The Asstt. Commissioner of Income-tax, Amritsar. V. Sh. Parvinder Singh Prop., Amritsar.

ITA 385/ASR/2012

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 2253 (ITAT-AMRITSAR)
• Duration Of Justice: 9 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-07-2013
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 15-07-2013
• Assessment Year: 2009-2010
• Appeal Filed On: 04-10-2012
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Income from undisclosed sources; Non compliance; Assessment record; Ignorance of law
• Section: 143(3); 234B; 27; 132; 154; 11; 139

Judgement Text

ITA NO.385(ASR)/2012 IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH; AMRITSAR. BEFORE SH. H.S. SIDHU, JUDICIAL MEMBER AND SH. B.P.JAIN, ACCOUNTANT MEMBER I.T.A. NO.385(ASR)/2012 ASSESSMENT YEAR:2009-10 PAN :ABZPS1687D ASSTT. COMMR. OF INCOME TAX, VS. SH.PARVINDER SINGH PROP. CENTRAL CIRCLE, AMRITSAR. M/S. MOHINDER SINGH JEW ELLERS, AMRITSAR. (APPELLANT) (RESPONDENT) APPELLANT BY:SH.TARSEM LAL, DR RESPONDENT BY:SH.SALIL KAPOOR, ADVOCATE DATE OF HEARING: 15/07/2013 DATE OF PRONOUNCEMENT:25/07/2013 ORDER PER BENCH ; THIS APPEAL OF THE REVENUE ARISES FROM THE ORDER O F THE CIT(A), AMRITSAR, DATED 13/07/2012 FOR THE ASSESSMENT YEA R 2009-10. THE REVENUE HAS RAISED FOLLOWING GROUNDS OF APPEAL: 1. THAT THE LD. CIT(A) ERRED BOTH IN LAW AND ON F ACTS IN DIRECTING THE AO TO TREAT THE AMOUNT LYING IN P.D. ACCOUNT AS ADVANCE TAX OF THE ASSESSEE IN VIEW OF THE SPECIFIC PROVISIO NS OF SECTION 132B(1), WHICH ARE AS UNDER: 2 I) THE AMOUNT OF EXISTING LIABILITY MAY BE RECOVE RED OUT OF SEIZED AMOUNT. II) THE ASSESSING OFFICER MAY APPLY SUCH SEIZED M ONEY IN THE DISCHARGE OF THE LIABILITIES AND THE ASSESSE E SHALL BE DISCHARGED OF SUCH LIABILITY TO THE EXTENT OF TH E MONEY SO APPLIED. 2. THAT THE LD. CIT(A) ERRED BOTH IN LAW AND ON FACTS IN NOT APPRECIATING THE LEGAL POSITION AS PROVIDED U/S 13 2B(1) ACCORDING TO WHICH ADVANCE TAX LIABILITY IS NOT INC LUDED IN THE EXISTING LIABILITY. 3. THAT THE LD. CIT(A) FAILED TO APPRECIATE THE FACT T HAT THE SECTION 132B(1) IS VERY CLEAR THAT THE SEIZED OR RELINQUISH ED ASSETS MAY BE DEALT WITH AGAINST ANY EXISTING LIABILITY UNDE R THE INCOME TAX ACT AND NOT AGAINST THE ADVANCE TAX AND IN DOIN G SO LOST SIGHT OF THE VERY PURPOSE OF THE LEGISLATION OF SEC TION 132B(1) OF THE INCOME TAX ACT. 4. THAT THE LD. CIT(A) ERRED BOTH IN LAW AND ON FACTS IN DELETING THE PENALTY U/S 271AAA WHICH WAS VALID AND LEVIED A S PER LAW. 5. THAT THE APPELLANT CRAVES LEAVE TO FILE FURTHER GRO UNDS OF APPEAL, IF REQUIRED, AT THE TIME OF HEARING. 6. IT IS PRAYED THAT THE ORDER OF CIT(APPEALS) BE SET ASIDE AND THAT OF THE A.O. BE RESTORED. 2. THE BRIEF FACTS IN THE GROUNDS OF THE REVENUE AR E THAT THE ASSESSEE HAD DISCLOSED AN AMOUNT OF RS.10 CRORES DURING THE COUR SE OF SEARCH U/S 132(4) AND THE SAID AMOUNT HAD BEEN DISCLOSED IN THE RETUR N OF INCOME FILED ON 29.02.2009 U/S 139(1), HOWEVER, THE ASSESSEE HAD NO T PAID THE DUE TAX ON THE UNDISCLOSED INCOME. THE ASSESSEE SUBMITTED BEFORE T HE A.O. THAT THE ALLEGED DEFAULT IN PAYMENT OF DUE TAXES ON THE AMOUNT DISCL OSED U/S 132(4) HAD 3 OCCURRED BECAUSE OF NON ACCEPTANCE OF REQUEST OF TH E ASSESSEE MADE BEFORE THE AO TO ADJUST THE CASH SEIZED TO THE TUNE OF RS. 89,30,000/- AGAINST THE ADVANCE TAX LIABILITY. IT WAS SUBMITTED BY THE ASSE SSEE THAT BECAUSE OF NON ADJUSTMENT OF SEIZED CASH, INTEREST U/S 234B /234C WAS LEVIED ON THE ASSESSEE WHICH LED TO SHORT PAYMENT OF DUE TAXES AN D IN TURN TO THE ALLEGED NON COMPLIANCE WITH THE STIPULATED REQUIREMENTS AS CONTAINED IN SECTION 132(4) TO AVAIL OF IMMUNITY FROM PENALTY PROCEEDING S. THE ASSESSING OFFICER HOWEVER REFERRED TO THE PROVISIONS OF SECTI ON 132B OF THE ACT TO HOLD THAT SEIZED CASH COULD NOT BE ADJUSTED AGAINST ADVA NCE TAX LIABILITY AS THE SAME WAS NOT IN THE NATURE OF EXISTING LIABILITY. THE A.O. THEREFORE PROCEEDED TO IMPOSE PENALTY U/S 271AAA ON THE GROU ND THAT SECTION 271AAA(2)(III) READS AS UNDER: NOTHING CONTAINED IN SECTION 271AAA(I) SHALL APPL Y IF THE ASSESSEE PAY THE TAX TOGETHER WITH INTEREST IF ANY IN RESPE CT OF THE UNDISCLOSED INCOME HAS NOT BEEN COMPLIED WITH. 3. BEFORE THE LD. CIT(A), THE LD. COUNSEL FOR THE A SSESSEE MADE THE SUBMISSIONS WHICH WERE ACCEPTED BY THE LD. CIT(A) V IDE PARA 3 & 4 OF HIS ORDER AND ACCORDINGLY HE CANCELLED THE PENALTY SO L EVIED BY THE AO. THE RELEVANT SUBMISSIONS MADE BY THE LD. COUNSEL FOR TH E ASSESSEE APPEARING