ACIT CEN CIR 2, THANE V. VIKAS C. JAIN, BHIWANDI

ITA 4202/MUM/2009

• Counselvise Citation: [2010] 119 COUNSELVISE.COM (IT) 6337 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 4 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-11-2010
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: F
• Next Hearing Date: 25-10-2010
• Assessment Year: 2004-2005
• Appeal Filed On: 08-07-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: P PEERYA
• Assessee Lawyers: VIJAY KOTHARI
• Keywords: Business income; Search and seizure
• Section: 153A; 132; 139

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES, F, MUMBAI BEFORE SHRI S V MEHROTRA, ACCOUNTANT MEMBER AND SHRI VIJAY PAL RAO, JUDICIAL MEMBER ITA NO. 4202 AND 4203/MUM/2009 (ASSESSMENT YEARS 2004-05 AND 2005-06) ACIT CEN CIR-2 PAWAR IND. ESTATE, EDULJI ROAD CHARAI, THANE . APPELLANT VS VIKAS C JAIN, FLAT NO.401 SHARDHA CHS, BEHIND AJAY NAGAR BHIWANDI PAN: AACPJ4467A ..RESPONDENT APPELLANT BY : SHRI P PEERYA RESPONDENT BY : SHRI VIJAY KOTHARI O R D E R PER VIJAY PAL RAO,JM THESE APPEALS BY THE REVENUE ARE DIRECTED AGAINST T HE TWO DIFFERENT ORDERS DATED 31.03.2009 OF THE LEARN ED CIT(A)-I, THANE, ARISING FROM THE PENALTY ORDER PASSED UNDER SECTION 271(1)( C ) OF THE ACT FOR THE ASSESSMENT YEARS 2 004-05 AND 2005-06 RESPECTIVELY. 2. THE REVENUE HAS RAISED VARIOUS GROUNDS IN THESE APPEALS, HOWEVER, THE ONLY COMMON ISSUE ARISES FOR OUR ITA NO. 4202 AND 4203/MUM/2009 (ASSESSMENT YEARS 2004-05 AND 2005-06) 2 CONSIDERATION AND ADJUDICATION IS WHETHER IN THE FA CTS AND CIRCUMSTANCES OF THE CASE, THE LEARNED CIT(A) IS JU STIFIED IN DELETING THE PENALTY LEVIED U/S 271(1)( C ) BY HOLD ING THAT THE ASSESSEE IS ENTITLED FOR THE BENEFIT OF IMMUNITY GIVEN UNDER CLAUSE (2) OF EXPLANATION 5 TO SECTION 271(1)( C ) OF THE ACT. 3. BRIEF FACTS LEADING TO THE LEVY OF PENALTY ARE T HAT A SEARCH AND SEIZURE ACTION UNDER SECTION 132 OF THE ACT WAS CONDUCTED AT THE BUSINESS AND RESIDENTIAL PREMISES OF THE ASSESSEE ON 05.01.2006. DURING THE COURSE OF SEAR CH ACTION CERTAIN DOCUMENTS WERE FOUND AND CEASED. IN HIS S TATEMENT RECORDED U/S 132(4), DURING THE SEARCH PROCEEDINGS, THE ASSESSEE HAD OFFERED AN INCOME OF RS.1,60,48,698/- BEING THE PROFIT FROM THE CONSTRUCTION PROJECT. IN RESPONSE TO THE NOTICE ISSUED U/S 153A, THE ASSESSEE FILED THE RETURNS OF INCOME DECLARING TOTAL INCOME OF RS.1,08,19,270/- AND RS. 37,90,860/- FOR THE ASSESSMENT YEARS 2004-05 AND 2005-06 RESPEC TIVELY. THE AO COMPLETED THE ASSESSMENT PROCEEDINGS