The DCIT, Central Circle-1, Baroda V. Shri Anil Bholabhai Patel, Baroda

ITA 481/AHD/2016

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 4111 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 5 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-08-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: Not Allotted
• Assessment Year: 2012-2013
• Appeal Filed On: 01-03-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: M K PATEL
• Keywords: Business income; Income from undisclosed sources; Loose papers; Document seized; Bonafide belief; Documents seized
• Section: 153A; 132; 139

Judgement Text

, SMC IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, AHMEDABAD BEFORE SHRI PRADIP KUMAR KEDIA, ACCOUNTANT MEMBER & SMT. MADHUMITA ROY, JUDICIAL MEMBER ./ I.T.A. NO. 481/AHD/2016 ( ASSESSMENT YEAR : 2012-13) DEPUTY COMMISSIONER OF INCOME-TAX, CENTRAL CIRCLE-1, AAYAKAR BHAVAN, RACE COURSE CIRCLE, BARODA / VS. SHRI ANILBHOLABHAI PATEL, 1-2, VISHRANTI, DARSHAN PARK SOCIETY, VIP ROAD, KARELIBAUG, BARODA BARODA - 390018 ./ ./ PAN/GIR NO. : ACTPP2509G ( APPELLANT ) .. ( / RESPONDENT ) / APPELLANT BY : SHRI ALOK KUMAR, SR. D.R. / RESPONDENT BY : SHRI M. K. PATEL & ARTI N. SHAH, A.R. DATE OF HEARING 02/07/2018 !'# / DATE OF PRONOUNCEMENT 09/08/2018 / O R D E R PER PRADIP KUMAR KEDIA - AM: THE CAPTIONED APPEAL HAS BEEN FILED AT THE INSTANCE OF THE REVENUE AGAINST THE ORDER OF THE CIT(A)-12, AHMEDAB AD (CIT(A) IN SHORT), DATED 28.10.2015 ARISING IN THE PENALTY ORD ER DATED 26.09.2014 PASSED BY THE ASSESSING OFFICER (AO) UNDER S. 271AA A OF THE INCOME TAX ACT, 1961 (THE ACT) CONCERNING ASSESSMENT YEAR 2012-13. ITA NO. 481/AHD/16 [DCIT VS. SHRI ANILBHOLABHAI PATEL] A.Y. 2012-13 - 2 - 2. BRIEFLY STATED, A SEARCH UNDER S. 132 OF THE ACT WAS CONDUCTED ON THE GROUP CASES INCLUDING THE CASE OF THE ASSESSEE ON 09.08.2011. DURING THE COURSE OF SEARCH OPERATION, THE ASSESSEE DISCLOSED AN AMOUNT OF RS.2,41,50,000/- ON ACCOUNT OF UNACCOUNTE D RECEIPTS DERIVED FROM LAND TRADING AND COMMISSION INCOME. T HE ASSESSEE BY FILING THE RETURN OF INCOME HAD ADMITTEDLY OFFERED THE AFORESAID UNDISCLOSED INCOME DECLARED AT THE TIME OF SEARCH A ND PAID TAXES THEREON. CONSEQUENT UPON THE RETURN FILED BY INCLU DING THE ADDITIONAL INCOME AS AFORESTATED, THE RETURN WAS SUBJECTED TO SCRUTINY ASSESSMENT. THE DISCLOSURE SO MADE WAS ACCEPTED BY AO AS SUCH. WHILE PASSING THE ASSESSMENT ORDER, THE AO THEREAFTER INCLUDED PR OVISIONS OF SECTION 271AAA OF THE ACT AND IMPOSED PENALTY @10% OF THE U NDISCLOSED INCOME OF THE SPECIFIED PREVIOUS YEAR AT RS.2,41,50 ,000/-. CONSEQUENTLY, THE PENALTY OF RS.24,15,000/- WAS IMP OSED UNDER S. 271AAA OF THE ACT VIDE PENALTY ORDER DATED 26.09.20 14 CONCERNING AY 2012-13 IN QUESTION. 3. AGGRIEVED BY THE IMPOSITION OF PENALTY, THE ASSE SSEE PREFERRED APPEAL BEFORE THE CIT(A). 4. THE CIT(A) HOWEVER FOUND MERIT FOR NON IMPOSITIO N OF PENALTY AS PLEADED BY THE ASSESSEE. THE CIT(A) ACCORDINGLY DELETED THE PENALTY IMPOSED AFTER ANALYZING THE FACTUAL POSITIO N IN THE LIGHT OF ITA NO. 481/AHD/16 [DCIT VS. SHRI ANILBHOLABHAI PATEL] A.Y. 2012-13 - 3 - JUDICIAL PRECEDENTS. THE RELEVANT OPERATIVE PARA O F THE ORDER OF THE CIT(A) IS REPRODUCED HEREUNDER: 4. I HAVE GIVEN VERY CAREFUL CONSIDERATION TO THE FACTS AND RIVAL CONTENTIONS AVAILABLE BEFORE ME. THE STATEMENT U/S 132(4) OF SHRI ANIL BHOLABHAI PATEL DATED 9-10/8/2011 (Q 11, 12) A ND PAGE NOS. 5 TO 8 OF THE STATEMENT ALONG WITH THE UNDATED LETTER SUBMITTED TO THE ADIT HAVE BEEN CAREFULLY PERUSED BY ME WHEN THE LD, AR TOOK ME THROUGH THE SAME. THE SAME ARE REPRODUCED HERE FOR READY REFERENCE: 4.1 ABSTRACT OF RELEVANT QUESTION AND REPLY OF STAT EMENT OF SHRI ANIL BHOLABHAI PATEL ON 9/8/2011 RECORDED U/S 132(4 ) OF THE ACT. (ENGLISH TRANSLATION) 'QUES 9: DURING THE SEARCH AT YOUR PREMISES TODAY, LOOSE PAPERS FROM YOUR HOUSE ARE FOUND WHICH IS INVENTERI SED AS ANNEXURE A/1-1 TO 43 PAGES. GIVE PAGE WISE REPLY OF IT. ANS.: DURING THE SEARCH TODAY, IN ANNEXURE A/1, PAG E 1 TO 38 CONSIST OF COPY OF WEALTH TAX RETURN FILED OF MY FAMILY MEM BERS AND PROOF OF INVESTMENT MADE IN SBI GOLD DEPOSIT/SCHEME AND PAGE 39 TO 43 CONSISTS OF CALCULATION OF CASH AMOUNT FROM OUR VAR IOUS SCHEMES/PROJECTS. QUES 10: AS MENTIONED IN ANSWER TO Q. 9 THAT CASH I S RECEIVED, WHETHER THE SAME IS RECORDED IN YOUR, BOOKS PF ACCO UNTS OR NOT? GIVE EXPLANATION OF IT. ANS: NO. THE CASH RECEIVED WHICH IS MENTIONED IN RE PLY TO Q. 9 IS NOT RECORDED IN OUR BOOKS OF ACCOUNTS. QUES 11: DURING THE SEARCH AT YOUR PREMISES, YOUR P ARTNERS' PREMISES AND VARIOUS BUSINESS PREMISES OF PROJECTS ON 9/8/2011, MANY AGREEMENTS (DASTAVEJ) AND VOLUMINOUS DOCUMENTS ARE FOUND. ON CLOSE EXAMINATION OF THE SAME, MANY ENTRIES OF Y OUR INCOME AND OF YOUR PARTNERS AND THEIR FAMILY MEMBERS HAS COME TO NOTICE. ON EXAMINATION OF BOOKS OF ACCOUNTS FOUND FROM YOIIR P REMISE, IT HAS BEEN FOUND THAT THE SAME IS NOT RECORDED IN THE BOO KS. THE SOME OF THE DOCUMENT ARE AS UNDER: PARTY NAME ANNEX NO. PG. NO. 1. PRASANNA ASSOCIATES PROP: HIMANSHU JOSHI PRASANNA HOUSE, NR. PF OFFICE, AKOTA VADODARA A/1 4&5 2. SUMATIJ. RAO B/49, BHAVANI SOC., ITA NO. 481/AHD/16 [DCIT VS. SHRI ANILBHOLABHAI PATEL] A.Y. 2012-13 - 4 - OPP. WATER TANK, KARELIBAUG, BARODA A/2 117 TO 121 3. SUMATI J. RAO B/49, BHAVANI SOC., OPP. WATER TANK, KARELIBAUG, BARODA A/5 167 TO 171 EXAMINE THIS DOCUMENT AND EXPLAIN THE SAME. ANS: I