HEMANT KANUGO, MUMBAI V. ASST CIT CEN CIR 13, MUMBAI

ITA 5046/MUM/2012

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 88490 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 6 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-02-2015
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: H
• Next Hearing Date: 27-08-2014
• Assessment Year: 2008-2009
• Appeal Filed On: 07-08-2012
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: PREMANAND J
• Assessee Lawyers: DR K SHIVRAM; AJAY R SINGH
• Keywords: Search and seizure; Document seized; Documents seized
• Section: 143(3); 153A; 131; 132; 139

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES C MUMBAI . . , , BEFORE SHRI I.P. BANSAL, JUDICIAL MEMBER AND SHRI CHANDRA POOJARI , ACCOUNTANT MEMBER S.NO. ITA NO. A.Y. APPELLANT RESPONDENT 1. 5046/MUM/2012 2008-09 SHRI HEMANT KANUGO 701, MAHALAXMI CHAMBERS, BHULABHAI DESAI ROAD, MUMBAI PAN:AKYPK 8441P ASSTT. COMMISSIONER OF INCOME TAX, CEN. CIR.13, MUMBAI. 2. 5249/MUM/2012 2008-09 SHRI VIMAL P.KANUGO, 701, MAHALAXMI CHAMBERS, BHULABHAI DESAI ROAD, MUMBAI PAN:AKVPK9706A ASSTT. COMMISSIONER OF INCOME TAX, CEN. CIR.13, MUMBAI. 3. 5251/MUM/2012 2008-09 SHRI KAMAL P. KANUGO 701, MAHALAXMI CHAMBERS, BHULABHAI DESAI ROAD, MUMBAI PAN:AMQPK 0453R ASSTT. COMMISSIONER OF INCOME TAX, CEN. CIR.13, MUMBAI. 4. 5252/MUM/2012 2008-09 SHRI. KIRTI P.KANUGO 701, MAHALAXMI CHAMBERS, BHULABHAI DESAI ROAD, MUMBAI PAN:ALAPK 4276F ASSTT. COMMISSIONER OF INCOME TAX, CEN. CIR.13, MUMBAI. 5. 5250/MUM/2012 2008-09 SMT.BHAVIKA V. KANUGO 301, TARDEO TOWER, 3 RD FLOOR, TARDEO, MUMBAI 400 034. PAN:ADUPJ 6595J ASSTT. COMMISSIONER OF INCOME TAX, CEN. CIR.13, MUMBAI. 6. 5168/MUM/2012 2009-10 ASSTT. COMMISSIONER OF INCOME TAX, CEN. CIR.13, MUMBAI. SHRI HEMANT P.KANUGO 701, MAHALAXMI CHAMBERS, BHULABHAI DESAI ROAD, MUMBAI 5046/MUM/2012& OTHERS 2 PAN:AKYPK 8441P 7. 5166/MUM/2012 2009-10 ASSTT. COMMISSIONER OF INCOME TAX, CEN. CIR.13, MUMBAI. SHRI VIMAL P.KANUGO, 701, MAHALAXMI CHAMBERS, BHULABHAI DESAI ROAD, MUMBAI PAN:AKVPK9706A 8. 5169/MUM/2012 2009-10 ASSTT. COMMISSIONER OF INCOME TAX, CEN. CIR.13, MUMBAI. SHRI KAMAL P. KANUGO 701, MAHALAXMI CHAMBERS, BHULABHAI DESAI ROAD, MUMBAI PAN:AMQPK 0453R 9. 5167/MUM/2012 2009-10 ASSTT. COMMISSIONER OF INCOME TAX, CEN. CIR.13, MUMBAI. SMT. KIRTI P.KANUGO 701, MAHALAXMI CHAMBERS, BHULABHAI DESAI ROAD, MUMBAI PAN:ALAPK 4276F ASSESSEE BY : DR. K.SHIVRAM & SHRI A JAY R. SINGH RESPONDENT BY : SHRI PR EMANAND J. DATE OF HEARING : 23/02/2015 DATE OF PRONOUNCEMENT : 23 /02/2015 ORDER PER BENCH: THESE NINE APPEALS ARE TWO SETS OF APPEALS. SERIAL NO.1 TO 5, ARE APPEALS FILED BY THE ASSESSEE AND THEY RELATES TO LEVY OF PENALTY UNDER SECTION 271(1) (C) OF THE INCOME TAX ACT, 1961 (THE ACT). SERIAL NO.6 TO 9 ARE APPEALS FILED BY THE REVENUE AND THEY RELATES TO LEVY OF PENALTY UNDER SECTION 271AAA OF THE ACT. ALL THESE ASSESSEES ARE GROUPS CONCERNS OF PRAKASH STEE LAGE GROUP OF COMPANIES ON WHICH SEARCH ACTION WAS CONDUCTED ON 09/02/2009 AN D CONCEALMENT PENALTY HAS 5046/MUM/2012& OTHERS 3 BEEN IMPOSED IN RESPECT OF INCOME WHICH WAS DISCLOS ED IN THE RETURN FILED IN PURSUANCE TO NOTICE UNDER SECTION 153A OF THE ACT, WHICH WAS OVER AND EXCESS TO THE ORIGINAL RETURN. IN RESPECT OF ASSESSMENT YEA R 2009-10, I.E. IN THE SECOND SET OF APPEALS, THE PENALTY UNDER SECTION 271AAA WAS IMPOS ED IN EACH CASE OF THE RESPECTIVE ASSESSEES AND THE SAME HAS BEEN DELETED BY LD. CIT(A), AGAINST WHICH REVENUE HAS FILED THE APPEALS. THESE APPEALS WERE ARGUED TOGETHER BY BOTH THE PARTIES, THEREFORE, FOR THE SAKE OF CONVENIENCE ALL OF THEM ARE DISPOSED OF BY THIS CONSOLIDATED ORDER. 2. DR. K.SHIVRAM, LD. SR. COUNSEL IS REPRESENTING THE ASSESSEES AND HAS SUBMITTED A CHART, WHICH READ AS FOLLOWS: NOTE : AS PER THE ORDER PASSED BY HONBLE ITAT IN THE CASE OF PRAKASH STEELAGE LTD. ITA NO 5257/MUM/2 012 DTD. 26/11/2014 THE SAID ISSUE IS COVERED IN RESPECT OF PENALTY LEVIED U/S. 271(1)(C) EXPLANATION 5A AND TH E ISSUE WAS DECIDED AGAINST THE ASSESSEE (PG.NO.6-13, PARA 8-15 , RELEVANT PARA 13) S.NO. SR.NO. AS PER BOARD NAME OF THE ASSESSEE A.Y APPEAL ITA NO. SECTION AMOUNT OF PENALTY CIT(A) ORDER 1. 12 HEMANT KANUGO 08-09 ASSESSEE 5046/MUM- 2012 271(1)(C) 1,10,437 PG.NO.9,PARA 6 2. 