Appeal details
Counselvise Citation
[2015] 140 COUNSELVISE.COM (IT) 92606 (ITAT-MUMBAI)
Assessee PAN
Bench
Appeal Number
Duration Of Justice
2 year(s) 9 month(s) 12 day(s)
Appellant
Respondent
Appeal Type
Income Tax Appeal
Pronouncement Date
29-05-2015
Appeal Filed By
Assessee
Order Result
Allowed
Bench Allotted
D
Next Hearing Date
16-03-2015
Assessment Year
2003-2004
Appeal Filed On
17-08-2012
Judgement Text
IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES D, MUMBAI BEFORE SHRI B R BASKARAN, AM & SHRI AMIT SHUKLA, JM ITA NOS.5234, 5235, 5236, 5237, 5238/MUM/2012 (ASSESSMENT YEARS : 2003-04, 2004-05,2005-06,2006-0 7,2007-08) RAJIV KUMAR MALHOTRA, 4 TH FLOOR, AQUAMARINE BLDG., 15N GAMADIA ROAD, MUMBAI 400 023. PAN AAOPM2664G VS. ACIT CENT. CIR. 38, MUMBAI. (APPELLANT) (RESPONDENT) APPELLANT BY : DR. PRAYAG JHA RESPONDENT BY : SHRI AKHILENDRA YADAV DATE OF HEARING : 01.05. 2015 DATE OF PRONOUNCEMENT : 29. 05.2015 O R D E R PER AMIT SHUKLA, JUDICIAL MEMBER THE AFORESAID APPEALS HAVE BEEN FILED BY THE ASSES SEE AGAINST THE COMMON ORDER DATED 21.06.2012 PASSED BY THE CIT(A) 41, MUM BAI, IN RELATION WITH THE PENALTY PROCEEDINGS U/S. 271(1)(C) OF THE I.T ACT, FOR THE ASSESSMENT YEARS 2003- 04, 2004-05, 2005-06, 2006-07 AND 2007-08. SINCE T HE ISSUES INVOLVED IN ALL THE APPEALS ARE COMMON AND ARE ARISING OUT OF SIMILAR S ET OF FACTS, THEREFORE, THEY WERE HEARD TOGETHER AND ARE BEING DISPOSED OFF BY THIS C ONSOLIDATED ORDER. 2. THE ASSESSEE IS MAINLY AGGRIEVED BY LEVY OF PENA LTY U/S. 271(1)(C) ON ACCOUNT OF ADDITIONAL INCOME OFFERED IN THE RETURN FILED U/S. 153A IN PURSUANCE OF SEARCH AND SEIZURE ACTION U/S. 132 OF THE I.T. ACT. THE PARTICULARS OF TOTAL INCOME ITA NO.5234-5238/MUM/2012 RAJIV KUMAR MALHOTRA 2 RETURNED, TOTAL INCOME ASSESSED, ADDITIONAL INCOME OFFERED AND PENALTY LEVIED U/S. 271(1)(C) FOR VARIOUS ASSESSMENT YEARS ARE AS UNDER : ASSESSMENT YEARS TOTAL INCOME RETURNED TOTAL INCOME ASSESSED ADDITIONAL INCOME PENALTY IMPOSED U/S. 271(1)(C) 2003 - 04 3,76,18,296/ - 3,76,18,296/ - 3,65,112/ - 1,15,010/ - 2004 - 05 1,53,07,690/ - 1,53,07,690/ - 3,67,462/ - 1,21,263/ - 2005 - 06 1,52,05,551/ - 1,52,05,551/ - 3,80,687/ - 1,28,139/ - 2006 - 07 1,49,79,536/ - 1,49,79,536/ - 4,26,287/ - 1,43,488/ - 2007 - 08 1,46,82,233/ - 1,46,82,233/ - 5,75,984/ - 1,93,876/ - 2. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E IS AN INDIVIDUAL HAVING INCOME FROM PROFESSION, LONG TERM CAPITAL GAIN ON S ALE OF SHARES AND INCOME FROM OTHER SOURCES. A SEARCH AND SEIZURE ACTION HAD TAK EN PLACE IN THE CASE OF MALHOTRA GROUP ON 24.07.2008, WHEREIN THE ASSESSEE WAS ALSO COVERED UNDER THE SAID SEARCH. DURING THE COURSE OF SEARCH, CERTAIN PAPER S WERE FOUND WHICH SHOWED THAT SOME EXPENSES WERE INCURRED ON PAYMENT OF SALARY TO DRIVERS AND DOMESTIC SERVANTS OF THE ASSESSEE DURING THE ASSESSMENT YEAR S 2003-04 TO 2007-08. IN RESPONSE TO NOTICE U/S. 153A DATED 09.09.2009, THE ASSESSEE FILED RETURN OF INCOME ON 26.10.2009 DECLARING TOTAL INCOME AT RS.3,76,18, 296/- FOR THE A.Y. 2003-04 AND ALSO FOR VARIOUS OTHER YEARS IN QUESTION AS PER THE DETAILS GIVEN ABOVE. THE ASSESSMENT U/S. 143(3) R.W.S. 153A HAVE BEEN COMPLE TED IN ALL THE ASSESSMENT YEARS ON THE RETURNED INCOME, VIDE SEPARATE ORDER D ATED 31.12.2010. IN THE ASSESSMENT ORDER, THE AO HAS NOTED THAT ... THE ADDITIONAL INCOME HAS BEEN ITA NO.5234-5238/MUM/2012 RAJIV KUMAR MALHOTRA 3 OFFERED IN VIEW OF THE VARIOUS LOOSE PAPERS/DOCUMEN TS/SEIZED/IMPOUNDED DURING SEARCH/SURVEY. THEREAFTER, THE ASSESSING OFFICER HAS MENTIONED THAT PENALTY PROCEEDINGS U/S. 271(1)(C) OF THE I.T ACT HAS BEEN INITIATED WITH REFERENCE TO THE ADDITIONAL INCOME SHOWN BY THE ASSESSEE. IN RESPONS E TO THE SHOW CAUSE NOTICE FOR THE LEVY OF PENALTY ON ADDITIONAL INCOME, THE ASSES SEE MAINLY RELIED UPON CERTAIN DECISIONS, INCLUDING THAT OF CIT VS. SURESH CHANDRA MITTAL (241 ITR 124). HOWEVER, THE ASSESSING OFFICER REJECTED THE ASSESSEES CONTE NTION AND HELD THAT THE ASSESSEES CASE IS COVERED BY EXPLANATION 5A TO SEC TION 271(1)(C), AS THE ASSESSEE HAD DECLARED ADDITIONAL INCOME AFTER THE SEARCH WAS CONDUCTED AND PENALTY IS LEVIABLE, THE RETURN U/S. 153A WAS NOT FILED WITHIN TWENTY DAYS OF NOTICE. THUS, AFTER INVOKING THE PROVISIONS OF EXPLANATION 5A, THE ASSE SSING OFFICER LEVIED PENALTY FOR ALL THE ASSESSMENT YEARS, AS PER THE DETAILS MENTIONED ABOVE. 3. BEFORE THE CIT(A), THE ASSESSEE SUBMITTED THAT T HE ASSESSING OFFICER ACCEPTED THE RETURN U/S. 153A AND INCOME HAS BEEN A SSESSED ON THE SAME INCOME THEREFORE, NO PENALTY SHOULD BE LEVIED. THE RELEV ANT SUBMISSION OF THE ASSESSEE BEFORE THE CIT(A) ARE AS UNDER: I. CERTAIN EXPENSES WERE INCURRED BY APPELLANT TOWARDS PAYMENTS OF SALARIES TO DOMESTIC SERVANTS AND DRIVERS II. SOME LOOSE