HAVE CLOSELY EXAMINED THE DOCUMENTS FOUND AT MY AND AT MY PARTNERS' RESIDENCE AND AT OTHER PREMISES OF OUR GROUP. I HAVE DISCUSSED THESE WITH MY PARTNERS AND MEMBERS OF THE GROUP AND HAVE TAKEN THEM IN CONFIDENCE AND STATE THAT FOR ANY OMISSION OF INCOME IN THE BOOKS MODE BY ME AND/OR OUR GROUP, WE DISCLO SE UNACCOUNTED INCOME OF RS. 35 CRORE ON BEHALF OF OUR ENTIRE GROU P WHICH INCLUDES ME , MY FAMILY MEMBERS, MY PARTNERS AND OTHER RELATED PARTIES. I WILL SUBMIT THE BREAKUP OF THIS INCOME AFTER EXAMINATION OF RECORDS SEIZED AND OPERATION OF BANK LOCKERS. I HAVE TAKEN CONSENT OF ALL MY FAMILY MEMBERS, PARTNERS AND OTHER RELATED PARTIES BEFORE DECLARING THE ABOVE UNDISCLOSED INCOME OF RS. 35 CRORE AND TH E ALL OF THEM HAVE SIGNED THIS STATEMENT IN ACCEPTANCE. QUES 12: DO YOU WANT TO SAY ANYTHING ELSE? ANS: YES, I ONCE AGAIN AGREE THAT I AND MY PARTNERS AND MY FAMILY MEMBERS HAVE UNACCOUNTED INCOME OF RS. 35 CRORE WHI CH IS NOT RECORDED IN OUR BOOKS AND WE AGREE TO PAY APPLICABL E TAX THEREON. WE REQUEST YOU NOT TO LEVY PENALTY ON THIS INCOME A S STATEMENT IS RECORDED U/S 132(4) OF THE ACT. SIGNED (BY ALL ON W/8/20U) AKSHAY ARVINDBHAI KOTHARI ANIL B PATEL NIKHIL K PATEL, BHARAT D PATEL, HARISH SHAH, RAVI R AO, DEVANG DESAI, M J SHAH, DILIP A SHAH, S J SHAH BIPJN B SHA H, NAVIRL J PATEL, SHASHIKANT C SHAH, HIMANSHU B JGSHI, JAYESH A BRAHMBHATT, KIRIT VADALIA 4.2 LETTER ADDRESSED TO ADIT: ANILBHAI B. PATEL 1-2, DARSHAN PARK SOCIETY, VIP ROAD, KARELIBAUG, BARODA DATE: TH NOVEMBER, 2011 TO, THE ASSTT, DIRECTOR OF INCOME - TAX (LNV)-1, BARODA. ITA NO. 481/AHD/16 [DCIT VS. SHRI ANILBHOLABHAI PATEL] A.Y. 2012-13 - 5 - SUB: BIFURCATION OF DISCLOSURE MADE RESPECTED SIR, THERE WAS SEARCH AT THE RESIDENTIAL AS WELL AS AT T HE OFFICE OF YOUR ASSESSEE & OTHER PARTNERS, THEIR FAMILY AND GR OUP MEMBERS ON 09.08.2011. DURING THE COURSE OF SEARCH PROCEEDINGS AN AMOUNT OF RS.35 CRORES WERE DECLARED. THE DETAILED HEAD WISE AS WELL AS YEAR WISE BIFURCATION OF THE SAME IS AS UNDER........... ........... NAME OF THE HEAD OF NATURE OF ASSTT.YEAR ASSTT.YEAR DECLARANT INCOME INCOME 2011-12 2011-12 ANILBHAI B. PATEL OTHER UNEXPLAINED NIL 25,50,000 INCOME CASH OTHER UNDER VALUATION NIL 1,76, 88,600 INCOME OF PROPERTY BUSINESS INCOME FROM PUR. 25,00,000 39,11,40 0 INCOME & SALE OF LAND & COMMISSION .. THIS WILL SATISFY YOUR HONOUR. THANKING YOU. YOURS FAITHFULLY, 4.3 SIMILARLY, FULL CONTENT OF THE RETURN OF INCOME FILED IN RESPONSE TO NOTICE U/S 153A, THE ASSESSMENT ORDER AS ALSO TH E ORDER OF PENALTY HAVE ALSO BEEN PERUSED BY ME. UPON SUCH PERUSAL, I HAVE NOTICED AS UNDER: 1) SHRI ANIL BHOLABAHAI HAS, VIDE ANSWER TO QUESTIO N NO. 11 AND 12, CLEARLY ADMITTED UNDISCLOSED INCOME OF RS. 35 CRORES FOR THE WHOLE GROUP. THIS ADMISSION IS RE- CONFIRMED AT THE BOTTOM OF THE STATEMENT BY OTHER 1 5 INDIVIDUALS OF THE GROUP, AS CAN BE SEEN ON PAGE 7- 8 OF THE STATEMENT. 2) VIDE ANSWER TO QUESTION 11, SHRI ANIL PATEL HAS CLEARLY STATED THAT THE ADMISSION OF RS. 35 CRORES IS 'ON B EHALF OF VARIOUS FIRMS AND THEIR PARTNERS AND OTHER RELAT ED INDIVIDUALS', AND AFTER CONSULTATION WITH RESPECTIV E PEOPLE, 'WHO HAVE SIGNED THIS STATEMENT AS A TOKEN OF THEIR CONSENT/SUCH CONSULTATION' 3) THE Q-11 CLEARLY SUGGESTS THAT THE ADMISSION IS BASED ON TRANSACTION DEPICTED IN SEIZED DOCUMENTS. 4) THERE IS NO FURTHER PROBE OR QUERY ABOUT THE MAN NER OR SUBSTANTIATION OF EARNING UNACCOUNTED INCOME BY THE AUTHORIZED OFFICER. ITA NO. 481/AHD/16 [DCIT VS. SHRI ANILBHOLABHAI PATEL] A.Y. 2012-13 - 6 - 5) THE STATEMENT DATED 9-10/8/2011 IS FURTHER FOLL OWED UP BY A CLEAR CUT BIFURCATION OF THE HANDS AND ASSESSM ENT YEARS IN WHICH THE UNDISCLOSED INCOME IS OFFERED, A LONG WITH CLEAR POINTING OUT OF THE MANNER OF EARNING TH E UNACCOUNTED INCOME IN RESPECTIVE HANDS. AS PER THE SAID LETTER, THE APPELLANT HAS MADE A TOTAL DISCOSURE OF RS. 2,66,50,000/- FOR AYS 11-12 AND 12-13. THERE ALSO D OES NOT APPEAR TO BE ANY QUERY OR FOLLOW-UP ABOUT THE MANNER OR SUBSTANTIATION OF EARNING ACCOUNTED INCOM E BY THE CONCERNED INVESTIGATING OFFICER AFTER RECEIP T OF THE LETTER OF ALLOCATION/HEAD AS REPRODUCED ABOVE. (6) THERE IS NO FURTHER SPECIFIC QUERY DURING ASSES SMENT PROCEEDINGS SO AS TO ELICIT ANY FURTHER INFORMATION ABOUT THE MANNER OF EARNING UNACCOUNTED INCOME OR SUBSTANTIATION THEREOF. NO ADDITION TO INCOME RETUR NED HAS BEEN MADE BY THE AO. AS SUCH, THE VERY SATISFAC TION OF THE AO FOR INITIATION OF THE PENALTY CONFIRMS TH AT THE SATISFACTION IS BASED ENTIRELY ON THE RETURN OF INC OME AND PARTICULARS CONTAINED THEREIN WITHOUT ANY REFER ENCE TO ANY SEIZED OR OTHER DOCUMENTS. THE ASSESSEE IN HIS RETURN OF INCOME HAS OFFERED ADDITIONAL INCOME OF RS. 2,41,50,000/- WHICH IS AS PER THE DISCLOSURE OF ADDITIONAL INCOME MADE DURING THE COURSE OF SEARCH PROCEEDINGS. THIS ADDITIONAL INCOME HAS BEEN OFFERED DUE TO SEARCH ACTION AND THE FINDINGS THEREOF, THUS THE AMOUNT OF RS. 2,41,50,0000/- IS UNDISCLOSED INCOME OF THE ASSESSEE FOR THE SPECIFIED PREVIOUS YEAR AS PER SECTION 271AAA OF THE ACT. THEREFORE, PENALTY PROCEEDINGS U/S 271AAA ARE SEPARATELY INITIATED.' 