SEJAL EXPORTS (INDIA), MUMBAI V. ASST CIT CEN CIR-2, MUMBAI

ITA 5724/MUM/2012

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 101169 (ITAT-MUMBAI)
• Duration Of Justice: 3 year(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-09-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: E
• Next Hearing Date: 12-01-2016
• Assessment Year: 2008-2009
• Appeal Filed On: 11-09-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Search and seizure; Document seized; Principle of natural justice; Documents seized
• Section: 153A; 132

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL E BENCH, MUMBAI BEFORE S/SHRI B.R.BASKARAN,AM AND AMARJIT SINGH, JM ./ I.T.A. NO.5724 ,5727 AND 5729 /MUM/2012 ( / ASSESSMENT YEAR S : 2007 - 08 TO 2 009 - 10 ) M/S SEJAL EXPORTS (INDIA), 301, PANCHRATNA BUILDING, 3 RD FLOOR, OPERA HOUSE, MUMBAI - 400004 / VS. ASSTT. COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE - 2, AAYAKAR BHAVAN, M K ROAD, MUMBAI - 400020 ( / APPELLANT ) .. ( / RES PONDENT ) ./ ./PAN. :AAAFS7201B / APPELLANT BY SHRI RAJEEV KHANDELWAL /RSPONDENT BY SHRI SUJIT BANGAR / DATE OF HEARING : 27.8.2015 / DATE OF PRONOUNCEMENT: 23 .9.2015 / O R D E R PER B.R.BASKARAN: THE ASSESSEE HAS FILED THESE APPEALS CHALLENGING THE ORDERS PASSED BY LD CIT(A) - 36, MUMBAI CONFIRMING THE PENALTY LEVIED BY THE AO U/S 271(1)(C) OF THE ACT FOR ASSESSMENT YEAR S 2007 - 08 TO 2009 - 10. 2. THE ASSESSEE IS A PARTNERSHIP FIRM AND IS ENGAGED IN THE BUSINESS OF TRADING AND EXPORTING OF CUT AND POLISHED DIAMONDS. THE REVENUE CARRIED OUT SEARCH AND SEIZURE OPERATIONS U/S 132 OF THE ACT IN THE BUSI NESS PREMISES OF THE ASSESSEE. DURING THE COURSE OF SEARCH, CERTAIN INCRIMINATING DOCUMENTS WERE SEIZED FROM THE OFFICE AND ALSO FROM THE RESIDENTIAL PREMISES OF ONE OF THE EMPLOYEES NAMED SHRI RONAK K SHAH. IN THE STATEMENT TAKEN FROM HIM U/S 132(4) OF THE ACT, HE ADMITTED THAT ITA NO. 5724 / MUM/20 1 2 AND 2 ORS 2 THE ASSESSEE FIRM IS PAYING PART OF SALARY AND ALSO LOANS TO EMPLOYEES IN CASH. SUBSEQUENTLY, ONE OF THE PARTNERS OF THE FIRM NAMED SHRI PARIN S SHAH WAS EXAMINED AND WHILE TAKING STATEMENT U/S 132(4) OF THE ACT, HE CONSULTED THE EMPLOYEE SHRI RONAK K SHAH AND ADMITTED THAT SALARY AND LOANS HAVE BEEN PAID TO EMPLOYEES IN CASH. HE ALSO AGREED TO OFFER A SUM OF RS.12.00 CRORES AS INCOME IN THE HANDS OF VARIOUS ASSESSEES OF THE GROUP. SINCE THE ASSESSEE WAS NOT ABLE TO SUBSTANTIATE THE PAYMENTS MADE