PAPERS WERE FOUND/SEIZED IN RESPECT OF S ALARIES PAID TO DOMESTIC SERVANTS AND DRIVERS III. THE LOOSE PAPERS WERE FOUND FOR PART OF THE PERIOD OF BLOC ASSESSMENT YEARS. HOWEVER, THE APPELLANT HAS MADE VOLUNTARY DISCLOSURE IN RESPECT OF DOMESTIC SERVANTS AND DRIV ERS FOR ALL THE ASSESSMENT YEARS COVERED UNDER BLOCK ASSESSMENT. IV. REVISED RETURNS WERE FILED IN RESPONSE TO NOTICE U/ S. 153A V. REVISED RETURNS ARE ACCEPTED IN TOTO VI. NO QUESTIONS WERE ASKED BY THE AUTHORISED OFFICER D URING THE COURSE OF THE SEARCH OR THEREAFTER IN RESPECT OF PAYMENTS MADE TO DOMESTIC SERVANTS OR DRIVERS. ITA NO.5234-5238/MUM/2012 RAJIV KUMAR MALHOTRA 4 VII. THE ASSESSING OFFICER PASSED ORDER UNDER SECTION 14 3(3) READ WITH SECTION 153A. DURING THE COURSE OF ASSESSMENT PROC EEDINGS NO QUESTIONS WERE ASKED BY THE AO IN RESPECT OF PAYMEN TS OF SALARIES OF DOMESTIC SERVANTS AND DRIVERS. VIII. THE ORDER PASSED BY AO IN RESPECT OF ABOVE ASST YEA R ON 31.12.2010 AND HIS ORDER AT PARA 3 AND 4 STATES AS UNDER: BESIDES, ASSESSEE ALSO HAS DECLARED ADDITIONAL INC OME OF RS.3,65,112/- IN RESPECT OF PAYMENT OF SALARY TO DO MESTIC SERVANTS AND DRIVERS ETC. THE ADDITIONAL INCOME HAS BEN OFF ERED IN VIEW OF THE VARIOUS LOOSE PAPERS/DOCUMENTS/SEIZED/IMPOUNDED DURING SEARCH/ SURVEY. ADDITIONAL INCOME OF RS.3,65,112/- RS.3,67,462/-, R S.3,80,687/-, RS.4,26,287/-, RS.5,75,984/- AND RS.6,93,522/- FOR THE AYS 2003-04 TO 2008-09 RESPECTIVELY. AFTER DISCUSSION, THE TOTAL INCOME OF THE ASSESSEE AS RETURNED IN ACCEPTED. IX. HOWEVER, SUCH EXPENSES WERE OFFERED IN ALL THE YEAR S UNDER REFERENCE TO AVOID LITIGATION. THUS, ADDITIONAL INC OME WAS OFFERED VOLUNTARILY AFTER EXTRAPOLATING AND TO THAT EXTENT ASSESSEE WAS PENALIZED BY WAY OF ADDITIONAL TAX AND ASSESSEE SHO ULD NOT BE FURTHER PENALIZED BY WAY OF CONCEALMENT PENALTY FOR VOLUNTARILY OFFERING SUCH FURTHER ADDITIONAL INCOME BY VOLUNTAR ILY EXTRAPOLATING IT TO AVOID LITIGATIONS. (I) COMMISSIONER OF INCOME TAX VS. SANGUR VANASPATI MIL LS LTD. (II) COMMISSIONER OF INCOME TAX VS. SURESH CHANDRA MITTA L, HIGH COURT OF MADHYA PRADESH (2000) 158 CTR (MP)26 (III) INCOME TAX OFFICER VS. FASHIONWAYS (2002) 77 TTJ (A SR) 59 (IV) M/S. KGK CREATIONS (INDIA) P LTD. VS. ASSTT COMMISS IONER OF INCOME TAX, MUMBAI (ITA NO. 2320/MUM/2009) (2010-TI OL- 206-ITAT-MUM) (V) COMMISSIONER OF INCOME TAX VS. SURESH CHAND BANSAL (2009) 223 