Shri Pravinbhai Gordhanbhai Patel, Kalol V. The DCIT, Central Cir-1(3), , Ahmedabad

ITA 2668/AHD/2017

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 8832 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 4 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-04-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2012-2013
• Appeal Filed On: 01-12-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: O P PATHAKSR
• Assessee Lawyers: A L THAKKAR
• Keywords: Question of law
• Section: 271(1)(c); 153A; 132; 139

Judgement Text

, - IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH C BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER AND SHRI WASEEM AHMED, ACCOUNTANT MEMBER ./ ITA NO. 2662 /AHD/2017 ASSTT.YEAR : 2009-10 LATE PRAGNESH NAVINBHAI PATEL THROUGH LEGAL HEIR SMT.SHRADDHA PRAGNESH PATEL 39, KAMALNAYAN BUNGALOWS AAROHI CLUB ROAD, AHMEDABAD. PAN : ABBPP 5517 H VS DCIT, CENT.CIR.1(3) AHMEDABAD. ./ ITA NO. 2669, 2670 AND 2671/AHD/2017 / ASSESSMENT YEAR: 2009-10, 2010-11 AND 2012-13 SHRI TEJAS VINUBHAI SHAH 48, ALOK BUNGALOW SUN-N-STEP CLUB ROAD PAN : AHBPS 5069 H VS DCIT, CENT.CIR.1(3) AHMEDABAD. ./ ITA NO. 2663 TO 2668/AHD/2017 / ASSESSMENT YEAR: 2007-08 TO 2012-13 SHRI PRAVINBHAI GORDHANBHAI PATEL 8, SARDAR SOCIETY NR. AMBICA NAGAR HIGHWAY ROAD KALOL (N.G.) PAN : AFUPP 7843 M VS DCIT, CENT.CIR.1(3) AHMEDABAD. / (APPELLANT) / (RESPONDENT) ASSESSEE BY : SHRI A.L. THAKKAR, AR REVENUE BY : SHRI O.P. PATHAK,SR.DR / DATE OF HEARING : 28 & 29/03/2019 /DATE OF PRONOUNCEMENT : 08/ 04/2019 O R D E R ITA NO.2662/AHD/2017 AND 9 OTHERS - 2 - PER RAJPAL YADAV, JUDICIAL MEMBER : PRESENT BUNCH OF TEN APPEALS WAS HEARD SEPARATELY I.E. ON 28.3.2019 AND 29.3.2019 AGAINST THE ORDERS OF THE LD.CIT(A) PASSED FOR THE ABOVE ASSESS MENT YEARS. SINCE COMMON ISSUE IS INVOLVED IN ALL THESE APPEALS, WE D ISPOSE OF ALL THEM BY THIS CONSOLIDATED ORDER. 2. SHORT COMMON QUESTION INVOLVED IN ALL THESE APPE ALS IS, WHETHER TO VISIT THE APPELLANTS WITH PENALTY UNDER SECTION 271(1)(C) R.W. EXPLANATION 5A, THERE SHOULD BE CERTAIN ASSETS, SUCH AS MONEY, BULLION, JEWELLERY AND DIARY BE FOUND IN THE POSSESSION OF T HE ASSESSEE DURING THE SEARCH REPRESENTING UNDISCLOSED INCOME DECLARED IN RESPONSE TO THE NOTICE ISSUED UNDER SECTION 153A OF THE INCOME TAX ACT, 1961 ? 