IN CASH WITH THE WITHDRAWALS, FOLLOWING AMOUNTS WERE OFFERED IN THE HANDS OF THE ASSESSEE IN THE FOLLOWING YEARS: - ASSESSMENT YEAR 2007 - 08 - 1,00,000 ASSESSMENT YEAR 2008 - 09 - 25,63,854 ASSESSMENT YEAR 2009 - 10 - 45,51,279 THE ASSES SEE FILED RETURN OF INCOME IN RESPONSE TO THE NOTICES ISSUED U/S 153A OF THE ACT, WHEREIN IT INCLUDED THE ADDITIONAL INCOME REFERRED ABOVE. THE ASSESSING OFFICER ALSO COMPLETED THE ASSESSMENT BY ACCEPTING THE ADDITIONAL INCOME SO OFFERED BY THE ASSESSEE. 3. THE ASSESSING OFFICER INITIATED PENALTY PROCEEDINGS U/S 271(1)(C) OF THE ACT DURING THE COURSE OF ASSESSMENT PROCEEDINGS AND THEREAFTER PASSED PENALTY ORDERS LEVYING PENALTY OF RS.33,660/ - , RS.8,71,454/ - AND RS.15,46,980/ - RESPECTIVELY FOR ASSESSME NT YEARS 2007 - 08, 2008 - 09 AND 2009 - 10 RESPECTIVELY. THE ASSESSING OFFICER RELIED UPON THE EXPLANATION 5A TO SEC. 271 OF THE ACT IN THIS REGARD. THE LD CIT(A) ALSO CONFIRMED THE PENALTY LEVIED BY THE AO IN ALL THE THREE YEARS. 4. THE LD A.R SUBMITTED THA T THE ASSESSING OFFICER HIMSELF HAS ADMITTED IN THE PENALTY ORDER PASSED FOR AY 2007 - 08 THAT THERE IS NO EVIDENCE WITH REGARD TO THE SURRENDER OF RS.1.00 LAKHS MADE IN THAT YEAR. ACCORDINGLY HE SUBMITTED THAT THE TAX AUTHORITIES ARE NOT JUSTIFIED IN INVOKI NG PROVISIONS OF EXPLANATION 5A TO SEC. 271 OF THE ACT IN THIS YEAR. HE FURTHER SUBMITTED THAT THE ALLEGED INCRIMINATING DOCUMENTS WERE FOUND AT THE RESIDENCE OF ITA NO. 5724 / MUM/20 1 2 AND 2 ORS 3 ONE OF THE EMPLOYEES AND HE IS CLAIMED TO HAVE ADMITTED THAT THE PAYMENTS TOWARDS SALARY AND LOANS WERE MADE IN CASH. THE PARTNER OF THE ASSESSEE HAS ADMITTED THE SAME, AFTER THE CONSULTING THE EMPLOYEE, IN ORDER TO AVOID LITIGATION AND ACCORDINGLY SURRENDERED THE INCOME CITED ABOVE WITH THE CONDITION THAT NO PENALTY SHOULD BE LEVIED ON SUCH ADMI SSION. HOWEVER, THE ASSESSING OFFICER HAS LEVIED PENALTY FOR ALL THE THREE YEARS WITHOUT CONSIDERING THE CONDITIONAL SURRENDER MADE BY THE ASSESSEE. HE FURTHER SUBMITTED THAT THE ASSESSING OFFICER DID NOT REFER TO ANY OF THE SEIZED DOCUMENTS IN THE PENA LTY ORDER, TO CORROBORATE THE ADDITIONAL INCOME SURRENDERED BY THE ASSESSEE AND HENCE IT WAS NOT CONCLUSIVELY PROVED THAT THE SEIZED DOCUMENTS DID REVEAL UNDISCLOSED INCOME OF THE ASSESSEE. ACCORDINGLY HE SUBMITTED THAT THE TAX AUTHORITIES ARE NOT JUSTIFI ED IN INVOKING EXPLANATION 5A TO SEC. 271 OF THE ACT. HE FURTHER SUBMITTED THAT THE VOLUNTARY OFFER