Shri Ajit Kumar Surana, Kolkata V. A.C.I.T CC - XVIII,kolkata, Kolkata

ITA 835/KOL/2013

• Counselvise Citation: [2014] 120 COUNSELVISE.COM (IT) 5624 (ITAT-KOLKATA)
• Duration Of Justice: 11 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-03-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2006-2007
• Appeal Filed On: 17-04-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: VARINDER MEHTA
• Assessee Lawyers: S M SURANA
• Keywords: Income from undisclosed sources; Search and seizure; Document seized; Initiation of penalty proceedings; Accommodation entries; Block assessment; Revised return; Documents seized; Reassessment proceedings
• Section: 143(3); 153A; 139(5); 131; 132; 139

Judgement Text

I.T.A. NOS.: 835-839/KOL./2013 ASSESSMENT YEARS : 2006-07, 2007-08, 2009-10, 2010 -11 & 2010-11 PAGE 1 TO 34 1 IN THE INCOME TAX APPELLATE TRIBUNAL, KOLKATA B BENCH, KOLKATA CORAM : SHRI MAHAVIR SINGH (JUDICIAL MEMBER) AND SHRI ABRAHAM P. GEORGE (ACCOUNTANT MEMBER) I.T.A. NOS.: 835, 836, 837, 838 & 839/KOL./ 2013 ASSESSMENT YEAR : 2006-07, 2007-08, 2009-10, 2010-1 1 & 2010-11 SHRI AJIT KUMAR SURANA,.................... ..........APPELLANT FLAT NO. 1B, 29, SHAKESPEARE SARANI, KOLKATA-700 017 [PAN :ALBPS 1149 Q] -VS.- ASSISTANT COMMISSIONER OF INCOME TAX,.............. ...RESPONDENT CENTRAL CIRCLE-XVIII, KOLKATA APPEARANCES BY: SHRI S.M. SURANA, ADVOCATE, FOR THE ASSESSEE SHRI VARINDER MEHTA, CIT, D.R., FOR THE DEPARTMENT DATE OF CONCLUDING THE HEARING : MARCH 06, 2014 DATE OF PRONOUNCING THE ORDER : MARCH 18, 2014 O R D E R PER ABRAHAM P. GEROGE: 1. THESE ARE APPEALS FILED BY THE ASSESSEE AGAINST PENALTY LEVIED UNDER SECTION 271(1)(C) OF THE ACT FOR ASSESSMENT YEARS 2 006-07, 2007-08 AND 2009-10, AND UNDER SECTION 271(1)(C) AS WELL AS SEC TION 271AAA FOR ASSESSMENT YEAR 2010-11, WHICH WERE CONFIRMED BY LD . COMMISSIONER OF THE INCOME TAX (APPEALS), CENTRAL-II, KOLKATA, BY H IS ORDERS DATED 08.03.2013, 08.03.2013, 11.03.2013, 12.03.2013, 12. 03.2013 RESPECTIVELY. 2. FACTS RESULTING IN THE LEVY OF PENALTY FOR ALL T HE YEARS CAN BE PUT IN A SHORT COMPASS. DEPARTMENT DURING THE COURSE OF AN INVESTIGATION BASED ON INFORMATION FROM FINANCIAL INTELLIGENCE UNIT (IN SHORT FIU) CAME TO KNOW THAT HUGE SUMS OF MONEY WERE DEPOSITED AND WIT HDRAWN FROM CERTAIN BANK ACCOUNTS WITH M/S. VIJAYA BANK IN THE NAME OF THE FOLLOWING FIVE INDIVIDUALS:- I.T.A. NOS.: 835-839/KOL./2013 ASSESSMENT YEARS : 2006-07, 2007-08, 2009-10, 2010 -11 & 2010-11 PAGE 1 TO 34 2 (1) VIJAY SANKAR PANDEY, (2) PRADIP ROY CHOWDHURY, (3) BISWAMOY MUKHERJEE, (4) SOHANLAL JAIN, (5) GOPAL KUMAR AGARWAL, 3. IT SEEMS SUMMONS UNDER SECTION 131 OF THE ACT WE RE ISSUED ON THE ABOVE PERSONS FOR EXPLAINING THE SOURCE OF THE DEPO SITS. IN RESPONSE TO SUCH SUMMONS, PRADIP ROY CHOWDHURY AND BISWAMOY MUK HERJEE AMONG THE ABOVE FIVE PERSONS APPEARED BEFORE DDIT(INVESTI GATION), UNIT-III, KOLKATA AND STATED IN THEIR STATEMENTS GIVEN ON 30. 12.2009 THAT EXISTENCE OF SUCH ACCOUNTS, CAME TO THEIR KNOWLEDGE ONLY WHEN THEY RECEIVED LETTERS FROM THE BANK IN MARCH 2009. THEIR VERSION WAS THAT ASSESSEE WAS THEIR YOUTH TIME FRIEND, AND THEY HAD ACCOMMODATED HIM BY SIGNING BANK ACCOUNTS OPENING FORM AND CHEQUES. IN OTHER WORDS, ACCORDING TO THEM, EXCEPT FOR SIGNING THE FORMS, THEY HAD NO KNOWLEDGE AS TO THE TRANSACTIONS IN THE BANK ACCOUNTS IN THEIR NAMES. 4. ON 28.01.2010, ASSESSEE WROTE A LETTER TO DDIT ( INVESTIGATION), OWNING UP THE BANK ACCOUNTS IN THE NAME OF ABOVE ME NTIONED PERSONS, AS HIS, ALONG WITH AN AFFIDAVIT. ASSESSEE ALSO OFFERED TO PAY TAX ON THE DEPOSITS THEREIN, AND REQUESTED THE DEPARTMENT TO S EIZE THE BALANCE IN SUCH BANK ACCOUNTS AND ADJUST THE AMOUNTS AGAINST H IS TAX LIABILITY. IT WAS ALSO MENTIONED THEREIN THAT HE WAS VOLUNTARILY OFFE RING RS. 8 CRORES AS HIS UNDISCLOSED INCOME NOT FORMING PART OF REGULAR RETU RNS, OUT OF WHICH RS.5 CRORES WAS STATED AS FOR ASSESSMENT YEAR 2009-10 AN D BALANCE RS.3 CRORES AS FOR ASSESSMENT YEAR 2010-11. THEREAFTER ON 23.02 .2010, A SEARCH UNDER SECTION 132 WAS CARRIED OUT IN ASSESSEES PREMISES. AS PER THE ASSESSING OFFICER DOCUMENTS WITH IDENTIFICATION MARKS AKS/OFF /1 TO AKS/OFF/18 AND AKS/OFF/PD/1 WERE SEIZED IN SUCH SEARCH APART F ROM CASH OF RS.50,000/-. NATURE OF DOCUMENTS SEIZED IS BEST ILL USTRATED BY THE OBSERVATIONS OF THE ASSESSING OFFICER IN THIS REGAR D, APPEARING IN THE I.T.A. NOS.: 835-839/KOL./2013 ASSESSMENT YEARS : 2006-07, 2007-08, 2009-10, 2010 -11 & 2010-11 PAGE 1 TO 34 3 ASSESSMENT ORDER FOR ASSESSMENT YEAR 2009-10, WHICH IS REPRODUCED HEREUNDER:- SEARCH AND SEIZURE OPERATIONS U/S 132 OF THE INCOM E TAX ACT, 1961 WERE CONDUCTED IN THE CASE OF AJIT KUMAR SURAN A & ORS. ON 23.02.2010 AND ON SUBSEQUENT DATES. THIS INCLUDE D SEARCH AT THE RESIDENCE OF SURANA FAMILY AT 29, SHAKESPEARE S ARANI, FLAT NO. 1B, KOLKATA-17 AND ALSO AT THE OFFICE PREMISE A T 126A, SARAT BOSE ROAD, KOLKATA 26. SEARCH WARRANT WAS EXE CUTED IN THE NAME OF THE ASSESSEE, SRI AJIT KUMAR SURANA, AN D PANCHANAMAS WERE DRAWN ON 24.02.2010 AND 19.04.2010 AT THE ASSESSEES OFFICE ADDRESS AT 126A, SARAT BOSE ROAD, GROUND FLOOR, KOLKATA-700,029. THIS APART, PANCHANAMA WAS ALSO DRAWN IN THE ASSESSEES NAME AT HIS RESIDENTIAL ADD RESS AT FLAT NO. 1B, 29, SHAKESPEARE SARANI, KOLKATA 700 017 ON 24.02.2010 ALSO AT THE RESIDENCE ONE CD MARKED AKS/LT/1, BUNCH ES OF PAPER MARKED AKS/1 & AKS/2, TWO LOCKERS JEYS AS PER ANNEXURE-O (THESE LOCKERS BELONG TO SRI GHEWAR CH AND SURANA WITH STANDARD CHARTERED BANK, SHAKESPEARE SARANI BR ANCH, KOLKATA AND MATTER CONSIDERED IN HIS ASSESSMENT U/S . 153A] WERE SEIZED. THIS APART, INVENTORIES OF SOME PASSPO RTS [AS PER ANNEXURE-2], ASH FOUND OF RS.27,320/- BUT NOT SEIZE D (ANNEXURE-3), SOME BANK ACCOUNTS AS PER ANNEXURE-4 AND JEWELLERIES HAVING IDENTIFICATION MARK ASJ/1 TO ASJ /52 (FOUND BUT NOT SEIZED) WERE MADE. THIS APART, HIS STATEMEN T WAS ALSO RECORDED U/S 132(4) OF THE I.T. ACT DURING SEARCH A ND ALSO AT THE POINT OF TIME OF SEARCH. ON 24.02.2010, DURING SEARCH OPERATION AT OFFICE PREMISES, BOOKS, DOCUMENTS ADN PEN DRIVE WERE SEIZED AS PER ANNEXURE A TO PANCHANAMA HAVING IDENTIFICATION MARKS AKS/OFF/1 TO AKS/OFF/18 AND AKS/OFF/PD/1. ALSO CASH OF RS.86,370/- WAS FOUND OU T OF WHICH RS.50,000/- WAS SEIZED AS PER ANNEXURE-1 TO THE PAN CHANAMA, DETAILS OF BANK ACCOUNTS FOUND WERE INVENTORIZED AS PER ANNEXURE-2 TO THE PANCHANAMA AND PASSPORT OF ASHOKE SURANA AND OTHERS INVENTORISED AS PER ANNEXURE-3 TO THE PA NCHANAMA. HERE DURING SEARCH SHRI ASHOKE SURANA, ASSESSEES B ROTHER, WAS PRESENT AND HIS STATEMENT WAS ALSO RECORDED U/S 132 (4). DURING SEARCH AT 126A, SARAT BOSE ROAD, KOLKATA-26 ON 19.0 4.2010, SOME FURTHER DOCUMENTS WERE INVENTORIZED AS PER AKS /OFF/19 TO AKS/OFF/21 AND SEIZED AND ALSO THE STATEMENT OF SRI AJIT KUMAR SURANA WAS AGAIN RECORDED. 5. NOTICES UNDER SECTION 153A OF THE ACT WERE ISSUE D TO THE ASSESSEE FOR VARIOUS ASSESSMENT YEARS STARTING FROM ASSESSME NT YEARS 2004-05 TO 2009-10, ON 15.09.2010. AT THIS JUNCTURE, IT HAS TO BE MENTIONED THAT, ASSESSEE HAD PRIOR TO THE SEARCH, FILED REGULAR RET URNS FOR ALL THE I.T.A. NOS.: 835-839/KOL./2013 ASSESSMENT YEARS : 2006-07, 2007-08, 2009-10, 2010 -11 & 2010-11 PAGE 1 TO 34 4 ASSESSMENT YEARS INVOLVED, EXCEPT FOR ASSESSMENT YE AR 2010-11. HOWEVER, IN SUCH RETURNS, NO INCOME WHATSOEVER WAS ADMITTED VIS-A-VIS THE DEPOSITS IN THE BANK ACCOUNTS MENTIONED AT PARA 2 A BOVE. HOWEVER, IN THE RETURNS FILED IN PURSUANCE TO THE NOTICE UNDER SECT ION 153A, ASSESSEE DISCLOSED THE DEPOSITS IN THE BANK ACCOUNTS OF THE FIVE PERSONS MENTIONED AT PARA 2 ABOVE AS HIS INCOME. FOR ASSESSMENT YEAR 2010-11, ASSESSEE INCLUDED THE FIGURES IN HIS REGULAR RETURN, SINCE T HE SEARCH WAS DURING THE CURRENCY OF PREVIOUS YEAR ENDING 31.03.2010. 6. INCOME SHOWN IN THE RETURN FILED BY THE ASSESSEE PURSUANT TO NOTICE UNDER SECTION 153A, WERE REVISED, DURING THE COURSE OF ASSESSMENT PROCEEDING. INCOME RETURNED, INCOME FURTHER OFFERED DURING THE COURSE OF ASSESSMENT PROCEEDINGS AND INCOME FINALLY ASSESSED FOR THE YEARS FOR WHICH NOTICES UNDER SECTION 153A OF THE ACT, WERE I SSUED, AND ON WHICH APPEALS HAVE BEEN NOW FILED ARE SUMMARIZED HEREUNDE R :- (1) (2) (3) (4) (5) AY - INCOME AS PER RETURN FILED U/S 139 INCOME AS PER RETURN FILED PURSUANT TO 153A NOTICE ADDITIONS MADE BY AO OTHER THAN DEPOSITS IN BANK ACCOUNT INCOME AFTER RE- CALCULATION OF DEPOSITS IN THE BANK ACCOUNTS OFFERED BY ASSESSEE DURING THE COURSE OF ASSESSMENT PROCEEDINGS INCOME AS FINALLY ASSESSED 2006-07- RS.1,24,254/ - 10,62,287 NIL --- 10,62,287/- 2007-08- RS.93,990/- 33,31,006/- NIL 62,24,680/- 62,2,4,680/- 2009 - 10 - RS.2,38,890/ - 5,02,46,100/ - (I) RS.5,29,50,000 /- (SALE OF SHARES OF ONE M/S. BANGLA ENTERTAINMENT PVT. LTD. BASED ON STATEMENT UNDER SECTION 7,91,58,956 / - 14,49,55,980/ - I.T.A. NOS.: 835-839/KOL./2013 ASSESSMENT YEARS : 2006-07, 2007-08, 2009-10, 2010 -11 & 2010-11 PAGE 1 TO 34 5 131 DATED 24.02.2010; (II) RS.15,00,000/- (SHARE APPLICATION MONEY AS PER SEIZED DOCUMENTS AKS/OFF/19) (III) RS.1,93,500/- (MINOR SONS INCOME CLUBBED) 7. FOR ASSESSMENT YEAR 2010-11 ASSESSEE FILED HIS R ETURN ON 02.10.2010, BEFORE DUE DATE OF FILING RETURN, WITHO UT ANY NOTICE BEING ISSUED BY THE DEPARTMENT, DECLARING INCOME OF RS.6, 03,497/-. THIS WAS REVISED THRICE, FIRST ON 30.12.2010 TO RS.2,63,24,3 13/-, SECOND ON 10.08.2011 TO RS.,22,25,130/- AND THIRD ON 29.12.20 11 TO RS.1,92,56,130/-. INCOME AS PER THE LAST REVISED RE TURN WAS ACCEPTED AND ASSESSMENT FOR 2010-11 COMPLETED UNDER SECTION 143( 3) ON 30.12.2011. 8. REASONS MENTIONED BY ASSESSEE FOR REVISING THE I NCOME DURING THE COURSE OF ASSESSMENT PROCEEDING FOR ASSESSMENT YEA RS 2007-08 AND 2009-10, AS CAN BE CULLED OUT FROM THE RESPECTIVE A SSESSMENT ORDERS, ARE SUMMARIZED HEREUNDER:- (I) RECORDING THE CORRECT FIGURE OF DEPOSITS IN THE FIVE BANK ACCOUNTS FOR ASSESSMENT YEAR 2007-08, (II) REWORKING THE CORRECT FIGURE OF DEPOSITS IN BA NK ACCOUNT, BY INCLUDING THE BANK ACCOUNT OF RINA SINHA, WITH M /S. DCB BANK, KOLKATA, OWNED UP BY THE ASSESSEE, AS HIS OWN FOR ASSESSMENT YEAR 2009-10. I.T.A. NOS.: 835-839/KOL./2013 ASSESSMENT YEARS : 2006-07, 2007-08, 2009-10, 2010 -11 & 2010-11 PAGE 1 TO 34 6 9. REASONS GIVEN BY ASSESSING OFFICER FOR MAKING FU RTHER ADDITIONS, APART FROM WHAT WAS OFFERED BY ASSESSEE, FOR ASSESS MENT YEAR 2009-10 ARE SUMMARIZED HEREUNDER:- (I) INCLUSION OF ALLEGED EARNINGS FROM SALE OF SHAR ES OF M/S. BANGLA INTERNATIONAL PVT. LTD. DONE BY ONE M/S. KIN GSHUK NIWAS PVT. LTD. BASED ON A STATEMENT GIVEN BY THE A SSESSEE ON 24.02.2010, UNDER SECTION 131 OF THE ACT. (II) INCLUSION OF SHARE APPLICATION MONEY OF RS. 15 LAKHS FOUND FROM SHARE APPLICATIONS SEIZED AT THE TIME OF SEARC H. (III) CLUBBING OF INCOME OF MINOR SON RS.1,93 ,500/-. 