Appeal Details
Counselvise Citation
35021514 RSA 2013
Assessee PAN
Bench
Appeal Number
CRN Number
Duration Of Justice
2 year(s) 5 month(s) 7 day(s)
Appellant
Respondent
Appeal Type
Income Tax Appeal
Pronouncement Date
09-09-2015
Appeal Filed By
Assessee
Order Result
Allowed
Bench Allotted
A
Next Hearing Date
02-09-2015
Assessment Year
2008-2009
Appeal Filed On
01-04-2013
Judgement Text
IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH, CHANDIGARH BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND MS. ANNAPURNA MEHROTRA, ACCOUNTANT MEMBER ITA NO. 350/CHD/2013 (ASSESSMENT YEAR : 2008-09) SH.PARVEEN GARG, VS. THE A.C.I.T., 208, FRIENDS COLONY, CENTRAL CIRCLE II, MOGA. CHANDIGARH. PAN: ACCPK1229P (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI SUDHIR SEHGAL RESPONDENT BY : SHRI MANJIT SINGH, DR DATE OF HEARING : 02.09.2015 DATE OF PRONOUNCEMENT : 09.09.2015 O R D E R PER BHAVNESH SAINI, J.M. : THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF LEARNED COMMISSIONER OF INCOME TAX (APPEALS)(CENTRAL), CHANDIGARH DATED 8.2.2013 FOR ASSESSMENT YEAR 2008-09, CHALLENGING LEVY OF PENALT Y UNDER SECTION 271(1)(C) OF THE INCOME TAX ACT, 196 1 (IN SHORT THE ACT). 2. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESS EE DERIVES INCOME FROM HOUSE PROPERTY AND SHARE IN THE 2 PARTNERSHIP FIRM. A SEARCH UNDER SECTION 132(1) OF THE ACT WAS CONDUCTED ON 15.07.2008 AT THE RESIDENCES A ND OFFICE OF THE INDIVIDUAL AND GROUP CONCERNS OF M/S B.R.S INSTITUTE OF MEDICAL SCIENCES GROUP OF CASES. IN R ESPONSE TO NOTICE UNDER SECTION 153A OF THE ACT, THE ASSESS EE FILED HIS RETURN OF INCOME ON 22.02.2010 DECLARING INCOME OF RS.67,68,610/- AND THE CASE OF THE ASSESSEE WAS ASS ESSED AT THE RETURNED INCOME OF RS. 67,68,610/- VIDE AN O RDER DATED 30.12.2010 UNDER SECTION 153A(L)(B) READ WITH SECTION 143(3) OF THE ACT. THE NOTICE DATED 30.12. 2010 FOR THE INITIATION OF PENALTY PROCEEDINGS WAS SERVED ON THE ASSESSEE WHEREIN THE ASSESSEE WAS ASKED TO EXPLAIN WHY PENALTY AS PER EXPLANATION 5-A TO SECTION 271(L)(C) OF THE ACT SHOULD NOT BE LEVIED AS THE RETURN HAS NOT BEEN FILED BY THE ASSESSEE WITHIN THE DUE DATE. CONSEQUENTLY, THE PENALTY UNDER SECTION 271(L)(C) OF THE ACT OF RS. 22,42,867/- WAS IMPOSED BY THE ASSESSING OFFICER VI DE HIS IMPUGNED ORDER DATED 28.06.2011. 3. BEFORE THE LEARNED CIT (APPEALS), THE ASSESSEE WAS AGGRIEVED THAT THE PENALTY OF RS.22,42,867/- W AS IMPOSED BY NOT CONSIDERING THE FACT THAT BEING A PA RTNER IN AN AUDIT FIRM AND ALSO IN A NON-AUDIT FIRM, THE ASSESSEE CAN FILE ITS RETURN OF INCOME ONLY AFTER FINALIZATION OF THE INCOME TAX RETURN OF THE FIRMS. MOREOVER, THE CASE OF THE ASSESSEE HAS BEEN ASSESSE D AT RETURNED INCOME AND UNDER SUCH CIRCUMSTANCES, THERE CANNOT BE ANY LEVY OF PENALTY UNDER SECTION 271(L)( C) OF THE 3 ACT. THE RELEVANT PORTION OF THE WRITTEN SUBMISSION FILED DURING THE APPELLATE PROCEEDINGS, IS REPRODUCED BEL OW: 5. THE ASSESSING OFFICER IN HIS PENALTY ORDER HAS RELIED ON EXPLANATION 5A TO THE SECTION 271(L)(C) THAT IN THE CASE OF THE ASSESSEE THE DUE DATE OF FILING RETURN WAS 31.07.2008 AND AS THE WARRANT OF AUTHORIZATION WAS LAST EXECUTED ON 08.08.2008 AND THE ASSESSEE HAD NO T FILED HIS RETURN OF INCOME SO HE IS COVERED BY THE DEEMING PROVISION S OF EXPLANATION 5A TO THE SECTION 271 (L)(C). 