MADE BY THE ASSESSEE WOULD NOT AUTOMATICALLY LEAD TO LEVY OF PENALTY U/S 271(1)(C) OF THE ACT. HE FURTHER SUBMITTED THAT THE ADDITIONAL INCOME ADMITTED BY THE ASSESSEE IN THE RETURN OF INCOME FILED U/S 153A OF THE ACT HAS SINCE BEEN ACCEPTED BY THE ASSESSING OFFICER AND HENCE THESE ARE NOT THE CASES WHERE THERE IS VARIATION OF INCOME BETWEEN THE RETURNED INCOME AND ASSESSED INCOME. HE FURTHER SUBMITTED THA T THE PARTNER OF THE ASSESSEE FIRM HAS ADMITTED AGGREGATE AMOUNT OF RS.12.00 CRORES IN THE HANDS OF VARIOUS PERSONS FOR VARIOUS YEARS. HOWEVER, THE ASSESSING OFFICER HAS LEVIED PENALTY IN RESPECT OF THE YEARS UNDER CONSIDERATION ONLY AND NO PENALTY WAS LE VIED IN RESPECT OF REMAINING AMOUNT VOLUNTARILY OFFERED BY THE ASSESSEE. HE FURTHER SUBMITTED THAT THE REVENUE HAS NOT TAKEN ANY ACTION IN THE HANDS OF THE EMPLOYEES IN RESPECT OF SALARY ALLEGED TO HAVE BEEN RECEIVED IN CASH OUTSIDE THE BOOKS OF ACCOUNTS. 5. THE LD A.R FURTHER SUBMITTED THE PROVISIONS OF SEC. 271(1)(C) PRESCRIBES TWO LIMBS FOR LEVYING PENALTY VIZ., CONCEALMENT OF PARTICULARS OF ITA NO. 5724 / MUM/20 1 2 AND 2 ORS 4 INCOME AND FURNISHING OF INACCURATE PARTICULARS OF INCOME. HOWEVER, IN THE NOTICE ISSUED U/S 274 R.W.S. 271(1 )(C) OF THE ACT FOR ASSESSMENT YEAR 2008 - 09 AND 2009 - 10, THE ASSESSING OFFICER HAS NOT SPECIFIED THE LIMB UNDER WHICH THE PENALTY WAS PROPOSED TO BE IMPOSED. HE SUBMITTED THAT THE NON - SPECIFICATION OF SPECIFIC CHARGE OR LIMB UNDER WHICH THE PENALTY WAS PR OPOSED TO BE IMPOSED, WOULD VITIATE THE PENALTY PROCEEDINGS. IN SUPPORT OF THIS PROPOSITION, THE LD A.R PLACED RELIANCE ON THE DECISION RENDERED BY HONBLE KARNATAKA HIGH COURT IN THE CASE OF MANJUNATH COTTON & GINNING FACTORY (359 ITR 565), WHEREIN THE H ONBLE HIGH COURT HELD AS UNDER: - IN EITHER EVENT, THE PERSON WHO IS ACCUSED OF THE CONDITIONS MENTIONED IN SECTION 271 SHOULD BE MADE KNOWN ABOUT THE GROUNDS ON WHICH THEY INTEND IMPOSING PENALTY ON HIM AS THE SECTION 274 MAKES IT CLEAR THAT ASSESSEE HAS A RIGHT TO CONTEST SUCH PROCEEDINGS AND SHOULD HAVE FULL OPPORTUNITY TO MEET THE CASE OF THE DEPARTMENT AND SHOW THAT THE CONDITIONS STIPULATED IN SECTION 271(1)(C) DO NOT EXIST AS SUCH HE IS NOT LIABLE TO PAY PENALTY. THE PRACTICE OF THE DEPARTMENT SENDI NG A PRINTED FORM WHERE ALL THE GROUND MENTIONED IN SECTION 271 ARE MENTIONED WOULD NOT SATISFY REQUIREMENT OF LAW WHEN THE CONSEQUENCES OF THE ASSESSEE NOT REBUTTING THE INITIAL PRESUMPTION