CTR (CAL) 128 : (2009) 22 DTR 1. THE LEARNED CIT(A) HOWEVER, CONFIRMED THE PENALTY O N THE GROUND THAT ALL THE RETURNS WERE FILED BY THE ASSESSEE ONLY AFTER THE S EARCH WHEN THE UNDISCLOSED INCOME WAS DETECTED AND THE ASSESSEE HAS MADE DISCL OSURE IN THE RETURN FILED IN RESPONSE TO NOTICE U/S. 153A. THUS, IT WAS A CLEAR CUT CASE OF CONCEALMENT AND SUBMITTING OF INACCURATE PARTICULARS OF SUCH INCOME . HE ALSO RELIED UPON THE ITA NO.5234-5238/MUM/2012 RAJIV KUMAR MALHOTRA 5 DECISION OF THE TRIBUNAL, MUMBAI BENCH IN THE CASE OF AJIT B ZOTA VS. ACIT (40 SOT 543). 4. BEFORE US, THE LEARNED COUNSEL DR. PRAYAG JHA, S UBMITTED THAT EXPLANATION 5A CANNOT BE INVOKED WITHOUT, SATISFYING THE CONDITION S LAID DOWN IN THE MAIN SECTION ITSELF. THE CONDITIONS LIKE RECORDING OF SATISFACT ION WITH REGARD TO CONCEALMENT OF INCOME OR FURNISHING OF INACCURATE PARTICULARS WHIC H ARE MANDATORY. IF SUCH CONDITIONS ARE NOT FULFILLED, THEN UNDER THE MAIN P ROVISIONS ITSELF, PENALTY CANNOT BE INVOKED. HE SUBMITTED THAT EXPLANATION 5A CANNOT S UBSTITUTE THE MAIN SECTION 271(1)(C). THE EXPLANATION CANNOT OVERRIDE THE NEC ESSITY OF FULFILLING THE CONDITIONS SET OUT IN THE SUBSTANTIVE PART OF THE SECTION. IN SUPPORT OF HIS CONTENTIONS, HE STRONGLY RELIED UPON THE DECISION OF THE HONBLE BO MBAY HIGH COURT IN THE CASE OF CIT VS. JET AIRWAYS INDIA LTD. (2010) 331 ITR 236, WHICH WAS RENDERED IN CONTEXT OF RE-OPENING U/S. 147, WHEREIN THE HONBLE HIGH COURT HELD THAT THE CONDITION PRECEDENT TO THE EXERCISE OF JURISDICTION U/S. 147 IS FORMATION OF A REASON TO BELIEVE BY THE ASSESSING OFFICER THAT ANY INCOME C HARGEABLE TO TAX HAS ESCAPED ASSESSMENT. IF THERE IS NO SUCH REASON TO BELIEVE THEN ENTIRE RE-OPENING IS INVALID. THEIR LORDSHIPS HAVE EXPLAINED THE EFFECT OF EXPLAN ATION 3 INSERTED BY FINANCE (NO.2) ACT 2009 AND HELD THAT THE EXPLANATION 3 DOE S NOT AND CANNOT OVERRIDE THE CONDITIONS SET OUT IN SUBSTANTIVE PART OF SECTION 1 47. THE EXPLANATION TO A STATUTORY PROVISION IS INTENDED TO EXPLAIN ITS CONTENT AND CA NNOT BE CONSTRUED TO OVERRIDE IT OR TO RENDER SUBSTANCE AND CORE NUGATORY. THE LEARNED COUNSEL FURTHER SUBMITTED THAT DURING THE SEARCH CERTAIN LOOSE PAPERS WERE SEIZED FROM THE PREMISES OF M/S. VIDYUT METALLIC PRIVATE LIMITED, THANE, WHICH PERTAINED TO CERTAIN MONTHS AND CONTAINED ITA NO.5234-5238/MUM/2012 RAJIV KUMAR MALHOTRA 6 CERTAIN NARRATION