6. IT IS SUBMITTED THAT AS STATED ABOVE THE AS SESSEE IS PARTNER IN TWO FIRMS NAMELY SHIVA INDUSTRIES AND KRISHAN LAI PARVE EN KUMAR. THE BOOKS OF ACCOUNTS OF THE FIRM SHIVA INDUSTRIES ARE AUDITED AND THUS THE DUE DATE OF RETURN FILING OF THE ASSESSEE CANNOT BE SAID TO BE 31 ST JULY AND IT IS 30 TH SEPTEMBER. THE EXPLANATION 5A TO SECTION 271(L)(C) OF THE ACT IS ONLY APPLICABLE WHERE THE DUE DATE FOR FILING THE R ETURN OF INCOME HAS EXPIRED AND THE ASSESSEE HAD NOT FILED ITS RETURN O F INCOME. BUT IN THE CASE OF THE ASSESSEE THE DUE DATE OF RETURN IS 30 TH SEPTEMBER AS THE ASSESSEE IS A PARTNER IN BOTH AN AUDIT FIRM AS WELL AS NON A UDIT FIRM. WE ARE ENCLOSING HEREWITH THE COPIES OF INCOME TAX RETURNS AS FILED BY THE PARTNERSHIP FIRM IN WHICH THE ASSESSEE IS A PARTNER FOR THE AY 2008-09 AND ALSO THE COPIES OF PARTNERSHIP DEED EVIDENCING THE SHARE OF THE ASSESSEE IN THE FIRM. 7. THE DUE DATES FOR THE FILING OF RETURN H AVE BEEN PRESCRIBED IN SECTION 139 OF THE ACT WHICH IS AS FOLLOWS: 139. [(1) EVERY PERSONS, (A) BEING A COMPANY [OR A FIRM]; OR (B) BEING A PERSON OTHER THAN A COMPANY [OR A FIRM], IF HIS TOTAL INCOME OR THE TOTAL INCOME OF ANY OTHER PERSON IN RESPECT OF WHICH HE IS ASSESSABLE UNDER THIS ACT DURING THE PREVIOUS YEAR EXCEEDED TH E MAXIMUM AMOUNT WHICH IS NOT CHARGEABLE TO INCOME-TAX, SHALL, ON OR BEFORE THE DUE DATE, FURNISH A RETURN OF HIS INCOME OR THE INCOME OF SUCH OTHER PERSON DURING THE PREVIOUS YEAR, IN THE PRESCRIBED FORM AND VERIFIED IN THE PRESCRIBED MANN ER AND SETTING FORTH SUCH OTHER PARTICULARS AS MAY BE PRESCRIBED EXPLANATION 2. IN THIS SUB-SECTION, 'DUE DATE' MEANS, 4 (A) WHERE THE ASSESSEE [OTHER THAN AN ASSESSEE REFE RRED TO IN CLAUSE(AA)] IS (I) A COMPANY [***]; OR (II) A PERSON (OTHER THAN A COMPANY) WHOSE ACCOUNTS ARE REQUIRED TO BE AUDITED UNDER THIS ACT OR UNDER ANY OTHER LAW FO R THE TIME BEING IN FORCE; OR (III) A WORKING PARTNER OF A FIRM WHOSE ACCOUNTS AR E REQUIRED TO BE AUDITED UNDER THIS ACT OR UNDER ANY OTHER LAW FOR THE TIME BEING IN FORCE, THE [30TH DAY OF SEPTEMBER] OF THE ASSESSMENT YEAR; THUS, IT IS VERY MUCH CLEAR FROM THE EXPLANATION 2 TO SECTION 139 OF THE ACT THAT THE DUE DATE FOR THE PARTNERS OF A FIRM WHOSE ACCOUNTS ARE REQUIRED TO BE AUDITED UNDER THIS ACT IS 30 TH SEPTEMBER. 8. THE VERY BASIS FOR THE LEVY OF PENALTY U/SEC 271(L) (C) IS NOT CORRECT AS THE ONLY POINT ON THE BASIS OF WHICH THE ASSESSING OFFI CER HAS LEVIED THE PENALTY IS THAT THE DUE DATE OF FILING OF RETURN OF INCOME FOR THE AY 2008-09 HAD EXPIRED AT THE TIME OF SEARCH AND THE ASSESSEE HAD NOT FILED HIS RETURN OF INCOME. BUT THE FACT AS STATED ABOVE IS THAT THE DUE DATE OF FILING OF RETURN OF INCOME HAD NOT EXPIRED IN THE CASE OF THE ASSESSEE AND THUS PROVISIONS OF EXPLANATION 5A TO SECTION 271(L)(C) A RE NOT AT ALL APPLICABLE IN THE CASE OF THE ASSESSEE. 9. WITHOUT PREJUDICE TO OUR ABOVE ARGUMENTS THAT NO PENALTY IS LEVIABLE AS THE PROVISIONS OF EXPLANATION 5A TO SECTION 271(L)(C) A RE NOT APPLICABLE, IT IS FURTHER SUBMITTED THAT EVEN OTHERWISE THE INCOME WA S ASSESSED AT THE INCOME RETURNED IN RESPONSE TO NOTICE U/SEC 153A OF THE ACT AND AS SUCH THERE CANNOT BE ANY LEVY OF PENALTY WHEN THE RETURN ED INCOME IS AS SUCH ACCEPTED DURING THE COURSE OF ASSESSMENT PROCEEDING S. SINCE THERE IS COMPLETE DETACHMENT OF 153A PROCEEDINGS FROM REGU LAR ASSESSMENT PROCEEDINGS U/S 143 OR 147 AND HENCE CONCEALMENT OF INCOME IS TO BE DETERMINED WITH REFERENCE TO THE RETURN OF INCOME T O TOE FILED IN RESPONSE TO NOTICE U/S 153A OF THE ACT. ONCE RETURNED INCOME IS ACCEPTED BY THE ASSESSING OFFICER IT CAN NEITHER BE A CASE OF CONCE ALMENT OF INCOME NOR FURNISHING OF INACCURATE OF PARTICULARS OF SUCH INC OME. THE ASSESSEE HAD DISCLOSED INCOME IN THE RETURN OF INCOME FILED DETE RMINED ON THE BASIS OF ENTRIES RECORDED IN SEIZED MATERIAL. 5 10. A) RELIANCE IN THIS REGARD IS ALSO PLACED ON THE HON'BLE DELHI HIGH COURT IN THE CASE OF M/S S.A.S. PHARMACEUTICALS AS REPORTED IN 335 ITR 259 WHILE DECIDING THE ISSUE LEVY OF PENALTY U/S 271(L)(C ) IN PARAGRAPH 15 & 16 HAS HELD AS UNDER: 15. IT NECESSARILY FOLLOWS THAT CONCEALMENT OF PAR TICULARS OF INCOME OR FURNISHING OF INACCURATE PARTICULARS OF INCOME BY T HE ASSESSEE HAS TO BE IN THE INCOME TAX RETURN FILED BY IT. THERE IS SUFF ICIENT INDICATION OF THIS COURT IN THE JUDGMENT IN THE CASE OF COMMISSIONER O F INCOME TAX, DELHI-I VS MOHAN DAS HASSA NAND 141 ITR 203 AND IN RELIANCE PETRO PRODUCTS PUT. LTD (SUPRA), THE SUPREME COURT HAS CLINCHED TH IS ASPECT, VIZ., THE ASSESSEE CAN FURNISH THE PARTICULARS OF INCOME IN H IS RETURN AND EVERYTHING WOULD DEPEND UPON THE INCOME TAX RETURN FILED BY TH E ASSESSEE. THIS VIEW GETS SUPPORTED BY EXPLANATION 4 AS WELL AS 5 AND 5A OF SECTION 271 OF THE ACT AS CONTENDED BY THE LEARNED COUNSEL FOR THE RESPONDENT. 16. NO DOUBT, THE DISCREPANCIES WERE FOUND DURING T HE SURVEY. THIS HAS YIELDED INCOME FROM THE ASSESSEE IN THE FORM OF AM OUNT SURRENDERED BY THE ASSESSEE. PRESENTLY, WE ARE NOT CONCERNED WITH THE ASSESSMENT OF INCOME, BUT THE MOOT QUESTION IS TO W HETHER THIS WOULD ATTRACT PENALTY UPON THE ASSESSEE UNDER PROVISIONS OF SECTION 271(L)(C) OF THE ACT. OBVIOUSLY, NO PENALTY CAN BE IMPOSED UNLES S THE CONDITIONS STIPULATED IN THE SAID PROVISIONS ARE DULY AND UNA MBIGUOUSLY SATISFIED. SINCE THE ASSESSEE WAS EXPOSED DURING SU RVEY, MAY BE, IT WOULD HAVE NOT DISCLOSED THE INCOME BUT FOR THE SAI D SURVEY. HOWEVER, THERE CANNOT BE ANY PENALTY ON SURMISES, ON CONJECT URES AND POSSIBILITIES. SECTION 271(L)(C) OF THE ACT HAS TO BE CONSTRUED S TRICTLY. UNLESS IT IS FOUND THAT THERE IS ACTUALLY A CONCEALMENT OR NON-DISCLOSURE OF THE PARTICULARS OF INCOME, PENALTY CANNOT BE IMPOSED. T HERE IS NO SUCH CONCEALMENT OR NON-DISCLOSURE AS THE ASSESSEE HAD M ADE A COMPLETE DISCLOSURE IN THE INCOME TAX RETURN AND OFFERED THE SURRENDERED AMOUNT FOR THE PURPOSE OF TAX.' B) RELIANCE IN THIS REGARD IS ALSO PLACED ON THE LA TEST JUDGMENT OF THE HON'BLE TRIBUNAL, DELHI BENCH IN THE CASE OF PREM ARORA VS. DCIT IN ITA NO. 4702 OF 2010 VIDE ORDER DATED 09.03.2012 WHEREIN THE JUDGMENT OF THE HON'BLE HIGH COURT HAS BEEN REL IED UPON AND RELIEF HAS BEEN ALLOWED TO THE ASSESSEE . 