ON BEHALF OF THE ASSESSEE BEFORE THE LD. CIT(A) AND TH E ORDER OF THE LD. CIT(A) AT PAGES 3 TO 6 FOR THE SAKE OF CONVENIENCE ARE REP RODUCED HEREINBELOW: 4 3. DURING THE COURSE OF APPELLATE PROCEEDINGS THE AR OF THE ASSESSEE SUBMITTED HIS ARGUMENTS ON THE ISSUE AS U NDER: I) SEARCH U/S 132 WAS MADE ON 05/02/2009. CASH OF RS.94,19,500/- WAS FOUND, OUT OF WHICH AMOUNT OF R S.89,30,000/- WAS SEIZED. THE ASSESSEE MADE SURRENDER OF RS.10,00,00 ,000/- INCLUDING CASH OF RS.90,00,000/- II) A NOTICE U/S 156 ALONGWITH ORDER U/S 210 DATED 25.2.2009 WAS RECEIVED FROM ACIT, CIRCLE-II, AMRITSAR, THE THEN A.O. FOR ADVANCE TAX DEMAND OF RS.3,45,69,000/- AFTER DEDUCTING ADV ANCE TAX OF RS.10,00,000/- ALREADY PAID. THE NEXT INSTALLMENT OF ADVANCE TAX WAS PAYABLE ON 15.03.2009. III) IN RESPONSE TO THE SAID NOTICE, ASSESSEE FILE D A LETTER ON 03.03.2009 REQUESTING THAT THE SEIZED AMOUNT OF RS .89,30,000/- BE KINDLY REQUESTED AGAINST THE ADVANCE TAX DEMAND OF RS.3,45,69,000/- AND AFTER ADJUSTMENT THE BALANCE PAYABLE BE KINDLY INITIATED AS THE ASSESSEE WAS NOT LEFT WITH ANY CASH AND HE HAD TO ARRANGE SOME BANK LOAN FOR PAYMENT OF BALANCE ADVANCE TAX. COPIES OF THIS LETTERS WERE ALSO SENT TO THE CIT-1, AMRITSAR AND CIT( CENTRAL) , LUDHIANA. IV) THE ASSESSEE DID NOT RECEIVE ANY REPLY THAT HI S APPLICATIONS HAD BEEN REJECTED. V) THE ASSESSEE HAD PAID RS.10,00,000/- EARLIER BY FIRST TWO INSTALMENT OF RS.5,00,000/- EACH. HE REQUESTED FOR ADJUSTMENT OF SEIZED AMOUNT OF RS.89,30,000/- TOWARDS LAST INST ALLMENT BEFORE DUE DATE AND ALSO PAID RS.2,52,00,000/- BEFORE 31/3/20 09. VI) AS PER INTIMATION U/S 143(1), THE SEIZED AMOUN T OF RS.89,30,000 WAS NOT CONSIDERED/ADJUSTED AS ADVANCE TAX AND INT EREST OF RS.22,16,382/- WAS CHARGED U/S 234B. AN APPLICATIO N U/S 154 WAS FILED ON 19/01/2011. VII) ASSESSEES PAID APPLICATION U/S 154 WAS REJEC TED BY ORDER DATED 28.02.2011, HOLDING THAT CREDIT OF RS.89,30,000/- WAS NOT GIVEN SINCE THE SAID AMOUNT WAS LYING IN THE P.D. ACCOUNT OF T HE CIT(CENTRAL), LUDHIANA AND THIS AMOUNT LYING IN P.D. ACCOUNT CAN NOT BE TREATED AS A PAYMENT AGAINST EITHER SELF ASSESSMENT TAX & ADV ANCE TAX.. 5 VIII) WHILE MAKING ASSESSMENT U/S 143(3), THE A.O. OBSERVED TAX DUE ON RETURNED INCOME HAS NOT BEEN CONSIDERED AS CREDITED INTO GOVT. ACCOUNT, THOUGH IT WAS LYING IN THE P.D. ACCOUNT. IN THIS WAY TAX HAS NOT BEEN PAID/CREDITED ON THE RETURNED INCOME DISC LOSED U/S 132(4) OF THE ACT ARE INITIATED. COPY OF THE ASSESSMENT ORDE R IS ENCLOSED. IX) THE DETAILED REPLY TO PENALTY PROCEEDINGS WAS FILED BY LETTER DATED 19.01.2011. HOWEVER, THE A.O. IMPOSED PENALT Y OF RS.1,00,000 @ 10% OF THE UNDISCLOSED INCOME OF RS.10,00,00,000 /- SURRENDERED BY THE ASSESSEE U/S 132(4) HOLDING THAT THE STAND OF THE ASSESSEE IS NOT ACCEPTABLE AS THE CASE OF THE ASSESSEE IS WEAK ON MERITS AS INTEREST U/S 234B HAS BEEN CHARGED. X) THE SEIZED AMOUNT WAS LIABLE TO BE ADJUSTED AGA INST THE ADVANCE TAX PAYABLE BY THE ASSESSEE. THE CASE IS SQUARELY COVERED UP BY THE ORDER OF THE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT VS. ASHOK KUMAR REPORTED AT 334 ITR 355 (P&H). EVEN THE FACT S ARE IDENTICAL. XI) SIMILAR JUDGMENTS HAVE ALSO BEEN PASSED BY THE DELHI HIGH COURT IN THE CASE OF CIT VS. K.K. MARKETING REPORT ED AT 278 ITR 596 (DEL.) AND BY THE BOMBAY HIGH COURT IN THE CASE OF CIT, CENTRAL VS. SH. POTINDRA B.MODY. XII) THE ASSESSEE HAD RECEIVED NOTICE U/S 156/210 ON 25.2.2009 FROM THE A.O. FOR ADVANCE TAX DEMAND OF RS.3,45,69 ,000/- AND THEREFORE, THAT DEMAND BECAME EXISTING LIABILITY A ND THE SEIZED AMOUNT OF RS.89,30,000/- WAS LIABLE TO BE ADJUSTED AGAINS T THE EXISTING LIABILITY. XIII) THAT IN ANY CASE, THE ASSESSEE HAD FILED HIS LETTER DATED 03/03/2009 REQUESTING THAT THE SEIZED AMOUNT OF RS .89,30,000/- BE KINDLY ADJUSTED AGAINST THE ADVANCE TAX DEMAND OF RS.3,45,69,000/- AND THE ASSESSEE HAD NOT RECEIVED ANY REPLY OR RES PONSE FROM THE DEPARTMENT THAT HIS APPLICATION WAS REJECTED. XIV) THE ASSESSEE HAD PAID THE TAX AND THE INTERES T PAYABLE, IF ANY, IN RESPECT OF THE UNDISCLOSED INCOME AND NO PENALTY W AS LEVIABLE U/S 271AAA. 6 4. I HAVE CONSIDERED THE BASIS OF PENALTY IMPOSED BY THE AO AND THE ARGUMENTS OF THE AR ON THE ISSUE. IT IS SEEN T HAT THE PENALTY U/S 271AAA HAS BEEN IMPOSED ONLY BECAUSE OF ALLEGED NO N COMPLIANCE WITH THE PROVISIONS OF SECTION 271AAA(2)(III) WHIC H STIPULATES THE PAYMENT OF TAX ALONGWITH INTEREST IN RESPECT OF TH E UNDISCLOSED INCOME. THE ONLY ISSUE