26 VIMAL P. KANUGO -DO- -DO- 5249/MUM- 2012 -DO- 1,10,437 PG.NO.10-15,PARA 2..4.1 2.4.8 3. 27 KAMAL P. KANUGO -DO- -DO- 5251/MUM- 2012 -DO- 8,50,508 PG.10-15, PARA 2.4.1- 2.4.8 4. 31 KIRTI P. KANUGO -DO- -DO- 5252/MUM- 2012 -DO- 8,50,508 PG. NO.10-15, PARA 2.5.2- 2.5.8 5. 34 BHAVIKA KANUGO -DO- -DO- 5250/MUM- 2012 -DO- 36,77,100 PAGE NO.10-20, PARA 2.5.1 2.5.16 NOTE: AS PER THE ORDER PASSED BY THE HONBLE ITAT IN THE CASE OF PRAKASH STEELAGE LTD., ITA NO.5221/M UM/2012 DTD. 28/01/2015 FOR A.Y 2009-2010 THE SAID ISSUE IS COVERED IN RESPECT OF PENALTY LEVIED U/S. 271AAA, AND THE ISSUE WAS RESTORED BACK TO FILE OF THE CIT(A) FOR EXAMIN ATION OF LEVY OF PENALTY AND FOR FRESH CONSIDERATIO N ISSUE ON MERITS (PG. NO.7, PARA 4.3) S.NO. SR.NO. AS PER BOARD NAME OF THE ASSESSEE A.Y APPEAL ITA NO. SECTION AMOUNT OF PENALTY CIT(A) ORDER 6. 24 HEMANT P KANUGO 09-10 DEPARTMENT 5168/MUM- 2012 271AAA 4,35,731 PG.9-16, PARA 2.5.1 2.5.6 7. 25 VIMAL P 09-10 -DO- 5166/MUM- -DO- 4,35,731 P G.NO.20-27, 5046/MUM/2012& OTHERS 4 KANUGO 2012 PARA 4.3.1 5.1.1 8. 28 KAMAL P KANUGO 09-10 -DO- 5169/MUM- 2012 271AAA 4,26,824 PG.21-27, PARA 4.3.1-5.1.1 9. 32 KIRTI P KANUGO 09-10 -D- 5167/MUM- 2012 271AAA 4,26,824 PG..NO.21-27, PARA4.4.1-4.4.6 3. LD. SR.COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE FACTS AND CIRCUMSTANCES OF THESE CASES ARE SIMILAR TO THE FOLLOWING TWO ORD ERS OF THE TRIBUNAL RELATING TO ISSUE OF LEVY OF PENALTY UNDER SECTION 271(1)(C) OF THE ACT AND SECTION 271AAA OF THE ACT IN THE GROUP CASES OF M/S. PRAKASH STEEL AGE. HE SUBMITTED THAT THAT DECISIONS RENDERED BY THE TRIBUNAL WOULD BE EQUALLY APPLICABLE TO THE FACTS AND CIRCUMSTANCES OF EACH OF THE CASES AS THE GROUNDS T AKEN BY THE ASSESSEE FOR ASSAILING IMPUGNED ORDER PASSED BY LD. CIT(A) WOULD BE THE SAME IN EACH OF THE CASE. S.NO. ITA NO. A.Y. DATE OF ORDER ORDER U/S. 1. 5256& 5257/MUM/12 2004-05 & 2008-09 26/11/2014 271(1)(C) 2. 5221/MUM/2012 2009-10 28.01.2015 271AAA COPIES OF BOTH THE ORDERS WERE ALSO PLACED ON OUR RECORD AND WERE ALSO GIVEN TO LD. DR. 4. LD. DR DID NOT OBJECT TO SUCH SUBMISSIONS OF LD. SR. COUNSEL FOR THE ASSESSEE AND SUBMITTED THAT THE ABOVE MENTIONED OR DERS MAY BE FOLLOWED TO DECIDE THE PRESENT APPEALS. 5. IT MAY BE MENTIONED HERE THAT THERE MAY BE VARIA TION IN THE FACTS OF EACH OF THE CASE AS IT RELATES TO PARTICULARS OF ADDITIONS AND QUANTUM AND CONSEQUENTIAL PENALTY BUT AS PER THE SUBMISSION OF LD. SR. COUNSE L AND HIS ADMISSION , THESE APPEALS WERE HEARD TOGETHER AND DISPOSED OF BY TA KING THESE APPEALS AS COVERED BY THE AFOREMENTIONED ORDERS. AS IN THE MATTERS REL ATING TO PENALTY UNDER SECTION 5046/MUM/2012& OTHERS 5 271(1)(C) THE TRIBUNAL HAS DECIDED THE ISSUE AGAINS T THE ASSESSEE AND IN RELATION TO MATTERS RELATING TO LEVY OF PENALTY UNDER SECTION 2 71AAA OF THE ACT, THE MATTER HAS BEEN RESTORED BACK. 6. IT IS IN THESE CIRCUMSTANCES THESE APPEALS WERE TAKEN FOR HEARING ACCEPTING THE SUBMISSIONS OF LD. SR. COUNSEL FOR THE ASSESS EE THAT THESE APPEALS ARE COVERED BY THE AFOREMENTIONED ORDERS OF THE TRIBUNAL. 7. FOR THE SAKE OF COMPLETENESS THE RELEVANT OBSERV ATIONS OF THE TRIBUNAL ON THE ISSUE RELATING TO LEVY OF PENALTY UNDER SECTION 27 1(1)(C) OF THE ACT IN THE AFOREMENTIONED ORDER DATED 26/11/2014 ARE REPRODUC ED BELOW. 8. NOW WE WILL TAKE UP APPEAL FOR A.Y. 2008-09, BEI NG ITA NO. 5257/MUM/2012, VIDE WHICH FOLLOWING GROUND HAS BEEN RAISED: THE HONBLE COMMISSIONER OF INCOME TAX (APPEALS) (HEREIN REFERRED AS CIT(A)) HAS ERRED IN CONFIRMING ORDER OF THE LEAR NED ASSESSING OFFICER LEVYING THE PENALTY OF RS.15,20,795/- U/S 271(1)(C) OF INCO ME TAX ACT, 1961 WITHOUT CONSIDERING THE FACTS AND SUBMISSIONS MADE DURING T HE PENALTY PROCEEDINGS. THE PENALTY OF RS.15,20,795/- HAS BEEN LEVIED ON THE AM OUNT OF RS.49,21,666/- DECLARED AS UNDISCLOSED INCOME BY THE ASSESSEE. IT IS SUBMITTED THAT YOUR APPELLANT HAS DULY INCLUDED SUCH UNDISCLOSED INCOME IN ITS RETURN FILED U/S 153A OF INCOME TAX ACT, 1961 AND HAS DULY PAID TAX ON SU CH INCOME. IT IS PRAYED THAT THERE HAS BEEN NO CONCEALMENT OR FURNISHING OF INAC CURATE PARTICULARS OF INCOME AND THEREFORE PENALTY U/S 271(1)(C) OF INCOME TAX A CT, 1961 AS LEVIED SHOULD BE DELETED. 