6 C) RELIANCE IN THIS REGARD IS ALSO PLACED ON THE LA TEST JUDGMENT OF THE HON'BLE TRIBUNAL , DELHI BENCH IN THE CASE OF SUMAN RAHEJA VS DCIT IN ITA NO. 4411 & 4412 OF 2011 VIDE ORDER DATED 25.05.2012 WHEREIN THE JUDGMENT OF THE HON'BLE HIGH COURT (SUPRA) AS WELL THE JUDGMENT IN THE CASE OF PREM ARORA (DEL BENCH) HAS BEEN RELIED UPON AND RELIEF HAS BEEN ALLOWED TO THE ASSESSEE. 11. IF THE FACTS OF THE CASE ARE EXAMINED IN THE L IGHT OF DECISION OF HON'BLE DELHI HIGH COURT IN SAS PHARMACEUTICALS (SU PRA), PENALTY U/S 271(L)(C) IS NOT IMPOSABLE WHERE THERE IS NEITHER C ONCEALMENT OF INCOME NOR FURNISHING OF INACCURATE PARTICULARS OF INCOME IN RETURN FILED U/S 153A OF THE ACT. IN EARLIER PARAGRAPHS WE HAVE HELD THAT THE CONCEALMENT OF INCOME IS TO BE DETERMINED WITH REFERENCE TO THE RE TURN OF INCOME TO BE FILED IN RESPONSE TO NOTICE U/S 153A OF THE ACT. ON CE RETURNED INCOME FILED U/S 153A IS ACCEPTED BY THE ASSESSING OFFICER IT CAN NEITHER BE A CASE OF CONCEALMENT OF INCOME NOR FURNISHING OF INACCURA TE OF PARTICULARS OF SUCH INCOME. HENCE, THE ASSESSEE'S CASE IS SQUARELY COVE RED BY THE DECISION OF HON'BLE DELHI HIGH COURT IN THE CASE SAS PHARMACEUT ICALS (SUPRA). HENCE, PENALTY U/S 271(L)(C) IS NOT EXIGIBLE. IN VIEW OF THE ABOVE SUBMISSIONS, IT IS HUMBLY REQU ESTED THAT THE PENALTY U/S 271 (L)(C) MAY PLEASE BE DELETED AND OBLIGE. IN CONTINUATION OF ITS EARLIER SUBMISSION, THE ASSE SSEE FURNISHED THE AUDIT REPORT U/S 44AB OF M/S SHIVA IN DUSTRIES, MOGA IN WHICH THE ASSESSEE IS A PARTNER OF 20 % SHARE. IT W AS REITERATED THAT THE LAST DATE OF FILING THE RETURN OF INCOME IN THE CASE OF APPELLANT WAS, ACCORDINGLY, 30 TH OF SEPTEMBER, 2008, SINCE THE ACCOUNTS OF THE FIRM ARE SUBJECT TO AUDIT U/S 44 AB. THEREFORE, TILL THE ACC OUNTS OF THE FIRM ARE FINALIZED, THE ASSESSEE CANNOT BE EXPECTED TO F ILE THE RETURN OF INCOME AND I.E. THE TIME OF FILING THE RETURN HAD T O BE CONSIDERED UPTO 30.09.2008. IT WAS FURTHER SUBMITTED THAT THE AMOUN T OF RS.65,00,000/- COULD NOT BE DISCLOSED IN THE ORIGIN AL RETURN, THOUGH INCLUDED IN THE RETURN FILED IN RESPONSE TO NOTICE U/S 153A AS THE SEIZED MATERIALS WERE NOT AVAILABLE. THAT ASSESSEE WAS ALS O NOT IN THE CORRECT FRAME OF MIND, AND WAS OF THE VIEW THAT THE ADDITIO NAL INCOME WAS TO BE SURRENDERED U/S 153A AS PER THE VIEW OF THE COUNSEL . 4. THE LEARNED CIT (APPEALS), HOWEVER, DID NOT ACCEPT THE CONTENTION OF THE ASSESSEE AND DISMISSED THE 7 APPEAL OF THE ASSESSEE. HIS FINDINGS IN PARAS 5 A ND 6 OF THE APPELLATE ORDER ARE REPRODUCED AS UNDER : 5. I HAVE CONSIDERED THE ASSESSEE'S SUBMISSIONS AN D THE IMPUGNED ORDER. THE AO HAS IMPOSED THE IMPUGNED PENALTY BY N OT ACCEPTING THE REPLY OF THE ASSESSEE AND NOT CONSIDERING THE CONTENTION OF THE ASSESSEE THAT, BEING A PARTNER IN AN AUDIT FIRM AND ALSO IN A NON-AUDIT FIRM, THE ASSESSEE CAN FILE ITS RETURN OF INCOME ONLY AFTER FINALIZATION OF THE INCOME TAX RETURN OF THE FIRMS. IN ORDER TO ADJUDICATE ON THE ISSUE, I SHALL REFER TO THE PR OVISIONS OF SECTION 271 (1)( C) R/W EXPLANATION 5A, WHICH IS REPRODUCED BELOW: 271. FAILURE TO FURNISH RETURNS, COMPLY WITH NOTICES, CONCEALMENT OF INCOME, ETC. (1) IF THE ASSESSING OFFICER OR THE COMMISSION ER OF (APPEALS) OR THE COMMISSIONER IN