Sh. Munish Jain, Ludhiana V. DCIT, Ludhiana

ITA 254/CHANDI/2017

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 5111 (ITAT-CHANDIGARH)
• Duration Of Justice: 1 year(s) 1 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-03-2018
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: Not Allotted
• Assessment Year: 2010-2011
• Appeal Filed On: 08-02-2017
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Opportunity of being heard; Principle of natural justice; Retrospective amendment; Initiation of penalty proceedings; Reasonable cause
• Section: 153A; 132; 139

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH B, CHANDIGARH BEFORE SHRI SANJAY GARG, JUDICIAL MEMBER AND MS. ANNAPURNA GUPTA, ACCOUNTANT MEMBER ITA NOS.254 & 255/CHD/2017 (ASSESSMENT YEAR : 2010-11 & 2011-12) SH.MUNISH JAIN, VS. THE D.C.I.T., B-121, PUSHAP VIHAR, CENTRAL CIRCLE-III, CANAL ROAD, LUDHIANA. LUDHIANA. PAN: ABNPJ4747M (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI RAJIV GUPTA, CA RESPONDENT BY : SMT.CHANDERKANTA, SR.DR DATE OF HEARING : 21.12.2017 DATE OF PRONOUNCEMENT : 19.03.2018 ORDER PER ANNAPURNA GUPTA, A.M. : BOTH THESE APPEALS FILED BY THE ASSESSEE HAVE BEEN PREFERRED AGAINST SEPARATE ORDERS PASSED BY THE LD . COMMISSIONER OF INCOME TAX(APPEALS)-5, LUDHIANA BOT H DATED 25.11.2016 RELATING TO ASSESSMENT YEARS 2010- 11 & 2011-12, CONFIRMING THE LEVY OF PENALTY U/S 271(1)( C) OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT). SINCE IDENTICAL ISSUE IS INVOLVED IN BOTH THE APPE ALS, THEY WERE HEARD TOGETHER AND ARE BEING DISPOSED OFF BY THIS CONSOLIDATED ORDER. FOR THE SAKE OF CONVENIENCE, W E SHALL BE DEALING WITH THE FACTS IN ITA NO.254/CHD/2017 AN D THE DECISION RENDERED THEREIN SHALL APPLY MUTATIS MUTAN DIS TO OTHER APPEAL OF THE REVENUE IN ITA NO.255/CHD/2017. 2 2. THE FACTS OF THE CASE ARE THAT RETURN FOR THE IMPUGNED YEAR WAS FILED BY THE ASSESSEE ON 11.12.2010 DECLAR ING INCOME OF RS.9,30,744/-. THEREAFTER SEARCH U/S 132 OF THE ACT WAS CARRIED OUT AT THE RESIDENCE OF THE ASSESS EE ON 14.3.2012, DURING THE COURSE OF WHICH INCOME OF RS. 28 LACS WAS SURRENDERED. THEREAFTER RETURN WAS FILED BY TH E ASSESSEE IN RESPONSE TO NOTICE U/S 153A DECLARING I NCOME OF RS.37,30,744/- WHICH INCLUDED THE SURRENDERED INCOM E OF RS.28 LACS. SUBSEQUENTLY DURING ASSESSMENT PROCEED INGS THE AO NOTED THAT DURING THE YEAR UNDER CONSIDERATI ON THE ASSESSEE HAD PURCHASED TWO PLOTS MEASURING 270 SQ .YD. EACH SITUATED AT MOJA BAREWAL AWARIA, ASHAPURI, LUD HIANA FOR RS.27,27,600/-. ON BEING CONFRONTED WITH THE SA ME THE ASSESSEE EXPLAINED THE SOURCE OF INVESTMENT AS BEIN G OUT OF THE SURRENDERED INCOME OF RS.28 LACS. THE ASSESSIN G OFFICER NOTED THAT THE SURRENDER WAS MADE AFTER DET ECTION OF CONCEALMENT BY THE DEPARTMENT BY WAY OF SEARCH U/S 132 OF THE ACT AND THEREFORE INITIATED PENALTY PROCEEDI NGS ON THE SAME U/S 271(1)(C) OF THE ACT. 3. DURING THE COURSE OF PENALTY PROCEEDINGS THE ASS ESSEE CONTENDED THAT THE ENTIRE SURRENDERED INCOME HAD BE EN DISCLOSED IN THE RETURN OF INCOME FILED AND NO AMOU NT HAD BEEN ADDED OR DISALLOWED WHILE COMPUTING TOTAL INCO ME OF THE YEAR, THEREFORE NO PENALTY U/S 271(1)(C) OF TH E ACT WAS LEVIABLE. THE ASSESSING OFFICER REJECTED THE CONTE NTION OF THE ASSESSEE STATING THAT THE SURRENDER IS NOT COVE RED U./S 132(4) OF THE ACT AS PER THE PROVISIONS OF SECTION 3 271AAA(4)(B) SINCE THE IMPUGNED YEAR IS NOT THE SEA RCH YEAR BUT THE YEAR FOR WHICH RETURN OF INCOME HAS ALREADY BEEN FILED. HE FURTHER REJECTED THE CONTENTION OF THE A SSESSEE THAT SINCE THE RETURNED INCOME HAS BEEN ACCEPTED, N O PENALTY IS LEVIABLE SINCE THE SURRENDER WAS MADE ON LY AFTER THE DETECTION OF CONCEALMENT AND WAS NOT DECLARED I N THE ORIGINAL RETURN FILED BY THE ASSESSEE. HE, THEREFO RE, LEVIED PENALTY OF RS.7,66,320/- @ 100% OF THE TAX SOUGHT T O BE EVADED ON THE CONCEALED INCOME OF RS.28 LACS. 4. THE MATTER WAS CARRIED IN APPEAL BEFORE THE LD.CIT(APPEALS) WHO HELD THAT IN THE FACTS OF THE P RESENT CASE PENALTY WAS LEVIABLE IN VIEW OF EXPLANATION-5A TO SECTION 271(1)(C) OF THE ACT BECOMING APPLICABLE TO SEARCHES CONDUCTED AFTER 1.6.2007 AND AS PER WHICH THE ASSES SEE WAS DEEMED TO HAVE CONCEALED PARTICULARS TO THE EXTENT OF INCOME DECLARED AFTER SEARCH WHICH WAS NOT DECLARED IN THE ORIGINAL RETURN OF INCOME FILED. 