3. GRIEVANCE OF ALL THE APPELLANTS IS THAT THE LD.C IT(A) HAS ERRED IN CONFIRMING FOLLOWING AMOUNTS OF PENALTIES IMPOSED B Y THE AO UNDER SECTIONS 271(1)(C): ASSESSEE ASSTT.YEAR AMOUNT LATE PRAGNESH NAVINBHAI PATEL 2009-10 RS.10,263/- SHRI TEJAS V. SHAH 2009-10, 2010-11 2012-13 RS.15,450/- RS.72,940/- RS.2,53,390/- SHRI PRAVINBHAI GORDHANBHAI PATEL 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 RS.2,080/- RS.8,570/- RS.61,490/- RS.37,470/- RS.76,330/- RS.1,30,310/- 4. BRIEFLY STATED FACTS ARE THAT A SEARCH UNDER SEC TION 132 OF THE INCOME TAX ACT WAS CARRIED OUT IN THE CASE OF TRICO N GROUP ON 5.12.2012. ALL THE APPELLANTS ARE COVERED UNDER SEARCH ACTION. IN ORDER TO GIVE ITA NO.2662/AHD/2017 AND 9 OTHERS - 3 - LOGICAL END TO THE PROCEEDINGS, NOTICE UNDER SECTIO N 153A WAS SERVED UPON THE ASSESSEE, AND THEY HAVE FILED THEIR RETURN S OF INCOME IN RESPONSE TO THOSE NOTICES. THERE IS A VARIATION BE TWEEN AMOUNT DISCLOSED IN THE RETURN FILED IN RESPONSE TO THE NO TICE UNDER SECTION 153A VIS--VIS THE RETURNED FILED UNDER SECTION 139(1) O F THE ACT. EXCEPT IN THE CASE OF PRAVINBHAI GORDHANBHAI PATEL IN THE ASS TT.YEAR 2007-08 AND 2008-09, WHERE HE HAS NOT FILED RETURNS UNDER SECTI ON 139(1) OF THE ACT. THE LD.AO HAS PASSED ASSESSMENT ORDER IN ALL THESE CASES AND ACCEPTED THE RETURNED INCOME DECLARED BY THE APPELLANTS. HE DID NOT MAKE ANY ADDITION. HE INITIATED PENALTY PROCEEDINGS UNDER S ECTION 271(1)(C) OF THE ACT ON THE GROUND THAT IF THE SEARCH WAS NOT CARRIE D OUT UPON THE ASSESSEE, THEY WOULD NOT HAVE DISCLOSED ANY UNDISCL OSED INCOME IN RESPONSE TO THE NOTICE UNDER SECTION 153A. AFTER HE ARING THE ASSESSEE, HE IMPOSED PENALTY IN EACH CASE. APPEAL TO THE CIT(A) DID NOT BRING ANY RELIEF TO THE ASSESSEE. 5. WITH THE ASSISTANCE OF THE LD.REPRESENTATIVES, W E HAVE GONE THROUGH THE RECORD CAREFULLY. EXPLANATION 5A AND SECTION 271AAA OF THE ACT HAS A DIRECT BEARING ON THE CONTROVERSY. THERE FORE, IT IS PERTINENT TO TAKE NOTE OF THIS CLAUSE, WHICH READS AS UNDER: EXPLANATION 5A. WHERE, IN THE COURSE OF A SEARCH INITIATED UNDER SECTION 132 ON OR AFTER THE 1ST DAY OF JUNE, 2007, THE ASSE SSEE IS FOUND TO BE THE OWNER OF (I) ANY MONEY, BULLION, JEWELLERY OR OTHER VALUAB LE ARTICLE OR THING (HEREAFTER IN THIS EXPLANATION REFERRED TO AS ASSET S) AND THE ASSESSEE CLAIMS THAT SUCH ASSETS HAVE BEEN ACQUIRED BY HIM B Y 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 E NTRY IN THE BOOKS OF ACCOUNT OR OTHER DOCUMENTS OR TRANSACTIONS REPRE SENTS HIS INCOME (WHOLLY OR IN PART) FOR ANY PREVIOUS YEAR, ITA NO.2662/AHD/2017 AND 9 OTHERS - 4 - WHICH HAS ENDED BEFORE