ACIT, Bangalore V. Sri B.P. Srinivasa Raju, Bangalore

ITA 558/BANG/2009

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 8482 (ITAT-BANGALORE)
• Duration Of Justice: 9 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-03-2010
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 03-03-2010
• Assessment Year: 2000-2001
• Appeal Filed On: 02-06-2009
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: V S SREELEKHA
• Assessee Lawyers: H N KHINCHA
• Keywords: Unexplained investment; Opportunity of being heard; Initiation of penalty proceedings
• Section: 271(1)(c); 143(3); 153A; 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL BANGALORE BENCH B BEFORE SHRI GEORGE GEORGE K, J.M.AND SHRI A. MOHAN ALANKAMONY, A.M. ITA NOS.558 TO 562(BNG)/09 (ASSESSMENT YEARS : 2000-01 & 2002-03 TO 2005-06) ASST. COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE 1(2), BANGALORE. VS. SRI B. P. SRINIVASA RAJU, NO.979, I MAIN, II CROSS, DIVANRAPALYA, GOKUL I PHASE, BANGALORE-54. APPELLANT. RESPONDENT. APPELLANT BY : SMT. V.S. SREELEKHA. RESPONDENT BY : SHRI H. N. KHINCHA. O R D E R PER BENCH : THESE FIVE APPEALS PREFERRED BY THE REVENUE ARE DIRECTED AGAINST THE CONSOLIDATED ORDER BY THE LEARNED COMMISSIONER OF I NCOME TAX (APPEALS) DT.6.2.2009. THE ASSESSMENT YEARS CONCERNED ARE 2000-01, 2002-03 TO 2005-06. THE ORDER OF THE CIT(A), EMANATES FROM THE SEPARATE ORDERS OF THE AC IT (ALL DT.31.5.2007) LEVYING PENALTY UNDER SECTION 271(1)(C) OF THE INCOME TAX A CT, 1961. 2. THE REVENUE HAS RAISED 12 IDENTICAL GROUNDS EXCE PT FOR VARIANCE IN THE FIGURE. THE CRUX OF ISSUE IN THESE APPEALS IS WHETHER THE C IT(A) WAS JUSTIFIED IN DELETING THE PENALTY LEVIED UNDER SECTION 271(1)(C) OF THE ACT, BOTH ON TECHNICAL GROUND AND ALSO ON MERITS. SINCE COMMON ISSUES ARE RAISED IN ALL THES E APPEALS, THEY ARE BEING DISPOSED OFF BY THIS CONSOLIDATED ORDER FOR THE SAKE OF CONV ENIENCE. 3. THE FACTS IN BRIEF ARE AS FOLLOWS : 3.1 A SEARCH UNDER SECTION 132 OF THE INCOME TAX AC T, 1961 WAS CARRIED OUT IN THE PREMISES OF THE ASSESSEE ON 23.7.2004. DURING THE C OURSE OF SEARCH, CERTAIN ITA NOS.558 TO 562(BNG)/09 - 2 - INCRIMINATING DOCUMENTS SUCH AS BOOKS OF ACCOUNTS A ND LOOSE SHEETS SHOWING INVESTMENTS MADE WERE FOUND AND SEIZED. ACCORDINGL Y A NOTICE UNDER SECTION 153A OF THE INCOME TAX ACT, 1961 WAS ISSUED TO THE ASSESSE E TO FILE THE RETURNS. CONSEQUENT TO THE SAME, RETURNS WERE FILED FOR VARIOUS ASSESSM ENT YEARS AND ASSESSMENTS WERE CONCLUDED. THE DETAILS OF THE ASSESSMENT YEARS CON CERNED, THE INCOME RETURNED, THE ASSESSED INCOME AND THE ADDITIONS MADE ARE AS UNDER : ASST. YEAR