5. AGGRIEVED BY THE SAME THE ASSESSEE HAS COME UP I N APPEAL BEFORE US RAISING FOLLOWING EFFECTIVE GROUND : 1. THAT THE LEARNED CIT(A) HAS ERRED IN CONFIRMING THE PENALTY UNDER SECTION 271(1)(C) OF THE ACT, 1961 IMPOSED BY THE ASSESSING OFFICER AGAINST THE FACTS AND CIRCUMSTANCES OF THE CASE. 6. SUBSEQUENTLY, VIDE A WRITTEN COMMUNICATION DATED 19.5.2017 THE ASSESSEE RAISED ADDITIONAL GROUNDS OF APPEAL WHICH READ AS UNDER: 1. ON THE FACTS AND THE CIRCUMSTANCES OF THE CASE & IN LAW, THE PENALTY PROCEEDINGS INITIATED VIDE NOTICE U/S 274 4 READ WITH SECTION 271 OF THE I.T. ACT,1961., DATED 29.11.2013 ARE INVALID AND BAD IN LAW. 2. ON THE FACTS AND ARE THE CIRCUMSTANCES OF THE CA SE AND IN LAW, THE PENALTY ORDER DATED 30.05.2014 PASSED U /S 271(L)(C) IS INVALID AND BAD IN LAW. 7. AT THE TIME OF HEARING, THE LD. COUNSEL FOR ASSE SSEE POINTED OUT THAT THE ADDITIONAL GROUNDS OF APPEAL I NVOLVED A POINT OF LAW FOR WHICH NECESSARY FACTS WERE ON RECO RD AND, THEREFORE, THE SAME BE ADMITTED FOR ADJUDICATION. 8. THE LD. DR, ON THE OTHER HAND, VEHEMENTLY OBJECT ED TO THE SAME STATING THAT THE ISSUE NOW RAISED IN THE A DDITIONAL GROUNDS HAD NOT BEEN RAISED BEFORE THE LD.CIT(APPEA LS) AND WERE BEING RAISED FOR THE FIRST TIME BEFORE THE I.T .A.T. 9. WE HAVE CONSIDERED RIVAL CONTENTIONS. IN OUR CONSIDERED OPINION FOLLOWING THE RATIO OF THE JUDGM ENT OF THE HON'BLE SUPREME COURT IN THE CASE OF NATIONAL T HERMAL POWER CO. LTD. VS. CIT (1988) 229 ITR 383 (SC), THE ADDITIONAL GROUNDS RAISED BEFORE US DESERVE TO BE A DMITTED FOR ADJUDICATION SINCE THEY INVOLVE POINT OF LAW AN D DO NOT REQUIRE ANY FURTHER OR FRESH INVESTIGATION OF FACTS . MOREOVER, SINCE THE GROUNDS RAISED RELATE TO THE JU RISDICTION OF THE ASSESSING OFFICER TO IMPOSE PENALTY U/S 271( 1)(C) OF THE ACT, THEY ARE RELEVANT TO DETERMINE THE LIABILI TY OF THE ASSESSEE FOR PENALTY U/S 271(1)(C) OF THE ACT. ACC ORDINGLY, THE GROUNDS ARE ADMITTED FOR ADJUDICATION. 10. WE SHALL FIRST DEAL WITH THE ADDITIONAL GROUNDS RAISED SINCE THEY CHALLENGE THE JURISDICTION TO PASS THE P ENALTY ORDER. 5 11. IN THE CONTEXT OF THE ADDITIONAL GROUNDS RAISE D, THE LD. COUNSEL FOR ASSESSEE CONTENDED THAT THE PENALTY NOT ICE ISSUED U/S 274 READ WITH SECTION 271(1)(C) OF THE A CT, DATED 29.11.2013 WAS INVALID AND BAD SINCE IT WAS ISSUED IN STANDARD PROFORMA AND THE IRRELEVANT PORTIONS OF TH E NOTICE HAD NOT BEEN STRUCK OFF. THE LD. COUNSEL FOR ASSES SEE CONTENDED THAT THIS WAS A LEGAL INFIRMITY FATAL TO THE IMPOSITION OF PENALTY BECAUSE IN THE ABSENCE OF SPE CIFYING THE GROUND ON WHICH PENALTY WAS INITIATED, THERE WA S A VIOLATION OF THE PRINCIPLE OF NATURAL JUSTICE. IN THIS CONTEXT, THE LD. COUNSEL FOR ASSESSEE SPECIFICALLY DREW OUR ATTENTION TO THE JUDGMENT OF THE HON'BLE KARNATAKA HIGH COUR T IN THE CASE OF CIT & ANR. VS. MANJUNATHA COTTON & GINNING FACTORY (2013) 359 ITR 565 (KARN), CIT VS. SSAS EM ERALD MEADOWS, CC NO.11485/2016 DATED 5.8.2016 (SC) (ITA NO 380 OF 2015 DATED 23.11.2015) AND THE DECISION OF T HE I.T.A.T. MUMBAI BENCH IN THE CASE OF M/S ORBIT ENTE RPRISES VS. ITO-15(2)(2) IN ITA NOS.1596 & 1597/MUM/2014 DA TED 1.9.2017. 12. THE LD. DR, ON THE OTHER HAND CONTENDED THAT NO BENEFIT CAN BE DERIVED BY THE ASSESSEE FROM THE AFO RESAID DECISION SINCE AS PER THE FACTS OF THE PRESENT CASE NOTICE HAD BEEN ISSUED TO THE ASSESSEE FOR TWO CHARGES; I) FOR CONCEALMENT AND II) FOR FURNISHING INACCURATE PARTI CULARS OF INCOME AND, THEREFORE, THE ASSESSEE WAS WELL AWARE OF THE CHARGES AGAINST HIM SO AS TO DEFEND HIS CASE. THE LD. DR CONTENDED THAT IT CANNOT BE SAID, THEREFORE, THAT T HE 6 ASSESSEES RIGHT FOR REASONABLE OPPORTUNITY OF BEIN G HEARD WAS PREJUDICED IN ANY MANNER. THE LD. DR IN THIS R EGARD RELIED UPON THE FOLLOWING DECISIONS: 1) CIT VS. SMT.KAUSHALYA & OTHERS 216 ITR 660 2) CIT VS. MITHILA MOTORS (1984) 149 ITR 751 (PAT) 3) GRASS FARMS & RESORTS (P)LTD. VS. DCIT IT APPEAL NO.730 (JP) OF 2011(ITAT, JAIPUR BENCH) 4) AIREN METALS PVT. LTD. VS. ACIT ITA NO.820/JP/2016 (ITAT, JAIPUR BENCH) 5) LABH SINGH VS. ITO, WARD-3, KAITHAL DATE OF OROD 5.8.2016 6) VASANTBHAI HARIBHAI GAJERA VS. DCIT ITA NO.2189/AHD/2014 (ITAT, SURAT) 7) TRISHUL ENTERPRISES VS. ACIT ITA NO.384 & 385/MUM/2014 (I.T.A.T., MUMBAI BENCH) 13. WE HAVE HEARD THE RIVAL CONTENTIONS. THE GENES IS OF THE ARGUMENTS OF THE LD. COUNSEL FOR ASSESSEE ORIGI NATES FROM THE ORDER OF THE HON'BLE KARNATAKA HIGH COURT