SHRI. YOGESH PARIKH, MUMBAI V. ACIT CC-45, MUMBAI

ITA 6751/MUM/2008

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 62696 (ITAT-MUMBAI)
• Duration Of Justice: 3 year(s) 8 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-07-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: G
• Next Hearing Date: 09-07-2012
• Assessment Year: 2004-2005
• Appeal Filed On: 24-11-2008
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: RAJHIV KHANDELWALA
• Keywords: Gift; Search and seizure; Wrong claim; Block assessment; Revised return; Reassessment proceedings
• Section: 143(3); 153A; 147; 148; 132; 15; 139

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI G BENCH MUMBAI BENCHES, MUMBAI BEFORE SHRI VIJAY PAL RAO, JM & SHRI RAJENDRA, AM ITA NO. 6750/MUM/2008 (ASSESSMENT YEAR 2003-04) ITA NO.6751/MUM/2008 (ASSESSMENT YEAR 2004-05) & ITA NO. 3409/MUM/2009 (ASSESSMENT YEAR 2005-06) SH YOGESH PARIKH C-36GUJRATI SOCIETY NEHRU ROAD VILE PARLE (E) MUMBAI 57 VS ASST COMMR OF INCOME TAX CEN CIR 45 MUMBNAI 400 020 (APPELLANT) (RESPONDENT) PAN NO. AACPP6250F ASSESSEE BY SH RAJHIV KHANDELWALA REVENUE BY SH JINAL SARVIYA DT.OF HEARING 9 TH JULY 2012 DT OF PRONOUNCEMENT 25 TH ,JULY 2012 PER VIJAY PAL RAO, JM THESE 3 APPEALS BY THE ASSESSEE ARE DIRECTED AGAINS T 3 SEPARATE ORDERS OF CIT(A) ARISING FROM THE PENALTY ORDER IS PASSED UND ER SECTION 271(1)(C) OF I T ACT FOR THE ASSESSMENT YEAR 2003 04, 04-05 AND 05-06 RESPE CTIVELY. 2 THE ASSESSEE HAS RAISED COMMON GROUNDS IN THESE A PPEALS EXCEPT THE AMOUNT OF PENALTY LEVIED. 2.1 THE EFFECTIVE GROUND RAISED FOR THE ASSESSMENT YEAR 2003-04 IS REPRODUCED AS UNDER: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE APPE LLANTS CASE AND IN LAW THE LD COMMISSIONER OF INCOME TAX(APPEALS) ERRED IN CONFIRMING THE PENALTY OF ` 63,000/- OUT OF PENALTY OF ` 94,500/- IMPOSED BY THE ASSESSING OFFICER U/S 271(1)( C). ITA NO.S 6750,6751 & 3409 SH YOGESH PARIKH 2 3 THE BRIEF FACTS LEADING TO THE LEVY OF PENALTY AR E AS UNDER: 3.1 A SEARCH AND SEIZURE OPERATION WAS CONDUCTED ON 10/01/2006 IN THE CASE OF M/S UNIMARK REMEDIES LTD AND ITS GROUP CONCERNS. T HE ASSESSEE HAD FILED RETURN OF INCOME IN RESPONSE TO THE NOTICE UNDER SECTION 15 3 A FOR ALL THESE 3 YEARS. 3.2 FOR THE ASSESSMENT YEAR 2003-04, THE ASSESSEE D ECLARED A TOTAL INCOME AT ` . 5,92,050/- INCLUDING AN AMOUNT OF ` . 2 LACS DECLARED BY THE ASSESSEE ONLY IN THE RETURN FILED U/S 153A. THE ASSESSING OFFICER NOTICE D THAT AT PAGE NO. 51 OF ANNEXURE A-1 SEIZED FROM THE RESIDENCE OF THE ASSESSEE, THER E WAS A CALCULATION OF INTEREST OF ` . 20,000/- UP TO 31/03/2003, WHICH INDICATED THAT T HE ASSESSEE HAD RECEIVED INTEREST OF ` . 20,000 OUT OF LOAN GIVEN TO SHRI KETAN. THE ASSES SING OFFICER COMPLETED THE ASSESSMENT BY ACCEPTING THE INCOME DECLARED BY THE ASSESSEE IN THE RETURN OF INCOME FILED IN RESPONSE TO NOTICE UNDER SECTION 15 3A. 3.3 FOR THE ASSESSMENT YEAR 2004-05, THE ORIGINAL R ETURN OF INCOME UNDER SECTION 139 (1) WAS FILED ON 27/10/2004 DECLARING INCOME AT ` . 4,53,810/-. IN RESPONSE TO NOTICE UNDER SECTION 153A, THE ASSESSEE FILED THE R ETURN OF INCOME FOR THE SAME INCOME ON 10/7/2006, THE ASSESSEE HAS SHOWN THE GIF T OF ` . 9,25,000/- FROM HIS UNCLE SHRI CHAMPAKLAL PAREKH ON 1.10.2003, WHO IS SETTLED IN USA. IN SUPPORT OF THE GIFT RECEIVED, THE ASSESSEE FURNISHED THE GIFT DEED SIGN ED BY SHRI ANIL PAREKH, POWER OF ATTORNEY HOLDER OF SHRI CHAMPAKLAL PAREKH. DURING THE ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER RECORDED THE STATEMENT OF THE ASS ESSEE ON 23/10/2007 AND ASKED THE ASSESSEE TO PRODUCE SHRI CHAMPAKLAL PAREKH TO P ROVE THE CREDITWORTHINESS AND GENUINENESS OF GIFT. AT THIS STAGE, THE ASSESSEE F ILED A REVISED RETURN AND OFFERED THE SAID GIFT AMOUNT OF ` . 