INCOME RETURNED U/S. 153A ASSESSED INCOM E ADDITIONS MADE 2000-01 RS.54878 + AGRL INCOME RS.81380 RS.364478 + 81380 RS.309600 2002-03 RS.61686 + AGRL INCOME RS.223810 RS.212715 + 223810 RS.151029 2003-04 RS.125612 + AGRL INCOME RS.249160 RS.806412 + 249160 RS.680800 2004-05 RS.315350 + AGRL INCOME RS.397280 RS.3241109 + 397280 RS.2925759 2005-06 RS.2086477 + AGRL INCOME RS.568693 RS.7072178 + 568693 RS.4985701 3.2 SIMULTANEOUSLY ON COMPLETION OF THE ASSESSMENT, PENALTY PROCEEDINGS UNDER SECTION 271(1)(C) OF THE INCOME TAX ACT, 196 1 WERE INITIATED. NOTICE UNDER SECTION 274 READ WITH SECTION 271 WERE ISSUED DIREC TING THE ASSESSEE TO SHOW CAUSE AS TO WHY PENALTY UNDER SECTION 271(1)(C) SHOULD NOT BE IMPOSED. THE ASSESSEE FILED REPLY TO THE SHOW CAUSE NOTICE FOR IMPOSITION OF PENALTY AND SAME READS AS UNDER : WITH REFERENCE TO THE ABOVE, I AM TO STATE THAT I HAVE NEITHER CONCEALED THE PARTICULARS OF INCOME NOR HAVE I FURN ISHED ANY INACCURATE PARTICULARS OF INCOME. THOUGH TECHNICALLY NOT DISP UTING THE ASSESSMENT, FOR PENALTY PROCEEDINGS PURPOSE I HAVE TO STATE THA T THE BASIS OF INITIATION OF PENALTY PROCEEDINGS IS NOT CORRECT AND NOT VALID IN LAW. IN ORDER FOR THE YEAR, PROFIT IS WORKED OUT ON A B ASIS AS ADOPTED FOR VARIOUS ASSESSMENT YEARS AND ALSO ACCORDINGLY P ROFIT IS DETERMINED AS ITA NOS.558 TO 562(BNG)/09 - 3 - AGAINST THE DECLARED PROFIT. THE CHANGE IN INCOME IS ONLY DUE TO REWORKING AND RECOMPUTATION OF PROFIT. I FURTHER STATE THAT NO FI GURES WERE HIDDEN. THERE IS NO FINDING THAT THE COST/EXPENSES HAVE BE EN SUPPRESSED. THE FIGURES ARE CORRECTLY GIVEN BUT ONLY METHOD OF COMPUTATION HAS CHANGED. THE METHOD AS CHANGES WAS ACCEPTED BY ME TO BUY PEACE. THERE IS NO CONCEALMENT AT ALL. THE VARIOUS OBJECTIONS RAISED BY THE ASSESSEE TO TH E LEVY OF PENALTY WAS REJECTED BY THE ASSESSING OFFICER AND PENALTY UNDER SECTION 271 (1)(C) OF THE INCOME TAX ACT, 1961 WERE LEVIED AMOUNTING TO RS.100753, RS.44,214, RS.2 14452, RS.87772 AND RS.1580782 FOR ASSESSMENT YEARS 20000-01, 2002-03 TO 2005-06 R ESPECTIVELY. 3.3 BEFORE THE LEARNED CIT(A), AGGRIEVED BY THE ORD ER OF THE PENALTY, IT WAS CONTENDED THAT THE LEVY OF PENALTY IS BAD IN LAW, S INCE PENALTY PROCEEDINGS WERE NOT INITIATED DURING THE COURSE OF ASSESSMENT PROCEEDIN GS. THE LEARNED CIT(A) ALLOWED THE TECHNICAL PLEA NAMELY NO PENALTY PROCEEDINGS WERE I NITIATED IN THE COURSE OF ASSESSMENT PROCEEDINGS. THE LEARNED CIT(A) ON MERITS ALSO ALL OWED THE APPEAL OF THE ASSESSEE BY HOLDING THAT, THERE WAS NO CONCEALMENT OR FURNISHIN G OF INACCURATE PARTICULARS OF INCOME. 