IN THE CASE OF MANJUNATHA COTTON & GINNING FACTORY (SUPRA) WHICH WAS FOLLOWED BY THE HON'BLE KARNATAKA HIGH COURT AG AIN IN SSAS EMERALD MEADOWS (SUPRA) WHEREIN SLP FILED BEF ORE THE HON'BLE SUPREME COURT WAS DISMISSED AND THE SAI D JUDGMENT WAS ALSO RELIED UPON BY THE TRIBUNAL IN A NUMBER OF DECISIONS RENDERED AND CITED BY THE LD. COUNSEL FOR ASSESSEE BEFORE US. IT IS, THEREFORE, PERTINENT TO UNDERSTAND THE REASONING LAID DOWN BY THE HON'BLE KARNATAKA HI GH COURT IN MANJUNATHA COTTON & GINNING FACTORY (SUPRA ) WHILE HOLDING THAT THE NOTICE U/S 274 MUST SPECIFIC ALLY SPELL OUT THE CHARGE FIXED ON THE ASSESSEE FOR THE PURPOS E OF LEVY 7 OF PENALTY WHETHER CONCEALMENT OR FURNISHING OF INA CCURATE PARTICULARS OF INCOME BY STRIKING OUT THE IRRELEVAN T CLAUSE IN THE NOTICE. PARA 59 OF THE ORDER DEALS WITH THE SAME AND IS BEING REPRODUCED HEREUNDER FOR REFERENCE: NOTICE UNDER SECTION 274 59. AS THE PROVISION STANDS, THE PENALTY PROCEEDINGS CAN BE INITIATED ON VARIOUS GROUND SET OUT THEREIN. IF THE OR DER PASSED BY THE AUTHORITY CATEGORICALLY RECORDS A FINDING REGA RDING THE EXISTENCE OF ANY SAID GROUNDS MENTIONED THEREIN AND THEN PENALTY PROCEEDINGS IS INITIATED, IN THE NOTICE TO BE ISSUED UNDER SECTION 274, THEY COULD CONVENIENTLY REFER TO T HE SAID ORDER WHICH CONTAINS THE SATISFACTION OF THE AUTHOR ITY WHICH HAS PASSED THE ORDER. HOWEVER, IF THE EXISTENCE OF T HE CONDITIONS COULD NOT BE DISCERNED FROM THE SAID ORDE R AND IF IT IS A CASE OF RELYING ON DEEMING PROVISION CONTAINED IN EXPLANATION-1 OR IN EXPLANATION-1(B), THEN THOUGH PENAL TY PROCEEDINGS ARE IN THE NATURE OF CIVIL LIABILITY, IN F ACT, IT IS PENAL IN NATURE. IN EITHER EVENT, THE PERSON WHO IS ACC USED OF THE CONDITIONS MENTIONED IN SECTION 271 SHOULD BE MAD E KNOWN ABOUT THE GROUNDS ON WHICH THEY INTEND IMPOSIN G PENALTY ON HIM AS THE SECTION 274 MAKES IT CLEAR THAT ASSESSEE HAS A RIGHT TO CONTEST SUCH PROCEEDINGS AN D SHOULD HAVE FULL OPPORTUNITY TO MEET THE CASE OF THE DEPARTME NT AND SHOW THAT THE CONDITIONS STIPULATED IN SECTION 271(1 )(C) DO NOT EXIST AS SUCH HE IS NOT LIABLE TO PAY PENALTY. THE PRA CTICE OF THE DEPARTMENT SENDING A PRINTED FORM WHERE ALL THE G ROUND MENTIONED IN SECTION 271 ARE MENTIONED WOULD NOT SAT ISFY REQUIREMENT OF LAW WHEN THE CONSEQUENCES OF THE ASS ESSEE NOT REBUTTING THE INITIAL PRESUMPTION IS SERIOUS IN NA TURE AND HE HAD TO PAY PENALTY FROM 100% TO 300% OF THE TAX LIABILITY. AS THE SAID PROVISIONS HAVE TO BE HELD TO BE STRICTL Y CONSTRUED, NOTICE ISSUED UNDER SECTION 274 SHOULD SATISFY THE G ROUNDS WHICH HE HAS TO MEET SPECIFICALLY. OTHERWISE, PRINCIPLE S OF NATURAL JUSTICE IS OFFENDED IF THE SHOW CAUSE NOTICE IS VAGUE. ON THE BASIS OF SUCH PROCEEDINGS, NO PENALTY COULD BE IMPOSED ON THE ASSESSEE. 60. CLAUSE (C) DEALS WITH TWO SPECIFIC OFFENCES, THAT I S TO SAY, CONCEALING PARTICULARS OF INCOME OR FURNISHING INAC CURATE PARTICULARS OF INCOME. NO DOUBT, THE FACTS OF SOME CA SES MAY ATTRACT BOTH THE OFFENCES AND IN SOME CASES THERE M AY BE OVERLAPPING OF THE TWO OFFENCES BUT IN SUCH CASES T HE INITIATION OF THE PENALTY PROCEEDINGS ALSO MUST BE FOR BOTH THE OFFENCES. BUT DRAWING UP PENALTY PROCEEDINGS FOR ONE OFFENCE AND FINDING THE ASSESSEE GUILTY OF ANOTHER OFFENCE OR F INDING HIM GUILTY FOR EITHER THE ONE OR THE OTHER CANNOT BE SU STAINED IN LAW. IT IS NEEDLESS TO POINT OUT SATISFACTION OF THE EXISTENCE OF THE GROUNDS MENTIONED IN SECTION 271(1)(C) WHEN IT I S A SINE QUA NON FOR INITIATION OR PROCEEDINGS, THE PENALTY PRO CEEDINGS 8 SHOULD BE CONFINED ONLY TO THOSE GROUNDS AND THE SAID GROUNDS HAVE TO BE SPECIFICALLY STATED SO THAT THE A SSESSEE WOULD HAVE THE OPPORTUNITY TO MEET THOSE GROUNDS. AFTE R, HE PLACES HIS VERSION AND TRIES TO SUBSTANTIATE HIS CLA IM, IF AT ALL, PENALTY IS TO BE IMPOSED, IT SHOULD BE IMPOSED ONLY ON THE GROUNDS ON WHICH HE IS CALLED UPON TO ANSWER. IT IS NOT OPEN TO THE AUTHORITY, AT THE TIME OF IMPOSING PENALTY TO IMPOSE PENALTY ON THE GROUNDS OTHER THAN WHAT ASSESSEE WAS CALLED UPON TO MEET. OTHERWISE THOUGH THE INITIATION OF PENAL TY PROCEEDINGS MAY BE VALID AND LEGAL, THE FINAL ORDER IMPO SING PENALTY WOULD OFFEND PRINCIPLES OF NATURAL JUSTICE AND CANNOT BE SUSTAINED. THUS ONCE THE PROCEEDINGS ARE INITIATED ON ONE GROUND, THE PENALTY SHOULD ALSO BE IMPOSED ON THE SAME GROUND. WHERE THE BASIS OF THE INITIATION OF PENALTY PROCEEDINGS IS NOT IDENTICAL WITH THE GROUND ON WHICH THE PENALTY WAS IMPOSED, THE IMPOSITION OF PENALTY IS NOT V ALID. THE VALIDITY OF THE ORDER OF PENALTY MUST BE DETERMI NED WITH REFERENCE TO THE INFORMATION, FACTS AND MATERIALS IN T HE HANDS OF THE AUTHORITY IMPOSING THE PENALTY AT THE TIME THE OR DER WAS PASSED AND FURTHER DISCOVERY OF FACTS SUBSEQUENT TO THE IMPOSITION OF PENALTY CANNOT VALIDATE THE ORDER OF PE NALTY WHICH, WHEN PASSED, WAS NOT SUSTAINABLE. 