OF PAYMENTS MADE TO DOMESTIC SERV ANTS AND DRIVERS SERVING THE ASSESSEE AND OTHER SERVICES BELONGING TO THE ASSESS EES FAMILY. THESE PAPERS NOWHERE INDICATE THAT THE PAYMENTS WERE MADE BY THE ASSESSEE OR FOR THE ASSESSEE ALONE. THESE PAPERS WERE NOT FOUND IN THE POSSESSI ON OF THE ASSESSEE. THE DECLARATION OF ADDITIONAL INCOME WAS MADE ONLY BY W AY OF ABUNDANT CAUTION AND TO AVOID ANY LITIGATION WITH THE DEPARTMENT. OTHERWIS E, ALSO THE CONDITIONS LAID DOWN IN EXPLANATION 5A, ARE NOT SATISFIED BECAUSE THE TR ANSACTION RECORDED DO NOT BELONG TO THE ASSESSEE. FURTHER HE RELIED UPON CATENA OF D ECISIONS, WHICH ARE NOT DISCUSSED AS THEY ARE NOT GERMANE TO THE ISSUE INVOLVED. 5. ON OTHER HAND, THE LEARNED DR STRONGLY RELIED UP ON THE ORDER OF THE ASSESSING OFFICER AND SUBMITTED THAT EXPLANATION 5A PROVIDES DEEMED PENALTY IN THE CASES WHERE THE ASSESSEE IS FOUND TO BE OWNER OF AN Y MONEY, BULLION, JEWELLERY ETC., OR ANY INCOME DURING THE COURSE OF SEARCH. T HERE IS NO ESCAPEMENT FROM EXPLANATION 5A IF IN THE RETURN OF INCOME, THE ASSE SSEE HAS NOT DECLARED SUCH INCOME PRIOR TO THE DATE OF SEARCH. HERE IN THIS CA SE, IT IS AN ADMITTED FACT THAT THE ASSESSEE HAS FILED THE RETURN OF INCOME ONLY AFTER THE DATE OF SEARCH, WHEREIN HE HAS ALSO ACCEPTED THE ADDITIONAL INCOME BASED ON CE RTAIN LOOSE PAPERS FOUND DURING THE COURSE OF SEARCH. THEREFORE, PENALTY HAS RIGHT LY BEEN LEVIED BY THE ASSESSING OFFICER. 6. WE HAVE HEARD THE RIVAL SUBMISSIONS, PERUSED THE RELEVANT FINDING GIVEN IN THE IMPUGNED ORDER. THE PENALTY HAS BEEN LEVIED ON ACCOUNT OF ADDITIONAL INCOME OFFERED BY THE ASSESSEE ON ACCOUNT OF CERTAIN PAYME NTS OF SALARIES TO DOMESTIC SERVANTS AND DRIVERS ETC., BASED ON VARIOUS LOOSE P APERS FOUND AND SEIZED DURING ITA NO.5234-5238/MUM/2012 RAJIV KUMAR MALHOTRA 7 THE COURSE OF SEARCH CARRIED ON 24.07.2008. IN RES PONSE TO THE NOTICE U/S. 153A, THE ASSESSEE HAS DECLARED ADDITIONAL INCOME IN VARI OUS YEARS AS PER THE DETAILS MENTIONED IN THE FOREGOING PARAGRAPH. THE ASSESSIN G OFFICER HAS INVOKED EXPLANATION 5A TO SECTION 271(1)(C) FOR LEVYING THE PENALTY. BEFORE US THE ASSESEES CASE IS THAT THE CONDITIONS LAID DOWN IN MAIN PROVI SION OF SECTION 271(1)(C) SHOULD BE FULFILLED BEFORE INVOKING EXPLANATION 5A. NOW W HETHER IN THIS CASE THE SAID CONDITIONS LIKE RECORDING OF SATISFACTION WITH REGA RD TO CONCEALMENT OF INCOME OR FURNISHING