VIREN P CHOKSEY, MUMBAI V. ACIT CEN CITR 45, MUMBAI

ITA 5744/MUM/2009

• Counselvise Citation: 574419914 RSA 2009
• Duration Of Justice: 1 year(s) 9 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-08-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: F
• Next Hearing Date: 03-08-2011
• Assessment Year: 2001-2002
• Appeal Filed On: 28-10-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SUBACHAN RAM
• Keywords: Search and seizure; Peak credit; Revised return; Reassessment proceedings
• Section: 143(3); 153A; 147; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL 'F' BENCH, MUMBAI BEFORE SHRI D. MANMOHAN, VICE PRESIDENT AND SHRI B. RAMAKOTAIAH, ACCOUNTANT MEMBER ITA NO. 5744/MUM/2009 (ASSESSMENT YEAR: 2001-02) SHRI VIREN P. CHOKSEY ACIT, CENTRAL CIRCLE 45 KRISHNA VILLA, LINKING ROAD AAYAKAR BHAVAN, M.K. RO AD SANTACRUZ (W), MUMBAI 400054 VS. MUMBAI 400020 PAN - AADPC 2698 B APPELLANT RESPONDENT APPELLANT BY: SHRI AJAY SINGH RESPONDENT BY: SHRI SUBACHAN RAM DATE OF HEARING: 04.08.2011 DATE OF PRONOUNCEMENT: 19.08.2011 O R D E R PER B. RAMAKOTAIAH, A.M. THIS APPEAL BY THE ASSESSEE IS AGAINST THE ORDER OF THE CIT(A), CENTRAL III, MUMBAI DATED 05.08.2009. THE ISSUE IN THIS APP EAL IS WITH REFERENCE TO PENALTY OF ` 1,15,202/- UNDER SECTION 271(1)(C) OF THE I.T. ACT. 2. BRIEFLY STATED, SEARCH AND SEIZURE OPERATIONS WERE CARRIED OUT AT THE BUSINESS AND RESIDENTIAL PREMISES OF CHOKSEY GROUP OF BUSINESS. AS THE ASSESSEE HAD BUSINESS CONNECTION WITH THE GROUP, HI S RESIDENTIAL PREMISES WERE ALSO SEARCHED. DURING THE COURSE OF SEARCH, S. B. A/C NO. 1922 AT SAMTA SAHAKARI BANK LTD., SANTACRUZ BRANCH IN WHICH THERE WERE TRANSACTIONS OF ASSESSEE BUSINESS. ON THE REASON TH AT ASSESSEE HAD NOT DISCLOSED THIS ACCOUNT IN HIS REGULAR RETURN OF INC OME, A NOTICE UNDER SECTION 148 WAS ISSUED. IN RESPONSE TO THE NOTICE U NDER SECTION 148, ASSESSEE SUBMITTED THAT THE RETURN FILED BY THEM BE TREATED IN RESPONSE TO THE NOTICE UNDER SECTION 148. SUBSEQUENTLY, ASSESS EE FILED REVISED RETURN OF INCOME ON 14.07.2008 WHEREIN PEAK AMOUNT OF ` 4,14,878/- IN THE BANK A/C NO. 1922 WAS OFFERED AS INCOME IN THE ABSENCE OF RE LEVANT DETAILS AND DOCUMENTS. THE A.O. COMPLETED ASSESSMENT UNDER SECT ION 147 R.W.S. 143(3) ITA NO. 5744/MUM/2009 SHRI VIREN P. CHOKSEY 2 ON 29,09.2008 AFTER INCLUDING AMOUNT OF ` 4,14,878/- AS UNACCOUNTED COMMISSION. IN RESPONSE TO THE SHOW CAUSE NOTICE UN DER SECTION 271(1)(C), THE LEARNED COUNSEL EXPLAINED THAT THE INCOME EARNE D OUT OF THE SALES AND PURCHASE TRANSACTIONS OF SAMTA SAHAKARI BANK LTD., ACCOUNT NO. 1922 AND SHAMRAO VITTHAL BANK LTD IN ACCOUNT NO. 8296 RESPEC TIVELY WAS INCLUDED IN THE CAR COMMISSION INCOME ALREADY DECLARED IN THE E ARLIER