61. THE ASSESSING OFFICER IS EMPOWERED UNDER THE ACT TO INITIATE PENALTY PROCEEDINGS ONCE HE IS SATISFIED IN THE COURSE OF ANY PROCEEDINGS THAT THERE IS CONCEALMENT OF INC OME OR FURNISHING OF INACCURATE PARTICULARS OF TOTAL INCOME UNDER CLAUSE (C). CONCEALMENT, FURNISHING INACCURATE PARTICU LARS OF INCOME ARE DIFFERENT. THUS THE ASSESSING OFFICER WH ILE ISSUING NOTICE HAS TO COME TO THE CONCLUSION THAT WHETHER IS IT A CASE OF CONCEALMENT OF INCOME OR IS IT A CASE OF FURNISHI NG OF INACCURATE PARTICULARS. THE APEX COURT IN THE CASE OF ASHOK PAI REPORTED IN 292 ITR 11 AT PAGE 19 HAS HELD THAT CONCEALMENT OF INCOME AND FURNISHING INACCURATE PART ICULARS OF INCOME CARRY DIFFERENT CONNOTATIONS. THE GUJRAT H IGH COURT IN THE CASE OF MANU ENGINEERING REPORTED IN 122 ITR 306 AND THE DELHI HIGH COURT IN THE CASE OF VIRGO MARKET ING REPORTED IN 171 TAXMN 156, HAS HELD THAT LEVY OF PENAL TY HAS TO BE CLEAR AS TO THE LIMB FOR WHICH IT IS LEVIED AND T HE POSITION BEING UNCLEAR PENALTY IS NOT SUSTAINABLE. THEREFORE, W HEN THE ASSESSING OFFICER PROPOSES TO INVOKE THE FIRST LIMB BEING CONCEALMENT, THEN THE NOTICE HAS TO BE APPROPRIATELY MARKED. SIMILAR IS THE CASE FOR FURNISHING INACCURATE PARTIC ULARS OF INCOME. THE STANDARD PROFORMA WITHOUT STRIKING OF THE RELEVANT CLAUSES WILL LEAD TO AN INFERENCE AS TO NON-AP PLICATION OF MIND. 14. AS IS EVIDENT FROM THE ABOVE THAT THE HON'BLE H IGH COURT HAS VERY LUCIDLY EXPLAINED THAT THE PURPOSE O F ISSUING NOTICE IS TO MAKE THE ACCUSED PERSON AWARE OF THE C HARGE AGAINST HIM FOR WHICH HE IS BEING PENALIZED I.E. FO R 9 CONCEALING PARTICULARS OF INCOME AND/OR FURNISHING INACCURATE PARTICULARS OF INCOME SO THAT HE CAN AD EQUATELY DEFEND HIMSELF. THE HON'BLE HIGH COURT FURTHER CLA RIFIED THAT THE SAME MAY BE CLEAR FROM THE ORDER OF THE AU THORITIES ITSELF PASSED IN PROCEEDINGS DURING THE COURSE OF W HICH HE WAS SATISFIED OF THE EXISTENCE OF THE IMPUGNED COND ITION, WHICH IS A STATUTORY REQUIREMENT FOR INITIATING PEN ALTY PROCEEDINGS U/S 271(1)(C) OF THE ACT. IN SUCH CASE S THE HON'BLE HIGH COURT HELD, WHERE GROUND FOR INITIATIN G PENALTY IS CLEARLY COMING OUT FROM THE ORDER, REFERENCE TO THE ORDER IN THE NOTICE U/S 274 OF THE ACT WOULD BE SUFFICIEN T TO MAKE THE PERSON CHARGED WITH THE SAME, AWARE OF THE CHAR GE. AS PER THE HON'BLE HIGH COURT, REFERENCE TO THE ORDER IN THE NOTICE WHICH CONTAINS CLEAR SATISFACTION OF THE AUT HORITY OF THE EXISTENCE OF ANY OF THE GROUNDS WOULD BE SUFFIC IENT COMPLIANCE OF THE AFORESAID CONDITION. THE HONBLE HIGH COURT FURTHER HELD THAT IN SITUATION WHERE THE ORDE R OF THE AUTHORITY IS NOT CLEAR VIS-A-VIS GROUND FOR WHICH I T IS INITIATED, AS IN CASES WHERE THERE IS DEEMED CONCEA LMENT AS PER EXPLANATION-1 TO SECTION 271(1)(C) OF THE AC T AND DEEMED SATISFACTION OF THE AUTHORITY OF CONCEALMENT AS PER SECTION 271(1)(B) OF THE ACT, THEN, THE HON'BLE HIG H COURT HAS HELD, THAT THE NOTICE SHOULD CLEARLY REFLECT TH E EXACT GROUND FOR WHICH PENALTY IS LEVIED. THE HONBLE H IGH COURT HAS IN VERY CLEAR WORDS EXPLAINED THAT THE PROCEEDI NGS BEING PENAL IN NATURE THE ASSESSEE SHOULD BE MADE A WARE OF THE GROUNDS ON WHICH PENALTY IS BEING LEVIED SO THA T HE CAN ADEQUATELY DEFEND HIMSELF. THE CRUX OF THE JUDGMENT 10 THEREFORE IS THAT THE NOTICE U/S 274 SHOULD CLEARLY BRING OUT THE CHARGE AGAINST THE PERSON WHO IS BEING PENALIZE D EITHER BY REFERRING TO THE ASSESSMENT ORDER WHERE THE AO H AS CLEARLY RECORDED HIS SATISFACTION OF THE EXISTENCE OF GROUND WARRANTING LEVY OF PENALTY OR WHERE THE SAME IS ABS ENT ,BY WAY OF STRIKING OFF THE IRRELEVANT GROUND WHICH FIN DS MENTION IN THE STANDARD PERFORMA USED BY THE REVENU E WHILE ISSUING NOTICE U/S 274 OF THE ACT. AT THIS JU NCTURE, IT IS RELEVANT TO POINT OUT THAT THE PENALTY U/S 271(1 )(C) OF THE ACT IS LEVIED FOR CONCEALING AND/OR FOR FURNISHING INACCURATE PARTICULARS OF INCOME. THE HON'BLE HIGH COURT HAS CLARIFIED THAT THERE MAY BE CIRCUMSTANCES WHETHER THE CHARGES ARE OVERLAPPING AND BOTH THE CONDITIONS EXIST. THE FAC TS, THEREFORE, SHOULD CLEARLY POINT OUT THE EXISTENCE O N EITHER OR BOTH THE GROUNDS AS IS APPLICABLE IN EACH CASES. 