OF INACCURATE PARTIES HAVE NOT BEEN FULF ILLED OR NOT. FROM THE PERUSAL OF THE ASSESSMENT ORDER IT IS SEEN THAT THE ASSESSING OFFICER HAS CATEGORICALLY NOTED THAT THE DECLARATION OF ADDITIONAL INCOME IN RESPEC T OF PAYMENT OF SALARY ETC., HAS BEEN MADE IN VIEW OF CERTAIN LOOSE PAPERS AND INCRI MINATING MATERIAL FOUND DURING THE COURSE OF SEARCH. THEREAFTER, HE HAS MENTIONED THAT PENALTY PROCEEDINGS U/S. 271(1)(C) IS BEING INITIATED. THIS REMARK OF THE A SSESSING OFFICER IN THE ASSESSMENT ORDER ITSELF CONSTRUES HIS SATISFACTION FOR INITIAT ING THE PENALTY PROCEEDING UNDER SECTION 271(1)(C). SUB SECTION (1B) HAS BEEN BROUG HT IN STATUTE BY FINANCE ACT 2008 WITH RETROSPECTIVE EFFECT FROM 01.04.1989, WHI CH CLEARLY LAYS DOWN THAT, WHERE ANY AMOUNT IS ADDED OR DISALLOWED IN COMPUTING THE TOTAL INCOME OR LOSS IN ANY ORDER OF ASSESSMENT OR REASSESSMENT AND THE SAID OR DER CONTAINS DIRECTION FOR INITIATION OF PENALTY PROCEEDINGS UNDER CLAUSE (C) OF SUB-SECTION (1), SUCH AN ORDER OF ASSESSMENT OR REASSESSMENT SHALL BE DEEMED TO CO NSTITUTE SATISFACTION OF THE ASSESSING OFFICER FOR INITIATION OF THE PENALTY PRO CEEDINGS UNDER THE SAID CLAUSE (C). THUS, WE DISAGREE WITH THE CONTENTION RAISED BY THE LEARNED COUNSEL THAT THE CONDITIONS LAID DOWN IN THE MAIN PROVISIONS OF SECT ION 271(1)(C) HAS NOT BEEN FULFILLED. EVER OTHERWISE ALSO, IF CERTAIN ADDITIO NAL INCOME IS OFFERED/DECLARED IN ITA NO.5234-5238/MUM/2012 RAJIV KUMAR MALHOTRA 8 WAKE OF DOCUMENTS/MATERIALS FOUND/SEIZED DURING THE COURSE OF SEARCH AND SEIZURE, THEN THAT BY ITSELF INDICATES THAT THERE IS A PRIMA FACIE CONCEALMENT OF PARTICULARS OF INCOME. EXPLANATION 5A WHICH HAS BEEN BROUGHT BY T HE FINANCE ACT 2009 WITH RETROSPECTIVE EFFECT FROM 01.06.2007 HAS BEEN SPECI FICALLY BROUGHT TO COVER THE CASES OF SEARCH WHICH HAS BEEN INITIATED U/S. 132 A FTER 1 ST DAY OF JUNE 2007. THE RELEVANT PROVISIONS OF EXPLANATION 5A READS AS UNDE R:- EXPLANATION 5A.WHERE, IN THE COURSE OF A SEARCH I NITIATED UNDER SECTION 132 ON OR AFTER THE 1ST DAY OF JUNE, 2007, THE ASSE SSEE IS FOUND TO BE THE OWNER OF (I) ANY MONEY, BULLION, JEWELLERY OR OTHER VALUABLE ARTICLE OR THING (HEREAFTER IN THIS EXPLANATION REFERRED TO AS ASSETS) AND THE ASS ESSEE 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 E NTRY IN THE BOOKS OF ACCOUNT OR OTHER DOCUMENTS OR TRANSACTIONS REPRESEN TS HIS INCOME (WHOLLY