RETURN FILED ON 30.07.2011 AND HENCE ASSESSEE DID NOT DISCLOSE THE TRANSACTIONS MENTIONED IN THE ABOVE REFERRED TWO BANK ACCOUNTS IN HIS ORIG INAL RETURN. IT WAS SUBMITTED THAT THE ENTIRE VALUE OF TRANSACTION WAS NOT THE INCOME OF THE ASSESSEE, THE ASSESSEE HARDLY EARNS 4% TO 5% AS NET PROFIT BY WAY OF COMMISSION BUT ONLY WITH A VIEW TO CO-OPERATE WITH THE DEPARTMENT, HE HAD OFFERED ENTIRE PEAK CREDIT AS HIS INCOME, THEREFORE , VOLUNTARY DISCLOSURE BY THE ASSESSEE DID NOT ATTRACT THE PROVISIONS OF SECT ION 271(1)(C). THE A.O. WAS OF THE VIEW THAT THERE WAS NO VOLUNTARY DISCLOSURE MADE BY ASSESSEE AT ANY STAGE, NEITHER AT THE TIME OF SEARCH PROCEEDINGS, N OR AT THE TIME OF FILING OF RETURN OF INCOME IN RESPONSE TO THE NOTICE UNDER SE CTION 148 AND ASSESSEE HAD OFFERED ADDITIONAL INCOME OF ` 4,14,878/- BY FILING REVISED RETURN OF INCOME ON 14.07.2008 WITH A PLEA THAT THIS INCOME WAS BEING DISCLOSED ONLY TO BUY PEACE OF MIND AND TO AVOID PROTRACTED LITIGA TION. THE A.O. FURTHER HELD THAT THE PLEA THAT THE AMOUNT DEPOSITED IN THE SB A CCOUNT ALREADY STOOD INCLUDED IN THE COMMISSION INCOME WAS NOT SUBSTANTI ATED WITH ANY DOCUMENTARY EVIDENCE. THE A.O. FURTHER HELD THAT IM MUNITY UNDER EXPLANATION 5A OF SECTION 271(1)(C) OF THE IT ACT W AS NOT APPLICABLE TO ASSESSEE THOUGH THE ASSESSEE HAD FILED RETURN OF IN COME FOR A.Y. 2001-02 WITHIN THE DUE DATE OF FILING OF RETURN, COMMISSIO N INCOME OF ` 4,14,878/- WAS NOT OFFERED BEFORE THE DATE OF SEARCH NOR AT TH E TIME OF FILING OF RETURN IN RESPONSE TO NOTICE U/S 148 . IT WAS DISCLOSED ONLY DURING THE COURSE OF ASSESSMENT PROCEEDINGS BY FILING THE REVISED RETURN . THE A.O. HELD THAT ASSESSEE HAD OFFERED THIS AMOUNT AFTER REALISATION THAT THERE WAS NO POSSIBILITY OF ESCAPE WITHOUT OFFERING THE AFORESAI D SUM FOR TAXATION; IF THE SEARCH ACTION WAS NOT CONDUCTED, THE ASSESSEE WOULD NOT HAVE MADE ANY DISCLOSURE ABOUT THIS INCOME. THE A.O. LEVIED PENAL TY OF ` 1,15,202/- BY RELYING ON THE FOLLOWING JUDGEMENTS: - ITA NO. 5744/MUM/2009 SHRI VIREN P. CHOKSEY 3 I) B.A. BALASUBRAMANIAN & BROS CO. VS. CIT 236 ITR 9 77 (SC) II) CIT VS. JEEVAN LAL SHAH 205 ITR 244 (SC) III) RAGHUVIR SONI VS. ACIT 258 ITR 239 (RAJ.) 3. BEFORE THE CIT(A) IT WAS SUBMITTED THAT THE BANK AC COUNT WAS A BUSINESS ACCOUNT, THE COMMISSION OF WHICH WAS ALREA DY DISCLOSED BUT THE TRANSACTIONS BY WAY OF CHEQUE IN THAT ACCOUNT COULD NOT BE CONFIRMED AS SUFFICIENT TIME HAS ELAPSED AND SO THE ASSESSEE IN ORDER TO SETTLE THE ISSUE AGREED FOR PEAK AMOUNT OF ` 4,14,878/- AS INCOME OF THE YEAR AND ACCORDINGLY FILED REVISED RETURN IN 148 PROCEEDINGS , WHICH WAS ACCEPTED BY THE A.O. AND, THEREFORE, THERE IS NO NEED FOR LEVY OF PENALTY. IT WAS HIS EXPLANATION THAT ASSESSEE WAS