4.4 IN VIEW OF THE CLEAR CUT FACTS AS EVIDENT AND N OTED BY ME ABOVE, I HAVE TO OBSERVE THAT THERE IS NO DENYING T HAT THE DISCLOSURE IS MADE U/S 132(4) AND MANNER OF EARNING IS CLEARLY NOT ONLY SPECIFIED IN THE LETTER ADDRESSED TO THE ADIT BUT, AS RIGHTLY POINTED OUT BY THE AR, IS SUBSTANTIATED BY SEIZED DOCUMENTS ON THE BASIS OF WHICH THE DISCLOSURE IS MADE. I AGREE WITH THE LD. AR, THAT THERE IS NO DEFINITION OF 'STATING THE MANNER AND SUBSTANTIA TING THE SAME' LAID DOWN IN S. 271AAA, AS INDEED IT IS TO BE GATHE RED FROM NOT ONLY THE STATEMENT U/S 132(4) BUT ALSO THE SEI ZED DOCUMENTS /ASSETS WHICH ARE CONFRONTED TO THE APPELLANT. MOREOVER, IN MY CONSIDERED OPINION AS FORTIFIED BY VARIOUS AUTHORIT IES RELIED UPON BY THE APPELLANT OR OTHERWISE PERUSED BY ME, THE VERY FACT THAT AFTER DISCLOSURE U/S 132(4) STATING THE 'MANNER' AS REFLE CTED IN THE SEIZED DOCUMENTS, WHEN THE APPELLANT HAS SHOWN THE DISCLOS URE IN THE RETURN OF INCOME IN CONFORMITY WITH THE STATEMENT/ DISCLOS URE U/S 132(4) (MADE 'A CLEAN BREAST' OF UNACCOUNTED INCOME), AND THAT NO ADDITION HAS BEEN MADE IN THE ASSESSMENT AND NO FURTHER QUER Y HAS BEEN RAISED NOT ONLY BY THE AUTHORIZED OFFICER BUT EVEN BY THE AO DURING ITA NO. 481/AHD/16 [DCIT VS. SHRI ANILBHOLABHAI PATEL] A.Y. 2012-13 - 7 - ASSESSMENT STAGE, WOULD CLEARLY ESTABLISH, IPSO FAC TO, THAT THE ONUS UNDER S. 271AAA(2) WITH REGARD TO MANNER AND SUBSTA NTIATION HAS BEEN FLAWLESSLY DISCHARGED BY THE APPELLANT. THUS, IT IS INDEED INCOMPREHENSIBLE, AS RIGHTLY PLEADED BY THE AR, AS TO HOW THE LD. AO HAS COME TO THE CONCLUSION THAT THE APPELLANT HAS N OT STATED THE MANNER OF EARNING UNACCOUNTED INCOME. THE ASSESSING OFFICER HAS NOT EVEN FOUND OR REFERRED TO ANY LOOSE PAPERS WHIC H CONTRADICT THE STATEMENT GIVEN OR INCOME RETURNED BY THE APPELLANT . RATHER, THE ASSESSMENT IS EXCLUSIVELY BASED ON THE ACCEPTANCE OF RETURN FILED BY THE APPELLANT, WITHOUT RAISING ANY DOUBT, CONDITIONALITY OR CONTRADICTION WITH REGARD TO SUCH ACCEPTANCE, WHICH IN TURN IS BASED ON STATEMENT U/S 132(4). THE INVESTIGATING OFFICER/ AUTHORIZED OFFICER HAD NOT ASKED ANY SPECIFIC QUESTIO N REGARDING THE MANNER OF DERIVING ADDITIONAL INCOME OR SUBSTANTI ATING THE SAME. EVEN THE LD. ASSESSING OFFICER HAD PUT NO FURTHER Q UERIES BEFORE INITIATING THE PROCEEDINGS U/S 271AAA. THE LD. AR IS THEREFORE RIGHT IN CONTENDING THAT THE OBSERVATION OF THE LD. AO TH AT THE APPELLANT HAS NOT DISCHARGED THE ONUS OF STATING THE MANNER O F EARNING THE UNACCOUNTED INCOME OR OF SUBSTANTIATING TH E SAME FOR CLAIMING BENEFIT OF S. 271AAA(2) IS NOT BASED ON FACTS AND EVIDENCES LIE ON RECORD. 4.5 MOREOVER, AS IS CLEAR FROM THE VARIOUS JUDICIAL RULING RELIED UPON BY THE AR AND FURTHER AS PERUSED BY ME AND CON SIDERED IN OTHER APPEAL PROCEEDINGS INVOLVING THE ISSUE OF PENALTY U /S 271AAA, (BELOW), THE ONUS TO PUT A SPECIFIC QUESTION WITH R EGARDS TO THE MANNER IN WHICH THE INCOME HAD BEEN DERIVED IS ON T HE PERSON WHO RECORDED STATEMENT IN THIS REGARDS I.E. AUTHORIZED OFFICER, THUS, SIMPLY BECAUSE THE AUTHORIZED OFFICER FAILS TO PUT THE QUESTION TO ASK THE MANNER OF DERIVING ADDITIONAL INCOME, THE APPEL LANT CANNOT BE DENIED THE BENEFIT PROVIDED UNDER SECTION 271AAA(2) OF THE ACT. IN THE FACTS BEFORE ME, AS CAN CLEARLY BE SEEN, EVEN I N THE FACE OF A REPLY BY THE APPELLANT VIDE ANSWER 11 REPRODUCED AB OVE PLEADING FOR IMMUNITY FROM PENALTY IN CONJUNCTION WITH AND IN CO NSIDERATION OF DISCLOSURE BEING MADE, AS THE 'STATEMENT IS U/S 132 (4)', THE AUTHORIZED OFFICER HAS NEITHER SOLICITED FURTHER IN FORMATION, NOR POINTED OUT ANY INCOMPLETENESS IN THE STATEMENT NOR INDICATED POSSIBILITY OF LIKELY PENALTY U/S 271(1)(C) OR U/S 271AAA. THE AO DURING THE ASSESSMENT OR DURING THE PENALTY PROCEED INGS HAS NOT BROUGHT OUT ANY POSITIVE MATERIAL EITHER IN THE FOR M OF SEIZED DOCUMENTS OR OTHERWISE TO CONCLUDE OR EVEN T O OBSERVE THAT THE UNACCOUNTED INCOME IS EARNED IN A MANNER DIFFER ENT FROM WHAT HAS BEEN STATED DURING 132(4). WHEN SEEN IN THE LIGHT OF MAHENDRA C SHAH (SUPRA), I FIND FORCE IN THE CONTENTION OF T HE ARS THAT SUBSEQUENT TO ADMISSION U/S 132(4), CLEARLY INDICAT ING THE BROAD MANNER OF EARNING, FOLLOWED BY OFFERING IN THE RETU RN, AND UNCONDITIONAL AND UNALTERED BRINGING OF THE SAME TO TAX BY THE AO, SUBSTANTIALLY TANTAMOUNT TO STATING THE MANNER AND SUBSTANTIATING THE SAME, AND THAT THE AO CANNOT HELD OTHERWISE DUR ING PENALTY PROCEEDINGS WITHOUT BRINGING IN POSITIVE EVIDENCE T O ESTABLISH THE ITA NO. 481/AHD/16 [DCIT VS. SHRI ANILBHOLABHAI PATEL] A.Y. 2012-13 - 8 - ABSENCE OF SUBSTANTIATION OR THE FALSITY IN CLAIM O F THE APPELLANT OR WITHOUT REFERRING TO SEIZED DOCUMENTS. AS SUCH, I AM ALSO OF THE CONSIDERED OPINION THAT THE FACT THAT THE AUTHORIZE D OFFICER DURING SEARCH AND INVESTIGATING OFFICER THEREAFTER HAS ACQ UIESCED IN THE REPLY GIVEN BY THE APPELLANT, WITHOUT ANY FURTHER P ROBE AT THAT TIME, CLEARLY ESTABLISHES THAT COMPLIANCE SATISFACTORY TO THE INVESTIGATING OFFICER HAS BEEN MADE BY THE APPELLANT. THEREAFTER, ONCE THE APPELLANT HAS FILED THE RETURN HONORING HIS COMMITM ENT FULLY, AND 'THUS WHICH HAS ALSO BEEN ACCEPTED DURING ASSESSMEN T WITHOUT ANY MODIFICATION TO RETURNED INCOME, THE LD. AO'S INSIS TENCE DURING PENALTY PROCEEDINGS FOR 'STATING THE MANNER AND SUB STANTIATING THE SAME' IS SIMPLY SUPERFLUOUS AND UNCALLED FOR IN THE CIRCUMSTANCES, IN THE FACE OF CLEAR-CUT DISCLOSURE OF MANNER OF EARNI NG AND/OR PURPOSE OF DISCLOSURE BY THE APPELLANT, AND ALSO IN LIGHT OF MAHENDRA C. SHAH (SUPRA). SUCH INSISTENCE OF THE AO AND 'NON-CO MPLIANCE THERETO' BY THE APPELLANT PLEADING 'SUFFICIENT COMP LIANCE', CANNOT CULMINATE INTO LEVY OF PENALTY U/S 271AAA. THE WORD 'SUBSTANTIATE' USED IN CLAUSE (II) OF SUB-SECTION (2) OF SECTION 2 71AAA HAS TO BE UNDERSTOOD ONLY IN THE SENSE IN WHICH IT HAS BEEN EXPLAINED BY THE HON'BLE GUJARAT HIGH COURT IN CASE OF MAHENDRA C. S HAH , [2008] 172 TAXMAN 58 (GUJ.), WHICH HAS FURTHER BEEN FOLLOW ED IN SUBSEQUENT ITAT DECISIONS IN THE CONTEXT OF IMMUNIT Y CONDITION 271AAA(2), TO THE EFFECT THAT ONCE THE INCOME ADMIT TED IS OFFERED URITH DUE PAYMENT OF TAXES THEREON, AND THE MANNER OF EARNING AS STATED DURING 1 32(4) OR SUBSEQUENTLY HAS BEEN ACCE PTED BY THE AUTHORIZED OFFICER WITHOUT WARNING ABOUT NON-FULFIL LMENT OF IMMUNITY CONDITION OF 271AAA(2)(II), AND FURTHER AC TED UPON OR ACQUIESCED BY THE ASSESSING OFFICER DURING ASSESSME NT, THERE IS SUFFICIENT COMPLIANCE TO THE CONDITION OF271AAA(2)( II) MADE BY THE ASSESSEE, AS UNDER:. (I) DECISION OF HON'BLE GUJARAT HIGH COURT IN CASE OF COMMISSIONER OF INCOME-TAX V. MAHENDRA C. SHAH[20O8] 172 TAXMAN 58 (GUJ.) '...INSOFAR AS THE ALLEGED FAILURE ON THE PART OF T HE ASSESSEE TO SPECIFY IN THE STATEMENT UNDER SECTION 132(4) REGARDING THE MANNER IN WHICH SUCH INCOME HAD BEEN DERIVED, WHEN THE STATEMENT WAS BEING RECORDED BY T HE AUTHORIZED OFFICER, IT WAS INCUMBENT UPON HIM TO EX PLAIN THE PROVISION OF THE EXPLANATION 5 IN ITS ENTIRETY TO THE ASSESSEE CONCERNED AND THE AUTHORIZED OFFICER COULD NOT STOP SHORT AT A PARTICULAR STAGE SO AS TO PERMIT TH E REVENUE TO TAKE ADVANTAGE OF SUCH A LAPSE IN THE STATEMENT. THE REASON WAS NOT FAR TO SEEK. IN THE F IRST INSTANCE, THE STATEMENT WAS BEING RECORDED IN THE QUESTION AND ANSWER FORM AND THERE WOULD BE NO OCCASION FOR AN ASSESSEE TO STATE AND MAKE AVERMENT S IN THE EXACT FORMAT STIPULATED BY THE PROVISIONS, CONSIDERING THE SETTING IN WHICH SUCH STATEMENT WAS ITA NO. 481/AHD/16 [DCIT VS. SHRI ANILBHOLABHAI PATEL] A.Y. 2012-13 - 9 - BEING RECORDED. SECONDLY, CONSIDERING THE SOCIAL ENVIRONMENT, IT IS NOT POSSIBLE TO EXPECT FROM AN ASSESSEE, WHETHER LITERATE OR ILLITERATE, TO BE SPE CIFIC AND TO THE POINT REGARDING THE CONDITIONS STIPULATED BY THE EXCEPTION NO. 2 WHILE MAKING STATEMENT UNDER SECTIO N 132(4). THE VIEW TAKEN BY THE TRIBUNAL TO THE EFFEC T THAT EVEN IF THE STATEMENT DOES NOT SPECIFY THE MANNER I N WHICLI THE INCOME IS DERIVED, IF THE INCOME IS DECL ARED AND TAX THEREON IS PAID, THERE WOULD BE SUBSTANTIAL COMPLIANCE NOT WARRANTING ANY FURTHER DENIAL OF THE BENEFIT UNDER THE EXCEPTION NO. 2 E EXPLANATION 5 W AS COMMENDABLE. [PARA 15] .. (II) DECISION OF HON'BLE AHMEDABAD TRIBUNAL IN CASE OF SULOCHANADEVI A. AGARWAL , DATED 17 JULY, 2012 VIDE ITA NO: 1052/AH4/2012 . (4) IN THE DECISION RENDERED BY THE JURISDICTIONAL HIGH COURT OF GUJARAT IN THE CASE OF CIT VS MAHENDR A C. SHAH (2008) 299 ITR 305 (GUJ) IT WAS HELD THAT W HEN UNDISCLOSED INCOME ADMITTED BY THE ASSESSEE HAS BEE N OFFERED FOR TAX IN THE RETURN OF INCOME AND THE TAX THEREOF DULY PAID, PENALTY CANNOT BE LEVIED, SPECIF ICALLY, IN THE ABSENCE OF ANY QUESTION IN THIS RESPECT BY T HE AO. AT THIS JUNCTURE, WE MUST ADMIT THAT THE REASONS POINTED OUT BY THE LEARNED CIT(A) ARE JUSTIFIABLE F OR DELETING THE PENALTY LEVIED BY THE LEARNED AO U/S 2 71 AAA OF THE ACT . THEREFORE, WE DO NOT FIND ANY HESITATION TO CONFIRM THE ORDER OF THE LEARNED CIT(A) (III) DECISION OF HON'BLE DELHI ITAT 'F' BENCH SMT. RAJ RANI GUPTA V/S DCIT (ITA NO. 3371/DEL/2011): 11. THE CLAUSE (2) OF EXPLANATION 5 OF SECTION 271(1)(C) HAS FALLEN FOR CONSIDERATION BEFORE VARIOUS HON'BLE HIGH COURTS. THE SCOPE AND MEANING HAS BEEN LUCIDLY EXPLAINED BY THE HON'BLE ALLAHABAD HIGH COURT IN THE CASE OF RADHA KISHAN GAEL (2OO5) 278 ITR 454. THE RELEVANT PORTION OF OBSERVATIONS OF HON'BLE HIGH COURT ARE AS UNDER:- ITA NO. 481/AHD/16 [DCIT VS. SHRI ANILBHOLABHAI PATEL] A.Y. 2012-13 - 10 - 'AN ORDER IMPOSING PENALTY FOR FAILURE TO CARRY OUT A STATUTORY OBLIGATION IS THE RESULT OF A QUASI CRIMINAL PROCEEDING, AND PENALTY WILL NOT ORDINARILY BE IMPOSED UNLESS THE PARTY OBLIGED, EITHER ACTED DELIBERATELY IN DEFIANCE OF LAW OR WAS GUILTY OF CONDUCT CONTUMACIOUS OR DISHONEST OR ACTED IN CONSCIOUS DISREGARD OF ITS OBLIGATION . PENALTY WILL NOT BE IMPOSED MERELY BECAUSE IT IS LAWFUL TO DO SO. WHETHER PENALTY SHOULD BE IMPOSED FOR FAILURE TO PERFORM A STATUTORY OBLIGATION IS A MATTER OF DISCRETION OF THE AUTHORITY TO BE EXERCISED JUDICIALLY AND ON A CONSIDERATION OF ALL THE RELEVANT CIRCUMSTANCES. EVEN IF A MINIMUM PENALTY IS PRESCRIBED, THE AUTHORITY COMPETENT TO IMPOSE THE PENALTY WILL BE JUSTIFIED IN REFUSING TO IMPOSE PENALTY, WHEN THERE IS A TECHNICAL OR VENIAL BREACH OF THE PROVISIONS O F THE ACT OR WHERE THE BREACH FLOWS FROM A BONAFIDE BELIEF THAT THE OFFENDER IS NOT LIABLE TO ACT IN TH E MANNER PRESCRIBED BY THE STATUTE.' THE HON'BLE GUJARAT HIGH COURT ALSO IN THE CASE OF CIT V. MAHENDRA C. SHAH 299 ITR 305 HAS ALSO FOLLOWED ALLA HABAD HIGH COURT AND HAS OBSERVED UNDER THE SIMILAR CIRCU MSTANCES. 