9. BRIEF FACTS ARE THAT, IN THE WAKE OF SEARCH AND SEIZURE ACTION U/S 132(1) CARRIED IN THE CASE OF THE ASSESSEE AND OTHER GROUP CONCERNS ON 09 .02.2009, THE ASSESSEE, ALONG WITH OTHER GROUP HAD MADE TOTAL DECLARATION OF UNDISCLOS ED INCOME OF RS.15,00,21,000/- ON 30.03.2009, COVERING THE ENTIRE GROUP FOR THE VARIO US ASSESSMENT YEARS INCLUDING THE ASSESSEE. THIS DECLARATION WAS MADE IN THE FORM OF LETTER FILED BEFORE THAT DDIT (INVESTIGATION AND ADDITIONAL DIT INVESTIGATION). T HE ORIGINAL RETURN OF INCOME FOR THE A.Y. 2008-09 WAS FILED ON 03.09.2008 AT AN INCOME O F RS.5,71,84,099/-. IN PURSUANCE OF NOTICE U/S 153A, THE ASSESSEE FILED ITS RETURN OF I NCOME ON 17.08.2009, DECLARING TOTAL INCOME OF RS.6,21,05,565/-, WHICH INCLUDED INTEREST INCOME BASED ON CERTAIN SEIZED DOCUMENTS. THIS ADDITIONAL AMOUNT OF RS.49,21,666/- WAS INCLUDED IN PURSUANCE OF THE OFFER LETTER, OFFERING THE ADDITIONAL/UNDISCLOSED I NCOME. THE SEIZED DOCUMENTS PRIMA FACIE REFLECTED THAT GROUP CONCERNS WERE INVOLVED IN RECE IPT AND PAYMENT OF EXCESS INTEREST IN CASH OVER AND ABOVE THE RECEIPTS AND PAYMENT OF IN TEREST ACCOUNTED IN THE REGULAR BOOKS 5046/MUM/2012& OTHERS 6 OF ACCOUNT. THE ASSESSING OFFICER ACCEPTED THE ADDI TIONAL INCOME OF RS.49,21,666/- OFFERED BY THE ASSESSEE IN THE RETURN OF INCOME U/S 153A. HOWEVER, HE REQUIRED THE ASSESSEE TO SUBSTANTIATE THE DECLARATION AND TO GIV E THE JUSTIFICATION FOR SUCH AN INCOME. IN RESPONSE THE ASSESSEE SUBMITTED THAT, IT REPRESE NTS ONE TIME INCENTIVE RECEIVED IN CASH ON ACCOUNT OF INTEREST AND MOREOVER IT HAS BEEN ALR EADY INCLUDED IN THE RETURN INCOME TO BE TAXED UNDER THE HEAD, INCOME FROM OTHER SOURCES AND NO FURTHER ADDITION SHOULD BE MADE. ACCORDINGLY THE ASSESSEES RETURN INCOME FILE D U/S 153A WAS ACCEPTED BY THE AO IN THE ORDER PASSED U/S 143(3) R.W.S. 153A. 10. DURING THE COURSE OF THE PENALTY PROCEEDINGS, I N RESPONSE TO THE SHOW CAUSE NOTICE, THE ASSESSEE SUBMITTED THAT VIDE LETTER DATED 22.12 .2010, THE ASSESSEE HAS GIVEN DETAIL REPLY WITH REGARD TO AMOUNT DECLARED TOWARDS INCENT IVE AGAINST THE INTEREST EXPENDING OUTSIDE THE BOOKS OF ACCOUNT. SINCE THE INCOME HAS ALREADY BEEN INCLUDED IN THE RETURN OF INCOME, NO PENALTY SHOULD BE LEVIED. HOWEVER, THE A SSESSING OFFICER REJECTED THE ASSESSEES SUBMISSION AND HELD THAT IN VIEW OF EXPL ANATION-5A TO SECTION 271(1)(C), THE ASSESSEE IS DEEMED TO HAVE CONCEALED THE PARTICULAR S OF INCOME ON THE AMOUNT OF RS.49,21,666/-, AS THE ASSESSEE HAD NOT SHOWN THIS AMOUNT IN THE ORIGINAL RETURN OF INCOME FILED ON 30.09.2008. ACCORDINGLY HE LEVIED P ENALTY OF RS.15,20,795/-. SUCH A PENALTY HAS ALSO BEEN CONFIRMED BY THE LD.CIT(A), R ELYING ON CERTAIN DECISIONS WHICH HAS BEEN DEALT BY THE LD.CIT(A) AT PAGES 31 TO 33 OF TH E APPELLATE ORDER. THE SUM AND SUBSTANCE OF HIS REASONING IS THAT, IN VIEW OF EXPL ANATION 5A TO SECTION 271(1)(C), IMMUNITY IS NOT AVAILABLE TO THE ASSESSEE FOR UNDIS CLOSED INCOME FOUND IN RESPECT OF ANY ASSESSMENT YEAR IN THE COURSE OF SEARCH, FOR WHICH THE TIME LIMIT FOR FILING OF RETURN OF INCOME HAD ELAPSED. THUS HE CONFIRMED THE PENALTY O N THE INCOME DISCLOSED IN THE RETURN OF INCOME FILED U/S 153A OF RS.49,21,666/- 11. BEFORE US LD. SENIOR COUNSEL, SHRI K. SHIVRAM S UBMITTED THAT SECTION 153A USES THE WORD NOTWITHSTANDING ANYTHING CONTAINED IN SECTION 139, WHICH INTER ALIA MEANS THAT, WHEN THE NOTICE U/S 153A IS ISSUED, THE EARLIER RET URN OF INCOME FILED BECOMES NONEST AND ONLY RETURN OF INCOME WHICH IS RELEVANT FOR THE ASS ESSMENT IS, RETURN OF INCOME FILED U/S 153A. SINCE THE ASSESSEE HAS DISCLOSED THE CORRECT INCOME IN PURSUANCE OF NOTICE U/S 153A, THEREFORE, IT CANNOT BE HELD THAT PENALTY IS LEVIABLE IN RESPECT OF THE AMOUNT DISCLOSED IN THE SAID RETURN OF INCOME. HE FURTHER SUBMITTED THAT EXPLANATION-5 AND 5A ARE IDENTICAL AND WHILE INTERPRETING EXPLANATION 5, THE COURTS HAVE HELD THAT, IF THE INCOME HAS BEEN DISCLOSED AND THE ASSESSEE AND HAS ALSO SPECIFIED THE MANNER IN WHICH INCOME HAS BEEN DERIVED, THEN NO PENALTY IS LEVIABL E. IN SUPPORT OF HIS CONTENTION HE RELIED UPON ON THE DECISION OF RAJASTHAN HIGH COURT IN THE CASES OF CIT VS. KANHAIYA LAL (2008) 299 ITR 19 (RAJ), CIT VS. S.D.V. CHANDRU (2004) 266 ITR 175 (MADRAS). 