IS THAT THE ASSESSEE WAS LE VIED INTEREST U/S 234B FOR SHORT PAYMENT OF ADVANCE TAX DUE ON THE I NCOME RETURN WHICH IN TURN WAS CAUSED BY INACTION ON THE PART O F THE A.O. TO ADJUST THE SEIZED CASH TOWARDS ADVANCE TAX LIABILITY AS R EQUESTED BY THE ASSESSEE. THE ASSESSEES APPEAL AGAINST THE ORDER OF THE A.O. REFUSING TO RECTIFY THE ORDER IMPOSING INTEREST U/S 234B HA S BEEN ADJUDICATED BY THE UNDERSIGNED. I HAVE HELD THAT NO INTEREST U /S 234B WAS LEVIABLE IN VIEW OF THE JUDGMENT OF HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT VS. ASHOK KUMAR 334 ITR 355. THIS MEAN T THAT THE ALLEGED SHORT PAYMENT OF INTEREST WAS ONLY ON ACCO UNT OF INCORRECT IMPOSITION OF INTEREST BY THE A.O. WHICH STANDS D ELETED. THEREFORE, THE BASIS TO IMPOSE PENALTY U/S 271AAA IN THE FORM OF NON-PAYMENT OF TAXES/INTEREST DOES NOT SURVIVE AND THUS PENALT Y IMPOSED IS DIRECTED TO BE DELETED. 4. THE LD. DR, MR. TARSEM LAL ARGUED AND INVITED OU R ATTENTION AT THE OUTSET TO THE PROVISIONS OF SECTION 271AAA WHICH RE ADS AS UNDER: [ PENALTY WHERE SEARCH HAS BEEN INITIATED. 271AAA. (1) THE ASSESSING OFFICER MAY, NOTWITHSTANDING ANYT HING CONTAINED IN ANY OTHER PROVISIONS OF THIS ACT, DIR ECT THAT, IN A CASE WHERE SEARCH HAS BEEN INITIATED UNDER SECTION 132 ON OR AFTER THE 1ST DAY OF JUNE, 2007 [BUT BEFORE THE IST DAY OF JULY, 2012] THE ASSESSEE SH ALL PAY BY WAY OF PENALTY, IN ADDITION TO TAX, IF ANY, PAYABLE BY HIM, A SUM COM PUTED AT THE RATE OF TEN PER CENT OF THE UNDISCLOSED INCOME OF THE SPECIFIED PREVIOU S YEAR. (2) NOTHING CONTAINED IN SUB-SECTION (1) SHALL APP LY IF THE ASSESSEE, ( I ) IN THE COURSE OF THE SEARCH, IN A STATEMENT UNDER SUB-SECTION (4) OF SECTION 132 , ADMITS THE UNDISCLOSED INCOME AND SPECIFIES THE MANNER IN WHICH SUCH INCOME HAS BEEN DERIVED; ( II ) SUBSTANTIATES THE MANNER IN WHICH THE UNDISCLOSED INCOME WAS DERIVED; AND ( III ) PAYS THE TAX, TOGETHER WITH INTEREST, IF ANY, IN RESPECT OF THE UNDISCLOSED INCOME. 7 5. A SPECIFIC REFERENCE WAS MADE TO SECTION 271AAA( 2)(III) WHERE THE ASSESSEE FOR GETTING IMMUNITY FROM LEVY OF PENALTY HAS TO PAY THE TAX TOGETHER WITH INTEREST, IF ANY, IN RESPECT OF UNDIS CLOSED INCOME. HE ARGUED THAT PAYING OF THE TAX TOGETHER WITH INTEREST IS WI TH REFERENCE TO FILING OF RETURN OF INCOME I.E. THE SAME HAS TO BE PAID BEFOR E FILING THE INCOME TAX RETURN. IF IT IS PAID LATER THAN THAT THEN THE PENA LTY U/S 271AAA HAS TO BE LEVIED @ 10% OF THE UNDISCLOSED INCOME OF THE SPECI FIED PREVIOUS YEAR, AS REFERRED IN SECTION 271AAA(1) OF THE ACT. THE LD. D R RELIED UPON THE DECISION OF THE HONBLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF CIT VS. MRIDULA, PROP. DHRUV FABRICS REPORTED IN (2011) 335 ITR 266. 6. THE LD. COUNSEL FOR THE ASSESSEE, MR. SALIL KAPO OR, ADVOCATE , ON THE OTHER HAND, ARGUED AND AT THE OUTSET RELIED UPON TH E SUBMISSIONS MADE BEFORE THE LD. CIT(A) AND THE ORDER OF THE LD. CIT(A). MR. SALIL KAPOOR, ADVOCATE ARGUED THAT THE ASSESSEE HAS DISCLOSED AN AMOUNT OF RS.10,00,00,000/- (RS. 10 CRORES) DURING THE COURSE OF SEARCH UNDER SECTIO N 132(4) OF THE ACT, WHICH AMOUNT HAD BEEN DISCLOSED AND THE RETURN OF INCOME FILED U/S 139(1) OF THE ACT. THE SEIZED CASH OF RS.89,30,000/- WAS NOT ADJU STED AGAINST THE OUTSTANDING DEMAND OF ADVANCE TAX AMOUNTING TO RS. 3,45,69,000/-. A NOTICE UNDER SECTION 156 ALONGWITH ORDER UNDER SECTION 210 DATED 25.02.2009 WAS 8 RECEIVED BY THE ASSESSEE AND ACCORDINGLY THE ASSESS EE FILED A LETTER DATED 03.03.2009 REQUESTING TO ADJUST THE SEIZED AMOUNT O F RS.89,30,000/- AGAINST ADVANCE TAX DEMAND OF RS.3,45,69,000/- AND ALSO PAI D RS.2,52,00,000/- BEFORE 31.03.2009. AS PER INTIMATION U/S 143(1), TH E SEIZED AMOUNT OF RS.89,30,000/- WAS NOT CONSIDERED/ADJUSTED AND INTE REST OF RS.22,16,382/- WAS CHARGED U/S 234B. AN APPLICATION UNDER SECTION 154 WAS FILED ON 19.01.2011 WHICH WAS REJECTED BY ORDER DATED 28.02. 