IS SERIOUS IN NATURE AND HE HAD TO PAY PENALTY FROM 100% TO 300% OF THE TAX LIABILITY. AS THE SAID PROVISIONS HAVE TO BE HELD TO BE STRICTLY CONSTRUED, NOTICE ISSUED UNDER SECTION 274 SHOULD SATISFY THE GROUNDS WHICH HE HAS TO MEET SPECIFICALLY. OTHERWISE, PRINCIPLES OF NATURAL JUSTICE IS OFFENDED IF THE SHOW CAUSE NOTI CE IS VAGUE. ON THE BASIS OF SUCH PROCEEDINGS, NO PENALTY COULD BE IMPOSED ON THE ASSESSE E. ACCORDINGLY HE SUBMITTED THAT THE IMPUGNED PENALTY ORDERS ARE LIABLE TO BE QUASHED ON THIS LEGAL GROUND ALSO. 6. ON THE CONTRARY, THE LD D.R SUBMITTED THAT THE SEARCH TEAM HAS FOUND DOCUMENTS EVIDENCING PAYMENT OF SALARY AND LOANS IN CASH TO THE EMPLOYEES AND THE SAME HAS BEEN CONFIRMED BY THE CONCERNED EMPLOYEE AND ALSO BY THE PARTNER OF THE ASSESSEE FIRM. FURTHER THE ADDITIONAL INCOME OF RS.12.00 CRORES WAS OF FERED ONLY UPON EXAMINING THOSE ITA NO. 5724 / MUM/20 1 2 AND 2 ORS 5 DOCUMENTS ONLY. ACCORDINGLY THE LD D.R SAID THAT THE LD A.R WAS NOT CORRECT IN CONTENDING THAT THE ADDITIONAL INCOMES OFFERED BY THE ASSESSEE WERE NOT CORROBORATED. HE FURTHER SUBMITTED THAT THE ASSESSEE CANNOT ESCAPE FROM THE ADDITION ON THE REASONING THAT THE REVENUE DID NOT TAKE ANY ACTION IN THE HANDS OF CONCERNED EMPLOYEES. HE FURTHER SUBMITTED THAT THE ASSESSING OFFICER HAS INITIATED PENALTY PROCEEDINGS UNDER BOTH THE LIMBS OF SEC. 271(1)(C), BUT FINALLY IMPOSED PENA LTY FOR CONCEALMENT OF PARTICULARS OF INCOME ONLY. ACCORDINGLY HE SUBMITTED THAT THE LD CIT(A) WAS JUSTIFIED IN CONFIRMING THE PENALTY IMPOSED BY THE AO. 7. WE HEARD THE PARTIES AND PERUSED THE RECORD. WE NOTICE THAT THE PARTNER OF THE ASSESSEE FIRM HAS AGREED TO OFFER A SUM OF RS.12.00 CRORES IN THE HANDS OF VARIOUS ASSESSEES OF THE GROUP. THE LD A.R HAS FURNISHED A LETTER, WHEREIN HE HAS STATED THAT THE REVENUE HAS NOT LEVIED PENALTY IN RESPECT OF THE INCOME SURRENDERED IN THE HANDS OF OTHER ASSES SEES. THE VERY FACT THAT THE PARTNER OF THE ASSESSEE AGREED TO OFFER A LUMP SUM FIGURE OF RS.12.00 CRORES SHOWS THAT THERE IS NO ONE TO ONE RELATIONSHIP BETWEEN THE DOCUMENTS FOUND AND THE INCOME SURRENDERED, I.E., IT WAS A LUMP SUM SURRENDER TO TAKE CARE OF ALL THE DEFICIENCIES, IF ANY. IN RESPECT OF THE YEARS UNDER CONSIDERATION ALSO, THE ADDITIONAL INCOME SURRENDERED BY THE ASSESSEE HAS NOT BEEN LINKED BY THE ASSESSING OFFICER TO ANY OF THE SEIZED DOCUMENTS. WHAT WE NOTICE FROM THE DISCUSSIONS MADE IN THE PENALTY ORDER IS THAT