12. ON THE OTHER HAND, LD. DR SUBMITTED THAT, EXPLANATI ON 5A DEALS WITH THE CASES, WHERE THE SEARCH HAS BEEN INITIATED U/S 132, AFTER 1ST JU NE 2007. THE SAID EXPLANATION DOES NOT CONTAIN ANY EXCEPTIONS, WHICH WAS SPECIFICALLY PROV IDED IN CLAUSE (1) AND (2) OF EXPLANATION 5, APPLICABLE TO SEARCHES INITIATED BEF ORE 1ST JUNE 2007. HERE IN THIS CASE THE ASSESSEE HAS ADMITTEDLY NOT SHOWN ADDITIONAL IN TEREST INCOME PRIOR TO THE DATE OF SEARCH AND ASSESSEE HAS BEEN FOUND TO EARNING THIS INCOME DURING THE COURSE OF SEARCH, THEREFORE, THERE IS A DEEMED CONCEALMENT OF INCOME UNDER EXPLANATION 5A. THUS THE REASONING GIVEN BY AO AS WELL AS LD.CIT(A), IS LE GALLY CORRECT WHICH SHOULD BE UPHELD. 5046/MUM/2012& OTHERS 7 THE DECISIONS RELIED UPON BY THE LEARNED COUNSEL WE RE ON EXPLANATION 5, WHICH ARE NOT APPLICABLE FOR EXPLANATION 5A. 13. WE HAVE HEARD THE RIVAL SUBMISSIONS, AND PERUSE D THE RELEVANT FINDINGS OF THE AO AS WELL AS LD.CIT(A) AND MATERIAL PLACED ON RECORD. TH E SEARCH AND SEIZURE ACTION U/S 132(1) HAD TAKEN PLACE IN THE CASE OF THE ASSESSEE ON 09.02.2009. PRIOR TO THE COMMENCEMENT OF SEARCH, DUE DATE OF RETURN OF INCOM E HAD ALREADY EXPIRED FOR THE A.Y. 2008-09. HERE IN THIS CASE ORIGINAL RETURN OF INCOM E U/S 139(1) WAS FILED ON 30.09.2008 DECLARING TOTAL INCOME OF RS.5,71,84,099/-. IN THE WAKE OF SEARCH AND SEIZURE ACTION, THE ASSESSEE HAD MADE DECLARATION FOR OFFERING ADDITION AL INCOME, WHICH WAS BASED ON DOCUMENTS FOUND AT THE TIME OF SEARCH. THE DOCUMENT S SEIZED, REVEALED THAT THE GROUP CONCERNS INCLUDING ASSESSEE WERE INDULGED IN RECEIV ING AND PAYING OF EXCESS INTEREST IN CASH OVER AND ABOVE THE RECEIPT AND PAYMENT OF INTE REST ACCOUNTED IN THE REGULAR BOOKS OF ACCOUNT. THE ASSESSEE HAS ALSO INCURRED CERTAIN EXPENSES WHICH WERE TOWARDS PROCESS OF LOANS PAID BY THE ASSESSEE IN CASH OR CHEQUES UN DER THE HEAD BROKERAGE/COMMISSION. STATEMENT OF SHRI ASHOK M. SETH, EXECUTIVE DIRECTOR OF THE COMPANY WAS ALSO RECORDED U/S 131 DURING THE COURSE OF SURVEY U/S 133A, WHICH WAS CARRIED OUT SIMULTANEOUSLY AND EXPLAINED THE CONTENTS OF IMPOUNDED MATERIAL AND IT S IMPLICATION IN THE BOOKS OF ACCOUNT. BASE ON THE SEIZED DOCUMENTS, AN INCOME OF RS.49,21 ,666/- WAS OFFERED AS UNDISCLOSED INCOME. THIS AMOUNT WAS INCLUDED IN THE RETURN OF I NCOME FILED ON 17.08.2009, IN RESPONSE TO NOTICE U/S 153A DATED 06.07.2009. AFTER INCLUDING THIS INCOME THE TOTAL INCOME WAS SHOWN AT RS.6,21,05,765/-. IN THE ASSESS MENT ORDER, THE ASSESSING OFFICER HAD DISCUSSED SPECIFICALLY THE RELATED SEIZED DOCUMEN TS AND THE AMOUNT OF INTEREST/INCENTIVES WHICH WAS RECEIVED IN CASH AND, FOUND TO BE NOT REC ORDED IN THE BOOKS OF ACCOUNT. THE DECLARATION MADE BY THE ASSESSEE HAD BEEN ACCEPTED BY THE ASSESSING OFFICER IN THE ORDER PASSED U/S 143(3) R.W.S. 153A, DATED 31.12.2010. IN THE COURSE OF THE PENALTY PROCEEDINGS, THE ASSESSEES SUBMISSION BEFORE THE A O WAS AS UNDER: 1. ASSESSEE COMPANY HAS FILED RETURN OF INCOME ON 30.9.2008 U/S. 139 DECLARING TOTAL INCOME AT RS.5,71,84,099/- AND CONSEQUENT TO SEARCH ACTION ASSESSEE 'COMPANY HAS FILED RETURN OF INCOME ON 17.08.2009 I N RESPONSE TO NOTICE U/S. 153A OF THE 'INCOME TAX ACT, 1961 DECLARING INCOME OF RS.6,21,05,765/ INCLUDING UNDISCLOSED INCOME OF RS.49,21,666/-. THE ASSESSMENT HAS BEEN COMPLETED U/S 143 (3) R.W.S. 153A OF INCOME TAX ACT , 1961 ASSESSING TOTAL INCOME AT RS.6,21,05,765/-. 2. IT IS SUBMITTED THAT RETURNED FILED BY THE ASSES SEE COMPANY HAS BEEN ACCEPTED IN THE ASSESSMENT COMPLETED U/S. 143 (3) OF INCOME TAX ACT, 1961. IT IS HOWEVER SUBMITTED THAT PENALTY U/S 271 (1) (C) HAS BEEN INI TIATED FOR THE UNDISCLOSED INCOME' DECLARED BY THE ASSESSEE COMPANY. 3. IT IS SUBMITTED THAT ABOVE DECLARATION INCLUDES AN AMOUNT OF RS. 49,21,&66/- ON ACCOUNT OF INTEREST/INCENTIVES IN CASH AND THE S AME HAS BEEN DULY OFFERED FOR TAX RETURN FILED IN RESPONSE TO NOTICE ISSUED U/S 1 53A OF INCOME TAX ACT 1961. 4. FURTHER WITH REGARD TO THE DECLARATION MADE IN R ESPECT OF UNDISCLOSED INCOME' ON THE BASIS OF SEIZED DOCUMENTS WE WOULD LIKE TO S TATE THAT THE EXPLAINED TO YOUR 5046/MUM/2012& OTHERS 8 HONOUR DURING THE ASSESSMENT PROCEEDINGS VIDE OUR S UBMISSION' DATED 20.12.2010 AND THE RELEVANT PARA OF THE SAME IS REPRODUCED HER E BELOW: '2. . WITH REGARD TO PAGE NO.39 OF FILE NO. A - 3 O F 701, MAHALAXMI CHAMBERS, BHULABHAI DESAI ROAD, MUMBAI - 400 026, WE WOULD LI KE TO STATE THAT ASSESSEE HAS DECLARED AN AMOUNT OF RS.47,75,000/- TOWARDS IN CENTIVES AGAINST THE INTEREST EXPENDED IN BOOKS OF ACCOUNT. SUCH INCENTIVE OF RS. 47,75,000/- HAS BEEN REED. IN CASH AND HAS BEEN DECLARED AS UNDISCLOSED INCOME. 