2011 BY HOLDING THAT THE AMOUNT LYING IN P.D. ACCOUNT CANNOT BE TREATED AS PAYMENT EITHER ON ACCOUNT OF SELF-ASSESSMENT TAX OR ADVANCE TAX. 7. THE LD. COUNSEL FOR THE ASSESSEE FURTHER ARGUED THAT WHILE MAKING ASSESSMENT UNDER SECTION 143(3), THE AO OBSERVED T AX DUE ON RETURNED INCOME HAS NOT BEEN CONSIDERED AS CREDITED INTO GO VT. ACCOUNT THOUGH IT WAS LYING IN THE P.D. ACCOUNT. IN THIS WAY TAX HAS NOT BEEN PAID/CREDITED ON THE RETURNED INCOME DISCLOSED U/S 132(4) OF THE ACT . THEREFORE, PENALTY PROCEEDINGS U/S 271AAA OF THE ACT ARE INITIATED. HE INVITED OUR ATTENTION TO THE ORDER OF PENALTY U/S 271AAA OF THE ACT WHERE TH E A.O. IN HIS ORDER DATED 23.06.2011 HAS OBSERVED THAT THE STAND OF THE ASSESSEE IS NOT ACCEPTABLE AS THE CASE OF THE ASSESSEE IS WEAK ON MERITS AS SECTION 234B IS VERY CLEAR ABOUT THE FACT THAT INTEREST FOR DEFAULT IN PAYMENT OF ADVANCE TAX UNDER THE PROVISION OF SECTION 210 FROM THE IST APR IL NEXT FOLLOWING SUCH 9 FINANCIAL YEAR TO THE DATE OF DETERMINATION OF TOTA L INCOME IS PAYABLE. THE AO OBSERVED IN THE PENALTY ORDER THAT AS A MATTER O F FACT INTEREST UNDER SECTION 234B HAS BEEN CHARGED BECAUSE TAX PAID IS LESS THAN 90% OF THE TAX ON ASSESSED INCOME AND ACCORDINGLY REFERRING TO THE PROVISIONS OF SECTION 271AAA(2)(III), THE A.O. LEVIED THE PENALTY. ON FIL ING LETTER DATED 03.03.2009 FOR REQUESTING TO ADJUST SEIZED AMOUNT O F RS.89,30,000/- AGAINST TOTAL DEMAND OF RS.3,45,69,000/-, THE SAME WAS NOT ADJUSTED AS MENTIONED HEREINABOVE. HOWEVER, THE LD. CIT(A) WITH REGARD TO APPLICATION U/S 154 FOR ADJUSTMENT OF RS.89,30,000/- AFTER CONSIDERING THE REMAND REPORT AND COUNTER COMMENTS OF THE LD. COUNSEL FOR THE ASSESSE E VIDE PARA 5 OF HIS ORDER HELD THAT THE A.OS ACTION IN REJECTING APPLICATION U/S 154 WAS ERRONEOUS AND THEREFORE, INTEREST SO CHARGED UNDER SECTION 234B W AS DIRECTED TO BE DELETED. THE MATTER TRAVELED BEFORE THE ITAT, AMRITSAR BENCH AND THE ITAT VIDE ORDER DATED 6.10.2012 IN ITA NO.197(ASR)/2012 FOR THE ASSESSMENT YEAR 2009-10 VIDE PARA 7 OF HIS ORDER DISMISSED THE APPE AL OF THE REVENUE. 8. THE LD. COUNSEL FOR THE ASSESSEE, MR. SALIL KAPO OR ADVOCATE, THEREFORE, ARGUED THAT THE VERY BASIS FOR WHICH PEN ALTY UNDER SECTION 271AAA WAS LEVIED DOES NOT STAND IN VIEW OF THE D ECISION OF THE CIT(A) AND THE ORDER OF THE ITAT, AMRITSAR BENCH, AS MENTI ONED HEREINABOVE. THEREFORE, ON THIS ACCOUNT, NO PENALTY U/S 271AAA C AN BE LEVIED. THE LD. 10 COUNSEL FOR THE ASSESSEE FURTHER ARGUED THAT THERE IS NO MENTION WITH REGARD TO LEVY OF PENALTY IN THE ORDER OF THE A.O. U/S 271 AAA WITH REGARD TO SECTION 234C AND IT IS FOR THE FIRST TIME THAT THE LD. DR HAS RAISED THE ARGUMENT WITH REGARD TO SECTION 234C AND ALSO ON TH IS ACCOUNT, NO PENALTY CAN BE LEVIED. 9. THE LD. COUNSEL FOR THE ASSESSEE ARGUED THAT IT IS NOT THE CASE THAT INTEREST UNDER SECTION 234C HAS NOT BEEN PAID, THE SAME HAS BEEN PAID WITHIN 30 DAYS OF SERVICE OF DEMAND NOTICE, WHICH IS NOT IN DISPUTE. REFERRING TO THE PROVISIONS OF SECTION 271AAA (1) (2) (III), HE ARGUED THAT NO TIME LIMIT HAS BEEN PROVIDED IN THE SAID SECTION TO PAY THE TA XES AND INTEREST. THE REVENUE CANNOT ADD ANY WORD IN THE SCHEME OF ANY SE CTION AND THEREFORE, OUTER LIMIT OF PAYMENT CANNOT BE READ AS INTEREST T O HAVE BEEN PAID BEFORE FILING OF THE INCOME TAX RETURN. THE LD. COUNSEL FO R THE ASSESSEE, MR. SALIL KAPOOR, ADVOCATE ON IDENTICAL FACTS RELIED UPON THE DECISION OF CO-ORDINATE BENCH IN THE CASE OF DCIT VS. PIONEER ONLINE LTD I N IT NO.1324- 5/KOL/2011 DATED 17.02.2012 REPORTED IN (2012) 52 S OT 94 (KOLKATA) (URO) AND DCIT VS. PIONEER MARBLES & INTERIORS (P) LTD. IN ITA NO.1326/KOL/2011 DATED 17.02.2012 (REPORTED IN (201 2) 50 SOT 571 (KOLKATA). HE FURTHER INVITED OUR ATTENTION THAT TH E PROVISIONS OF SECTION 271AAA HAVE BEEN OMITTED W.E.F. 01.07.2012 AND IN P LACE OF 271AAA, THE 11 NEW SECTION I.E. SECTION 271AAB HAS BEEN INTRODUCED WHERE THE TIME LIMIT HAS BEEN PRESCRIBED AND ACCORDINGLY LEVY OF PENALTY IN DIFFERENT CIRCUMSTANCES HAS BEEN PRESCRIBED IN THE NEWLY INSE RTED SECTION. THE LD. COUNSEL FOR THE ASSESSEE, THEREFORE, CLARIFIED AND INVITED OUR ATTENTION THAT HAD THE TIME LIMIT FOR PAYMENT OF TAX ALONGWITH INT EREST COULD HAVE BEEN THE INTENTION OF THE LEGISLATURE WHILE INCORPORATING SE CTION 271AAA THEN THERE WOULD HAVE BEEN NO OMISSION OF THE SECTION 271AAA A ND THERE WOULD NOT HAVE BEEN INTRODUCTION OF NEW SECTION AS 271AAB PRE SCRIBING THE TIME LIMIT AND OTHER CONDITIONS, WHICH WERE NOT PRESENT IN EAR LIER SECTION 271AAA, WHICH IN FACT ARE MATTER OF PRESENT DISPUTE. THEREF ORE, ON THIS ACCOUNT AS WELL, INTENTION OF THE LAW WAS CLEAR THAT THERE WAS NO TIME LIMIT PRESCRIBED IN SECTION 271AAA OF THE ACT FOR THE PAYMENT OF INTER EST TOGETHER WITH INTEREST. 10. LASTLY, THE LD. COUNSEL FOR THE ASSESSEE REFERR ED TO THE DECISION IN THE CASE OF CIT VS. MRIDULA, PROP. DHRUV FABRICS REPORT ED IN 335 ITR 266 (P&H) WHICH IS IN DIFFERENT CONTEXT AND NOT ON SECT ION 271AAA, CANNOT BE MADE APPLICABLE IN THE PRESENT FACTS AND CIRCUMSTAN CES OF THE CASE. THE LD. COUNSEL ACCORDINGLY PRAYED TO CONFIRM THE ORDER OF THE LD. CIT(A) AND DISMISS THE APPEAL OF THE REVENUE. 