U/S 153 A BY DETERMINING THE TOTAL INCOME OF THE ASSESSEE FOR TH E ASSESSMENT YEARS 2004-05 AND 2005-06 AT RS.1,09,20, 080/- AND RS.38,90,760/- RESPECTIVELY. THE AO ALSO INITI ATED PENALTY PROCEEDINGS, U/S 271(1 ) ( C ) IN RESPECT OF TOTAL INCOME ASSESSED AS PER THE ASSESSMENT ORDER FOR THE ASSESS MENT YEARS UNDER CONSIDERATION AND LEVIED THE PENALTY OF ITA NO. 4202 AND 4203/MUM/2009 (ASSESSMENT YEARS 2004-05 AND 2005-06) 3 RS.34,07,340/- AND 10,84,423/- RESPECTIVELY VIDE TW O SEPARATE PENALTY ORDERS DATED 26.6.2008. 4. ON APPEAL, THE CIT(A) DELETED THE PENALTY WITH RESPECT TO THE AMOUNT WHICH WAS DISCLOSED BY THE ASSESSEE I N THE RETURN FILED BY ASSESSEE IN RESPONSE TO THE NOTICE U/S 153A OF THE ACT BY HOLDING THAT THE ASSESSEE HAD COMPLIED WITH THE REQUIREMENT OF SUB-CLAUSE (2) OF EXPLANATION 5 OF SECTION 271(1)( C ) BECAUSE THE ASSESSEE HAS PAID TAXES A ND INTEREST ON THE DISCLOSED INCOME. ACCORDINGLY, THE CIT(A ) WAS OF THE VIEW THAT THE ASSESSEE IS ENTITLED TO GET THE BENEF IT OF EXPLANATION 5 TO SECTION 271(1)( C ) OF THE ACT. THE PENALTY WITH RESPECT TO THE ADDITION MADE BY THE AO OVER AN D ABOVE THE INCOME DISCLOSED IN THE RETURN OF INCOME FILED IN RESPONSE TO THE NOTICE U/S 153A HAS BEEN CONFIRMED BY THE C IT(A). 5. BEFORE US, THE LEARNED DR HAS SUBMITTED THAT TH E INCOME DISCLOSED BY THE ASESEEE IN THE RETURN FILED IN RESPONSE TO THE NOTICE U/S 153A IS NOT A VOLUNTARIL Y DISCLOSURE. THE ASSESSEE SUPPRESSED HIS TRUE AND CORRECT INCO ME AND CONCEALED THE PARTICULARS OF INCOME BECAUSE THE AS SESSEE DID NOT DISCLOSE THIS INCOME IN THE REGULAR RETURN FILE D U/S 139(1) BEFORE THE SEARCH AND THIS DISCLOSURE WAS MADE ONLY WHEN THE EVIDENCE WAS FOUND AND SEIZED DURING THE COURSE OF THE SEARCH. THEREFORE, CLAUSE (2) OF EXPLANATION 5 TO S ECTION ITA NO. 4202 AND 4203/MUM/2009 (ASSESSMENT YEARS 2004-05 AND 2005-06) 4 271(1)( C ) IS NOT APPLICABLE IN THE CASE OF THE AS SESSEE WHO HAS DISCLOSED THE ADDITIONAL INCOME VOLUNTARILY. H E HAS FURTHER SUBMITTED THAT AS PER THE PROVISIONS OF SU B-CLAUSE (2) OF CLAUSE (B) OF EXPLANATION 5 TO SECTION 271(1)( C ), THE IMMUNITY IS PROVIDED ONLY TO THE ASSESSEE WHO IN TH E COURSE OF SEARCH MAKES A STATEMENT U/S 132(4) THAT ANY DOCUM ENTS, MONEY, BULLION, JEWELLERY OR OTHER VALUABLE ARTICLE OR THING FOUND HAS BEEN ACQUIRED BY THE ASSESSEE OUT OF HIS INCOME WHICH HAS NOT BEEN DISCLOSED SO FAR IN HIS RETURN O F INCOME TO BE FURNISHED BEFORE THE EXPIRY OF TIME PRESCRIBED U/S 139(1). APART FROM THIS, THE ASSESSEE WHO ALSO