9, 25, 000/- TO TAX. ITA NO.S 6750,6751 & 3409 SH YOGESH PARIKH 3 3.4 THE ASSESSING OFFICER WAS OF THE VIEW THAT THE REVISED RETURN CANNOT BE TERMED AND TREATED AS VALID RETURN AS IT IS NOT VO LUNTARILY SUBMITTED AS PER THE PROVISIONS OF SUB-SECTION 5 OF SECTION 139 AND ACCO RDINGLY, MADE AN ADDITION OF GIFT AMOUNT OF ` 9,25 LACS TO THE TOTAL INCOME OF THE ASSESSEE. 3.5 FOR THE ASSESSMENT YEAR 2005- 06, THE ASSESSEE FILED ORIGINAL RETURN OF INCOME ON 29/08 2005 DECLARING TOTAL INCOME OF ` . 9,95,456/-. IN THE RETURN OF INCOME FILED IN RESPONSE TO NOTICE UNDER SECTION 153A, THE ASSESSEE DECLARED AN AMOUNT OF ` 9.50 LAKH AND ACCORDINGLY, DECLARED THE TOTAL INCOME OF ` . 19,45,460/-. THE ASSESSING OFFICER FRAMED THE ASSESSMENT ON THE RETURN INCOME FILED BY THE ASSESSEE UNDER SECTION 153A. 3.6 THE PENALTY PROCEEDINGS WERE INITIATED UNDER SE CTION 271(1)(C) OF INCOME TAX ACT IN RESPECT OF THE INCOME DECLARED BY THE ASSESS EE IN THE RETURN OF INCOME FILED IN RESPONSE TO NOTICE UNDER SECTION 153A FOR THE AS SESSMENT YEAR 2003-04 AND 2005- 06 AND FOR THE ASSESSMENT YEAR 200405 AGAINST THE ADDITION OF GIFT AMOUNT OF ` . 9,25,000/-. ACCORDINGLY, THE ASSESSING OFFICER LE VIED THE PENALTY UNDER SECTION 271(1)(C), WHICH IS 150% OF TAX SOUGHT TO BE EVADED ON THE INCOME DECLARED/ADDITION MADE BY THE ASSESSING OFFICER . 3.7 ON APPEAL, THE CIT(A), THOUGH CONFIRMED THE LEV Y OF PENALTY MADE BY THE ASSESSING OFFICER ; HOWEVER, RESTRICTED THE SAME TO100% OF THE TAX SOUGHT TO BE AVAILED. 4 BEFORE US, THE LEARNED A.R. OF THE ASSESSEE HAS S UBMITTED THAT THE NOTICE UNDER SECTION 274 READ WITH SECTION 271(1)( C) OF INCOME TAX ACT ISSUED BY THE ASSESSING OFFICER IS WITHOUT ANY SPECIFIC CHARGE OF CONCEALMENT OF PARTICULARS OR FURNISHING OF INACCURATE PARTICULARS OF INCOME. THE LD AR HAS FURTHER SUBMITTED THAT ITA NO.S 6750,6751 & 3409 SH YOGESH PARIKH 4 EVEN IN THE ORDER PASSED UNDER SECTION 271(1)( C), THE ASSESSING OFFICER HAS NOT MENTIONED SPECIFICALLY WHETHER THE ASSESSEE HAS CON CEALED THE PARTICULARS OF INCOME OR FURNISHED INACCURATE PARTICULARS OF INCO ME. THE LD AR HAS REFERRED PARA 8 OF THE PENALTY ORDER AND SUBMITTED THAT THE ASSESSI NG OFFICER HIMSELF WAS NOT SURE ABOUT THE CHARGE AGAINST THE ASSESSEE; THEREFORE, T HE PENALTY ORDER IS NOT SUSTAINABLE AND VOID. IN SUPPORT OF HIS CONTENTION, HE HAS RELIED UPON THE DECISION OF HONOURABLE GUJARAT HIGH COURT IN CASE OF NEW SORATH IA ENGINEERING CO. V. COMMISSIONER OF INCOME-TAX REPORTED IN 282 ITR 64 2 AND SUBMITTED THAT WHEN THERE IS NO CLEAR CUT FINDING THAT THE PENALTY WAS LEVIED FOR CONCEALMENT OF PARTICULARS OF INCOME OR FURNISHING OF INACCURATE PARTICULARS OF I NCOME, THEN THE PENALTY COULD NOT BE SUSTAINED AND IS LIABLE TO BE CANCELLED. THUS, T HE LD AR HAS SUBMITTED THAT IN THE IDENTICAL CIRCUMSTANCES, THE HONOURABLE GUJARAT HIG H COURT HAS HELD THAT THE PENALTY ORDER IS INVALID WHEN THE ASSESSING OFFICER HAS NOT GIVEN A CLEAR CUT FINDING WHETHER THE ASSESSEE HAS CONCEALED THE PARTICULARS OF INCOME OR FURNISHED INACCURATE PARTICULARS OF INCOME. 