4. THE REVENUE BEING AGGRIEVED IS IN APPEAL BEFORE US. 5. THE LEARNED DEPARTMENTAL REPRESENTATIVE SUBMITTE D THAT TECHNICAL ISSUE IS COVERED IN FAVOUR OF THE REVENUE BY THE ORDER OF TH E TRIBUNAL IN THE CASE OF ACIT, CENTRAL CIRCLE 1(2), BANGALORE VS. SRI JOHN MOHAN R EDDY, BANGALORE (ITA NO.834 TO 838/BANG/09 DT.29.1.2010. THE LEARNED AUTHORISED REPRESENTATIVE FAIRLY CONCEDED THAT THE TECHNICAL ISSUE WAS DECIDED IN FAVOUR OF T HE REVENUE BY THE ORDER OF THE TRIBUNAL (SUPRA) CITED. ITA NOS.558 TO 562(BNG)/09 - 4 - 6. WE HAVE HEARD THE SUBMISSIONS REGARDING THE TECH NICAL ISSUE AND PERUSED THE MATERIAL AVAILABLE ON RECORD. THE TRIBUNAL IN THE CASE OF SRI JOHN MOHAN REDDY (SUPRA) HAD HELD AS FOLLOWS : WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED TH E MATERIAL ON RECORD. WE SHALL FIRST TAKE UP THE TECHNICAL IS SUE VIZ. WHETHER PENALTY PROCEEDINGS WERE INITIATED DURING THE COURSE OF ASS T. PROCEEDINGS. THE CIT(A) WAS OF THE VIEW THAT THE PENALTY PROCEEDINGS WERE NOT INITIATED DURING THE COURSE OF ASST., FOR THE REASON THAT THE WORDS PENALTY PROCEEDINGS U/S 271(1)(C) WERE INITIATED SEPARATELY WERE MENTIONED AFTER RECORDING OF WORDS ISSUE DEMAND NOTICE AND C HALLAN. IN OTHER WORDS, THE CIT(A) STATES THAT THE ASST. ORDER ENDS WITH THE WORD ISSUE DEMAND NOTICE AND CHALLAN AND ANY RECORDING AFTER THESE WORDS ARE NOT PART OF THE ASST. PROCEEDINGS. THE CIT(A)S REASON ING DREW STRENGTH FROM HIS ORDER IN THE CASE OF SRINIVAS RAJU (SUPRA) . HOWEVER, IT IS PERTINENT TO NOTE THAT IN THE CASE OF SRINIVAS RAJ U (SUPRA), THE WORDS PENALTY PROCEEDINGS U/S 271(1)(C) WERE INITIATED S EPARATELY WERE RECORDED AFTER THE SIGNATURE OF THE CONCERNED AO. IN THE INSTANT CASE, THE WORDS PENALTY PROCEEDINGS U/S 271(1)(C) WERE I NITIATED SEPARATELY ARE RECORDED BEFORE THE SIGNATURE OF THE AO. WE AR E OF THE OPINION THAT THE CIT(A)S VIEW IS HYPER TECHNICAL AND UNTENABLE. THERE IS NO SUCH FORMAT FOR CLOSURE OF THE ASST. PROCEEDINGS. THE CIT(A)S ASSUMPTION THAT THE ASST. IS COMPLETE WITH THE RECORD OF THE W ORDS ISSUE DEMAND NOTICE AND CHALLAN IS WITHOUT ANY LEGAL BASIS. NO JUDICIAL PRONOUNCEMENT HAS BEEN BROUGHT TO OUR NOTICE TO JUS TIFY THE VIEW OF THE CIT(A). IN THE INSTANT CASE, AT THE FOOT OF THE AS ST. ORDER BEFORE THE SIGNATURE OF THE AO, IT IS CLEARLY RECORDED THAT P ENALTY PROCEEDINGS U/S 271(1)(C) WERE INITIATED SEPARATELY, WHICH IN OUR VIEW IS PART OF ASST. ORDER AND VALID RECORDING OF SATISFACTION OF THE AO FOR INITIATION OF PENALTY PROCEEDINGS U/S 271(1)(C) IN VIEW OF INTRODUCTION O F SUB SEC. 1B OF SEC. 271(1). MOREOVER, IN THIS CASE, THE ASST. ORDER, T HE DEMAND NOTICE AND THE SHOW CAUSE NOTICE U/S 274 READ WITH SEC. 271 HA S BEEN DULY SERVED ITA NOS.558 TO 562(BNG)/09 - 5 - TOGETHER WITHIN THE DUE DATE I.E BEFORE 31.12.06 AN D THE ASSESSEE HAD COMPLIED WITH THE SHOW CAUSE NOTICE. THE HONBLE SUPREME COURT IN THE CASE OF KALYANKUM AR RAY VS. CIT, 193 ITR 634 WAS OF THE VIEW THAT AOS CALCULAT ION OF INTEREST IS PART OF THE ASST. ORDER. THE RELEVANT PORTION OF THE RU LING OF THE HONBLE SUPREME COURT IS REPRODUCED BELOW : THE STATUTE DOES NOT, HOWEVER, REQUIRE THAT BOTH THE COMPUTATIONS (I.E OF THE TOTAL INCOME AS WELL AS OF THE SUM PAYABLE) SHOULD BE DONE ON THE SAME SHEET OF PAPER, THE SHEE T IS SUPERSCRIBED ASSESSMENT ORDER. IT DOES NOT PRESCRIBE ANY FOR M FOR THE PURPOSE. IT WILL BE APPRECIATED THAT ONCE THE ASSESSMENT OF THE TOTAL INCOME IS COMPLETE WITH INDICATIONS OF THE DEDUCTIONS, REBATE S, RELIEFS AND ADJUSTMENTS AVAILABLE TO THE ASSESSEE, THE CALCULAT ION OF THE NEXT TAX PAYABLE IS A PROCESS WHICH IS MOSTLY ARITHMETICAL B UT GENERALLY TIME- CONSUMING. IF, THEREFORE, THE INCOME-TAX OFFICER F IRST DRAWS UP AN ORDER ASSESSING THE TOTAL INCOME AND INDICATING THE ADJUS TMENTS TO BE MADE, DIRECTS THE OFFICE TO COMPUTE THE TAX PAYABLE ON TH AT BASIS AND THEN APPROVES OF IT, EITHER IMMEDIATELY OR SOME TIME LAT ER, NO FAULT CAN BE FOUND WITH THE PROCESS, THOUGH IT IS ONLY WHEN BOTH THE COMPUTATION SHEETS ARE SIGNED OR INITIATED BY THE INCOME-TAX OF FICER THAT THE PROCESS DESCRIBED IN SEC. 143(3) WILL BE COMPLETE. OUR VIEWS ARE ALSO SUPPORTED BY THE DECISION OF TH E HONBLE HIGH COURT OF HIMACHAL PRADESH IN THE CASE OF RAJA RANA YOGENDRA CHANDRA VS. CIT, 117 ITR 473, WHERE IN IT WAS HELD AS FOLLO WS : ITO, AFTER RECORDING ASSESSED IN THE ASST. ORDE R, DIRECTING ISSUE OF NOTICE FOR PENALTY U/S 271(1)(A) AND SIGNING THE REAFTER; IT COULD NOT BE SAID THAT ASST. WAS FIRST COMPLETED AND DIRECTION F OR ISSUE OF NOTICE FOR PENALTY WAS MADE THEREAFTER AND WAS AN AFTER-THOUGH T. PENALTY IMPOSED WAS VALID AND ISSUANCE OF NOTICE TWO DAYS THEREAFTE R WAS IMMATERIAL. IN THE LIGHT OF THE ABOVE REASONING, WE HOLD THAT THE CIT(A) IS NOT JUSTIFIED IN CANCELING THE PENALTY ORDER ON THE TECHNICAL PLEA OF THE ASSESSEE THAT NO PENALTY PROCEEDINGS ARE INITIATED IN THE COURSE OF ASST. PROCEEDINGS. ITA NOS.558 TO 562(BNG)/09 - 6 - 7. IN VIEW OF THE ABOVE TRIBUNAL DECISION, THE TECH NICAL ISSUE HAS TO BE ANSWERED IN FAVOUR OF REVENUE AND WE HOLD THAT THE LEARNED CIT (A) IS NOT JUSTIFIED IN ANNULLING THE PENALTY ORDER ON THE TECHNICAL PLEA OF THE ASSESSEE VIZ. NO PENALTY PROCEEDINGS ARE INITIATED IN THE COURSE OF ASSESSMENT PROCEEDINGS. 