THE DATE OF SEARCH AND, (A) WHERE THE RETURN OF INCOME FOR SUCH PREVIOUS Y EAR HAS BEEN FURNISHED BEFORE THE SAID DATE BUT SUCH INCOME HAS NOT BEEN D ECLARED THEREIN; OR (B) THE DUE DATE FOR FILING THE RETURN OF INCOME F OR 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 DATE OF SEARCH, HE SHALL, FOR THE PURPOSES OF IMPOSITION OF A PENALTY UNDER CLAUSE (C) OF SUB-SEC TION (1) OF THIS SECTION, BE DEEMED TO HAVE CONCEALED THE PARTICULARS OF HIS INC OME OR FURNISHED INACCURATE PARTICULARS OF SUCH INCOME. 271AAA. (1) THE ASSESSING OFFICER MAY, NOTWITHSTAND ING ANYTHING CONTAINED IN ANY OTHER PROVISIONS OF THIS ACT, DIRECT THAT, I N A CASE WHERE SEARCH HAS BEEN INITIATED UNDER SECTION 132ON OR AFTER THE 1ST DAY OF JUNE, 2007 BUT BEFORE THE 1ST DAY OF JULY, 2012, THE ASSESSEE SHAL L PAY BY WAY OF PENALTY, IN ADDITION TO TAX, IF ANY, PAYABLE BY HIM, A SUM COMP UTED AT THE RATE OF TEN PER CENT OF THE UNDISCLOSED INCOME OF THE SPECIFIED PRE VIOUS YEAR. (2) NOTHING CONTAINED IN SUB-SECTION (1) SHALL APPL Y IF THE ASSESSEE, (I) IN THE COURSE OF THE SEARCH, IN A STATEMENT U NDER SUB-SECTION (4) OF SECTION 132, ADMITS THE UNDISCLOSED INCOME AND S PECIFIES THE MANNER IN WHICH SUCH INCOME HAS BEEN DERIVED; (II) SUBSTANTIATES THE MANNER IN WHICH THE UNDISCL OSED INCOME WAS DERIVED; AND (III) PAYS THE TAX, TOGETHER WITH INTEREST, IF ANY, IN RESPECT OF THE UNDISCLOSED INCOME. (3) NO PENALTY UNDER THE PROVISIONS OF CLAUSE (C) O F SUB-SECTION (1) OF SECTION 271 SHALL BE IMPOSED UPON THE ASSESSEE IN RESPECT O F THE UNDISCLOSED INCOME REFERRED TO IN SUB-SECTION (1). (4) THE PROVISIONS OF SECTIONS 274 AND 275 SHALL, S O FAR AS MAY BE, APPLY IN RELATION TO THE PENALTY REFERRED TO IN THIS SECTION . EXPLANATION.FOR THE PURPOSES OF THIS SECTION, (A) 'UNDISCLOSED INCOME' MEANS (I) ANY INCOME OF THE SPECIFIED PREVIOUS YEAR REP RESENTED, EITHER WHOLLY OR PARTLY, BY ANY MONEY, BULLION, JEWELLERY OR OTHER VALUABLE ARTICLE OR THING OR ANY ENTRY IN THE BOOKS OF ACCOU NT OR OTHER DOCUMENTS OR TRANSACTIONS FOUND IN THE COURSE OF A SEARCH UNDER SECTION 132, WHICH HAS (A) NOT BEEN RECORDED ON OR BEFORE THE DATE OF SEAR CH IN THE BOOKS OF ACCOUNT OR OTHER DOCUMENTS MAINTAINED IN THE NOR MAL COURSE RELATING TO SUCH PREVIOUS YEAR; OR ITA NO.2662/AHD/2017 AND 9 OTHERS - 5 - (B) OTHERWISE NOT BEEN DISCLOSED TO THE 87[PRINCIPA L CHIEF COMMISSIONER OR] CHIEF COMMISSIONER OR 87[PRINCIPAL COMMISSIONER OR] COMMISSIONER BEFORE THE DATE OF SE ARCH; OR (II) ANY INCOME OF THE SPECIFIED PREVIOUS YEAR REP RESENTED, EITHER WHOLLY OR PARTLY, BY ANY ENTRY IN RESPECT OF AN EXP ENSE RECORDED IN THE BOOKS OF ACCOUNT OR OTHER DOCUMENTS MAINTAINED IN THE NORMAL COURSE RELATING TO THE SPECIFIED PREVIOUS YEAR WHIC H IS FOUND TO BE FALSE AND WOULD NOT HAVE BEEN FOUND TO BE SO HAD TH E SEARCH NOT BEEN CONDUCTED; (B) 'SPECIFIED PREVIOUS YEAR' MEANS THE PREVIOUS Y EAR (I) WHICH HAS ENDED BEFORE THE DATE OF SEARCH, BU T THE DATE OF FILING THE RETURN OF INCOME UNDER SUB-SECTION (1) OF SECTION 1 39 FOR SUCH YEAR HAS NOT EXPIRED BEFORE THE DATE OF SEARCH AND THE A SSESSEE HAS NOT FURNISHED THE RETURN OF INCOME FOR THE PREVIOUS YEA R BEFORE THE SAID DATE; OR (II) IN WHICH SEARCH WAS CONDUCTED. 6. A PERUSAL OF BOTH THESE SECTIONS TOGETHER WOULD INDICATE THAT THE IMMUNITY AKIN TO EXPLANATION 5 IS AVAILABLE TO THE ASSESSEE UNDER EXPLANATION-5A ALSO, IF HE FULFILLS THE CONDITIONS NARRATED IN SECTION 271AAA. THE EXPLANATION APPENDED TO SECTION 271AAA PROVIDES THE DEFINITION OF UNDISCLOSED INCOME AND SPECIFIED PREV IOUS YEAR. A PERUSAL OF THE EXPRESSION SPECIFIED PREVIOUS YEAR WOULD I NDICATE THAT THE YEAR OF SEARCH AND IMMEDIATELY EARLIER YEAR, IF DUE DATE OF FILING OF THE RETURN HAS NOT EXPIRED AND INCOME-TAX RETURN FOR SUCH YEAR HAS NOT BEEN FILED. SINCE THE ASSESSMENT YEARS INVOLVED BEFORE US ARE T HE ASSTT.YEARS 2007- 2008 TO 2012-13, THE DUE DATE FOR FILING OF THE RET URNS WAS EXPIRED BEFORE THE SEARCH ACTION. THUS, THESE YEARS DO NOT FALL W ITHIN THE AMBIT OF SPECIFIED YEARS. SINCE THE PERIOD OF THESE ASSES SMENT YEARS DO NOT FALL WITHIN THE EXPRESSION SPECIFIED YEAR PROVIDED IN SECTION 271AAA, THEREFORE, WE DO NOT DEEM IT NECESSARY TO CONSTRUE AND EXPLAIN THE MEANING OF EXPLANATION 5A WITHIN THE SCOPE OF SECTI ON 271AAA. ITA NO.2662/AHD/2017 AND 9 OTHERS - 6 - 7. AT THE COST OF REPETITION, WE WOULD LIKE TO OBSE RVE THAT AS PER EXPLANATION 5A, IF IN THE COURSE OF SEARCH INITIATED UNDER SEC TION 132 ON OR AFTER THE 1ST JUNE, 2007, THE ASSESSEE IS FOUND TO BE OWNER OF ANY MONEY, BULLION, JEWELLERY OR OTHER VALUABLE ARTICLE OR THINGS AND THE ASSESSEE CLAIMS SUCH ASSETS HAVE BEEN ACQUIRED BY H IM BY UTILSING THE WHOLE OR PARTLY OF HIS INCOME FROM ANY PREVIOUS YEA R OR ANY INCOME BASED ON ANY ENTRY IN ANY BOOKS OF ACCOUNT OR OTHER DOCUMENTS OR TRANSACTIONS FOUND DURING THE COURSE OF SEARCH, AND THE ASSESSEE CLAIMS THAT SUCH ENTRY IN THE BOOKS OF ACCOUNT OR OTHER DO CUMENTS OR