4.1 THE 2 ND LEG OF THE ARGUMENT OF LEARNED A.R OF THE ASSESSEE IS THAT THE SEIZED DOCUMENT IS A DUMB PAPER WITHOUT ANY SIGNATURE AND NAME AND THEREFORE, THE SAME CANNOT BE THE BASIS FOR ANY ADDITION OF INCOME . HE HAS FURTHER SUBMITTED THAT THE SAID PAPER WAS NOT CONFRONTED WITH THE ASSESSEE DURING THE SEARCH PROCEEDINGS AND THEREFORE, THE SAME CANNOT BE USED AGAINST THE ASSESSEE WHEN THE ASSESSEE HAS NOT ACCEPTED THE SAME. THE INCOME DECLARED IN T HE RETURN OF INCOME FILED IN RESPONSE TO NOTICE UNDER SECTION 153A WAS TO BUY PE ACE AND TO AVOID THE LITIGATION AND THE SAME WOULD NOT AUTOMATICALLY INVOKED THE PR OVISIONS OF SECTION 271(1)(C). MOREOVER, THE ASSESSEE DISOWNED THE SAID PAPER IN H IS REPLY TO THE SHOW CAUSE NOTICE UNDER SECTION 271(1)(C). THE LEARNED A.R HAS REFERRED PARAGRAPH 3 OF THE ITA NO.S 6750,6751 & 3409 SH YOGESH PARIKH 5 ORDER PASSED UNDER SECTION 271(1)(C) AND SUBMITTED THAT THE ASSESSEE HAS CATEGORICALLY STATED THAT THE SAID PAPER DOES NOT B ELONG TO THE ASSESSEE. 4.2 AS REGARDS THE REVISED RETURN FILED FOR THE ASS ESSMENT YEAR 2004-05, THE LD AR OF THE ASSESSEE HAS REFERRED THE PROVISIONS OF SECT ION 153A AND SUBMITTED THAT AS PER CLAUSE (A) OF SUB. SECTION 1 OF SECTION 153A, THE R ETURN OF INCOME FILED UNDER THE SAID PROVISION IS TREATED, IF SUCH RETURN WERE A RETURN REQUIRED TO BE FURNISHED UNDER SECTION 139; THEREFORE, THE REVISED RETURN CAN BE F ILED AS PER SECTION 139 (5) OF THE INCOME TAX ACT AND THE ASSESSING OFFICER CANNOT TR EAT THE SAME AS INVALID. 4.3 AS REGARDS THE GIFT AMOUNT OF ` . 9,25,000/- ,THE LD AR OF THE ASSESSEE HAS SUBMITTED THAT THE GIFT WAS RECEIVED BY THE ASSESSE E FROM HIS UNCLE, WHO IS SETTLED IN USA; BUT WHEN THE ASSESSING OFFICER ASKED THE ASSE SSEE TO PRODUCE THE DONOR IN PERSON, THEN TO AVOID THE HARASSMENT TO HIS UNCLE, THE ASSESSEE OFFERED THE SAID AMOUNT TO TAX TO BUY PEACE. THE LEARNED A.R. OF THE ASSESSEE HAS SUBMITTED THAT OFFERING OF THE GIFT AMOUNT TO TAX WOULD NOT INVITE LEVY OF PENALTY UNDER SECTION 271 ONCE THE ASSESSEE FURNISHED ALL RELEVANT DOCUMENTS INCLUDING GIFT DEED AND OTHER E-MAIL CORRESPONDENCE. THE LD COUNSEL FOR THE ASSE SSEE HAS FURTHER SUBMITTED THAT THE AMOUNT OF GIFT WAS FROM THE SALE OF FLAT, WHICH HAS NOT BEEN DISPUTED BY THE DEPARTMENT. HE HAS RELIED UPON THE DECISION OF HONO URABLE MADRAS HIGH COURT IN THE CASE OF COMMISSIONER OF INCOME-TAX V. M. PACHAM UTHU REPORTED IN 295 ITR 502(MAD). 4.4 FOR THE ASSESSMENT YEAR 2005-06, THE LEARNED A. R. OF THE ASSESSEE HAS SUBMITTED THAT THE INCOME WAS OFFERED BY THE ASSESS EE VOLUNTARILY AS THE SAME CANNOT BE ADDED ON THE BASIS OF THE SEIZED MATERIAL WHICH IS A DUMB DOCUMENT. THE 3 RD LINE OF ARGUMENT OF THE LD AR OF THE ASSESSEE IS THAT THE PROVISIONS OF ITA NO.S 6750,6751 & 3409 SH YOGESH PARIKH 6 EXPLANATION 5 TO SECTION 271(1)(C) ARE NOT APPLICAB LE IN THE CASE OF THE ASSESSEE WHEN NO ADDITION WAS MADE ON THE BASIS OF SEIZED MA TERIAL AND FURTHER WHEN NO MONEY, BULLION, JEWELLERY OR OTHER VALUABLE ARTICLE S OR THINGS WAS FOUND DURING THE SEARCH, THEN IT CANNOT BE DEEMED THAT THE ASSESSEE HAS CONCEALED THE PARTICULARS OF INCOME OR FURNISHED INACCURATE PARTICULARS OF IN COME AS PER EXPLANATION 5 TO SECTION 271(1)(C). IN SUPPORT OF HIS CONTENTION, TH E LD AR OF THE ASSESSEE HAS RELIED UPON THE DECISION OF THE HONOURABLE SUPREME COURT I N CASE OF COMMISSIONER OF INCOME-TAX V. SURESH CHANDRA MITTAL REPORTED IN 251 ITR 9(SC). 4.5 HE HAS ALSO RELIED UPON THE DECISION OF COORDI NATE BENCH OF THIS TRIBUNAL IN CASE OF SANJOY SANKAR SALVI VS ACIT DATED 31/10/201 1 AS WELL AS DECISION OF DELHI BENCHES OF THIS TRIBUNAL IN CASE OF SHRI PREM ARORA VS DCIT DATED 9 TH MARCH 2012 IN ITA NUMBER 4702/DEL/2010. THE LD AR OF THE ASSESSEE HAS SUBMITTED THAT IN THE IDENTICAL FACTS, THE COORDINATE BENCH OF THIS TRIBUNAL IN CAS E OF SANJOY SANKAR SALVI (SUPRA) HAS CANCELLED THE PENALTY LEVIED BY THE ASSESSING OFFIC ER. HE HAS POINTED OUT THAT IN CASE OF SHRI PREM ARORA (SUPRA), THE DELHI BENCHES OF THE TRIBUNAL HAS HELD THAT NO PENALTY UNDER SECTION 271(1)(C) IS LEVIABLE WHEN TH ERE IS NO VARIATION IN THE RETURN OF INCOME AND TOTAL INCOME ASSESSED BY THE ASSESSING O FFICER UNDER SECTION 153. 