OR IN PART) FOR ANY PREVIOUS YEAR, WHICH HAS ENDED BEFORE THE DATE OF SEARCH AND, (A) WHERE THE RETURN OF INCOME FOR SUCH PREVIOUS YE AR HAS BEEN FURNISHED BEFORE THE SAID DATE BUT SUCH INCOME HAS NOT BEEN D ECLARED THEREIN; OR (B) THE DUE DATE FOR FILING THE RETURN OF INCOME FO R SUCH PREVIOUS YEAR HAS EXPIRED BUT THE ASSESSEE HAS NOT FILED THE RETURN, THEN NOTWITHSTANDING THAT SUCH INCOME IS DECLARED B Y HIM IN ANY RETURN OF INCOME FURNISHED ON OR AFTER THE DATE OF SEARCH, HE SHALL, FOR THE PURPOSES OF IMPOSITION OF A PENALTY UNDER CLAUSE (C) OF SUB-SEC TION (1) OF THIS SECTION, BE DEEMED TO HAVE CONCEALED THE PARTICULARS OF HIS INC OME OR FURNISHED INACCURATE PARTICULARS OF SUCH INCOME. FROM THE PLAIN READING OF THE ABOVE EXPLANATION IT IS AMPLY CLEAR THAT THE EXPLANATION IS APPLICABLE IN THE CASES WHERE SEARCH U/S. 132 HAS BEEN INITIATED AFTER 01.06.2007 AND IN THE COURSE OF SUCH SEARCH, THE AS SESSEE IS FOUND TO BE THE OWNER OF , FIRSTLY, ANY ASSETS LIKE MONEY, BULLIO N, JEWELLERY OR OTHER VALUABLE ARTICLE OR THING; SECONDLY, ANY INCOME BASED ON ANY ENTRY I N BOOKS OF ACCOUNT OR OTHER ITA NO.5234-5238/MUM/2012 RAJIV KUMAR MALHOTRA 9 DOCUMENTS OR OTHER TRANSACTIONS; AND IF THE ASSESSE E CLAIMS THAT SUCH ASSET OR INCOME HAVE BEEN ACQUIRED BY HIM BY UTILIZING THE I NCOME OR REPRESENTS HIS INCOME FOR ANY PREVIOUS YEAR OR WHICH HAS ENDED BEFORE THE DATE OF SEARCH AND RETURN OF INCOME FOR SUCH PREVIOUS YEAR HAS BEEN FURNISHED BE FORE THE SAID DATE, BUT NOT DECLARED IN THE RETURN OF INCOME OR THE DUE DATE FO R FILING THE RETURN OF INCOME HAS EXPIRED. IN SUCH A SITUATION, EVEN IF SUCH INCOME HAS BEEN DECLARED IN THE RETURN OF INCOME FURNISHED AFTER THE DATE OF SEARCH IS DEEMED TO HAVE CONCEALED PARTICULARS OF INCOME OR FURNISHED INACCURATE PARTICULARS OF SU CH INCOME. THUS, THERE IS NO EXCEPTION PROVIDED IN THE SAID EXPLANATION FOR GETT ING ANY IMMUNITY UNLIKE IN EXPLANATION 5 WHICH WAS APPLICABLE IN THE CASES OF SEARCH PRIOR TO 01.06.2007. THE CRUCIAL CONDITION FOR INVOKING OF EXPLANATION 5A IS THAT, THE ASSESSEE SHOULD BE FOUND TO BE THE OWNER OF VARIOUS KINDS OF ASSETS OR INCOME IN THE COURSE OF SEARCH AND SUCH ASSETS OR INCOME HAS NOT BEEN DECLARED IN THE RETURN OF INCOME PRIOR TO THE DATE OF SEARCH. HERE IN THIS CASE IT HAS NOT B EEN REBUTTED BY THE ASSESSEE EITHER DURING THE COURSE OF ASSESSMENT PROCEEDINGS OR DURING