12 11. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE FACTS OF THE CASE. AT THE OUTSET, WE ARE CONVINCED WITH THE ARGUMENTS MADE BY THE LD. COUNSEL FOR THE ASSESSEE, MR. SALIL KAPOOR, ADVOCATE THAT THE AO HAS LEVIED PENALTY U/S 271AAA OF THE ACT KEEPING IN VIEW THE PROVISION OF SECTION 234B. SECTION 234C WAS NEVER THE BASIS OF THE A.O. WHILE LEVYING PENALTY AND IT IS FOR THE FIRST TIME THAT THE LD. DR HAS REFERRED TO SECTION 234C OF THE ACT. THE SEIZED AMOUNT OF RS.89,30,000/- WAS NOT ADJUSTE D AS AN ADVANCE TAX BY THE A.O. WHICH MATTER WAS TAKEN TO THE A.O. FOR REC TIFICATION, WHICH WAS REFUSED. THE MATTER TRAVELED TO THE LD. CIT(A) WHO WHILE CITING VARIOUS DECISIONS OF LAW DIRECTED THE A.O. TO ADJUST THE AM OUNT LYING IN P.D. ACCOUNT AS AN ADVANCE TAX. THE REVENUES APPEAL WAS DISMISS ED BY THE ITAT, AMRITSAR BENCH IN ITA NO.197(ASR)/2012 VIDE ORDER D ATED 04.10.2012. IT IS ALSO NOT UNDER DISPUTE THAT THE DEMAND OF RS.11.25 LACS BEING INTEREST UNDER SECTION 234C RAISED VIDE NOTICE UNDER SECTION 156 DATED 22.12.2010 WAS PAID WITHIN TIME AS STATED TO HAVE BEEN PAID ON 20. 01.2011. 12. AS REGARDS THE PENALTY PROCEEDINGS U/S 271AAA W ITH SPECIFIC REFERENCE TO SECTION 271AAA(2)(III) WHERE THE PENA L PROVISIONS ARE NOT APPLICABLE, WHERE THE ASSESSE PAYS THE TAX TOGETHER WITH INTEREST, IF ANY, IN RESPECT OF UNDISCLOSED INCOME. IN THIS REGARD, WE A RE CONVINCED WITH THE ARGUMENTS MADE BY THE LD. COUNSEL FOR THE ASSESSEE, MR. SALIL KAPOOR, 13 ADVOCATE THAT THERE IS NO TIME LIMIT MENTIONED IN THE SAID SECTION . HAD THERE BEEN ANY INTENTION OF THE LAW THEN SECTION 27 1AAA WOULD NOT HAVE BEEN OMITTED WHICH SINCE HAS BEEN OMITTED BY THE FI NANCE ACT, 2012 FOR THE SEARCHES MADE UNDER SECTION 132 ON OR AFTER IST DAY OF JULY, 2012 W.E.F. 1.7.2012 BY INTRODUCING NEW SECTION AS 271AAB WHERE THE TIME LIMIT AND THE QUANTUM OF PENALTY IN DIFFERENT CIRCUMSTANCES H AS BEEN INTRODUCED IN THE ACT ITSELF. THEREFORE, THE LEGISLATORS WERE C LEAR THAT THERE IS NO INTENTION OF THE LAW W.R.T. TIME LIMIT EMBEDDED IN SECTION 27 1AAA WITH REGARD TO PAYMENT OF TAX TOGETHER WITH INTEREST. ACCORDINGLY, SECTION 271AAB WAS INTRODUCED W.E.F. 01.07.2012 BY FINANCE ACT, 2012 I NCORPORATING THEREIN TIME LIMIT, WHICH FOR THE SAKE OF CONVENIENCE IS RE PRODUCED AS UNDER: 271AAB (1) THE ASSESSING OFFICER MAY, NOTWITHSTANDING ANY THING CONTAINED IN ANY OTHER PROVISIONS OF THIS ACT, DIR ECT THAT, IN A CASE WHERE SEARCH HAS BEEN INITIATED UNDER SECTION 132 ON OR AFTER THE IST DAY OF JULY, 2012, THE ASSESSEE SHALL PAY BY WAY O F PENALTY, IN ADDITION TO TAX, IF ANY, PAYABLE BY HIM,- (A) A SUM COMPUTED AT THE RATE OF TEN PERCENT OF T HE UNDISCLOSED INCOME OF THE SPECIFIED PREVIOUS YEAR, IF SUCH AS SESSEE- (I) IN THE COURSE OF THE SEARCH, IN A STATEMENT U NDER SUB- SECTION (4) OF SECTION 132, ADMITS THE UNDISCLOS ED INCOME AND SPECIFIED THE MANNER IN WHICH SUCH INCOME HA S BEEN DERIVED II) SUBSTANTIATES THE MANNER IN WHICH THE UNDISCL OSED INCOME WAS DERIVED AND III) ON OR BEFORE THE SPECIFIED DATE- A) PAYS THE TAX, TOGETHER WITH INTEREST, IF ANY, IN RESPECT OF THE UNDISCLOSED INCOME; AND B) FURNISHES SUCH UNDISCLOSED INCOME THEREIN. 14 B) A SUM COMPUTED AT THE RATE OF TWENTY PERCENT OF THE UNDISCLOSED INCOME OF THE SPECIFIED PREVIOUS YEAR, IF SUCH ASSE SSEE- I) IN THE COURSE OF THE SEARCH, IN A STATEMENT UNDER S UB- SECTION (4) OF SECTION 132, DOES NOT ADMIT THE UNDI SCLOSED INCOME AND II) ON OR BEFORE THE SPECIFIED DATE- A) DECLARES SUCH INCOME IN THE RETURN OF INCOME FURNISHED FOR THE SPECIFIED PREVIOUS YEAR; AND B) PAYS THE TAX, TOGETHER WITH INTEREST, IF ANY, IN RESPECT OF THE UNDISCLOSED INCOME; C) A SUM WHICH SHALL NOT BE LESS THAN THIRTY PERCE NT BUT WHICH SHALL NOT EXCEED NINETY PERCENT OF THE UNDISCLOSED INCOM E OF THE SPECIFIED PREVIOUS YEAR, IF IT IS NOT COVERED BY THE PROVISIO NS OF CLAUSE (A) AND (B). 