15. HAVING SAID SO WE SHALL PROCEED TO APPLY THE AF ORESAID RATIO TO THE FACTS OF THE PRESENT CASE. THE NOTICE ISSUED TO THE ASSESSEE U/S 274 OF THE ACT STATES THAT DURING THE COURSE OF PROCEEDINGS FOR THE IMPUGNED YEAR IT APPE ARED THAT THE ASSESSEE HAD CONCEALED PARTICULARS OF HIS INCOME AND (EMPHASIS SUPPLIED BY US) FURNISHED INACCURATE PARTICULARS OF INCOME. THE RELEVANT NOTICE PRODUC ED BEFORE US IS AS UNDER: NOTICE UNDER SECTION 274 READ WITH SECTION 271 OF T HE INCOME TAX ACT, 1961. PAN: ABNPJ4747M OFFICE OF THE DY. COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-ILL, DANDI SWAMI CHOWK, CIVIL LINES, LUDHIANA. DATED, LUDHIANA THE 29/11/2013. 11 TO SH. MUNISH JAIN, B- 121,PUSHAPVIHAR, CANAL ROAD, LUDHIANA. WHEREAS IN THE COURSE OF PROCEEDINGS BEFORE ME FOR THE ASSESSMENT YEAR 2010-11 IT APPEARS TO ME THAT YOU:- HAVE WITHOUT REASONABLE CAUSE FAILED TO FURNISH ME RETURN OF INCOME WHICH YOU WERE REQUIRED TO FURNISH BY A NOTI CE GIVEN UNDER SECTION OF THE INCOME TAX ACT, 1961, DATED_________________ ___. HAVE WITHOUT REASONABLE CAUSE FAILED TO COMPLY WITH THE NOTICE U/S -------- --------------- ISSUED ON ---------------------- FI XING THE CASE FOR HEARING ON WHICH WAS SERVED ON HAVE CONCEALED THE PARTICULARS OF YOUR INCOME AND FOR FURNISHING INACCURATE PARTICULARS OF SUCH INCOME. 2. YOU ARE HEREBY REQUESTED TO APPEAR BEFORE ME AT 11.30AM ON 26.12.2013 AND SHOW CAUSE WHY AN ORDER IMPOSING A PENALTY ON Y OU SHOULD NOT BE MADE UNDER SECTION 274 READ WITH SECTION 271 OF THE INCO ME TAX ACT, 1961. IF YOU DO NOT WISH TO AVAIL YOURSELF OF THIS OPPORTUNITY OF BEING HEARD I N PERSON OR THROUGH AUTHORIZED REPRESENTATIVE YOU MAY SHOW CAUSE IN WRITING ON OR BEFORE THE SAID DATE WHICH WILL BE CONSIDERED BEFORE ANY SUCH ORDER IS MADE UNDER SECT ION 271(1 )(C) OF THE I.T.ACT,1961. (SUKHJIT SINGH) DY. COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-ILL, LUDHIANA. THE CHARGE AGAINST THE ASSESSEE IS THEREFORE ON BO TH COURTS WHICH AS POINTED OUT ABOVE BY US HAS BEEN HE LD TO BE PLAUSIBLE AS THE SAME CAN BE OVERLAPPING IN CERT AIN CIRCUMSTANCES. 15. THERE IS, THEREFORE, NO INFIRMITY IN THE NOTICE AND THE GROUND FOR WHICH PENALTY WAS INITIATED ON THE ASSES SEE HAS BEEN CLEARLY AND UNAMBIGUOUSLY BROUGHT OUT IN THE S AID NOTICE. THE ASSESSEE HAS ALSO, WE FIND, RESPONDED TO THE 12 NOTICE AND WAS GIVEN FULL OPPORTUNITY TO DEFEND HIM SELF AGAINST THE SAID CHARGES WHICH WAS DULY AVAILED OF ALSO BY THE ASSESSEE. NECESSARY AND REQUISITE REPLY DEFEND ING HIMSELF FROM THE CHARGES WAS FILED BEFORE THE ASSES SING OFFICER. IT IS NOT THE CASE OF THE ASSESSEE THAT DU E OPPORTUNITY WAS NOT GIVEN TO THE ASSESSEE. UNDER T HE AFORESAID CIRCUMSTANCES WE FIND THAT THERE IS NO VI OLATION OF THE PRINCIPLES OF NATURAL JUSTICE IN THE PRESENT CA SE WHEN THE ASSESSEE HAVING BEEN AWARE OF THE SPECIFIC CHAR GE FOR WHICH PENALTY WAS INITIATED AND ALSO HAVING BEEN GI VEN DUE OPPORTUNITY TO DEFEND HIMSELF FROM THE SAID CHARGE. WE, THEREFORE, CANNOT AGREE WITH THE CONTENTION OF THE LD. COUNSEL FOR ASSESSEE THAT THE NOTICE ISSUED TO IT U /S 274 OF THE ACT SUFFERED FROM INFIRMITY. MOREOVER, WE FIND THAT THE DECISIONS RELIED UPON BY THE LD. COUNSEL FOR ASSESS EE ARE OF NO ASSISTANCE SINCE THEY ARE ALL DISTINGUISHABLE ON FACTS AS IN ALL THE SAID CASES THE GROUND ON ACCOUNT OF WHIC H PENALTY WAS INITIATED WAS NOT CLEAR WITH THE NOTICE BEING I N A STANDARD FORMAT MENTIONING BOTH THE CHARGES ALTERNA TIVELY WITHOUT STRIKING OF THE INCORRECT CHARGE WHICH IS D IFFERENT FROM THE FACTS OF THE PRESENT CASE. IN VIEW OF THE ABOVE, WE DISMISS THE ADDITIONAL GROUND OF APPEAL RAISED BY T HE ASSESSEE. 16. NOW COMING TO THE GROUND RAISED CHALLENGING TH E LEVY OF PENALTY AS PER EXPLANATION 5A TO SECTION 271(1) OF THE ACT, BEFORE US THE LD. COUNSEL FOR ASSESSEE RELIED UPON THE SUBMISSIONS MADE BEFORE THE LD.CIT(APPEALS) REPRODU CED IN 13 THE ORDER OF THE LD.CIT(APPEALS) AT PARA-2 AND WHIC H BRIEFLY STATED ARE AS UNDER: 1. SINCE NO INCRIMINATING MATERIAL WAS DISCOVERED AND NO VALUABLE ARTICLE WAS FOUND BY THE REVENUE DURING SEARCH, NO PENALTY WAS LEVIABLE AS PER EXPLANATION-5A TO SECTION 271(1)(C) OF THE ACT. 2) WHEN RETURN OF INCOME FILED U/S 153A IS ACCEPTED BY THE ASSESSING OFFICER, THERE WILL BE NO CONCEALM ENT OF INCOME AND CONSEQUENTLY PENALTY U/S 271(1)(C) OF THE ACT CANNOT BE IMPOSED. 