4.6 ON THE OTHER HAND, THE LD DR HAS SUBMITTED THA T IN PARAGRAPH 5 OF THE PENALTY ORDER THE ASSESSING OFFICER HAS SPECIFICAL LY MENTIONED THAT HAD THERE BEING NO SEARCH THE CONCEALMENT/FILING OF INACCURATE PARTICULARS OF INCOME WOULD HAVE NEVER COME TO LIGHT. THE LEARNED D.R. HAS THEN REFERRED TO PARA 6 OF TH E ASSESSMENT ORDER FOR THE ASSESSMENT YEAR 2003-04 AN D SUBMITTED THAT THE ASSESSING OFFICER HAD SPECIFICALLY MENTIONED THAT THE ASSESS EE DECLARED THE ADDITIONAL INCOME ON ACCOUNT OF THE SEIZED MATERIAL AND NOTING S THEREIN AND THEREFORE, THE ITA NO.S 6750,6751 & 3409 SH YOGESH PARIKH 7 PENALTY PROCEEDINGS UNDER SECTION 271(1)(C) READ WI TH EXPLANATION 5 WERE INITIATED SEPARATELY. THE LD DR HAS RELIED UPON THE ORDERS OF THE AUTHORITIES BELOW. 5 WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AS WELL AS RELEVANT MATERIAL ON RECORD. THE ASSESSING OFFICER HAS RELIED UPON THE SEIZED MATERIAL BEING THE DOCUMENT AT PAGE NUMBER 51 OF ANNEXURE A-1 HAVING S OME NOTINGS REGARDING THE INTEREST OF ` 20,000/- UP TO 31ST OF MARCH 2003 AND OTHER ENTRIE S REGARDING SOME FIGURES FOR AIR TICKET INTEREST FROM APRIL TO FEB 2 005 . 5.1 FOR THE ASSESSMENT YEAR 2003-04, AS PER THE SEI ZED DOCUMENT ONLY ` . 20,000/- WAS SHOWN AS INTEREST AND NOTHING ELSE HAS BEEN MEN TIONED IN THE SAID DOCUMENT. THE ASSESSEE OFFERED ` 2 LAKH IN THE RETURN FILED IN RESPONSE TO THE NOT ICE UNDER SECTION 153A. EVEN, AS PER THE SAID DOCUMENT MORE THAN ` . 20,000/- CANNOT BE TREATED AS UNDISCLOSED INCOME OF THE ASSESSEE; THER EFORE, THE REMAINING AMOUNT OF ` . 1,80,000/- IS NOTHING BUT A VOLUNTARY DECLARATION BY THE ASSESSEE AND NOT BASED ON THE SEIZED MATERIAL. THE INCOME RETURNED BY THE AS SESSEE, WHICH IS OTHERWISE CANNOT BE ADDED ON THE BASIS OF SEIZED MATERIAL, WOULD NOT AUTOMATICALLY LEAD TO THE CONCLUSION THAT THE ASSESSEE HAS CONCEALED PARTICUL ARS OF INCOME OR FURNISHED INACCURATE PARTICULARS OF INCOME. FURTHER, THE EXP LANATION 5 TO SECTION 271(1)( C) IS APPLICABLE ONLY IN THE CASES WHEN THE ADDITIONAL IN COME HAS BEEN ADMITTED BY THE ASSESSEE BECAUSE OF SOME INCRIMINATING MATERIAL SHO WING MATERIAL SHOWING UNDISCLOSED INCOME FOUND AND SEIZED DURING THE SEAR CH AND SEIZURE ACTION. 5.2 FOR THE ASSESSMENT YEAR 2003-04, THE INCRIMINAT ING MATERIAL SHOWS ONLY ` . 20,000/- AS INTEREST AND THEREFORE, IT CANNOT BE PRESUMED IN THE ABSENCE OF ANY MATERIAL OR INFORMATION THAT THE ADDITIONAL INCOME OFFERED BY THE ASSESSEE IS ITA NO.S 6750,6751 & 3409 SH YOGESH PARIKH 8 OTHERWISE LIABLE TO BE ADDED TO THE INCOME OF THE A SSESSEE ON THE BASIS OF SEIZED MATERIAL. 5.3 FOR THE ASSESSMENT YEAR 2004-05, THE GIFT OF ` . 9,25,000/- WAS ALREADY SHOWN IN THE CAPITAL ACCOUNT OF THE ASSESSEE; THEREFORE, THE SAID AMOUNT WAS ALREADY RECORDED IN THE BOOKS OF ACCOUNTS AND CANNOT BE SAI D THAT THE ADDITIONAL INCOME OFFERED BY THE ASSESSEE WAS BECAUSE OF SOMETHING, W HICH WAS NOT RECORDED IN THE BOOKS OF ACCOUNT; BUT ONLY BECAUSE OF SEIZED MATERI AL. ONCE THE GIFT WAS DULY SHOWN IN THE BOOKS OF ACCOUNTS, THEN THE EXPLANATIO N 5 TO SECTION 271 (1)(C)WOULD NOT APPLY. IT APPEARS FROM THE ASSESSMENT ORDER TH AT DURING THE COURSE OF ASSESSMENT PROCEEDING, THE ASSESSING OFFICER ASKED THE ASSESSEE TO PRODUCE HIS UNCLE, WHO HAS GIVEN THIS GIFT TO THE ASSESSEE AND ONLY AT THIS POINT AND STAGE, THE ASSESSEE DECIDED TO OFFER THE SAID AMOUNT TO TAX. 5.4 IT IS APPARENT AND MANIFEST FROM THE FACTS AND CIRCUMSTANCES OF THE CASE THAT TO AVOID THE HARASSMENT OF BRINGING HIS UNCLE FROM ABROAD AND TO PRODUCE BEFORE THE ASSESSING OFFICER, THE ASSESSEE HAS OFFERED THE GIFT AMOUNT TO TAX. THE ASSESSING OFFICER HIMSELF HAS RECORDED THE FACT THAT IN THE E -MAIL CORRESPONDENCE, THE UNCLE OF THE ASSESSEE HAS ACCEPTED THE SAID AMOUNT. EVEN THE SOURCE OF THE GIFT WAS ALSO EXPLAINED AS THE SALE PROCEED OF FLAT AND THEREFORE , THOUGH THE ASSESSEE OFFERED THE SAID AMOUNT TO TAX, THE SAME WAS NOT HELD AS A BOGU S. 5.5 FURHTER, IN THE PENALTY PROCEEDINGS, THE ASSESS ING OFFICER HAS NOT CONDUCTED ANY ENQUIRY TO PROVE AND ESTABLISH THAT THE GIFT IN ITIALLY CLAIMED BY THE ASSESSEE WAS A BOGUS CLAIM OF THE ASSESSEE. 