13. THEREFORE, WE ARE CONVINCED WITH THE ARGUMENTS MADE BY THE LD. COUNSEL THAT THE LAW HAD NO INTENTION IN SECTION 27 1AAA FOR PAYMENT OF TAX TOGETHER WITH INTEREST TO PAY THE SAME WITHIN SOME TIME LIMIT IN PARTICULAR BEFORE DUE DATE OF FILING OF RETURN. ON IDENTICAL F ACTS, AS ARGUED BY THE LD. COUNSEL FOR THE ASSESSEE, MR. SALIL KAPOOR, ADVOCAT E, THE DECISION OF CO- ORDINATE BENCH IN THE CASE OF DCIT VS. PIONEER ONL INE LTD. (SUPRA) WHICH WILL BE VERY RELEVANT IN THE FACTS AND CIRCUMSTANCE S OF THE PRESENT CASE. THE RELEVANT PART OF THE SAID ORDER IN PARA 3 TO 11 ARE REPRODUCED FOR THE SAKE OF CLARITY AS UNDER: 3. THE ISSUE IN APPEAL LIES IN A NARROW COMP ASS OF UNDISPUTED FACTS. ON 30TH AUGUST 2007, THE ASSESSEE COMP ANY AND CERTAIN ASSOCIATED ENTITIES, COLLECTIVELY RE FERRED TO AS PIONEER GROUP, WERE SUBJECTED TO SE ARCH AND SEIZURE OPERATIONS UNDER SECTION 132 OF THE ACT. DUR ING THE COURSE OF THIS OPERATION, THE ASSESSEE MADE A DISCLOS URE OF RS 1,00,00,000 FOR THE ASSESSMENT YEAR 2007 -08 AND RS 50,00,000 FOR ASSESSMENT YEAR 2 008- 09. THERE IS NO 15 DISPUTE THAT THE INCOME SO DECLARED WAS INCLUDED IN THE INCOME SUBSEQUENTLY RETURNED BY TH E ASSESSEE, VIDE INCOME TAX RETURNS FILED ON 13T H NOVEM BER 2007 FOR THE ASSESSMENT YEAR 2007 -08 AND 29TH SEPTEMB ER 2008 FOR THE ASSESSMENT YEAR 2 008-09. THE ASSESSMENT U NDER SECTION 143(3) FOR THE ASSESSMENT YEAR 2007 -08 WAS COMPLETED ON 31 ST DECEMBER 2009, BUT, WHILE FINALIZING THE ASSESSMENT, THE ASSESSING OFFICER ALSO INITIATED THE PENALTY PROCEEDINGS UNDER SECTION 271 AAA AND OBSERVED THAT SINCE THE ASSESSEE HAS NOT PAID THE FULL T AXES AND INTEREST ON DISCLOSURE MADE U/S 132(4), P ENALTY PROCEEDINGS UNDER SECTION 271AAA OF THE ACT ARE INITIATED. THE SAME WAS THE POSITION WITH REGARD TO THE ASSESSMENT YEAR 2008 -09. IN THE RESULTANT PENALTY PROCEEDINGS, IT WAS SUBMITTED BY THE ASSESSEE THAT BEFORE FILING THE INCOM E TAX RETURN, THE ASSESSEE HAD PAID ADVANCE TAX OF RS 18,72,162 ON 25.10.2007 AND THE ASSESSEE HA D ALSO REQUESTED THAT THE CASH OF RS.15,00,000 SEIZED F ROM ASSESSEES PREMISES DURING SEARCH OPERATION BE ADJUST ED AGAINST THE BALANCE LIABILITY. THE ADJUSTMENT WAS FINALLY CARRIED OUT ON 17.3.2010 AND THE CASH SEIZE D WAS ADJUSTED AGAINST THE TAX LIABILITY. THERE WA S ALSO A DEMAND FOR 234B AND 234 C LIABILITIES A ND THERE IS NO DISPUTE THAT THE ASSESSEE LATER ON PAID O VER THE SHORTFALL, WITHIN PERMISSIBLE TIME, UPON RECEIVING THE NOTICE OF DEMAND UNDER SECTION 156. SO FAR AS ASSESSMENT YEAR 2 008-09 IS CONCERNED, THE A SSESSEE HAD DULY PAID TAX LIABILITY BEFORE FILING OF INCOME TAX RETURN BUT THE ASSESSEE DID NOT, DUE TO INADVER TENT MISTAKE, COMPUTE INTEREST UNDER SECTION 234B AND 234C. THERE WAS ALSO A DEMAND FOR 234B AND 234C L IABILITIES AND THERE IS NO DISPUTE THAT THE ASSESSEE LATER ON PAID OVER THE SHORTFALL, WITHIN PERMISSIBLE TIME, UPON RECEIVING THE NOTICE OF DEMAND UNDER SECTION 156. IT WAS THUS ARGUED THAT THE TAX, TOGETHER WIT H APPLICABLE INTEREST, WAS DULY PAID BY THE ASS ESSEE, AND, ACCORDINGLY, THE CONDITION REGARD PAYMENT OF TAX AND INTEREST WAS DULY COMPLIED WITH. THE ASSESSING OFFICER WAS, THEREFORE, URGED TO DROP THE PENALTY PROCEEDINGS. HOWEVER , THE ASSESSING OFFICER WAS NOT IMPRESSED WITH THIS SUBMIS SION.BY WAY OF 16 TWO SEPARATE, BUT MATERIALLY SIMI LAR ORDERS, THE ASSESSING OFFICER REJECTED THE SUBMISSIONS OF THE ASSESSEE AND PROCEEDED TO IMPOSE THE PENALTY BY OBSERVING A S FOLLOWS: THE ABOVE SUBMISSION HAS BEEN CONSIDERED A ND THE ASSESSMENT RECORD HAS BEEN PERUSED. SINCE THE SEARCH WAS CONDUCTED ON 30/8/2007 AND THE DISCLOSURE WAS MADE IN THE STATEMENT RECORDED U/S 132(4) OF THE ACT FOR T HE SPECIFIED PREVIOUS YEAR, THE PENALTY PROVISIONS OF SECTION 271AAA WAS SQU ARELY APPLICABLE IN THIS CASE. THE SUB SECTION (2) OF SECTION 271AAA PROVIDES THAT: (2) NOTHING CONTAINED IN SUB-SECTION (1) S HALL APPLY IF THE ASSESSEE, (I) IN THE COURSE OF THE SEARCH, IN A STATEMENT UNDER SUB-SECTION (4) OF SECTION 132, ADMITS THE UNDISCLOSED INC OME AND SPECIFIES THE MANNER IN WHICH SUCH INCOME HAS BEEN D ERIVED; (II) SUBSTANTIATES THE MANNER IN WHICH THE UNDISCLOSED INCOME WAS DERIVED; AND (III) PAYS THE TAX, TOGETHER WITH I NTEREST, IF ANY, IN RESPECT OF THE UNDISCLOSED INCOME. IT CAN BE SEEN THAT, IN ORDER TO ESCAPE THE PENALTY UNDER SECTION 271AAA, THE ASSESSEE IS REQUIRED TO FULFIL ALL THE THREE CONDITIONS LAID DOWN AS REPRODUCED ABO VE. IN THE PRESENT CASE, THE ASSESSEE ADMITTEDLY DID NOT PAY THE MANDATO RY INTEREST PAYABLE UNDER SECTION 234 C OF THE A CT. THUS, ALL THE CONDITIONS OF 271AAA(2) HAVE NOT BEEN COMPLIED WIT H. IGNORANCE OF LAW CANNOT BE TAKEN AS A PLEA T O GET IMMUNITY. THE ASSESSEE HAS EXPOSED HIMSELF TO THE PENAL P ROVISIONS OF SECTION 271 AAA(1). CONSIDERING THE FACTS AND CIRCUMST ANCES OF THE CASE, I AM OF THE OPINION THAT IT IS A FIT CA SE FOR IMPOSITION OF PENALTY UNDER SECTION 271 AAA. THE QUAN TUM OF PENALTY IS COMPUTED @ 10% OF THE AMOUNT OF DISCLOSURE AT RS50 ,00,000. 