10. REASONS GIVEN BY THE ASSESSEE FOR REVISING THE INCOME FOR ASSESSMENT YEAR 2010-11 IS NOT CLEARLY MENTIONED BY THE ASSESSING OFFICER. IT SEEMS SUCH REVISIONS WERE EFFECTED PURS UANT TO CHANGES IN INCOME FOR ASSESSMENT YEAR 2009-10 ON ACCOUNT OF CA LCULATION OF DEPOSITS IN BANK ACCOUNT OF SMT. RINA SINHA, WITH M/S. DIB B ANK, BRABOURNE ROAD BRANCH, KOLKATA. SAID LADY IN HER DEPOSITION BEFORE THE ASSESSING OFFICER, HAD PUT THE BALL IN ASSESSEES COURT, SAYING THAT M ONEY BELONGED TO THE LATTER AND SHE HAD NOTHING TO DO WITH THE ACCOUNT. CREDITS IN SUCH BANK ACCOUNTS WERE PARTLY CONSIDERED IN ASSESSMENT YEAR 2009-10 AND PARTLY FOR ASSESSMENT YEAR 2010-11. VIDE HIS LETTER DATED 29.12.2011, WHICH IS REPRODUCED BY THE ASSESSING OFFICER AT PAGE 16 OF T HE ASSESSMENT ORDER FOR ASSESSMENT YEAR 2009-10, ASSESSEE HAD REPEATED HIS EARLIER REQUEST TO APPROPRIATE THE AMOUNTS IN THE BANKS ACCOUNTS, ALRE ADY SEIZED BY THE DEPARTMENT, AGAINST TAXES DUE FOR THE RESPECTIVE YE ARS. 11. ASSESSING OFFICER ON COMPLETING THE ASSESSMENTS , INITIATED PENALTY PROCEEDINGS UNDER SECTION 271(1)(C) FOR ASSESSMENT YEARS 2006-07, 2007-08 AND 2009-10. FOR ASSESSMENT YEAR 2010-11 PE NALTY PROCEEDINGS WERE INITIATED BOTH UNDER SECTION 271(1)(C) AS WELL AS SECTION 271AAA. I.T.A. NOS.: 835-839/KOL./2013 ASSESSMENT YEARS : 2006-07, 2007-08, 2009-10, 2010 -11 & 2010-11 PAGE 1 TO 34 7 SECTION 271AAA WAS ROPED IN FOR ASSESSMENT YEAR 201 0-11, SO AS TO LEVY PENALTY ON THE ADDITIONAL INCOME OFFERED THROUGH TH E REVISED RETURNS, MENTIONED AT PARA 10 ABOVE. PENALTY PROPOSED UNDER SECTION 271(1)(C) FOR ALL THE YEARS WERE FOR CONCEALMENT OF INCOME VI S-A-VIS DEPOSITS IN THE ACCOUNTS OF FIVE PERSONS, SHOWN BY THE ASSESSEE AS HIS OWN INCOME IN THE RETURNS, AND FURTHER ADMITTED DURING THE COURSE OF ASSESSMENT PROCEEDINGS, EXCEPT FOR ASSESSMENT YEAR 2009-10. FO R ASSESSMENT YEAR 2009-10 PENALTY WAS PROPOSED ALSO ON THE SUM ADDED FOR ALLEGED SALE OF SHARES, SHARE APPLICATION MONEY, AND CLUBBED MINOR S INCOME. SHOW CAUSE NOTICES WERE ISSUED TO THE ASSESSEE IN THIS REGARD. 12. REPLY GIVEN BY THE ASSESSEE TO THE SHOW-CAUSE N OTICES CAN BE SUMMARISED AS UNDER:- (I) DISCLOSURE OF BANK ACCOUNTS WERE VOLUNTARILY AN D VARIATION IN INCOME WAS ONLY DUE TO MISTAKE IN CALCULATION OF THE FIGURE. (II) DISCLOSURE WAS CONDITIONAL IN THAT PENALTY PRO CEEDING WERE NOT TO BE INITIATED. (III) DISCLOSURE WAS BONAFIDE AND MADE TO BUY PEACE . (IV) APART FROM THE STATEMENT GIVEN BY THE ASSESSEE , NOTHING WAS BROUGHT ON RECORD TO SHOW THAT THE BANK ACCOUNT S BELONGED TO THE ASSESSEE. 13. ASSESSING OFFICER WAS LEAST IMPRESSED BY THE AB OVE REPLY. HE PROCEEDED TO LEVY PENALTY UNDER SECTION 271(1)(C) F OR VARIOUS ASSESSMENT YEARS AT 100% OF THE TAX SOUGHT TO BE AVOIDED AND F OR ASSESSMENT YEAR 2010-11 UNDER SECTION 271AAA AT 10% OF THE UNDISCLO SED INCOME. DETAILS OF THE PENALTIES LEVIED IS SUMMARIZED HEREUNDER: ASSESSMENT YEAR PENALTY UNDER SECTION 271(1)(C) PENALTY UNDER SECTION 271AAA 2006-07 2,42,212/- ---- 2007-08 19,74,365/- ---- 2009-10 4,91,49,432/- ---- 2010-11 57,88,836 1,83,346/- I.T.A. NOS.: 835-839/KOL./2013 ASSESSMENT YEARS : 2006-07, 2007-08, 2009-10, 2010 -11 & 2010-11 PAGE 1 TO 34 8 14. ASSESSEE MOVED IN APPEAL BEFORE THE CIT(APPEALS ) FOR ALL THE ABOVE YEARS AND WAS UNSUCCESSFUL IN ANY. VIS-A-VIS THE LE VY OF PENALTY UNDER SECTION 271(1)(C), OBSERVATION OF THE LD. CIT(APPEA LS) IS REPRODUCED HEREUNDER:- 6.5. IN THE CASE OF APPELLANT, FROM THE FACTS AS D ISCUSSED ABOVE, IT IS APPARENT THAT HE HAD NOT MADE THE DISCLOSURE OF INC OME OR ADMISSION OF OWNERSHIP OF FIVE BENAMI BANK ACCOUNTS VOLUNTARY . THE ADMISSION WAS MADE UNDER CONSTRAINT WHEN HE CAME TO KNOW THAT THE BANK AND THE INCOME TAX DEPARTMENT WERE CONDUCTING THE INQUI RY ABOUT THESE BANK ACCOUNTS. MAY BE, BY THE TIME WHEN HE FILED A LETTER DATED 29.01.2010 BEFORE THE DDIT (INV.) ADMITTING THE OWN ERSHIP AND INCOME FROM THESE BANK ACCOUNTS; NO NOTICE WAS ISSU ED TO THE APPELLANT. BUT, DEFINITELY, FROM ONE OR OTHER SOURC E, HE CAME TO KNOW ABOUT THE ENQUIRIES BEING CONDUCTED BY THE DEPARTME NT IN RESPECT OF THESE BANK ACCOUNTS AND THIS FACT IS PROVED FROM TH E APPELLANTS LETTER DATED 28.01.2010 ITSELF. THUS, IT CANNOT BE SAID THAT THE APPELLANT VOLUNTARY DISCLOSED THE BANK ACCOUNTS BEF ORE THE DATE OF SEARCH. FURTHER EVEN VIDE LETTER DATED 28.01.2010 F ILED BEFORE THE DDIT(INV.), THE APPELLANT DID NOT MAKE TRUE AND HON EST DISCLOSURE. THIS IS PROVED BY THE FACT THAT THE APPELLANT WAS H AVING ONE MORE BENAMI BANK ACCOUNT IN THE NAME OF RINA SINHA, A/C NO. 08911100007955 WITH DEVELOPMENT CREDIT BANK, BRABOU RNE ROAD BRANCH, KOLKATA WHICH WAS DISCLOSED BY HIM IN THE C OURSE OF ASSESSMENT PROCEEDINGS. AS DISCUSSED ABOVE, IN THIS CASE ALSO THE INQUIRY WAS BEING CONDUCTED BY THE INVESTIGATION WI NG OF THE DEPARTMENT AND, THEREFORE, THE APPELLANT CAME FORWA RD TO ADMIT THIS ACCOUNT. THIS REFLECTS THE INTENTION OF THE APPELLA NT THAT HE MADE ALL THE EFFORTS TO AVOID THE DISCLOSURE OF SIXTH BENAMI BANK ACCOUNT IN THE NAME OF RINA SAHA AND THE SAME WAS ADMITTED UND ER CONSTRAINT IN THE COURSE OF ASSESSMENT PROCEEDINGS. THEREFORE, THE ADMISSION/DISCLOSURE OF SIX BANK ACCOUNTS WAS NEITH ER VOLUNTARY NOR IN GOOD FAITH. EVEN AT THE TIME OF ASSESSMENT PRO CEEDINGS, HE DID NOT COME CLEAN BY ADMITTING ALL THE UNDISCLOSED INCOME AND DID NOT DISCLOSE HIS CORRECT AND TRUE TAXABLE INCOME AND, T HEREFORE, AS A RESULT, FURTHER ADDITIONS WERE MADE BY THE AO BASED ON THE ENQUIRIES CONDUCTED BY HIM AND SUBSEQUENTLY ADMITTED BY THE A PPELLANT. IN THE CASE OF CIT VS.- K. MAHIM 149 ITR 737 (KER), IT IS HELD THAT FILING OF REVISED RETURN VOLUNTARILY BY THE ASSESSEE WHEN HE CAME TO KNOW THAT DEPARTMENT WAS CONDUCTING ENQUIRIES AGAINST HIM WOU LD NOT EXONERATE THE ASSESSEE FROM THE LIABILITY TO PENALT Y U/S 271(1)(C) OF THE ACT. IN THE CASE OF SHREEJI TRADERS VS.- DCIT, CENTRAL CIRCLE, THANE 136 ITD 249 (MUM), IT IS HELD THAT WHERE DESP ITE SEARCH, ASSESSEE DID NOT WANT TO DISCLOSE REAL CONCEALED IN COME, THE PENALTY IS CORRECTLY LEVIED U/S 271(1)(C). IN THE CASE OF D CIT, CENTRAL CIRCLE-1, KOLKATA VS.- SUSHMA DEVI AGARWAL 133 ITD 155 (KOL) (TM), IT IS HELD THAT THE PENALTY U/S 271(1)(C) IS RIGHTLY IMPOSED W HERE REVISED I.T.A. NOS.: 835-839/KOL./2013 ASSESSMENT YEARS : 2006-07, 2007-08, 2009-10, 2010 -11 & 2010-11 PAGE 1 TO 34 9 RETURN FILED AFTER DETECTION OF CONCEALMENT BY THE AO. IN THE CASE OF APPELLANT, HE AGREED TO VARIOUS ADDITIONS ONLY AFTE R THE CONCEALMENT DETECTED BY THE AO/ DEPARTMENT. 6.6. FURTHER, AS PER THE LAW, IN THE CASE OF APPELL ANT THE PROVISIONS OF EXPLANATION 5A TO SECTION 271(1)(C) ARE APPLICAB LE BECAUSE FOR THE YEAR UNDER APPEAL THE ORIGINAL RETURN OF INCOME WAS FILED BY THE APPELLANT, BUT NO INCOME AS PER THE BENAMI BANK ACC OUNTS WAS DECLARED THEREIN. THE ADDITIONAL INCOME3 WAS DECLAR ED BY THE APPELLANT IN THE RETURN FILED IN RESPONSE TO NOTICE U/S 153A ISSUED SUBSEQUENT TO THE SEARCH OPERATION. THE PROVISIONS OF EXPLANATION 5A OF SECTION 271(1)(C) READS AS UNDER :- EXPLANATION 5A WHERE, IN THE COURSE OF A SEARCH I NITIATED UNDER SECTION 132 ON OR AFTER THE 1 ST DAY OF JUNE, 2007, THE ASSESSEE IS FOUND TO BE THE OWNER OF (I) ANY MONEY, BULLION, JEWELLERY OR OTHER VALUATION AR TICLE OR THING (HEREAFTER IN THIS EXPLANATION REFERRED TO AS ASSETS) AND THE ASSESSEE CLAIMS THAT SUCH ASSETS HAVE BEEN ACQUIRED BY HIM BY UTILIZING (WHOLLY OR IN PART) HIS INCOME FOR ANY PREVIOUS YEAR, OR (II) ANY INCOME BASED ON ANY ENTRY IN ANY BOOKS OF ACCOU NT OR OTHER DOCUMENTS OR TRANSACTIONS AND HE CLAIMS THAT SUCH E NTRY IN THE BOOKS OF ACCOUNT OR OTHER DOCUMENTS OR TRANSACT IONS REPRESENTS HIS INCOME (WHOLLY OR IN PART) FOR ANY P REVIOUS YEAR, WHICH HAS ENDED BEFORE THE DATE OF SEARCH AND, - (A) WHERE THE RETURN OF INCOME FOR SUCH PREVIOUS YEAR H AS BEEN FURNISHED BEFORE THE SAID DATE BUT SUCH INCOME HAS NOT BEEN DECLARED THEREIN, OR (B) THE DUE DATE FOR FILING THE RETURN OF INCOME FOR SU CH PREVIOUS YEAR HAS EXPIRED BUT THE ASSESSEE HAS NOT FILED THE RETURN, THEN, NOTWITHSTANDING THAT SUCH INCOME IS DECLARED BY HIM IN ANY RETURN OF INCOME FURNISHED ON OR AFTER T HE DATE OF SEARCH, HE SHALL, FOR THE PURPOSES OF IMPOS ITION OF A PENALTY UNDER CLAUSE (C) OF SUB-SECTION (1) OF THIS SECTION, BE DEEMED TO HAVE CONCEALED THE PARTICULAR S OF HIS INCOME OR FURNISHED INACCURATE PARTICULARS O F SUCH INCOME. 6.7. ON PERUSAL OF EXPLANATION 5A OF SECTION 271(1 )(C) SUBSTITUTED BY THE FINANCE (NO. 2) ACT, 2009 APPLICABLE WITH RE TROSPECTIVE EFFECT FROM 01.06.2007 IT IS APPARENT THAT IN CASE OF AN A SSESSEE WHERE THE SEARCH IS INITIATED ON OR AFTER 1 ST DAY OF JUNE, 2007 AND SUCH AN ASSESSEE IS FOUND TO BE THE OWNER OF ANY MONEY, BUL LION, JEWELLERY OR OTHER VALUATION ARTICLE OR THING OR HAVING ANY INCO ME BASED ON ANY ENTRY IN ANY BOOKS OF ACCOUNT OR OTHER DOCUMENTS AN D RELATES TO ANY PREVIOUS YEAR WHICH HAS ENDED BEFORE THE DATE OF SE ARCH AND WHERE I.T.A. NOS.: 835-839/KOL./2013 ASSESSMENT YEARS : 2006-07, 2007-08, 2009-10, 2010 -11 & 2010-11 PAGE 1 TO 34 10 THE RETURN OF INCOME FOR SUCH PREVIOUS YEAR HAS BEE N FURNISHED BEFORE THE SAID DATE BUT SUCH INCOME HAS NOT BEEN DECLARED THEREIN, THEN, NOTWITHSTANDING THAT SUCH INCOME IS DECLARED BY HIM IN ANY RETURN OF INCOME FURNISHED ON OR AFTER THE DATE OF SEARCH, HE SHALL, FOR THE PURPOSE OF IMPOSITION OF PENALTY U/S 271(1)(C), BE DEEMED TO HAVE CONCEALED THE PARTICULARS OF HIS INCOME OR FURNISHE D INACCURATE PARTICULARS OF SUCH INCOME. IN THE CASE OF APPELLAN T, THERE IS NO DISPUTE THAT THE SEARCH WAS CONDUCTED AFTER 01.06.2 007 AND THE INCOME RELATES TO THE PREVIOUS YEAR WHICH HAS ENDED BEFORE THE DATE OF SEARCH. THE APPELLANT HAD FILED RETURN OF INCOME FOR SUCH PREVIOUS YEAR BUT DID NOT DECLARE THE INCOME THEREIN. UNDER THE CIRCUMSTANCES, EVEN IF THE APPELLANT HAS DECLARED THE UNDISCLOSED INCOME IN THE RETURN FILED U/S 153A, HE WILL BE DEEMED TO HAVE CO NCEALED THE PARTICULARS OF HIS INCOME FOR THE PURPOSE OF IMPOSI TION OF PENALTY. AS PER EXPLANATION 5A TO SECTION 271(1)(C), NO IMMUNIT Y HAS BEEN PROVIDED FROM THE PENALTY IF THE UNDISCLOSED INCOME WAS DECLARED U/S 132(4) IN THE COURSE OF SEARCH PROCEEDINGS, AS PROV IDED EARLIER BY EXPLANATION 5 OF THIS SECTION. AS FAR AS THE INCOME ADMITTED BY THE APPELLANT IN THE COURSE OF ASSESSMENT PROCEEDINGS E ITHER BY FILING THE LETTERS OR WHEN CONFRONTED BY THE AO IS CONCERNED, T4HE PENALTY IS IMPOSABLE UNDER SECTION 271(1)(C) BECAUSE SAID ADMI SSION WAS NOT VOLUNTARY BUT THE RESULT OF ENQUIRIES CONDUCTED AGA INST THE APPELLANT. IN VIEW OF ABOVE, I AM OF THE OPINION THAT THE AO W AS JUSTIFIED IN IMPOSING THE PENALTY U/S 271(1)(C) OF THE ACT BECAU SE THE DISCLOSURE MADE BY THE APPELLANT, AS CLAIMED BY HIM, BEFORE TH E DATE OF SEARCH OR IN THE COURSE OF ASSESSMENT PROCEEDINGS WAS NEIT HER VOLUNTARY NOR IN GOOD FAITH. THE ADDITIONAL INCOME WAS NOT DECLAR ED IN THE ORIGINAL RETURN FILED HIM. IT IS A CLEAR CUT CASE WHERE THE APPELLANT HAD CONCEALED HIS INCOME AND, THEREFORE, THE PENALTY IM POSED BY THE AO U/S 271(1)(C) OF THE ACT AMOUNTING TO RS.4,91,49,43 2/- IS CONFIRMED. THE JUDICIAL DECISIONS RELIED UPON BY THE APPELLANT ARE DISTINGUISHABLE ON FACTS. THE GROUND NO. 3, 4, AND 5 ARE DISMISSED. 