SPECIFY IN HIS STATEMENT THE MANNER IN WHICH SUCH INCOME HAS BEEN DERIVED AND PAYS THE TAX TOGETHER WITH INTEREST IF ANY IN R ESPECT OF SUCH INCOME. THUS, THE LEARNED DR HAS SUBMITTED TH AT THE RETURN OF INCOME TO BE FURNISHED BEFORE THE EXPIRY OF TIME PRESCRIBED U/S 139(1) AND DISCLOSES THE INCOME THEN ONLY SUB- CLAUSE (2) OF CLAUSE (B) AND EXPLANATION IS APPLIC ABLE. WHEREAS IN THE CASE OF THE ASSESSEE, THE ASSESSEE HAS FILED, THE RETURN OF INCOME U/S 153A IN RESPONSE TO THE NO TICE ISSUED UNDER THIS SECTION WAS NOT WITHIN TIME PRESCRIBED U /S 139(1). 6. THE LEARNED DR HAS VEHEMENTLY CONTENDED THAT TH E IMMUNITY AGAINST THE LEVY OF PENALTY IS AVAILABLE O NLY IN THE CASE WHERE THE ADDITIONAL INCOME IS DISCLOSED IN T HE RETURN TO BE FILED BEFORE THE EXPIRY OF TIME PRESCRIBED U/S 1 39(1) AND NOT ITA NO. 4202 AND 4203/MUM/2009 (ASSESSMENT YEARS 2004-05 AND 2005-06) 5 THEREAFTER. HE HAS RELIED UPON THE PENALTY ORDER. HE HAS ALSO RELIED UPON THE DECISION OF THE HON. CALCUTTA HIGH COURT IN THE CASE OF CIT V/S BIJAY IRON STORES (2001)( 252 ITR 408) ( CAL ). 7. ON THE OTHER HAND, THE LEARNED AR HAS SUBMITTED THAT THE ASSESSEE IN THE STATEMENT RECORDED U/S 132(4) H AD VOLUNTARILY DISCLOSED ALL THE PARTICULARS OF INCOM E. THE ASSESSEE HAS ALSO EXPLAINED THE ACQUISITION OF VARI OUS ASSETS BY HIM, HIS BUSINESS PARTICULARS INCLUDING THE MODU S OPERENDY AND PROFIT EARNED BY THE ASSESSEE FROM THE BUSINESS OF CONSTRUCTION AND SALE OF THE GODOWN. HE HAS REFE RRED THE PROVISIONS OF SECTION 153A AND SUBMITTED THAT THE R ETURN FILED IN RESPONSE TO THE NOTICE U/S 153A SHALL BE TREATED AS THE RETURN TO BE FILED U/S 139, THEREFORE, WHEN THE ASS ESSEE HAS DISCLOSED THE ADDITIONAL INCOME IN THE RETURN FILE D IN RESPONSE TO THE NOTICE U/S 153A, THE SAME SHALL BE TREADED AS RETURN FILED U/S 139. SINCE THE ASSESSEE DISCLOSED THE ADDITIONAL INCOME IN THE RETURN OF INCOME PAID TAX AND INTEREST THEREON ACCORDINGLY AS THE PROVISIONS OF SUB-CLAUSE (2) OF CLAUSE (B) OF EXPLANATION 5 TO SECTION 271(1)( C ) , THE ASSESSEE IS ENTITLED FOR IMMUNITY AGAINST THE LEVY OF THE PENALTY. HE HAS FURTHER SUBMITTED THAT WHILE ANSW ERING TO THE QUESTIONS NO.10,11 AND 17, THE ASSESSEE HAS EXPLAIN ED THE DETAILS OF THE UNDISCLOSED INCOME AS WELL AS SOUR CES FROM THE ITA NO. 4202 AND 4203/MUM/2009 (ASSESSMENT YEARS 2004-05 AND 2005-06) 6 BUSINESS ACTIVITIES. HE HAS RELIED UPON THE ORDER O F THE BANGALORE BENCHES OF THE TRIBUNAL IN THE CASE OF DCIT V/S K NATARAJAN REPORTED IN (2010) TTJ (BANG) 558. 