TRANSACTIONS REPRESENTS HIS INCOME FROM ANY PREVIOU S YEAR, WHICH HAS ENDED BEFORE THE DATE OF SEARCH, THEN, NOTWITHSTAND ING SUCH INCOME IS DECLARED BY HIM IN ANY RETURN OF INCOME FURNISHED O N OR AFTER THE DATE OF SEARCH, HE SHALL FOR THE PURPOSE OF IMPOSITION OF P ENALTY UNDER CLAUSE (C) OF SUB-SECTION (1) OF THIS SECTION BE DEEMED TO HAV E BEEN CONCEALED PARTICULARS OF INCOME OR FURNISHED INACCURATE PARTI CULARS. THE MOOT QUESTION FOR ATTRACTING THIS EXPLANATION IS THAT IN THE COURSE OF SEARCH MONEY, BULLION, JEWELLERY OR INCOME BASED ON ANY EN TRY IN THE BOOKS OF ACCOUNTS OR OTHER DOCUMENTS OUGHT TO HAVE BEEN FOUN D. IN A GIVEN SITUATION, NO MONEY OR BULLION OR JEWELLERY OR INCO ME MIGHT HAVE FOUND FROM THE ASSESSEES FOR THE ASSESSMENT YEARS WHICH W ERE NOT PART OF SPECIFIED PREVIOUS YEAR CONTEMPLATED IN SECTION 2 71AAA OR IMMUNITY AVAILABLE TO THE ASSESSEES UNDER SUB-CLAUSE (A) AND (B) OF EXPLANATION 5A, THEN ALSO, IF IN RESPONSE TO THE NOTICE UNDER SECTI ON 153A, THE ASSESSEE DISCLOSED SOME ADDITIONAL INCOME VOLUNTARILY, WOULD HE BE DEEMED TO HAVE CONCEALED THE INCOME FOR VISITING HIM WITH PEN ALTY UNDER SECTION 271(1)(C) OF THE ACT ? THE LD.REVENUE AUTHORITIES HAD DRAWN INFERENCE THAT SINCE THE ASSESSEE HAS NOT DISCLOSED ADDITIONA L INCOME IN THE ITA NO.2662/AHD/2017 AND 9 OTHERS - 7 - ORIGINAL RETURNS, MEANING THEREBY, IT IS TO BE ASSU MED THAT THEY HAVE DISCLOSED THIS AMOUNT ONLY WHEN SOME INCRIMINATING MATERIAL WAS FOUND. TO OUR MIND THIS ASSUMPTION OUGHT TO BE SUP PORTED WITH REFERENCE OF THAT INCRIMINATING MATERIAL. 8. WE HAVE PERUSED THE ASSESSMENT ORDER. THE AO HA S NOT MADE REFERENCE TO ANY MATERIAL FOUND DURING THE COURSE O F SEARCH WHICH CAN SUGGEST THAT ADDITIONAL INCOMES DECLARED BY THE ASS ESSEE ARE REPRESENTING ANY MONEY, BULLION, JEWELLERY OR IMPOU NDED ANY DIARY. IN OTHER WORDS, IT CANNOT BE CONSTRUED THAT SOME ASSET S WERE FOUND DURING THE COURSE OF SEARCH REPRESENTING THAT INCOME WHICH HAS BEEN DECLARED BY THE APPELLANTS. SOMEWHAT SIMILAR AND IDENTICAL ISSUE HAS BEEN CONSIDERED BY THE HONBLE DELHI HIGH COURT IN THE C ASE OF PR.CIT VS. NEERAJ JINDAL, 393 ITR 1. THE FOLLOWING FINDING OF HONBLE DELHI HIGH COURT IS WORTH TO NOTE. IT READS AS UNDER: 26. NOW FOR THE REVENUE TO INVOKE EXPLANATION 5, I T WOULD HAVE TO PROVE THAT ITS REQUIREMENTS ARE CLEARLY FULFILLED IN THE PRESENT CASE. IN ORDER FOR EXPLANATION 5 TO APPLY, IT IS NECESSARY THAT TH ERE MUST BE CERTAIN ASSETS (SUCH AS