THE COURSE OF ANY PROCEEDINGS UNDER THIS ACT, IS SATISFIED THAT ANY PERSON (A) (B) ......... (C) HAS CONCEALED THE PARTICULARS OF HIS INCOME OR FU RNISHED INACCURATE PARTICULARS OF SUCH INCOME, OR (D) . EXPLANATION 5A. - WHERE, IN THE COURSE OF A SEARCH INITIATED UNDER SECTION 132 O N 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 ART ICLE 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 ACCOU NT OR OTHER DOCUMENTS OR TRANSACTIONS AND HE CLAIMS THAT SUCH E NTRY REPRESENTS HIS INCOME (WHOLLY IN PART) FOR ANY PREVIOUS YEAR, WHICH HAS ENDED BEFORE THE DATE OF SEARCH AND,- 8 (A) WHERE THE RETURN OF INCOME FOR SUCH PREVIOUS YEAR H AS 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 FOR SU CH PREVIOUS YEAR HAS EXPIRED BUT THE ASSESSEE HAS NOT FILED THE RETU RN , 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 PURPOSE OF IMPOSITION OF A PENALTY UNDER CLAUSE (C ) OF SUB -SECTION (1) OF THIS SECTION, BE DEEMED TO HAVE CONCEALED THE PARTICULAR S OF HIS INCOME OR FURNISHED INACCURATE PARTICULARS OF SUCH INCOME. (EMPHASIS ASSIGNED) IN THIS CASE, THE SEARCH WAS CONDUCTED ON 15.7.2008 . THE DUE DATES FOR FILING OF THE RETURN FOR AY 2008-09 UNDER CONSIDE RATION AS PER SECTION 139(1) IN RESPECT OF AN ASSESSEE WHO IS PARTNER IN A FIRM WHOSE ACCOUNTS ARE SUBJECT TO AUDIT IS 30 TH SEPTEMBER OF THE ASSESSMENT YEAR. IN OTHER WORDS , ASSUMING THE CONTENTION OF THE ASSESSEE IS CORRECT THAT THE PART NERSHIP FIRM IS SUBJECT TO AUDIT FOR WHICH A COPY OF DEED DATED 1.4.2005 WAS FURNISH ED, THE ASSESSEE WAS THEREFORE REQUIRED TO FURNISH HIS RETURN BY 30.9.20 08. RETURN WAS STATED FILED ON 2.9.2008 AS PER ITRV-V COPY WITH DUE ACKNOWLEDGEMEN T. HOWEVER THIS DOES NOT HELP AS THE SURRENDER OF ADDITIONAL INCOME WAS DISCLOSED IN THE RETURN FILED IN RESPONSE TO NOTICE U/S 153A. THOUGH THE RETURN U/S 153 (1) (A) HAS BEEN ACCEPTED BY THE DEPARTMENT, IMPORTANTLY THE ADDITIO NAL INCOME HAD NOT BEEN SHOWN IN THE RETURN FILED BY THE ASSESSEE U/S 139(1 ), EVEN THOUGH THE DUE DATE FOR FILING OF THE RETURN HAD NOT EXPIRES. THE REA SONS FOR NOT HAVING INCLUDED THE ADDITIONAL INCOME IN THE RETURN FILED U/S 139 HAVE NOT BEEN ELUCIDATED BY THE ASSESSEE, EXCEPTING STATING THAT THE ASSESSEE WAS N OT IN POSSESSION OF SEIZED MATERIALS, AND HAD RELIED ON HIS COUNSEL. HENCE IT IS APPARENT THAT HAD IT NOT BEEN FOR THE SEARCH OPERATION AND QUESTIONS RAISED DURIN G RECORDING OF THE STATEMENT, THERE WOULD HAVE BEEN NO DISCLOSURE OF ADDITIONAL I NCOME BY THE ASSESSEE. HENCE I AM OF THE OPINION THAT THE ASSESSEE HAS NOT SUFFI CIENTLY COVERED HIMSELF WITH THE IMMUNITY CONFERRED U/S 271 (1) (C) EXPLANATION 5A. IN OTHER WORDS, THE APPEAL OF THE ASSESSEE IS DISMISSED. 6. IN THE RESULT THE APPEAL OF THE ASSESSEE IS DISMISSED. 9 7. WE HAVE HEARD THE LEARNED REPRESENTATIVES OF BO TH THE PARTIES AND PERUSED THE FINDINGS OF THE AUTHORI TIES BELOW. THE LEARNED COUNSEL FOR THE ASSESSEE REITERATED THE SUBMISSIONS MADE BEFORE THE AUTHORITIES BELOW AND S UBMITTED THAT THE EXPLANATION 5-A TO SECTION 271(1)(C) OF TH E ACT IS NOT APPLICABLE IN THE CASE OF THE ASSESSEE AS THERE WA S NO ENTRY FOUND IN THE BOOKS OF ACCOUNT, FOR WHICH PENALTY WA S INITIATED. FURTHER EXPLANATION 5-A TO SECTION 271 (1)(C) OF THE ACT IS NOT APPLICABLE IN THE CASE OF THE ASSESSEE AS THE DUE DATE OF RETURN IN THE CASE OF THE ASSESSEE WAS 30 .9.2008, WHICH HAS NOT EXPIRED ON THE DATE OF SEARCH ON 15. 