17. THE LD. COUNSEL FOR ASSESSEE ALSO RELIED UPON T HE DECISION OF VARIOUS TRIBUNALS IN THIS CONTEXT WHICH WERE REFERRED BEFORE THE LD.CIT(APPEALS) ALSO. 18. THE LD. DR, ON THE OTHER HAND, SUPPORTED THE OR DER OF THE LD.CIT(APPEALS). 19. WE HAVE HEARD THE RIVAL CONTENTIONS. THE RELEV ANT FINDING OF THE LD.CIT(APPEALS) WHILE UPHOLDING THE LEVY OF PENALTY AFTER DEALING WITH THE ABOVE CONTENTIONS O F THE ASSESSEE BEFORE HIM IS AS UNDER: TO DECIDE THE ISSUE, IT IS RELEVANT TO NOTE HERE T HAT THERE WAS AN AMENDMENT IN SECTION 271(1} BY FINANCE ACT 2 007 AND A NEW EXPLANATION 'EXPLANATION 5A' WAS INSERTED W.E.F. 01.06.2007, WHICH IS APPLICABLE TO CASES WHERE SEARCH U/S 132 WAS INITIATED ON OR AFTER 1 ST DAY OF JUNE 2007. FURTHER 'EXPLANATION 5' HAS BEEN MADE APPLICABLE TO CASES WHER E SEARCH WAS INITIATED BEFORE 1 ST DAY OF JUNE 2007. IN THE PRESENT CASE UNDER CONSIDERATION SEARCH ACTION U/S 132 WAS INITIATED ON 30.06.2009, THEREFORE, THIS CASE IS COVERED BY T HE PROVISIONS OF 'EXPLANATION 5A' WHICH IS REPRODUCED A S UNDER: 14 [EXPLANATION 5A- WHERE, IN THE COURSE OF A SEARCH INITIATED UNDER SECTION 132 ON OR AFTER THE 1 ST DAY OF JUNE, 2007., THE ASSESSEE IS FOUND TO BE THE OWNER OF- (I) ANY MONEY, BULLION, JEWELLERY OR OTHER VALUABLE ARTICLE OR THING (HEREAFTER IN THIS EXPLANATION REFERRED TO AS ASSETS) AND THE ASSESSEE CLAIMS THAT SUCH ASSETS HAVE BEEN ACQ UIRED BY HIM BY UTILIZING (WHOLLY OR IN PART) HIS INCOME FOR ANY PREVIOUS YEAR; OR (II) ANY INCOME BASED ON ANY ENTRY IN ANY BOOKS OF ACCOUNT OF OTHER DOCUMENTS OR TRANSACTIONS AND HE CLAIMS THAT SU CH ENTRY IN THE BOOKS OF ACCOUNT OR OTHER DOCUMENTS OR TRANS ACTIONS REPRESENTS HIS INCOME (WHOLLY OR IN PART) FOR ANY PREVIOUS YEAR, WHICH HAS ENDED BEFORE THE DATE OF SEARCH AND,- (A) WHERE THE RETURN OF INCOME FOR SUCH PREVIOUS YEA R HAS BEEN FURNISHED BEFORE THE SAID DATE BUT SUCH INCOME HAS NOT BEEN DECLARED THEREIN: OR (B) THE DUE DATE FOR FILING THE RETURN OF INCOME FOR SUCH PREVIOUS YEAR HAS EXPIRED BUT THE ASSESSEE HAS NOT FILED THE RETURN, THEN, NOTWITHSTANDING THAT SUCH INCOME IS DECLARED BY HIM IN ANY RETURN OF INCOME FURNISHED ON OR AFTER THE DAT E OF SEARCH, HE SHALL, FOR THE PURPOSES OF IMPOSITION OF A PENALTY UNDER CLAUSE (C) OF SUB-SECTION (1) OF THIS SECTION, BE DEEMED TO HAVE CONCEALED THE PARTICULARS OF HIS INCOME OR FURN ISHED INACCURATE PARTICULARS OF SUCH INCOME] A PLAIN READING OF THE ABOVE EXPLANATION SHOWS THA T IF THE INCOME DECLARED BY THE ASSESSEE AFTER SEARCH, IN RE SPONSE TO NOTICE U/S 153A, WHICH WAS NOT DECLARED BY THE ASSES SEE EARLIER FOR ANY PREVIOUS YEAR WHICH HAS ENDED BEFORE THE DATE OF SEARCH, THEN THE ASSESSEE SHALL BE DEEMED TO HA VE CONCEALED THE PARTICULARS OF HIS INCOME OR FURNISHE D INACCURATE PARTICULARS OF SUCH INCOME. THE UNDISPUTE D FACT IN THIS CASE ARE THAT THE INCOME DECLARED FOR THE YEAR UNDER CONSIDERATION IN THE RETURN FILED IN RESPONSE TO NOTICE U /S 153A (AFTER THE SEARCH) WAS MORE THAN THE INCOME DECLARE D IN THE RETURN FILED U/S 139 BEFORE THE SEARCH I.E. THE SURRENDERED/EXTRA INCOME WAS NOT FORMING PART OF IN COME IN THE RETURN FILED BEFORE THE DATE F SEARCH). THE CASE OF THE ASSESSEE IS THUS COVERED U/S 271(1)(C) BY THE D EEMING FICTION CREATED BY EXPLANATION 5A WHICH HAS BEEN INSERTED BY FINANCE ACT, 2007 W.E.F. 01.06.2007. FURTH ER, THE CASE LAWS QUOTED BY THE LD. COUNSEL FOR ASSESSEE RE LATES TO CASES WHERE THE SEARCH U/S 132 WAS CONDUCTED BEF ORE 1 ST JUNE 2007 AND IN THOSE CASES 'EXPLANATION 5 WAS APPLICABLE AND HENCE THESE ARE NOT APPLICABLE TO THE PRESENT CASE. THIS VIEW FIND SUPPORT FROM THE J UDGMENT OF THE HON'BLE ITAT CHANDIGARH BENCH IN I TA NO. 516/CHP/2012, SH. RAJNISH VOHRA VS. DCIT, CC-I, 15 CHANDIGARH DATED 31.10.2012. THE RELEVANT PARA OF TH E JUDGMENT DATED 31.10.2012 ARE REPRODUCED BELOW: '29. IN THE PRESENT CASE, THE NORMAL RETURN OF INCO ME FOR THE ASSESSMENT YEAR 2007-08 WAS FILED BY THE ASSESSEE, ON 31.3,2007 I.E. THE DATE OF SEARCH ITSE LF. HOWEVER, THE ASSESSEE FILED HIS RETURN OF INCOME IN RESPONSE TO NOTICE DATED 27.1.2009 ISSUED U/S 153A OF THE ACT, ON 23.7.2009, DECLARING INCOME OF RS.3,27,01,440/-, INCLUDING