MONEY, BULLION ETC.) FOUND IN THE POSSESSIO N OF THE ASSESSEE DURING THE SEARCH, AND THAT THE ASSESSEE MUST CLAIM THAT S UCH ASSETS HAVE BEEN ACQUIRED BY HIM BY UTILISING (WHOLLY OR IN PART) HIS INCOME. MOREOVER, SUCH INCOME MUST BE IN RELATION TO A PARTICULAR PREVIOUS YEAR THAT HAS EITHER ENDED BEFORE THE DATE OF THE SEARCH OR IS TO END ON OR AFTER THE DATE OF THE SEARCH AND SUCH INCOME IS DECLARED SUBSEQUENTLY IN THE RETURN OF INCOME FILED AFTER THE SEARCH. THEREFORE, IT IS ONLY WHEN ASSETS ARE FOUND DURING THE SEARCH WHICH THE ASSESSEE CLAIMS HAVE BEEN ACQUIRED BY HIM BY UTILIZING (WHOLLY OR IN PART) HIS INCOME FOR ANY PARTICULAR PR EVIOUS YEAR, AND THEN DECLARES SUCH INCOME (WHICH HE UTILIZED IN ACQUIRIN G THE ASSETS FOUND) IN A SUBSEQUENT RETURN FILED AFTER THE DATE OF SEARCH, W OULD IT BE DEEMED THAT THE ASSESEE HAS CONCEALED HIS INCOME. IN OTHER WORDS, T HE ASSETS SEIZED DURING THE SEARCH MUST RELATE TO THE INCOME OF THE PARTICU LAR ASSESSMENT YEAR WHOSE RETURN IS FILED AFTER THE DATE OF THE SEARCH. SUCH A CONCLUSION IS ONLY LOGICAL, CONSIDERING THAT ASSESSMENT UNDER THE ACT IS WITH R ESPECT TO A PARTICULAR ASSESSMENT YEAR AND THE PENALTY IMPOSED UNDER SECTI ON 271(1)(C) WOULD ITA NO.2662/AHD/2017 AND 9 OTHERS - 8 - ALSO BE FOR CONCEALING INCOME IN THAT PARTICULAR AS SESSMENT YEAR, WHICH CONCEALMENT WAS REVEALED BY THE DISCOVERY OF CERTAI N ASSETS IN THE ASSESSEE'S POSSESSION DURING THE SEARCH CONDUCTED UNDER SECTIO N 132. HERE, IT WOULD BE BENEFICIAL TO REPRODUCE THE DICTUM OF THE RAJAST HAN HIGH COURT IN CIT V. KANHAIYALAL [2008] 299 ITR 19, WHERE IT HE LD THAT- 'WE MAY CONSIDER THE THINGS FROM YET ANOTHER ASPECT , VIZ., THAT UNDER THE SET UP OF IT ACT, IN WHATEVER EVENTUALITY THE ASSES SMENT MAY HAVE TO BE MADE, I.E. WHETHER A REGULAR ASSESSMENT, OR ASSESSM ENT CONSEQUENT UPON ESCAPEMENT OF INCOME, OR ASSESSMENT OF A BLOCK PERI OD, BUT IN EITHER CASE, THE ASSESSMENT HAS TO BE, WITH RESPECT TO THE PARTI CULAR ASSESSMENT YEAR, RELATING TO THE CONCERNED PREVIOUS YEAR, AND THE IN COME DERIVED, OR FOUND BY THE DEPARTMENT TO HAVE BEEN DERIVED, OR EARNED, BY THE ASSESSEE, DURING PARTICULAR PREVIOUS YEAR, HAS TO BE ASSESSED DURING THE RELEVANT ASSESSMENT YEAR ONLY, AND ASSESSMENT OF SUCH INCOME CANNOT BE SHIFTED TO ANY OTHER PAST OR FUTURE YEARS, SO MUCH SO THAT THE RE MAY BE CASES, WHERE THE RIGHT OF THE DEPARTMENT TO ASSESSMENT MAY HAVE BEEN LOST ON ACCOUNT OF PASSAGE OF LIMITATION ALSO.' THUS, IT IS CLEAR