'INSOFAR AS THE ALLEGED FAILURE ON THE PART OF THE ASSESSEE TO SPECIFY IN THE STATEMENT UNDER S. 132(4 ) OF THE ACT REGARDING THE MANNER IN WHICH SUCH INCOME H AS BEEN DERIVED, SUFFICE IT TO STATE THAT WHEN THE STA TEMENT IS BEING RECORDED BY THE AUTHORIZED OFFICER IT IS INCUMBENT UPON THE AUTHORIZED OFFICER TO EXPLAIN TH E PROVISIONS OF EXPLANATION 5 IN ENTIRETY TO THE ASSE SSEE CONCERNED AND THE AUTHORIZED OFFICER CANNOT STOP SH ORT AT A PARTICULAR STAGE SO AS TO PERMIT THE REVENUE T O TAKE ADVANTAGE OF SUCH A LAPSE IN THE STATEMENT. THE REA SON IS NOT FAR TO SEEK. IN THE FIRST INSTANCE, THE STATEME NT IS BEING RECORDED IN THE QUESTION AND ANSWER FORM AND THERE WOULD BE NO OCCASION FOR AN ASSESSEE TO STATE AND MAKE AVERMENTS IN THE EXACT FORMAT STIPULATED BY TH E PROVISIONS CONSIDERING THE SETTING IN WHICH SUCH STATEMENT.IS BEING RECORDED, AS NOTED BY ALLAHABAD HIGH COURT IN CASE OF RADHA KISHAN GOEL (SUPRA). . SECON DLY, CONSIDERING THE SOCIAL ENVIRONMENT IT IS NOT POSSIB LE TO EXPECT FROM AN ASSESSEE, WHETHER LITERATE OR ILLITE RATE, TO BE SPECIFIC AND TO THE POINT REGARDING THE CONDITIO NS STIPULATED BY EXCEPTION NO. 2 WHILE MAKING STATEMEN T UNDER S. 132(4) OF THE ACT' IN VIEW OF THE ABOVE, THE PENALTY IS DELETED,' ITA NO. 481/AHD/16 [DCIT VS. SHRI ANILBHOLABHAI PATEL] A.Y. 2012-13 - 11 - (IV) CIT V. SUDHIRJAIN 41 TAXMANN.COM. 234 (DEL.) A CERTAIN SUM WAS SURRENDERED AS UNDISCLOSED INCOME BY AN AOP AT TIME OF SEARCH - TAXES AND APPLICABLE INT EREST WERE PAID ON UNDISCLOSED INCOME AND MANNER OF EARNI NG WAS RECORDED IN STATEMENT OF ONE OF MEMBERS OF AOP THAT INCOME WAS DERIVED FROM TRADING TRANSACTIONS N OT RECORDED IN BOOKS - WHETHER PENALTY UNDER SECTION 2 71 AAA COULD NOT BE IMPOSED - HELD, YES IF DISCLOSURE MADE BY ONE OF THE MEMBERS OF THE GROUP, IMMUNITY IS AVAILABLE TO ALL. (V) CONCRETE DEVELOPERS V. ACIT 34 TAXMANN.COM 62 (NAGPUR) WHETHER WHERE DURING COURSE OF SEARCH ASSESSEE ADMITTED UNDISCLOSED INCOME, PAID TAX TOGETHER WITH INTEREST, FILED RETURN SHOWING SAID INCOME AS BUSIN ESS INCOME AND ASSESSING OFFICER HAD ACCEPTED SAME, IT COULD NOT BE SAID THAT ASSESSEE HAD NOT SPECIFIED M ANNER OR COULD NOT SUBSTANTIATE MANNER IN WHICH INCOME WA S DERIVED - HELD, YES (VI) ASHOK KUMAR SHARMA V. DCIT 33 TAXMANN.COM 652 (CUTTAK) UNDISPUTEDLY, THE ASSESSEE HAD SHOWN THE UNDISCLOSE D INCOME UNDER THE HEAD 'INCOME FROM BUSINESS' IN THE RETURNS FILED BY HIM AND THAT WAS ACCEPTED BY THE DEPARTMENT. THEREFORE, THE CASES OF THE ASSESSEE FE LL EXACTLY WITHIN THE PURVIEW OF SUB-SECTION (2) OF SE CTION 271 AAA. INCOME DISCLOSED AS BUSINESS INCOME ACCEPT ED. (VII) PRAMOD KUMAR JAIN V. DCIT 33 TAXMANN.COM 651 (CUTTACK) HELD THAT NO DEFINITION COULD BE GIVEN TO THE 'SPECIFIED MANNER' INSOFAR AS THE VERY STATEMENT ON OATH UNDER SECTION 132(4) SPECIFIES THE MANNER ON WHICH THE ASSESSEE IS PREPARED TO PAY TAX THEREON. THE INSCRI BING IN THE ACCOUNT WAS TAKEN CARE OF BY THE ASSESSEE WH EN HE FILED THE RETURNS IN PURSUANCE OF NOTICE UNDER SECTION 153A ACCOUNTING THE ASSETS. THEREFORE, THE PENALTY IS NOT AUTOMATIC IF ONE OF THE PURPORTED CONDITIONS IS NOT FULFILLED ALTHOUGH ALL THE CONDIT IONS HAVE BEEN AGREED TO OF HAVING FULFILLED BY THE ASSE SSING OFFICER INSOFAR AS THE TAX AND INTEREST HAVE BEEN RECOVERED. IN VIEW OF THE ABOVE THE LEVY OF PENALTY UNDER SECTION 271AAA WAS NOT JUSTIFIED NO SPECIFIC DEFINI TION OF COMPLIANCE OF MANNER. ITA NO. 481/AHD/16 [DCIT VS. SHRI ANILBHOLABHAI PATEL] A.Y. 2012-13 - 12 - (VIII) NEERTTT SINGAL V. ACIT 37 TAXMANN, COM 189 ( DELHI) ON BASIS OF CERTAIN DOCUMENTS FOUND AND SEIZED DURI NG SEARCH AT HIS PRE ASSESSES SURRENDERED CERTAIN AMOU NT AS UNDISCLOSED INCOME AND ALSO PAID TAX DUE THEREON - IN STATEMENT UNDER SECTION 132(4), ASSESSEE STATED THA T INCOME WAS DERIVED FROM FORWARD/SPECULATIVE AND PROPERTY TRANSACTIONS CARRIED OUT IN FINANCIAL YEAR 2009- 10- BEING NOT SATISFIED WITH ASSESSEE'S EXPLANATION , ASSESSING OFFICER IMPOSED PENALTY UNDER SECTION 271 AAA - WHETHER WHEN AUTHORIZED OFFICER HAD NOT RAISED ANY QUERY DURING COURSE OF RECORDING OF STATEMENT UNDER SECTION 132(4) ABOUT MANNER IN WHICH UNDISCLOSED INCOME HAD BEEN DERIVED AND ABOUT ITS SUBSTANTIATIO N, ASSESSING OFFICER WAS NOT JUSTIFIED IN IMPOSING PEN ALTY UNDER SECTION 271AAA, SPECIFICALLY WHEN OFFERED UNDISCLOSED INCOME HAD BEEN ACCEPTED AND TAXES DUE THEREON HAD BEEN PAID BY ASSESSEE - HELD, YES (IX) ACIT V. MUNISHKUMAR GOYAL 45 TAXMAN 563 (CHANDIGARH) WHERE ASSESSEE HAVING SURRENDERED CERTAIN INCOME IN COURSE OF SEARCH, FILED RETURN WHEREIN SAID AMOUNT WAS DULY DISCLOSED AND TAXES WERE PAID ACCORDINGLY, THE RE WAS SUFFICIENT COMPLIANCE OF PROVISIONS OF SECTION 271AAA(2) AND, THUS, IMPUGNED PENALTY ORDER DESERVE D TO BE SET ASIDE - HELD, YES (X) SITA RAM GUPTA V. ACIT 48 TAXMANN 327 (DEL.) IN COURSE OF SEARCH PROCEEDINGS CARRIED OUT IN CASE OF ASSESSEE, CASH WAS FOUND AT DIFFERENT PLACES BELONG ING TO HIM - IN STATEMENT RECORDED UNDER SECTION 132(4), ASSESSEE ADMITTED THAT SAID CASH REPRESENTED UNDISC LOSED INCOME - ASSESSING OFFICER HAVING COMPLETED ASSESSM ENT, PASSED A PENALTY ORDER UNDER SECTION 271AAA FOR DEF AULT OF NOT SUBSTANTIATING MANNER IN WHICH UNDISCLOSED INCOME WAS DERIVED - IT WAS NOTED FROM RECORDS THAT ASSESSEE MADE STATEMENT THAT HE HAD EARNED UNDISCLOSED INCOME FROM VARIOUS TRANSACTIONS OF SALE/PURCHASE OF LAND AND SAID STATEMENT DID NOT FA CE ANY REBUTTAL OR REJECTION AT HANDS OF ASSESSING OFF ICER - IT WAS ALSO UNDISPUTED THAT ASSES'SEE HAD PAID DUE TAX ON ADMITTED UNDISCLOSED INCOME - WHETHER ON FACTS, IMPUGNED PENALTY ORDER PASSED BY AUTHORITIES BELOW DESERVED TO BE SET ASIDE -HELD, YES ITA NO. 481/AHD/16 [DCIT VS. SHRI ANILBHOLABHAI PATEL] A.Y. 2012-13 - 13 - (XI) AHMEDABAD ITAT 'B' BENCH IN CASE OF SANDEEP NAVNITLAL SHAH V/S. ACIT (VIDE ITA NO. 506, 507&508/AHD/2011): '4. IN VIEW OF ABOVE DISCUSSION, WE FIND THERE IS N O DIFFERENCE BETWEEN RETURNED INCOME AND ASSESSED INC OME AND AS SUCH