THE ADDITIONAL AMOUNT OF RS.2,00,60,000/-,DECLARED BY THE ASSESSEE, IN THE STATEMENT RECORDED U/S 132(4) OF THE ACT. THE ASSESSEE FILED RETURN OF INCOME, IN RESPONSE TO THE SAID NOTICE U/S 153A OF THE ACT, ON 23.7.2009 AND ON THE DATE OF FILING THE RETURN, THE EXPLANATION 5A INSERTED BY THE FINANCE (NO.2)ACT OF 2009, WITH RETROSPECTIVE EFFECT FROM 1.6.2007, WAS ON THE STAT UTE. IN THE PRESENT CASE, RETURN OF INCOME WAS FILED IN R ESPONSE TO NOTICE U/S 153A OF THE ACT, WHICH IS COVERED BY EXPLANATION 5A TO SECTION 271(1) (C) OF THE ACT, INS ERTED BY FINANCE (NO.2) ACT OF 2009. THE FACTS OF PRESENT C ASE, ARE NOT SIMILAR TO THE FACTS, AS OBTAINING, IN THE CASE LAW, RELIED UPON BY THE ASSESSEE, AS DISCUSSED ABOVE. 30. FURTHER, THE PROVISIONS OF SECTION 153A ARE SPE CIFICALLY ARE BROUGHT ON THE STATUTE BOOK, FOR ASSESSMENT, IN CA SE OF SEARCH U/S 132(1) OF REQUISITION OF BOOKS OF ACCOUNT U/S 1 32A OF THE ACT. THE OPENING SENTENCE OF SECTION 153A OF THE ACT, OV ERRIDES THE PROVISIONS OF SECTION 139, 147, 148, 149, 151 AND 153 OF THE ACT. THE ASSESSEE HAS DECLARED UNDISCLOSED INCOME, IN THE RETURN FILED- IN RESPONSE TO NOTICE U/S 153A OF THE ACT AN D THE CIT(APPEALS), HAVING REGARD TO THE FACTS OF THE CASE, INVOKED THE CURRENTLY APPLICABLE EXPLANATION 5A SECTION 271(1 ) (C) OF THE ACT AND UPHELD THE PENALTY, LEVIED BY THE AO. IN SUCH A FACT-SITUATION, THE CIT(APPEALS) HAS ACTE D IN ACCORDANCE WITH THE CURRENTLY OPERATIVE AND RELEVA NT PENAL PROVISIONS, WITH REFERENCE TO THE RETURN OF INCOME, FI LED IN RESPONSE TO SECTION 153A OF THE ACT. 31. IN VIEW OF THE ABOVE LEGAL AND FACTUAL DISCUSSI ONS, AND HAVING REGARD TO THE EXPRESS STATUTORY PROVISIONS OF SECTION 271(1) (C) OF THE ACT READ WITH EXPLANATION 5A THERE UNDER, AS INSE RTED BY THE FINANCE. (NO. 2) ACT, 2009, WITH RETROSPECTIVE EF FECT FROM 01.06.2007, WE DO NOT FIND ANY INFIRMITY, IN THE FINDINGS OF LD CIT(APPEALS). THEREFORE, THE FINDING S OF THE CIT(APPEALS) ARE UPHELD AND, CONSEQUENTLY, THE GROU NDS OF APPEAL OF THE ASSESSES ARE DISMISSED. 32. IN THE RESULT APPEAL OF THE ASSESSEE IS DISMISSED. ' IN THE PRESENT CASE THE PROVISIONS OF EXPLANATION-5 A TO SECTION 271(L)(C) ARE ATTRACTED. DURING THE APPELLATE PROCE EDINGS, THE MAIN ARGUMENT OF THE AR WAS THAT NO INCRIMINATING D OCUMENT WAS FOUND AND THE INCOME RETURNED IN RESPONSE TO NO TICE U/S!53A HAS BEEN ACCEPTED. HOWEVER, PERUSAL OF THE ASSESSMENT 16 ORDER SHOWS THAT THE ADDITIONAL INCOME HAS BEEN DEC LARED BY THE ASSESSEE AFTER THE SEARCH. THE EXTRA INCOME OFFER ED/ASSESSED U/S 153A REPRESENT CONCEALED INCOME WHICH WAS NOT D ECLARED IN THE RETURN FILED BEFORE THE SEARCH AND HAD THERE BE EN NO SEARCH THIS EXTRA INCOME WOULD NEVER HAVE BEEN B ROUGHT TO TAX. THEREFORE, IN VIEW OF THE FACTS AND CIRCUMSTANC ES OF THE CASE AND IN THE LIGHT OF THE ABOVE JUDGMENT OF THE HON'B LE ITAT, CHANDIGARH BENCH PASSED IN ITANO.516/CHD/2012 DATED 31.10.2012, THE PENALTY IMPOSED BY THE AO IN THIS IS FOUND AS PER LAW IN VIEW OF EXPLANATION-5A TO SECTION 271(L) (C) AND THEREFORE UPHELD. 20. AS IS EVIDENT FROM THE ABOVE, THE LD.CIT(APPEAL S) HAS HELD THAT SINCE SEARCH IN THE PRESENT CASE WAS INIT IATED ON OR AFTER 1 ST DAY OF JUNE, 2007, THE PRESENT CASE IS COVERED BY THE PROVISIONS OF EXPLANATION-5A TO SECTION 271( 1)(C) OF THE ACT. AT THIS JUNCTURE IT IS RELEVANT TO REPROD UCE THE PROVISIONS OF EXPLANATION 5A TO SECTION 271(1) SIN CE THE CHALLENGE OF THE ASSESSEE IS TO THE APPLICABILITY O F THE SAID EXPLANATION IN THE FACTS OF THE PRESENT CASE: [EXPLANATION 5A- WHERE, IN THE COURSE OF A SEARCH INI TIATED UNDER SECTION 132 ON OR AFTER THE 1ST DAY OF JUNE, 2007, THE ASSESSEE IS FOUND TO BE THE OWNER OF (I) ANY MONEY, BULLION, JEWELLERY OR OTHER VALUABLE ARTICLE OR THING EXPLANATION REFERRED TO AS ASSETS) AND THE ASSESSEE CLAIMS THAT SUCH ASSETS HAVE BEEN ACQUIRED BY HIM BY UTILISING (WHOLLY OR IN PART ) HIS INCOME FOR ANY PREVIOUS YEAR; OR (II) ANY INCOME BASED ON ANY ENTRY IN ANY BOOKS OF ACCOUNT OR OTHER DOCUMENTS OR TRANSACTIONS AND HE CLAIMS THAT SUCH ENTRY IN THE BOOKS OF ACCOUNT OR OTHER DOCUMENTS OR TRANSACTIONS REPRESENTS HIS INCOME(WHOLLY OR IN PART) FOR ANY PREVIOUS YEAR, WHICH HAS ENDED BEFORE THE DATE OF SEARCH AND, (A) WHERE THE RETURN OF INCOME FOR SUCH PREVIOUS YEA R HAS BEEN FURNISHED BEFORE THE SAID DATE BUT SUCH INCOME HAS NOT BEEN DECLARED THEREIN; (B) THE DATE FOR FILING THE RETURN OF INCOME FOR SUCH PREVIOUS YEAR HAS EXPIRED BUT THE ASSESSEE HAS NOT FILED THE RETURN. THEN, NOTWITHSTANDING THAT SUCH INCOME IS DECLARED BY H IM IN ANY RETURN OF INCOME FURNISHED ON OR AFTER THE DATE OF SEARCH, HE SHALL, FOR THE PURPOSES OF IMPOSITION OF A PENALTY UNDER CLAUSE (C) OF SUB-SECTION (1) OF THIS SECTION, BE DEEMED TO HAVE 17 CONCEALED THE PARTICULARS OF HIS INCOME OR FURNISHED INACCURATE PARTICULARS OF SUCH INCOME.] 