THAT THE REVENUE HAS TO ESTABLISH THAT THE ASSETS SEIZED DURING THE SEARCH CONDUCTED ON THE ASSESSEE, RELATE D TO THE INCOME OF THE ASSESSEE FOR THE RELEVANT ASSESSMENT YEARS I.E. AY 2005-06 AND AY 2006- 07. XXXX XXXX XXXX 28. BASING ITS REASONING ON THIS DECISION, THE ITAT IN THE PRESENT CASE HELD THAT IN THE CASE OF THE ASSESSEE, THE SEARCH WAS CO NDUCTED ON 11.01.2007 AND CASH OF RS.5,26,530/- WAS RECOVERED FROM THE POSSES SION OF THE ASSESSEE; AND SO THE CASH WAS ADMITTEDLY, NOT SEIZED DURING THE R ELEVANT ASSESSMENT YEARS IN CONSIDERATION BEFORE THE TRIBUNAL. IN OTHER WORD S, WHILE THE ASSESSEE HAD SURRENDERED UNDISCLOSED INCOME, THE CASH WAS SEIZED DURING SEARCH IN A.Y 2007-2008, AND NOT IN THE RELEVANT ASSESSMENT YEARS . HOWEVER, IN THE RELEVANT ASSESSMENT YEAR UNDER CONSIDERATION IN THE INSTANT CASE, THE ASSESSEE MADE AN ADDITION OF RS.21,65,932/- IN THE RETURN FILED PURSUANT TO NOTICE UNDER SECTION 153A. THE ITAT HELD THAT EXPLA NATION 5 TO SECTION 271(1) OF THE ACT COULD NOT BE INVOKED IN ASSESSMENT YEARS 2005-06 & 2006-07, WHICH ARE UNDER CONSIDERATION IN THIS CASE , MERELY ON THE PRESUMPTION THAT THE ASSESSEE MIGHT HAVE BEEN IN PO SSESSION OF THE SEIZED CASH THROUGHOUT THE PERIOD COVERED BY THE SEARCH AS SESSMENTS. THE LEARNED ITAT ALSO HELD- ITA NO.2662/AHD/2017 AND 9 OTHERS - 9 - 'THE INCOME OFFERED TO TAX U/S 153A FOR ASSESSMENT YEARS 2005- 06 AND 2006-07 CANNOT BE SAID TO BE BASED ON ASSETS SEIZED , BECAUSE FROM THE ASSESSMENT ORDER, IT IS CLEAR THAT SEARCH WAS ON 11 .01.2007 (I.E AY 2007- 08), THE CASH SEIZED DURING SEARCH WAS ONLY TO THE TUNE OF RS.5,26,530/- AND IT IS NOT EMERGING FROM THE RECORDS THAT THE ASSESS EE HAS CLAIMED DURING SEARCH THAT THE CASH SEIZED (ON 11.0 1.2007), BELON GED TO HIM AND THAT WAS OWNED BY HIM IN THE RELEVANT ASSESSMENT YEARS I.E. AYS 2005-06 AND 2006- 07. UNLESS THERE IS A CLEAR FINDING IN THIS RESPECT , EXPLANATION 5 OF SECTION 271(1)(C) CANNOT BE OF ANY HELP TO THE DEPARTMENT. AS RIGHTLY POINTED OUT BY THE COORDINATE BENCH IN PREM ARORA (SUPRA), THE PRO VISIONS OF EXPLANATION 5 CANNOT BE INVOKED IN ASSESSMENT YEARS 2005-06 AND 2006-07 IN RESPECT OF ENTRIES RECORDED IN SEIZED MATERIAL. THUS INVOKING OF EXPLANATION 5 IN ASSESSMENT YEAR 2005-06 & 2006-07 IS BASED ON ASSUM PTIONS AND PRESUMPTIONS. IT IS SETTLED LAW THAT SUSPICION HOWS OEVER STRONG, CANNOT TAKE THE PLACE OF EVIDENCE AND HENCE THE CONTENTION OF T HE REVENUE THAT ASSESSEE WAS IN POSSESSION OF