15. VIS-A-VIS THE LEVY OF PENALTY UNDER SECTION 271 AAA, OBSERVATION OF LD. CIT(APPEALS) IS REPRODUCED HEREUNDER:- 6 I HAVE CONSIDERED THE SUBMISSION OF THE APPELLAN T AND PERUSED THE ASSESSMENT ORDER AS WELL AS THE PENALTY ORDER. ON CAREFUL CONSIDERATION OF FACTS, I AM NOT INCLINED T O AGREE WITH THE SUBMISSION OF THE APPELLANT THAT NO PENALTY U/S 271AAA OF THE ACT IS IMPOSABLE BECAUSE THE INCOME WAS DECLARE D BY HIM VOLUNTARILY BEFORE THE DATE OF SEARCH AND SUBSEQUEN TLY IN THE COURSE OF SEARCH. AS PER THE LAW, IN ORDER TO GET T HE IMMUNITY FROM PENALTY U/S 271AAA, THE APPELLANT HAS TO SPECI FY AS TO HOW, IN HIS CASE THE CONDITIONS LAID DOWN IN SUB-SE CTION 2 OF SECTION 271AAA ARE SATISFIED. HOWEVER, BOTH IN THE COURSE OF PENALTY PROCEEDINGS, AS WELL AS APPELLANT PROCEEDIN GS, THE I.T.A. NOS.: 835-839/KOL./2013 ASSESSMENT YEARS : 2006-07, 2007-08, 2009-10, 2010 -11 & 2010-11 PAGE 1 TO 34 11 APPELLANT HAS FAILED TO SPECIFY THAT IN HIS CASE CO NDITIONS OF SECTION 271AAA(2) ARE SATISFIED. THE APPELLANT HAS HARPED ONLY ON THE POINTY THAT HE DISCLOSED THE INCOME VOLUNTAR ILY BEFORE THE SEARCH. HE HAS NOT MADE THE SPECIFIC SUBMISSION WITH REFERENCE TO THE PROVISIONS OF SECTION 271AAA OF TH E ACT. UNDER THE CIRCUMSTANCES, THE PENALTY IMPOSED BY THE AO IS CONFIRMED. THE GROUND NO. 3, 4 AND 5 ARE DISMISSED. 16. AGGRIEVED, NOW THE ASSESSEE IS BEFORE US. LD. C OUNSEL FOR THE ASSESSEE, STRONGLY ASSAILING THE PENALTY ORDERS SUB MITTED THAT ASSESSEE HAD DISCLOSED HIS INCOME VOLUNTARILY AND HAD COME F ORWARD OFFERING TAXES THEREON, MUCH PRIOR TO THE DATE OF SEARCH. ACCORDIN G TO HIM EXPLANATION 5A TO SECTION 271(1)(C) HAD NO APPLICABILITY SINCE NEITHER THE BANK ACCOUNTS NOR DEPOSITS IN SUCH ACCOUNTS CAME TO THE KNOWLEDGE OF THE REVENUE, AS A RESULT OF SEARCH. INFORMATION WAS ALR EADY WITH THEM, BY WAY OF THE LETTER FILED BY THE ASSESSEE ON 28.01.20 10. ACCORDING TO HIM, LEVY OF PENALTY UNDER SECTION 271(1)(C) COULD BE WI TH REFERENCE TO CONCEALED INCOME IF ANY EMANATING FROM THE RETURN/R ETURNS FILED PURSUANT TO THE NOTICE UNDER SECTION 153A OF THE AC T. ASSESSEE HAVING SUO-MOTU RETURNED THE INCOME, THERE COULD BE NO ELE MENT OF CONCEALMENT OR FURNISHING OF INACCURATE PARTICULARS. ACCORDING TO LD. A.R., REVENUE CANNOT TAKE REFUGE UNDER ANY OTHER EXPLANATORY CLAU SES TO SECTION 271(1)(C), SINCE EXPLANATION 5A WAS SPECIFICALLY IN TENDED FOR CONCEALMENT ARISING IN SEARCH CASES. RELIANCE WAS P LACED ON THE FOLLOWING DECISIONS: (I) M/S. UNIMARK REMEDIES LTD. VS.- ACIT (ITA NOS . 409- 411/MUM./2009, 290-292/MUM/2009, 3817/MUM/2011 DATE D 26.09.2012) OF MUMBAI BENCH OF THE TRIBUNAL. (II) SRI KIRAN SHAH VS.- ACIT [ITA NOS. 5919 TO 5925/MU M/2011, ORDER DATED 08.01.2014] AGAIN OF MUMBAI BENCH OF TH IS TRIBUNAL) I.T.A. NOS.: 835-839/KOL./2013 ASSESSMENT YEARS : 2006-07, 2007-08, 2009-10, 2010 -11 & 2010-11 PAGE 1 TO 34 12 IN ANY CASE ACCORDING TO THE LD. A.R., ASSESSEE HAV ING GIVEN FULL PARTICULARS OF THE INCOME IN THE RETURNS FILED COUL D NOT BE FASTENED WITH A PENALTY. THERE WAS NO INTENTION TO CONCEAL. REVISIO N OF THE INCOME DURING THE COURSE OF ASSESSMENT PROCEEDINGS FOR VARIOUS YE ARS WERE ONLY FOR CORRECTION OF ARITHMETICAL MISTAKES IN THE CALCULAT ION OF CREDITS IN THE RESPECTIVE BANK ACCOUNTS, WHICH HAD TO BE BROKEN UP IN TO VARIOUS YEARS. THERE WAS NO INTENTION TO CONCEAL. AS PER THE LD. A .R., ASSESSEE HAD NOT FURNISHED ANY INACCURATE PARTICULARS, IN THE RETURN S FILED. 17. CONTINUING HIS ARGUMENT, LD. A.R. SUBMITTED THA T FOR ASSESSMENT YEAR 2010-11, PENALTY UNDER SECTION 271AAA ALONE CO ULD HAVE BEEN LEVIED, IF AT ALL ANY. FOR THIS, RELIANCE WAS PLACE D ON THE FOLLOWING DECISIONS:- (I) DINESH KUMAR AMABLAL VS.- ACIT [ITA NO. 1429/HYD./2012 AND 1430/HYD/2012 DATED 24.05.2013(HYDERABAD BENCH)] (II) DCIT VS.- M/S. PIONEER MARBLES & INTERIORS PVT. LTD. [(2012) 68 DTR 01, (2012) 14 ITR (TRIB.) 608 OF COORDINATE BENCH]. 18. IN SUPPORT OF HIS CONTENTION THAT THERE WAS NO CONCEALMENT, LD. COUNSEL FOR THE ASSESSEE PLACED HEAVY RELIANCE ON T HE DECLARATION DATED 28.01.2010 FILED BY THE ASSESSEE. AS PER LD. A.R., IT WAS CLEARLY MENTIONED THEREIN THAT ASSESSEE WAS MAKING A DISCLOSURE OF RS .8,00,00,000/-AS UNDISCLOSED INCOME OF WHICH RS.5,00,00,000/- PERTAI NED TO ASSESSMENT YEAR 2009-10 AND RS.3,00,00,000/- PERTAINED TO ASSE SSMENT YEAR 2010- 11. AS PER LD. AR, DEPARTMENT HAD SEIZED RS.5,16,00 ,000/- STANDING IN THE VARIOUS BANK ACCOUNTS AND THESE WERE GOOD ENOUGH TO MEET ALL THE TAX DUES. LD. A.R. FURTHER SUBMITTED THAT ASSESSEE HAD CLEARLY MENTIONED IN SUCH DECLARATION, POSSIBILITY OF SOME ERRORS OR OMI SSION IN THE CALCULATION OF THE DEPOSIT AMOUNTS. I.T.A. NOS.: 835-839/KOL./2013 ASSESSMENT YEARS : 2006-07, 2007-08, 2009-10, 2010 -11 & 2010-11 PAGE 1 TO 34 13 19. IN SO FAR AS THE LEVY OF PENALTY UNDER SECTION 271AAA FOR ASSESSMENT YEAR 2010-11 WAS CONCERNED, LD. A.R. SUB MITTED THAT THERE WAS NO CHARGE OF CONCEALMENT IN THE NOTICE ISSUED B Y THE ASSESSING OFFICER. PLACING RELIANCE ON SUCH NOTICE, COPY OF W HICH HAS BEEN PLACED AT PAPER BOOK PAGE NO. 22), LD. A.R. SUBMITTED THAT AS SESSING OFFICER MENTIONED FAILURE OF THE ASSESSEE TO SATISFY THE CO NDITIONS MENTIONED IN SUB-SECTION 2 TO SECTION 271AAA OF THE ACT WITHOUT SPECIFYING THE NATURE OF SUCH FAILURE. THE NOTICE WAS VAGUE SINCE THERE W AS NOTHING MENTIONED AS TO WHICH CONDITION ASSESSEE HAD NOT SATISFIED. A S PER LD. A.R., THERE COULD HAVE BEEN NO CONCEALMENT AT ALL FOR ASSESSMEN T YEAR 2010-11, SINCE THE DUE DATE FOR FILING THE RETURN WAS STILL FAR AW AY AS ON THE DATE OF THE SEARCH. THERE WAS NO QUESTION OF ASSESESE BEING ABL E TO FILE A RETURN FOR A PREVIOUS YEAR IN WHICH THE SEARCH WAS CONDUCTED, PR IOR TO SUCH SEARCH. HENCE THERE CANNOT BE A CASE OF ANY NON- DISCLOSURE IN SUCH RETURN. 20. REVERTING BACK TO THE LEVY OF PENALTY FOR ASSES SMENT YEAR 2009-10, LD. A.R POINTED OUT THAT THE ASSESSING OFFICER HAD STATEMENT IN THE ASSESSMENT ORDER THAT A SUM OF RS.1,86,49,244/- WAS DISCLOSED BY THE ASSESSEE ON 29.12.2011, IN THE REVISED RETURN, AFTE R DETECTION OF THE CONCEALED INCOME. ACCORDING TO HIM THIS OBSERVATION WAS NOT CORRECT SINCE ASSESSEE HAD ON 19.04.2010, PRIOR TO THE SEAR CH OFFERED INCOME OF RS.3,00,00,000/- FOR ASSESSMENT YEAR 2010-11. THE F INAL ASSESSED INCOME CAME TO RS.1,92,56,130/- ONLY. RELYING ON THE DECIS ION OF THE HONBLE CHANDIGARH BENCH OF THIS TRIBUNAL IN THE CASE OF JC IT VS.- BHAGWANDAS GAR [158 TTJ 132 (CHANDIGARH)] LD. A.R. SUBMITTED T HAT INCOME EVEN IF IT WAS SHOWN IN A REVISED RETURN WOULD NOT ATTRACT LEV Y OF PENALTY IF SUCH INCOME STOOD INCLUDED IN THE DISCLOSURE STATEMENT A LREADY GIVEN BY THE ASSESSEE. 21. LD. A.R. FURTHER SUBMITTED THAT ASSESSING OFFIC ER HAD NOT INITIATED ANY PENALTY PROCEEDING IN THE ASSESSMENT ORDER FOR ASSESSMENT YEAR 2009-10 IN SO FAR AS THE ADDITION OF RS.4,00,56,380 /- MADE FOR BANK I.T.A. NOS.: 835-839/KOL./2013 ASSESSMENT YEARS : 2006-07, 2007-08, 2009-10, 2010 -11 & 2010-11 PAGE 1 TO 34 14 DEPOSITS IN THE NAME OF SMT. RINA SINHA. ASSESSING OFFICER HAD NOT CONSIDERED IT AS CONCEALED INCOME. ASSESSING OFFICE R HAD MENTIONED INITIATION OF PENALTY PROCEEDINGS, ONLY FOR THE ADD ITION OF RS.5,29,50,000/- BEING ALLEGED SHARE SALE EFFECTED BY M/S. KINGSHUK NIWAS PVT. LTD. AND ADDITION OF RS.15,00,000/- BEIN G UNDISCLOSED SHARE APPLICATION MONEY. INITIATION OF PENALTY PROCEEDING S WAS NOT AT ALL DISCERNABLE IN RESPECT OF THE ADDITION FOR DEPOSITS IN THE BANK ACCOUNT OF SMT. RINA SINHA AND ALSO FOR THE MINORS INCOME OF RS.1,93,500/- CLUBBED WITH THAT OF THE ASSESSEE. EVEN FOR THE AMOUNTS ON WHICH PENALTY WAS INITIATED, ASSESSING OFFICER HAD NOT MENTIONED WHET HER IT WAS FOR CONCEALMENT OR FOR FURNISHING OF INACCURATE PARTICU LARS. PLACING RELIANCE ON PAPER BOOK PAGE 23 WHICH IS NOTICE ISSUED BY THE ASSESSING OFFICER FOR LEVY OF PENALTY UNDER SECTION 271(1)(C) OF THE ACT, LD. A.R. SUBMITTED THAT A SPECIFIC CHARGE WAS NOT MENTIONED THEREIN. IN ANY CASE, AS PER LD. A.R. ASSESSEE COULD FILE REVISED RETURN FOR ASSESSMENT Y EAR 2009-10 UNDER SECTION 139(5) OF THE ACT UPTO 31.03.2011, AND HENC E INCOME IF ANY SHOWN IN REVISED RETURNS COULD NOT BE CONSIDERED FOR LEVY OF PENALTY. AS PER LD. A.R. THE ADDITION OF RS.5,29,50,000/- WAS BASED ON STATEMENTS GIVEN BY A THIRD PARTY. ASSESSEE HAD NEVER ACCEPTED IT AS HIS INCOME AT ANY POINT OF TIME. SIMILAR WAS THE SITUATION WITH REGARD TO ADDI TION OF RS.15,00,000/- FOR SHARE APPLICATION MONEY. THE INCOME HAVING NOT BEEN ADMITTED, JUST BECAUSE ASSESSEE HAD NOT FILED AN APPEAL WOULD NOT BE SUFFICIENT TO CONCLUDE THAT THERE WAS ANY CONCEALMENT. 