5.6 ON THE QUESTION OF REVISED RETURN FILED BY THE ASSESSEE, THE PROVISIONS OF SECTION 153A CLEARLY STIPULATES THAT THE RETURN FIL ED IN RESPONSE TO NOTICE UNDER ITA NO.S 6750,6751 & 3409 SH YOGESH PARIKH 9 SECTION 153A WILL BE TREATED AS RETURN FILED UNDER SECTION 139 AND ALL OTHER PROVISIONS OF THE ACT ARE APPLICABLE. HENCE, ONCE THE RETURN FILED IN RESPONSE TO NOTICE U/S SECTION 153A IS TREATED AS RETURN FILED UNDER SECT ION 139, THEN IF ASSESSEE FILED A REVISED RETURN WITHIN THE PERMISSIBLE PERIOD OF TIM E AS PROVIDED UNDER SECTION 139(5), THE SAME CANNOT BE REJECTED OR TREATED INVALID; THO UGH FOR THE PURPOSE OF PENALTY THE ASSESSING OFFICER COULD TREAT THE ACTION OF THE ASSESSEE AS NOT VOLUNTARY; BUT BECAUSE OF THE INVESTIGATION AND ENQUIRY OF THE ASS ESSING OFFICER. THEREFORE, THE REVISED RETURN FILED BY THE ASSESSEE WITHIN THE PER IOD OF LIMITATION AS PRESCRIBED UNDER SECTION 139 (5), CANNOT BE HELD INVALID. IT IS TO BE NOTED THAT WHEN THE ASSESSEE HAS ALREADY RECORDED THE GIFT AMOUNT IN THE BOOKS OF AC COUNT AND ONLY TO AVOID THE INCONVENIENCE AND HARASSMENT TO HIS UNCLE, THE ASSE SSEE OFFERED THE SAME TO TAX, WOULD NOT AUTOMATICALLY LEAD TO THE CONCLUSION THAT THE ASSESSEE HAD FURNISHED INACCURATE PARTICULARS OF INCOME OR CONCEALED PARTI CULARS OF INCOME IN THE ABSENCE OF ANY CONCLUSIVE FINDING THAT THE CLAIM OF THE ASS ESSEE WAS A BOGUS. 5.7 SIMILARLY, FOR THE ASSESSMENT YEAR 200506, THE INCOME OFFERED BY THE ASSESSEE IN THE RETURN FILED IN RESPONSE TO SECTION 153A DOE S NOT BORNE OUT FROM THE SEIZED MATERIAL. WHEN THERE IS NO CO-RELATION AND NEXUS O F THE ADDITIONAL INCOME OFFERED BY THE ASSESSEE AND THE FIGURES RETURN IN THE SEIZE D DOCUMENTS, THEN IT CANNOT BE SAID THAT THE ADDITIONAL INCOME ADMITTED IN THE RET URN OF INCOME FILED UNDER SECTION 153A IS BASED ON SOME INCRIMINATING MATERIAL OR INF ORMATION FOUND DURING THE COURSE OF SEARCH AND SEIZURE ACTION. 5.8 FURTHER, IN THE CASE OF SANJOY SANKAR SALVI (SU PRA), THE COORDINATE BENCH OF THIS TRIBUNAL HAS DEALT WITH A SIMILAR ISSUE IN PAR A 7 AND 8 AS UNDER: 7. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS, PERUSE D THE RECORD AND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW AS THE DEC ISION CITED. IN THE COURSE OF SEARCH SOME MATERIAL WAS FOUND. WHEN THE ASSESSE E FILED REVISED RETURN OF ITA NO.S 6750,6751 & 3409 SH YOGESH PARIKH 10 INCOME IN PURSUANCE TO SECTION 153A OF THE ACT, SOM E ADDITIONAL INCOME WAS DECLARED VOLUNTARILY. DURING THE COURSE OF ASSESSME NT PROCEEDINGS, NO VERIFICATION AND ENQUIRY WAS MADE BY THE ASSESSING OF FICER AND ACCEPTED WHATEVER INCOME DECLARED BY ASSESSEE. EVEN IN THE CO URSE OF PENALTY PROCEEDINGS, THE ASSESSING OFFICER WITHOUT INVESTIGA TING AND WITHOUT MAKING ANY ENQUIRY INTO THE FACTS OF THE CASE SIMPLY IMPOS ED PENALTY REJECTING THE EXPLANATION OFFERED BY THE ASSESSEE. THE LEARNED CIT (A) CONFIRMED THE PENALTY BY FOLLOWING THIRD MEMBER DECISION OF ITAT, AHMEDABAD B THIRD MEMBER BENCH, IN ASST. COMMISSIONER OF INCOME-TAX IN THE CASE OF KIRIT DAHYABHAI PATEL. ON PERUSAL OF THE SAID CASE, WE FI ND THE SAID CASE IS NOT APPLICABLE TO THE FACTS