THERE IS NO UNDISCLOSED INCOME. IT IS UNDISPUTED THAT ASSESSEE HAS PAID ALL THE TAXES DUE ON RETURNS FILED IN LIEU OF NOTICES U/S. 153A. UNDER T HESE FACTS AND CIRCUMSTANCES, WE HOLD THAT IT IS NOT REL EVANT WHETHER RETURN OF INCOME WAS FILED BY ASSESSEE PRIO R TO THE DATE OF SEARCH AND WHETHER ANY INCOME WAS UNDISCLOSED IN THAT RETURN OF INCOME. IN VIEW OF SPECIFIC PROVISION OF SECTION 153A OF THE INCOME TAX ACT, RETURN OF INCOME FILED IN RESPONSE TO NOTICE U/S. 1 53A OF THE ACT IS TO BE CONSIDERED AS RETURN FILED U/S. 139 OF THE ACT AS ASSESSING OFFICER HAS MADE ASSESSMENT ON THE SAID RETURN AND THEREFORE, RETURN IS TO BE CONS IDERED FOR THE PURPOSE OF PENALTY U/S. 271(1)(C) AND PENAL TY IS TO BE LEVIED ON INCOME ASSESSED. AS THERE IS NO DIFFERENCE BETWEEN RETURN OF INCOME AND ASSESSED INCOME, SO, IN VIEW OF CASE OF KIRIT DAHYABHAI PATE L [SUPRA], NO PENALTY U/S. 271(1)(C)/271AAA IS LEVIAB LE AND ACCORDINGLY, ORDER OF LEVY PENALTY FOR ALL THE THREE YEARS ARE QUASHED. ASSESSING OFFICER IS DIRECTED ACCORDINGLY.' 4.6 IN VIEW OF THE ABOVE, THUS, I FIND, AS ARGUED B Y THE LD. ARS THAT THE APPELLANT'S CASE IS SQUARELY COVERED BY TH E RATIOS OF MAHENDRA C SHAH AND SIDH NATH GOEL (SUPRA), AND OTH ER AUTHORITIES AND THUS IT IS TO BE HELD THAT THE APPELLANT HAS MA DE EFFECTIVE AND SUFFICIENT COMPLIANCE TO IMMUNITY CONDITION OF S. 2 71AAA(2)(II) ALSO. SUCH A VIEW HAS ALSO AND ALREADY, RESPECTFULLY FOLL OWING THESE AUTHORITIES, BEEN TAKEN BY ME IN SHANTI BUILDERS [C IT(A)-12/7/CC- 2(2)/14-15 DATED 31/08/2015], WHEREIN I HAVE OBSERV ED, OPINED AND HELD THAT THERE HAS TO BE ONLY A BROAD COMPLIANCE W ITH REGARD TO REQUIREMENT OF STATING THE MANNER AND SUBSTANTIATIN G THE SAME WITHIN THE MEANING OF SECTION 271AAA(2)(II) AS UNDER: 8. APART FROM THE ABOVE DECISIONS, THE LD. AR HAS A LSO HEAVILY RELIED ON JURISDICTIONAL HC DECISION IN THE CASE OF CTT V. MAHENDRA C SHAH 299 ITR 305 DRAWING MY ATTENTION TO THE FOLLOWING OBSERVATION OF THE HONBLE HC WITH REFERE NCE TO REQUIREMENT OF EXPLANATION 5 TO S. 271(1)(C) WHICH IS IN PARI MATERIA WITH REQUIREMENT OF S. 271AAA(2): INSOFAR AS THE ALLEGED FAILURE ON THE PART OF THE A SSESSEE TO SPECIFY IN THE STATEMENT UNDER SECTION 132(4) REGAR DING THE MANNER IN WHICH SUCH INCOME HAD BEEN DERIVED, WHEN THE STATEMENT WAS BEING RECORDED BY THE AUTHORIZED OFFI CER, IT WAS ITA NO. 481/AHD/16 [DCIT VS. SHRI ANILBHOLABHAI PATEL] A.Y. 2012-13 - 14 - INCUMBENT UPON HIM TO EXPLAIN THE PROVISION OF THE EXPLANATION 5 IN ITS ENTIRETY TO THE ASSESSEE CONCE RNED AND THE AUTHORIZED OFFICER COULD NOT STOP SHORT AT A PARTIC ULAR STAGE SO AS TO PERMIT THE REVENUE TO TAKE ADVANTAGE OF SUCH A LAPSE IN THE STATEMENT. THE REASON WAS NOT FAR TO SEEK. IN T HE FIRST INSTANCE, THE STATEMENT WAS BEING RECORDED IN THE Q UESTION AND ANSWER FORM AND THERE WOULD BE NO OCCASION FOR AN A SSESSEE TO STATE AND MAKE AVERMENTS IN THE EXACT FORMAT STIPUL ATED BY THE PROVISIONS, CONSIDERING THE SETTING IN WHICH SUCH S TATEMENT WAS BEING RECORDED. SECONDLY, CONSIDERING THE SOCIAL ENVIRONMENT, IT IS NOT POSSIBLE TO EXPECT FROM AN A SSESSEE, WHETHER LITERATE OR ILLITERATE, TO BE SPECIFIC AND TO THE POINT REGARDING THE CONDITIONS STIPULATED BY THE EXCEPTIO N NO. 2 WHILE MAKING STATEMENT UNDER SECTION 132(4). THE VI EW TAKEN BY THE TRIBUNAL TO THE EFFECT THAT EVEN IF THE STAT EMENT DOES NOT SPECIFY THE MANNER IN WHICH THE INCOME IS DERIV ED, IF THE INCOME IS DECLARED AND TAX THEREON IS PAID, THERE W OULD BE SUBSTANTIAL COMPLIANCE NOT WARRANTING ANY FURTHER D ENIAL OF THE BENEFIT UNDER THE EXCEPTION NO. 2 IN THE EXPLAN ATION 5 WAS COMMENDABLE. [PARA 15] [EMPHASIS SUPPLIED] 9. THE ABOVE VIEW OF THE HONBLE GUJARAT HC HAS ALS O BEEN REITERATED BY HONBLE ALLAHABAD HC IN CONNECTION WI TH CLAUSE (2) OF EXPLANATION 5 TO S. 271(1)(C) IN CIT V. SIDH NATH GOEL 359 ITR 481: 7. THE ITAT RELIED UPON JUDGMENTS OF MADRAS HIGH CO URT IN C/7~V. S.D.V. CHANDRU [2004] 266 ITR 175/136 TAX MAN 537;AND RAJASTHAN HIGH COURT IN CIT V. MISHRIMALSON I [2007] 289 ITR 77/162 TAXMAN 53 AND GUJARAT HIGH COURT IN CITV. MAHENDRA C. SHAH [2008] 299 ITR 305/172_TAXMAN58, W HICH HAVE EXPLAINED THE EXTENT AND SCOPE OF EXPLANATION 5 TO SECTION 271(L)(C) OF THE ACT, WHICH DEALS WITH A SI TUATION IN WHICH ANY ASSETS ARE FOUND TO BE IN THE OWNERSHIP O F THE ASSESSEE IN THE COURSE OF SEARCH UNDER SECTION 132 OF THE ACT. CLAUSE (2) OF EXPLANATION 5 MAKES IT CLEAR THAT WHE RE IN THE COURSE OF SEARCH THE ASSESSEE MAKES A STATEMENT UND ER SECTION 132 (4) AND OWNS THAT HE ACQUIRED ANY OF SUCH ASSET S OUT OF HIS UNDISCLOSED INCOME, NOT SO FAR RETURNED, AND FURTHE R STATES THE MANNER IN WHICH SUCH INCOME HAS BEEN DERIVED AND PA YS TAX TOGETHER WITH INTEREST IF ANY IN RESPECT OF SUCH IN COME, NO PRESUMPTION OF CONCEALMENT HAS TO BE DRAWN, NOTWITH STANDING THE ADMISSION TO THAT EFFECT. IN OTHER WORDS TO THE EXTENT THE ASSESSEE MAKES A CLEAN BREAST OF HIS UNDISCLOSED IN COME REPRESENTED BY ASSETS FOUND TO BE IN THE POSSESSION OF THE ASSESSEE HE IS NOT DEEMED TO HAVE CONCEALED HIS INC OME OR CONCEALED PARTICULARS THEREOF. THE EXPLANATION IS N OT CONFINED TO PHYSICAL POSSESSION BUT EXTENDS TO OTHER FORMS O F POSSESSION, [EMPHASIS SUPPLIED] ITA NO. 481/AHD/16 [DCIT VS. SHRI ANILBHOLABHAI PATEL] A.Y. 2012-13 - 15 - 10. THUS, THE JUDICIAL OPINION IS UNAMBIGUOUS TO TH E EFFECT THAT WHAT SECTION 271AAA(2) FUNDAMENTALLY REQUIRES IS THAT THE ASSESSEE 