7.2008. THE ASSESSEE HAS FILED THE RETURN OF INCOME ON 31.3 .2009. THE ASSESSEE IS A PARTNER IN TWO FIRMS AND ACCOUNTS ARE AUDITED. THEREFORE, THE DUE DATE IN THE CASE OF THE ASSESSEE FOR FILING OF THE RETURN WAS 30.9.2008, WHICH IS A LSO ADMITTED BY THE LEARNED CIT (APPEALS). HE HAS, THEREFORE, SUBMITTED THAT THE ISSUE IS COVERED IN FAVOUR OF THE ASSESSEE BY THE ORDER OF THE I.T.A.T., MUMBAI BENCH IN THE CASE OF KSHITI R. MANIAR VS. ACIT IN ITA NO.1020/MUM/2011 FOR ASSESSM ENT YEAR 2007-08 DATED 28.8.2013. HE HAS FURTHER SUBM ITTED THAT THE PENALTY WAS LEVIED ON THE SOLE REASON THAT THE ASSESSEE HAS NOT DISCLOSED THE SURRENDERED AMOUNT I N THE ORIGINAL RETURN FILED ON 31.3.2009 BUT THE SURRENDE RED AMOUNT WAS SHOWN IN THE RETURN FILED UNDER SECTION 153A O F THE ACT. THE ASSESSEE IS NOT A TECHNICAL PERSON AND IT WAS A DVISED THAT THE SURRENDERED AMOUNT HAS TO BE SHOWN IN THE RETUR N FILED IN RESPONSE TO SECTION 153A OF THE ACT. THE ERROR COMMITTED 10 BY THE ASSESSEE WAS BONAFIDE AND INADVERTENT AND, T HEREFORE, PENALTY IS NOT LEVIABLE. 8. ON THE OTHER HAND, THE LEARNED D.R FOR THE REVE NUE RELIED UPON THE ORDERS OF THE AUTHORITIES BELOW. 9. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. IT IS N OT IN DISPUTE THAT THE SEARCH WAS CONDUCTED ON 15.7.2008 AT THE P REMISES OF THE ASSESSEE. THE ASSESSING OFFICER LEVIED PEN ALTY AS PER EXPLANATION 5-A TO SECTION 271(1)(C) OF THE ACT BEC AUSE THE RETURN HAS NOT BEEN FILED BY THE ASSESSEE WITHIN T HE DUE DATE OF FILING OF THE RETURN I.E. 31.7.2008. THE ASSE SSEE, HOWEVER, EXPLAINED THAT THE ASSESSEE IS A PARTNER IN TWO FIR MS AND THE BOOKS OF ACCOUNT OF ONE FIRM ARE AUDITED. THEREFO RE, IN HIS CASE THE DUE DATE OF FILING OF THE RETURN CANNOT B E 31.7.2008 AND IT WOULD BE 30.9.2008. THIS FACT IS ADMITTED BY THE LEARNED CIT (APPEALS) IN HIS FINDINGS. IT IS, THE REFORE, CLEAR THAT IN THE PRESENT CASE, AT THE TIME OF SEARCH ON 15.7.2008, THE DUE DATE OF FILING OF THE RETURN FOR ASSESSMEN T YEAR UNDER APPEAL I.E. 2008-09 HAD NOT EXPIRED BECAUSE THE DUE DATE OF FILING OF THE RETURN WAS 30.9.2008. THE I.T.A.T. , MUMBAI BENCH IN THE CASE OF KSHITI R. MANIAR (SUPRA) CONS IDERED THE APPLICATION OF EXPLANATION 5-A TO SECTION 271(1)(C) OF THE ACT AND HELD THAT THE DEEMING PROVISIONS OF EXPLANATION 5-A CANNOT BE APPLIED BECAUSE AT THE TIME OF SEARCH, TH E RELEVANT PREVIOUS YEAR FOR THE ASSESSMENT YEAR UNDER APPEAL , THE DUE DATE OF FILING OF RETURN OF INCOME HAD NOT EXPIRED. THE 11 FINDINGS OF THE TRIBUNAL IN PARAS 6 AND 7 OF THE OR DER ARE REPRODUCED AS UNDER : 6. WE HAVE HEARD THE RIVAL CONTENTIONS AND HAVE PE RUSED THE FINDINGS OF THE ASSESSING OFFICER AS WELL AS THE COMMISSIONER ( APPEALS). IN THE PRESENT CASE, PENALTY HAS BEEN LEVIED BY INVOKING THE PROVI SIONS OF EXPLANATION 5A TO SECTION 271(L)(C) (AND NOT EXPLANATION 5, AS MENTI ONED BY THE ASSESSING OFFICER). EXPLANATION 5A, IS A DEEMING PROVISION WH ERE IN CASE OF SEARCH AND SEIZURE OPERATION