTER THE SEARCH IN RESPONSE TO NOTICES ISSUED BY DEPARTMENT U/S 153A, EVEN THOUGH IT KNEW FULLY WELL THAT THE INCOME WAS TO BE INCLUDED IN THE EARLIER RETURN FILED. IT IS ALSO CLEAR THAT SUCH INCOMES WOULD NOT HAVE BEEN DECLARED HAD A SEARCH NOT TAKEN PLACE. FURTHER AS PER THE DEEMING PROVISION OF EXPLANATION 5A TO SECTION 271(1 )(C) SUCH INCOMES ARE DEEMED TO BE CONCEALMENT WIT HIN THE MEANING OF SECTION 271(1 )(C). IN SUCH A SITUATION ARGUMENT OF THE APPELLANT THAT INCOME HAS BEEN VOLUNTARILY DECLARED AND THEREFORE PENALTY U/S. 271(1 )(C) IS NOT LEVIABLE, IS NOT ACCEPTABLE. 5.13 IN VIEW OF THE ABOVE THE PENALTY LEVIED BY THE AO U/S 271(1 )(C) IS JUSTIFIED. THE SAME IS CONFIRMED. 5. DURING THE COURSE OF APPELLATE PROCEEDIN GS BEFORE US, THE LEARNED COUNSEL CONTENDED THAT INITIALLY THE ASSESSEE HAD OFFERED INCOME AS LONG TERM CAPITAL GAIN BECAUSE OF INDEXATION BECAUSE PERIOD OF HOLDING WAS REQUIRED TO BE CALCULATED FROM THE DATE OF REGISTRATION OF PURCHASE DOCUMENT AND NOT FROM THE DATE OF BANAKHAT.. LATER ON THE CA WHO WAS HANDLING THE TAXATION MATTER OF THE FATHER OF THE ASSESSEE INFORMED THAT PERIOD OF HOLDING WAS REQUIRED TO BE CALCULATED FROM THE DATE OF REGISTRATION OF PURCHASE DOCUMENT AND NOT FROM THE DATE OF BANAK HAT , THE RETURN WAS REVISED ACCORDINGLY . HE FURTHER STATED THAT THIS FACT PROVES THAT THIS IS A BONAFIDE MISTAKE AND REQUESTED THAT ON WHICH PENALTY SHOULD NOT BE LEVIED . LD. D.R. RELIED ON THE ORDER OF THE LD. COMMISSIONER OF INCOME TAX(A). I.T.A NO. 2295 /AHD/20 13 A.Y. 2009 - 10 PAGE NO SANDIP B PADSALA VS. ACIT 10 6. WE HA VE HEARD BOTH THE SIDES AND PERUSED THE MATERIAL ON RECORD. WE FIND THAT IN THIS CASE THE SEARCH ACTION WAS CONDUCTED ON 04.03.2010.THE RETURN OF INCOME IN RESPONSE TO NOTICE U/S 153A WAS FILED ON 17.10.2011 DECLARING INCOME OF RS. 1,30,36,600/ - SUBSEQUENTL Y, THE ASSESSEE HAS REVISED HIS DECLARED INCOME TO RS. 1,37,77,640/ - ON 26.12.2011 .WE NOTICED THAT AT THE TIME OF FILING OF RETURN OF INCOME THE ASSESSEE HAD COMPUTED LONG TERM CAPITAL GAIN AS LONG TERM BECAUSE THIS LAND WAS ACQUIRED INITIALLY THROUGH BAN AKHA T /AGREEMENT FOR SALE ON 1 ST NOV, 1994. FOR WHICH THE PURCHASE DEED WAS REGISTERED ON 24 TH FEB, 2006. WE HAVE ALSO CONSIDERED THE FACTS REPORTED BY THE ASSESSEE AND OCCUR R ING OF MISTAKE BECAUSE THE PERIOD OF HOLDING WAS REQUIRED TO BE CALCULATED FROM THE DATE OF REGISTRATION OF PURCHASE DOCUMENT AND NOT FROM THE DATE OF BANAKHAT. WE FIND THAT ASSESSEE HAS DISCLOSED THE COMPLETE DETAIL S OF SALE AND PURCHASE OF LAND . WE HAVE NOTICED THAT THE DIFFERENCES IN THE INCOME WAS ARISING ONLY BECAUSE OF INDEX ATION OF THE PURCHASE OF LAND WHICH WAS NOT AVAILABLE IN THE CASE OF SHORT TERM CAPITAL GAIN. THE ORIGINAL RETURN ITSELF WAS FILED AFTER THE SEARCH ACTION IN RESPONSE TO NOTICE UNDER SECTION 153A OF THE ACT WHICH WAS REVISED TO CORRECT THE MISTAKE AS ELAB ORATED ABOVE IN THIS ORDER. LOOKING TO THE ABOVE FACTS , WE FIND THAT CORREC TION OF WORKING OF CAPITAL GAIN IN VIEW OF ABOVE STATED FACTS AND CIRCUMSTANCES IS NOT THE CASE WHERE THE ASSESSEE HA D CONCEALED THE PARTICULAR OF INCOME DECLARED ONLY BECAUSE OF S EARCH ACTION. ACCORDINGLY, WE CONSIDERED THAT THE LD. COMMISSIONER OF INCOME TAX(A) IS NOT JUSTIFIED IN SUSTAI NING THE PENALTY LEVIED BY THE ASSESSING O FFICER . I.T.A NO. 2295 /AHD/20 13 A.Y. 2009 - 10 PAGE NO SANDIP B PADSALA VS. ACIT 11 7. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED. ORDER PR ONOUNCED IN THE OPEN C OURT ON 23 - 12 - 201 6 SD/ - SD/ - ( R. P. TOLANI ) ( AMARJIT SINGH ) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD : DATED 23 /12 /2016 / COPY OF ORDER FORWARDED TO: - 1. ASSESSEE 2. REVENUE 3. CONCERNED CIT 4. CIT (A) 5. DR, ITAT, AHMEDABAD 6. GUARD FILE. BY ORDER/ , / ,