'MAKES A CLEAN BREAST' U/S 132(4) AND STIC KS TO SAME BY FILING RETURN U/S 153A AND PAYING TAXES. THE OTH ER REQUIREMENT OF SPECIFICATION AND SUBSTANTIATION OF MANNER OF EARNING IS ONLY TO BE BROADLY INSISTED UPON. AS OBS ERVED BY GUJARAT HC (SUPRA), 'SECONDLY, CONSIDERING THE SOCI AL ENVIRONMENT, IT IS NOT POSSIBLE TO EXPECT FROM AN A SSESSEE, WHETHER LITERATE OR ILLITERATE, TO BE SPECIFIC AND TO THE POINT REGARDING THE CONDITIONS STIPULATED BY THE EXCEPTIO N NO. 2 WHILE MAKING STATEMENT UNDER SECTION 132(4). THE VI EW TAKEN BY THE TRIBUNAL TO THE EFFECT THAT EVEN IF THE STAT EMENT DOES NOT SPECIFY THE MANNER IN WHICH THE INCOME IS DERIVED, IF THE INCOME IS DECLARED AND TAX THEREON IS PAID, THERE W OULD BE SUBSTANTIAL COMPLIANCE NOT WARRANTING ANY FURTHER D ENIAL OF THE BENEFIT UNDER THE EXCEPTION NO. 2 IN THE EXPLAN ATION 5 WAS COMMENDABLE.', THE ASSESSEE HAS IN FACT MADE MORE T HAN SUFFICIENT COMPLIANCE. THEREFORE, RESPECTFULLY FOLLOWING THE VARIOUS JUDGMENTS AS CITED AND DISCUSSED ABOVE, I F IND MYSELF IN AGREEMENT-SEA? WITH THE AVERMENT OF THE LD. AR THAT ON FACTS, THE ASSESSEE HAS MADE SUFFICIENT COMPLIA NCE TO THE REQUIREMENT OF S. 271AAA(2) SO AS TO DESERVE IMMUN ITY FROM RIGORS OF PENALTY U/S 271AAA. SUCH A VIEW IN SIMILAR CIRCUMSTANCES HAS BEEN TAKEN BY GUJARAT HC AND OTHER HON'BLE HC AND ITAT BENCHES AS DETAILED ABOVE . 4.7 KEEPING WITH THE PARAMOUNT JUDICIAL REQUIREMENT OF FOLLOWING ONE'S OWN DECISION, I HAVE THEREFORE NO HESITATION IN HOLDING, ON THE BASIS OF CUMULATIVE FACTS AS DISCUSSED ABOVE, THAT THE APPELLANT HAS DISCLOSED THE AMOUNT U/S 132(4), STATED AND SUBSTAN TIATED THE MANNER OF EARNING THE SAME WITHIN THE MEANING OF S 271AAA(2) (I) AND (II). AS SUCH, IN MY CONSIDERED OPINION IN THIS PARTICUL AR CASE, THE DISCLOSURE, FOLLOWED BY DETAILED NOTE, WAS BASE D ON SEIZED DOCUMENTS NOT ONLY THUS SUBSTANTIATING THE MANNER O F EARNING BUT FORMING THE SOLE BASIS OF ASSESSMENT MADE BY THE LD . AO. IN VIEW OF THIS DISCUSSION, IT IS FURTHER HELD THAT THE OBJECT IONS 1-3 OF THE LD AO ' (PAGE 2 OF THIS ORDER) HAVE NO MERITS AS THE SCOP E OF 'SUBSTANTIATION' AS PER S.271AAA(2)(II) IS CLEARLY MISREAD BY HIM. AS HELD IN MAHENDRA C SHAH, THE APPELLANT CANNOT BE EX PECTED TO PROVIDE GRAPHIC AND COMPLETE DETAILS OF THE SOURCE OF EACH UNACCOUNTED RUPEE EARNED BY HIM, AND THUS, THE FIND INGS BASED ON ABSENCE OF SUCH DETAILS DO NOT SURVIVE. SIMILARLY, OBJECTIONS 4-5, BEING CONCLUSIONS DRAWN ON THE BASIS OF WRONG NOTIO N OF REQUIREMENT OF S. 271AAA(2) ALSO DO NOT SURVIVE. OBJECTION 6 RE GARDING BONA- FIDES IS COMPLETELY IRRELEVANT. THUS, ON FACTS, THE APPELLANT HAS QUALIFIED FOR IMMUNITY AS PROVIDED U/S 271AAA(2)(I) AND (II). THERE IS NO CONTROVERSY WITH REGARD TO FULFILLMENT OF IMM UNITY CONDITION CONTAINED IN 271AAA(2)(III). THUS, AS DISCUSSED ABO VE IN PARA 3 AND PARA 4, ALL THE THREE IMMUNITY CONDITIONS AS PRESCRIBED U/S 271AAA(2) ARE THUS HELD TO BE COMPLIED WITH IN LAW BY THE ITA NO. 481/AHD/16 [DCIT VS. SHRI ANILBHOLABHAI PATEL] A.Y. 2012-13 - 16 - APPELLANT AND THUS IT IS TO BE HELD THAT APPELLANT CLEARLY QUALIFIED FOR IMMUNITY. THIS CONCLUSION, APART FROM THE DISCU SSION AS ABOVE, IS ALSO CLEARLY SUPPORTED BY THE DECISION OF THE TR IBUNAL IN SULOCHANADEVI AGARWAL (SUPRA). THE PENALTY U/S 271A AA LEVIED BY THE AO IS THUS HELD NOT SUSTAINABLE IN VIEW OF IMMU NITY AVAILABLE TO THE APPELLANT U/S 271AAA(2). 5. MOREOVER, I ALSO FIND THAT THE PROPOSITION OF LA W LAID DOWN IN KIRIT DAHYABHAI (SUPRA) TO THE EFFECT THAT PENALTY, POST-SEARCH, CAN BE LEVIED OR SUSTAINED ONLY ON THE INCOME WHICH HAS BEEN ASSESSED 'OVER AND ABOVE' THAT RETURNED BY THE ASSESSEE AFTE R THE SEARCH, IN VIEW OF THE SPECIFIC PROVISIONS OF S. 153A , HAS BEEN FOLLOWED BY ITAT AHMEDABAD IN SANDIP NAVNITLAL (SUPRA) IN THE DIRECT CONTEXT OF PENALTIES BOTH U/S 271(L)(C) READ WITH EXPLANATION 5A AND ALSO U/S 271AAA. DECISION OF GUJARAT HIGH COURT IN CASE OF KIIRT DAY ABHAI PATEL V/S. ACIT (ITA NO. 1181,1182&1185/AHD/2011): 13. CONSIDERING THE FACTS AND CIRCUMSTANCES OF THE CASE AND ALSO CONSIDERING THE DECISIONS RELIED UPON BY LEARN ED SENIOR ADVOCATE FOR THE APPELLANT, WE ARE OF THE CONSIDERE D OPINION THAT THE VIEW TAKEN BY THE TRIBUNAL IS ERRONEOUS. T HE RIGHTLY HELD THAT IT IS NOT RELEVANT WHETHER ANY RETURN OF INCOME WAS FILED BY THE ASSESSEE PRIOR TO THE DATE OF SEARCH A ND WHETHER ANY INCOME WAS UNDISCLOSED IN THAT RETURN OF INCOME . IN VIEW OF SPECIFIC PROVISION OF SECTION 153A OF THE I.T. A CT, THE RETURN OF INCOME FILED IN RESPONSE TO NOTICE UNDER SECTION 153(A) OF THE I.T. ACT IS TO BE CONSIDERED AS RETURN FILED UN DER SECTION 139 OF THE ACT, AS THE ASSESSING OFFICER HAS MADE A SSESSMENT ON THE SAID RETURN AND THEREFORE, THE RETURN IS TO BE CONSIDERED FOR THE PURPOSE OF PENALTY UNDER SECTION 271(1)(C) OF THE I.T. ACT AND THE PENALTY IS TO BE LEVIED ON THE INCOME A SSESSED OVER AND ABOVE THE INCOME RETURNED UNDER SECTION 153A, I F ANY. (V) DECISION OF HON'BLE AHMEDABAD ITAT 'B' BENCH IN CASE OF SANDEEP NAVNITLAL SHAH V/S. ACIT (VIDE ITA NO. 5O6, 507&508/AHD/2011): '4. IN VIEW OF ABOVE DISCUSSION, WE FIND THERE IS N O DIFFERENCE BETWEEN RETURNED INCOME AND ASSESSED INCOME AND AS SUCH THERE IS NO UNDISCLOSED INCOME. IT IS , UNDISPUTED THAT ASSESSEE HAS PAID ALL THE TAXES DUE ON RETURNS FILED IN LIEU OF NOTICES U/S. 153A. UNDER THESE FACTS AND CIRCUMSTANCES, WE HOLD THAT IT IS NOT RELEVANT WHETHER RETURN