OF THE CASE. WE FIND THAT T HE JUDGMENT OF THE HONBLE SUPREME COURT IN THE CASE OF CIT VS. SURESH CHANDRA MI TTAL, (SUPRA), ON WHICH RELIANCE PLACED BY THE ASSESSEE, IS SQUARELY APPLICA BLE TO THE FACTS OF THE CASE UNDER CONSIDERATION. THE HONBLE SUPREME COURT AFF IRMED THE DECISION OF THE MADHYA PRADESH HIGH COURT IN THE SAID CASE AND THE FACTS OF THE SAID CASE ARE AS UNDER: THE ASSESSEE HAD ORIGINALLY FILE D RETURNS SHOWING MEAGRE INCOME. WHEN, AFTER ACTION U/S 132 OF THE INCOME-TA X ACT, A NOTICE UNDER SECTION 148 WAS SERVED ON HIM, HE FILED REVISED RETU RNS SHOWING HIGHER INCOME. EVENTUALLY, ASSESSMENT ORDERS WERE PASSED A ND THE RETURNS SUBMITTED REGULARIZED UNDER SECTION 148. IN PENALTY PROCEEDINGS U/S 271, THE ASSESSEE CLAIMED THAT HE HAD OFFERED ADDITIONAL INCOME TO BU Y PEACE OF MIND AND AVOID LITIGATION. PENALTY ORDERS WERE PASSED AND TH E CIT(A) CONFIRMED THE ORDERS. BUT THE APPELLATE TRIBUNAL HELD THAT THE DEP ARTMENT HAD NOT DISCHARGED ITS BURDEN OF PROVING CONCEALMENT AND HAD SIMPLY RESTED ITS CONCLUSION ON THE ACT OF VOLUNTARY SURRENDER DONE BY THE ASSESSEE IN GOOD FAITH, AND THAT PENALTY COULD NOT BE LEVIED. ON A R EFERENCE, THE HIGH COURT HELD THAT NO PENALTY COULD BE LEVIED FOR CONCEALMENT . THE DEPARTMENT PREFERRED APPEALS TO SUPREME COURT. THE SUPREME COURT DISMISSED THE APPEALS HOLDING THAT NO INTERFERENCE WITH THE ORDER OF THE HIGH COURT WAS CALLED FOR AND THE DECISION OF THE HIGH COURT WAS A FFIRMED BY THE HONBLE SUPREME COURT. 8. IN THE PRESENT CASE, THE ASSESSEE ORIGINALLY FILE D RETURN OF INCOME BY SHOWING SOME INCOME AND AFTER ACTION U/S 132, THE AS SESSEE FILED REVISED RETURN OF INCOME U/S 153A, WHICH WAS .ACCEPTED BY THE AO. EVEN IN THE PENALTY PROCEEDINGS, THE AO HAS NOT MADE ANY INVESTI GATION OR ENQUIRY WITH REGARD TO THE INCOME SHOWN BY THE ASSESSEE. IT WAS S UBMITTED BEFORE US, THE ADDITIONAL INCOME SHOWN BY THE ASSESSEE VOLUNTARILY IN GOOD FAITH AND BONA- FIDE BELIEF THAT NO PENALTY PROCEEDINGS WOULD BE LE VIED. WE FIND THAT THE FACTS OF THE CASE UNDER CONSIDERATION ARE SIMILAR TO THAT OF THE CASE DECIDED BY THE HONBLE SUPREME COURT IN THE CASE OF CIT VS. SURESH CHANDRA MITTAL, (SUPRA). THEREFORE, RESPECTFULLY FOLLOWING THE SAID J UDGMENT, WE SET ASIDE THE ORDER OF THE CIT(A) AND DELETE THE PENALTY LEVIED B Y THE AO U/S 271(1)(C) OF THE ACT IN ALL THE YEARS UNDER CONSIDERATION. 5.9 SIMILARLY, IN THE CASE OF SHRI PREM ARORA (SUPR A), THE DELHI BENCH OF THIS TRIBUNAL HAS HELD IN PARAGRAPH 9 TO 12 AS UNDER: ITA NO.S 6750,6751 & 3409 SH YOGESH PARIKH 11 9. WE HAVE HEARD BOTH THE PARTIES AND GONE THROUGH TH E MATERIAL AVAILABLE ON RECORD. THE FIRST CONTENTION OF LD. AR OF THE ASS ESSEE IS THAT THE RETURN OF INCOME FILED UNDER SEC. 153A IS VOLUNTARY AND ASSESSE E CAN DECLARE THE INCOME, WHICH WAS NOT EARLIER DISCLOSED. ON THE OTHER HAND, THE CONTENTION OF THE REVENUE IS THAT THE RETURN FILED UNDER SEC. 153 A, IS NOT VOLUNTARY AND IS INTENDED TO ASSESS THE UNDISCLOSED INCOME. SEC. 153 A WAS INSERTED INTO STATUTE WITH EFFECT FROM 1ST JUNE, 2003 BY THE FINAN CE ACT, 2003 WHICH READS AS UNDER: 153A NOTWITHSTANDING ANYTHING CONTAINED IN SECTION 139, SECTION 147, SECTION 148, SECTION 149, SECTION 151 AND SECTION 1 53, IN THE CASE OF A PERSON WHERE A SEARCH IS INITIATED UNDER SECTION 132 OR BOOKS OF ACCOUNT, OTHER DOCUMENTS OR ANY ASSETS ARE REQUISITIONE D UNDER SECTION 132A AFTER THE 31ST DAY OF MAY, 2003, THE AS SESSING OFFICER SHALL (A) ISSUE NOTICE TO SUCH PERSON REQUIRING HIM TO FURNI SH WITHIN SUCH PERIOD, AS MAY BE SPECIFIED IN THE NOTICE, THE RETUR N OF INCOME IN RESPECT OF EACH ASSESSMENT YEAR FALLING WITHIN SIX AS SESSMENT YEARS REFERRED