4. AGGRIEVED, ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE CIT(A). LEARNED CIT(A) NOTED T HAT FROM A PLAIN READING OF THE ABOVE SECTION (I.E. 271AAA) IT IS APPARENT THAT 17 IF THE CONDITIONS LAID DOWN UNDER SUB SECTION 2 OF SECTION 271 AAA ARE SATISFIED, NO PENALTY WILL BE IMPOSED AND THAT .IN SECTION 271AAA, THERE IS NO PRECONDITI ON THAT THE TAX ALONGWITH INTEREST MUST BE PAID BEFORE FILING OF RETURN OR ANY OTHER SPECIFIED DATE. IT WAS IN THIS BA CKDROP, AND IN A SITUATION IN WHICH IT WAS AN ADMITT ED POSITION THAT DUE TAX, ALONG WITH INTEREST, WAS PAID BEFORE THE PENALTY PROCEEDINGS WERE CONCLUDED, THE CIT(A) DELETED THE IMPUGNED PENALTY. THE ASSESSING OFFICER IS NOT SATISFIED WITH THE STAND SO TAKEN BY THE CI T(A) AND IS IN APPEAL BEFORE US. 5. WE HAVE HEARD THE RIVAL CONTENTIONS, PERUSED THE MATERIAL ON RECORD AND DULY CONSIDERED FAC TS OF THE CASE IN THE LIGHT OF THE APPLICABLE LEGAL POS ITION. 6. WE FIND THAT SECTION 271 AAA, W HICH IS APPLICABLE IN RESPECT OF UNDISCLOSED IN COME UNEARTHED AS A RESULT OF SEARCH OPERATIONS CARRIED OUT ON OR AFTE R 1ST JUNE 2007, PROVIDES AS FOLLOWS: PENALTY WHERE SEARCH HAS BEEN INITIATED. 271AAA. (1) THE ASSESSING OFFICER MAY, NOTW ITHSTANDING ANYTHING CONTAINED IN ANY OTHER PROVISIONS OF THIS ACT, DIRECT THAT, IN A CASE WHERE SEARCH HAS BEEN INITIATED UNDER SECTION 132 ON OR AFTER THE 1ST DAY OF JUNE, 2007, THE ASSESSEE SHALL PAY BY WAY OF PENALTY, IN ADDITION T O TAX, IF ANY, PAYABLE BY HIM, A SUM COMPUTED AT THE RATE OF TEN PER CENT OF THE UNDISCLOSED INCOME OF THE SPECIFIED PREVIO US YEAR. (2) NOTHING CONTAINED IN SUB-SECTION (1) SHALL APP LY IF THE ASSESSEE, (I) IN THE COURSE OF THE SEARCH, IN A STAT EMENT UNDER SUB-SECTION (4) OF SECTION 132, ADMITS THE UNDI SCLOSED INCOME AND SPECIFIES THE MANNER IN WHICH SUCH INCOME HAS BEEN DERIVED; (II) SUBSTANTIATES THE MANNER IN WH ICH THE UNDISCLOSED INCOME WAS DERIVED; AND 18 (III) PAYS THE TAX, TOGETHER WIT H INTEREST, IF ANY, IN RESPECT OF THE UNDISCLOSED INCOME. (3) NO PENALTY UNDER THE PROVISIONS OF CLAUSE (C) OF SUB-SECTION (1) OF SECTION 271 SHA LL BE IMPOSED UPON THE ASSESSEE IN RESPECT OF THE UNDI SCLOSED INCOME REFERRED TO IN SUB-SECTION (1). (4) THE PROVISIONS OF SECTIONS 274 AND 275 SHALL, SO FAR AS MAY BE, APPLY IN RELATION TO THE PENALTY REFERRED TO IN TH IS SECTION. EXPLANATION : FOR THE PURPOSES OF THIS SECTION, (A) UNDISCLOSED INCOME MEANS (I) ANY INCOME OF THE SPECIFIE D PREVIOUS YEAR REPRESENTED, EITHER WHOLLY OR PARTLY, BY ANY MONEY, BULLION, JEWELLERY OR OTHER VALUABLE ARTICLE OR THING OR ANY ENTRY IN THE BOOKS OF ACCOUNT OR OTHER DOCUMENTS OR TR ANSACTIONS FOUND IN THE COURSE OF A SEARCH UNDER SECTION 13 2, WHICH HAS (A) NOT BEEN RECORDED ON OR BEFORE TH E DATE OF SEARCH IN THE BOOKS OF ACCOUNT OR OTHER DOCUMENTS MAINTAINED IN THE NORMAL COURSE RELATING TO SUCH PREVIOUS YEAR; OR (B) OTHERWISE NOT BEEN DISCLO SED TO THE CHIEF COMMISSIONER OR COMMISSIONER BEFORE THE DATE OF S EARCH; OR (II) ANY INCOME OF THE SPECIFIED PR EVIOUS YEAR REPRESENTED, EITHER WHOLLY OR PARTLY, BY ANY ENTRY IN RESPEC T OF AN EXPENSE RECORDED IN THE BOOKS OF ACCOUNT OR OTHER DOCUMENTS MAIN TAINED IN THE NORMAL COURSE RELATING TO THE SPECIFIED PREVIO US YEAR WHICH IS FOUND TO BE FALSE AND WOULD NOT HAVE BEEN FOUND TO BE SO HAD THE SEARCH NOT BEEN CONDUCTED; (B) SPECIFIED PREVIOUS YEAR MEANS THE PREVIO US YEAR (I) WHICH HAS ENDED BEFORE THE DATE OF SEARCH, BUT THE DATE OF FILING THE RETURN OF INCOME UNDER SUB -SECTION (1) OF SECTION 139 FOR SUCH YEAR HAS NOT EX PIRED BEFORE THE DATE OF SEARCH AND THE ASSESSEE HAS NOT FURNIS HED THE RETURN OF INCOME FOR THE PREVIOUS YEAR BEFORE THE SAID DATE; OR (II) IN WHICH SEARCH WAS CONDUCTED. 19 7. WE FIND THAT UNDER THE S CHEME OF SECTION 271AAA, THERE IS A COMPLETE PARADIGM SHIF T SO FAR AS PENALTY IN RESPECT OF UNACCOUNTED INCOME UNE ARTHED AS A RESULT OF SEARCH OPERATION CARRIED OUT ON OR AFTER 1S T JUNE 2007 IS CONCERNED. UNLIKE IN THE CASE OF PENALTY UNDER SECTION 271(1)(C), SECTION 271 AAA, WITHOUT ANY REFERENCE TO FINDINGS OR PRESUMPTIONS OF CONCEA LMENT OF INCOME OR THE FINDINGS OR PRESUMPTIONS OF FURNISH ING OF INACCURATE PARTICULARS, PROVIDES THAT IN RESPECT OF UNAC COUNTED INCOME IN THE CASES WHERE SEARCH INITIATED AFTER 1S T JUNE 2007, THE ASSESSEE IS TO PAY A PENALTY @ 10% OF UNACCO UNTED INCOME. SUB SECTION 2 OF SECTION 271 AAA, HOW EVER, RELAXES