3. WITH REGARD TO PAGE NO.27 28 AND 31 OF FILE NO.A - 3 OF 701, MAHALAXML CHAMBERS, BHULABHAI DESAI ROAD, MUMBAI 400 026, WE WOULD .LIKE TO STATE THAT ASSESSEE HAS DECLARED AN AMOUNT OF RS.1,46,666/- TO WARDS INCENTIVES AGAINST THE INTEREST EXPENDED IN BOOKS OF ACCOUNT. SUCH INCENTI VE OF RS.1,46,666/- HAS BEEN REED. IN CASH AND HAS BEEN DECLARED AS UNDISCLOSED INCOME. ' 5. IT IS THEREFORE CLEAR FROM THE ABOVE FACTS YOUR HONOUR HAS WRONGLY INITIATED PENALTY PROCEEDINGS IN ASSESSEE'S CASE EVEN AFTER V OLUNTARY DISCLOSURE BY THE ASSESSEE AND THEREFORE THE PENALTY PROCEEDING INITI ATED BY YOUR HONOUR SHOULD BE DROPPED. 6. IT IS THEREFORE SUBMITTED THAT YOUR ASSESSEE HAS NOT DELIBERATELY CONCEALED ANY FACT OR CONCEALED ANY PARTICULARS OF INCOME AT' THE 'TIME OF FILING OF THE RETURN, HENCE NO PENALTY SHOULD BE LEVIED. 7. IN VIEW OF THE ABOVE FACTS AND ABOVE. LEGAL CASE LAWS, IT IS PRAYED THAT PENALTY PROCEEDINGS IN THE CASE OF THE ASSESSEE SHOULD BE D ROPPED. HOWEVER, THE ASSESSING OFFICER HAS LEVIED THE PENA LTY AFTER INVOKING EXPLANATION 5A TO SECTION 271(1)(C). THE MAIN ISSUE BEFORE US IS, WHE THER UNDER THE AFORESAID FACTS, PENALTY CAN BE SAID TO BE LEVIABLE UNDER EXPLANATION 5A TO SECTION 271(1)(C). FOR SAKE OF READY REFERENCE EXPLANATION 5A WHICH HAS BEEN BROUGHT IN THE STATUTE W.E.F. 01.06.2007 READS AS UNDER: [EXPLANATION 5A- WHERE, IN THE COURSE OF A SEARCH INITIATED UNDER SECTION 132 ON OR AFTER THE 1 ST DAY OF JUNE, 2007, THE ASSESSE E IS FOUND TO BE THE OWNER OF- (I) ANY MONEY, BULLION, JEWELLERY OR OTHER VALUABLE ARTICLE OR THING (HEREINAFTER IN THIS EXPLANATION REFERRED TO AS ASSETS) AND THE ASS ESSEE CLAIMS THAT SUCH ASSETS HAVE BEEN ACQUIRED BY HIM UTILIZING (WHOLLY OR IN P ART) HIS INCOME FOR ANY PREVIOUS YEAR; OR (II) ANY INCOME BASED ON ANY ENTR Y 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 TRANSACTION REPRESENT S HIS INCOME (WHOLLY OR IN PART) FOR ANY PREVIOUS YEAR, WHICH HAS ENDED BEFORE THE DATE OF SEARCH AND, (A) WHERE THE RETURN OF INCOME FOR SUCH PREVIOUS 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, 5046/MUM/2012& OTHERS 9 THEN, NOTWITHSTANDING THAT SUCH INCOME IS DECLARED BY HIM IN ANY RETURN OF INCOME FURNISHED ON OR AFTER THE DATE OF SEARCH, HE SHALL, FOR HE PURPOSES OF IMPOSITION OF A PENALTY UNDER CLAUSE (C) OF SUB-SECTION(1) OF THI S SECTION, BE DEEMED TO HAVE CONCEALED THE PARTICULARS OF HIS INCOME OR FURNISHE D INACCURATE PARTICULARS OF SUCH INCOME.] 14. THE AFORESAID EXPLANATION MAKES IT CLEAR THAT, FIRSTLY, IT IS APPLICABLE IN THE CASES WHERE THE SEARCH HAS BEEN INITIATED U/S 132 AFTER 0 1.06.2007 AND DURING THE COURSE OF SEARCH, THE ASSESSEE IS FOUND TO BE THE OWNER OF AN Y OF THE ASSET OR INCOME AS SPECIFIED IN CLAUSE (I) AND (II) FOR ANY PREVIOUS Y EAR WHICH HAS ENDED BEFORE THE DAY OF SEARCH AND; SECONDLY, IF SUCH AN ASSET OR INCOME HA S NOT BEEN DECLARED IN THE RETURN OF INCOME BEFORE THE DATE OF SEARCH OR THE DUE DATE OF RETURN OF INCOME FOR SUCH PREVIOUS YEAR HAS EXPIRED AND THE ASSESSEE HAS NOT FILED THE RETURN, THEN ANY INCOME DECLARED BY THE ASSESSEE IN THE RETURN OF INCOME AFTER THE DATE OF SEARCH, HE SHALL BE DEEMED TO HAVE CONCEALED PARTICULARS OF HIS INCOME OR HAS A FURNIS HED INACCURATE PARTICULARS OF SUCH INCOME. THERE ARE NO EXCEPTION CLAUSES FOR IMMUNITY FROM PENALTY U/S 271(1)(C), AND TO THIS EXTENT, EXPLANATION 5A IS IN CONTRADISTINCTION WITH EXPLANATION 5, WHICH WAS APPLICABLE FOR SEARCHES PRIOR TO 01.06.2007. IN EXP LANATION 5, THERE WERE TWO EXCEPTIONS PROVIDED IN CLAUSE (I) AND (II). IF THE CASES FELL WITHIN THE SAID EXCEPTIONS, THEN NO PENALTY IS LEVIABLE. SUCH EXCEPTIONS HAVE NOT BEEN PROVIDED IN EXPLANATION 5A. ALL THE CASE LAWS WHICH HAVE BEEN REFERRED BY THE ASSESSEE, PERTAIN T O EXCEPTION CLAUSES PROVIDED IN EXPLANATION-5. HERE IN THIS CASE ADMITTEDLY THE S EARCH HAS TAKEN PLACE AFTER 01.06.2007 AND THE RETURN OF INCOME FOR THE A.Y. 2008-09 HAD F ALLEN DUE MUCH BEFORE THE DATE OF SEARCH. IN THE RETURN OF INCOME FILED PRIOR TO THE DATE OF SEARCH, THE INCOME OF RS.49,21,666/- WAS NOT INCLUDED BY THE ASSESSEE. TH E ADDITIONAL INCOME WHICH HAS BEEN DECLARED AFTER THE DATE OF SEARCH WAS IN THE RETURN OF INCOME FILED U/S 153A AND NOT EARLIER. THUS IN OUR VIEW EXPLANATION-5A IS CLEARLY ATTRACTED AND THE PENALTY LEVIED BY THE AO U/S 271(1)(C) HAS RIGHTLY BEEN CONFIRMED BY THE LD.CIT(A). ACCORDINGLY, THE GROUNDS RAISED BY THE ASSESSEE IS DISMISSED AND THE ASSESSEES APPEAL FOR A.Y. 2008-09 IS DISMISSED. 