ONLY DOING COMMISSION BUSINESS AND INCOME OF COMMISSION WAS DECLARED IN THE ORIGINAL RETURN F ILED. THE TRANSACTIONS IN THE BANK ACCOUNT COULD NOT BE CORRELATED AFTER A LO NG TIME AND, THEREFORE, IT WAS VOLUNTARILY DISCLOSED. THE CIT(A), HOWEVER, DID NOT AGREE AND STATED THAT THE SEARCH AND SEIZURE OPERATION ONLY RESULTED IN U NEARTHING THE BANK ACCOUNT IN THE BANK OF SAMTA SAHAKARI BANK LTD. AND ADDITIONAL INCOME WAS DISCLOSED ONLY WHEN THESE BANK ACCOUNTS WERE DE TECTED IN THE COURSE OF SEARCH AND SEIZURE PROCEEDINGS AND 148 NOTICE WAS I SSUED. RELYING ON THE PRINCIPLES ESTABLISHED BY THE JUDGEMENT OF THE HON' BLE RAJASTHAN HIGH COURT IN THE CASE OF RAGHUVIR SONI VS. ACIT 258 ITR 239 A ND IN THE CASE OF CIT VS. JEEVAN LAL SHAH 205 ITR 244 (SC), HE CONFIRMED THE PENALTY. 4. BEFORE US THE LEARNED COUNSEL SUBMITTED THAT THE A. O. INITIATED PROCEEDINGS UNDER SECTION 148 FOR THIS ASSESSMENT Y EAR WHEREAS IN OTHER ASSESSMENT YEARS HE HAS BEEN INITIATED PROCEEDINGS UNDER SECTION 153A. HE THEN REFERRED TO THE ASSESSMENT ORDER IN A.Y. 2003- 04 PLACED ON RECORD IN THE PAPER BOOK TO SUBMIT THAT ASSESSEE HAS DECLARED THE FOLLOWING INCOMES ON THE BASIS OF PEAK AMOUNT LYING IN HIS SAVINGS AC COUNT WITH SHAMARAO VITHAL CO-OPERATIVE BANK SANTACRUZ: 2001-02 ` 4,14,878/- 2003-04 ` 4,15,599 2004-05 ` 10,64,796 ITA NO. 5744/MUM/2009 SHRI VIREN P. CHOKSEY 4 5. IT WAS HIS SUBMISSION THAT INITIALLY WHEN THE SEARC H WAS CONDUCTED THERE WAS NOTHING INCRIMINATING EXCEPT THE BANK ACC OUNT. IT WAS ON THE BASIS THAT THE BANK ACCOUNT WAS NOT DISCLOSED IN TH E REGULAR INCOME THE A.O. WANTED TRANSACTIONS TO BE JUSTIFIED. AS THE SE ARCH OCCURRED IN 2007 AND TRANSACTIONS WERE OF EARLIER YEARS, THE PURCHASES A ND SALES AND COMMISSION COULD NOT BE CORRELATED WITH THE ENTRIES IN THE BOO KS, ASSESSEE DECIDED TO OFFER THE PEAK INCOME FOR THE ABOVE THREE ASSESSMEN T YEARS. HE FURTHER SUBMITTED THAT THE A.O. HAS HIMSELF DROPPED THE PEN ALTY PROCEEDINGS INITIATED IN THE RESPECTIVE TWO ASSESSMENT YEARS, I .E. 2003-04 AND 2004-05. HE PLACED ON RECORD THE ORDERS UNDER SECTION 271(1) (C) DATED 07.08.2009 FOR THE TWO ASSESSMENT YEARS WHERE THE A.O. DROPPED THE PENALTY PROCEEDINGS. THE LEARNED COUNSEL ALSO PLACED ON RECORD THAT IN S IMILAR CASE OF THE FAMILY MEMBER MRS. NINA VIREN CHOKSEY AND VIREN P. CHOKSEY HUF, THERE WAS NO ADDITION MADE IN THE ASSESSMENT ORDER PASSED UNDER SECTION 153A AND CONSEQUENTLY NO PENALTY PROCEEDINGS WERE INITIATED. THEREFORE, IT WAS ASSESSEES SUBMISSION THAT MERE AGREEMENT FOR ADDIT ION DOES NOT MEAN THAT THERE IS CONCEALMENT OF INCOME AND PENALTY COULD NO T HAVE BEEN LEVIED. 6. THE LEARNED D.R., HOWEVER, SUBMITTED THAT ASSESSEE HAD FILED ORIGINALLY RETURN ON 30.07.2001 DISCLOSING COMMISSI ON INCOME. IN RESPONSE TO NOTICE UNDER SECTION 148 ALSO VIDE LETTER DATED 16.05.2008 ASSESSEE ASKED THE ORIGINAL RETURN TO BE TREATED AS RETURN FILED I N RESPONSE TO SECTION 148. ONLY WHEN ASSESSMENT PROCEEDINGS WERE GOING ON CONS EQUENT TO DETECTION OF BANK ACCOUNT NO. 1922 ASSESSEE OFFERED PEAK AMOUNT OF ` 4,14,878/- BY FILING REVISED RETURN. SINCE THE BANK ACCOUNT WAS D ETECTED IN THE COURSE OF SEARCH AND THE INCOME WAS NOT OFFERED IN THE ORIGIN AL RETURN, PENALTY PROCEEDINGS UNDER SECTION 271(1)(C) ARE WARRANTED. WHILE ADMITTING THAT THE A.O. DROPPED THE PENALTY PROCEEDINGS IN OTHER YEARS IT WAS SUBMITTED THAT ASSESSEE ADMITTED AT THE TIME OF FILING THE RETURN ITSELF IN THE OTHER YEARS WHEREAS IN THIS YEAR ASSESSEE DID NOT OFFER THE INC OME AT THE TIME OF FILING THE RETURN BUT FILED REVISED RETURN IN REASSESSMENT PROCEEDINGS IN RESPONSE TO NOTICE UNDER SECTION 148. THEREFORE, DROPPING OF PENALTY IN OTHER YEARS SHOULD NOT COME IN THE WAY OF LEVYING PENALTY IN TH IS ASSESSMENT YEAR. HE RELIED ON THE JUDGMENT OF THE HON'BLE MADRAS HIGH C OURT IN THE CASE OF M. ITA NO. 5744/MUM/2009 SHRI VIREN P. CHOKSEY 5 SAJJANRAJ NAHAR VS. CIT 155 TAXMAN 536 (MAD) THAT A .O. WAS JUSTIFIED IN LEVYING PENALTY WHEN SUBSEQUENT TO COMPLETION OF OR IGINAL ASSESSMENT ASSESSEE FILED REVISED RETURN DECLARING ADDITIONAL INCOME. HE ALSO RELIED ON THE PRINCIPLES ESTABLISHED BY THE HON'BLE SUPREME C OURT IN THE CASE OF G.C. AGARWAL VS. CIT 186 ITR 571 TO SUBMIT THAT IN VIEW OF THE DIFFERENCE BETWEEN THE ORIGINAL RETURN AND REVISED RETURN THE TRIBUNAL WAS CORRECT IN HOLDING THAT PENALTY UNDER SECTION 271(1)(C) WAS JUSTIFIED. 7. WE HAVE CONSIDERED THE ISSUE. THERE IS NO DISPUTE W ITH REFERENCE TO THE FACT THAT ASSESSEE IS IN THE BUSINESS OF PURCHA SE AND SALE OF CARS ON COMMISSION BASIS. IT IS ALSO NOT DISPUTED THAT ASSE SSEE HAS OFFERED COMMISSION INCOME FROM THE BUSINESS ORIGINALLY WHIC H HAD NOT BEEN VARIED EVEN IN THE REASSESSMENT PROCEEDINGS. THE ONLY ISSU E IS BRINGING TO TAX IN THE REASSESSMENT PROCEEDINGS THE PEAK AMOUNT OFFERE D OUT OF THE CREDIT ENTRIES IN THE BANK ACCOUNT NOS. 1922 AND 296 OF TW O BANKS. IT WAS THE SUBMISSION OF THE ASSESSEE THAT ASSESSEE IS A DEALE R AND IN THE PROCESS THE BUYERS ISSUE CHEQUES TO THE AGENT, AS THEY DO NOT K NOW THE SELLER, WHO AFTER GETTING THE AMOUNT, PASS ON THE PRICE OF THE CAR TO THE SELLER. IN THIS PROCESS THERE ARE CREDITS AND DEBITS IN THE BANK ACCOUNTS. ASSESSEE WAS OFFERING THE COMMISSION EARNED IN THE TRANSACTIONS. AS SEEN FROM THE ORDER OF THE A.O., THE A.O. SIMPLY ACCEPTED THE REVISED RETURN WHEREIN PEAK AMOUNT OF ` 4,14,878/- WAS OFFERED BY THE ASSESSEE. IT IS ALSO TRUE THAT ASSESSEE OFFERED SIMILAR AMOUNTS IN A.Y. 2003-04 AND A.Y. 2004-05 AN D ALL THE AMOUNTS OFFERED WERE ACCEPTED WITHOUT ANY DISPUTE. IT IS NO T THE CASE OF THE A.O. THAT THE COMMISSION INCOME EARNED ON THESE TRANSACTIONS WAS NOT DISCLOSED BY THE ASSESSEE. WHAT THE ASSESSEE ORIGINALLY DISCLOSE D WAS THE COMMISSION AMOUNT AND IN THE REVISED PROCEEDINGS ALSO THE SAME COMMISSION AMOUNT ORIGINALLY OFFERED WAS ACCEPTED. THE A.O. ALSO NOT MADE OUT ANY CASE THAT THE TRANSACTIONS IN THE BANK ACCOUNT PERTAINS TO AS SESSEES UNACCOUNTED TRANSACTIONS. IT IS THE SUBMISSION THAT MOST OF THE TRANSACTIONS ARE BY WAY OF CHEQUES, THE CONTENTION OF WHICH WAS NOT DISPUTE D IN ANY OF THE PROCEEDINGS. WHAT THE ASSESSEE WAS ASKED TO EXPLAIN OR PROVE IS THAT THE TRANSACTIONS ARE FROM THE BUYERS AND SELLERS OF THE CARS. THERE IS NO INCRIMINATING MATERIAL FOUND DURING THE SEARCH PROC EEDINGS THAT ASSESSEE ITA NO. 5744/MUM/2009 SHRI VIREN P. CHOKSEY 6 WAS INTRODUCING HIS OWN MONEYS IN THE FORM OF CASH CREDITS IN THE BANK ACCOUNT. SINCE ASSESSEE WAS UNABLE TO JUSTIFY THE C REDITS AND DEBITS VIS--VIS THE CLIENTS, IN ORDER TO SETTLE THE MATTER HE HAS O FFERED PEAK CREDITS AS OWN INCOME, WHICH WAS ACCEPTED IN THE RESPECTIVE THREE ASSESSMENT YEARS AS SUCH. 8. WE ALSO NOTICED THAT THE A.O. DROPPED PENALTY PROCE EDINGS IN A.Y. 2003-04 AND A.Y. 2004-05. IN FACT IN THESE YEARS AL SO, ASSESSEE HAD FILED ORIGINAL RETURNS ADMITTING ONLY COMMISSION INCOME A S AN AGENT IN PURCHASE AND SALE OF CARS. IN THESE YEARS ALSO CONSEQUENT TO SEARCH, PEAK CREDITS WERE OFFERED AS INCOME IN THE PROCEEDINGS UNDER SECTION 153A. THE PENALTY PROCEEDINGS WERE INITIATED BUT THEY WERE DROPPED BY THE A.O. AFTER ACCEPTING ASSESSEES EXPLANATION. THE SAME EXPLANATION WAS OF FERED IN A.Y. 2001-02 ALSO THAT ASSESSEE IS AN AGENT, THAT THE TRANSACTIO NS PERTAIN TO DIFFERENT CLIENTS, THAT ASSESSEE WAS UNABLE TO FURNISH ANY EV IDENCE DUE TO LAPSE OF TIME AND OFFERING THE PEAK AMOUNT AS INCOME IN ALL THE THREE YEARS ON VOLUNTARY BASIS. 9. SINCE THE A.O. HIMSELF HAS DROPPED THE PENALTIES IN TWO ASSESSMENT YEARS, WE ARE OF THE OPINION THAT THE EXPLANATION G IVEN FOR ALL THE THREE YEARS SHOULD HAVE BEEN ACCEPTED BY THE A.O. THERE CANNOT BE A BONAFIDE EXPLANATION FOR TWO ASSESSMENT YEARS AND MALAFIDE E XPLANATION FOR ONE ASSESSMENT YEAR WHEN, CONSEQUENT TO THE SEARCH, ASS ESSEE OFFERED PEAK CREDITS IN THE BANK ACCOUNTS AS INCOME. SINCE ON SI MILAR FACTS A.O. ACCEPTED THE EXPLANATION AS BONAFIDE, WE ARE OF THE OPINION THAT THE EXPLANATION GIVEN BY ASSESSEE FOR THIS ASSESSMENT YEAR, OFFERING INCO ME AND ADMITTING PEAK CREDIT SHOULD BE ACCEPTED AS BONAFIDE EXPLANATION. 10. THE LEARNED D.R. RELIED ON THE PRINCIPLES ESTABLISH ED BY THE HON'BLE SUPREME COURT IN THE CASE OF G.C. AGARWAL VS. CIT 1 86 ITR 571 JUSTIFYING LEVY OF PENALTY. ON THE SET OF FACTS PARTICULARLY W ITH REFERENCE TO THE EXPLANATION THEN AVAILABLE FOR A.Y. 1964-65 AND 196 5-66 WHERE TOTAL INCOME RETURNED BY ASSESSEE WAS FOUND TO BE LESS THAN 80% OF THE TOTAL INCOME ASSESSED, INVOKING THE EXPLANATION THEN EXISTING P ENALTY WAS UPHELD. HOWEVER, THE OBSERVATIONS OF THE HON'BLE GUWAHATI H IGH COURT IN THE CASE OF ITA NO. 5744/MUM/2009 SHRI VIREN P. CHOKSEY 7 G.C. AGARWAL VS. CIT 102 ITR 408 WHILE CONFIRMING T HE PENALTY IS WORTH EXTRACTING HERE: - IT IS NOW SETTLED LAW THAT IN ORDER TO SUSTAIN A P ENALTY UNDER SECTION 271(1)(C) THE DEPARTMENT MUST ESTABLISH THAT THE RE CEIPT OF THE AMOUNT IN DISPUTE CONSTITUTES INCOME OF THE ASSESSEE AND P ART FROM THE FALSITY OF THE EXPLANATION GIVEN BY THE ASSESSEE, THE DEPAR TMENT MUST HAVE BEFORE IT COGENT MATERIAL OR EVIDENCE FROM WHICH IT CAN BE INFERRED THAT THE ASSESSEE HAS CONSCIOUSLY CONCEALED THE PARTICUL ARS OF HIS INCOME OR HAS DELIBERATELY FURNISHED INACCURATE PARTICULARS I N RESPECT OF SUCH INCOME. IT IS ALSO SETTLED LAW THAT THE FINING GIVE N IN THE ASSESSMENT PROCEEDINGS FOR DETERMINING OR COMPUTING THE TAX CA NNOT BY ITSELF BE SAID TO BE CONCLUSIVE IN PENALTY PROCEEDINGS THOUGH IT MAY BE GOOD EVIDENCE WHICH MAY BE CONSIDERED ALONG WITH THE OTH ER EVIDENCE IN THE PENALTY PROCEEDINGS. 11. THESE PRINCIPLES STOOD THE TEST OF TIME IN EXAMININ G SCOPE OF PENALTY U/S 271(1)(C). WHAT WE NOTICED IN THIS CASE IS THAT THE A.O. WAS SATISFIED ABOUT THE EXPLANATION GIVEN BY THE ASSESSEE AS BONA FIDE IN RESPECT OF TWO ASSESSMENT YEARS BUT LEVIED THE PENALTY WITH REFERE NCE TO THIS ASSESSMENT YEAR. SINCE THE EXPLANATION IS COMMON AND THE FACT THAT BANK ACCOUNT WAS CAME TO THE KNOWLEDGE AFTER THE SEARCH, THERE CANNO T BE DIFFERENT TREATMENT GIVEN TO THE SAME ASSESSEE IN DIFFERENT ASSESSMENT YEARS ON THE SAME SET OF FACTS. THEREFORE, WE ARE OF THE OPINION THAT THE A. O. SHOULD HAVE DROPPED THE PENALTY PROCEEDINGS IN THIS ASSESSMENT YEAR AS WELL . CONSEQUENTLY, WE ARE OF THE OPINION THAT THE EXPLANATION OFFERED BY THE ASS ESSEE IS TO BE CONSIDERED AS BONAFIDE EXPLANATION AND ACCORDINGLY IN VIEW OF EXPLANATION 1 TO SEC 271(1)(C), PENALTY PROCEEDINGS ARE NOT ATTRACTED. T HE PENALTY IS THEREFORE, CANCELLED. 12. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 19 TH AUGUST 2011. SD/- SD/- (D. MANMOHAN) (B. RAMAKOTAIAH) VICE PRESIDENT ACCOUNTANT MEMBER MUMBAI, DATED: 19 TH AUGUST 2011 ITA NO. 5744/MUM/2009 SHRI VIREN P. CHOKSEY 8 COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) CENTRAL III, MUMBAI 4. THE CIT CENTRAL IV, MUMBAI CITY 5. THE DR, F BENCH, ITAT, MUMBAI BY ORDER //TRUE COPY// ASSISTANT REGISTRAR ITAT, MUMBAI BENCHES, MUMBAI N.P.