8. IN REBUTTAL, THE LEARNED DR HAS SUBMITTED THAT THE ASSESSEE WOULD NOT HAVE DISCLOSED THE UNDISCLOSED I NCOME HAD THE SEARCH NOT CARRIED OUT BY THE DEPARTMENT. THEREFORE, THE IMMUNITY PROVIDED UNDER SUB-CLAUSE (2) CLAUSE ( B) TO EXPLANATION 5 TO SECTION 271(1)(C ) IS NOT AVAILAB LE TO THE ASESEEE. 9. WE HAVE CONSIDERED THE RIVAL CONTENTIONS AND REL EVANT RECORD. IT IS UNDISPUTED FACT THAT THE ASSESSEE HA S DISCLOSED TOTAL INCOME OF RS.1,60,48,698 IN HIS STATEMENT REC ORDED U/S 132(4) DURING THE COURSE OF SEARCH AND SEIZURE A CTION CONDUCTED ON 05.01.2006. THE ASSESSEE HAS DISCLO SED THE SAID ADDITIONAL INCOME BIFURCATING INTO TWO ASSESSM ENT YEARS 2004-05 AND 2005-06 IN HIS RETURN OF INCOME FILED IN RESPONSE TO THE NOTICE U/S 153A. AS PER CLAUSE (A) OF SECT ION 153A(1) THE RETURN FURNISHED AS REQUIRED U/S 153A IN RESP ECT OF EACH ASSESSMENT YEAR FALLING WITHIN SIX ASSESSMENT YEARS REFERRED TO IN CLAUSE ( B ), IN THE PRESCRIBED FORM AND VERIFIED IN THE PRESCRIBED MANNER, THE PROVISIONS OF THIS ACT SHA LL, SO FAR AS MAY BE, APPLY ACCORDINGLY AS IF SUCH RETURN WERE A RETURN REQUIRED TO BE FURNISHED UNDER SECTION 139 . AS PER PROVISO TO SECTION 153A)(1) THE ASSESSMENT OR REASSESSMENT, IF ANY, RELATING TO ANY ASSESSMENT YEAR FALLING WITHIN THE PERIOD OF SIX ASSESSMENT YEARS REFERRED TO IN THIS [SUB-SECTION] PENDING ON ITA NO. 4202 AND 4203/MUM/2009 (ASSESSMENT YEARS 2004-05 AND 2005-06) 7 THE DATE OF INITIATION OF THE SEARCH UNDER SECTION 132 OR MAKING OF REQUISITION UNDER SECTION 132A , AS THE CASE MAY BE, SHALL ABATE. THUS, AS PER THE PROVISO OF SECTION 153A, IF THERE IS A SEARCH INITIATED U/S 132, THE ASSESSMENT U/S 153A SUBSTITUTES THE ORIGINAL ASSESSMENT AND ACCORDINGLY, THE RETURN FILED IN RESPONSE TO THE NOTICE U/S 153A ;IS DEEMED TO HAVE BEEN FILED AS REQUIRED U/S 139 FOR APPLICATION OF THE PROVISIO NS OF THIS ACT. THEREFORE, THE IMMUNITY UNDER SUB-CLAUSE (2) OF CLAUSE (B) OF EXPLANATION 5 TO SECTION 271(1)( C) IS AVA ILABLE TO THE ASESEEE WHEN THE ASSESSEE HAS DISCLOSED AN ADDITION AL INCOME IN THE RETURN FILED IN RESPONSE TO THE NOTIC ES U/S 153A. HOWEVER, WHEN THE ASSESSEE APART FROM DISCLOSING T HE INCOME ALSO DISCLOSED THE SOURCES OF THE ADDITIONA L INCOME AS HIS BUSINESS INCOME IN THE STATEMENT MADE U/S 132(4 ). THE DECISION OF THE HON. CALCUTTA HIGH COURT IN THE CA SE OF CIT V/S BIJAY IRON STORES (SUPRA) IS NOT APPLICABLE I N THE FACTS OF PRESENT CASE BECAUSE IN THAT CASE THE PENALTY WAS L EVIED ON THE ADDITION MADE BY THE AO ON THE BASIS OF SEIZED MATERIAL AND THE ISSUE OF APPLICABILITY OF SUB-CLAUSE 2 OF CLAUSE (B) OF EXPLANATION 5 WAS NOT INCLUDED IN THE SAID CASE. THE POSITION REGARDING APPLICABILITY OF SUB-CLAUSE (2) OF CLAUSE (B) OF EXPLANATION 5 TO SECTION 271(1)( C ) IS FURTHER MADE CLEAR BY THE INTRODUCTION OF EXPLANATION 5A TO SECTION 271(1 )( C) WHICH READS AS UNDER : ITA NO. 4202 AND 4203/MUM/2009 (ASSESSMENT YEARS 2004-05 AND 2005-06) 8 [ FAILURE TO FURNISH RETURNS, COMPLY WITH NOTICES, CONCEALMENT OF INCOME, ETC. 271. (1) IF THE [ASSESSING] OFFICER OR THE 6 [***] 7 [COMMISSIONER (APPEALS)] 8 [OR THE COMMISSIONER] IN THE COURSE OF ANY PROCEEDINGS UNDER THIS ACT, IS SATISFIED THAT ANY PERSON (A) 9 [* * *] (B) (C) HAS CONCEALED THE PARTICULARS OF HIS INCOME OR [* * *] FURNISHED INACCURATE PARTICULARS OF 14 [SUCH INCOME, OR] 15 [(D) (I) [(II) . [(III) [EXPLANATION 1. EXPLANATION 2. [EXPLANATION 3. EXPLANATION 4. [EXPLANATION 5.. [ EXPLANATION 5A. WHERE, IN THE COURSE OF A SEARCH INITIATED 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 VALUABL E ARTICLE OR THING (HEREAFTER IN THIS EXPLANATION RE FERRED TO AS ASSETS) AND THE ASSESSEE CLAIMS THAT SUCH ASSETS HAVE BEEN ACQUIRED BY HIM BY UTILISING (WHOL LY 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, ITA NO. 4202 AND 4203/MUM/2009 (ASSESSMENT YEARS 2004-05 AND 2005-06) 9 WHICH HAS ENDED BEFORE THE DATE OF SEARCH AND, (A) WHERE THE RETURN OF INCOME FOR SUCH PREVIOUS YE AR 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 FO R 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 T HE 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 TH E PARTICULARS OF HIS INCOME OR FURNISHED INACCURATE PARTICULARS OF SUCH INCOME. ] 10. AFTER THE EXPLANATION 5A BROUGHT INTO STATUTE, THE IMMUNITY PROVIDES UNDER SUB-CLAUSE(2) TO CLAUSE (B) OF EXPLANATION 5 TO SECTION 271(1)( C ) IS NOT MORE AP PLICABLE IN THE CASE WHERE SEARCH INITIATED U/S 132 ON OR AFTER 01.06.2007 DESPITE SUCH INCOME DECLARED BY THE ASSESSEE IN AN Y RETURN OF INCOME FURNISHED ON OR AFTER THE DATE OF SEARCH. SINCE, THE SEARCH IN CASE IN HAND WAS CONDUCTED ON 05.01.20 06 WHICH IS PRIOR TO 01.06.2007, THEREFORE, EXPLANATION 5A T O SECTION 271(1)( C ) IS NOT APPLICABLE AND ACCORDINGLY THE I MMUNITY UNDER SUB-CLAUSE (2) OF CLAUSE (B) OF EXPLANATION 5 TO SECTION 271(1)( C ) IS AVAILABLE TO THE ASSESSEE. SIMILAR VIEW HAS BEEN TAKEN BY THE BANGALORE BENCH OF THIS TRIB UNAL IN THE CASE OF DCIT V/S K NATARAJAN (SUPRA) IN PARAGRAPHS 5.4 AND 5.5 HELD AS UNDER : ITA NO. 4202 AND 4203/MUM/2009 (ASSESSMENT YEARS 2004-05 AND 2005-06) 10 5.4 THE ASSESSEE VIDE HIS STATEMENT DATED 9TH NOVEMBER, 2004 IN ANSWER TO QUESTION NO.34 IN WHICH HE WAS ASKED TO SAY AS TO WHETHER HE HAS GOT ANYTHING ELSE TO SAY. THE ASSESSEE REPLIED AS UNDER 'YES, AS EXPLAINED EARLIER, I WOULD VOLUNTARILY DECLARED A SUM OF TS.24,34,709/- BEING THE UNACCOUNTED SUNDRY DEBTORS RECEIVABLE AS ON DATE. SINCE, LAM VOLUNTARILY DECLARED THIS INCOME, I MAY PLEASE BE GIVEN IMMUNITY FROM PENALTY AND PROSECUTION. WHEN THE ABOVE REFERRED ANSWER IS READ ALONG WITH QUESTION NO.13, IT IS CLEAR THAT THE ASSESSEE HAS T O RECEIVE RS.24,34,709/- OUT OF RECEIVABLE OF RS.93,54,663/- AS ON 31ST MARCH, 2004. HENCE, THERE IS A DECLARATION U/S 132(4) FOR A SUM OF RS.24,34,7 09/- WHICH RELATES TO ASST YEAR 2004-05 AS THE SUM REPRESENTED THE RECEIVABLE AS ON 31ST MARCH, 2004. IN THE RETURN FILED FOR THE ASST. YEAR 2004-05, THE ASSESSEE COMPUTED THE ADDITIONAL TAX PAYABLE AT RS.16,02,723/-.. THE SAME WAS PAID AS SELF ASSESSMENT TAX AS PER THE COPY OF THE RETURN FILED IN THE PAPER BOOK BY THE ASSESSEE. THE HONBLE RAJASTHAN HIGH COURT IN THE CASE OF CIT V KANAIAHLA L 299 ITR 90 HELD THAT PENALTY CANNOT BE IMPOSED AND HELD THAT THE ASSESSEE WAS ENTITLED TO IMMUNITY UND ER EXPLANATION 5 TO SECTION 271(L)(C) AS THE ASSESSEE HAS MADE DISCLOSURE OF UNDISCLOSED INCOME OF RS.3,50,000/-AND STATED THAT IT WOULD FILE A RETURN IN RESPECT OF THIS AMOUNT. EVEN IF THIS AMOUNT WAS SPREAD OVER, INSTEAD OF THE ASST. YEAR FOR WHICH IT WAS DISCLOSED, THE HON'BLE RAJASTHAN HIGH COURT HELD TH AT IMMUNITY WILL BE AVAILABLE. THE HON'BLE RAJASTHAN HIGH COURT IN THE CASE OF CIT V MISHRIMAL SONI HELD THAT EXPLANATION TO SECTION 271(L)(C) APPLIES TO TANGIBLE AND INTANGIBLE ASSETS. THE HON'BLE ALLAHAB AD HIGH COURT IN THE CASE OF CIT V RADHAKRISHNA GOYAL HELD THAT NONDISCLOSURE OF MANNER IN WHICH UNDISCLOSED INCOME WAS DERIVED IS NOT RELEVANT. HOWEVER, IN THE INSTANT CASE, THE MANNER IN WHICH T HE UNDISCLOSED INCOME HAS BEEN DERIVED IS CLEAR FROM THE FACTS RECORDED IN THE STATEMENT U/S 132(4) OF T HE IT ACT. 5.5 THE HON'BLE GUJARAT HIGH COURT IN THE CASE OF C IT V MAHENDRA C SHAH 299 ITR 305 MENTIONED THAT THE STATEMENT IS RECORDED IN THE QUESTION AND ANSWER ITA NO. 4202 AND 4203/MUM/2009 (ASSESSMENT YEARS 2004-05 AND 2005-06) 11 FORM AND THERE WOULD BE NO OCCASION FOR AN ASSESSES TO STATE AND MAKE AVERMENTS IN THE EXACT FORMAT STIPULATED BY THE PROVISIONS CONSIDERING THE SETTIN G IN WHICH STATEMENT IS BEING RECORDED. IT