CASH THROUGHOUT THE PERIOD OF ASSESSMENT YEARS UNDER CONSIDERATION HAS TO BE REJECTED.' IT IS DIFFICULT TO SEE ANY INFIRMITY IN THE DECISIO N OF THE LEARNED ITAT IN THE PRESENT CASE. LEVY OF PENALTY UNDER SECTION 271(1)(C ) CANNOT BE ON THE BASIS OF SURMISES AND CONJECTURES. THUS, EXPLANATION 5 CA NNOT ASSIST THE CLAIM OF THE REVENUE IN THE PRESENT CASE FOR THE RELEVANT AS SESSMENT YEARS UNDER CONSIDERATION BEFORE THIS COURT FOR THE SIMPLE REAS ON THAT FOR THE RELEVANT ASSESSMENT YEARS, 2005-06 & 2006-07, NO MATERIAL WA S RECOVERED DURING THE SEARCH. RATHER, THE ASSESSEE ADDED RS.21,65,932 /- IN THE RETURN FILED PURSUANT TO NOTICE UNDER SECTION 153A. THAT AMOUNT WAS NOT RELATABLE TO ANY SUM RECOVERED OR ARTICLE SEIZED. THEREFORE, THE QUESTION OF ADDING OR NOT ADDING AMOUNTS AFTER THE SEARCH AND FALLING WITHIN THE MISCHIEF OF EXPLANATION 5 TO SECTION 271 (1) (C) CANNOT ARISE IN THE FACTS AND CIRCUMSTANCES OF THIS CASE. 29. BASED ON THE ABOVE DISCUSSION, THIS COURT IS OF THE OPINION THAT EXPLANATION 5 CANNOT BE RELIED UPON BY THE REV ENUE IN THE RELEVANT ASSESSMENT YEARS UNDER CONSIDERATION BEFORE THIS CO URT, AND IN THE ABSENCE OF RECOURSE TO EXPLANATION 5, THERE IS NO INCRIMINA TING EVIDENCE TO SHOW THAT THE ASSESSEE HAS CONCEALED THE PARTICULARS OF HIS INCOME, WITHIN THE MEANING OF SECTION 271(1)(C) OF THE ACT. IN CONCLUSIO N, THIS COURT IS OF THE VIEW THAT THERE IS NO ILLEGALITY IN THE ORDER OF TH E LEARNED ITAT IN THE PRESENT CASE. IN ALL FOUR APPEALS, THE QUESTION OF LAW INVOLVED IS THUS ANSWERED IN FAVOUR OF THE ASSESSEE. THE REVENUE'S A PPEALS ARE THEREFORE DISMISSED. ITA NO.2662/AHD/2017 AND 9 OTHERS - 10 - 9. ITAT, RAJKOT BENCH IN THE CASE OF SHRI MANSUKHBH AI R. SORATHIA AND OTHERS VS. JCIT, IT(SS)A.NO.46/RJT/2014 AND OTH ERS HAS ALSO CONSIDERED IDENTICAL ISSUE AND HELD THAT REVENUE CA NNOT ASSUME EXISTENCE OF SEIZED MATERIAL BY HOLDING THAT HAD TH E SEARCH NOT CARRIED OUT, ASSESSEE WOULD HAVE NOT DISCLOSED THIS INCOME IN RESPONSE TO SECTION 153A NOTICE. IN RESPECT OF THIS ASSUMPTION , THERE SHOULD BE RECOVERY OF SOME ASSETS, SUCH MONEY, BULLION, JEWEL LERY OR DIARY. NO SUCH THINGS HAVE BEEN REFERRED IN THESE CASES. THE REFORE, WE ALLOW ALL THESE APPEALS AND DELETED ALL THE PENALTIES IMPUGNE D IN THESE APPEALS. 10. IN THE RESULT, ALL THE APPEALS OF THE ASSESSEES ARE ALLOWED. PRONOUNCED IN THE OPEN COURT ON 8 TH APRIL, 2019. SD/- SD/- (WASEEM AHMED) ACCOUNTANT MEMBER (RAJPAL YADAV) JUDICIAL MEMBER