21. THERE IS NO DISPUTE VIS--VIS THE FINDING OF T HE CIT(A) THAT SINCE SEARCH IN THE PRESENT CASE WAS INITIATED AFTER 1 ST DAY OF JUNE 2007 EXPLANATION 5A TO SECTION 271(1)(C ) WAS APPLICABLE. LD.COUNSEL FOR THE ASSESSEE HAS MADE N O ARGUMENTS CHALLENGING THIS FINDING OF THE CIT(A). 22. FURTHER WE FIND NO INFIRMITY IN THE INTERPRETAT ION OF THE LD.CIT(A) OF EXPLANATION 5A TO SECTION 271(1)(C ) SINCE THE LANGUAGE OF EXPLANATION 5A IS VERY CLEAR AN D UNAMBIGUOUS, THAT THE ASSESSEE WILL BE DEEMED TO HAVE CONCEALED PARTICULARS OF HIS INCOME VIS A VIS INCO ME DECLARED IN THE RETURN FILED IN RESPONSE TO NOTICE U/S 153A AFTER SEARCH, WHICH WAS NOT DECLARED IN THE ORIGIN AL RETURN OF INCOME FILED. THEREFORE, WE HOLD, THAT THE LD.C IT(A) HAS RIGHTLY DISMISSED THE CONTENTION OF THE ASSESSEE TH AT WHERE INCOME RETURNED U/S 153A IS ACCEPTED NO PENALTY IS LEVIABLE. LD.CIT(A) HAS, WE FIND, DISTINGUISHED THE CASE LAWS RELIED UPON BY THE ASSESSEE IN SUPPORT OF ITS AFORE SAID CONTENTION, AS NOT HAVING BEEN RENDERED IN THE CONT EXT OF EXPLANATION 5A TO SECTION 271(1)(C) AND HENCE NOT APPLICABLE IN THE FACTS OF THE PRESENT CASE. LD CO UNSEL FOR THE ASSESSEE WAS UNABLE TO CONTROVERT THIS. THEREF ORE WE FIND NO REASON TO INTERFERE IN THIS FINDING OF THE CIT(A) ALSO. 23. AS FOR THE CONTENTION OF THE ASSESSEE THAT THE EXPLANATION-5A TO SECTION 271(1)(C) OF THE ACT IS A TTRACTED ONLY WHEN SOME INCRIMINATING MATERIAL IS FOUND DURI NG THE COURSE OF SEARCH IN THE FORM OF MONEY, BULLION, JEW ELLERY OR 18 ANY INCOME BASED ON AN ENTRY IN THE BOOKS OF ACCOUN T AND SINCE NO SUCH INCRIMINATING MATERIAL WAS FOUND DURI NG THE COURSE OF SEARCH IN THE PRESENT CASE, NO PENALTY AS PER EXPLANATION-5A TO SECTION 271(1)(C) OF THE ACT IS L EVIABLE, WE FIND NO MERIT IN THE SAME. THE FACTS ON RECORD POINT OTHERWISE. UNDOUBTEDLY IT WAS THE ASSESSEE WHO HAD SURRENDERED RS.28 LACS DURING SEARCH. THE SURREND ER WAS NEVER RETRACTED BY THE ASSESSEE. NOTHING TO THIS E FFECT IS RECORDED IN THE ORDERS OF THE AUTHORITIES BELOW NOR HAS BEEN BROUGHT TO OUR NOTICE DURING THE COURSE OF HEARING BEFORE US. THUS AS PER THE ASSESSEES OWN ADMISSION, HE HAD NOT DISCLOSED INCOME TO THE TUNE OF RS.28LACS EARNED DU RING THE YEAR. THEN SUBSEQUENTLY DURING ASSESSMENT PROCEEDI NGS THE ASSESSEE CLAIMS /ADMITS TO HAVE INVESTED THIS I NCOME IN TWO PROPERTIES. WHAT THIS TANTAMOUNTS TO IS THAT TH E SURRENDER MADE BY THE ASSESSEE WAS ON ACCOUNT OF UNDISCLOSED INCOME FOR THE YEAR, INVESTED IN ASSETS . AND SINCE THE ASSESSEE HAD SUO MOTO MADE THE SURRENDER IT TANTMOUNTED TO THE ASSESSEE HIMSELF COMING CLEAN BE FORE THE REVENUE ABOUT THE FACT OF EARNING SUCH INCOME A ND INVESTING IT IN ASSETS. THUS AT THE POINT OF TIME W HEN THE SURRENDER WAS MADE BY THE ASSESSEE DURING SEARCH TH E REVENUE FOR ALL PURPOSES HAD FOUND THE ASSESSEE TO BE THE OWNER OF ASSETS ACQUIRED OUT OF EARLIER UNDISCLOSED INCOME DURING SEARCH. AFTER THE SUO MOTO DISCLOSURE BY THE ASSESSEE NO REQUIREMENT REMAINED FOR THE REVENUE TO MAKE ANY FURTHER DISCOVERY AT ALL. THE REQUIREMENT OF EX PLANATION 5A OF THE ASSESSEE BEING FOUND DURING SEARCH TO BE THE 19 OWNER OF ASSETS ACQUIRED OUT OF EARLIER UNDISCLOSED INCOME IS THEREFORE MET. THE CONTENTION OF THE ASSESSEE T HAT NO INCRIMINATING MATERIAL WAS FOUND DURING SEARCH, WE HOLD, HAS BEEN RIGHTLY DISMISSED BY THE CIT(A). 24. IN VIEW OF THE ABOVE WE UPHOLD THE ORDER OF THE CIT(A) ACT, CONFIRMING THE LEVY OF PENALTY OF RS.7,66,320/ - U/S 271(1)(C) OF THE ACT. GROUND OF APPEAL NO.1 IS THEREFORE DISMISSED IN THE RESULT, BOTH THE APPEALS OF THE ASSESSEE AR E DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT. SD/- SD/- (SANJAY GARG) (ANNAPURNA GUPTA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 19 TH MARCH, 2018 *RATI* COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A)S 4. THE CIT 5. THE DR ASSISTANT REGISTRAR, ITAT, CHANDIGARH