IS INCUMBENT UPON AUTHORIZED OFFICER TO EXPLAIN THE PROVISIONS O F EXPLANATION 5 IN ENTIRETY TO THE ASSESSEE CONCERNED AND THE AUTHORIZED OF FLEER CANNOT STOP SHORT AT A PARTICULAR STAGE SO AS TO PERMIT THE REVENUE TO TAK E ADVANTAGE OF SUCH A LAPSE IN THE STATEMENT. HENCE, IF THE STATEMENT DOES NOT SPECIFY THE MANNER IN WHICH THE INCOME HAS BEEN EARNED THEN IT IS NOT DETRIMENT AL UNTIL AND UNLESS SPECIFIC QUESTION IS ASKED AND THE ASSESSEE DOES NOT GIVE THE REPLY. IN THE INSTANT CA SE, TAX HAS BEEN PAID. THE REQUIREMENT OF EXPLANATION 5 TO SECTION 271(L)(C) FOR PROVIDING IMMUNITY FROM PENALTY IS THAT TAX ALONG WITH INTEREST IS PAID. TH ERE IS NO PRESCRIPTION AS TO THE POINT OF TIME WHEN THE TA X HAS TO BE PAID QUA THE AMOUNT OF INCOME DECLARED IN THE STATEMENT U/S 132(4). IN THE INSTANT CASE, THE ASSESSEE HAS PAID THE TAX. THE RETURN FILED IN RESPONSE TO SECTION 153A WERE NOT PROCESSED. THE PAYMENT OF INTEREST WAS CREATED AT THE TIME OF ASSESSMENT AND IT IS NOT THE CASE OF THE REVENUE TH AT SUCH PAYMENT HAS NOT BEEN PAID. HENCE WE ARE OF THE OPINION THAT NO PENALTY IS LEVIABLE IN RESPECT OF S UM-OF RS.24,34,709/- AS DECLARED IN THE STATEMENT U/S 132(4) FOR WHICH THE TAX STANDS PAID. IT IS TRUE TH AT THE ASSESSEE HAS ADMITTED SUNDRY DEBTORS OF MORE THAN FTS.93 LAKHS AS ON 31ST MARCH, 2004; BUT HAS NOT DECLARED THE SAME U/S 132(4) OF THE I T ACT. IN THE ABSENCE OF ANY CLEAR CUT DECLARATION IN THE STATEME NT RECORDED U/S 132(4), IMMUNITY FROM PENALTY CANNOT B E ALLOWED ON THE SUM OF RS.93,54,663/-. IMMUNITY FROM PENALITY UNDER EXPLANATION 5 CANNOT BE EXTENDED IF ADDITIONAL INCOME IS DECLARED BY FILING THE RETURN. THERE IS SPECIFIC REQUIREMENT THAT ADDITIONAL INCOM E BE DECLARED IN THE STATEMENT RECORDED U/S 132(4). YIENCE, WE CAN NOT EXTEND THE SCOPE OF EXPLANATION THAT PENALTY WILL NOT BE LEVIABLE IF ADDITIONAL INC OME IS DECLARED IN THE RETURN AND TAX ALONGWITH INTEREST I S PAID ITA NO. 4202 AND 4203/MUM/2009 (ASSESSMENT YEARS 2004-05 AND 2005-06) 12 11. IN VIEW OF THE ABOVE DISCUSSIONS, WE DO NOT FI ND ANY REASON TO INTERFERE WITH THE ORDER OF THE CIT(A), THE SAME IS UPHELD. 12. IN THE RESULT, THE APPEALS BY THE REVENUE ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 26.11.2010 SD SD (S V MEHROTRA ) (VIJAY PAL R AO) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI, DATED 26 TH NOV 2010 SRL:221110 COPY TO: 1. APPELLANT 2. RESPONDENT 3. CIT CONCERNED 4. CIT(A) CONCERNED 5. DR CONCERNED BENCH BY ORDER TRUE COPY ASSTT. REGISTRAR, ITAT, MUMBAI