22. FOR ASSESSMENT YEAR 2007-08, AS PER THE LD. A.R ., LEVY OF PENALTY WAS ENTIRELY FOR DEPOSITS IN THE BANK ACCOUNTS WHIC H WAS ALREADY DISCLOSED BY THE ASSESSEE. THERE WAS NO SPECIFIC CH ARGE WHATSOEVER IN THE NOTICE UNDER SECTION 271(1)(C) FOR ASSESSMENT YEAR 2007-08 ALSO. SIMILARLY FOR ASSESSMENT YEAR 2006-07 ALSO, THERE W AS NO FINDING OF ANY CONCEALMENT. I.T.A. NOS.: 835-839/KOL./2013 ASSESSMENT YEARS : 2006-07, 2007-08, 2009-10, 2010 -11 & 2010-11 PAGE 1 TO 34 15 23. VIS-A-VIS THE LEVY OF PENALTY UNDER SECTION 271 (1)(C) OF THE ACT FOR ASSESSMENT YEAR 2010-11, LD. A.R. SUBMITTED THAT TH E INCOME DISCLOSED BY THE ASSESSEE WAS HIGHER THAN THE INCOME FINALLY ASS ESSED. BEING THE ASSESSMENT YEAR RELEVANT TO THE PREVIOUS YEAR IN WH ICH SEARCH WAS CONDUCTED, AS PER LD. A.R., EXPLANATION 5A TO SECTI ON 271(1)(C) COULD NOT BE APPLIED. FOR THIS RELIANCE WAS PLACED ON THE DEC ISION OF THE HONBLE HYDERABAD BENCH OF THIS TRIBUNAL IN THE CASE OF DIN ESH KUMAR AMBALAL VS.- ACIT IN ITA NOS. 1429 & 1430/HYD/2012 DATED 24 .05.2013 PLACED AT PAPER BOOK PAGES 140 TO 148. WHEN ASSESSEE WAS QUES TIONED BY THE ASSESSING OFFICER, DURING THE COURSE OF ASSESSMENT PROCEEDINGS, HE HAD CLEARLY GIVEN DETAILS AND PARTICULARS OF THE SOURCE FROM WHERE THE FUNDS HAD COME INTO THE VARIOUS BANK ACCOUNTS, LEAVING NO SCOPE FOR ANY LEVY OF PENALTY FOR NON-DISCLOSURE. 24. PER CONTRA, LD. D.R. SUBMITTED THAT THE DISCLOS URE OF BANK ACCOUNTS ARGUED BY THE ASSESSEE TO HAVE BEEN MADE VOLUNTARIL Y DONE WAS NOT ACTUALLY SO. WHEN ASSESSEE CAME TO KNOW THAT INVEST IGATION WAS BEING CONDUCTED BASED ON INPUTS FROM FIU, WITH RESPECT TO DEPOSITS IN BANK ACCOUNTS OF THE FIVE PERSONS AND FINDING THAT THE S AID ACCOUNT HOLDERS HAD ADMITTED SUCH BANK ACCOUNTS TO HAVE BEEN OPENED FOR AND ON BEHALF OF THE ASSESSEE, HE CAME FORWARD WITH A DECLARATION BE FORE THE REVENUE. JUST BECAUSE THE DECLARATION WAS PRIOR TO THE DATE OF SE ARCH WOULD NOT, ACCORDING TO THE LD. D.R. MAKE IT A VOLUNTARY ONE. COUNTERING THE ARGUMENT OF THE ASSESSEE THAT SATISFACTION WAS NOT RECORDED WITH REGARD TO SOME OF THE ITEMS ON WHICH ADDITIONS WERE MADE, LD. D.R. SUBMITTED THAT SUCH SATISFACTION WAS CLEARLY DISCERNABLE ON A READING OF THE ASSESSMENT ORDER AND THIS WAS VERY MUCH IN THE MIND OF THE ASSESSING OFFICER. AT THE END OF THE EACH ASSESSMENT ORDER, A SSESSING OFFICER HAD CLEARLY MENTIONED THAT PENALTY PROCEEDINGS WERE BEI NG SEPARATELY INITIATED. ACCORDING TO THE LD. D.R., SECTION 271(1 B) CLEARLY MENTIONED THAT A DIRECTION FOR INITIATION OF PENALTY PROCEEDI NGS, WAS SUFFICIENT TO CONSTITUTE THE SATISFACTION MENTIONED UNDER SECTION 271(1)(C) OF THE ACT. I.T.A. NOS.: 835-839/KOL./2013 ASSESSMENT YEARS : 2006-07, 2007-08, 2009-10, 2010 -11 & 2010-11 PAGE 1 TO 34 16 THE OFFER OF INCOME FROM THE ASSESSEE HAD COME AFTE R THE DETECTION OF THE BENAMI BANK ACCOUNTS HELD BY THE ASSESSEE IN THE NA ME OF VARIOUS PERSONS. SUCH OFFER WAS NOT BASED ON GOOD CONDUCT. ASSESSEE HAD REPEATEDLY REVISED HIS INCOME EVEN DURING THE COURS E OF ASSESSMENT PROCEEDINGS. ACCORDING TO HIM, LEVY OF PENALTY WAS JUSTIFIED BY VIRTUE OF THE DECISION OF THE HONBLE APEX COURT IN THE CASE OF MAK DATA PVT. LTD. VS.- CIT (SC) [358 ITR 593]. 25. AGAIN AS PER THE LD. D.R. EXPLANATION 5A OF SEC TION 271(1)(C) CLEARLY APPLIED FOR ALL THE ASSESSMENT YEARS. ASSESSEE COUL D NEVER CLAIM ANY IMMUNITY EXCEPT AT THE MOST FOR THE YEARS WHICH WOU LD BE COVERED UNDER SECTION 271AAA OF THE ACT. LEVY OF PENALTY IN EACH OF THE YEAR UNDER SECTION 271(1)(C) OF THE ACT AND LEVY OF PENALTY UN DER SECTION 271AAA FOR ASSESSMENT YEAR 2010-11 WAS ACCORDING TO THE LD. D. R. FULLY JUSTIFIED. 26. AD LIBITUM REPLY OF LD. AR WAS THAT RECORDING O F SATISFACTION BY THE ASSESSING OFFICER WAS NECESSARY EVEN AFTER INTRODUC TION OF SECTION 271(1B). IT WAS A BASIC CONDITION THAT SATISFACTION SHOULD BE DISCERNABLE FROM THE RECORDS. RELIANCE WAS PLACED ON THE DECISI ON OF THE HONBLE DELHI HIGH COURT IN THE CASE OF MADHUSHREE GUPTA & ORS. [307 ITR 107], THAT OF NAGPUR BENCH OF THIS TRIBUNAL IN THE CASE O F DCIT VS.- PURTI SAKHAR KARKHANA LTD. [153 TTJ 12] AND THAT OF HONB LE KARNATAKA HIGH COURT IN THE CASE OF CIT VS.- M/S. MANJU NATHA CO TTON AND GINNING FACTORY [(2013) 053 (1) TCL 0002]. 27. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. MAJOR ADDITIONS MADE IN VARIOU S ASSESSMENT YEARS INVOLVED IN THESE PENALTY APPEALS WERE ON ACCOUNT O F CREDITS APPEARING BANK ACCOUNTS OF SIX PERSONS. LIST OF THE FIVE AMON G THEM, WHO WERE HAVING THEIR ACCOUNTS IN M/S. VIJAYA BANK, HAS BEEN GIVEN AT PARA 2 ABOVE, WHEREAS SIXTH PERSON WAS ONE MRS. RINA SINHA WHOSE BANK CREDITS WERE SUBJECT OF ADDITION FOR ASSESSMENT YEARS 2009-10 AN D 2010-11. IT IS CLEAR I.T.A. NOS.: 835-839/KOL./2013 ASSESSMENT YEARS : 2006-07, 2007-08, 2009-10, 2010 -11 & 2010-11 PAGE 1 TO 34 17 FROM THE ORDER OF LD. CIT(APPEALS) THAT OUT OF THE FIVE PERSONS TWO ALONE APPEARED ON A SUMMONS ISSUED BY THE DEPARTMENT AND PLEADED IGNORANCE OF THE BANK ACCOUNTS, EXCEPT FOR THEIR REMEMBERANCE THAT SOME ACCOUNT OPENING FORMS WERE SIGNED BY THEM, AT THE BEHEST OF THE ASSESSEE. IN THE CASE OF ACCOUNT OF SMT. RINA SINHA, IT SEEMS SHE HA D SUBMITTED A LETTER ON 09.12.2011 IN RESPONSE TO A SUMMONS, WHEREIN SHE ST ATED THAT HER ACCOUNT WITH M/S. DCB BANK WAS SOLELY MAINTAINED BY THE ASSESSEE. ASSESSEE HAD IN HIS LETTER DATED 19.04.2010 ADDRESS ED TO DDIT (INVESTIGATION) SPECIFICALLY STATED THAT CREDITS IN THE ABOVE BANK ACCOUNTS REPRESENTED UNDISCLOSED INCOME DEPLOYED BY HIM. THE SAID LETTER OF THE ASSESSEE, WHICH MAKES A SPECIFIC REFERENCE TO HIS E ARLIER DISCLOSURE DATED ON 29.01.2010, IS REPRODUCED HEREUNDER:- FROM : AJIT KUMAR SURANA, FLAT NO. 1B, 29, SHAKESPEARE SARANI, KOLKATA-700 017 (PAN : ALBPS 1149 Q] 19 TH APRIL, 2010 TO THE LD. DDIT (INV.) UNIT-III(3). AAYAKAR BHAWAN ANNEXE, P-13, CHOWRINGHEE SQUARE, KOLKATA-700 069 SUB. : DISCLOSURE OF INCOME U/S 132(4) OF THE INCOM E TAX ACT, 1961, - PETITION. SEARCH AND SEIZURE OPERATIONS WERE CONDUCTED IN MY OFFICE PREMISES AT 126A, SURAT BOSE ROAD, GROUND FLOOR, KOLKATA AND IN MY RESIDENTIAL PREMISES AT FLAT NO. 1B, 29, SHAKESPEARE SARANI, KO LKATA ON 23.02.2010 AND ON SUBSEQUENT DATED. IN THE COURSE OF SAID OPERATIO NS, DOCUMENTS, BOOKS OF ACCOUNTS, DAIRIES, COMPUTERS, CASH, JEWELLERY, BANK ACCOUNTS, ETC. WERE FOUND. SOME OF THE DOCUMENTS WERE SEIZED. I AM ENGAGED IN THE BUSINESS OF PRODUCTION OF TV SE RIALS AS WELL AS MARKETING AGENT OF ENTERTAINMENT SOFTWARE. I AM PRO PRIETOR OF M/S. SPEEL BINDERS IN WHICH I CARRY SUCH BUSINESS. SIR, I AM PEACE LOVING CITIZEN AND DEEM FIT TO COME OUT CLEAN BY OFFERING MY ENTIRE UNDISCLOSED INCOME FOR TAXATION. I HAD SO ME UNDISCLOSED INCOME FROM SALE OF ENTERTAINMENT RIGHTS, COMMISSION ON SA LE OF ASSETS AND SHARES, I.T.A. NOS.: 835-839/KOL./2013 ASSESSMENT YEARS : 2006-07, 2007-08, 2009-10, 2010 -11 & 2010-11 PAGE 1 TO 34 18 INTEREST INCOME AND FINANCIAL DEALINGS, WHICH DO NO T FORM PART OF MY REGULAR RETURNS OR ACCOUNTS. THESE UNDISCLOSED INCOMES HAVE BEEN DEPLOYED IN FIV E UNDISCLOSED BANK ACCOUNTS AS PER DETAILS BELOW. I AM THE SOLE BENEFI CIARY OF THESE FIVE BANK ACCOUNTS. I ENCLOSE HEREWITH COPY OF DECLARATION DA TED 29.01.2010, WHEREIN I HAVE AFFIRMED THESE FACTS. IT MAY BE NOTED THAT S OME OF THE DOCUMENTS FOUND IN MY POSSESSION ON THE DAY OF SEARCH REAFFIR MS THESE FACTS. REFERENCE MAY BE MADE TO SEIZE DOCUMENTS AKS/OFF1 TO AKS/OFF/ 5 AND AKS/1, PAGE 58 AND 59. SR. NO. BANK ACCOUNT IN THE NAME OF AMOUNT (RS.) 1. PRADIP ROY CHOWDHURY RS.1,01,19,403/ - 2. VIJAY SHANKAR PANDEY 1,01,20,060/- 3. BISWAMOY MUKHERJEE 1,01,20,541/- 4. SOHAN LAL JAIN 1,11,52,107/ - 5. GOPAL KUMAR AGARWAL 1,01,20,096/- THUS MY UNDISCLOSED INCOME THAT HAS BEEN DEPLOYED I N UNDISCLOSED BANK ACCOUNTS IS TO THE TUNE OF RS.5,16,32,207/- AND THE BALANCE AMOUNT RECEIVABLE BY ME WHICH I SHALL DEPOSIT IN MY REGULA R BANK ACCOUNTS ON RECEIPT OF THE SAME. THUS, I HEREBY VOLUNTARILY OFFER AN SUM OF RS.8,00, 00,000/- AS MY UNDISCLOSED INCOME NOT FORMING PART OF REGULAR RETU RNS AND ACCOUNTS. OUT OF THE ABOVE, A SUM OF RS.5,00,00,000/- REPRESENT M Y UNDISCLOSED INCOME FOR FINANCIAL YEAR 2008-09 AND 3,00,00,000/- FOR FINANC IAL YEAR 2009-10. SIR, I HAVE DEEMED FIT AND PROPER AND TO DEMONSTRAT E MY COOPERATIVE ATTITUDE AND TO AVOID UNNECESSARY LITIGATIONS AND T O BUY PEACE, TO MAKE A DISCLOSURE OF ADDITIONAL INCOME. THE SAME MAY BE TR EATED ASD INCOME DISCLOSED U/S 132(4) READ WITH CLAUSE (I) OF SUB-SE CTION 2 OF SECTION 271AAA OF THE INCOME TAX ACT, 1961. 28. THERE IS NO DISPUTE THAT SEARCH IN ASSESSEES P REMISES WAS DONE DURING THE PERIOD 23.02.2010 TO 24/02/2010, WELL AF TER THE DECLARATION FILED BY THE ASSESSEE TO DDIT(INVESTIGATION) ON 29. 01.2010. ADDITIONS MADE BY THE ASSESSING OFFICER IN ALL THE YEARS EXCE PT FOR ASSESSMENT YEAR 2009-10 WERE ENTIRELY FOR THE DEPOSITS IN THE BANK ACCOUNTS OF THE SIX PERSONS. IN THE RETURNS FILED UNDER SECTION 139(1), PRIOR TO THE SEARCH ASSESSEE HAD NOT INCLUDED ANY SUCH AMOUNT. HOWEVER, IN THE RETURNS FILED PURSUANT TO NOTICES UNDER SECTION 153A ASSESSEE HAD INCLUDED THE DEPOSITS IN THE IMPUGNED BANK ACCOUNTS EXCEPT FOR T HE DEPOSITS IN THE I.T.A. NOS.: 835-839/KOL./2013 ASSESSMENT YEARS : 2006-07, 2007-08, 2009-10, 2010 -11 & 2010-11 PAGE 1 TO 34 19 NAME OF SMT. RINA SINHA. THOUGH LD. COUNSEL FOR THE ASSESSEE ARGUED THAT PENALTY PROCEEDINGS WERE NOT INITIATED IN ACCORDANC E WITH LAW, EVEN IF WE IGNORE THAT ARGUMENT, IT IS CLEAR THAT INCOME OFFER ED BY THE ASSESSEE THROUGH HIS DECLARATION DATED 28.01.2010, FILED ON 29.01.2010, PRIOR TO THE SEARCH OPERATION CANNOT BE CONSIDERED AS A SUM WHICH WAS CONCEALED OR A SUM ON WHICH INACCURATE PARTICULARS WERE FILED , IN RESPECT OF ASSESSMENTS COMPLETED UNDER SECTION 153A AND 143(3) OF THE ACT, AFTER THE SEARCH. 29. NATURE OF INCOME WHETHER IT WAS BASED ON A VOLU NTARY DISCLOSURE BY THE ASSESSEE OR INVESTIGATION DONE BY THE DEPARTMEN T WOULD BE IMPORTANT ONLY IN A PENALTY PROCEEDING INITIATED IN THE COURS E OF NORMAL ASSESSMENT PROCEEDINGS UNDER SECTION 143(3) OR 147 OF THE ACT AND NOT FOR A PENALTY INITIATED IN THE COURSE OF AN ASSESSMENT UNDER SECT ION 153A OF THE ACT. THIS HAS BEEN CLEARLY BROUGHT OUT BY THE MUMBAI BEN CH OF THIS TRIBUNAL IN THE CASE OF SHRI KIRAN SHAH (SUPRA). IN THAT CAS E, RETURNED INCOME FILED UNDER SECTION 153A WAS ACCEPTED BY THE ASSESSING OF FICER BUT STILL PENALTY LEVIED FOR A REASON THAT THERE WAS A CONCEA LMENT OF INCOME, VIS-A- VIS RETURNS FILED PRIOR TO THE DATE OF SEARCH. AFTE R REFERRING TO THE DECISION OF THE HONBLE DELHI BENCH OF THIS TRIBUNA L IN THE CASE OF PREM ARORA VS.