CARRIED OUT UNDER SECTION 132 A FTER 1 ST JUNE 2007, THE ASSESSEE IS DEEMED TO HAVE CONCEALED THE PAR TICULARS OF HIS INCOME OR FURNISHED INACCURATE PARTICULARS OF INCOME, IF HE I S FOUND TO BE THE OWNER OF ANY MONEY BULLION JEWELLERY OR OTHER VALUABLE ARTIC LE OR THING ACQUIRED BY HIM UTILIZING HIS INCOME IN ANY PREVIOUS YEAR OR ANY INCOME BASED ON ENTRY IN ANY BOOKS OF ACCOUNT OR OTHER DOCUMENTS FOR ANY PREVIOUS YEAR. THE RELEVANT PROVISIONS OF EXPLANATION 5A TO SECT ION 271(L)(C) IS REPRODUCED BELOW:- [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 VALUABL E ARTICLE OR THING (HEREAFTER IN THIS EXPLANATION REFERRED TO AS ASSET S) AND THE ASSESSEE CLAIMS THAT SUCH ASSETS HAVE BEEN ACQUIRED BY HIM BY UTILI SING (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 REPRESEN TS 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 YEAR H AS 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 FOR SU CH 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.' THUS, IN CASE OF SEARCH CONDUCTED ON / OR AFTER 1 ST JUNE 2007, PENALTY FOR CONCEALMENT OF INCOME AND FURNISHING OF INACCURATE PARTICULARS OF INCOME IS DEEMED UNDER EXPLANATION 5A. HOWEVER, TWO EXCEPTIONS OR SAVING CLAUSE HAS BE EN PROVIDED WHEREIN THE PENALTY CANNOT BE LEVIED UNDER THIS SECTION. FIRSTLY, THE A SSESSEE HAS SHOWN THE ASSETS AS 12 MENTIONED IN CLAUSE (I) OR INCOME AS MENTIONED IN C LAUSE (II), IN THE RETURN OF INCOME FURNISHED BEFORE THE DATE OF SEARCH OR SECON DLY, THE DUE DATE FOR FILING OF RETURN OF INCOME FOR SUCH PREVIOUS YEAR HAS NOT E XPIRED. IF ANY CASE FALLS UNDER THESE SAVING CLAUSES, EXPLANATION 5A CANNOT BE INVO KED. 7. IN THE PRESENT CASE, THE SEARCH HAD TAKEN PLACE ON 19 TH JUNE 2007. THE DUE DATE FOR FILING OF RETURN OF INCOME FOR THE ASS ESSMENT YEAR 2007-08, HAD NOT EXPIRED ON THE DATE OF SEARCH AS THE DUE DATE OF FI LING OF RETURN OF INCOME UNDER SECTION 139(1) WAS 31 ST JULY 2007 AND DUE DATE UNDER SECTION 139(4) WAS 31 ST MARCH 2008. THUS, IN THE PRESENT CASE, DEEMING PROVISIONS OF EXPLANATION 5A CANNOT BE APPLIED HERE BECAUSE AT THE TIME OF SEARCH, THE REL EVANT PREVIOUS YEAR FOR THE ASSESSMENT YEAR 2007-08, THE DUE DATE OF FILING OF RETURN OF INCOME HAD NOT EXPIRED. WHETHER THE ASSESSEE HAD FILED THE RETURN OF INCOME UNDER SECTION 139(1) OR 139(4) AFTER THE DATE OF SEARCH, WILL NOT BE OF MUC H CONSEQUENCE BECAUSE THE INCOME IN QUESTION PERTAINS TO ASSESSMENT YEAR 2007-08 FOR WH ICH THE DUE DATE HAD NOT EXPIRED AT THE TIME OF SEARCH. THE DEEMING PROVISIO NS AS GIVEN ANY EXPLANATION 5A HAS TO BE STRICTLY CONSTRUED BECAUSE ONE HAS TO SEE WHAT IS THE STATUS OF INCOME ON THE DATE OF SEARCH AND NOT AFTERWARDS. THE PENALTY IN THIS CASE, CANNOT BE LEVIED UNDER THE MAIN PROVISION AS THE ASSESSEE HAS INCLUD ED THIS INCOME IN THE RETURN OF INCOME IN RESPONSE TO NOTICE UNDER SECTION 153A AND WHICH HAS BEEN ASSESSED ALSO. THERE IS NO VARIATION BETWEEN THE RETURN OF INCOME AND THE ASSESSED INCOME, QUA THIS ADDITION. FOR LEVYING THE PENALTY IN CASES OF SEARCH AFTER 1 ST JUNE 2007, THE DEEMING PROVISIONS OF EXPLANATION 5A CAN ONLY BE IN VOKED, WHICH CLEARLY CARVES OUT THE EXCEPTION IN THE CASES WHERE DUE DATE OF FI LING OF THE