TO IN CLAUSE (B), IN THE PRESCRIBED FORM AND V ERIFIED IN THE PRESCRIBED MANNER AND SETTING FORTH SUCH OTHER PARTI CULARS AS MAY BE PRESCRIBED AND THE PROVISIONS OF THIS ACT SHALL, SO FAR AS MAY BE, APPLY ACCORDINGLY AS IF SUCH RETURN WERE A RETURN REQUIRED TO B E FURNISHED UNDER SECTION 139; (B) ASSESS OR REASSESS THE TOTAL INCOME OF SIX ASSESS MENT YEARS IMMEDIATELY PRECEDING THE ASSESSMENT YEAR RELEVANT TO THE PREVIOUS YEAR IN WHICH SUCH SEARCH IS CONDUCTED OR REQUISITION IS MADE: PROVIDED THAT THE ASSESSING OFFICER SHALL ASSESS OR REASSESS THE TOTAL INCOME IN RESPECT OF EACH ASSESSMENT YEAR FALLING WI THIN SUCH SIX ASSESSMENT YEARS: PROVIDED F URTHER THAT ASSESSMENT OR REASSESSMENT, IF ANY, RELAT ING TO ANY ASSESSMENT YEAR FALLING WITHIN THE PERIOD OF SIX ASSE SSMENT YEARS REFERRED TO IN THIS SECTION PENDING ON THE DATE OF I NITIATION OF THE SEARCH UNDER SECTION 132 OR MAKING OF REQUISITION UNDER SECTI ON 132A, AS THE CASE MAY BE, SHALL ABATE. EXPLANATION. FOR THE REMOVAL OF DOUBTS, IT IS HEREBY DECLARED THAT , (I) SAVE AS OTHERWISE PROVIDED IN THIS SECTION, SECT ION 153B AND SECTION 153 C, ALL OTHER PROVISIONS OF THIS ACT SHALL APPLY TO THE ASSESSMENT MADE UNDER THIS SECTION; (II) IN AN ASSESSMENT OR REASSESSMENT MADE IN RESPECT OF AN ASSESSMENT YEAR UNDER THIS SECTION, THE TAX SHALL BE CHARGEABLE AT THE RATE OR RATES AS APPLICABLE TO SUCH ASSESSMENT YEAR. 10. ON BARE READING OF SEC. 153A IT IS SEEN THAT THI S SECTION STARTS WITH A NON- OBSTANTE CLAUSE RELATING TO NORMAL ASSESSMENT PROCEDURE COVERED BY ITA NO.S 6750,6751 & 3409 SH YOGESH PARIKH 12 SECTIONS 139, 147, 148, 149, 151 AND 153 IN RESPECT OF SEARCHES MADE AFTER 31ST MAY, 2003. THE SECTIONS, SO EXCLUDED, RELATE TO FILI NG OF RETURN, ASSESSMENT AND RE-ASSESSMENT PROCEEDINGS. FURTHER SECTION 153A INTE NDS TO ASSESS OR REASSESS TOTAL INCOME OF SIX ASSESSMENT YEARS IMMEDIATELY PRE CEDING THE ASSESSMENT YEAR RELEVANT TO THE PREVIOUS YEAR IN WHICH SUCH SEA RCH IS CONDUCTED OR REQUISITION IS MADE. THUS THE LEGISLATIVE INTENTION IS NOT TO ASSESS ESCAPED INCOME AS IN SECTION 147 OR UNDISCLOSED INCOME AS W AS ASSESSED ULS 158BC OF THE ACT. THE FIRST PROVISO TO SEC. 153A MAKES IT CL EAR, THAT NOTICE UNDER SEC. 153A WILL BE FOR EACH SUCH SIX ASSESSMENT YEARS FOR A SSESSMENT OR RE- ASSESSMENT OF TOTAL INCOME. SECOND PROVISO TO SECTIO N 153A PROVIDES THAT SUCH NOTICE WILL HAVE THE EFFECT OF ABATING ALL THE PENDING ASSESSMENT OR RE- ASSESSMENT PROCEEDINGS, SO AS TO AVOID MULTIPLICITY OF PROCEEDINGS, WHICH WAS A FEATURE OF BLOCK ASSESSMENT. HONBLE ALLAHABAD HIGH COURT IN THE CASE CIT (CENTRAL), KANPUR V SHAILA AGARWAL [2011] 16 TAXM ANN.COM 232 (ALL.) HAS HELD THAT THE WORD ABATEMENT IS REFERABLE TO SOMETH ING, WHICH IS PENDING ALIVE, OR IS SUBJECT TO DEDUCTION. THE ABATEMENT REFE RS TO SUSPENSION OR TERMINATION OF THE PROCEEDINGS EITHER OF THE MAIN AC TION, OR THE PROCEEDINGS ANCILLARY OR COLLATERAL TO IT. THE WORD IS COMMONLY USE D IN THE LEGISLATIONS, WHICH PROVIDE FOR ABATEMENT OF ACTION/SUIT; ABATEMEN T OF LEGACIES; ABATEMENT OF NUISANCE; AND ALL ACTIONS FOR SUCH NATU RE, WHICH HAVE THE PENDENCY OR CONTINUANCE. THE PROCEEDINGS, WHICH HAVE ALREADY TERMINATED ARE NOT LIABLE FOR ABATEMENT UNLESS STATUTE EXPRESSLY PROVIDES FOR SUCH CONSEQUENCE THEREOF. THE WORD PENDING OCCURRING IN THE SECOND PROVISO TO SECTION 153A OF THE ACT, IS ALSO SIGNIFICANT. IT IS QUALIFIED BY THE WORDS ON THE DATE OF INITIATION OF THE SEARCH , AND MAKES IT AB UNDANTLY CLEAR THAT ONLY SUCH ASSESSMENT OR REASSESSMENT PROCEEDINGS ARE LIABL E TO ABATE. THE PENDENCY OF AN APPEAL IN THE TRIBUNAL AGAINST THE O RDER OF ASSESSMENT AGAINST WHICH AN APPEAL HAS BEEN DECIDED BY COMMISS IONER (APPEALS) IS NOT A CONTINUATION OF THE PROCEEDINGS OF ASSESSMENT. 