7.1 IN THIS VIEW OF THE SITUATION, AFTER HEARING BO TH THE PARTIES IN RESPECT OF ITA NO.5046 AND OTHERS, (1 ST SET OF APPEALS), THE ISSUE IS DECIDED AGAINST THE ASSESSEE AND THESE APPEALS ARE DISMISSED. 7.2 IN RESPECT OF LEVY OF PENALTY UNDER SECTION 271 AAA OF THE ACT, THE RELEVANT OBSERVATIONS OF THE TRIBUNAL AS PER AFOREMENTIONED ORDER DATED 28/01/2015 ARE AS UNDER: 4.3 THE INGREDIENTS OF SECTION 271AAA, FOR WHICH R EFERENCE MAY BE MADE TO SUBSECTIONS (1) AND (2) THEREOF, AND WHICH PROVISION ONLY IS AP PLICABLE FOR THE CURRENT YEAR - THE YEAR 5046/MUM/2012& OTHERS 10 OF SEARCH (S. 271AAA(1) R/W EXPLANATION THERETO), A ND IN FACT APPLIED BY THE A.O., VARY SUBSTANTIALLY FROM THAT OF SECTION 271(1)(C) (EXPLA NATION 5), NOTED AT PARA 6.5.4 OF THE IMPUGNED ORDER, INASMUCH AS THE FORMER PROVIDES FOR SUBSTANTIATION OF THE MANNER IN WHICH THE UNDISCLOSED INCOME, AS DISCLOSED PER S. 1 32(4), IS DERIVED BY THE ASSESSEE. IN FACT, THE LD. CIT(A) RECORDS THE INGREDIENTS OF EXP LANATION 5 TO SECTION 271(1)(C) AT PARA 6.5.4 OF HIS ORDER, WHILE EXPLANATION 5A TO S. 271( 1)(C) ALONE IS RELEVANT FOR A SEARCH INITIATED U/S.132 ON AND AFTER 01.06.2007, AS IN TH E INSTANT CASE; THE FORMER APPLYING ONLY IN CASE OF A SEARCH INITIATED BEFORE 01.06.2007. EV EN THE DECISION RELIED UPON BY HIM (AT PARA 6.5.5), I.E., MAHENDRA C. SHAH (SUPRA), IS ONL Y IN THE CONTEXT OF SECTION 271(1)(C). THE TWO SECTIONS, I.E., S. 271(1)( C) AND S. 271AAA , ARE NOT ONLY WORDED DIFFERENTLY, WITH THUS DIFFERENT CONCOMITANT SCOPES, ARE RATHER MANDA TED TO OPERATE EXCLUSIVELY (REFER SECTION 271AAA(3)). THE FOREGOING, WE BELIEVE, WOUL D BRING FORTH THE BASIS AS WELL AS THE VALIDITY OF OUR INITIAL OBSERVATION AT PARA 4.1 OF THIS ORDER, I.E., OF THE LD. CIT(A) HAVING GROSSLY MISAPPLIED HIMSELF IN THE MATTER. WE, THERE FORE, ACCEPTING THE REVENUES GROUND # 1, VACATE THE FINDINGS BY THE LD. CIT(A) AS WELL AS HIS CONSEQUENT DECISION AS RECORDED IN THE CONCLUDING SUB-PARA (# 6.5.6) OF HIS ORDER. THE SAME, HOWEVER, WOULD NOT BY ITSELF IMPLY A POSI TIVE SATISFACTION OF THE CONDITIONS OF SECTION 271AAA, ONLY ON THE BASIS OF WHICH THE PENA LTY AS LEVIED COULD BE SUSTAINED. THE MATTER WOULD THEREFORE; THE LD. CIT(A) HAVING EXAMI NED THE LEVY ON THE BASIS AND ANVIL OF A DIFFERENT PROVISION, REQUIRE BEING RESTORED BACK TO HIM FOR A CONSIDERATION AFRESH, I.E., THE ISSUE ON MERITS, AND TOWARD WHICH THE REVENUE H AS RAISED ITS GROUND NO. 2 BEFORE US. WE, ACCORDINGLY, RESTORE THE MATTER BACK TO THE FIL E OF THE LD. CIT(A) TO ADJUDICATE THE ISSUE ARISING, I.E., THE APPLICABILITY OF S. 271AAA IN THE FACTS OF THE CASE, AND AFTER ALLOWING THE ASSSESSEE AN OPPORTUNITY TO STATE ITS CASE BEFORE HIM. 4.4 IN THIS REGARD, WE ALSO CONSIDER IT RELEVANT TO STATE OUR PRIMA FACIE OBSERVATIONS, SO THAT THE SAME ARE KEPT IN VIEW BY THE LD. CIT(A) WH ILE DECIDING THE ASSESSEES CASE BEFORE HIM. FIRSTLY, ANY INCOME TO BE SUBJECT TO PENALTY U /S.271AAA SHOULD BE AN UNDISCLOSED INCOME, AS DEFINED VIDE EXPLANATION BELOW SUB-SUBS ECTION (4) THE SAID SECTION. THE PENALTY IN THE INSTANT CASE, HOWEVER, HAS BEEN LEVI ED ON THE INCOME OF RS.3,46,632/-, WHICH, AS IT WOULD APPEAR TO US ON A READING OF THE ASSESSMENT AND PENALTY ORDER, IS ONLY ON ACCOUNT OF A DIFFERENCE IN THE VALUATION OF STOC K. THUS A FINDING AS TO THE IMPUGNED INCOMES BEING UNDISCLOSED INCOMES IS A PRE-REQUISIT E FOR THE APPLICATION OF THE PROVISION. FURTHER, EACH OF THE THREE INGREDIENTS AS SPECIFIED U/S. 271AAA(2) WOULD NEED TO BE SEPARATELY EXAMINED FOR THEIR SATISFACTION BY TH E ASSESSEE IF THE PENALTY THERE-UNDER IS NOT TO BE LEVIED AND, THUS, SUSTAINED. WHILE THIS M AY SEEM AXIOMATIC AND, THEREFORE, SUPERFLUOUS FOR US TO BE STATING SO, LIABLE TO BE C ONSTRUED AS AN EXPRESSION OF OVER ANXIETY, WE DO SO AS WE OBSERVE A GROSS OVERLOOKING OF THIS VITAL ASPECT OF THE MATTER. AS WE OBSERVE, THE UNDISCLOSED INCOME OF RS.562.62 LAC S RELATING TO STOCK WAS DECLARED BY THE ASSESSEE, I.E., FOR THE FIRST