8. LET US NOW DRAW OUR ATTENTION TO THE ISSUE ON ME RITS. THE ASSESSEE HAS FILED A PAPER BOOK CONTAINING THE SEIZED MATERIAL RUNNING I NTO 182 PAGES. AS STATED EARLIER, IN THE COURSE OF SEARCH, CERTAIN PAPERS WERE FOUND, WH EREIN CERTAIN FIGURES WERE NOTED. THE FIGURES IN THE NOTE, HAVE BEEN TAKEN AS INCOME, UNACCOUNTED ADVANCES MADE AND TAXED ACCORDINGLY. ADDITION OF RS.3,09,600 FOR A. Y. 2000-01, RS.1,51,029 FOR A.Y. 2002-03, RS.6,80,800 FOR A.Y. 2003-004 ARE BASED ON SUCH NOTING. FOR A.Y. 2004-05, THE ADDITIONS MADE ARE AS UNDER : A) RS.170669 BEING ADVANCES BASED ON NOTINGS AS STA TED ABOVE. B) RS.45090 BEING INVESTMENT IN PURCHASE OF GOLD JE WELLERY. C) RS.415000 AS INVESTMENT IN BUILDINGS. D) RS.2295000 UNACCOUNTED INVESTMENT BEING PURCHASE OF SITE. FOR ASSESSMENT YEAR 2005-06, THE ADDITIONS MADE ARE AS UNDER : A) RS.61060 BEING PURCHASE OF JEWELLERY. B) RS.150000 AS ADVANCE FOR PURCHASE OF FLAT IN THE NA ME OF HIS WIFE SMT. SHANTA. C) RS.4774641 BEING UNDISCLOSED PROFIT. 9. BASED ON THE ABOVE ADDITIONS, THE PENALTY HAS BE EN IMPOSED FOR THE RESPECTIVE ASSESSMENT YEARS. THE LEARNED CIT(A) DELETED THE P ENALTY ON MERITS ESPECIALLY FOR TWO REASONS AND THEY ARE REPRODUCED BELOW : I) A SEARCH UNDER SECTION 132 OF INCOME TAX ACT M AY NOT RESULT IN DETECTION OF CONCEALMENT. WHERE IN A SEARCH CONDUC TED BEFORE 1.4.2007 ITA NOS.558 TO 562(BNG)/09 - 7 - ONLY DOCUMENTS WERE SEIZED AND THE ASSESSEE COMES F ORWARD WITH ADDITIONAL INCOME IN THE RETURNS AND ON ADDITIONS OF THE SAME BY THE ASSESSING OFFICER WITHOUT SEEKING EXPLANATION ALSO DO NOT PRE FER ANY APPEAL THE SAME WOULD NOT BE ELIGIBLE FOR TREATMENT AS DEEMED CONCE ALMENT UNDER THE PROVISIONS OF EXPLANATION 5 TO SECTION 271(1)(C) OF INCOME TAX ACT. II) IN THE SITUATION (II) ABOVE IF EXPLANATIONS AR E OFFERED BEING ASKED BY THE ASSESSING OFFICER ON WHICH ASSESSING O FFICER HAS NOT RECORDED THE REASONS WHY HE CONSIDERS THEM UNRELIAB LE OR UNSATISFACTORY, SUCH MAY BE GOOD ENOUGH FOR ADDITION BUT NOT SUFFI CIENT TO TREAT THE SAME AS CONCEALED INCOME OR INACCURATE PARTICULARS OF IN COME SINCE THE PROOF REQUIRED FOR SUCH TREATMENT MUST BE STRICT AND POSI TIVE IN SO MUCH AS IT IS THE ASSESSING OFFICER WHO IS ASSERTING THAT THE ASS ESSEE HAS CONCEALED OR FURNISHED INACCURATE PARTICULARS OF INCOME. TO EXAMINE WHETHER EXPLANATION 5 TO SECTION 271(1)( C) HAS APPLICATION TO INSTANCE CASE THE RELEVANT PROVISION IS REPRODUCED BELOW FOR READ Y REFERENCE : EXPLANATION 5 WHERE IN THE COURSE OF A SEARCH INITIATED UNDER S ECTION 132 BEFORE THE 1 ST DAY OF JUNE, 2007, THE ASSESSEE IS FOUND TO BE THE OWNER OF 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 UTILIZING (WHOL