11. THUS WHILE SECTION 153A PRESCRIBES FOR ASSESSME NT OR REASSESSMENT OF TOTAL INCOME IN SEARCH CASES, SECTION 153B PRESCRIBES THE T IME LIMIT FOR COMPLETION OF ASSESSMENT UNDER SEC. 153A. SECTION 153C RELATES T O THE CASES WHERE BOOKS OF ACCOUNTS OR DOCUMENTS OR ASSETS SEIZED UNDER SEC. 132 OR REQUISITION MADE UNDER SEC. 1 32A BELONG TO A PERSON OTHER THAN A PERSON IN WHOSE CASE SEARCH UNDER SEC. 132 OR REQUISITION UNDER SEC. 1 32A WAS MADE. THUS PROVISIONS OF SECTIONS 153A, 153B AND 153C ARE COMPL ETE CODE FOR SEARCH ASSESSMENTS WHEREIN SEARCH HAS BEEN INITIATED AFTER 3 1ST MAY, 2003. THE EXISTENCE OF THE WORDS ALL OTHER PROVISIONS OF THIS ACT SHALL APPLY TO THE ASSESSMENT MADE UNDER THIS SECTION IN EXPLANATION (I) OF SECTION 153A MAKES IT CLEAR THAT IN SEARCH ASSESSMENTS, AMONGST OTHERS T HE PROVISIONS RELATING TO PENALTY AND PROSECUTION WILL ALSO BE APPLICABLE. HO WEVER, WHEN NORMAL ASSESSMENT PROCEDURE COVERED BY SECTIONS 139, 147, 148 , 149, 151 AND 153 HAS BEEN COMPLETELY EXCLUDED BY OPERATION OF NON-OBS TANTE CLAUSE NOTWITHSTANDING ANYTHING CONTAINED THE SEARCH ASSE SSMENTS MADE ULS SECTION 153A OF THE ACT CANNOT BE TREATED AS CONTIN UANCE OF NORMAL ASSESSMENT PROCEEDINGS WHETHER ABATED OR NOT. THUS TH ERE IS COMPLETE DETACHMENT OF ASSESSMENT PROCEEDINGS U/S 143 OR 147 F ROM SEARCH PROCEEDINGS U/S 153A OF THE ACT. WHEN SCHEME OF SEA RCH ASSESSMENT AS DESIGNED BY THE LEGISLATURE DOES NOT PRESCRIBE TO TA KE INTO ACCOUNT THE EARLIER ASSESSMENT PROCEEDINGS WHETHER ABATED OR NOT, IT WILL NOT BE PROPER OR ITA NO.S 6750,6751 & 3409 SH YOGESH PARIKH 13 JUSTIFIED TO REFER TO RETURNED INCOME U/S 139 FOR THE PURPOSE IMPOSITION OF PENALTY U/S 271(1 )(C) OF THE ACT. IT FOLLOWS THAT THE CONCEALMENT OF INCOME HAS TO BE SEEN WITH REFERENCE TO ADDITIONAL INCOME B ROUGHT TO TAX OVER AND ABOVE RETURNED BY THE ASSESSEE IN RESPONSE TO NOTICE ISSUED U/S 153A OF THE ACT. ACCORDINGLY IN OUR CONSIDERED OPINION FOR THE PURP OSE OF IMPOSITION OF PENALTY U/S 271(1)(C) RESULTING AS A RESULT OF SEARC H ASSESSMENTS MADE U/S153A, THE ORIGINAL RETURN OF INCOME FILED U/S 139 CANNOT BE CONSIDERED. 12. FURTHER IN CASE OF SEARCH INITIATED AFTER 1.6.2003 A RETURN OF INCOME IS ALWAYS FILED ON ISSUE OF NOTICE U/S 153A. AS HELD A BOVE THE PENALTY U/S 271(1)(C) IS IMPOSABLE WHEN THERE IS VARIATION IN AS SESSED AND RETURNED INCOME. IF THERE IS NO VARIATION, THERE WILL BE NO C ONCEALMENT. WHEN THERE IS NO CONCEALMENT, QUESTION LEVY OF PENALTY ULS 271(1) (C) OF THE ACT WILL NOT ARISE. THIS IS SETTLED POSITION OF LAW. THE CONCEPT OF VOLUNTARY RETURN OF INCOME MAY BE IMPORTANT IN PENALTY PROCEEDINGS INITIATED IN COURSE OF NORMAL ASSESSMENT PROCEEDINGS MADE U/S 143(3) OR 147 BUT N OT U/S 153A. FROM ABOVE DISCUSSION IT FOLLOWS THAT WHERE RETUNED INCOME FILED U/S 153A IS ACCEPTED BY THE ASSESSING OFFICER, THERE WILL BE NO CONCEALMENT OF INCOME AND CONSEQUENTLY PENALTY U/S 171(1)(C) CANNOT BE IM POSED. 6 IN VIEW OF THE ABOVE DECISIONS OF THE COORDINATE BENCHES OF THIS TRIBUNAL AS WELL AS IN THE FACTS AND CIRCUMSTANCES OF THE PRESE NT CASE, WE CANCEL THE PENALTY LEVIED UNDER SECTION 271(1)(C) OF THE I T ACT. 7 IN THE RESULT, HE APPEALS FILED BY THE ASSESSEE A RE ALLOWED ORDER PRONOUNCED IN THE OPEN COURT ON THE 25 TH , DAY OF JULY 2012. SD/- SD/- ( RAJENDRA ) ACCOUNTANT MEMBER ( VIJAY PAL RAO ) JUDICIAL MEMBER PLACE: MUMBAI : DATED: 25 TH ,JULY 2012 RAJ* ITA NO.S 6750,6751 & 3409 SH YOGESH PARIKH 14 COPY FORWARDED TO: 1 APPELLANT 2 RESPONDENT 3 CIT 4 CIT(A) 5 DR /TRUE COPY/ BY ORDER DY /AR, ITAT, MUMBAI