TIME, ONLY PER IT S RETURN OF INCOME FILED ON 29.11.2009, AND NOT PER THE DECLARATION VIDE A STATEMENT/DEPOSITION U/S.132(4) OF THE ACT; THE DISCLOSURE FOLLOWING SEARCH EXTENDING ONLY TO AN INCOME OF RS. 99.13 LACS, I.E., BY WAY OF INTEREST. THE ONLY FINDING BY THE LD. CIT(A) IN THE MATTER IS THAT VIDE PARA 6.5.5 OF HIS ORDER, WHICH STATES OF TAX AND INTEREST HAVING BEEN PAID ON THE INCOMES OFFERED U/S. 132(4), AND WHICH 5046/MUM/2012& OTHERS 11 FIND DUE REFLECTION IN THE RETURN OF INCOME. THE ON LY INCOME, OF THE THREE INCOMES UNDER REFERENCE, WHICH SATISFIES THIS REQUIREMENT, IS THE INTEREST INCOME, I.E., PRESUMING THAT THE MANNER OF ITS DERIVATION STANDS ALSO SPECIFIED. THE ADMISSION U/S.132(4) IS TO SPECIFY THE UNDISCLOSED INCOME, OR AT LEAST THE MANNER IN WHICH IT IS TO BE ARRIVED AT; THE WHOLE PREMISE FOR EXTENDING IMMUNITY FROM THE PENALTY, ST ATUTORILY MANDATED, BEING THAT THE ASSESSEE COMMITS HIMSELF, PROVIDING THE NECESSARY D ETAILS UNDER A CONDITION OF OATH. FURTHER, SURPRISINGLY AGAIN, WE OBSERVE NO FINDING BY THE LD. CIT(A) IN RESPECT OF SUBSTANTIATION OF THE MANNER OF DERIVING THE UNDISC LOSED INCOME, WHICH STIPULATION, WHILE MISSING IN SECTION 271(1)(C), STANDS INCORPORATED I N SECTION 271AAA. THE A.O. CLEARLY RECORDS A FINDING, BOTH IN RESPECT OF THE ASSESSEE HAVING FAILED TO SPECIFY THE MANNER IN WHICH THE UNDISCLOSED INCOME IS DERIVED AS WELL AS OF THE ASSESSEE HAVING FAILED TO SUBSTANTIATE THE SAME, AND WHICH IN FACT THE LD. CI T(A) NOTES VIDE PARA 6.5.2 OF HIS ORDER. CLEARLY, THESE FINDINGS OF FACT WOULD NEED TO BE AD DRESSED BY THE LD. CIT(A), EITHER ENDORSING OR REVERSING OR OTHERWISE MODIFYING THE S AME, I.E., BASED ON HIS REAPPRAISAL OF THE MATERIALS FOUND FROM THE POSSESSION OF, OR OTHE RWISE FURNISHED BY, THE ASSESSEE, OR EVEN THE EVIDENCES LED BY IT BEFORE HIM FOR THE FIR ST TIME, OF-COURSE BY AND UPON OBSERVING THE DUE PROCESS OF LAW (REFER R. 46A). THE ONUS TO SATISFY THE CONDITIONS OF THE PROVISION THOUGH, WOULD ONLY BE ON THE ASSESSEE. IN FACT, ALL THIS WOULD PRECISELY BE THE PURVIEW OF THE FIRST APPELLATE AUTHORITY IN THE SET ASIDE PROC EEDINGS. COMING TO THE DECISION IN THE CASE OF MAHENDRA C. S HAH (SUPRA), RELIED UPON BY THE LD. CIT(A), THE SAME, AS AFORE-STATED, IS FIRST LY IN RESPECT OF SECTION 271(1)(C), THE PARAMETERS AS WELL AS INGREDIENTS OF WHICH ARE DIFF ERENT FROM THAT OF SECTION 271AAA. WHILE THE FORMER PROVISION IS APPLICABLE IN THE CAS E OF CONCEALMENT OF OR FURNISHING INACCURATE, PARTICULARS OF INCOME, CONSIDERING THE DEEMING PROVISIONS IN ITS RESPECT UNDER THE SECTION, S. 271AAA PROVIDES FOR A MANDATO RY LEVY OF PENALTY EXCEPT WHERE THE ASSESSEE SATISFIES THE CONDITIONS OF SECTION 271AAA (2). EVEN THE SAVING UPON PROVING A REASONABLE CLAUSE, AS PROVIDED UNDER SECTION 273B, IS NOT APPLICABLE FOR A PENALTY IMPOSABLE U/S.271AAA, WHICH IS ONLY IN RESPECT OF U NDISCLOSED INCOME, SO THAT WHAT ALONE IS RELEVANT IS THE APPLICABILITY OF THE PROVI SION IN THE FACTS OF THE CASE. IT IS APPARENT FROM THE READING OF THE SAID DECISION THAT THE ENVI RONMENTAL CONDITIONS EXISTING AT THE TIME OF THE SEARCH, INCLUDING THE MANNER IN WHICH T HE STATEMENT U/S.132(4) IS GENERALLY RECORDED, PREVAILED WITH THE HONBLE COURT IN HOLDI NG OF A SUBSTANTIAL COMPLIANCE IN THE FACTS OF THE CASE, I.E., QUA THE CONDITION OF ADMIS SION OF UNDISCLOSED INCOME AND THE STATEMENT OF THE MANNER IN WHICH IT IS DERIVED, ALS O PROVIDED U/EXPL.5 TO S. 271(1)(C), SAVING PENALTY. AS EXPLAINED BY IT, THIS IS AS THE ASSESSEE HAD NO OCCASION TO STATE OR MAKE AVERMENTS IN THE MANNER AS REQUIRED BY OR UNDE R THE LAW. ITS PRESCRIPTION IS THEREFORE TO BE READ CONTEXTUALLY. THE LEGAL PROPOS ITION THAT THUS ARISES FROM THE SAID JUDGMENT IS THAT THE SATISFACTION OF THE CONDITIONS MUST BE CONSIDERED IN THE BACKGROUND AND THE CONTEXT OF THE OBTAINING FACTS AND CIRCUMST ANCES OF THE CASE. IN THE INSTANT CASE, THE STATEMENT U/S.132(4), WHICH IS BY SHRI PRAKASH C. KANUGO, A DIRECTOR OF THE ASSESSEE- COMPANY, WAS RECORDED ONLY ON 06.03.2009 (COPY ON R ECORD), I.E., NEARLY A MONTH AFTER THE SEARCH. THE ASSESSEE CANNOT BE SAID TO BE CONST RAINED FOR WANT OF TIME - WHICH WAS AMPLE, TO DELIBERATE IN THE MATTER, AS WELL AS SEEK LEGAL ADVICE. IN FACT, THE STATEMENT WAS MADE ONLY IN THE PRESENCE OF ITS COUNSEL, SHRI