OF INCOME WAS FILED BY ASSESSEE PRIOR TO THE DATE OF SEARCH AND WHETHER ANY INCOME WAS UNDISCLOSED IN THAT RETURN OF INCOME. IN VIEW OF SPECIFIC PROVISION OF SECTION 153A OF THE INCOME TAX ACT, RE TURN OF ITA NO. 481/AHD/16 [DCIT VS. SHRI ANILBHOLABHAI PATEL] A.Y. 2012-13 - 17 - INCOME FILED IN RESPONSE TO NOTICE U/S. 153A OF THE ACT IS TO BE CONSIDERED AS RETURN FILED V/S. 139 OF THE ACT A S ASSESSING OFFICER HAS MADE ASSESSMENT ON THE SAID RETURN AND THEREFORE, RETURN IS TO BE CONSIDERED FOR THE PURPO SE OF PENALTY U/S. 271(1)(C) AND PENALTY IS TO BE LEVIED ON INCOME ASSESSED. AS THERE IS NO DIFFERENCE BETWEEN RETURN OF INCOME AND ASSESSED INCOME, SO, IN VIEW OF CASE OF KIRIT D AHYABHAI PATEL [SUPRA], NO PENALTY U/S. 271(1)(C)/271AAA IS LEVIABLE AND ACCORDINGLY, ORDER OF LEVY PENALTY FOR ALL THE THREE YEARS ARE QUASHED. ASSESSING OFFICER IS DIRECTED ACCORDIN GLY.' 6. RESPECTFULLY FOLLOWING THE SAME, ALSO, IT IS TO BE FURTHER HELD THAT THE LD. AO ERRED IN LEVYING THE PENALTY U/S 271AAA ON THE 'UNDISCLOSED INCOME' ALREADY RETURNED IN THE INCOME FILED V/S 153A AFTER SEARCH, AND ON THIS COUNT ALSO THE LEVY PENAL TY IS HELD NOT SUSTAINABLE. THUS, PENALTY NEEDS TO BE CANCELLED AND IS THUS CANCELLED. THE APPELLANT GETS RELIEF AS UNDER: A.Y. RELIEF 2011-12 RS.2,50,000/- 2012-13 RS.24,15,000/- 5. AGGRIEVED BY THE ACTION OF CIT(A) TOWARDS CANCEL LATION OF PENALTY IMPOSED BY AO, THE REVENUE PREFERRED APPEAL BEFORE THE TRIBUNAL. 6. THE LEARNED DR FOR THE REVENUE SUBMITTED THAT TH E CONDITIONS WITH REGARD TO PROVIDING THE MANNER IN WHICH THE UNDISCLOSED INCOME HAS BEEN DERIVED AND SUBSTANTIATION THEREO F HAS NOT BEEN DONE BY THE ASSESSEE AS CONTEMPLATED BY SECTION 271 AAA(2) OF THE ACT. THE LEARNED DR THUS SUBMITTED THAT IN VIEW OF THE NONFULFILLMENT OF MANDATORY CONDITIONS AS PROVIDED IN THE EXIT CLA USE, THE ASSESSEE CANNOT BE EXONERATED FROM THE LIABILITY OF PENALTY UNDER S. 271AAA OF THE ACT. THE LEARNED DR ACCORDINGLY SUBMITTED THAT THE PENALTY ORDER OF THE CIT(A) CANCELLING PENALTY REQUIRES TO BE SET ASIDE AND THE PENALTY ORDER PASSED BY THE AO REQUIRES TO BE RESTO RED. ITA NO. 481/AHD/16 [DCIT VS. SHRI ANILBHOLABHAI PATEL] A.Y. 2012-13 - 18 - 7. LEARNED AR, ON THE OTHER HAND, SUBMITTED THAT NO SPECIFIC QUESTION WAS ASKED TO THE ASSESSEE WITH REGARD TO T HE MANNER OF DERIVING INCOME AND SUBSTANTIATION THEREOF WHILE RE CORDING THE STATEMENT UNDER S.132(4) OF THE ACT OR AT ANY LATER STAGE IN THE COURSE OF ASSESSMENT PROCEEDINGS. THE LEARNED AR THUS SUB MITTED THAT WITHOUT BEING PUT TO QUERY ON THIS SUBJECT IT WAS N OT POSSIBLE FOR THE ASSESSEE TO VISUALIZE THE SAME. THE LEARNED AR ADV ERTED OUR ATTENTION TO THE DECISION OF THE HONBLE GUJARAT HIGH COURT I N THE CASE OF CIT VS. MAHENDRA C SHAH [2008] 299 ITR 305 (GUJ) TO THE EFFECT THAT THE OBLIGATION DOES NOT FALL UPON THE ASSESSEE TO EXPLA IN THE MANNER AND SUBSTANTIATION THEREOF IN THE ABSENCE OF ANY SPECIF IC QUERY POSED BY THE REVENUE IN THIS REGARD. THE LEARNED AR THUS SU BMITTED THAT THE CIT(A) HAS APPRECIATED THE FACT IN PROPER PERSPECTI VE AND IS IN SYNC WITH SEVERAL JUDICIAL PRECEDENTS IN THIS REGARD. T HE LEARNED AR ACCORDINGLY SUBMITTED THAT NO INTERFERENCE WITH THE ORDER OF THE CIT(A) IS CALLED FOR. 8. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSIO NS AND PERUSED THE ORDER PASSED BY THE AO AND THE APPELLATE ORDER PASSED BY THE CIT(A) APPEALED AGAINST AND CASE LAW CITED ACROSS T HE BAR. THE SOLE ISSUE THAT ARISES FOR DETERMINATION IN THE PRESENT CASE IS WHETHER THE ASSESSEE IN THE FACTS OF THE CASE HAS FULFILLED THE CONDITIONS FOR EXCLUSION FROM CLUTCHES OF PENALTY UNDER S.271AAA O F THE ACT OR NOT. THE THRUST OF THE CASE OF THE AO IS THAT THE ASSESS EE HAS FAILED TO SPECIFY THE MANNER IN WHICH THE INCOME HAS BEEN DER IVED AS WELL AS FAILED TO SUBSTANTIATE THE MANNER AS CONTEMPLATED U NDER S.271AAA(2) OF THE ACT. IN THIS REGARD, WE FIND THAT THE ISSUE IS SQUARELY COVERED IN FAVOUR OF THE ASSESSEE BY THE DECISION OF THE HONB LE GUJARAT HIGH COURT IN THE CASE OF MAHENDRA C SHAH (SUPRA). IN T HE ABSENCE OF ANY EVIDENCE OR RECORD TO SHOW THAT ANY SPECIFIC QUERY MADE TO THE ASSESSEE AND IN THE ABSENCE OF ANY QUERY ON THE MAN NER AND ITA NO. 481/AHD/16 [DCIT VS. SHRI ANILBHOLABHAI PATEL] A.Y. 2012-13 - 19 - SUBSTANTIATION THEREOF, THE ALLEGATION FOR NON-FULF ILLMENT OF CONDITION OF SECTION 271AAA(2) OF THE ACT DOES NOT SURVIVE. IN VIEW OF THE BINDING PRECEDENT DELIVERED BY HONBLE GUJARAT HIGH COURT THE ONUS WOULD SHIFT ON THE ASSESSEE TO SPECIFY THE MANNER O F EARNING UNDISCLOSED INCOME AND SUBSTANTIATION THEREOF ONLY UPON REQUISITE INQUIRY IN THIS REGARD. IN THE ABSENCE OF ANY INQU IRY IN THIS REGARD, THE ASSESSEE CANNOT BE BLAMED FOR NON-SATISFACTION OF T HE EXIT CLAUSE PROVIDE UNDER S. 271AAA(2) OF THE ACT. THE CIT(A) IN OUR VIEW HAS CORRECTLY RECORDED THE FINDING OF FACTS AND LAW IN THIS REGARD AND HAS COME TO A RIGHTFUL CONCLUSION. THUS, WE DECLINE TO INTERFERE. 9. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISM ISSED. SD/- SD/- (MADHUMITA ROY) (PRADIP K UMAR KEDIA) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD: DATED 09/08/2018 TRUE COPY S. K. SINHA !'#' / COPY OF ORDER FORWARDED TO:- &. / REVENUE 2. / ASSESSEE (. )*+ , / CONCERNED CIT 4. ,- / CIT (A) /. 012 33*+4 *+#4 56) / DR, ITAT, AHMEDABAD 7. 289 : / GUARD FILE. BY ORDER / 4 /5 *+#4 56) THIS ORDER PRONOUNCED IN OPEN COURT ON 09/08/201 8