RETURN OF INCOME HAD NOT EXPIRED AT THE TIME OF SEARCH. THUS, FOR LE VY OF PENALTY UNDER EXPLANATION 5A, IT HAS TO BE SEEN WHETHER ANY ASSET S OR INCOME FOUND ON THE DATE OF SEARCH HAS BEEN ACQUIRED OUT OF THE PREVIOUS YEA R AND NOT AFTERWARDS FOR WHICH PENALTY CAN BE LEVIED OR INITIATED UNDER OTHE R PROVISIONS OF SECTION 271(L)(C). THUS, IN OUR OPINION, ONCE THE DUE DATE HAD NOT EXPIRED FOR FILING THE RETURN OF INCOME FOR THE ASSESSMENT YEAR 2007-08, A T THE TIME OF SEARCH, PENALTY CANNOT BE LEVIED UNDER THE DEEMING PROVISIONS OF EX PLANATION 5A. CONSEQUENTLY, WE SET ASIDE THE IMPUGNED ORDER PASSED BY THE LEARN ED COMMISSIONER (APPEALS) AND HOLD THAT ON THIS PRELIMINARY GROUND, PENALTY L EVIED BY THE ASSESSING OFFICER AND AS CONFIRMED BY THE COMMISSIONER (APPEALS) CANN OT BE SUSTAINED AND SAME IS DELETED. 10. CONSIDERING THE FACTS OF THE CASE IN THE LIGHT OF THE DECISION OF I.T.A.T., MUMBAI BENCH IN THE CASE OF KSHITI R. MANIAR (SUPRA), IT IS CLEAR THAT IN THE CASE OF TH E ASSESSEE, SEARCH HAD TAKEN PLACE ON 15.7.2008. THE DUE DATE OF FILING 13 OF THE RETURN FOR ASSESSMENT YEAR UNDER APPEAL I.E . 2008-09 HAD NOT EXPIRED ON THE DATE OF THE SEARCH AS THE DU E DATE OF FILING OF THE RETURN OF INCOME UNDER SECTION 139(1) WAS 30.9.2008. THUS, IN THE PRESENT CASE, THE DEEMING PROVISIONS OF EXPLANATION 5-A CANNOT BE APPLIED BECAUSE AT THE TIME OF SEARCH, THE RELEVANT PREVIOUS YEAR FOR THE ASSESSME NT YEAR UNDER APPEAL, THE DUE DATE OF FILING OF THE RETURN OF INCOME HAD NOT EXPIRED. THUS, THE DECISION OF I.T.A.T., MUMBAI BENCH IN THE CASE OF KSHITI R. MANIAR (SUPRA) IS S QUARELY APPLICABLE TO THE FACTS AND CIRCUMSTANCES OF THE CA SE. FURTHER, THE ASSESSEE EXPLAINED THAT THERE WAS NO V ARIATION IN THE RETURN OF INCOME AND ASSESSED INCOME AS PER THE ASSESSMENT ORDER PASSED UNDER SECTION 153A R.W.S. 1 43(3) OF THE ACT BECAUSE THE RETURNED INCOME WAS ACCEPTED IN CLUDING THE SURRENDERED INCOME. THE LEARNED COUNSEL FOR T HE ASSESSEE ALSO EXPLAINED THAT DUE TO THE BONAFIDE ER ROR, SURRENDERED INCOME WAS NO INCLUDED IN THE RETURN FI LED UNDER SECTION 139(1) OR 139(4) OF THE ACT BECAUSE AS PER THE ADVICE, THE SURRENDERED INCOME WAS TO BE DECLARED IN THE RE TURN TO BE FILED UNDER SECTION 153A OF THE ACT. THE ASSES SING OFFICER LEVIED THE PENALTY UNDER DEEMING PROVISIONS OF EXPL ANATION 5- A TO SECTION 271(1)(C) OF THE ACT, WHICH IN OUR VIE W, IS NOT APPLICABLE TO THE FACTS AND CIRCUMSTANCES OF THE CA SE. THERE IS THUS, NO CONCEALMENT OF INCOME IN THE CASE OF TH E ASSESSEE FOR ATTRACTING LEVY OF PENALTY. THEREFORE, CONSID ERING THE FACTS AND CIRCUMSTANCES OF THE CASE IN THE LIGHT OF THE 14 DECISION IN THE CASE OF KSHITI R. MANIAR (SUPRA), WE SET ASIDE THE ORDERS OF THE AUTHORITIES BELOW AND CANCEL THE PENALTY. 11. IN THE RESULT, THE APPEAL FILED BY THE ASSESSE E IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 9 TH DAY OF SEPTEMBER, 2015. SD/- SD/- (ANNAPURNA MEHROTRA) (BHAVNESH SAINI) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 9 TH SEPTEMBER, 2015 *RATI* COPY TO: THE APPELLANT/THE RESPONDENT/THE CIT(A)/THE CIT/THE DR. ASSISTANT REGISTRAR, ITAT, CHANDIGARH
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