THERE WERE SOME DOCUMENTS EVIDENCING PAYMENT OF SALARY AND LOANS IN CASH. WITH REGARD TO THE SAME, THE EMPLOYEE OF THE ASSESSEE ADMITTED THAT THE SALARY AND LOANS HAVE BEEN PAID IN CASH. THE PARTNER OF THE ASSESSEE FIRM ALSO, A FTER CONSULTING THE EMPLOYEE, ADMITTED THE SAME. HOWEVER, THERE IS NO DISCUSSION ABOUT THE QUANTUM OF SALARY/LOAN PAID IN CASH OUT OF WHICH, HOW MUCH WAS ACCOUNTED AND HOW MUCH WAS UNACCOUNTED, SO THAT ONE CAN DECIPHER ABOUT THE UNDISCLOSED INCOME, IF ANY , THAT CAN BE GATHERED FROM THOSE DOCUMENTS. ITA NO. 5724 / MUM/20 1 2 AND 2 ORS 6 8. THE ASSESSING OFFICER AND LD CIT(A) HAS PLACED RELIANCE ON THE PROVISIONS OF EXPLANATION 5A TO SEC. 271 OF THE ACT IN SUPPORT OF THE PENALTY LEVIED BY THEM. UNDER THE DEEMING PROVISIONS PROVIDED IN EXPLA NATION 5A, ANY INCOME BASED ON ANY ENTRY IN THE BOOKS OF ACCOUNT OR OTHER DOCUMENTS OR TRANSACTIONS IS FOUND AND IF THE ASSESSEE HAS NOT DECLARED THE SAME WITHIN THE TIME PRESCRIBED THEREIN, THEN HE SHALL BE DEEMED TO HAVE CONCEALED THE PARTICULARS OF INCO ME OR FURNISHED INACCURATE PARTICULARS OF INCOME. IT IS WELL SETTLED PROPOSITION OF LAW THAT THE PENAL PROVISIONS SHOULD BE CONSTRUED STRICTLY, SINCE THE SAME IMPOSES LIABILITY UPON THE ASSESSEE. WHEN IT COMES TO DEEMING PROVISIONS, THE CONSTRUCTION BEC OMES STRICTER. IN THE INSTANT CASE, THE ASSESSING OFFICER REFERS TO SOME DOCUMENTS FOUND DURING THE COURSE OF SEARCH WITH REGARD TO THE PAYMENT OF SALARY AND LOANS IN CASH. HENCE CLAUSE (II) OF EXPALANATION 5A IS APPLICABLE IN THE INSTANT CASE AND THE SA ID CLAUSE REFERS TO THE INCOME BASED ON THE DOCUMENTS. HENCE, IN OUR VIEW, THE ASSESSING OFFICER SHOULD MAKE SPECIFIC REFERENCE TO THE DOCUMENTS BASED UPON WHICH THE UNDISCLOSED INCOME WAS ASSESSED BY HIM. IT IS ALSO WELL SETTLED PROPOSITION THAT THE V ALIDITY OF THE ORDER OF PENALTY MUST BE DETERMINED WITH REFERENCE TO THE INFORMATION, FACTS AND MATERIALS IN THE HANDS OF THE AUTHORITY IMPOSING PENALTY AT THE TIME THE ORDER WAS PASSED. IN THE INSTANT CASE, THE ASSESSING OFFICER DID NOT REFER TO ANY OF T HE DOCUMENTS OR MATERIALS FOUND DURING THE COURSE OF SEARCH FROM WHICH THE IMPUGNED UNDISCLOSED INCOME WAS FOUND OUT. HENCE, IN OUR VIEW, THE TAX AUTHORITIES COULD NOT HAVE PLACED RELIANCE ON EXPLANATION 5A TO SEC. 271 OF THE ACT WITHOUT MAKING SPECIFIC RE FERENCE TO THE DOCUMENTS, WHICH REVEALED ABOUT CONCEALMENT OF INCOME, I.E., THE CONDITIONS PRESCRIBED IN THE EXPLANATION 5A