- DCIT (2012) 78 DTR (TRIB.) 91, IT WAS H ELD AS UNDER IN KIRAN SHAHS CASE :- ON BARE READING OF SECTION 153A IT IS SEEN THAT TH IS SECTION STARTS WITH A NON OBSTANTE CLAUSE RELATING TO NORMAL ASSESSMENT PROCE DURE COVERED BY SECTIONS 139, 147, 148, 149, 151 AND 153 IN RESPECT OF SEARCHES M ADE AFTER 31.5.2003. THE SECTIONS, SO EXCLUDED, RELATE TO FILING OF RETURN, ASSESSMENT AND REASSESSMENT PROCEEDINGS. FURTHER, SECTION 153A INTENDS TO ASSES S OR REASSESS TOTAL INCOME 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 LEGISLATIVE INTENTION IS NOT TO ASSESSEE ESCAPED IN COME AS IN SECTION 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 EA CH OF SUCH SIX ASSESSMENT YEARS FOR ASSESSMENT OR RE-ASSESSMENT OF TOTAL INCOME. SECOND PROVISO TO SECTION 153A PROVIDES THAT SUCH NOTICE WILL HAVE THE EFFECT OF A BATING ALL THE PENDING ASSESSMENT OR REASSESSMENT PROCEEDINGS, SO AS TO AVOID MULTIPL ICITY OF PROCEEDINGS, WHICH WAS A FEATURE OF BLOCK ASSESSMENT. THUS, THERE IS COMPLET E 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 DO ES NOT PRESCRIBE TO TAKE INTO I.T.A. NOS.: 835-839/KOL./2013 ASSESSMENT YEARS : 2006-07, 2007-08, 2009-10, 2010 -11 & 2010-11 PAGE 1 TO 34 20 ACCOUNT THE EARLIER ASSESSMENT PROCEEDINGS WHETHER ABATED OR NOT, IT WILL NOT BE PROPER OR JUSTIFIED TO REFER TO RETURNED INCOME U/S . 139 FOR THE PURPOSE OF IMPOSITION OF PENALTY U/S. 271(1)(C). IT FOLLOWS THAT THE CONCEAL MENT OF INCOME HAS TO BE SEEN WITH REFERENCE TO ADDITIONAL INCOME BROUGHT TO TAX OVER AND ABOVE INCOME RETURNED BY THE ASSESSEE IN RESPONSE TO NOTICE ISSUED U/S. 153A. AC CORDINGLY, 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. 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 ABOVE THE PENALT Y U/S. 271(1)(C) IS IMPOSSIBLE WHEN THERE IS VARIATION IN ASSESSED AND RETURN INCO ME. IF THERE IS NO VARIATION, THERE WILL BE NO CONCEALMENT. WHEN THERE IS NO CONCEALMEN T, QUESTION OF LEVY OF PENALTY U/S. 271(1)(C) WILL NOT ARISE. THIS IS SETTLED POSI TION OF LAW. THE CONCEPT OF VOLUNTARY RETURN OF INCOME MAY BE IMPORTANT IN PENALTY PROCEE DINGS INITIATED IN COURSE OF NORMAL ASSESSMENT PROCEEDINGS MADE U/S. 143(3) OR 1 47 BUT NOT UNDER SECTION 153A. FROM ABOVE DISCUSSION IT FOLLOWS THAT WHERE R ETURNED INCOME FILED UNDER SECTION 153A IS ACCEPTED BY THE AO, THERE WILL BE N O CONCEALMENT OF INCOME AND, CONSEQUENTLY, PENALTY U/S. 271(1)(C) CANNOT BE IMPO SED. 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. 409 TO 411 /M/09 AND ITA NOS. 290 TO 292/M/09 WHEREIN THE TRIBUNAL AT PARA-7 OF ITS ORDE R HAS HELD AS UNDER: WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSIONS IN THE LIGHT OF THE MATERIAL PLACED BEFORE US. PENALTY IN THESE CASES HAS BEEN IMPOSED ON THE INCOME DISCLOSED IN THE RETURN OF INCOME FILED IN RESPONSE TO NOTICE U/S. 1 53A. THE REASON FOR IMPOSITION OF SUCH PENALTY IS THAT THE ACT OF CONCEALMENT RELATED TO RETURN FILED U/S. 139(1) AND NOT TO RETURN FILED U/S. 153A. THEREFORE, THE QUESTION IN THE PRESENT APPEALS IS LIMITED ONLY TO THE EXTENT THAT WHETHER CONCEALMENT PENALTY CAN BE LEVIED IN SUCH A CASE WITH REFERENCE TO ORIGINAL RETURN. THE CASE OF THE AO IS THAT ASSESSEE HAS COMMITTED THIS DEFAULT WHILE FILING THE ORIGINAL RETURN OF INCOME, THEREFORE CONCEALMENT HAS TO BE VIEWED WITH REFERENCE TO RETURN ORIGINALLY FILED AN D AO ALSO HAS REFERRED TO THE PROVISIONS OF EXPLANATION-5. LD. CIT(A) HAS UPHELD THE ORDER OF THE AO. WE FOUND THAT THIS ISSUE HAS BEEN CONSIDERED AT LENGTH IN TH E AFOREMENTIONED 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 RETURNED INCOME FILED U/S. 153A IS ACCEPTED BY THE AO AND THERE IS NO VARIATION IN ASSESSED INCOME AND RETURNED INC OME, PENALTY U/S. 271(1)(C) CANNOT BE IMPOSED. IN ANOTHER CASE BEFORE THE TRIBU NAL MUMBAI BENCH IN THE CASE OF VRAJLAL T. GALA VS ACIT 33 TAXMANN. COM 620 WHERE T HE TRIBUNAL 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 IN EXPLANATION. IT WAS HELD YES AND ACCORDINGLY DELETED THE PENALTY LEVIED 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 REITERATED 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 RELATES TO SE ARCH INITIATED U/S. 132 OF THE ACT BEFORE THE FIRST DAY OF JUNE, 2007 AND WHERE IN THE COURSE OF SEARCH THE ASSESSEE IS FOUND TO BE THE OWNER OF ANY MONEY, BULLION, JEWELL ERY OR OTHER VALUABLE ARTICLE OR I.T.A. NOS.: 835-839/KOL./2013 ASSESSMENT YEARS : 2006-07, 2007-08, 2009-10, 2010 -11 & 2010-11 PAGE 1 TO 34 21 THING. IN THE PRESENT CASE, THE ASSESSEE WAS NOT FO UND 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 RELIED UPON BY THE LD. DR RELATE TO THE CASES WHERE EXPLANATION-5/5A WERE APPLICABLE. THEREFORE, ALL TH E DECISIONS RELIED ON BY THE LD. DR ARE MISPLACED. 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, THAT 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 ANY SUBSTANCE FOR THE LEVY OF PENALTY U/S. 271(1)(C) OF THE ACT. THE AO IS DIRECTED TO DELETE THE PENALT Y SO LEVIED IN ALL THE ASSESSMENT YEARS UNDER CONSIDERATION. THE APPEALS FILED BY THE ASSESSEE FOR ALL THE ABOVE ASSESSMENT YEARS ARE ALLOWED. 30. NO DOUBT HERE IN OF THE ASSESSEES CASE, WHAT W AS FINALLY ASSESSED, EXCEPT FOR ASSESSMENT YEAR 2006-07 WAS HIGHER THAN THE INCOME RETURNED IN THE RETURN FILED PURSUANT TO NOTICE UNDER SECTIO N 153A OF THE ACT. FOR ASSESSMENT YEAR 2007-08, SUCH DIFFERENCE WAS ONLY D UE TO CORRECTION OF MISTAKES IN CALCULATION OF DEPOSITS AND CREDITS IN THE BANK ACCOUNTS, WHICH WAS OFFERED BY THE ASSESSEE HIMSELF. FOR ASSE SSMENT YEAR 2009-10, THE DIFFERENCE WAS DUE TO THE ADDITION OF DEPOSITS IN THE ACCOUNT OF MRS. RINA SINHA, FOR UNDISCLOSED SHARE APPLICATION MONEY , FOR ALLEGED SALE OF SHARES OF M/S. BANGLA ENTERTAINMENT PVT. LTD., AND CLUBBING OF MINORS INCOME. OF THESE. CREDITS IN THE BANK ACCOUNT OF MR S. RINA SINHA, WAS VOLUNTARILY OFFERED BY THE ASSESSEE DURING THE COUR SE OF ASSESSMENT PROCEEDINGS. 31. LD. CIT(APPEALS) HAD UPHELD THE LEVY OF PENALTY UNDER EXPLANATION 5A TO SECTION 271(1)(C) OF THE ACT. THE SAID EXPLAN ATION FILED IS REPRODUCED HEREUNDER :- EXPLANATION 5A WHERE, IN THE COURSE OF A SEARCH INITIATED UNDER SECTION 132 ON OR AFTER THE 1 ST DAY OF JUNE, 2007, THE ASSESSEE IS FOUND TO BE THE OWNER OF (I) ANY MONEY, BULLION, JEWELLERY OR OTHER VALUATION AR TICLE OR THING (HEREAFTER IN THIS EXPLANATION REFERRED TO AS ASSETS) AND THE ASSESSEE CLAIMS THAT SUCH ASSETS HAVE BEEN ACQUIRED BY HIM BY UTILIZING (WHOLLY OR IN PART) HIS INCOME FOR ANY PREVIOUS YEAR, OR (II) ANY INCOME BASED ON ANY ENTRY IN ANY BOOKS OF ACCOUNT OR OTHER DOCUMENTS OR TRANSACTIONS AND HE I.T.A. NOS.: 835-839/KOL./2013 ASSESSMENT YEARS : 2006-07, 2007-08, 2009-10, 2010 -11 & 2010-11 PAGE 1 TO 34 22 CLAIMS THAT SUCH ENTRY IN THE BOOKS OF ACCOUNT OR OTHER DOCUMENTS OR TRANSACTIONS REPRESENTS HIS INCOME (WHOLLY OR IN PART) FOR ANY PREVIOUS YEAR, WHICH HAS ENDED BEFORE THE DATE OF SEARCH AND, - (A) WHERE THE RETURN OF INCOME FOR SUCH PREVIOUS YEAR HAS BEEN FURNISHED BEFORE THE SAID DATE BUT SUCH INCOME HAS NOT BEEN DECLARED THEREIN, OR (B) THE DUE DATE FOR FILING THE RETURN OF INCOME FOR SUCH PREVIOUS YEAR HAS EXPIRED BUT THE ASSESSEE HAS NOT FILED THE RETURN, THEN, NOTWITHSTANDING THAT SUCH INCOME IS DECLARED BY HIM IN ANY RETURN OF INCOME FURNISHED ON OR AFTER THE DATE OF SEARCH, HE SHALL, FOR THE PURPOSES OF IMPOSITION OF A PENAL TY UNDER CLAUSE (C) OF SUB-SECTION (1) OF THIS SECTION, BE D EEMED TO HAVE CONCEALED THE PARTICULARS OF HIS INCOME OR FURNISHE D INACCURATE PARTICULARS OF SUCH INCOME. FOR FASTENING A PENALTY UNDER EXPLANATION 5A, THE PRIMARY REQUIREMENT IS THAT ASSESSEES OWNERSHIP OF ANY MON EY, BULLION, JEWELLERY OR OTHER VALUATION ARTICLE OR THING OR INCOME BASED ON ANY ENTRY IN ANY BOOKS OF ACCOUNT OR OTHER DOCUMENTS, SHOULD BE FOUN D IN THE COURSE OF A SEARCH INITIATED UNDER SECTION 132 OF THE ACT. NO D OUBT ASSESSEE MIGHT HAVE BEEN CONSTRAINED TO OFFER AS HIS OWN, VARIOUS BANK ACCOUNTS HELD IN DIFFERENT NAMES, DUE TO VARIOUS DEVELOPMENTS WITH R EGARD TO THE INVESTIGATION INTO SUCH BANK ACCOUNTS. STILL IT REM AINS A FACT THAT SUCH DECLARATION WAS GIVEN PRIOR TO THE SEARCH. THEREFOR E, DEPOSITS IN SUCH BANK ACCOUNTS CANNOT BE CONSIDERED AS SOMETHING WHI CH CAME OUT OF THE SEARCH. IN OUR OPINION, APPLICATION OF EXPLANATION 5A IS OUSTED AT THE THRESHOLD. 32. THAT CONCEALMENT OF INCOME IS TO BE DETERMINED WITH REFERENCE TO RETURN OF INCOME FILED IN RESPECT TO NOTICE UNDER S ECTION 153A OF THE ACT AND THAT THERE IS COMPLETE DETACHMENT OF SUCH PROCE EDINGS FROM REGULAR ASSESSMENT PROCEEDINGS IS CLEARLY COMING OUT OF THE DECISION OF THE COORDINATE BENCH IN THE CASE OF UNIMARK REMEDIES LI MITED VS.- ACIT [ITA NOS. 409-411/MUM/2009 & 290-292/MUM/2009- ORDE R DATED I.T.A. NOS.: 835-839/KOL./2013 ASSESSMENT YEARS : 2006-07, 2007-08, 2009-10, 2010 -11 & 2010-11 PAGE 1 TO 34 23 26.09.2012[ (PAPER BOOK PAGES 186 TO 208). PARA 24 OF THE SAID ORDER OF THE COORDINATE BENCH IS RELEVANT AND REPRODUCED HER EUNDER:- 24. THE ASSESSING OFFICER HAS INVOKED PROVISIONS O F EXPLANATION 5 TO SEC. 271(1)(C ) WHILE IMPOSING PENALTY IN ASSESSMENT YEAR 2004-05. IT IS ALSO IMPORTANT TO NOTE THAT CHAPTER XIVB WAS INSERTED IN THE STATUTE BY THE FIN ANCE ACT, 1995 W.E.F. 1.7.1995 WHICH PRESCRIBED SPECIAL PROCEDURE FOR SEARCH ASSES SMENTS. NO PENALTY U/S 271 OR 271A OR 271B, OR INTEREST U/S 234A/234B/234C WAS LE VIABLE IN RESPECT OF UNDISCLOSED INCOME DETERMINED IN BLOCK ASSESSMENT IN VIEW OF SP ECIFIC PROVISIONS OF SECTION 158BF OF THE ACT. SECTION 158BFA WAS INSERTED BY TH E INCOME -TAX (AMENDMENT), ACT , 1997 W.E.F. 1.1.1997 PRESCRIBING BOTH INTERES T AND PENALTY FOR CONCEALMENT OF INCOME IN RESPECT OF UNDISCLOSED INCOME DETERMINED U/S 158BC(C). THUS THEPROVISIONS OF EXPLANATION 5 TO SECTION 271(1) RE MAINED INOPERATIVE DURING THE PERIOD FROM 1.7.1995 TO 31.05.2003. 25. SECTION 153 A WAS INSERTED INTO STATUTE W.E.F 1.6.2003. CLAUSE (I) OF EXPLANATION TO SECTION 153A CLARIFY THAT SUBJECT TO SECTIONS 153A, 153B AND 153C, ALL OTHER PROVISIONS OF THIS A CT SHALL APPLY TO THE ASSESSMENT MADE UNDER THIS SECTION MEANING THEREBY THAT PROVIS IONS RELATING TO PENALTY AND PROSECUTION WILL ALSO APPLY. IT MEANS THAT THE EXPL ANATION 5 OF SECTION 271(1) WILL ALSO APPLY IN SEARCH ASSESSMENT MADE U/S 153A OF THE ACT PROVIDED THAT THE CONDITIONS RELATING THERETO ARE SATISFIED. 26. IN THE CASE BEF ORE US THE ASSESSEE HAS DISCLOSED UNDISCLOSED INCOME IN THE RETURN OF INCOME FILED IN RESPONSE TO NOTICE U/S 153A OF THE ACT WHICH HAS BEEN ACCEPTED BY THE ASSESSING OFFICE R. WE HAVE HELD IN EARLIER PARAGRAPHS THAT UNDER THE SCHEME OF SEARCH ASSESSME NT U/S 153A, THE TOTAL INCOME OF THE ASSESSEE IS TO BE DETERMINED FOR EACH OF SIX ASSESSMENT YEARS. THE ASSESSMENT OR RE-ASSESSMENT PROCEEDING U/S 153A IS NOT IN CONTINUATION OF ASSESSMENT PROCEEDINGS U/S 143 OR SEC. 147 OF THE A CT. SINCE THERE IS COMPLETE DETACHMENT OF 153A PROCEEDINGS FROM REGULAR ASSESSM ENT PROCEEDINGS U/S 143 OR 147 AND HENCE CONCEALMENT OF INCOME IS TO BE DETERM INED WITH REFERENCE TO THE RETURN OF INCOME TO BE FILED IN RESPONSE TO NOTICE U/S 153A OF THE ACT. ONCE RETURNED INCOME IS ACCEPTED BY THE ASSESSING OFFICER IT CAN NEITHER BE A CASE OF CONCEALMENT OF INCOME NOR FURNISHING OF INACCURATE OF PARTICULA RS OF SUCH INCOME. THE ASSESSEE HAD DISCLOSED INCOME IN THE RETURN OF INCOME FILED DETERMINED ON THE BASIS OF ENTRIES RECORDED IN SEIZED MATERIAL. 33. NO DOUBT, AS MENTIONED BY THE LD. D.R., HONBLE APEX COURT IN THE CASE OF MAK DATA PVT. LTD. (SUPRA) HAS CLEARLY HELD AT PARA 10 OF THE JUDGMENT THAT ASSESSING OFFICER WAS NOT REQUIRED TO RECORD HIS SATISFACTION IN A PARTICULAR MANNER OR PRODUCE IT I N WRITING FOR INITIATING PENALTY PROCEEDINGS. A READING OF THE JUDGMENT OF T HE HONBLE APEX COURT CLEARLY SHOW THAT THOUGH SUCH A REQUIREMENT OF RECO RDING OF SATISFACTION IS NOT THERE, THE FUNDAMENTAL ASPECT OF SATISFACTIO N BEING PRESENT HAS NOT BEEN DISPENSED WITH. ASSESSMENT ORDER FOR ASSESSMEN T YEAR 2009-10 IN WHICH SUBSTANTIAL ADDITIONS HAVE BEEN DONE BY THE A SSESSING OFFICER, IN OUR OPINION, DOES NOT AT ANY PLACE SHOW THAT ASSESS ING OFFICER HAD REACHED ANY SUCH SATISFACTION. EXCEPT FOR THE ADDIT ION OF RS.5,29,15,000/- I.T.A. NOS.: 835-839/KOL./2013 ASSESSMENT YEARS : 2006-07, 2007-08, 2009-10, 2010 -11 & 2010-11 PAGE 1 TO 34 24 FOR ALLEGED SALE OF SHARES OF M/S. BANGLA ENTERTAIN MENT PVT. LTD. AND ADDITION OF RS.15,00,000/- FOR SHARE APPLICATION MO NEY REFLECTED IN SEIZED DOCUMENTS, ON OTHER ADDITIONS, NAMELY FOR DEPOSITS IN THE BANK ACCOUNTS OF MRS. RINA SINHA AND FOR MINORS INCOME OF RS.1,9 3,500/- CLUBBED, THERE IS NOTHING TO SHOW ANY CONCEALMENT TO HAVE BEEN DON E BY THE ASSESSEE. ASSESSING OFFICER SIMPLY MENTIONED THAT ASSESSEE HA D OWNED UP THE BANK ACCOUNT OF ONE SMT. RINA SINHA WITH DEVELOPMENT CRE DIT BANK, BRABOURNE ROAD BRANCH, KOLKATA. THERE IS NOTHING ON RECORD TO SHOW THAT SUCH DISCLOSURE MADE BY THE ASSESSEE DURING THE COURSE O F ASSESSMENT PROCEEDINGS WAS ON ACCOUNT OF ANY COMPULSION ARISIN G OUT OF ANY INFORMATION AVAILABLE WITH THE REVENUE. RELEVANT PA RA IN THE ASSESSMENT ORDER WITH RESPECT TO DEPOSITS IN THE ACCOUNTS OF S MT. RINA SINHA CONSIDERED SUO MOTU SHOWN BY THE ASSESSEE AS HIS OW N, IS REPRODUCED HEREUNDER:- SMT. RINA SAHA, SUBMITTED A LETTER ON 09.12.2011 I N RESPONSE TO THE SUMMON U/S. 131 OF THE I.T. ACT ISSUED TO HE R ON 07.12.2011 AND SHE ALSO DENIED ANY CONNECTION WITH THIS PARTICULAR A/C NO. 7955 STANDING IN HER NAME WITH D CB, BRABOURNE ROAD BRANCH. SHE ALSO STATED VERY CLEARLY IN THIS LETTER THE DCB BANK ACCOUNT NO. 08911100007955 I S SOLELY MAINTAINED BY MR. AJEET SURANA. AT THE ASSESSMENT STAGE, THE ASSESSEE HAS REVISED H IS QUANTUM OF DISCLOSURE TWICE, FIRST VIDE LETTER SUBMITTED ON 17.08.2011, WHEREBY HE OFFERED FURTHER RS.29187380/- ON ACCOUNT OF OWNING UP RINA SAHAS BANK ACCOUNT AND THEN AGAIN H E REVISED THE DISCLOSURE AMOUNT VIDE LETTER DATED 29.12.2011 TO RS.41071380/- FOR ASSESSMENT YEAR 2009-10 ON ACCOUN T OF RINA SAHAS A/C THE ASSESSEE WAS ASKED THAT WHY HE HAS E XCLUDED RS.2.5 CRORES IN HIS 2 ND DISCLOSURE LETTER FROM THE SUM TOTAL OF ALL THE NON-CASH DEPOSITS APPEARING IN THE ACCOUNTS STATEMENT. HE STATED THAT THE REASON HAS BEEN EXPLAINED IN THE LETTER DATED 29.12.2011 ALONG WITH ENCLOSURES IN THE FORM OF BAN K STATEMENTS. HE ALSO SUBMITTED A CASH FLOW STATEMENT SHOWING THAT THE CASH DEPOSITS IN THE ACCOUNT OF RINA SAHA [AND IN FACT IN THE OTHER FIVE ACCOUNTS] WERE OUT OF CASH IN HAN D AND HENCE, DOES NOT DESERVE ADDITION. I HAVE CONSIDERED THESE EXPLANATIONS BY THE ASSESSEE AND IS OF THE OPINION THAT THEY RE REASONABLE AND ACCEPTABLE SO FAR AS THE QUANTUM OF DISCLOSURE IN RESPECT OF THE BANK ACCOUNT OF RINA SAHA AND OTHER FIVE ACCOUN TS. FOR RECORDS, IT SHOULD BE MENTIONED AT THIS POINT THAT AT THE FAG END I.T.A. NOS.: 835-839/KOL./2013 ASSESSMENT YEARS : 2006-07, 2007-08, 2009-10, 2010 -11 & 2010-11 PAGE 1 TO 34 25 OF THE ASSESSMENT PROCEEDINGS, TO BE PRECISE ON 29. 12.2011 THE ASSESSEE THROUGH HIS AR SUBMITTED TWO LETTERS, KEPT IN THE FOLDERS FOR ASSESSMENT YEAR 2009-10. IN ONE LETTER HE HAS FORWARDED RS.40056380/- AS HIS INCOME ARISING OUT O F THE BANK ACCOUNT OF RINA SAHA. IN THE SAME LETER HE HAD ALSO REQUESTED THAT OUT OF THIS AMOUNT A TOTAL SUM OF RS.10,15,00 0/- WAS TRANSFERRED TO VARIOUS FAMILY MEMBERS DURING THE MO NTHS OF MARCH 20098, DETAILS OF WHICH ARE GIVEN IN ANNEXURE A TO THIS LETTER. THE SAID TRANSFERRED AMOUNT IS REFLECTED AS INCOME IN IT RETURN OF RESPECTIVE PERSONS AND COPIES OF THE SAME HAS ALREADY BEEN FURNISHED TO YOU. UNDER THE CIRCUMSTANCES, THI S SUM OF RS.10,15,000/- SHALL NOT PART OF MY INCOME. IT IS CLEARLY MENTIONED BY THE ASSESSING OFFICER TH AT THE EXPLANATIONS GIVEN BY THE ASSESSEE WERE REASONABLE AND ACCEPTABL E IN SO FAR AS THE DISCLOSURE IN RESPECT OF BANK ACCOUNTS OF SMT. RINA SINHA AND OTHER FIVE ACCOUNTS WERE CONCERNED. 34. AS TO THE ADDITION OF RS.5,29,50,000/- FOR THE ALLEGED SALE OF SHARES OF M/S. BANGLA ENTERTAINMENT PVT. LTD., BY M/S. KIN GSHUK NIWAS, AGAIN FOR ASSESSMENT YEAR 2009-10, ASSESSING OFFICER HAS INDE ED STATED THAT PENALTY PROCEEDING WAS BEING INITIATED SEPARATELY. THE QUESTION THEREFORE IS WHETHER SUCH AMOUNT CAN BE CONSIDERED AS CONCEAL ED OR A SUM ON WHICH INACCURATE PARTICULARS WERE FILED BY THE ASSE SSEE. VIS-A-VIS THIS ADDITION THE QUESTION RAISED BY THE ASSESSING OFFIC ER AND THE ANSWER GIVEN BY THE ASSESSEE IS REPRODUCED HEREUNDER:- Q. 4 : AS PER THE CHART OF SHAREHOLDERS SUBMITTED B Y YOU THERE WAS ONE SHARE HOLDER OF M/S. BANGLA ENTERTAINMENT P VT. LTD. BY THE NAME OF M/S. KINGSHUK NIWAS PVT. LTD. OF 40, WESTON STREET, KOLKATA-12, WHO HAD SOLD 5000 SHARES TO M/S . HIGHLIGHT COMMODEAL PVT. LTD. AND 22500 SHARES TO M /S. INDRA BARTER PVT. LTD. IN RETURN IT HAD RECEIVED 4,045 CR ORES FROM M/S. INDRA BARTER PVT. LTD. AND 1.25 CRORES FROM M/ S. HIGH LIGHT COMMODEAL PVT. LTD. THE UNDERSIGNED HAD MADE AN ENQUIRY WITH THAT COMPANY THROUGH ITS ASSESSING OFF ICER. THE AO FORWARDED ME A PHOTO COPY OF THE REPLY BY M/S. K INGSHUK NIWAS PVT. LTD. ADDRESSED TO HIM. PLEASE GO THROUGH THE REPLY. AS YOU CAN SEE THE DIRECTOR OF THE COMPANY HAS CLEA RLY STATED THAT NO PURCHASE OR SALE OF SHARES OF M/S. BANGLA ENTERTAINMENT PVT. LTD. TOOK PLACE BUT THE ENTIRE T RANSACTION I.T.A. NOS.: 835-839/KOL./2013 ASSESSMENT YEARS : 2006-07, 2007-08, 2009-10, 2010 -11 & 2010-11 PAGE 1 TO 34 26 WERE IN THE NATURE OF ACCOMMODATION ENTRIES. WHAT D O YOU WANT TO COMMENT UPON THIS? ANS. : WE DO NOT KNOW UNDER WHAT CIRCUMSTANCES AND UNDER WHAT DURESS THE PARTY HAD MADE SUCH A STATEMENT, WE DO NOT RECALL HAVING ANY DIRECT TRANSACTION WITH THE COMPA NY. HOWEVER, IF YOU HONOUR CONSIDERS THE SUM INVOLVED I .E. RS.5.295 CRORES AS INCOME IN MY HAND FOR THE RELEVA NT PERIOD THEN TO AVOID LITIGATION AND BUY PEACE. I AM READY TO ACCEPT SUCH ADDITION OF RS.5,295 CRORES. HOWEVER, I HOPE Y OUR HONOUR WILL BE KIND ENOUGH NOT TO INITIATE ANY PENA LTY PROCEEDINGS FOR SUCH ADDITION. IN OUR OPINION, THERE IS NOTHING IN THE ABOVE REPLY WHICH WILL SHOW ANY CONCEALMENT. NOR IS THERE ANYTHING TO SHOW ANY INAC CURATE PARTICULARS BEING FILED. 35. SIMILARLY WITH REGARD TO THE SUM OF RS.15,00,00 0/-, CONSIDERED AS UNEXPLAINED SHARE APPLICATION MONEY, AGAIN IN ASSES SMENT YEAR 2009-10, THE RELEVANT QUESTION RAISED BY THE ASSESSING OFFIC ER AND THE ANSWER GIVEN BY THE ASSESSEE IS REPRODUCED HEREUNDER:- Q.5 : IT CAN BE SEEN FROM PAGE NO. 23 AND 76 OF SEI ZED DOCUMENT NO. AKS/OFF/19 THAT THESE ARE SHARE APPLICATION FOR MS IN M/S. GAURISUTA BUSINES PVT. LTD. AND M/S. CHANNEL EIGHT STUDIO LTD. BY ONE COMPANY NAMED M/S. SWASTICK SECURITIES AND F INANCE LTD. M/S. SWASTICK SECURITIES & FINANCE LTD. HAD IN VESTED RS.5 LAKHS AND 10 LAKHS RESPECTIVELY THGROUGH CHEQUES BE ARING NO. S 735748 AND 735749 DRAWN ON HDFC BANK, 31, G.C. AVEN UE WHERE IT HAS AN ACCOUNT NO. 03828640000065. IT WAS SEEN FRFOM ENQUIRIES THAT M/S. SWASTICK SECURITIES HAD RECEIVE D MONEY FROM M/S. SKYLARK COMMERCE (P) LTD. OF 29A, WESTON STREET, KOLKATA-12 JUST BEFORE THESE CHEQUES WERE ISSUED. A GAIN M/S. SKYLARK HAD RECEIVED MONEY THROUGH BANKING CHANNEL FROM ONE COMPANY NAMED M/S. KRISHNA TRADING JUST BEFORE THAT . AS YOU MAY RECALL THAT M/S. KRISHNA TRADING HAD RECEIVED R S.60 LAKHS FROM M/S. HIGHLIGHT COMMODEAL ON SALE OF 2500 SHARE S OF M/S. BANGLA ENTERTAINMENT TO IT. WHAT IS YOUR COMMENTS O N THIS CIRCULAR FLOW OF FUND STARTING WITH SALE OF SHARES OF A COMPANY WHERE YOU AND YOUR FAMILY MEMBERS/ COMPANIES HELD M AJORITY SHARES, AND ENDING IN RECEIPT OF AT LEAST RS.15 LAK HS, APPARENTLY AS SHARE APPLICATION MONEY, BY TWO OF YOUR FAMILY C OMPANIES NAMELY M/S. GAURISUTA BUSINESS )P)LTD. AND CHANNEL EIGHT STUDIO LTD.? I.T.A. NOS.: 835-839/KOL./2013 ASSESSMENT YEARS : 2006-07, 2007-08, 2009-10, 2010 -11 & 2010-11 PAGE 1 TO 34 27 ANS. : I HAVE NO DIRECT LINK WITH THESE COMPANIES A ND I AM NOT AWARE OF THEIR DAY TO DAY TRANSACTIONS. THE OFFICE WHERE SEARCH WERE CONDUCTED IS ALSO THE REGISTERED OFFICE OF THO SE COMPANIES. HOWEVER, IF YOUR HONOUR CONSIDERS THE SUM INVOLVED AS INCOME IN MY HAND FOR THE RELEVANT PERIOD THEN TO AVOID LI TIGATION AND BUY PEACE I AM READY TO ACCEPT SUCH ADDITION OF RS. 15 LAKHS. HOWEVER, I HOPE YOUR HONOUR WILL BE KIND ENOUGH NOT TO INITIATE ANY PENALTY PROCEEDINGS FOR SUCH ADDITION. IN OUR OPINION, NO CONCEALMENT WHATSOEVER CAN BE MA DE OUT FROM THE ANSWER GIVEN BY THE ASSESSEE ON THE ABOVE AMOUNT. O N THE OTHER HAND, ASSESSEE CLEARLY STATES THAT HE HAD NO DEALINGS WIT H THE RESPECTIVE PARTIES. 36. THUS THERE IS AN ABSENCE OF A DISCERNABLE ELEME NT OF CONCEALMENT IN THE ADDITIONS MADE. ONCE A CONCEALMENT OR FURNISHIN G OF INACCURATE PARTICULARS IS NOT COMING OUT AS SUCH FROM THE RETU RNS FILED VIS-A-VIS THE FINALLY ASSESSED INCOME, IT BECOMES NECESSARY TO SE E WHETHER ANY OF THE DEEMING PROVISIONS SET OUT IN THE EXPLANATIONS TO S ECTION 271(1)(C) WILL COME INTO PLAY. AS ALREADY MENTIONED BY US AT PARA 31, EXPLANATION 5A CANNOT BE APPLIED SINCE THE THRESHOLD CONDITION FOR APPLYING SUCH EXPLANATION HAS NOT BEEN SATISFIED. LEAVING THE QUE STION WHETHER ANY OTHER EXPLANATORY CLAUSES CAN BE INVOKED IN A SEARC H CASE, ONCE EXPLANATION 5A IS FOUND NOT APPLICABLE OPEN, PRESUM ING IT CAN BE SO DONE, ONLY OTHER EXPLANATION THAT CAN BE CONSIDERED IN TH E CIRCUMSTANCES OF THE CASE IS EXPLANATION ONE. AT THIS JUNCTURE, IT WILL BE WORTHWHILE TO HAVE A CAREFUL UNDERSTANDING OF THE JUDGMENT OF HONBLE AP EX COURT IN THE CASE OF MAC DATA PVT. LTD. (SUPRA). IN THIS CASE BEFORE HONBLE APEX COURT, THERE WAS A SURVEY IN THE SISTER CONCERN OF THE ASS ESSEE CONCERNED ON 16.12.2003, WHEREIN CERTAIN DOCUMENTS WITH SHARE AP PLICATION FORM, BANK STATEMENTS, MEMORANDUM OF ASSOCIATION OF COMPANIES, AFFIDAVITS, COPIES OF INCOME TAX RETURNS, ASSESSMENT ALSO AND BLANK SH ARE DOCUMENTS WERE IMPOUNDED. ASSESSEE FILED ITS RETURN MORE THAN 10 M ONTHS AFTER THE SURVEY, TO BE PRECISE ON 27.10.2004. DESPITE THE SU RVEY IN THE SISTER I.T.A. NOS.: 835-839/KOL./2013 ASSESSMENT YEARS : 2006-07, 2007-08, 2009-10, 2010 -11 & 2010-11 PAGE 1 TO 34 28 CONCERN, IT DID NOT INCLUDE THE INCOME THAT IT SHOU LD HAVE, IN SUCH RETURN. ONLY WHEN THE ASSESSING OFFICER ISSUED A SHOW CAUSE NOTICE ON 22.11.2006, ASSESSEE CAME OUT WITH AN OFFER SURREND ERING INCOME OF RS.40.74 LAKH. ASSESSEE OFFERED NO EXPLANATION FOR THE SURRENDERED INCOME, BUT ONLY STATED THAT SUCH INCOME WAS BEING SURRENDERED TO AVOID LITIGATION, BUY PEACE AND TO CHANNELIZE ITS ENERGY AND RESOURCES TOWARDS PRODUCTIVE WORK AND FOR AMICABLE SETTLEMENT WITH TH E DEPARTMENT. IT WAS IN THESE CIRCUMSTANCES THAT THE APEX COURT HELD THA T SURRENDER WAS NOT VOLUNTARY. AT PARA NINE OF ITS JUDGMENT THEIR LORDS HIPS OBSERVED AS UNDER:- THE SURVEY WAS CONDUCTED MORE THAN 10 MONTHS BEFORE THE ASSESSEE FILED ITS RETURN OF INCOME. HAD IT BEEN THE INTENTI ON OF THE ASSESSEE TO MAKE FULL AND TRUE DISCLOSURE OF ITS INCOME, IT WOU LD HAVE FILED THE RETURN DECLARING AN INCOME INCLUSIVE OF THE AMOUNT WHICH WAS SURRENDERED LATER DURING THE COURSE OF THE ASSESSME NT PROCEEDINGS. CONSEQUENTLY, IT IS CLEAR THAT THE ASSESSEE HAD NO INTENTION TO DECLARE ITS TRUE INCOME. IT IS THE STATUTORY DUTY OF THE AS SESSEE TO RECORD ALL ITS TRANSACTIONS IN THE BOOKS OF ACCOUNT, TO EXPLAI N THE SOURCE OF PAYMENTS MADE BY IT AND TO DECLARE ITS TRUE INCOME IN THE RETURN OF INCOME FILED BY IT FROM YEAR TO YEAR. THE AO, IN OU R VIEW, HAS RECORDED A CATEGORICAL FINDING THAT HE WAS SATISFIE D THAT THE ASSESSEE HAD CONCEALED TRUE PARTICULARS OF INCOME AND IS LIA BLE FOR PENALTY PROCEEDINGS UNDER SECTION 271 READ WITH SECTION 274 OF THE INCOME TAX ACT, 1961. AS AGAINST THE ABOVE FACTS, IN THE CASE BEFORE US THERE WAS NO SURVEY OR SEARCH AT ANY PLACE, PRIOR TO THE DISCLOS URE OF THE BANK ACCOUNTS IN THE NAME OF FIVE PERSONS AS HIS OWN BY THE ASSES SEE ON 28.01.2010. THERE WAS ONLY AN ENQUIRY IN PROGRESS ON SUCH ACCOU NTS BY THE DEPARTMENT. WELL BEFORE ANY NOTICE WAS ISSUED BY TH E DEPARTMENT, ASSESSEE HAD COME UP WITH HIS DISCLOSURE AND FILED AN AFFIDAVIT BEFORE DDI(INVESTIGATION). EVEN EXPLANATION (1) TO SECTION 271(1)(C) COULD NOT HAVE BEEN APPLIED ON THE ASSESSEE SINCE ASSESSEE HA D OFFERED EXPLANATION AND FURNISHED ALL PARTICULARS OF THE INCOME DISCLOS ED BY HIM. AS ALREADY MENTIONED BY US, PARTICULARS OF EVERY ITEM OF INCOM E OFFERED BY THE ASSESSEE AND ADDED BY THE ASSESSING OFFICER IS CLEA RLY AVAILABLE IN THE ASSESSMENT ORDER FOR ASSESSMENT YEAR 2009-10, WHERE IN ASSESSING OFFICER I.T.A. NOS.: 835-839/KOL./2013 ASSESSMENT YEARS : 2006-07, 2007-08, 2009-10, 2010 -11 & 2010-11 PAGE 1 TO 34 29 HAS ELABORATELY ANALYZED THE INFORMATION AND PARTIC ULARS GIVEN BY THE ASSESSEE, AS TO HOW THE CREDITS IN VARIOUS BANK ACC OUNTS HAD COME IN. NONE OF SUCH EXPLANATION GIVEN BY THE ASSESSEE WERE FOUND TO BE UNTRUE OR INCORRECT. 37. AS FOR THE LEVY OF PENALTY UNDER SECTION 271AAA FOR ASSESSMENT YEAR 2010-11 IS CONCERNED, THE INCOME FINALLY COMPU TED BY THE ASSESSING OFFICER WAS LESS THAN THE SUM OF RS.3,00,00,000/- D ECLARED BY THE ASSESSEE PRIOR TO THE SEARCH IN HIS LETTER DATED 28 .01.2010ADDRESSED TO THE DDIT(INVESTIGATION). IN THE NOTICE ISSUED UNDER SECTION 271AAA FOR LEVY OF PENALTY, (PAPER BOOK PAGE NO.22) ASSESSING OFFICER STATED THAT ASSESSEE HAD NOT SATISFIED THE CONDITIONS MENTIONED IN SUB-SECTION 2 OF SECTION 271AAA OF THE ACT. HOWEVER, IN THE PENALTY ORDER HE STATED THAT ASSESSEE HAD CONCEALED HIS INCOME KNOWINGLY AND INT ENTIONALLY IN THE RETURN OF INCOME FILED BEFORE THE SEARCH. HOWEVER, FOR ASSESSMENT YEAR 2010-11, THE RETURN WAS FILED BY THE ASSESSEE ON 02 .10.2010, WHICH WAS AFTER THE DATE OF SEARCH. LEVY OF PENALTY UNDER SEC TION 271AAA WAS FOR A DIFFERENT REASON THAN THE ONE MENTIONED IN THE NOTI CE. LD. CIT(APPEALS) ON THE OTHER HAND OBSERVED THAT ASSESSEE DID NOT SA TISFY THE CONDITION MENTIONED IN SUB-SECTION 2 OF SECTION 271AAA. NONE OF THE LOWER AUTHORITIES COULD POINT OUT WHICH CONDITION ASSESSE E HAD NOT SATISFIED. ASSESSEE HAD IN THE STATEMENT TAKEN FROM HIM UNDER SECTION 132(4) OF THE ACT ADMITTED THE UNDISCLOSED INCOME ARISING OUT OF THE DEPOSITS IN THE BANK ACCOUNTS OF FIVE PERSONS. IN THE ASSESSMENT OR DER FOR ASSESSMENT YEAR 2009-10, ASSESSING OFFICER HIMSELF HAS CLEARLY MENTIONED ELABORATELY AT PAGES 2 TO 14 OF HIS ORDER AS TO HOW THE AMOUNTS CAME INTO THE ACCOUNTS OF THE BENAMIS OF THE ASSESSEE. THAT THE D ETAILED INFORMATION WITH REGARD TO THESE TRANSACTIONS RESULTING IN THE CREDITS IN THE BANK ACCOUNTS WERE GIVEN BY THE ASSESSEE HIMSELF, IS MEN TIONED BY THE ASSESSING OFFICER AT PAGE 5 OF THE ASSESSMENT ORDER FOR ASSESSMENT YEAR 2009-10 WHICH, INTER ALIA, STATES AS UNDER :- I.T.A. NOS.: 835-839/KOL./2013 ASSESSMENT YEARS : 2006-07, 2007-08, 2009-10, 2010 -11 & 2010-11 PAGE 1 TO 34 30 THE ASSESSEE HAD STATED U/S. 131 ON 24.02.2010 IN REPLY TO QUESTION NO. 8 THAT HE SHALL FURNISH THE LIST OF OU TSIDE SHAREHOLDERS IN DUE COURSE. SUBSEQUENTLY, THESE DET AILS WERE FILED BY THE ASSESSEE DURING NOVEMBER, 2011 AND AFT ERWARDS, THESE DETAILED INFORMATION I.E. NAME OF SHAREHOLDER S, NUMBER OF SHARES HELD BY THEM ETC. WERE MATCHED. ASSESSEE HAD EVEN PRIOR TO THE DATE OF SEARCH REQUE STED THE DEPARTMENT TO APPROPRIATE TOWARDS TAX, THE BALANCE OF RS.5.16 CRORES LYING IN THE BANK ACCOUNTS TOWARDS HIS TAX DUES. THERE IS NO CAS E FOR THE REVENUE THAT THERE REMAINED ANY TAX AND INTEREST PAYABLE BY THE ASSESSEE FOR ASSESSMENT YEAR 2010-11. THUS, IN OUR OPINION, ALL THE THREE CONDITIONS SPECIFIED IN SUB-SECTION 2 OF SECTION 271AAA STOOD SATISFIED. IN THE CASE OF CIT VS.- PIONEER MARBLE INTERIOR PVT. LTD. (201 2) 68 DTR 01, COORDINATE BENCH OF THIS TRIBUNAL HELD AS UNDER :- 7. WE FIND THAT UNDER THE SCHEME OF SECTION 271 A AA, THERE IS A COMPLETE PARADIGM SHIFT SO FAR AS PENALTY IN RESPECT OF UNAC COUNTED INCOME UNEARTHED AS A RESULT OF SEARCH OPERATION CARRIED OUT ON OR AFTE R 1 ST JUNE 2007 IS CONCERNED. UNLIKE IN THE CASE OF PENALTY UNDER SECTION 271(1)( C), SECTION 271 AAA, WITHOUT ANY REFERENCE TO FINDINGS OR PRESUMPTIONS OF CONCEA LMENT OF INCOME OR THE FINDINGS OR PRESUMPTIONS OF FURNISHING OF INACCURAT E PARTICULARS, PROVIDES THAT IN RESPECT OF UNACCOUNTED INCOME IN THE CASES WHERE SEARCH INITIATED AFTER 1 ST JUNE 2007, THE ASSESSEE IS TO PAY A PENALTY @ 10% OF UNACCOUNTED INCOME. SUB SECTION 2 OF SECTION 271 AAA, HOWEVER, RELAXES THE RIGOUR OF THIS PENALTY PROVISION IN A SITUATION IN WHICH (I) IN THE COURSE OF THE SEARCH, IN A STATEMENT UNDER SECTION 132(4), ADMITS THE UNDISCLOSED INCOME AND SPECIFIES THE MANNER IN WHICH SUCH INCOME HAS BEEN DERIVED; (II) SUBSTAN TIATES THE MANNER IN WHICH THE UNDISCLOSED INCOME WAS DERIVED; AND (III) PAYS THE TAX, TOGETHER WITH INTEREST, IF ANY, IN RESPECT OF THE UNDISCLOSED INC OME. WHILE PAYMENT OF TAXES, ALONG WITH INTEREST, BY THE ASSESSEE IS ONE OF THE CONDITIONS PRECEDENT FOR AVAILING THE IMMUNITY UNDER SECTION 271AAA(2), THER E IS NO TIME LIMIT SET OUT FOR SUCH PAYMENTS BY THE ASSESSEE. ONCE A TIME LIMI T FOR PAYMENT OF TAX AND INTEREST HAS NOT BEEN SET OUT BY THE STATUTE, IT CA NNOT INDEED BE OPEN TO THE ASSESSING OFFICER TO READ SUCH A TIME LIMIT INTO TH E SCHEME OF THE SECTION OR TO INFER ONE. THERE IS THUS NO LEGALLY SUSTAINABLE BAS IS FOR THE STAND OF THE ASSESSING OFFICER THAT IN A SITUATION IN WHICH DUE TAX AND INTEREST HAS NOT BEEN PAID IN FULL BEFORE FILING OF THE RELEVANT INCOME T AX RETURN, THE ASSESSEE WILL NOT BE ELIGIBLE FOR IMMUNITY UNDER SECTION 271 AAA(2). 8. WHILE DEALING WITH EXPLANATION 5 TO SECTION 271( 1)(C), WHICH IS BROADLY ON THE SAME LINES, HONBLE GUJARAT HIGH COURT, IN THE CASE OF CIT VS MAHENDRA C SHAH (299 ITR 305) HAS OBSERVED THAT, THERE IS NO PRESCRIPTION ABOUT THE POINT OF TIME WHEN THE TAX HAD TO BE PAID QUA THE AMOUNT OF INCOME DECLARED IN THE STATEMENT UNDER SECTION 132(4) OF THE ACT . WE MUST, HOWEVER, POINT OUT THAT EVEN AFTER MAKING THESE SPECIFIC OBSERVATIONS THEIR LORDSHIPS HAD TO TREAT THE CONCLUSION OF ASSESSMENT PROCEEDINGS AS OUTER LIMIT FOR MAKING PAYMENT OF TAX I.T.A. NOS.: 835-839/KOL./2013 ASSESSMENT YEARS : 2006-07, 2007-08, 2009-10, 2010 -11 & 2010-11 PAGE 1 TO 34 31 AND INTEREST BUT THAT WAS BECAUSE OF THE PECULIAR N ATURE OF PENALTY PROVISIONS UNDER SECTION 271(1)(C) WHEREIN ASSESSING OFFICER H AS TO RECORD THE SATISFACTION IN THE COURSE OF ASSESSMENT PROCEEDINGS ITSELF SOMET HING WHICH IS NOT A CONDITION PRECEDENT FOR IMPOSITION OF PENALTY UNDER SECTION 2 71 AAA. THEIR LORDSHIPS HAD HELD THAT HOWEVER, THE OUTER LIMIT HAS TO BE THE POINT OF TIM E WHEN THE ASSESSMENT PROCEEDINGS ARE UNDERTAKEN BY THE ASSESS ING OFFICER BECAUSE THE OPENING PORTION OF SECTION 271(1) OF THE ACT REQUIR ES THE ASSESSING OFFICER TO RECORD SATISFACTION IN THE COURSE OF SUCH PROCEEDIN GS, AND THE SATISFACTION HAS TO BE AS REGARDS THE CONCEALMENT OF PARTICULARS OF INCOME OR FURNISHING INACCURATE PARTICULARS OF INCOME. SECTION 271 AAA, AS THE STATUTE UNAMBIGUOUSLY PROVIDES, DOES NOT REQUIRE ANY SUBJEC TIVE SATISFACTION OF THE ASSESSING OFFICER TO BE ARRIVED AT DURING THE ASSES SMENT PROCEEDINGS, AND, THEREFORE, THE OUTER LIMIT OF PAYMENT BEFORE THE CO NCLUSION OF ASSESSMENT PROCEEDINGS WILL NOT COME INTO PLAY. 38. IN THE CASE OF DINESH KUMAR AMBALAL VS.- CIT ( SUPRA), HYDERABAD BENCH OF THIS TRIBUNAL IN RELATION TO WHETHER SECTI ON 271AAA OR SECTION 271(1)(C) IS TO BE APPLIED WITH REGARD TO LEVY OF P ENALTY HELD AS UNDER :- 9. COMING TO THE ISSUE OF LEVY OF PENALTY, ASSESS EES CONTENTION THAT EXPLANATION (5A) DOES NOT APPLY TO THE FACTS OF TH E CASE IS CORRECT. EXPLANATION 5A TO S.271(1)(C) READS AS UNDER- EXPLANATION 5A. WHERE, IN THE COURSE OF A SEARCH INITIATED UNDER SECTION 132 ON OR AFTER THE 1ST DAY OF JUNE, 2007, THE ASSESSEE IS FOUND TO BE THE OWNER OF (I) ANY MONEY, BULLION, JEWELLERY OR OTHER VALUABLE ARTICLE OR THING (HEREAFTER IN THIS EXPLANATION REFERRED TO AS ASSETS) AND THE ASSESSEE CLAIMS THAT SUCH ASSETS HAVE BEEN ACQUIRED BY HIM BY UTILIZING (WHOLLY OR IN PART) HIS INCOME FOR ANY PR EVIOUS YEAR; OR (II) ANY INCOME BASED ON ANY ENTRY IN ANY BOOKS OF ACCOUNT OR OTHER DOCUMENTS OR TRANSACTIONS AND HE CLAIMS THAT SUCH ENTRY IN THE BOOKS OF ACCOU NT OR OTHER DOCUMENTS OR TRANSACTIONS REPRESENTS HIS INCOME (WHOLLY OR IN PART) FOR ANY P REVIOUS YEAR, WHICH HAS ENDED BEFORE THE DATE OF SEARCH AND, (A) WHERE THE RETURN OF INCOME FOR SUCH PREVIOUS YE AR HAS BEEN FURNISHED BEFORE THE SAID DATE BUT SUCH INCOME HAS NOT BEEN DECLARED THEREIN; OR (B) THE DUE DATE FOR FILING THE RETURN OF INCOME FO R SUCH PREVIOUS YEAR HAS EXPIRED BUT THE ASSESSEE HAS NOT FILED THE RETURN, THEN, NOTWITHSTANDING THA T SUCH INCOME IS DECLARED BY HIM IN ANY RETURN OF INCOME FURNISHED ON OR AFTER THE DATE OF SEARCH, 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 PARTICULARS OF HIS INCOME OR FURNISHED INACCURATE P ARTICULARS OF SUCH INCOME. AS CAN BE SEEN FROM THE ABOVE, WHERE ANY SEARCH HAS BEEN INITIATED UNDER S.132 OF THE ACT ON OR AFTER 1.6.2007 BUT BEFORE 1. 7.2012 AND THE IMPUGNED INCOME PERTAINED TO ANY PREVIOUS YEAR WHICH HAS END ED BEFORETHE DATE OF SEARCH OR WHERE THE ASSESSEE HAS NOT DECLARED THE IMPUGNED INCOME IN RETURN FILED BEFORE THE DATE OF SEARCH OR DUE DATE FOR FURNISHIN G THE RETURN FOR THE RELEVANT PREVIOUS YEAR HAS EXPIRED AND THE ASSESSEE HAS NOT FILED THE RETURN, THEN ONLY EXPLANATION 5A CAN BE INVOKED. THIS EXPLANATION APP LIES TO THE ASSETS OR INCOME WHICH WAS FOUND TO BE NOT DECLARED OR ACCOUNTED PER TAINING TO AN YEAR THE I.T.A. NOS.: 835-839/KOL./2013 ASSESSMENT YEARS : 2006-07, 2007-08, 2009-10, 2010 -11 & 2010-11 PAGE 1 TO 34 32 PREVIOUS YEAR ENDED BEFORE SEARCH AND IN THE RETURN IT WAS NOT DECLARED OR RETURN WAS NOT FILED. AS NOTED ABOVE, IN THE PRESENT CASE, THE EVENT RELE VANT FOR ASSESSMENT YEAR 2008-09, LEADING TO THE SEIZURE OF CASH OCCURRED ON 26.3.2008 DURING THE YEAR AND THE PREVIOUS YEAR HAS NOT ENDED, AS IT WOULD EN D AFTER THE DATE OF SEARCH, VIZ. ON 31.3.2008, WHICH IS RELEVANT FOR ASSESSMENT YEAR 2008-09. THEREFORE, FOR THE ASSESSMENT YEAR 2008-09, SEARCH OCCURRED DURING THE ACCOUNTING YEAR. EXPLANATION 5A DOES NOT APPLY AS THE SITUATIONS SPE CIFIED THERE IN ARE NOT APPLICABLE TO THE FACTS OF THIS CASE. LIKEWISE FOR THE ASSESSMENT YEAR 2009-10 ALSO, THE SEIZURE WAS WITHIN THE FINANCIAL YEAR, WH ICH ENDED ON 31.3.2009 AND THEREFORE, THE PROVISIONS OF EXPLANATION 5A DO NOT APPLY, AS THE PREVIOUS YEAR HAS NOT ENDED BEFORE THE DATE OF SEARCH. THE ASSESSEES CONTENTION THAT PROVISION OF EXPLANATION 5A TO S.271(1)(C) DOES NOT APPLY HAS TO BE ACCEPTED IN VIEW OF THE SPECIFIC PROVISIONS OF THE SAID EXPLANATION. 10. ON THE CONTRARY, THE PROVISION OF S.271AAA, AS CONTENDED BY THE ASSESSEE, ARE APPLICABLE. THE SAID PROVISIONS READ AS UNDER- PENALTY WHERE SEARCH HAS BEEN INITIATED. 271AAA. (1) THE ASSESSING OFFICER MAY, NOTWITHSTAND ING ANYTHING CONTAINED IN ANY OTHER PROVISIONS OF THIS ACT, DIRE CT THAT, IN A CASE WHERE SEARCH HAS BEEN INITIATED UNDER SECTION 132 ON OR A FTER THE 1ST DAY OF JUNE, 2007 BUT BEFORE THE 1ST DAY OF JULY, 2012 , THE ASSESSEE SHALL PAY BY WAY OF PENALTY, IN ADDITION TO TAX, IF ANY, PAYABLE BY HIM , A SUM COMPUTED AT THE RATE OF TEN PER CENT OF THE UNDISCLOSED INCOME OF T HE SPECIFIED PREVIOUS YEAR. (2) NOTHING CONTAINED IN SUB-SECTION (1) SHALL APPL Y IF THE ASSESSEE, ( I ) IN THE COURSE OF THE SEARCH, IN A STATEMENT UNDER SUB-SECTION (4) OF SECTION 132, ADMITS THE UNDISCLOSED INCOME AND SPEC IFIES THE MANNER IN WHICH SUCH INCOME HAS BEEN DERIVED; ( II ) SUBSTANTIATES THE MANNER IN WHICH THE UNDISCLOSED INCOME WAS DERIVED; AND ( III ) PAYS THE TAX, TOGETHER WITH INTEREST, IF ANY, IN RESPECT OF THE UNDISCLOSED INCOME. (3) NO PENALTY UNDER THE PROVISIONS OF CLAUSE ( C ) OF SUB-SECTION (1) OF SECTION 271 SHALL BE IMPOSED UPON THE ASSESSEE IN R ESPECT OF THE UNDISCLOSED INCOME REFERRED TO IN SUB-SECTION (1). (4) THE PROVISIONS OF SECTIONS 274 AND 275 SHALL, S O FAR AS MAY BE, APPLY IN RELATION TO THE PENALTY REFERRED TO IN THIS SECTION . EXPLANATION. FOR THE PURPOSES OF THIS SECTION, ( A ) 'UNDISCLOSED INCOME' MEANS ( I ) ANY INCOME OF THE SPECIFIED PREVIOUS YEAR REPRESE NTED, EITHER WHOLLY OR PARTLY, BY ANY MONEY, BULLION, JEWELLERY OR OTHER V ALUABLE ARTICLE OR THING OR ANY ENTRY IN THE BOOKS OF ACCOUNT OR OTHER DOCUMENT S OR TRANSACTIONS FOUND IN THE COURSE OF A SEARCH UNDER SECTION 132, WHICH HAS ( A ) NOT BEEN RECORDED ON OR BEFORE THE DATE OF SEARCH IN THE BOOKS OF ACCOUNT OR OTHER DOCUMENTS MAINTAINED IN THE NORMAL COURSE RELATING TO SUCH PREVIOUS YEAR; OR I.T.A. NOS.: 835-839/KOL./2013 ASSESSMENT YEARS : 2006-07, 2007-08, 2009-10, 2010 -11 & 2010-11 PAGE 1 TO 34 33 ( B ) OTHERWISE NOT BEEN DISCLOSED TO THE CHIEF COMMISS IONER OR COMMISSIONER BEFORE THE DATE OF SEARCH; OR ( II ) ANY INCOME OF THE SPECIFIED PREVIOUS YEAR REPRESE NTED, EITHER WHOLLY OR PARTLY, BY ANY ENTRY IN RESPECT OF AN EXPENSE RECOR DED IN THE BOOKS OF ACCOUNT OR OTHER DOCUMENTS MAINTAINED IN THE NORMAL COURSE RELATING TO THE SPECIFIED PREVIOUS YEAR WHICH IS FOUND TO BE FALSE AND WOULD NOT HAVE BEEN FOUND TO BE SO HAD THE SEARCH NOT BEEN CONDUCTED; ( B ) 'SPECIFIED PREVIOUS YEAR' MEANS THE PREVIOUS YEAR ( I ) WHICH HAS ENDED BEFORE THE DATE OF SEARCH, BUT TH E DATE OF FILING THE RETURN OF INCOME UNDER SUB-SECTION (1) OF SECTION 1 39 FOR SUCH YEAR HAS NOT EXPIRED BEFORE THE DATE OF SEARCH AND THE ASSESSEE HAS NOT FURNISHED THE RETURN OF INCOME FOR THE PREVIOUS YEAR BEFORE THE S AID DATE; OR ( II ) IN WHICH SEARCH WAS CONDUCTED. 11. HAVING REGARD TO THE MEANING OF THE TERMS UNDI SCLOSED INCOME, SPECIFIED PREVIOUS YEAR AS DEFINED IN EXPLANATION TO S.271AA A, THE ASSESSEES CASE IS TOTALLY OUTSIDE THE PURVIEW OF S.271(1)(C) AND FALL S WITHIN THE PURVIEW OF PROVISIONS OF S.271AAA. THE SAME POSITION WAS REITERATED BY TH E COORDINATE BENCH OF THE TRIBUNAL (AHMEDABAD A BENCH) IN THE CASE OF DCIT V/S. SATISH M.PATEL IN ITA NO.256/AHD/2012 VIDE ORDER DATED 20.07.2012, AND TH E SAID DECISION RELIED UPON BY THE ASSESSEE CLEARLY APPLIES TO THE FACTS OF THE PRESENT CASE. IN THAT CASE ALSO, THE FACTS ARE THAT FOR ASSESSMENT YEAR 2009-10, THE ASSESSEE ADMITTED INCOME OF RS.35,53,000 FROM PURCHASE AND SALE OF LAND CONSEQU ENT TO SEARCH CONDUCTED ON 24.09.2008, WHEN THE PENALTY WAS LEVIED UNDER S.271 (1)(C), THE LEARNED CIT(A) DELETED THE PENALTY, AND THE SAME WAS CONFIRMED BY THE TRIBUNAL WITH THE FOLLOWING OBSERVATIONS- 7. WE HAVE HEARD THE LEARNED DR AND CAREFULLY PERU SED THE MATERIAL ON RECORD. IT IS EVIDENT FROM THE ORDER OF THE LEARNED AO THAT SEARCH WAS CONDUCT ED ON 24-09-2008. LOOKING AT THE PROVISIONS OF SECTION 271AAA OF THE ACT IT BECOMES ABUNDANTLY CLEAR THAT WHERE SEARCH HAS BEEN INITIATED U/S 132 OF THE ACT, ON OR AFTER 01-06-2007, SECTION 271 AAA COMES INTO PLAY WHILE AS SECTION 271(1) (C) IS BARRED BY VIRTUE OF SECTION 271AAA SUB SECTION ( 3). SECTION 271AAA SUB SECTION (1) AND (3) ARE REPRODUC ED HEREIN BELOW FOR REFERENCE: 'PENALTY WHERE SEARCH HAS BEEN INITIATED. 271AAA. ( 1) THE ASSESSING OFFICER MAY, NOTWITHSTANDING ANYTHING CONTAINED IN ANY OTHER PRO VISIONS OF THIS ACT, DIRECT THAT, IN A CASE WHERE SEARCH HAS BEEN INITIATED UNDER SECTION 132 ON OR A FTER THE 1ST DAY OF JUNE, 2007, THE ASSESSEE SHALL PAY BY WAY OF PENALTY, IN ADDITION TO TAX, IF ANY, PAYABLE BY HIM, A SUM COMPUTED AT THE RATE OF TEN PER CENT OF THE UNDISCLOSED INCOME OF THE SP ECIFIED PREVIOUS YEAR. (3) NO PENALTY UNDER THE PROVISIONS OF CLAUSE (C) O F SUBSECTION (1) OF SECTION 271 SHALL BE IMPOSED UPON THE ASSESSEE IN RESPECT OF THE UNDISCLOSED INC OME REFERRED TO IN SUB-SECTION (1).' 8. IT IS CLEAR FROM THE ABOVE THAT THE LEARNED AO H AS NOT INVOKED THE CORRECT PROVISIONS OF LAW FOR LEVYING THE PENALTY. IN THIS CASE SEARCH WAS CONDUC TED IN THE PREMISES OF THE ASSESSEE ON 24-09- 2008, THUS THE DATE OF INITIATION OF SEARCH WAS ON 24-09-2008. FROM THE PROVISIONS OF SECTION 271AAA IT IS CLEAR THAT IN THE CASE WHERE ACTION U/ S 132 IS INITIATED ON OR AFTER 01/06/2007, PENALTY CANNOT BE LEVIED U/S 271 (1)(C)OF THE ACT. PENALTY CAN BE LEVIED ONLY U/S. 271AAA OF THE ACT WHEN CERTAIN CONDITIONS STIPULATED THEREIN IS NOT COMPLI ED. THEREFORE, WE DO NOT HAVE ANY OPTION THAN TO CONFIRM THE ORDER OF THE LEARNED CIT(A) DELETING TH E PENALTY LEVIED BY THE LEARNED AO. 39. BASED ON OUR DISCUSSION AT PARAS 27 TO 38 WE AR E OF THE OPINION THAT NEITHER OF THE LEVY OF PENALTY UNDER SECTION 271(1) (C) FOR ASSESSMENT I.T.A. NOS.: 835-839/KOL./2013 ASSESSMENT YEARS : 2006-07, 2007-08, 2009-10, 2010 -11 & 2010-11 PAGE 1 TO 34 34 YEARS 2006-07, 2007-08, 2009-10 AND 2010-11 NOR THE LEVY OF PENALTY UNDER SECTION 271AAA FOR ASSESSMENT YEAR 2010-11 CO ULD HAVE BEEN FASTENED ON THE ASSESSEE. SUCH LEVIES ARE DELETED. 40. IN THE RESULT, ALL THE APPEALS ARE ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 18 TH DAY OF MARCH, 2014. SD/- SD/- MAHAVIR SINGH ABRAHAM P. GEORGE (JUDICIAL MEMBER) (ACC OUNTANT MEMBER) KOLKATA, THE 18 TH DAY OF MARCH, 2014 COPIES TO : (1) SHRI AJIT KUMAR SURANA, FLAT NO. 1B, 29, SHAKESPEARE SARANI, KOLKATA-700 017 (2) ASSISTANT COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-XVIII, KOLKATA (3) CIT (4) CIT(A) (5) THE DEPARTMENTAL REPRESENTATIVE (6) GUARD FILE BY ORDER ETC ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL KOLKATA BENCHES, KOLKATA LAHA/SR. P.S.