THE RIGOUR OF THIS PENALTY PROVISION IN A SITUATION IN WHICH (I) IN THE COURSE OF THE SEARCH, IN A STATEMENT UNDER SECTION 132(4), ADMITS THE UNDISCLOS ED INCOME AND SPECIFIES THE MANNER IN WHICH SUC H INCOME HAS BEEN DERIVED; ( II) SUBSTANTIATES THE MANNER IN WHICH THE UNDISCLOSED INCOME WAS DERIVE D; AND (III) PAYS THE TAX, TOGETHER WITH INTEREST, IF ANY , IN RESPECT OF THE UNDISCLOSED INCOME . WHILE PAYMENT OF TAXES, ALONG WITH INTEREST, BY THE ASSESSEE IS ONE OF THE CONDITIONS PRECEDENT FOR AVAILING THE IMMUNITY UNDER SECTION 2 71AAA(2), THERE IS NO TIME LIMIT SET OUT FOR SUCH PAYMENTS BY THE ASSES SEE. ONCE A TIME LIMIT FOR PAYMENT OF TAX AND INTEREST HAS NOT BE EN SET OUT BY THE STATUTE, IT CANNOT INDEED BE OPEN TO THE ASSESSING OFFICER TO READ SUCH A TIME LIMIT INTO THE SCHEM E OF THE SECTION OR TO INFER ONE. THERE IS THUS NO LEGALLY SUSTAINABLE BASIS FOR THE STAND OF THE ASSESSING OFFICER THAT IN A SITUATION IN WHICH DUE TAX AND INTEREST HAS NO T BEEN PAID IN FULL BEFORE FILING OF THE RELEVANT INCO ME TAX RETURN, THE ASSESSEE WILL NOT BE ELIGIBLE FOR IMMUNITY UNDER S ECTION 271 AAA(2). 8. WHILE DEALING WITH EXPLANATION 5 TO SECTION 271(1)(C), WHICH IS BROADLY ON THE SAME LINES, HONB LE GUJARAT HIGH COURT, IN THE CASE OF CIT VS MAHENDRA C SHAH (299 ITR 305) HAS OBSERVED THAT, THERE IS NO PRES CRIPTION ABOUT THE POINT OF TIME WHEN THE TAX HAD TO BE PAID QUA THE 20 AMOUNT OF INCOME DECLARED IN THE STATEMENT UNDER S ECTION 132(4) OF THE ACT. WE MUST, HOWEVER, POINT OUT THAT EVEN AFTER MAKING THESE SPECIFIC OBSERVATIONS THEIR LORDSHIPS HAD TO TREAT THE CONCLUSION OF ASSE SSMENT PROCEEDINGS AS OUTER LIMIT FOR MAKING PAYMENT OF TAX AND INTEREST BUT THAT WAS BECAUSE OF THE PECULIAR NATURE OF PENAL TY PROVISIONS UNDER SECTION 271(1)(C) WHEREIN ASSESSING OFFICER HAS TO RECORD THE SATISFACTION IN THE COURSE OF ASSESSMENT PROCEEDINGS ITSELF SOMETHING WHICH IS NOT A CONDITION PRECEDENT FOR IMPOSITION OF PENALTY UNDER SECTION 271 AAA. THEIR LORDSHIPS HAD HELD THAT HOWEVER, THE OUTER LIMIT HAS TO BE THE POINT OF TIME WHEN THE ASSESSMENT PROCEEDINGS ARE UNDERTAKEN BY THE ASS ESSING OFFICER BECAUSE THE OPENING PORTION OF SECTION 271(1) OF THE ACT REQUIRES THE ASSESSING OFFICER TO RECORD SATISFACTION IN THE COURSE OF SUCH PROCEEDINGS, AND THE SATISFACTION HAS TO BE AS REGARDS THE CONCEALMENT OF PARTICULARS OF INCOME OR FURNISHING INACCURATE P ARTICULARS OF INCOME. SECTION 271 AAA, AS THE STATUTE UNA MBIGUOUSLY PROVIDES, DOES NOT REQUIRE ANY SUBJECTIVE SAT ISFACTION OF THE ASESSING OFFICER TO BE ARRIVED AT DURING THE ASSESSMENT ROCEEDINGS, AND, THEREFORE, THE OUTER LIMIT OF PAYMENT BEFORE THE CONCLUSION OF ASSESSMENT PROCEEDINGS WILL NOT COME INTO PLAY. 9. IN OUR CONSIDERED VIEW, THEREF ORE, ON THE FACTS OF THE PRESENT CASE WHEREIN ENTIRE TAX A ND INTEREST HAS BEEN DULY ADJUSTED OUT OF SEIZED CASH OR O THERWISE PAID IN DEFERENCE TO NOTICES OF DEMAND, WEL L BEFORE THE PENALTY PROCEEDINGS WERE CONCLUDED, THE ASSESSEE COULD NOT BE DENIED THE IMMUNITY UNDER SECTION 271AAA( 2) ONLY BECAUSE ENTIRE TAX, ALONG WITH INTEREST, WAS NOT PAID BEFORE FILING OF INCOME TAX RETURN OR, FOR THAT PU RPOSE, BEFORE CONCLUDING THE ASSESSMENT PROCEEDINGS. 10. FOR THE REASONS SET OUT ABOVE, WE APPROVE THE CONCLUSIONS ARRIVED AT BY THE CIT(A) AND DECLINE TO INTERFERE IN THE MATTER. 11. IN THE RESULT, THE APPEAL IS DISMISSED. PR ONOUNCED IN THE OPEN COURT TODAY ON 17T H DAY OF FEBRUARY 2012. 21 14. ON PERUSAL OF THE ORDER IN THE CASE OF DCIT VS . PIONEER ONLINE LTD. (SUPRA), IT IS OBVIOUS THAT THE FACTS IN THE PRESEN T CASE ARE IDENTICAL TO THE FACTS IN THE CASE OF DCIT VS. PIONEER ONLINE LTD. ( SUPRA) AND FOLLOWING THE SAME, WE FIND NO INFIRMITY IN THE ORDER OF THE LD. CIT(A), WHO HAS RIGHTLY CANCELLED THE PENALTY LEVIED BY THE A.O. THUS, WE F IND NO INFIRMITY IN THE ORDER OF THE LD. CIT(A) AND THE SAME IS UPHELD. AC CORDINGLY, ALL THE GROUNDS OF THE REVENUE ARE DISMISSED. 15. IN THE RESULT, THE APPEAL FILED BY THE REVENUE IN ITA NO.385(ASR)/2010 IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 25TH JULY, 2013. SD/- SD/- (H.S. SIDHU) (B.P. JAIN) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 25TH JULY, 2013 /SKR/ COPY OF THE ORDER FORWARDED TO: 1. THE ASSESSEE:SH.PARVINDER SINGH, AMRITSAR. 2. THE ACIT, CC, ASR. 3. THE CIT(A), ASR. 4. THE CIT, ASR. 5. THE SR DR, ITAT, AMRITSAR. TRUE COPY BY ORDER (ASSISTANT REGISTRAR) INCOME TAX APPELLATE TRIBUNAL, AMRITSAR BENCH: AMRITSAR.