HAS NOT BEEN SATISFIED IN THE INSTANT CASES. ON THE CONTRARY, WE HAVE NOTICED THAT THE PARTNER OF THE ASSESSEE HAS MADE A LUMP SUM DISCLOSURE OF RS.12.00 CRORES, THAT TOO IN THE HANDS OF VARIOUS ITA NO. 5724 / MUM/20 1 2 AND 2 ORS 7 ASSESSEE, WHICH GOES AGAINST THE FINDING OF THE TAX AUTHORITIES THAT THERE WERE SPECIFIC DOCUMENTS EVIDENCING UNDISCLOSED INCOME. THE FOLLOWING REPLY GIVEN BY THE PARTNER OF THE ASSESSEE FIRM FURTHER VINDICATES THIS POINT: - I HAVE GONE THROUGH THE STATEMENT OF SHRI RONAK KIRIT KUMAR SHAH, MANAGER OF SEJAL EXPORTS AND STATEMENTS OF ALL THE EMPLOYEES RECORDED AT FATIMA MANZIL OFFICE OF SEJAL EXPORTS. FURTHER I HAVE GONE THROUGH THE STATEMENTS OF SHRI RONAK KIRITKUMAR SHAH AT HIS RESIDENCE. I COMPLETELY AGREE WITH THE STATEMENTS GIVEN BY OUR EMPLOYEE. I FURTHER ADMIT THAT SALARY AND LOANS HAVE BEEN PAID TO THE EMPLOYEES IN CASH AS PER STATEMENTS AND THE PAPERS FOUND AND SEIZED. OVER ALL, ON AC COUNT OF VARIOUS DISCREPANCIES, AS MENTIONED ABOVE, FOUND IN VARIOUS PREMISES OF THIS GROUP AND ITS EMPLOYEES, ON ACCOUNT OF SEIZED MATERIALS FOUND/BOOKS OF ACCOUNTS/INVESTMENTS IN THE HANDS OF THE GROUP CONCERNS AS WELL AS INDIVIDUALS RELATED, I OFFER RS .12 CRORES IN THE HANDS OF THE CONCERNS AND INDIVIDUALS AS ADDITIONAL INCOME FOR THE RELEVANT YEAR. THE EXACT BIFURCATION ON THE HEADS OF INCOME AS WELL AS PERSONS WILL BE PROVIDED IN A SHORT WHILE. I HAVE CONSULTED WITH ALL THE FAMILY MEMBERS AND PARTNE RS/DIRECTORS OF OUR GROUP CONCERNS AND THEY ABIDE BY THE SAME THUS WE NOTICE THAT THERE IS NO REFERENCE TO ANY OF THE SEIZED DOCUMENTS IN THE REPLY GIVEN BY THE PARTNER OF THE ASSESSEE FIRM, WHICH PERSUADED HIM TO SURRENDER ADDITIONAL INCOME OF RS.12.00 CRORES. IN VIEW OF THE ABOVE, WE ARE OF THE CONSIDERED VIEW THAT THE EXPALANATION 5A TO SEC. 271 DOES NOT HAVE APPLICATION IN THE FACTS AND CIRCUMSTANCES OF THE CASE. 9. FURTHER, WE NOTICE THAT THE AO HAS MADE A BALD STATEMENT THAT THE SALARY AND LOAN P AID IN CASH COULD NOT BE SUBSTANTIATED WITH WITHDRAWALS, MEANING THEREBY HE HAS ALSO NOT DONE ANY EXERCISE TO CORROBORATE THE ADDITIONAL INCOME WITH ANY MATERIAL. A CAREFUL PERUSAL OF THE REPLY GIVEN BY THE PARTNER WOULD SHOW THAT HE IS ADMITTING ABOUT TH E PAYMENT OF SALARY/LOANS BY WAY OF CASH. NOTHING IS MENTIONED THAT THE SAME WERE NOT ITA NO. 5724 / MUM/20 1 2 AND 2 ORS 8 ACCOUNTED FOR OR PAID OUTSIDE THE BOOKS OF ACCOUNT. HENCE, IN OUR VIEW, THE ADDITIONAL INCOME