VI NAY DOSHI, CA, AND ITSELF MAKES A PLEA FOR GRANT OF CONDONATION FROM THE LEVY OF PENALTY ( IN ANSWER TO Q.11). COULD IT BE 5046/MUM/2012& OTHERS 12 THEREFORE BE SAID THAT THE ASSESSEE HAD NO OCCASION TO AVER WITH REGARD TO THE MANNER OF DERIVING THE INCOME BEING DISCLOSED? A COMPANY ACTS THROUGH THE HUMAN AGENCY OF ITS MANAGEMENT, WHICH ALONE COULD DEPOSE QUA THE MANNER IN WHICH ITS UNDISCLOSED INCOME STOOD EARNED/ DERIVED, BEING RATHER IN ITS EXCLUSIV E KNOWLEDGE? ALL THAT THE LAW POSTULATES IS A HONEST DISCLOSURE QUA THE SAID INCO ME. A FINDING AS TO THE SATISFACTION OR OTHERWISE OF THE SAID CONDITION, OR FOR THAT MATTER ITS SUBSTANTIATION, I.E., OF THE MANNER IN WHICH THE UNDISCLOSED INCOME WAS DERIVED, IT NEE DS TO BE APPRECIATED, ARE PURE FINDINGS OF FACT. THE HONBLE HIGH COURTS CAN INTER FERE WITH SUCH A FINDING/S ONLY WHERE IT IS IN ITS VIEW EITHER PERVERSE OR WITHOUT EVIDENCE OR BASED ON IRRELEVANT MATERIAL, OR WHICH IS PARTLY RELEVANT AND PARTLY IRRELEVANT (REF ER, INTER ALIA, CIT V. DAULAT RAM RAWATMULL [1973] 87 ITR 349 (SC)). FURTHER, EVEN WH ERE SO, THE PROVINCE OF THE HONBLE COURT IS TO RESTORE THE MATTER BACK TO THE TRIBUNAL , STATING ITS REASONS, AS CLARIFIED BY THE HONBLE COURT IN JANATHA CONTRACT CO. V. CIT [1976] 105 ITR 627 (KER), FOLLOWING THE BINDING DECISIONS BY THE APEX COURT IN CIT V. GREAV ES COTTON & CO. LTD. [1968] 68 ITR 200 (SC) AND CIT V. INDIAN MOLLASSES & CO. (P.) LTD . [1970] 78 ITR 474 (SC). THE AUTHORITIES ON THE LAW IN THE MATTER COULD IN FACT BE MULTIPLIED. THEN, AGAIN, WE WONDER, RATHER THAN READING DOWN THE PROVISION, SO AS TO OP ERATE TO NEGATE THE MANDATORY REQUIREMENT OF THE SECTION, DEFEATING THE LEGISLATI VE INTENT, WHICH, AS EXPLAINED BY THE HONBLE COURTS AS WELL AS THE OFFICIAL PRONOUNCEMEN TS EXPLAINING THE PROVISION, IS OF PLUGGING THE GENERATION OF UNDISCLOSED INCOME AND T HE CONSEQUENT LEAKAGE OF REVENUE FOR FUTURE, WHY COULD THE SAME BE NOT READ SO AS TO ALL OW THE ASSESSEE THE LATITUDE FOR PROVIDING THE NECESSARY DETAILS SUBSEQUENTLY, I.E., WHERE THE DISCLOSURE U/S.132(4) IS MADE UNDER EXCRUCIATING OR DIFFICULT CIRCUMSTANCES. THE SAME OF COURSE WOULD BE UNDER OATH, MAKING IT A PART OF AND REFER TO THE EARLIER STATEMENT U/S. 132(4), COMPLYING THUS SUBSTANTIALLY AND EFFECTIVELY, WITH THE SUBSTANTIVE PROVISION OF LAW. FURTHER, THE FURTHER CONDITION OF SUBSTANTIATION, AS PROVIDED U/S. 271 AAA(2)(II), WHICH WAS NOT THERE IN THE CASE, BEING U/S. 271(1)(C), BEFORE THE HONBLE COUR T IN MAHENDRA C. SHAH (SUPRA), COULD ONLY BE INTERPRETED TO MEAN OF THE LAW CASTING A F URTHER OBLIGATION ON THE ASSESSEE TO DEMONSTRATE THE MANNER OF DERIVING THE UNDISCLOSED INCOME, AS SPECIFIED PER THE STATEMENT U/S.132(4), AS VALID AND TRUE, I.E., STAN DS VALIDATED AND IS ON A FIRM BASIS; THE PRESUMPTION AS TO THE TRUTH OF THE MATERIALS FOUND BEING ALREADY PROVIDED FOR U/S. 292C. THE SAID DECISION WOULD THUS BE OF LITTLE ASSISTANC E TO THE ASSESSEE. 5. IN THE RESULT, THE REVENUES APPEAL IS ALLOWED F OR STATISTICAL PURPOSES 7.3 AS IT CAN BE SEEN FROM THE AFOREMENTIONED ORDER , IN PARA 4.3, THE TRIBUNAL HAS RESTORED BACK THE MATTER TO THE FILE OF LD. CIT (A), SAME ORDER IS BEING PASSED IN THE PRESENT SECOND SET OF APPEALS AND THE MATTER IS RESTORED BACK TO THE FILE OF LD. CIT(A) WITH SIMILAR DIRECTIONS AS HAVE BEEN GI VEN IN AFOREMENTIONED ORDER DATED 28/01/2015 AND THE SECOND SET OF APPEALS IS CONSIDERED TO BE ALLOWED FOR STATISTICAL PURPOSES IN THE MATTER AFORESAID. 5046/MUM/2012& OTHERS 13 8. IN THE RESULT, THE FIRST SET OF APPEALS BEING AP PEALS FILED BY THE ASSESSEE ARE DISMISSED AND SECOND SET OF APPEALS BEING APPEALS F ILED BY THE REVENUE ARE ALLOWED FOR STATISTICAL PURPOSES IN THE MATTER AFOR ESAID. ORDER PRONOUNCED IN THE OPEN COURT ON 2 3/02/2015 ! ' #$% & '() 23/02/2015 $ ' * + SD/- SD/- ( /CHANDRA POOJARI ) ( . . / I.P. BANSAL ) /ACCOUNTANT MEMBER / JUDICIAL EMBER MUMBAI; '( DATED 23/02/2015 ! ! ! ! ' '' ' ,-. ,-. ,-. ,-. /.%- /.%- /.%- /.%- / COPY OF THE ORDER FORWARDED TO : 1. 01 / THE APPELLANT 2. ,201 / THE RESPONDENT. 3. 3 ( ) / THE CIT(A)- 4. 3 / CIT 5. .4* ,-( , , / DR, ITAT, MUMBAI 6. *5 6 / GUARD FILE. !( !( !( !( / BY ORDER, 2.- ,- //TRUE COPY// 7 77 7 / 8 8 8 8 (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI . ( . ./ VM , SR. PS