LY OR IN PART) HIS INCOME A) FOR ANY PREVIOUS YEAR WHICH HAS ENDED BEFORE THE DA TE OF THE SEARCH, BUT THE RETURN OF INCOME FOR SUCH YEAR HAS NOT BEEN FURNISHED BEFORE THE SAID DATE OR, WHERE SUCH RETURN HAS BEEN FURNIS HED BEFORE THE SAID DATE, SUCH INCOME HAS NOT BEEN DECLARED THEREIN; OR B) FOR ANY PREVIOUS YEAR WHICH IS TO END ON OR AFTER T HE DATE OF THE SEARCH, THEN, NOT WITHSTANDING THAT SUCH INCOME IS DECLARE D BY HIM IN ANY RETURN OF INCOME FURNISHED ON OR AFTER THE DATE OF THE SEA RCH, HE SHALL, FOR THE PURPOSES OF IMPOSITION OF A PENALTY UNDER CLAUSE (C ) OF SUB-SECTION (1) OF THIS SECTION, BE DEEMED TO HAVE CONCEALED THE PARTI CULARS OF HIS INCOME OR FURNISHED INACCURATE PARTICULARS OF SUCH INCOME, UNLESS, -- (1) SUCH INCOME IS, OR THE TRANSACTIONS RESULTING IN SU CH INCOME ARE RECORDED, - (I) IN A CASE FALLING UNDER CLAUSE (A), BEFORE T HE DATE OF THE SEARCH; AND (II) IN A CASE FALLING UNDER CLAUSE (B), ON OR BEFO RE SUCH DATE, IN THE BOOKS OF ACCOUNT, IF ANY, MAINTAINED BY HIM FOR ANY SOURC E OF INCOME OR SUCH INCOME IS OTHERWISE DISCLOSED TO THE CHIEF COMMISSI ONER OR COMMISSIONER BEFORE THE SAID DATE; OR ITA NOS.558 TO 562(BNG)/09 - 8 - (2) HE, IN THE COURSE OF THE SEARCH, MAKES A STATEMENT UNDER SUB-SECTION (4) OF SECTION 132 THAT ANY MONEY, BULLION, JEWELLERY OR O THER VALUABLE ARTICLE OR THING FOUND IN HIS POSSESSION OR UNDER HIS CONTROL, HAS BEEN ACQUIRED OUT OF HIS INCOME WHICH HAS NOT BEEN DISCLOSED SO FAR I N HIS RETURN OF INCOME TO BE FURNISHED BEFORE THE EXPIRY OF TIME SPECIFIED IN SUB-SECTION (1) OF SECTION 139, AND ALSO SPECIFIES IN THE STATEMENT TH E MANNER IN WHICH SUCH INCOME HAS BEEN DERIVED AND PAYS THE TAX, TOGETHER WITH INTEREST, IF ANY, IN RESPECT OF SUCH INCOME . (EMPHASIS SUPPLIED) WE ARE OF THE VIEW THAT EXPLN.5 TO SECTION 271(1)(C ) OF THE INCOME TAX ACT, 1961 DOES NOT HAVE ANY APPLICATION TO THE FACTS OF THE INSTAN T CASE, SINCE THE ADDITIONS WERE MADE NOT ON THE BASIS OF STATEMENT RECORDED UNDER SECTIO N 132(4) OF THE ACT (DURING THE COURSE OF SEARCH PROCEEDINGS) BUT WERE MADE IN THE COURSE OF ASSESSMENT PROCEEDINGS. THE FINDING OF THE CIT(A) THAT THE ASSESSEE HAD COM E FORWARD WITH ADDITIONAL INCOME IN THE RETURNS WAS ALSO NOT CORRECT BECAUSE ADDITIO NS WERE MADE TO THE RETURNED INCOME. THEREFORE EXPLN.5 TO SECTION 271(1)(C) OF THE ACT DOES NOT HAVE ANY APPLICATION TO THE FACTS OF THIS CASE AND CIT(A)S RELIANCE ON THE SAME FOR DELETING THE PENALTY ON MERITS IS WITHOUT ANY LEGAL BASIS. 10. THE LEARNED AUTHORISED REPRESENTATIVE IN THE CO URSE OF HEARING HAD REFERRED TO PAGE 26 OF THE PAPER BOOK, VIZ. THE SEIZED MATER IAL MARKED AS A/BPSR/4. IT WAS STATED, THAT THE SEIZED MATERIAL CONTAIN CERTAIN NO TINGS OF AMOUNTS AND REAL MONEY HAD NEVER BEEN TRANSFERRED BY THE ASSESSEE. IN OTHER WO RDS, IT WAS SUBMITTED THAT IT IS ONLY CERTAIN SCRIBLINGS AND THERE IS NO INDICATION OF RECEIPT OF MONEY OR ADVANCES. LIKEWISE WITH REFERENCE TO EACH OF THE ADDITIONS MA DE IN THE QUANTUM ASSESSMENTS FOR DIFFERENT ASSESSMENT YEARS, IT WAS SUBMITTED IT COU LD BE EXPLAINED. AMOUNTS HAVE BEEN AGREED TO BE ADDED IN THE QUANTUM ASSESSMENT T O CONCLUDE THE ASSESSMENT ITA NOS.558 TO 562(BNG)/09 - 9 - PROCEEDINGS AND TO BUY PEACE WITH THE DEPARTMENT. THE ADDITIONS CANNOT BE TERMED AS CONCEALMENT OR FILING OF INACCURATE PARTICULARS OF INCOME. 11. THE LEARNED DEPARTMENTAL REPRESENTATIVE, ON THE OTHER HAND, SUBMITTED THAT THE SEIZED MATERIAL NOW PRODUCED AND THE EXPLANATIO N NOW SUBMITTED BY THE LEARNED A.R. WITH REFERENCE TO THE SEIZED MATERIAL VIS--VI S THE ADDITIONS MADE, THERE HAS BEEN NO DELIBERATION BY THE CIT(A) NOR BY THE ASSESSING OFFICER. THEREFORE IN THE INTEREST OF JUSTICE, SHE PRAYED THAT THE MATTER MAY BE REMIT TED TO THE ASSESSING OFFICER CONCERNED, FOR A PROPER ADJUDICATION OF THE MATTER . 12. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. WE FIND FROM THE ORDER OF THE PENALTY AND THE ORDER OF THE CIT(A), THERE IS NO REFERENCE TO THE SEIZED MATERIAL NOW PRODUCED BE FORE US. THE AUTHORISED REPRESENTATIVES REFERENCE TO THE FIGURE OF THE SEI ZED MATERIAL FOR SUPPORTING HIS CONTENTION THAT THERE IS NO CO-RELATION TO ADDITION MADE AND CONSEQUENTLY NO PENALTY IS WARRANTED, IS NOT DISCUSSED BY THE CIT(A) WHILE DEL ETING THE PENALTY IMPOSED. THE MATTER NEEDS PROPER ADJUDICATION AND HENCE WE RESTO RE THE ISSUE OF PENALTY ON MERITS TO THE FILE OF LEARNED ASSESSING OFFICER TO PASS FR ESH ORDERS. THE LEARNED ASSESSING OFFICER SHALL PASS FRESH PENALTY ORDER AFTER AFFORD ING A REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. ITA NOS.558 TO 562(BNG)/09 - 10 - 13. IN THE RESULT THE APPEAL FILED BY THE REVENUE O N THE TECHNICAL ISSUE IS ALLOWED VIZ. WHETHER ANY PENALTY PROCEEDINGS ARE INITIATED IN THE COURSE OF ASSESSMENT PROCEEDINGS. ON MERITS THE APPEAL OF REVENUE IS AL LOWED FOR STATISTICAL PURPOSES. PRONOUNCED IN THE OPEN COURT ON 12 TH MARCH, 2010. SD/- SD/- (A. MOHAN ALANKAMONY) (GEO RGE GEORGE K) ACCOUNTANT MEMBER JU DICIAL MEMBER BANGALORE, DT.12.03.2010. COPY TO : 1. THE ASSESSEE. 2. THE ASSESSING OFFICER. 3. CIT(APPEALS) 4. CIT 5. DEPARTMENTAL REPRESENTATIVE, ITAT, BANGALORE. 6. GUARD FILE, ITAT, BANGALORE. 7. GUARD FILE, ITAT, NEW DELHI. * GPR BY OR DER ASSISTANT R EGISTRAR