OFFERED BY THE ASSESSEE COULD NOT BE CORROBORATED WITH SPECIFIC DOCUMENTS. HENCE THERE IS MERIT IN THE SUBMISSIONS MADE BY THE ASSESSEE IN THE REPLY TO PENALTY NOTICE THAT THE ADDITIONAL INCOME HAS BEEN VOLUNTARILY OFFERED. THE VERY FACT THAT THE ADDITIONAL INCOME OF RS.12.00 CRORES HAS BEEN DISTRIBUTED IN THE HANDS OF VARIOUS ASSESSEES FURTHER VINDICATES THE STAND OF THE ASSESSEE. 10. IT IS ALSO WELL SETTLED PROPOSITION THAT THE ADDITIONS MADE IN THE ASSESSMENT ORDER WOULD NOT AUTOMATICALLY GIVE RISE TO PENALTY. IN THE PENALTY PROCEEDINGS, THE ASSESSING OFFICER IS REQUIRED TO EXAMINE THE ISSUES AFRESH AND FOR THAT PURPOSE THE DISCUSSIONS MADE IN THE ASSESSMENT ORDER CAN BE TAKEN AS GUIDANCE. IN THE INSTANT CASES, THE ASSESSING OFFICER HAS IMPOSED PENALTY WITHOUT ESTABLISHING THAT THERE WAS CONCEALMENT OF INCOME. ACCORDIN GLY, WE ARE OF THE VIEW THAT THE BASIC CONDITION FOR IMPOSING PENALTY WAS NOT SATISFIED AND HENCE THE IMPUGNED PENALTY LEVIED FOR THE YEARS UNDER CONSIDERATION IS LIABLE TO BE SET ASIDE. 11. THE LD A.R ALSO URGED A LEGAL ISSUE THAT THE ASSESSING OFFICER HAS NOT SPECIFIED THE LIMB UNDER WHICH THE PENALTY PROCEEDINGS WERE INITIATED. WE ALSO NOTICE THAT, IN THE PENALTY NOTICE ISSUED BY THE AO, ONE OF THE LIMBS HAS NOT BEEN STRUCK OFF. HOWEVER, IN THE ASSESSMENT ORDER, THE ASSESSING OFFICER HAS CLEARLY STAT ED THAT THE PENALTY PROCEEDINGS ARE INITIATED FOR CONCEALMENT OF INCOME. HENCE, THE LEGAL ISSUE URGED BY THE ASSESSEE BECOMES DEBATABLE. THE LD A.R ALSO CONTENDED THAT THERE IS NO VARIATION BETWEEN THE RETURNED INCOME AND ASSESSED INCOME AND HENCE THE PE NALTY WAS NOT LEVIABLE. SINCE WE HAVE DELETED THE PENALTY ON MERITS, WE DO NOT FIND IT NECESSARY TO ADJUDICATE THESE LEGAL ISSUES. ITA NO. 5724 / MUM/20 1 2 AND 2 ORS 9 12. IN VIEW OF THE FOREGOING DISCUSSIONS, WE SET ASIDE THE ORDERS PASSED BY LD CIT(A) AND DIRECT THE ASSESSING OFFICER TO DELETE THE PENALTY LEVIED U/S 271(1)(C) OF THE ACT FOR THE YEARS UNDER CONSIDERATION. 13. IN THE RESULT, APPEALS FILED BY THE ASSESSEE ARE ALLOW E D. PRONOUNCED ACCORDINGLY ON 23RD SEPT, 2015. 23 RD SEPT, 2015 SD SD (AMARJIT SINGH ) ( B.R. BASKARAN) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI: 23RD SEPT, 2015. . . ./ SRL , SR. PS / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A) - CONCERNED 4. / CIT C ONCERNED 5. , , / DR, ITAT, MUMBAI CONCERNED 6. / GUARD FILE. / BY ORDER, TRUE COPY (ASSTT. REGISTRAR) , /ITAT, MUMBAI