THE COURSE OF PENALTY PROCEEDINGS THAT THESE DOCUMENTS DO NOT PERTAIN TO THE ASSESSEE AND HE WAS NOT FOUND TO BE IN POSSESSION OF SUCH DOCUMENTS INDICAT ING PAYMENTS OF SALARY OR DOES NOT REPRESENT HIS UNDISCLOSED INCOME. BEFORE US, T HE CONTENTION OF THE LEARNED COUNSEL IS THAT THE SEIZED PAPERS INDICATING THE PA YMENTS OF SALARY ETC., WERE NOT FOUND IN THE POSSESSION OF THE ASSESSEE. SINCE THI S CRUCIAL FACT IS NOT BORNE OUT FROM THE ORDER OF THE ASSESSING OFFICER OR THE ORDE R OF THE CIT(A). THEREFORE, IN THE INTEREST OF JUSTICE, WE FEEL THAT THIS MATTER SHOUL D BE RESTORED BACK TO THE FILE OF THE ASSESSING OFFICER TO EXAMINE, WHETHER THE DOCUMENTS ON THE BASIS OF WHICH THE ASSESSEE HAS DISCLOSED THE ADDITIONAL INCOME PERTAI NS TO THE ASSESSEE AND HAS BEEN ITA NO.5234-5238/MUM/2012 RAJIV KUMAR MALHOTRA 10 FOUND FROM THE POSSESSION OF THE ASSESSEE. FOR INV OKING THE PROVISIONS OF EXPLANATION 5A FOR LEVYING THE PENALTY U/S. 271(1)( C), THE PRIMARY CONDITION IS THAT IN THE COURSE OF SEARCH THE ASSESSEE SHOULD BE FOUN D TO BE THE OWNER OF ANY ASSET OR ANY INCOME BASED ON ANY ENTRY IN ANY BOOKS OR DO CUMENTS OR ANY SUCH TRANSACTIONS. IF THE DOCUMENTS DOES NOT INDICATE T HE TRANSACTION PERTAINING TO THE ASSESSEE OR THE ASSESSEE IS NOT FOUND TO BE THE OWN ER THEN PROVISIONS OF EXPLANATION 5A CANNOT BE INVOKED. THE ONUS NOW IN THIS CASE AND AT THIS STAGE TO PROVE THAT EXPLANATION 5A IS NOT APPLICABLE, IS WHO LLY UPON THE ASSESSEE TO EXPLAIN BEFORE THE ASSESSING OFFICER. THUS, THE IMPUGNED OR DERS ARE SET ASIDE AND THE MATTER IS RESTORED BACK TO THE FILE OF THE ASSESSIN G OFFICER TO CONSIDER THE PENALTY PROCEEDINGS AFRESH IN THE LIGHT OF THE OBSERVATIONS MADE ABOVE. ACCORDINGLY, THE GROUNDS RAISED BY THE ASSESSEE FOR ALL THE ASSESSME NT YEARS IN APPEAL ARE TREATED AS ALLOWED FOR STATISTICAL PURPOSES. 7. IN THE RESULT, ALL THE APPEALS ARE ALLOWED FOR S TATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 29 TH DAY OF MAY 2015. SD/- SD/- (B R BASKARAN) (AMIT SHUKLA) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI; DATED :29 TH MAY, 2015. SA ITA NO.5234-5238/MUM/2012 RAJIV KUMAR MALHOTRA 11 / COPY OF THE ORDER FORWARDED TO : 1. /THE APPELLANT. 2. / THE RESPONDENT. 3. ( ) / THE CIT(A), MUMBAI. 4. / CIT 5. , , / DR, D BENCH, ITAT, MUMBAI / BY ORDER, //TRUE COPY// (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI
