KIRAN SHAH, MUMBAI V. ACIT CEN CIR 15 & 16, MUMBAI

ITA 5919/MUM/2011

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 75267 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 4 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-01-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 01-01-2014
• Assessment Year: 1999-2000
• Appeal Filed On: 24-08-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S J SINGH
• Keywords: Income from undisclosed sources; Search and seizure; Document seized; Retrospective amendment; Question of law; Initiation of penalty proceedings; Block assessment; Documents seized; Reassessment proceedings
• Section: 143(3); 153A; 147; 148; 132; 12; 139

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, MUMBAI . . , !'#$ , % & BEFORE SHRI B.R. MITTAL, JM AND SHRI N.K. BILLAIYA, AM ./ I.T.A. NOS.5919 TO 5925/MUM/2011 ( ' ' ' ' / ASSESSMENT YEARS : 1999-2000 TO 2005-06 SHRI KIRAN SHAH, 4/5, AMRUT TOWER, 248, TELANG ROAD, MATUNGA (CR), MUMBAI-400 019 / VS. THE ACIT, CENTRAL 15 & 16 AAYAKAR BHAVAN, MUMBAI-400 020 ( % ./ )* ./ PAN/GIR NO. : AACPS 0379N ( (+ / APPELLANT ) .. ( ,-(+ / RESPONDENT ) (+ . / APPELLANT BY: SHRI VIJAY MEHTA ,-(+ / . / RESPONDENT BY: SHRI S.J. SINGH / 01% / DATE OF HEARING :01. 01.2014 23' / 01% / DATE OF PRONOUNCEMENT : .01.2014 4 / O R D E R PER N.K. BILLAIYA, AM: IN ALL THESE ASSESSMENT YEARS, THE ASSESSEE IS IN A PPEAL AGAINST LEVY OF PENALTY U/S. 271(1)(C) OF THE ACT. AS ALL THESE APPEALS WERE HEARD TOGETHER, THEY ARE DISPOSED OF BY THIS COMMON ORDER FOR THE SAKE OF CONVENIENCE AND BREVITY. 2. FOR THE SAKE OF CLARITY, OUR ORDER IS SEGREGATE D INTO TWO PARTS (1) RELATES TO THE LEVY OF PENALTY U/S. 271(1)(C) FOR A SSESSMENT YEAR 1999- SHRI KIRAN SHAH 2 2000 AND THE (2) PART RELATES TO LEVY OF PENALTY U/ S. 271(1)(C) FOR ASSESSMENT YEARS 2000-01 TO 2005-06. ITA NO. 5919/MUM/2011 A.Y. 1999-2000 3. THE ASSESSEE IS AGGRIEVED BY THE LEVY OF PENALTY U/S. 271(1)(C). IT IS THE CLAIM OF THE ASSESSEE THAT THE PENALTY PROCE EDINGS WERE INITIATED ONLY ON THE DIFFERENCE BETWEEN THE RETURNED INCOME AND ASSESSED INCOME OF RS. 90,000/- BY THE ASSESSING OFFICER WHEREAS IT IS THE CLAIM OF THE REVENUE THAT THE AO HAS LEVIED PENALTY ON THE SUM O FFERED FOR TAXATION EVEN THOUGH IT IS ON ESTIMATED BASIS. 4. BRIEF FACTS OF THE CASE ARE THAT A SEARCH AND SE IZURE OPERATION U/S. 132(1) OF THE ACT WERE CARRIED OUT IN THE VIJAY GRO UP OF CASES ON 22.9.2005. THE SEARCH OPERATIONS WERE ALSO CARRIED OUT AT THE BUSINESS PREMISES OF THE CHARTERED ACCOUNTANT OF THE VIJAY G ROUP OF CASES AND CERTAIN DOCUMENTS WERE FOUND AND SEIZED WHICH SHOWE D THAT THE ASSESSEE CARRIED OUT BUSINESS OF HOTEL AND ALSO EARNED INTER EST INCOME AND OTHER INCOME IN DIFFERENT YEARS. THE ASSESSEE OFFERED TO TAX RS. 2.47 CRORES IN HIS STATEMENT MADE BEFORE INVESTIGATION WING ON 5.1 2.2005. FOR THE ASSESSMENT YEAR 1999-2000, THE ASSESSEE FILED RETUR N OF INCOME DECLARING TOTAL INCOME AT RS. 5,52,227/- AND AGRICULTURAL INC OME AT RS. 51,545/-. AFTER THE SEARCH AND SEIZURE OPERATION IN RESPONSE TO NOTICE U/S. 148 OF THE ACT, THE ASSESSEE DECLARED TOTAL INCOME AT RS. 19,4 5,227/- WHICH INCLUDED ADDITIONAL INCOME OF RS. 13,93,000/- WHICH THE ASSE SSEE HAS STATED TO HAVE DECLARED SUO MOTU BEFORE THE INVESTIGATION AUT HORITIES. 4.1. DURING THE COURSE OF THE ASSESSMENT PROCEEDING S, THE AO OBSERVED THAT AS PER PAGE NO. 7 & 8 OF ANNEXURE A-4 TO PANCH ANAMA DT. SHRI KIRAN SHAH 3 22.9.2005, THE ASSESSEE HAS GIVEN LOAN OF RS. 5,20, 667/- TO M.S. HEERA PETROLEUM ON WHICH INTEREST AMOUNTING TO RS. 90,000 /- IS SHOWN TO BE EARNED. THE ASSESSEE WAS CONFRONTED WITH THESE SE IZED DOCUMENTS. THE ASSESSEE EXPLAINED THAT THE DIFFERENCE WAS ONLY OF RS. 20,667/- WHICH PERTAINED TO A.Y. 1998-99. THE AO DID NOT ACCEPT T HE CONTENTIONS OF THE ASSESSEE AND ADDED A SUM OF RS. 90,000/- BEING INTE REST AS APPEARED IN THE SEIZED DOCUMENTS AND INITIATED PENALTY PROCEEDINGS U/S. 271(1)(C) OF THE ACT. 4.2. IN THE PENALTY PROCEEDINGS, THE ASSESSEE STRON GLY CONTENDED THAT THE ADDITION OF RS. 90,000/- MADE ON ACCOUNT OF INTERES T HAS BEEN DELETED BY THE LD. CIT(A) VIDE HIS ORDER DT. 27.2.2009. IT WA S POINTED OUT THAT WITH THIS DELETION, THERE IS NO DIFFERENCE BETWEEN THE A SSESSED INCOME AND THE RETURNED INCOME. THEREFORE, THERE IS NO CONCEALMEN T OF INCOME AND ACCORDINGLY NO PENALTY SHOULD BE LEVIED. THE AO WA S OF THE FIRM BELIEF THAT FOR THE YEAR UNDER CONSIDERATION, THE ASSESSEE HAS DISCLOSED ADDITIONAL INCOME OF RS. 13,93,000/- ONLY AFTER THE CONCEALMEN T OF INCOME WAS DETECTED FROM THE INCRIMINATING DOCUMENTS PERTAININ G TO THE ASSESSEE WHICH WERE FOUND AND SEIZED DURING THE COURSE OF SE ARCH ON VIJAY GROUP. ONLY AFTER THE SEARCH TOOK PLACE AND THE INCRIMINAT ING DOCUMENTS REGARDING CONCEALED INCOME WERE FOUND THAT THE ASSE SSEE DECLARED ADDITIONAL INCOME IN HIS RETURN FILED U/S. 148. TH E AO ALSO REJECTED THE CONTENTION OF THE ASSESSEE THAT THE RETURN U/S. 148 HAS BEEN ACCEPTED BY THE DEPARTMENT THEREFORE, NO PENALTY IS JUSTIFIED. THE AO WENT ON TO LEVY PENALTY ON INCOME AT RS. 13,93,000/- AND COMPUTED T HE PENALTY AT RS. 3,91,900/-. 5. THE ASSESSEE CARRIED THE MATTER BEFORE THE LD. C IT(A) BUT WITHOUT ANY SUCCESS. THE LD. CIT(A) WHILE CONFIRMING THE P ENALTY OBSERVED THAT SHRI KIRAN SHAH 4 THE RETURN FILED U/S. 148 OF THE ACT WAS NOT A VOL UNTARILY RETURN AND THE INCOME OFFERED IS UNACCOUNTED INCOME WHICH WAS NOT DISCLOSED IN THE ORIGINAL RETURN OF INCOME. 6. AGGRIEVED BY THIS, THE ASSESSEE IS BEFORE US. T HE LD. COUNSEL FOR THE ASSESSEE STRONGLY SUBMITTED THAT IN THE ASSESSM ENT ORDER THE SATISFACTION WAS RECORDED BY THE AO ONLY IN RESPECT OF THE ADDITION OF RS. 90,000/- WHICH HAS BEEN DELETED BY THE LD. CIT( A) THEREFORE, THEIR REMAINS NO REASON FOR THE LEVY OF PENALTY. SO FAR AS ADDITIONAL INCOME OF RS. 13,93,000/- IS CONCERNED, IT IS THE SAY OF THE LD. COUNSEL THAT THE SAID INCOME WAS OFFERED PURELY ON ESTIMATED BASIS A ND HAS NO CONNECTION/REFERENCE TO ANY OF THE SEIZED MATERIAL. THE AO HAS ACCEPTED THE ADDITIONAL INCOME WITHOUT RECORDING ANY SATISFA CTION ABOUT THE CONCEALMENT OF INCOME. THE LD. COUNSEL FURTHER ARG UED THAT THIS INCOME IS AN ESTIMATED INCOME AND PENALTY CANNOT BE LEVIED ON ESTIMATED INCOME. 7. THE LD. DEPARTMENTAL REPRESENTATIVE STRONGLY CON TENDED THAT THE INCOME WAS NOT FOUND RECORDED IN THE BOOKS OF ACCOU NT OF THE ASSESSEE AND THEREFORE ON ACCOUNT OF FAILURE ON THE PART OF THE ASSESSEE TO MAINTAIN ACCOUNT THE ASSESSEE HAS TO ESTIMATE HIS INCOME. I T IS THE SAY OF THE LD. DR THAT THE ASSESSEE HIMSELF HAS ADMITTED THAT HE H AS CAPITALIZED THE AMOUNT OF INCOME SO ESTIMATED WHICH MEANS THAT THE INCOME SO ESTIMATED HAS BEEN USED TO EXPLAIN INVESTMENT/LOANS ETC. THE LD. DR SAYS THAT IF IT HAD BEEN A CASE OF ESTIMATION OF I NCOME WITHOUT ANY RELATION TO THE REALITY, THEN THE ASSESSEE COULD NO T HAVE CAPITALIZED THE SAME. THIS FACT SHOWS THAT INCOME ESTIMATED BY THE ASSESSEE IS CLOSE TO INCOME EARNED BY IT AND IS NOT AN IMAGINARY FIGURE. THE LD. DR FURTHER SUBMITTED THAT THERE IS NO UNIVERSAL RULE THAT PENA LTY U/S. 271(1)(C) IS NOT SHRI KIRAN SHAH 5 LEVIABLE ON INCOME ESTIMATED. HE REFERRED TO THE D ECISION OF ALLAHABAD HIGH COURT IN THE CASE OF SWATANTRA CONFECTIONARY WORKS 104 ITR 294. HE FURTHER RELIED UPON ANOTHER DECISION OF ALLAHAB AD HIGH COURT IN THE CASE OF SUSHIL KUMAR SHARAD KUMAR 232 ITR 588. TH E LD. DR CONCLUDED THAT ESTIMATION MADE BY THE ASSESSEE IS N OT IMAGINARY AND THEREFORE THE AO WAS JUSTIFIED IN LEVYING PENALTY U /S. 271(1)(C) OF THE ACT. 8. WE HAVE HEARD THE RIVAL PARTIES AND PERUSED THE ORDERS OF THE LOWER AUTHORITIES. WE HAVE ALSO THE BENEFIT OF GOING THR OUGH THE ASSESSMENT ORDER DT. 8.12.2006. IT IS NOT IN DISPUTE THAT THE RETURNED INCOME WAS ASSESSED BY MAKING AN ADDITION OF RS. 90,000/-. IT IS ALSO NOT IN DISPUTE THAT THE ADDITION OF RS. 90,000/- WAS DELETED BY TH E LD. CIT(A) WHICH BRINGS TO THE FACT THAT THE ASSESSED INCOME IS ALSO THE RETURNED INCOME. A PERUSAL OF THE ASSESSMENT ORDER AND IN PARTICULAR P ARA 5.1, 5.2 AND 5.3 READ TOGETHER WOULD LEAD TO THE CONCLUSION THAT AT PARA-5.4, THE AO HAS RECORDED THE SATISFACTION FOR INITIATION OF PENALTY PROCEEDINGS IN RESPECT OF THE ADDITION OF RS. 90,000/- ONLY. THEN AT THE CONCLUDING PART OF THE ASSESSMENT ORDER, THE AO HAS MENTIONED ISSUE NOTIC E U/S. 274 R.W. SECTION 271(1)(C) OF THE ACT. THE AO HAS NOWHERE RECORDED ANY SATISFACTION SO FAR AS ADDITIONAL INCOME OF RS. 13, 93,000/- IS CONCERNED. OUR VIEW IS ALSO FORTIFIED BY SEC. 271(1)(B) WHICH WAS INSERTED IN THE STATUTE BY THE FINANCE ACT 2008 WITH RETROSPECTIVE EFFECT FROM 1.4.1989 WHICH READS AS UNDER: WHERE ANY AMOUNT IS ADDED OR DISALLOWED IN COMPUTI NG THE TOTAL INCOME OR LOSS OF AN ASSESSEE IN ANY ORDER OF ASSESSMENT OR REASSESSMENT AND THE SAID ORDER CONTA INS A SHRI KIRAN SHAH 6 DIRECTION FOR INITIATION OF PENALTY PROCEEDINGS UND ER CLAUSE (C) OF SUB-SECTION (1) OF SEC. 271. SUCH AN ORDER OF ASSESSMENT OR REASSESSMENT SHALL BE DEEMED TO CONST ITUTE SATISFACTION OF THE AO FOR INITIATION OF THE PENAL TY PROCEEDINGS UNDER THE SAID CLAUSE (C) 9. A PERUSAL OF THE AFORESTATED SECTION CLEARLY SHO W THAT WHEN ANY AMOUNT IS ADDED OR DISALLOWED THEN ONLY A DIRECTION WOULD SUFFICE FOR THE LEVY OF PENALTY U/S. 271(1)(C) OF THE ACT. BUT IN THE INSTANT CASE, IN RESPECT OF THE ADDITIONAL INCOME NEITHER ANY AMOUNT IS ADDED NOR DISALLOWED BY THE AO , WHATEVER HAS BEEN RETURNED B Y THE ASSESSEE IS ASSESSED TO TAX EXCEPT AN ADDITION OF RS. 90,000/- WHICH WAS SUBSEQUENTLY DELETED BY THE LD. CIT(A). IN OUR HUM BLE OPINION, FACTS AS DISCUSSED HEREINABOVE DO NOT SUGGEST ANY LEVY OF PE NALTY U/S. 271(1)(C) OF THE ACT. THE DECISIONS RELIED UPON BY THE LD. D R ARE MISPLACED. WE ACCORDINGLY DIRECT THE AO TO CANCEL THE LEVY OF PEN ALTY. APPEAL OF THE ASSESSEE IS ACCORDINGLY ALLOWED. ITA NO. 5920 TO 5925/M/11 A.YRS 2000-01 TO 2005-0 6 10. THE GRIEVANCE OF THE ASSESSEE IN ALL THESE ASSE SSMENT YEARS RELATE TO THE LEVY OF PENALTY U/S. 271(1)(C) OF THE ACT THOUG H QUANTUM MAY DEFER. THE RETURN OF INCOME FOR ALL THESE YEARS WERE FILED U/S. 153C OF THE ACT WHICH CONTAIN INCOME WHICH WAS NOT DECLARED IN THE ORIGINAL RETURN FILED U/S. 139 OF THE ACT. THE ISSUE INVOLVED IS WHETHER PENALTY CAN BE LEVIED ON INCOME WHICH IS NOT DECLARED IN THE ORIGINAL RET URN OF INCOME BUT DECLARED IN THE RETURN OF INCOME FILED IN RESPONSE TO NOTICE ISSUED U/S. 153A OF THE ACT. IT IS THE CLAIM OF THE ASSESSEE T HAT WHEN THE INCOME DECLARED IN THE RETURN OF INCOME FILED IN RESPONSE TO NOTICE U/S. 153A HAS SHRI KIRAN SHAH 7 BEEN ACCEPTED, NO PENALTY U/S. 271(1)(C) IS LEVIABL E. FOR THIS PROPOSITION, STRONG RELIANCE HAS BEEN PLACED ON THE DECISIONS OF THE TRIBUNAL IN THE CASE OF :- 1) PREM ARORA VS DCIT 24 TAXMANN.COME 260 (DELHI TRIBUNAL) 2)PURTI SAKHAR KARKHANA VS DCIT 35 TAXMANN.COM 594 (NAG.TRI) 3) VRAJLAL T. GALA VS ACIT 33 TAXMANN.COM 620(MUM. TRIBUNAL) 4) M/S. UNIMARK REMEDIES LTD. VS ACIT DT. 26.9.201 2 IN ITA NO. 3817/M/2009 5) SMT. PRAMILA D. ASHTEKAR VS ITO-39 TAXMANN. COM 103(PUNE 6)YOGESH PAREKH VS ACIT ITA NO. 6750, 6051/M/08 11. THE LD. DEPARTMENTAL REPRESENTATIVE STRONGLY CO NTENDED THAT IF IT IS HELD THAT NO PENALTY IS LEVIABLE ON INCOME NOT D ECLARED IN THE REGULAR RETURN OF INCOME FILED U/S. 139 BUT IS DECLARED IN RETURN OF INCOME FILED IN RESPONSE TO NOTICE ISSUED U/S. 153A OF THE ACT , S UCH VIEW WILL RENDER THE EXPLANATION 5 OR 5A TO SECTION 271(1)(C) REDUNDANT. THE LD. DR STRONGLY RELIED UPON THE DECISION OF THE TRIBUNAL C HENNAI BENCH IN THE CASE OF ACIT VS SMT. J. MYTHILUI 35 TAXMANN.COM 86. THE LD. DR ALSO RELIED UPON THE DECISION OF MUMBAI BENCH IN THE CAS E OF AJIT B. ZOTA VS ACIT 40 SOT 543. IT IS THE SAY OF THE LD. DR THAT THERE IS NO IMMUNITY FOR PENALTY FOR THOSE YEARS IN RESPECT OF WHICH EIT HER DUE DATE FOR FILING OF RETURN HAS NOT EXPIRED OR ASSESSMENT YEAR RELATING TO THE SEARCH. THE LD. DR FURTHER CONTENDED THAT FOR THOSE ASSESSMENT YEAR S WHERE RETURN OF INCOME HAS BEEN FILED U/S. 139 OF THE ACT PRIOR TO THE DATE OF SEARCH WHAT THE ASSESSEE IS REQUIRED IS SIMPLY TO DECLARE THE I NCOME IN THE RETURNS TO BE FILED IN RESPONSE TO NOTICE U/S. 153A OF THE ACT . HOWEVER, WHERE RETURNS OF INCOME WERE NOT DUE ON THE DATE OF SEARC H, IMMUNITY WILL BE AVAILABLE NOT ON THE BASIS OF INCOME DECLARED IN TH E RETURN BUT ON SHRI KIRAN SHAH 8 FULFILLING THE CONDITIONS MENTIONED IN EXPLANATION 5 OR EXPLANATION 5A OF THE I.T. ACT ACCORDING TO THE LD. DR, THIS ABSURD INTERPRETATION IS REQUIRED TO BE AVOIDED BECAUSE PENALTY PROVISIONS A RE NOT TO BE SO INTERPRETED THAT IT PLACES DISHONEST ASSESSEES IN A DVANTAGEOUS POSITION OVER HONEST ASSESSEE. IT IS THE SAY OF THE LD. DR THAT IF NO PENALTY IS LEVIABLE ON INCOME DISCLOSED IN RETURN OF INCOME FI LED IN RESPONSE TO NOTICE U/S. 153A, THEN ALL THE ASSESSEES WOULD BE S AVED FROM PENAL PROVISIONS SIMPLY BY DISCLOSING THE INCOME IN THE R ETURN OF INCOME FILED IN RESPONSE TO NOTICED U/S. 153A OF THE ACT. THE L D. DR STRONGLY CONCLUDED THAT THIS CANNOT BE THE INTENTION OF THE PARLIAMENT WHILE FRAMING THE LAW. THE LD. DR SUBMITTED THAT SINCE T HIS INVOLVES AN IMPORTANT QUESTION OF LAW AND INVOLVED IN MANY CAS ES, THE ISSUE SHOULD BE REFERRED TO SPECIAL BENCH FOR DECISION. 12. WE HAVE HEARD THE RIVAL PARTIES AND PERUSED THE ORDERS OF THE LOWER AUTHORITIES. IT IS NOT IN DISPUTE THAT ADDITIONAL INCOME WAS DECLARED IN RESPONSE TO NOTICE U/S. 153A OF THE ACT. THE POSIT ION OF ORIGINALLY RETURNED INCOME AND THE ASSESSED INCOME WOULD BE CL EAR FROM THE FOLLOWING CHART: S. NO. ASST. YEARS APPEAL NO. ORIGINAL RETURNED INCOME RETURNED INCOME U/S. 148 U/S. 153C ADDITION FINALLY SUSTAINED ON WHICH NO PENALTY LEVIED DIFFERENCE BETWEEN ORIGINAL RETURNED INCOME AND INCOME OFFERED U/S. 148 & 153C PENALTY LEVIED U/S. 271(1)(C) ON INCOME IN COL 4 1. 2000-01 5920/M/11 4,97,038 1994,038 1,19,180 14,97,000 4,65,410 2. 2001-02 5921/M/11 4,03,164 16,03,164 4,40,546 12,00,000 3,90,780 3. 2002-03 5922/M/11 3,88,417 35,38,417 3,24,512 31,50,000 9,79,264 4. 2003 - 04 5923/M/11 4,51,558 96,38,554 .. 91,55,000 28,56,525 5. 2004-05 5924/M/11 2,28,867 41,77,873 39,49,000 12,74,570 6. 2005-06 5925/M/11 3,59,499 36,77,495 .. 33.18.000 10,87,667 SHRI KIRAN SHAH 9 13. A PERUSAL OF THE ABOVE CHART CLEARLY BRINGS THE CASE OF THE ASSESSEE COVERED BY THE DECISIONS IN FAVOUR OF THE ASSESSEE MENTIONED AT PAGE-7 OF THIS ORDER. IT WOULD BE PERTINENT TO REFER TO THE DECISION OF THE DELHI BENCH IN THE CASE OF PREM ARORA VS DCIT (SUPRA) WHE REIN IT HAS BEEN HELD AS UNDER: ON BARE READING OF SECTION 153A IT IS SEEN THAT TH IS SECTION STARTS WITH A NON OBSTANTE CLAUSE RELATING TO NORMA L ASSESSMENT PROCEDURE COVERED BY SECTIONS 139, 147, 148, 149, 151 AND 153 IN RESPECT OF SEARCHES MADE AFTER 31.5.2003. THE SECTIONS, SO EXCLUDED, RELATE TO FIL ING OF RETURN, ASSESSMENT AND REASSESSMENT PROCEEDINGS. F URTHER, SECTION 153A INTENDS TO ASSESS OR REASSESS TOTAL IN COME OF SIX ASSESSMENT YEARS IMMEDIATELY PRECEDING THE ASSESSME NT YEAR RELEVANT TO THE PREVIOUS YEAR IN WHICH SUCH SEARCH IS CONDUCTED OR REQUISITION IS MADE. THUS, THE LEGISL ATIVE INTENTION IS NOT TO ASSESSEE ESCAPED INCOME AS IN S ECTION 147 OR UNDISCLOSED INCOME AS WAS ASSESSED U/S. 158BC. THE FIRST PROVISO TO SEC. 153A MAKES IT CLEAR THAT NOTICE U/ S. 153A WILL BE FOR EACH OF SUCH SIX ASSESSMENT YEARS FOR A SSESSMENT OR RE-ASSESSMENT OF TOTAL INCOME. SECOND PROVISO T O SECTION 153A PROVIDES THAT SUCH NOTICE WILL HAVE THE EFFECT OF ABATING ALL THE PENDING ASSESSMENT OR REASSESSMENT PROCEEDI NGS, SO AS TO AVOID MULTIPLICITY OF PROCEEDINGS, WHICH WAS A FEATURE OF BLOCK ASSESSMENT. THUS, THERE IS COMPLETE DETACHMENT OF ASSESSMENT PROCEEDINGS U/S. 143 OR 147 FROM SEARCH PROCEEDINGS U/S. 153A. WHEN SCHEME OF SEARCH ASSESSMENT AS DESIGNED BY THE LEGISLATURE DOES NOT PRESCRIBE TO TAKE INTO ACC OUNT THE EARLIER ASSESSMENT PROCEEDINGS WHETHER ABATED OR NO T, IT WILL NOT BE PROPER OR JUSTIFIED TO REFER TO RETURNED INC OME U/S. 139 FOR THE PURPOSE OF IMPOSITION OF PENALTY U/S. 2 71(1)(C). IT FOLLOWS THAT THE CONCEALMENT OF INCOME HAS TO BE SEEN WITH REFERENCE TO ADDITIONAL INCOME BROUGHT TO TAX OVER AND ABOVE INCOME RETURNED BY THE ASSESSEE IN RESPONSE T O NOTICE ISSUED U/S. 153A. ACCORDINGLY, FOR THE PURPOSE OF IMPOSITION OF PENALTY U/S. 271(1)(C) RESULTING AS A RESULT OF SEARCH ASSESSMENTS MADE U/S. 153A, THE ORIGINAL RETURN OF INCOME FILED U/S. 139 CANNOT BE CONSIDERED. SHRI KIRAN SHAH 10 FURTHER, IN CASE OF SEARCH INITIATED AFTER 1.6.2003 A RETURN OF INCOME IS ALWAYS FILED ON ISSUE OF NOTICE U/S. 1 53A. AS HELD ABOVE THE PENALTY U/S. 271(1)(C) IS IMPOSSIBLE WHEN THERE IS VARIATION IN ASSESSED AND RETURN INCOME. IF THERE IS NO VARIATION, THERE WILL BE NO CONCEALMENT. WHEN T HERE IS NO CONCEALMENT, QUESTION OF LEVY OF PENALTY U/S. 271(1 )(C) WILL NOT ARISE. THIS IS SETTLED POSITION OF LAW. THE C ONCEPT OF VOLUNTARY RETURN OF INCOME MAY BE IMPORTANT IN PENA LTY PROCEEDINGS INITIATED IN COURSE OF NORMAL ASSESSMEN T PROCEEDINGS MADE U/S. 143(3) OR 147 BUT NOT UNDER S ECTION 153A. FROM ABOVE DISCUSSION IT FOLLOWS THAT WHERE RETURNED INCOME FILED UNDER SECTION 153A IS ACCEPTED BY THE AO, THERE WILL BE NO CONCEALMENT OF INCOME AND, CONSEQUENTLY, PENALTY U/S. 271(1)(C) CANNOT BE IMPOSED. 14. THIS VIEW HAS ALSO BEEN FOLLOWED BY THE MUMBAI BENCH IN THE CASE OF M/S. UNIMARK REMEDIES LTD VS ACIT IN ITA NOS. 4 09 TO 411/M/09 AND ITA NOS. 290 TO 292/M/09 WHEREIN THE TRIBUNAL A T PARA-7 OF ITS ORDER HAS HELD AS UNDER: WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSIONS IN THE LIGHT OF THE MATERIAL PLACED BEFORE US. PENALTY I N THESE CASES HAS BEEN IMPOSED ON THE INCOME DISCLOSED IN THE RETURN OF INCOME FILED IN RESPONSE TO NOTICE U/S. 153A. THE REASON FOR IM POSITION OF SUCH PENALTY IS THAT THE ACT OF CONCEALMENT RELATED TO R ETURN FILED U/S. 139(1) AND NOT TO RETURN FILED U/S. 153A. THEREFOR E, THE QUESTION IN THE PRESENT APPEALS IS LIMITED ONLY TO THE EXTENT T HAT WHETHER CONCEALMENT PENALTY CAN BE LEVIED IN SUCH A CASE WI TH REFERENCE TO ORIGINAL RETURN. THE CASE OF THE AO IS THAT ASSESS EE HAS COMMITTED THIS DEFAULT WHILE FILING THE ORIGINAL RETURN OF IN COME, THEREFORE CONCEALMENT HAS TO BE VIEWED WITH REFERENCE TO RETU RN ORIGINALLY FILED AND AO ALSO HAS REFERRED TO THE PROVISIONS OF EXPLANATION-5. LD. CIT(A) HAS UPHELD THE ORDER OF THE AO. WE FOUN D THAT THIS ISSUE HAS BEEN CONSIDERED AT LENGTH IN THE AFOREMEN TIONED ORDER OF DELHI ITAT IN THE CASE OF SHRI PREM ARORA VS DCIT ( SUPRA). 15. IN ANOTHER CASE BEFORE NAGPUR BENCH IN ITA NOS 150 TO 155/NAG/10, THE TRIBUNAL HAS HELD THAT WHERE RETURN ED INCOME FILED U/S. 153A IS ACCEPTED BY THE AO AND THERE IS NO VARIATIO N IN ASSESSED INCOME SHRI KIRAN SHAH 11 AND RETURNED INCOME, PENALTY U/S. 271(1)(C) CANNOT BE IMPOSED. IN ANOTHER CASE BEFORE THE TRIBUNAL MUMBAI BENCH IN TH E CASE OF VRAJLAL T. GALA VS ACIT 33 TAXMANN. COM 620 WHERE THE TRIBUNA L HAS HELD THAT EXPLANATION -5 COULD NOT BE APPLICABLE TO ASSESSEE S CASE AS IT HAD NOT BEEN FOUND TO BE OWNER OF ANY OF ASSET MENTIONED I N EXPLANATION. IT WAS HELD YES AND ACCORDINGLY DELETED THE PENALTY LEVI ED U/S. 271(1) OF THE ACT. THE TRIBUNAL AT PUNE BENCH IN THE CASE OF SMT . PRAMILA D. ASHTEKAR VS ITO 39 TAXMANN. COM 103 HAS ONCE AGAIN REITERATE D THE VIEW OF THE TRIBUNAL BY HOLDING THAT WHEN THERE IS NO ADDITION OVER AND ABOVE THE INCOME DECLARED BY THE ASSESSEE IN RETURN OF INCOME FILED IN RESPONSE TO NOTICE U/S. 153A, NO PENALTY U/S. 271(1)(C) WAS TO BE IMPOSED. 15.1. CONSIDERING VARIOUS JUDICIAL DECISIONS DISCUS SED HEREINABOVE IN THE LIGHT OF EXPLANATION-5 TO SEC. 271(1)(C) WHICH RELA TES TO SEARCH INITIATED U/S. 132 OF THE ACT BEFORE THE FIRST DAY OF JUNE, 2 007 AND WHERE IN THE COURSE OF SEARCH THE ASSESSEE IS FOUND TO BE THE OW NER OF ANY MONEY, BULLION, JEWELLERY OR OTHER VALUABLE ARTICLE OR THI NG.. IN THE PRESENT CASE, THE ASSESSEE WAS NOT FOUND TO BE THE OWNER OF ANY SUCH THINGS MENTIONED IN EXPLANATION-5 THEREFORE EXPLANA TION -5 DOES NOT APPLY ON THE FACTS OF THE CASE. THE DECISIONS RELI ED UPON BY THE LD. DR RELATE TO THE CASES WHERE EXPLANATION-5/5A WERE APP LICABLE. THEREFORE, ALL THE DECISIONS RELIED ON BY THE LD. DR ARE MISPL ACED. THE DR HAS ALSO REFERRED TO SEC. 271AAA BUT THAT SECTION HAS BEEN BROUGHT IN STATUTE BY THE FINANCE ACT 2007 W.E.F 1.4.2007. THEREFORE, TH AT SECTION IS NOT APPLICABLE IN THE PRESENT CASE. 15.2. CONSIDERING THE FACTS UNDER APPEAL WITH THE J UDICIAL DECISIONS RELIED UPON AND CITED HEREINABOVE, WE DO NOT FIND A NY SUBSTANCE FOR THE LEVY OF PENALTY U/S. 271(1)(C) OF THE ACT. THE AO IS DIRECTED TO DELETE THE SHRI KIRAN SHAH 12 PENALTY SO LEVIED IN ALL THE ASSESSMENT YEARS UNDER CONSIDERATION. THE APPEALS FILED BY THE ASSESSEE FOR ALL THE ABOVE ASS ESSMENT YEARS ARE ALLOWED. 17. BEFORE CLOSING, WE FIND THAT THE TRIBUNAL HAS B EEN VERY CONSISTENT IN TAKING SIMILAR VIEWS AS DISCUSSED HEREINABOVE. THE APPREHENSION OF THE LD. DR THAT EXPLANATION 5/5A WOULD BECOME REDUN DANT DO NOT HAVE ANY FORCE AND AS THE CO-ORDINATE BENCHES OF THE TRI BUNAL ARE CONSISTENT IN THEIR OWN VIEWS, THEREFORE , WE DO NOT FIND ANY REA SON TO REFER THE MATTER UNDER DISPUTE TO A SPECIAL BENCH. REQUEST OF THE LD DR IS DENIED. 18. IN THE RESULT, THE APPEALS FILED BY THE ASSESSE E ARE ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 8 TH JANUARY, 2014 . 4 / 3' % 5 67 08.01.2014 3 / 8 SD/- SD/- (B.R. MITTAL ) (N.K. BILLAIYA) /JUDICIAL MEMBER % / ACCOUNTANT MEMBER MUMBAI; 6 DATED 08.01.2014 . . ./ RJ , SR. PS SHRI KIRAN SHAH 13 4 4 4 4 / // / ,0! ,0! ,0! ,0! 9!'0 9!'0 9!'0 9!'0 / COPY OF THE ORDER FORWARDED TO : 1. (+ / THE APPELLANT 2. ,-(+ / THE RESPONDENT. 3. : ( ) / THE CIT(A)- 4. : / CIT 5. !;8 ,0 , , / DR, ITAT, MUMBAI 6. 8< = / GUARD FILE. 4 4 4 4 / BY ORDER, -!0 ,0 //TRUE COPY// > >> > / ? ? ? ? ) ) ) ) (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI