GAYATRI HOMES, NAVI MUMBAI V. ITO (CEN), THANE

ITA 841/MUM/2016

• Counselvise Citation: [2018] 118 COUNSELVISE.COM (IT) 9113 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 9 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-12-2018
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: Not Allotted
• Assessment Year: 2008-2009
• Appeal Filed On: 18-02-2016
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: V VIDHYADHAR
• Assessee Lawyers: SUBODH RATNAPARKHI
• Keywords: Income from undisclosed sources; Search and seizure; Document seized; Question of law; Initiation of penalty proceedings; Revised return; Documents seized; Reassessment proceedings
• Section: 271(1)(c); 143(3); 153A; 148; 132; 28; 139

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL G BENCH, MUMBAI BEFORE SHRI SHAMIM YAHYA, AM AND SHRI SANDEEP GOSAIN, JM ITA NO. 841 /MUM/ 2016 (ASSESSMENT YEAR: 2008 - 09 ) GAYATRI HOMES B - 304, SHIV CHAMBERS, PLOT NO. 21, SECTOR 11, CBD BELAPUR, NAVI MUMBAI - 400 614 VS. ITO (CENTRAL) 2 ND FLOOR, PAWAR INDUSTRIAL ESTATE, EDULJI ROAD, CHARAI, THANE (W) PAN/GIR NO. AAFFG 8177 K ( APPELLANT ) : ( RESPONDENT ) APPELLANT BY : SHRI SUBODH RATNAPARKHI RESPONDENT BY : SHRI V. VIDHYADHAR DATE OF HEARING : 05.10.2018 DATE OF PRONOUNCEMENT : 13.12 .2018 O R D E R PER SHAMIM YAHYA, A. M.: THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) - 11, PUNE (LD.CIT(A) FOR SHORT) DATED 21.12.2015 AND PERTAINS TO THE ASSESSMENT YEAR (A.Y.) 2008 - 09. 2. THE GROUNDS OF APPEAL READ AS UNDER: 1. ON THE FACTS AND IN LAW, THE HON. CIT(A) ERRED IN CONFIRMING THE PENALTY OF RS.2,48,29,695/ - , LEVIED U/S. 271(1)(C) OF THE IT INCOME TAX ACT, 1961. 2. ON THE FACTS AND IN LAW, THE HON. CIT(A) ERRED IN CONFIRMING THE PENALTY U/S. 271(1)(C) AMOUNTING TO RS.2,48,29,695/ - , NOT APPRECIATING THAT (I) THE DIFFERENCE BETWEEN THE RETURNED INCOME AND ASSESSED INCOME WAS NIL II) THE PRIMA FACIE SATISFACTION OF THE LD. AO AS MANDATED BY SE CTION 271(1) WAS ABSENT IN THE ASSESSEMTN ORDER AND III) THE SHOW CAUSE NOTICE ISSUED PRIOR TO LEVY OF PENALTY U/S. 271(1)(C) WAS DEFECTIVE. 3. BRIEF FACTS OF THE CASE ARE AS UNDER: 2 ITA NO. 841/MUM/2016 THE FACTS OF THE CASE AS CULLED OUT FROM THE RECORDS ARE THAT THE APP ELLANT, IS A PARTNERSHIP FIRM BELONGING TO SIDDHI GROUP OF NAVI MUMBAI AND HAS BEEN ENGAGED IN THE BUSINESS OF BUILDERS AND DEVELOPERS. THE APPELLANT HAD UNDERTAKEN TO CONSTRUCT A SHOPPING MALL NAMELY 'LITTLE WORLD' AT KHARGHAR. RETURN OF INCOME WAS ORIGINALLY FILED FOR THE YEAR UNDER CONSIDERATION DECLARING TOTAL INCOME OF RS . 95,01,369/ - . SUBSEQUENTLY, A SEARCH ACTION U/S 132 OF THE INCOME TAX ACT 1961 WAS CONDUCTED ON 19.02.2009 IN THE CASE OF THE APPELLANT ALONG WITH OTHER ENTITIES OF THE GROUP. DURING THE SEARCH AND SEIZURE OPERATIONS, CERTAIN INCRIMINATING PAPERS/DOCUMENTS/RECORDS WERE FOUND AND SEIZED FROM THE BUSINESS PREMISES OF THE APPELLANT AS WELL AS FROM THE RESIDENTIAL PREMISES OF SHRI MAYUR PATEL, WHO IS ONE OF THE KEY PERSONS OF IHO APPELLANT GROUP AND IN CHARGE OF SALES AND OTHER AFFAIRS OF THE SHOPPING MALL 'LITTLE WORLD', DURING THE SEARCH PROCEEDINGS AND THE POST - SEARCH PROCEEDINGS, THE APPELLANT ACCEPTED THAT THE TRANSACTIONS RECORDED IN THE SAID SEIZED DOCUMENTS WERE CASH RECEIPTS IN RESPECT OF PURCHASE OF SHOPS FROM THE APPELLANT IN LITTLE WORLD MALL WHICH WERE OVER AND ABOVE THE AGREEMENT VALUE AND THE SAME HAVE NOT BEEN ACCOUNTED FOR IN THE BOOKS OF ACCOUNT. ACCORDINGLY, THESE CASH RECEIPT S WERE OFFERED AS UNDISCLOSED INCOME OF THE APPELLANT IN THE STATEMENTS RECORDED DURING THE SEARCH OPERATIONS AS UNDER: SI. NO. A.Y AMOUNT (RS. ) 1 2008 - 09 8.00 CRORES 2 2009 - 10 4.05 CRORES TOTAL 12. 05 CRORES 4. CONSEQUENT TO THE AFORESAID FINDINGS DURING THE SEARCH OPERATION, A NOTICE U/S 153A WAS ISSUED TO THE APPELLANT ON 29.09.2009 AND IN RESPONSE TO THE NOTICE, THE APPELLANT FILED RETURN OF INCOME ON 30.11.2009 DECLARING TOTAL INCOME OF RS.8,25,51,370 / - FOR THIS YEAR, THE ASSESSMENT U/S 143(3) R.W.S. 153A WAS COMPLETED ON 30.12.2010, 3 ITA NO. 841/MUM/2016 ASSESSING THE TOTAL INCOME OF THE APPELLANT AT RS. 8,25,51,370 / - AS ADMITTED BY THE APPELLANT'IN THE RETURN OF INCOME FILED U/S 153A. THE INCOME ADMITTED BY THE APPELLANT IN THE RETURN AND ASSESSED COMP RISES UNDISCL OSED INCOME OF RS. 7,30,50,000/ - IN RESPECT OF SAID CASH RECEIPT S AND THE REGULAR INCOME OF RS. 95,01,369/ - . PENALTY PROCEEDINGS U/S 271AAA / 271(L)(C) WERE INITIATED BY THE ASSESSING OFFICER STATING THAT THE ADDITI ONAL INCOME OF RS. 7,30,50,000 / - WAS OFFERED CONSEQUENT TO SEARCH ACTIO N IN THE CASE OF THE APPELLANT. 5. DURING THE PENALTY PROCEEDINGS THAT FOLLOWED, THE APPELLANT SUBMITTED BEFORE THE ASSESSING OFFICER THAT THE INCOME ADMITTED IN THE RETURN FILED IN RESPONSE TO NOTICE U/S 153A WAS ACCEPTED AS IT IS IN THE ASSESSMENT ORDER AND THEREFORE THERE IS NO CAUSE FOR HOLDING THE APPELLANT GUILTY OF CONCEALING ANY INCOME ATTRACTING PENALTY U/S 271(L)(C). THE APPELLANT ALSO ARGUED BEFORE THE ASSESSING OFFICER THAT SEARCH ASSESSMENTS MADE U/S 153A CANNOT BE T REATED AS CONTINUANCE OF NORMAL ASSESSMENT PROCEEDINGS WHETHER ABATED OR NOT AND IT IS NOT JUSTIFIED TO REFER TO THE INCOME RETURNED U/S 139 FOR THE PURPOSE OF IMPOSITION OF PENALTY U/S 271(L)(C). FOR THIS PROPOSITION, THE APPELLANT RELIED ON CERTAIN JUDIC IAL PRECEDENTS AS MENTIONED IN THE PENALTY ORDER. THE SUBMISSIONS OF THE APPELLANT WERE HOWEVER NOT FOUND TO BE ACCEPTABLE TO THE ASSESSING OFFICER. ON THE FIRST CONTENTION OF THE APPELLANT THAT THERE IS NO VARIATION IN THE INCOME RETURNED U/S 153A AND INC OME FINALLY ASSESSED IN THE ASSESSMENT ORDER, THE ASSESSING OFFICER OBSERVED THAT THE INCOME WAS ACCEPTED AFTER MAKING AN ADDITION OF RS. 7,30,50,000/ - TO THE ORIGINAL RETURNED INCOME OF RS. 95,01,369/ - AND THE TOTAL INCOME WAS COMPUTED AT RS. 8,25,51,370/ - AND THEREFORE ACCORDING THE ASSESSING OFFICER, PENALTY IS EXIGIBLE IN RESPECT OF ADDITIONAL 4 ITA NO. 841/MUM/2016 INCOME OF RS. 7,30,50,000/ - . THE OTHER ARGUMENT OF THE LD. AR THAT INCOME RETURNED UNDER SEC. 139(1) CANNOT BE REFERRED FOR LEVY OF PENALTY AND THE INCOME DECLARED IN THE RETURNS FILED U/S 153A WILL HAVE TO BE CONSIDERED WAS ALSO BRUSHED ASIDE BY THE ASSESSING OFFICER STATING THAT SUCH PROPOSITION CANNOT BE ACCEPTED FOR THE REASON THAT THE ADDITIONAL INCOME WAS OFFERED CONSEQUENT TO THE SEARCH OPERATIONS. TH E ASSESSING OFFICER ALSO OBSERVED THAT THE AUTHORITIES RELIED UPON BY THE APPELLANT ARE CLEARLY DISTINGUISHABLE AND CANNOT BE APPLIED TO THE FACTS OF THE PRESENT CASE. THE ASSESSING OFFICER FURTHER HELD THAT EXPLANATION - 5A TO SEC, 271(L)(C) IS APPLICAB LE IN THIS CASE AND HENCE PENALTY IS ATTRACTED. IT WAS ALSO NOTED BY THE ASSESSING OFFICER THAT THERE IS NO DISPUTE ABOUT THE QUANTUM ADDITION MADE IN THE ASSESSMENT ORDER AND THE APPELLANT HAS CONCEALED THE PARTICULARS OF INCOME TO THE EXTENT OF RS. 7,30,50,000 / - ON ACCOUNT OF UNACCOUNTED CASH RECEIPTS IN RESPECT OF SALE OF UNITS IN THE SAID SHOPPING MAIL. ACCORDINGLY, MINIMUM PENALTY OF RS.2,48,29,695/ - WAS IMPOSED ON THE APPELLANT U/S 271(L)(C), WHICH IS THE SOLE GRIEVANCE OF THE APPELLANT IN THE PR ESENT APPEAL. 6. AGAINST THE ABOVE ORDER, THE ASSESSEE APPEALED BEFORE THE LD. CIT(A). 7. T HE LD. CIT(A) ELABORATELY REFERRED TO THE CONTENTION OF THE ASSESSEE. HOWEVER , HE WAS NOT CONVINCED. HE UPHELD THE PENALTY BY HOLDING AS UNDER: 3.4 THE PROPOSI TIONS CANVASSED BY THE LD. COUNSEL FOR THE APPELLANT ARE CAREFULLY EXAMINED IN THE LIGHT OF THE FACTS OF THE CASE, MATERIAL PLACED ON RECORD AND THE LEGAL POSITION AS APPLICABLE TO THE YEAR. THE FIRST CONTENTION OF THE APPELLANT IN THE MATTER IS THAT THE A O INITIATED PENALTY PROCEEDINGS U/S 271AAA/271(L)(C) MECHANICALLY AS EITHER/OR OPTION IN RESPECT OF THE ALLEGED CONCEALMENT OF INCOME AND THEREFORE THE PRIMAFACIE SATISFACTION OF THE AO THAT THE APPELLANT HAS CONCEALED ITS INCOME WARRANTING PROBABLE LEVY O F PENALTY U/S 271(L)(C) IS ABSENT IN THE ASSESSMENT ORDER. THIS CONTENTION OF THE LD. COUNSEL IS NOT WELL FOUNDED. IN THE PRESENT CASE, THE ASSESSING OFFICER, AT PARA - 3 AND PARA - 6 OF THE ASSESSMENT ORDER, HAS CLEARLY RECORDED THAT PENALTY PROCEEDINGS ARE B EING 5 ITA NO. 841/MUM/2016 INITIATED SINCE THE APPELLANT HAS OFFERED UNDISCLOSED INCOME IN QUESTION AS A CONSEQUENCE OF SEARCH ACTION. FURTHER, THE UNDISCLOSED INCOME ADMITTED IN THE RETURN OF INCOME FILED U/S 153A WAS NOT ACCEPTED QUIETLY AND MECHANICALLY BY TH E AO, BUT ENTIRE MODUS OPERANDI WAS DISCUSSED IN PARA - 2 OF THE ASSESSMENT ORDER BY EXTENSIVELY REFERRING TO THE STATEMENTS OF THE KEY PERSONS RECORDED DURING THE SEARCH, WHICH IS REPRODUCED HEREUNDER: 'THIS PAGE, CONTAINS D SUMMARY OF SALE OF SHOPS OF,LITTLE WORLD MALL IN CLUDING DETAILS SUCH AS NO., NAME OF PURCHASER, BRAND TO WHICH LET OUT, CHARGEABLE AREA, TOTAL DEAL VALUE (INCLUDING CHEQUE AND CASH COMPONENT) TOTAL CHEQUE VALUE (WHICH IS THE VALUE APPEARING IN THE SALE OF AGREEMENT OF THE RESPECTIVE SHOP) AMOUNT OF CHEQ UE RECEIVED, BALANCE CHEQUE PAYMENT RECEIVABLE, TOTAL CASH VALUE, AMOUNT OF CASH RECEIVED AND BALANCE CASH RECEIVABLE. THE LAST THREE COLUMNS ARE DP TOTAL AMOUNT - RECEIVED AND BALANCE RECEIVABLE. THE FIGURES APPEARING ON THIS PAGE ARE CODED, WITH 'XXX' STAN DING FOR '000' I.E, THE FIGURES ARE IN THOUSANDS. THE TOTAL OF THE COLUMN CASH RECEIVED IS RS. 12.05 CRORES. I ADMIT THAT HIS AMOUNT WAS RECEIVED IN CASH OVER AND ABOVE THE AGREEMENT VALUE AND THE SAME HAS NOT BEEN ACCOUNTED FOR IN THE BOOKS OF ACCOUNT. I OFFER THE SAME .; - AS THE UNDISCLOSED INCOME OF M/S GAYATRI HOMES. I SHALL SUBMIT THE AY WISE BIFURCATION OF THIS AMOUNT' 3 . 4.1 FROM A BARE READING OF THE ABOVE EXTRACT IN THE ASSESSMENT ORDER, IT IS QUITE EVIDENT THAT THE PENALTY PROCEEDINGS WERE NOT INITIATED IN A PERFUNCTORY MANNER BY THE AO AND THERE IS MENTION ABOUT INITIATION OF PENALTY PROCEEDINGS AT THREE PLACES IN THE ASSE SSMENT ORDER, TWICE IN THE TEXT OF THE ORDER AND AGAIN AT THE END OF THE ORDER. THIS CLEARLY SHOWS THAT THERE WAS APPLICATION OF MIND ON THE PART OF THE ASSESSING OFFICER AND PRIMA FACIE SATISFACTION OF ASSESSING OFFICER THAT THE CASE MAY DESERVE IMPOSITIO N OF PENALTY IS CLEARLY DISCERNIBLE FROM ASSESSMENT ORDER PASSED. AS REGARDS THE MENTION OF BOTH THE SECTIONS I.E. SEC. 271(L)(C) AND 271AAA IN THE ASSESSMENT ORDER, FIRSTLY, THIS IS NOT A CASE WHERE PENALTY PROCEEDINGS ARE NOT INITIATED AT ALL DURING THE ASSESSMENT PROCEEDINGS. IT NEEDS TO BE APPRECIATED THAT CONCEALMENT OF PARTICULARS OF INCOME AND FURNISHING OF INACCURATE PARTICULARS THEREOF SOMETIMES OVERLAP AND THEREFORE MERELY BECAUSE SPECIFIC CHARGE IS NOT INDICATED IN THE ASSESSMENT ORDER, IT DOES N OT VITIATE TH E ENTIRE LEVY PENALTY WHEN THE PENALTY IS LEVIED LATER ON A SPECIFIC CHARGE. SECONDLY, AT TIMES BOTH THE SECTIONS ARE MENTIONED IN ASSESSMENT ORDERS PASSED CONSEQUENT TO THE SEARCH AND SEIZURE OP ERATION AS AN ABUNDANT CAUTION AND FOR THE REASO N THAT FOR SOME ASSESSMENT YEAR IN THE BLOCK PERIOD I.E. SPECIFIED PREVIOUS YEARS, PRO VISIONS OF SEC. 271AAA ARE APPLICABLE AND FOR OTHER YEARS, PROVISIONS OF SEC. 271(L)(C) ARE ATTRACTED. IN SUCH CASES, WHAT IS IMPORTANT TO BE SEEN IS WHETHER PENALTY IS LEVIED BY THE AO ON A SPECIFIC C HARGE AND UNDER A SPECIFIC SECTION IN THE PENALTY ORDER. IN THE CASE OF THE APPELLANT, DURING THE PENALTY PROCEEDINGS AFTER AFFORDING AN OP PORTUNITY OF BEING HEARD TO THE APPELLANT AND ON APPRECIATION OF MA TERIAL AND EVIDENCES AVAILABLE ON RECORD BY THE A.O. THE PENALTY WAS LEVIED UNDER A SPECIFIC SECTION 271(L)(C) AND ON A SPECIFIC CHARGE THAT THE APPELLANT CONCEALED PARTICULARS OF INCOME. IN FACT, THE OBSERVATIONS OF DELHI HC IN THE CASE OF MS. MADHUSHRE E GUPTA (SUPRA) REFERRED BY THE APPELLANT THAT AT THE STAGE OF INITIATION OF PENALTY 6 ITA NO. 841/MUM/2016 PROCEEDINGS THE ORDER PASSED BY THE ASSESSING OFFICER NEED NOT REFLECT SATISFACTION VIS - A - VIS EACH AND EVERY ITEM OF ADDITION OR DISALLOWANCE IF OVERALL SENSE GATHERED FRO M THE ORDER IS THAT A FURTHER PROGNOSIS IS CALLED FOR CLEARLY SUGGEST THAT IF PENALTY PROCEEDINGS ARE INITIATED IN THE ASSESSMENT ORDER, IT IS SATISFACTORY COMPLIANCE WITH THE REQUIREMENT OF THE SECTION EVEN IF SPECIFIC CHARGE VI Z. WHETHER CONCEALMENT OF INCOME OR FURNISHING OF INACCURATE PARTICULARS OF INCOME IS NOT SPELT OUT IN THE ASSESSMENT ORDER. IN THIS CONTEXT, REFERENCE CAN ALSO BE MADE TO THE DECISION OF MADRAS HC IN THE CASE OF M. SAJJANRAJ NAHAR & OTHERS VS.CIT (283 ITR 230} WHEREIN IT WAS HELD 'THAT THE ASSESSING OFFICER HAVING RECORDED HIS SATISFACTION REGARDING CONCEALMENT OF INCOME BY INDICATING IN THE ASSESSMENT ORDER THAT PENALTY PROCEEDINGS ARE INITIATED SEPARATELY UNDER SECTION 271(1)(C), THERE WAS SATISFACTORY COMPLIANCE WITH REQUIREMENTS OF LAW, THE MADRAS HIGH COURT FURTHER STATED THAT THE FOLLOWING OBSERVATIONS OF THE APEX COURT IN 5.V. ANGIDI CHETTIAR'S CASE (44 ITR 739) WERE NOT BROUGHT TO THE NOTICE OF THE DELHI HIGH COURT IN RAM COMMERCIAL ENTERPRISES' C ASE (246 ITR 568), DIWAN ENTERPRISE' CASE (246 ITR 571), VIKAS PROMOTERS (P.) LTD.'S CASE (277 ITR 337): '. . . THERE IS NO EVIDENCE ON THE RECORD THAT THE INCOME - TAX OFFICER WAS NOT SATISFIED IN THE COURSE OF THE ASSESSMENT PROCEEDING THAT THE FIRMS HAD CONCEALED ITS [PARTICULARS] OF INCOME. THE ASSESSMENT ORDER IS DATED 10 - 21 - 1951, AND THERE IS AN ENDORSEMENT AT THE FOOT OF THE ASSESSMENT ORDER BY THE INCOME - TAX OFFICER THAT ACTION UNDER SECTION 28 HAD BEEN TAKEN FOR CONCEALMENT OF INCOME INDICATING CLEARLY THAT THE INCOME - TAX OFFICER WAS SATISFIED IN THE COURSE OF - THE ASSESSMENT PROCEEDINGS THAT THE FIRM HAD CONCEALED ITS INCOME. ' (P. 549 ) 3.4.2 SIMILAR VIEW WAS TAKEN BY THE ALLAHABAD HC IN THE CASE OF NAINU MA I HET CHAND VS. C1T [2007] 160 TAXMAN 49 THAT THE SATISFACTION CAN BE GATHERED FROM THE ASSESSMENT ORDER. IN THE CASE OF ORIENTAL INSURANCE CO LTD VS. ACIT, [2010 - T10L - 02 - ITAT - DEL - NEW DEL HI (DATED: OCTOBER 30, 2009), ITAT DELHI HAS TAKEN SIMILAR VIEW THAT WHEN THE A.O. HAD AT THE END OF THE ASSESSMENT ORDER SPECIFICALLY STATED THAT PENALTY PROCEEDINGS ARE INITIATED SEPARATELY, IT WOULD HAVE TO BE HELD THAT THE A.O. HAS RECORDED HIS SATISFA CTION. IN THE PRESENT CASE ALSO, THE AO HAD MATERIAL BEFORE HIM, AS DISCUSSED IN THE ASSESSMENT ORDER, FOR BEING SATISFIED THAT THE APPLICANT HAS CONCEALED THE PARTICULARS OF HIS INCOME AND IT COULD BE REASONABLY CONSTRUED FROM THE ASSESSMENT ORDER THAT TH E AO HAD PRIMA FACIE SATISFACTION THAT THE CASE MAY DESERVE IMPOSITION OF PENALTY FOR CONCEALMENT OF INCOME. IN SUCH CIRCUMSTANCES, JUST BECAUSE BOTH THE SECTIONS ARE MENTIONED IN THE ASSESSMENT ORDER, IT CANNOT BE SAID THAT PRIMAFACIE SATISFACTION OF THE AO FOR LEVY OF PROBABLE PENALTY IS ABSENT IN THE ASSESSMENT ORDER AND THE PLEA RAISED BY THE APPELLANT IN THIS REGARD CANNOT BE COUNTENANCED. 3.4 . 2.1 THE APPELLANT HAS ALSO ARGUED THAT THE PENALTY NEEDS TO BE CANCELLED BECAUSE THE AO HAD ISSUED THE NOTICE U/S 271AAA AND NOT UNDER SECTION 271(1)(C) OF THE ACT. IN THIS REGARD THE APPELLANT AHS PLACED RELIANCE ON THE BANGALORE ITAT DECISION IN THE CASE OF K PRAKASH SETTY. 1 HAVE CONSIDERED THIS ARGUMENT. IT IS ALREADY MENTIONED ABOVE THAT THE AO HAD CLEARLY R EACHED A VERY CONSCIOUS CONCLUSION THAT CONCEALMENT PENALTY WAS REQUIRED IN THE CASE. HOWEVER AS IT IS NEW SECTION, THE AO .WITH ABUNDANT PRECAUTION ISSUED NOTICES U/S BOTH THE 7 ITA NO. 841/MUM/2016 SECTIONS 271AAA AND 271(1)(C) PF THE ACT. THE AO HAS MENTIONED IN THE PENALTY O RDER THAT NOTICE U/S 271(1)( C ) WAS ISSUED 18.4.2011 THE APPELLANT HAS NOT DENIED THIS FACT NOR HAS PRODUCED A COPY OF THE NOTICE DATED 18.4.2011 TO SHOW THAT THE NOTICE HAD BEEN ISSUED UNDER THE WRONG SECTION. THE APPELLANT HAS PRODUCED A COPY OF A NOTICE DATED 30/12/2010 U/S 271AAA. BUT THIS DOES NOT PROVE THAT NO NOTICE U/S. 271(1)(C) WAS ISSUED. THE PURPORTED NOTICE U/S . 271AAAWAS NOT ACTED UPON. NEITHER THE APPELLANT RESPONDED TO THE NOTICE NOR DID THE AO LEVY .ANY PENALTY UNDER SECTION 271AAA. THUS AT B EST THE NOTICE U/S 271AAA WAS AN EXTRA BUT FUTILE EXERCISE. BUT THIS DOES NOT WIPE OUT THE NOTICE ISSUED UNDER SECTION 271(1)(C) AS MENTIONED IN THE ASST ORDER AND THE PENALTY ORDER. THE NOTICE WAS ISSUED WELL WITHIN TIME AND THE PENALTY WAS LEVIED WITHIN THE LIMITATION PRESCRIBED UNDER THE ACT. FURTHER THERE IS NOTHING IN THE PENALTY ORDER OR THE APPELLANT'S SUBMISSIONS DURING THE PENALTY PROCEEDINGS THAT THE PROCEEDINGS WERE FOR PENALTY U/S 271(1)(C). IT IS NOT THAT THE ASSESSEE WAS UNDER AN IMPRESSION TH E PENALTY WAS CONTEMPLATED UNDER SECTION 271AAA AND PUT UP HIS DEFENSE ACCORDINGLY WHICH PREJUDICED HIS CASE. THE RELIANCE ON THE BANGALORE ITAT CASE IS THEREFORE MISPLACED. THIS CONTENTION IS THEREFORE REJECTED. 3.4.3 HAVING OBSERVED THAT PRIMAFACIE SATISFACTION OF THE AO FOR INITIATING PENALTY PROCEEDINGS FOR CONCEALMENT OF INCOME IS DISCERNIBLE FROM THE ASSESSMENT ORDER, IT IS NOW EXAMINED WHETHER PENALTY LEVIED IS JUSTIFIED HAVING REGARD TO THE NATURE OF ADDITION MADE IN THE ASSESSMENT ORDER, IN RE SPECT OF WHICH PENALTY WAS LEVIED. THE PLEA SET UP BY THE LD. COUNSEL IN THIS REGARD IS THAT THE PROCEEDINGS COMMENCED BY NOTICE ISSUED U/S 153A ARE FRESH ASSESSMENT PROCEEDINGS AND THAT THE INCOME DECLARED IN SUCH RETURNS IS THE STARTING POINT FOR FRESH A SSESSMENT AND SINCE THERE WAS NO ADDITION TO THE INCOME RETURNED U/S 153A IN THE ASSESSMENT ORDER, THERE IS NO CAUSE, FOR LEVY OF PENALTY IN VIEW OF EXPLANATION - 4 TO SEC. 271(L)(C). THIS PLEA OF THE APPELLANT IS NOT LEGALLY SUSTAINABLE. SECTION 271(L)(C) V ISUALIZES IMPOSITION OF PENALTY WHEN THE ASSESSEE HAS CONCEALED INCOME OR WHEN THE ASSESSEE HAS FURNISHED INACCURATE PARTICULARS OF INCOME. IN ADDITION TO THESE TWO SITUATIONS, PENALTY CAN ALSO BE IMPOSED, INTER ALIA, WHEN ASSESSEE IS DEEMED TO HAVE CONCEA LED PARTICULARS OF INCOME UNDER EXPLANATIONS TO SEC. 271(L)(C). IN THE CASE OF THE APPELLANT, THE SEQUENCE OF EVENTS CLEARLY SHOWS THAT BUT FOR SEARCH OPERATION IN THE CASE OF APPELLANT GROUP OF CASES, THE CORRECT INCOME EARNED BY APPELLANT TO THE EXTENT O F RS. 7.30 CRORES FOR THE YEAR UNDER CONSIDERATION WOULD HAVE REMAINED UNDISCLOSED AND ESCAPED TAXATION. FURTHER, THIS IS NOT A CASE WHERE THE ADDITIONAL INCOME WAS DECLARED ON ESTIMATE BASIS OR IN RESPECT OF A DEBATABLE LEGAL ISSUE TO BUY PEA CE OR TO AVOID LITIGATION. SPECIFIC EVIDENCES CONTAINING UNIT - WISE UNACCOUNTED CASH RECEIPTS RELATING TO SALE OF MALL WERE FOUND DURING THE SEARCH AT TWO PREMISES AND AS A RESULT THE APPELLANT HAD NO OPTION BUT TO ADMIT THE UNDISCLOSED INCOME. TH E OMISSION OF SUCH RECEIPTS IN THE REGULAR BOOKS OF A/C OR ORIGINAL RETURN OF INCOME WAS NOT DUE TO ANY BONA FIDE OR INADVERTENT OR MISTAKE ON THE PART OF THE APPELLANT. AS ALREADY DISCUSSED, A PARTICULAR MODUS OPERAND I WAS ADOPTED TO UNDERSTATE THE S A LE PROCEEDS ON SALE OF UNITS IN THE SAID MALL BY WRITING AMOUNTS RECEIVED IN CASH IN CODES OUTSIDE THE REGULAR BOOKS OF A/C, IN THIS CONTEXT, REFERENCE CAN BE MADE TO THE DECISION OF MADRAS HC IN THE CASE OF M. SHAHUL HAMEED BATCHA REPORTED IN 292 8 ITA NO. 841/MUM/2016 1TR 585 WHEREIN PENALTY LEVIED WAS CONFIRMED WHEN THE REVISED RETURN WAS FILED ONLY AFTER THE SEARCH AND THERE WAS NO MATERIAL WITH ASSESSEE TO SHOW THAT MISTAKE HAD CREPT IN ORIGINAL RETURN ACCIDENTALLY WITHOUT ANY INTENTION. IN THE PRESENT CASE ALSO , THERE WAS NO MATERIAL WITH THE APPELLANT TO SHOW THAT MISTAKE HAD CREPT IN ORIGINAL RETURN ACCIDENTALLY WITHOUT ANY INTENTION. THOUGH THE APPELLANT SUBMITTED THAT IT HONOURED THE DECLARATION MADE AT THE TIME OF THE SEARCH BY OFFERING THE ENTIRE UNDISCLOS ED INCOME IN THE RETURN OF INCOME FILED U/S 153A, YET THE APPELLANT CANNOT BE ABSOLVED OF THE PENAL CONSEQUENCES U/S 2.71(L)(C) IN VIEW OF SPECIFIC PROVISIONS OF EXPLANATION 5A TO SEC. 271(L)(C). EXPLANATION - 5A TO SEC. 271(L)(C) PROVIDES THAT WHERE IN THE COURSE OF A SEARCH INITIATED UNDER SEC. 132 ON OR AFTER 01.06,2007, THE ASSESSEE IS FOUND TO BE THE OWNER OF ANY INCOME BASED ON ANY ENTRY IN ANY B OOKS OF ACCOUNT OR OTHER DOCUMENTS OR TRANSACTIONS AND HE CLAIMS THAT SUCH ENTRY IN THE BOOKS OF ACCOUNT OR O THER DOCUMENTS OR TRAN 'SACTIONS REPRESENTS HIS INCOME (WHOLLY OR IN PART) FOR ANY PREVIOUS YEAR WHICH HAS ENDED BEFORE THE DATE OF THE SEARCH AND WHERE THE RETURN OF INCOME FOR SUCH PREVIOUS YEAR HAS BEEN 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 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 PARTICULARS OF SUCH INCOME. THEREFORE, THE ARGUMENT OF THE APPELLANT THAT THE RETURN FILED U/S 153A IS THE STARTING POINT FOR FRESH ASSESSMENTS AND IN VIEW OF EXPLANATION - 4 TO SEC. 271(L)(C), THERE IS NO CONCEALMENT OF INCOME IS BEREFT OF ANY MERIT. 3.4.4 BUT THE ARGUMENT OF THE APPELLANT RELYING ON CERTAIN JUDICIAL PRECEDENTS IS THAT THE INCRIMINATING PAPERS FOUND DURING THE SEARCH CANNOT BE EQUATED WITH DOCUMENTS AS CONTEMPLATED IN EXPLANATION 5A AND THEREFORE EXPLANATION 5A IS NOT APPLICABLE TO THE FACTS OF THE PRESENT CASE. THIS ARGUMENT IS ALSO LACKING IN MERIT. FIRSTLY, AS ADMITTED BY THE LD. COUNSEL, THE DECISIONS RELIED UPON WERE RENDERED IN THE CONTEXT OF EXPL ANATION 5 TO SEC. 271(L)(C), WHERE CLAUSE (II) OF EXPLANATION 5A I.E. WHERE ASSESSEE IS FOUND TO BE THE OWNER OF 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 ACCOUNT OR OTHER DOCUMENTS OR TRANSACTIONS REPRESENTS HIS INCOME (WHOLLY OR IN PART) FOR ANY PREVIOUS YEAR, IS ABSENT. SECONDLY, EVEN PRESUMING FOR A WHILE THAT THE INCRIMINATING PAPERS FOUND DURING THE SEARCH EVIDENCING UNACCOUNTED CASH REC EIPTS CANNOT BE CONSTRUED AS DOCUMENTS AS CLAIMED BY THE APPELLANT, THE TRANSACTIONS REPRESENTING APPELLANT'S UNDISCLOSED INCOME AS ENVISAGED IN EXPLANATION 5A WERE FOUND DURING THE SEARCH AND SEIZURE OPERATIONS. THUS, NOTWITHSTANDING THE POSITION THAT UN DISCLOSED INCOME OF 7.30 CRORES WAS DECLARED IN THE RETURN FILED U/S 153A AND THERE WAS NO OTHER ADDITION IN THE ASSESSMENT ORDER, THE APPELLANT SHALL FOR THE PURPOSE OF IMPOSITION OF PENALTY U/S 271(L)(C) BE DEEMED TO HAVE CONCEALED PARTICULARS OF INCOME. 3.4.5 ADVERTING TO THE CASE LAWS RELIED UPON BY THE APPELLANT, IN THE CASE OF ACIT VS. GEBILAL KANHAIALAL (348 ITR 561)(SC), THE DECLARATION OF ADDITIONAL INCOME U/S 132(4) WAS MADE FOR THE ASSESSMENT YEAR FOR WHICH DUE DATE TO FILE THE RETURN OF INCOME H AS NOT EXPIRED AS ON THE DATE , OF THE INITIATION OF SEARCH. THE PENALTY WAS 9 ITA NO. 841/MUM/2016 LEVIED BY THE REVENUE ON THE GROUND THAT THE APPELLANT HAS NOT PAID TAXES ON THE INCOME ADMITTED DURING THE SEARCH. IN THAT CONTEXT, THE APEX COURT HELD THAT NO TIME LIMIT FOR PAY MENT OF SUCH TAX STOOD IS PRESCRIBED UNDER CLAU SE (2) AND THE ONLY REQUIREMENT STIPULATED IN THE THIRD CONDITION WAS THAT THE ASSESSEE HAS TO 'PAY TAX TOGETHER WITH INTEREST 1 AND THEREFORE THE ASSESSEE IS ENTITLED TO GET IMMUNITY FROM PENALTY UNDER EXPLANATION 5 TO SEC. 27L(L)(C). IN MY 'HUMBLE OPINION, THIS DECISION HAS NO RELEVANCE TO THE FACTS OF THE PRESENT CASE WHERE THE APPELLANT HAS ALREADY FILED THE RETURN OF INCOME FO R THE YEAR PRIOR TO THE SEARCH OR DUE DATE TO FILE THE INCOME HAS ALREADY EXPIRED . IN THE CASE OF SHERATON APPARELS VS. ACIT, (256 ITR 20), THE BOMBAY - HC WAS DEALING WITH A SITUATION WHERE THE ASSESSEE CLAIMED IMMUNITY UNDER EXPLANATION 5 TO SEC. 271(L)(C ) AND IN THAT CONTEXT IT WAS HELD THAT THE LOOSE SLIPS, DIARY, ETC. CANNOT BE CONSIDERED AS DOCUMENTS AS ENVISAGED IN EXPLANATION 5. THIS DECISION IS ALSO NOT APPLICABLE TO THE SEARCHES CONDUCTED AFTER 01.06.2007 WHERE PROVISIONS OF EXPLANATION 5A ARE APPL ICABLE. IN THE CASE OF PURTI SAKHAR KARKANA (35 TAXMAN. COM 594), ALSO RELIED UPON BY THE APPELLANT, THE SEARCH ACTION WAS CONDUCTED ON 23.08.2006 I.E. PRIOR TO INSERTION OF EXPLANATION 5A AND THEREFORE THE SAID DECISION HAS NO APPLICATION TO THE FACTS OF THE PRESENT CASE WHERE THE SEARCH WAS CONDUCTED ON 19.02.2009. SIMILARLY, THE OTHER CASES RELIED ' UPON BY THE APPELLANT WERE RENDERED IN A DIFFERENT FACTUAL CONTEXT AND INSERTION OF EXPLANATION 5A AND AS SUCH THE RATIO OF THOSE ;E: S 3NS IS OF NO AVAIL TO THE CASE OF THE APPELLANT. 3.4.6 IT IS ALSO DIFFICULT TO AGREE WITH THE APPELLANT'S LEGAL CONTENTION THAT BECAUSE THE CONCEALMENT WAS DETECTED DURING THE COURSE OF A SEARCH, NO PENALTY CAN BE LEVIED. IF ADMISSION OF GUILT AFTER DETECTION IS SUFFICIENT EXPLANATION THEN THERE WILL BE NO CASE WHERE PENALTY CAN BE LEVIED, BECAUSE IN ALL CASES WHERE THE GUILT IS ESTABLISHED BEYOND REASONABLE DOUBT THE GUILTY WOULD ADMIT IT AND HE WOULD BE EXONERATED OF THE PENALTY. IN OTHER CASES ANY HOW THERE WILL BE NO PEN ALTY BECAUSE THE GUILT ITSELF IS NOT ESTABLISHED. . . 3.4.7 I FIND THAT IN SO MANY CASES THE COURTS HAVE UPHELD LEVY OF CONCEALMENT PENALTY WHERE REVISED RETURNS WERE FILED SUBSEQUENT TO DETECTION OF THE CONCEALMENT IN A SURVEY OR A SEARCH. THE HONORABLE' HIGH COURT OF MADRAS CONFIRMED THE LEVY OF PENALTY IN THE CASE OF COMMISSIONER OF INCOME - TAX V. C. ANANTHAN CHETTIAR213 ITR 401, IN THIS CASE DURING SEARCH, CASH AND JEWELLERY WERE FOUND - AND THE ASSESSEE FILED REVISED RETURN BY DISCLOSING ADDITIONAL INCOM E - NO EXPLANATION WAS OFFERED BY ASSESSEE EXPECT ASSERTING THAT HE HAD DISCLOSED INCOME ONLY TO BUY PEACE WITH DEPARTMENT - THE COURT HELD THAT IN CIRCUMSTANCES AND FACTS OF THE CASE THE TRIBUNAL ERRED IN SETTING ASIDE PENALTY. 3.4.8 IN T HE CASE OF BANARAS CHEMICAL FACTORY [1977] 108 ITR 96 (ALL.) THE HONORABLE HIGH COURT OF ALLAHABAD HELD THAT EVEN WHEN ASSESSEE MAKES A VOLUNTARY DISCLOSURE OF ITS CONCEALED INCOME, HE CANNOT BE ABSOLVED FROM LEVY OF PENALTY. 3.4.9 THE HONORABLE HIGH COURT OF KERALA HAS IN THE CASE OF P.C. JOSEPH & BROS. [2000] 108 TAXMAN 253 (KER.) CONFIRMED LEVY OF PENALTY. IN THAT CASE AFTER COMPLETION OF ORIGINAL ASSESSMENTS, A SEARCH WAS CONDUCTED AT BUSINESS PREMISES OF ASSESSEE - FIRM AND RESIDENCE - OF PARTNERS. FROM SEIZED DOCUMENTS I T WAS FOUND THAT ASSESSEE HAD SHOWN CERTAIN AMOUNT AS CASH SALES AS AGAINST CREDIT SALES AND 10 ITA NO. 841/MUM/2016 ADDITION WAS MADE FOR ASSESSMENT YEAR 1974 - 75 - HOWEVER, COMMISSIONER (APPEALS) AND TRIBUNAL REDUCED ADDITION NOTICING THAT BOTH PARTIES HAD AGREED THAT BALANCE AM OUNT REPRESENTED EARNINGS OF FOUR ASSESSMENT YEARS 1970 - 71 TO 1973 - 74 - REASSESSMENT PROCEEDINGS UNDER SECTION 147/148 WERE INITIATED AND REVISED RETURNS FOR FOUR ASSESSMENT YEARS WERE FILED BY ASSESSEE OFFERING ADDITIONAL INCOME. REASSESSMENTS WERE MADE A ND ASSESSING OFFICER LEVIED PENALTY UNDER SECTION 271(L)(C). THE COURT HELD THAT AS THE SURRENDER OF INCOME MADE IN REVISED RETURN WAS NOT VOLUNTARY BUT WAS AS A RESULT OF DETECTION BY ASSESSING AUTHORITY, BY FILING REVISED RETURN IT COULD NOT BE SAID THAT THERE WAS NO CONCEALMENT OF INCOME ATTRACTING LEVY OF PENALTY. THE COURT ALSO ACCEPTED THAT THE REVISED RETURN FILED IN RESPONSE TO NOTICE UNDER SECTION 148 COULD NOT BE TREATED AT PAR WJTH VOLUNTARILY FILED REVISED RETURN AND, THUS, PENALTY UNDER SECTION 271(L)(C) WAS RIGHTLY LEVIED ON ASSESSEE. 3 . 4.10 WE CAN ALSO REFER TO THE DECISION OF THE HONORABLE HIGH COURT OF MADRAS IN THE CASE OF M. S. MOHAMMED MARZOOK (LATE) [2006] 283 ITR 254 (MAD.) IN THIS CASE THE ASSESSEE FILED REVISED RETURN BEFORE ISSUE OF NOTICE UNDER SECTION 148, - ASSESSING OFFICER ACCEPTED SAID RETURNS BUT LEVIED PENALTY ON GROUND THAT ASSESSEE FILED REVISED RETURNS ONLY AFTER SEARCH TOOK PLACE AT PREMISES OF ASSESSEE. - TRIBUNAL ALSO HELD THAT THERE WAS NO MATERIAL WITH ASSESSEE TO SHOW THAT MISTAKE HAD CREPT IN ORIGINAL RETURN ACCIDENTALLY WITHOUT ANY INTENTION WARRANTING DELETION OF PENALTY. THE COURT HELD THAT ON FACTS AND HAVING REGARD TO AFORESAID LEGAL POSITION, TRIBUNAL WAS JUSTIFIED IN CONFIRMING PENALTY LEVIED BY ASSESSING OFFICE R. 3.4,11 THE JHARKHAND HIGH COURT IN THE FOLLOWING FACTS OF THE CASE CONFIRMED LEVY OF PENALTY IN THE CASE OF MAHABIT PRASAD BAJAJ 298 ITR 109 (JHARKHAND). FOR THE RELEVANT - ASSESSMENT YEARS, THE ASSESSMENTS WERE COMPLETED UNDER SECTION 143(3). A SEARCH AND SEIZURE WAS CONDUCTED LATER UNDER SECTION 132 AND IN THE COURSE OF THE SAID SEARCH OPERATIONS, 'CERTAIN BOOKS OF ACCOUNT AND PAPERS RELATING TO THE BUSINESS OF THE ASSESSEE WERE FOUND AND SEIZED. THE SAID BOOKS OF ACCOUNT PERTAINED TO THE EARLIER FINAN CIAL YEARS. CERTAIN LOOSE SHEETS INCLUDING SALES, ETC., WERE ALSO SEIZED. THE TRANSACTIONS MADE THROUGH BANK ACCOUNTS WERE FOUND TO HAVE BEEN MOSTLY KEPT OUT OF THE BOOKS OF ACCOUNT. AFTER THE AFORESAID SEARCH AND SEIZURE CARRIED OUT ON 26 - 8 - 1986, THE ASSE SSEE FILED A REVISED RETURN, UNDER THE AMNESTY SCHEME DISCLOSING ADDITIONAL INCOME FOR THE ASSESSMENT YEARS 1984 - 85 AND 1985 - 86. THE ASSESSMENTS WERE REGULARIZED BY GETTING SERVICE OF NOTICE UNDER SECTION 148 AND THE ASSESSMENTS, WERE COMPLETED FOR BOTH TH E YEARS ON DISCLOSED AMOUNT ONLY. SUBSEQUENTLY, PENALTY WAS LEVIED. THE ASSESSEE'S CONTENTION WAS THAT NO PENALTY WAS IMPOSABLE UNDER SECTION 271(L)(C) AS THE REVISED RETURNS FILED BY HIM HAD BEEN ACCEPTED. 3.4.12 ON APPEAL THE COURT HELD THAT THE ASSESSE E DID NOT ACT VOLUNTARILY AND BONA FIDE IN FILING THE REVISED RETURN AND OFFERING THE ADDITIONAL INCOME AND, ADMITTEDLY, THE REVISED RETURN WAS NOT FILED WITHIN THE FINANCIAL YEAR OR EVEN BEFORE SEARCH AND SEIZURE WAS CONDUCTED AND INCRIMINATING DOCUMENTS WERE RECOVERED SHOWING DISCLOSED INCOME OF THE ASSESSEE. THE ASSESSING OFFICER WAS, THEREFORE, FULLY JUSTIFIED IN INITIATING PENALTY PROCEEDINGS AND LEVYING PENALTY UNDER SECTION 271(L)(C) IN VIEW OF EXPLANATION 5 TO SECTION 271 (1) (C), 11 ITA NO. 841/MUM/2016 3.4.13 SIMILARLY, IN THE CASE OF SHERATON APPARELS V. ASST. C/R[2002] 256MTR 20 THE PROVISIONS OF SECTION 271(L)(C) OF THE ACT AND EXPLANATION 5 CAME UP FOR CONSIDERATION BEFORE THE BOMBAY HIGH COURT. IN THAT CASE, A SEARCH AND SEIZURE OPERATION UNDER SECTION 132 OF THE ACT WAS CARRIED OUT IN THE SHOP PREMISES OF THE APPELLANT AFTER RETURNS FILED BY HIM. IN THE COURSE OF SEARCH AND SEIZURE OPERATIONS, CERTAIN DOCUMENTS, PAPERS AND RECORDS, INCLUDING CERTAIN DIARIES WERE SEIZED, AFTER SCRUTINY, UNACCOUNTED INCOME W AS WORKED OUT. THE APPELLANT ADMITTED THE ABOVE UNACCOUNTED INCOME AND OFFERED TO DISCLOSE THE ADDITIONAL INCOME IN THE HANDS OF VARIOUS FUNDS IN VARIOUS YEARS WHICH WERE BROADLY ON THE BASIS OF ENTRIES RECORDED IN THE DIARIES. ON THE BASIS OF DISCLOSURES, ALL THE GROUPS CONCERNED INCLUDING THE APPELLANT CHOSE TO FILE A REVISED RETURN DISCLOSING THE ADDITIONAL INCOME WHICH WAS ACCEPTED BY THE ASSESSING OFFICER BY PASSING THE ASSESSMENT ORDER UNDER SECTION 152(3) OF THE ACT. IN THE ASSESSMENT ORDER, THE ASSE SSING OFFICER ORDERED INITIATION OF PENALTY PROCEEDINGS UNDER SECTION 271(L)(C) OF THE ACT. THE ASSESSING AUTHORITY FINALLY PASSED THE ORDER OF PENALTY. AGGRIEVED WITH THE SAID ORDER, THE APPELLANT PREFERRED APPEALS BEFORE THE APPELLATE AUTHORITY WHO CONFI RMED THE LEVY OF PENALTY. THE APPELLANT THEN MOVED THE INCOME - TAX APPELLATE TRIBUNAL BY FILING APPEALS WHICH WERE EVENTUALLY DISMISSED. THE APPELLANT THEN MOVED THE BOMBAY HIGH COURT RAISING THE FOLLOWING SUBSTANTIAL QUESTION OF LAW (PAGE 25): 'WHETHER, ON THE FACTS AND IN CIRCUMSTANCES OF THE CASE AND LAW, THE DIARIES, ON THE BASIS OF WHICH THE ADDITIONS WERE MADE COULD BE REGARDED AS BOOKS OF ACCOUNT FOR THE PURPOSES OF CLAUSE (1) OF EXPLANATION 5 TO S ECTION 271(L)(C) OF THE ACT SO AS TO PROVIDE IMMUNITY TO THE APPELLANTS ?' DISMISSING ALL THE APPEALS, THE HIGHS COURT OBSERVED (PAGE 32): THE TERM BOOKS OF ACCOUNT REFERRED TO IN CLAUSE ( 1 ) OF EXPLANATION 5 TO SECTION 271(1)( C ) MEANS BOOKS OF ACCOUNT WHICH HAVE BEEN MAINTAINED FOR DETERMINING ANY SOURCE OF INCOME. THE TERM SOURCE OF INCOME, AS UNDERSTOOD IN THE ACT IS TO IDENTIFY OR CLASSIFY INCOME SO AS TO DETERMINE UNDER WHICH HEAD, OUT OF THE VARIOUS HEADS OF INCOME REFERRED TO IN SECTION 14 OF THE ACT, IT WOULD FALL FOR THE PURPOSES OF COMPUTATION OF TOTAL INCOME FOR CHARGING INCOME - TAX THEREON. THUS, THE TERM BOOKS OF ACCOUNT REFERRED TO IN THIS RELEVANT SUB - CLAUSE OF EXPLANATION 5 WOULD MEAN THOSE BOOKS OF ACCOUNT WHOSE MAIN OBJECT IS TO PROVIDE CREDIBLE DATA AND INFORMATION TO FILE THE TAX RETURNS. THE CREDIBLE ACCOUNTING RECORD PROVIDES BEST FOUNDATION FOR FILING RETURN OF BOTH DIRECT AND INDIRECT TAXES. ACCOUNTING IS CALLED A LANGUAGE OF BUSINESS. ITS AIM IS TO COMMUNICATE FINANCIAL INFORMATION ABOUT THE FINANCIAL RESULTS.THIS IS NOT POSSIBLE UNLE SS THE MAIN OBJECTIVES OF THE BOOKS OF ACCOUNT ARE TO MAINTAIN RECORD OF BUSINESS TO CALCULATE PROFIT EARNED OR LOSS SUFFERED DURING THE PERIOD OF TIME, TO DEPICT THE FINANCIAL POSITION OF THE BUSINESS: TO PORTRAY LIQUIDITY POSITION; TO PROVIDE UP - TO - DATE INFORMATION OF ASSETS AND LIABILITIES WITH A VIEW TO DERIVE INFORMATION SO AS TO PREPARE PROFIT AND LOSS ACCOUNT AND DRAW BALANCE SHEET TO DETERMINE INCOME AND SOURCE THEREOF. THUS, THE TERM BOOKS OF ACCOUNT REFERRED TO 12 ITA NO. 841/MUM/2016 IN EXPLANATION 5 MUST ANSWER THE A BOVE QUALIFICATIONS. IT CANNOT BE UNDERSTOOD TO MEAN COMPILATION OR COLLECTIONS OF SHEETS IN ONE VOLUME. THE BOOKS OF ACCOUNT REFERRED TO ARE THOSE BOOKS OF ACCOUNT WHICH ARE MAINTAINED FOR THE PURPOSES OF THE ACT AND NOT THE DIARIES WHICH ARE MAINTAINED M ERELY MANS PRIVATE RECORD; PREPARED BY HIM AS MAY BE IN ACCORDANCE WITH HIS PLEASURE OR CONVENIENCE TO SECRETLY RECORD SECRET, UNACCOUNTED CLANDESTINE TRANSACTIONS NOT MEANT FOR THE PURPOSES OF THE ACT, BUT WITH SPECIFIC INTENTION OR DESIRE ON THE PART OF THE ASSESSEE TO HIDE OR CONCEAL INCOME SO AS TO AVOID IMPOSITION OF TAX THEREON. THE TERM BOOKS OF ACCOUNT REFERRED TO IN CLAUSE ( 1 ) OF EXPLANATION 5 TO SECTION 271(1)( C ) MEANS BOOKS OF ACCOUNT WHICH HAVE BEEN MAINTAINED FOR DETERMINING ANY SOURCE OF I NCOME. THE TERM SOURCE OF INCOME, AS UNDERSTOOD IN THE ACT IS TO IDENTIFY OR CLASSIFY INCOME SO AS TO DETERMINE UNDER WHICH HEAD, OUT OF THE VARIOUS HEADS OF INCOME REFERRED TO IN SECTION 14 OF THE ACT, IT WOULD FALL FOR THE PURPOSES OF COMPUTATION OF TOTA L INCOME FOR CHARGING INCOME - TAX THEREON. THUS, THE TERM BOOKS OF ACCOUNT REFERRED TO IN THIS RELEVANT SUB - CLAUSE OF EXPLANATION 5 WOULD MEAN THOSE BOOKS OF ACCOUNT WHOSE MAIN OBJECT IS TO PROVIDE CREDIBLE DATA AND INFORMATION TO FILE THE TAX RETURNS. THE CREDIBLE ACCOUNTING RECORD PROVIDES BEST FOUNDATION FOR FILING RETURN OF BOTH DIRECT AND INDIRECT TAXES. ACCOUNTING IS CALLED A LANGUAGE OF BUSINESS. ITS AIM IS TO COMMUNICATE FINANCIAL INFORMATION ABOUT THE FINANCIAL RESULTS.THIS IS NOT POSSIBLE UNLESS T HE MAIN OBJECTIVES OF THE BOOKS OF ACCOUNT ARE TO MAINTAIN RECORD OF BUSINESS TO CALCULATE PROFIT EARNED OR LOSS SUFFERED DURING THE PERIOD OF TIME, TO DEPICT THE FINANCIAL POSITION OF THE BUSINESS: TO PORTRAY LIQUIDITY POSITION; TO PROVIDE UP - TO - DATE INFO RMATION OF ASSETS AND LIABILITIES WITH A VIEW TO DERIVE INFORMATION SO AS TO PREPARE PROFIT AND LOSS ACCOUNT AND DRAW BALANCE SHEET TO DETERMINE INCOME AND SOURCE THEREOF. THUS, THE TERM BOOKS OF ACCOUNT REFERRED TO IN EXPLANATION 5 MUST ANSWER THE ABOVE QUALIFICATIONS. IT CANNOT BE UNDERSTOOD TO MEAN COMPILATION OR COLLECTIONS OF SHEETS IN ONE VOLUME. THE BOOKS OF ACCOUNT REFERRED TO ARE THOSE BOOKS OF ACCOUNT WHICH ARE MAINTAINED FOR THE PURPOSES OF THE ACT AND NOT THE DIARIES WHICH ARE MAINTAINED MEREL Y MANS PRIVATE RECORD; PREPARED BY HIM AS MAY BE IN ACCORDANCE WITH HIS PLEASURE OR CONVENIENCE TO SECRETLY RECORD SECRET, UNACCOUNTED CLANDESTINE TRANSACTIONS NOT MEANT FOR THE PURPOSES OF THE ACT, BUT WITH SPECIFIC INTENTION OR DESIRE ON THE PART OF THE ASSESSEE TO HIDE OR CONCEAL INCOME SO AS TO AVOID IMPOSITION OF TAX THEREON. THE WORDS IN EXPLANATION 5 BOOKS OF ACCOUNT, IF ANY, MAINTAINED BY HIM FOR ANY SOURCE OF INCOME ARE IMPORTANT WORDS SIGNIFYING THE LEGISLATIVE INTENT EMBODIED IN THE EXPLANATIO N WARRANTING GRANT OF IMMUNITY FROM PENALTY. THE LEGISLATIVE INTENT IS TO ADMIT ONLY THOSE BOOKS OF ACCOUNT MAINTAINED BY THE ASSESSEE ON HIS OWN BEHALF AS BY THEIR VERY NATURE AND CIRCUMSTANCES ARE MAINTAINED FOR THE PURPOSES OF DRAWING SOURCE OF INCOME. THEREFORE, WHEN BOOKS OF ACCOUNT ARE TENDERED FOR CLAIMING BENEFIT OF EXPLANATION 5 OF SECTION 271(1)( C ), IT MUST BE SHOWN TO BE A BOOK, THAT BOOK MUST BE A BOOK OF ACCOUNT, AND ON THE TOP OF IT THAT MUST BE 13 ITA NO. 841/MUM/2016 ONE MAINTAINED FOR THE PURPOSES OF DRAWING SOURC E OF INCOME UNDER THE ACT. THESE ESSENTIAL REQUIREMENTS MUST BE CAREFULLY OBSERVED WHILE IMPLEMENTING TAX LEGISLATION IN THE COUNTRY WHERE SECRET AND PARALLEL ACCOUNTS BASED ON FRAUDS AND FORGERY ARE EXTREMELY COMMON AND RESPONSIBILITY OF KEEPING AND MAINT AINING ACCOUNTS FOR THE PURPOSES OF THE TAX LEGISLATION IS HONOURED IN THE BREACH RATHER THAN THE OBSERVANCE. NOW, TURNING TO THE FACTS OF THE CASES IN HAND, PRIVATE DIARIES MAY HAVE BEEN MOST REGULARLY MAINTAINED, IT MAY HAVE BEEN EXHIBITING RECORD OF TH E FACTUAL FACTS, CONTEMPORANEOUSLY MADE BUT THEY WERE NEVER MAINTAINED FOR THE PURPOSES OF THE ACT TO DRAW SOURCE OF INCOME OR FOR THE COMPUTATION OF TOTAL INCOME TO OFFER INCOME CALCULATED THEREFROM FOR THE PURPOSES OF TAXATION, SUCH BOOKS OR DIARIES CAN HARDLY BE DESIGNED OR ACCEPTED AS BOOKS OF ACCOUNT FOR THE PURPOSES OF EXPLANATION 5 TO SECTION 271(1)( C ) SO AS TO AFFORD IMMUNITY FROM PENALTY. NONE OF THE CASES CITED BY THE APPELLANTS WERE CLOSE TO THE FACTS FOUND HEREIN, HENCE NO REFERENCE THEREOF IN O UR OPINION, IS NECESSARY. THE TRIBUNAL WAS PERFECTLY JUSTIFIED IN UPHOLDING LEVY OF THE PENALTY UNDER SECTION 271(1)( C ). ACCORDINGLY, QUESTION OF LAW REFRAMED IS ANSWERED IN NEGATIVE, I.E., AGAINST THE APPELLANTS/ASSESSEE AND IN FAVOUR OF THE REVENUE. IN THE RESULT, ALL THE APPEALS ARE DISMISSED WITH NO ORDER AS TO COSTS. 8. HE FURTHER REFERRED TO MUMBAI ITAT DECISION IN THE CASE OF ACIT VS. SURYAPRAKASH AGARWAL 152 ITD 278 (MUM). THEREAFTER HE OBSERVED THAT THE NEXT QUESTION THAT ARISES FOR CONSIDERATION IS WHETHER THE ADDITIONAL INCOME OFFERED IN THE RETURN FILED IN RESPONSE TO THE 148/153A NOTICE WOULD AMOUNT TO CONCEALED INCOME BECAUSE THE SAME HAD NOT BEEN DISCLOSED IN THE REGULAR RETURN OF INCOME FILED P RIOR TO THE SEARCH. 9. HE FIND THAT QUESTION WAS ANSWERED BY THE ITAT IN RECENT DECISION IN THE CASE OF SARITA KAUR MANJIT SINGH CHOPRA (IN ITA NO. 1562/PN/2013 FOR A.Y. 2009 - 10 VIDE ORDER DATED 30.10.2010). T HEREAFTER, THE LD. CIT(A) DEAL T WITH THE CONT ENTION THAT THE INCOME ASSESSED TO TAX AS UNDISCLOSED RECEIPTS FROM SALE OF SHOPS AT THE LITTLE WORLD - MALL AT NAVI MUMBAI ARE THE GROSS SALE RECEIPTS OF THE APPELLANT AND THE ACTUAL COMPONENT OF 14 ITA NO. 841/MUM/2016 'INCOME' IN SUCH RECEIPTS W ILL BE SUBSTANTIALLY LOWER. IT WA S ARGUED THAT THE APPELLANT IN THE COURSE OF SEARCH OFFERED THE ENTIRE GROSS RECEIPTS TO TAX TO AVOID LITIGATION AND AS THE COMPONENT REAL OF 'INCOME' IN SUCH RECEIPT WOULD BE SUBSTANTIALLY LOWER, THE LEVY OF PENALTY U/S 271(L)(C) ON THE GROSS RECEIPTS IS N OT JUSTIFIED. 10. HE RE J ECTED THIS BY OBSERVING THAT F IRSTLY, NO EVIDENCE IS PLACED ON RECORD TO INDICATE THAT THE APPELLANT INCURRED EXPENDITURE OVER AND ABOVE THE EXPENDITURE RECORDED IN THE REGULAR BOOKS OF A/C. SECONDLY, EVEN PRESUMING FOR A WHILE THA T SOME EXPENDITURE IN RELATION TO UNACCOUNTED CASH RECEIPTS WAS INCURRED OUTSIDE THE BOOKS OF ACCOUNT, THE SAME CANNOT BE ALLOWED AS EXPENDITURE AS PER THE PROVISO TO SEC. 69C. IN SUCH A SITUATION, THE CONTENTION OF THE APPELLANT THAT IT OFFERED GROSS CASH RECEIPTS TO TAX TO AVOID LITIGATION AND THE COMPONENT OF REAL INCOME IN SUCH RECEIPTS IS LOWER CANNOT BE ACCEPTED. 11. THE LD. CIT(A) CONCLUDED AS UNDER: TO SUM UP, PROVISIONS O F EXPLANATION - 5A TO SECTION 271( L)(C) HAVE BEEN ESPECIALLY BROUGHT INTO STATUTE TO DEAL WITH THIS KIND OF CASES WHERE THE ASSESSEE HAD ALREADY FILED ITS RETURN OF INCOME U/S. 139 AND SEARCH PROCEEDINGS LEAD TO DISCOVERY OF CONCEALED INCOME PERTAINING TO S U CH PERIOD. IN SUCH CASES, THE ASSESSEE IS DEEMED TO HAVE CONCEALED PARTI CULARS OF ITS INCOME EVEN IF SUCH CONCEALED INCOME IS DISCLOSED IN THE RETURN OF INCOME FILED IN RESPONSE TO NOTI CE ISSUED U/S. 153C /153A AND TH E RETURNED INCOME IS ACCEPTED AS IT IS BY THE AO. THE FACTS OF THE CASE WHEN APPRECIATED WITH REFERENCE TO THE PROVISIONS OF EXPLANATION 5A TO SECTION 271(L)(C) LEAVE NO ROOM FOR DOUBT THAT PENALTY IN THIS CASE IS CLEARLY EXIGIBLE FOR CONCEALMENT OF INCOME. IN VIEW OF THE FOREGOING DISCUSSION, IT IS HELD THAT THAT THIS IS A FIT A CASE FOR IMPOSITION OF PENALTY U/S 271(L)(C) FOR CONCEALING THE PARTICULARS OF INCOME BY THE APPELLANT IN RESPECT OF AFORESAID CASH RECEIPTS OF RS. 7,30,50,000/ - . ACCORDINGLY, THE MINIMUM PENALTY IMPOSED BY THE ASSESSING OFFICER OF RS. 2,48,29,695/ - DOES NOT CALL FOR ANY INTERFERENCE AND THE SAME IS UPHELD IN ENTIRETY. 12. AGAINST THE ABOVE ORDER, THE ASSESSEE IS IN APPEAL BEFORE US. 15 ITA NO. 841/MUM/2016 13. WE HAVE HEARD BOTH THE COUNSEL AND PERUSED THE RECORDS. THE LD. COUNSEL OF THE ASSESSEE SUBMITTED THAT THERE IS NO PRIMA FACIE SATISFACTION AS TO CONCEALMENT, AS THE SAME IS ABSENT IN THE ASSESSMENT ORDER/SHOW CAUSE NOTICE INASMUCH AS THE A.O. HAS ISSUED NOTICE MECHANICALLY U/S. 271(1)(C) AND 271AAA WITHOUT APPLICATION OF MIND. THE LD. COUNSEL OF THE ASSESSEE SUBMITTED THAT THE S HOW CAUSE NOTICE ISSUED U/S. 274 ON 30.12.2010 DOES NOT SPECIFY THE EXACT LIMB ON WHICH THE PENALTY IS INITIATED AND THEREFORE THE NOTICE ITSELF IS BAD AND THEREFORE NOT SUSTAINABLE. 14. THE LD. COUNSEL OF THE ASSESSEE FURTHER SUBMITTED THAT THE ISSUE IS COVERED IN FAVOUR OF THE ASSESSEE BY THE DECISION OF ITAT IN THE CASE OF SIDDHI HOMEMAKERS (IN ITA NO. 4168/M/2013). HE FURTHER PLACED RELIANCE UPON THE FOLLOWING CASE LAWS: (I) SIDDHI HOME MAKERS - VS - ITO, CENTRAL, THANE, ITA NO. 4168/M/2013 (FOR A. Y. 2 008 - 09), DT. 28.04.2017 - HON. MEMBERS, 'E' BENCH ITA T, MUMBAI (II) CIT - VS - SSA EMERALD MEADOWS, 73 TAXMANN. COM 248 (SC) ( II I) CIT - VS - SSA EMERALD MEADOWS, 73 TAXMANN.COM 241 (KAR) (2016) (IV) CIT - VS - SAMSON PERINCHERY, 392ITR 4 (BOM) (V) A.P. SHANMUGARAJ - VS - MWP LTD., 264 CTR 502 (KAR) (2014) (VI) CIT & ANR - VS - MANJUNATHA COTTON & GINNING FACTORY, 359 ITR 565 (KARN)(2013) (VII) MADHUSHREE GUPTA - VS - UNION OF INDIA & ANR, 317 ITR 107 (DELHI) (2009) 15. AS REGARDS THE MERIT S OF THE CASE, THE LD. COUNSEL OF THE ASSESSEE SUBMITTED THAT THE ASSESSEE HAS OFFERED A SUM OF RS.7,30,50,000/ - FOR TAX AGAINST THE NOTICE U/S. 153A WHICH HAS BEEN ACCEPTED BY THE A.O. WITHOUT ADDITION. HENCE, HE PLEADED THAT SINCE THERE IS NO ADDITION, T HERE CANNOT BE ANY PENALTY U/S. 271(1)(C). HE PLACED RELIANCE UPON EXPLANATION 4 TO SECTION 271(1)(C). IN THIS REGARD, THE LD. COUNSEL OF THE ASSESSEE PLACED RELIANCE UPON THE CASE LAWS: (VIII) KIRIT DAHYABHAI PATEL - VS - ACIT, 80TAXMANN.COM 162 (GUJ) (2017) (IX) DCIT - VS - PURTI SAKHAR KHARKHANA, 35 TAXMANN.COM 594 (NAGPUR)(2 0 13) 16 ITA NO. 841/MUM/2016 16. THE LD. COUNSEL OF THE ASSESSEE FURTHER SUBMITTED THAT THE 3 RD MEMBER DECISION OF ITAT AMRITSAR I N THE CASE OF HPCL MITTAL ENERGY LTD. VS. ACIT (IN ITA NO. 554 & 555/ASR/2014 VIDE ORDER DATED 07.05.2018) IS NOT APPLICABLE HERE. 17. PER CONTRA, THE LD. DEPARTMENTAL REPRESENTATIVE (LD. DR FOR SHORT) AS REGARDS THE MERITS OF THE CASE, THE LD. CIT(A) HAS PASSED A VERY ELABORATE ORDER COVERING ALL THE ISSUES RAISED B Y THE ASSESSEE. AS REGARDS THE ASSESSEES PLEA ON THE PRELIMINARY ISSUE, THE LD. DR SUBMITTED THAT THE LD. CIT(A) HAS FULLY COVERED THIS ISSUE ALSO. HE SUBMITTED THAT THE ASSESSEE HAD NOT DENIED THAT HE HAD NOT RECEIVED THE NOTICES U/S. 271(1)(C) AND 271AA A. HE FURTHER SUBMITTED THAT AS REGARDS THE ISSUE OF STRIKING OFF THE RELEVANT PORTION IN THE NOTICE ISSUED IS CONCERNED, HE SUBMITTED THAT THIS ISSUE WAS NEVER RAISED BEFORE THE AUTHORITIES BELOW. IN ANY CASE, HE SUBMITTED THAT THIS ISSUE IS COVERED IN FA VOUR OF THE REVENUE BY THE SEVERAL CASE LAWS: 18. UPON CAREFUL CONSIDERATION, WE FIND THAT THE PRELIMINARY ISSUE RAISED BY THE LD. COUNSEL OF THE ASSESSEE HAS TWO LIMBS. THE FIRST PRELIMINARY ISSUE RAISED IS THAT THE A.O. HAS ISSUED NOTICE BOTH U/S. 271(1 )(C) AND SECTION 271AAA AND, HENCE, THE NOTICE IS BAD AND THE SECOND LIMB IN THIS REGARD IS THAT THE A.O. HAS NOT STRICKEN OFF THE RELEVANT LIMB OF CHARGE IN THE NOTICE U/S. 271(1)(C) IS CONCERNED. AS REGARDS THE PRELIMINARY ISSUE OF GIVING NOTICE BOTH U/S . 271(1)(C) AND 271AAA IS CONCERNED, WE NOTE THAT IT IS NOT DISPUTED THAT THE A.O. HAS NOT ISSUED BOTH THE NOTICES. ADMITTEDLY, NOTICE U/S. 271AAA W AS NOT ACTED UPON. THE LD. CIT(A) HAS GIVEN A FINDING THAT THE A.O. HAS GIVEN THE SAID NOTICE OUT OF ABUNDAN T CAUTION. PRIMA FACIE SATISFACTION OF THE A.O. REGARDING THE CONCEALMENT WAS CLEARLY EXHIBITED IN THE ASSESSMENT ORDER. HENCE, THE LD. CIT(A) HAS 17 ITA NO. 841/MUM/2016 FOUND NO REASON TO HOLD THAT THE PENALTY IS LIABLE TO BE QUASHED SINCE THE NOTICE U/S. 271(1)(C)AND 271AAA BO TH WERE ISSUED AND NOTICE U/S. 271AAA WAS NOT ACTED UPON , EVEN AT THE COST OF REPETITION WE MAY REFER TO THE LD. CIT(A)S OBSERVATION IN 3.4 .1 MENTIONED HEREINABOVE : 3 . 4.1 FROM A BARE READING OF THE ABOVE EXTRACT IN THE ASSESSMENT ORDER, IT IS QUITE EVIDENT THAT THE PENALTY PROCEEDINGS WERE NOT INITIATED IN A PERFUNCTORY MANNER BY THE AO AND THERE IS MENTION ABOUT INITIATION OF PENALTY PROCEEDINGS AT THREE PLACES IN THE ASSE SSMENT ORDER, TWICE IN THE TEXT OF THE ORDER AND AGAIN AT THE END OF THE ORDER. THIS CLEARLY SHOWS THAT THERE WAS APPLICATION OF MIND ON THE PART OF THE ASSESSING OFFICER AND PRIMA FACIE SATISFACTION OF ASSESSING OFFICER THAT THE CASE MAY DESERVE IMPOSITIO N OF PENALTY IS CLEARLY DISCERNIBLE FROM ASSESSMENT ORDER PASSED. AS REGARDS THE MENTION OF BOTH THE SECTIONS I.E. SEC. 271(L)(C) AND 271AAA IN THE ASSESSMENT ORDER, FIRSTLY, THIS IS NOT A CASE WHERE PENALTY PROCEEDINGS ARE NOT INITIATED AT ALL DURING THE ASSESSMENT PROCEEDINGS. IT NEEDS TO BE APPRECIATED THAT CONCEALMENT OF PARTICULARS OF INCOME AND FURNISHING OF INACCURATE PARTICULARS THEREOF SOMETIMES OVERLAP AND THEREFORE MERELY BECAUSE SPECIFIC CHARGE IS NOT INDICATED IN THE ASSESSMENT ORDER, IT DOES N OT VITIATE TH E ENTIRE LEVY PENALTY WHEN THE PENALTY IS LEVIED LATER ON A SPECIFIC CHARGE. SECONDLY, AT TIMES BOTH THE SECTIONS ARE MENTIONED IN ASSESSMENT ORDERS PASSED CONSEQUENT TO THE SEARCH AND SEIZURE OP ERATION AS AN ABUNDANT CAUTION AND FOR THE REASO N THAT FOR SOME ASSESSMENT YEAR IN THE BLOCK PERIOD I.E. SPECIFIED PREVIOUS YEARS, PRO VISIONS OF SEC. 271AAA ARE APPLICABLE AND FOR OTHER YEARS, PROVISIONS OF SEC. 271(L)(C) ARE ATTRACTED. IN SUCH CASES, WHAT IS IMPORTANT TO BE SEEN IS WHETHER PENALTY IS LEVIED BY THE AO ON A SPECIFIC C HARGE AND UNDER A SPECIFIC SECTION IN THE PENALTY ORDER. IN THE CASE OF THE APPELLANT, DURING THE PENALTY PROCEEDINGS AFTER AFFORDING AN OP PORTUNITY OF BEING HEARD TO THE APPELLANT AND ON APPRECIATION OF MA TERIAL AND EVIDENCES AVAILABLE ON RECORD BY THE A.O. THE PENALTY WAS LEVIED UNDER A SPECIFIC SECTION 271(L)(C) AND ON A SPECIFIC CHARGE THAT THE APPELLANT CONCEALED PARTICULARS OF INCOME. WE FIND THAT THE REASONING GIVEN BY THE LD. CIT(A) IS COGENT. THE ASSESSEE HAS RECEIVED BOTH NOTICES. NOTICE U/S. 271AAA WAS ISSUED BY THE A.O. UNDER ABUNDANT CAUTION ONLY AND IT WAS NOT SUBSEQUENTLY ACTED UPON. 19. AS REGARDS THE ISSUE OF STRIKING OFF T HE RELEVANT LIMB IN NOTICE U/S. 271(1) IS CONCERNED, WE FIND THAT THIS ISSUE WAS NEVER BEFORE THE LD. CIT(A). IN FACT, THE LD. CIT(A) IN HIS ORDER NOTED THAT THE ASSESSEE HAD ARGUED THAT THE PENALTY NEEDS TO BE CANCELLED 18 ITA NO. 841/MUM/2016 BECAUSE A.O. HAS ISSUED NOTICE U/S . 271AAA AND NOT U/S.271(1)(C). THE LD. CIT(A) HAS CATEGORICALLY FOUND THAT THE PENALTY U/S. 271(1)(C) HAS BEEN LEVIED ON A SPECIFIC CHARGE OF CONCEALMENT BY THE ASSESSEE. THIS ISSUE IS NEITHER RAISED BEFORE IN THE GR OUNDS OF APPEAL BEFORE THE LD. C IT(A), NOR IN THE WRITTEN SUBMISSION OF THE LD. CIT(A), COPY OF WHICH HAS BEEN PLACED IN THE PAPER BOOK. BEFORE THE LD. C IT(A), THE ISSUE RAISED BY THE ASSESSEE WAS ONLY THAT NOTICES HAS BEEN CLAIMED TO BE ISSUED BOTH U/S. 271AAA AND U/S. 271(1)(C). HENCE , THE LEVY OF PENALTY IS BAD. 20. WE FIND THAT AS REGARDS THE STRIKING O F F THE RELEVANT LIMB IN THE NOTICE U/S. 271(1)(C) IS CONCERNED, THE LD. COUNSEL OF THE ASSESSEE HAS PLACED RELIANCE UPON SEVERAL CASE LAWS AS ABOVE. FURTHER, THE LD. DEPARTMENTAL REPR ESENTATIVE RELIED UPON SEVERAL CASE LAWS FOR THE PROPOSITION THAT THE ISSUE IS COVERED IN FAVOUR OF THE REVENUE. FOLLOWING DECISIONS ARE SAID TO BE IN FAVOUR OF THE REVENUE IN THIS REGARD WHICH READS AS UNDER: MAHARAJ GARAJE & CO. VS. CIT [2018] 400 ITR 2 9 2 (BOM) KAUSHALYA DEVI & ORS VS SHRI K.L. BANSAL [ 1970 ] AIR 838, 1969 SCR (2)1048 CIT VS. SVA CHETHYAR 44 ITR 7 39 (SC) 21. IN ANY CASE, WE FIND THAT THIS ISSUE W AS NEVER RAISED BEFORE THE LD. C IT(A). I N OUR CONSIDERED OPINION, THE ADJUDICATION OF THIS ISSUE NEEDS REFERENCE TO THE ORIGINAL RECORDS IN ORDER TO EXAMINE THE VERACITY OF THE ASSESSEES CLAIM , I N VIEW OF THE LD. C IT(A)S FINDING THAT THE PENALTY WAS LEVIED ON SPECIFIC CHARGE OF CONCEALMENT OF INCOME AND NOTING THAT THE ASSESSEE HAS PLEADED THAT ONLY NOTICE U/S. 271AAAA WAS RECEIVED. HENCE , WE DEEM IT APPROPRIATE TO REMIT THIS ISSUE T O THE FILE OF THE LD. CIT(A) ONLY AFTER FACTUAL EXAMIN ATION OF THIS CLAIM , THE CASE LAW ON THE ISSUE CITED ABOVE NEED TO BE CONSIDERED. HENCE, THIS ISSUE IS REMITTED TO THE FILE OF THE LD. CIT(A). THE LD. CIT(A) IS DIRECTED TO CONSIDER THE ISSUE AND PASS A SPEAKING ORDER. 19 ITA NO. 841/MUM/2016 22. AS REGARDS THE MERITS OF THE CASE IS CONCERNED, WE FIND THAT THE LD. CIT(A) HAS GIVEN A ELABORATE FINDING ON THIS ISSUE ALSO. IT IS NOTED THAT THE PENALTY HAS BEEN LEVIED U/S. 271(1)(C) UNDER EXPLANATION 5A. WE MAY GAINFULLY REFER TO EXPLANATION 5A OF SECTION 271(1)(C) IN THIS REG ARD WHICH READS AS UNDER: FAILURE TO FURNISH RETURNS, COMPLY WITH NOTICES, CONCEALMENT OF INCOME, ETC. 271. (1) IF THE 70 [ASSESSING] OFFICER OR THE 71 [***] 72 [COMMISSIONER (APPEALS)] 73 [OR THE 74 [PRINCIPAL COMMISSIONER OR] COMMISSIONER] IN THE COURSE OF ANY PROCEEDINGS UNDER THIS ACT 75 , IS SATISFIED THAT ANY PERSON ( A ) 76 [***] ( B ) HAS 77 [***] FAILED TO COMPLY WITH A NOTICE 78 [UNDER SUB - SECTION (2) OF SECTION 115WD OR UNDER SUB - SECTION (2) OF SECTION 115WE OR] UNDER SU B - SECTION (1) OF SECTION 142 OR SUB - SECTION (2) OF SECTION 143 79 [OR FAILS TO COMPLY WITH A DIRECTION ISSUED UNDER SUB - SECTION (2A) OF SECTION 142 ], OR ( C ) HAS CONCEALED THE PARTICULARS OF 80 HIS INCOME OR 81 [***] 80 FURNISHED INACCURATE PARTICULARS OF 82 [SUCH INCOME, OR] 80 83 [( D ) HAS CONCEALED THE PARTICULARS OF THE FRINGE BENEFITS OR FURNISHED INACCURATE PARTICULARS 80 OF SUCH FRINGE BENEFITS,] HE MAY DIRECT THAT SUCH PERSON SHALL PAY BY WAY OF PENALTY, ( I ) 84 [***] 85 [( II ) IN THE CASES REFERRED TO IN CLAUSE ( B ), 86 [IN ADDITION TO TAX, IF ANY, PAYABLE] BY HIM, 87 [A SUM OF TEN THOUSAND RUPEES] FOR EACH SUCH FAILURE ;] 88 [( III ) IN THE CASES REFERRED TO IN CLAUSE ( C ) 89 [OR CLAUSE ( D )], 90 [IN ADDITION TO TAX, IF ANY, PAYABLE] BY HIM, A SUM WHICH SHALL NOT BE LESS THAN, BUT WHICH SHALL NOT EXCEED 91 [THREE TIMES], THE AMOUNT OF TAX SOUGHT TO BE EVADED BY REASON OF THE CONCEALMENT OF PARTICULARS OF HIS INCOME 92 [OR FRINGE BENEFITS] OR THE FURNISHING OF INACCURATE PARTICULARS OF SUCH INCOME 92 [OR FRINGE BENEFITS]. 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 UTILISING (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 TRANSACTION S AND HE CLAIMS THAT SUCH ENTRY IN THE BOOKS OF ACCOUNT OR OTHER DOCUMENTS OR TRANSACTIONS REPRESENTS HIS INCOME (WHOLLY 20 ITA NO. 841/MUM/2016 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 17 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 PENALTY UNDER CLAUSE ( C ) OF SUB - SECTION (1) OF THIS SECTION, BE DEEMED TO HAV E CONCEALED THE PARTICULARS OF HIS INCOME OR FURNISHED INACCURATE PARTICULARS OF SUCH INCOME.] A READING OF THE ABOVE MAKES IT CLEAR THAT THE PENALTY U/S. 271(1)(C) WHICH ARE LEVIED UNDER THE CAPTION OF EXPLANATION 5A HAVE TO BE LEVIED IRRES PEC TIVE OF THE FACT WHETHER THE UNDISCLOSED INCOME DECLARED IN SEARCH IS DISCLOSED BY THE ASSESSEE IN THE RETURN OF INCOME FURNISHED AFTER THE DATE OF SEARCH. HENCE, THE ASSESSEES PLEA THAT THE PENALTY SHOULD NOT BE LEVIED AS THE UNDISCLOSED INCOME HAS BEEN OFFERED IN THE RETURN OF INCOME PURSUANT TO SEARCH CANNOT COME TO THE RESCUE OF THE ASSESSEE. THE CASE LAW CITED BY THE LD. COUNSEL OF THE ASSESSEE IN THIS REGARD WITH REGARD TO THE KIRIT DAHYABHAI PATEL - VS - ACIT , 80TAXMANN.COM 162 (GUJ) (2017) AND DCIT - VS - PURTI SAKHAR KHARKHANA , 35 TAXMANN.COM 594 (NAGPUR)(2 0 13) CANNOT HELP THE CASE OF THE ASSESSEE AS THEY WERE NOT RENDERED UNDER THE CONTEXT OF THE PENALTY LEVIED U/S. 271(1)(C) UNDER EXPLANATION 5A. HENCE, WE FIND THAT THERE IS NO INFIRMITY IN TH E ORDER OF THE LD . CIT(A) UPHOLDING THE LEVY OF PENALTY ON MERITS OF THE CASE. 23. WE FIND THAT THE MAIN EMPHASIS OF THE LD. COUNSEL OF THE ASSESSEE IN THIS CASE IS THAT THE ISSUE IS COVERED IN FAVOUR OF THE ASSESSEE BY THE DECISION OF THE ITAT IN THE CASE OF SIDHI HOME MAKERS (SUPRA). IN THIS CASE, WE FIND THAT THE PENALTY WAS QUASHED ON A FINDING THAT THE NOTICE ISSUED BY THE A.O. U/S. 271(1)(C) IS UNTENABLE AND, HENCE, THE 21 ITA NO. 841/MUM/2016 PENALTY IMPOSED BY THE A.O. U/S. 271(1)(C) WAS DIRECTED TO BE DELETED. THE TRIBUNAL HAS ALSO GIVE N A FINDING THAT THE ISSUE OF NOTICE U/S. 271AAA WAS ERRONEOUS. IN THIS CASE, WE HAVE ALREADY FOUND ABOVE IN THE PRESENT CASE THE ISSUE OF VALIDITY OF NOTICE U/S. 271(1)(C) ON ACCOUNT O F NON STRIKING OFF OF RELEVANT LIMB WAS NOT BEFORE THE LD. CIT(A) AND WE HAVE ALREADY REMITTED THE SAME TO THE FILE OF THE LD. C IT(A) T O GIVE A FACTUAL FINDING ON THIS ACCOUNT. HENCE, THIS CASE LAW ON THIS POINT DOES NOT COME TO THE RESCUE OF THE ASSESSEE. MOREOVER , SEVERAL CAS E LAWS FROM THE HON'BLE JURISDICTIONAL HIGH COURT AS WELL AS HONBLE APEX COURT REFERRED HEREINABOVE ALSO NEED TO BE CONSIDERED BY THE LD. CIT(A) , APART FROM FACTUAL FINDING ON TH E ISSUE RAISED . 24. IN THE RESULT, THIS APPEAL BY THE ASSESSEE IS PARTLY AL LOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 1 3 . 1 2 . 2 0 1 8 S D / - S D / - ( SANDEEP GOSAIN ) (SHAMIM YAHYA) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI ; DATED : 1 3 . 1 2 . 2 0 1 8 ROSHANI , SR. PS COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) 4. CIT - CONCERNED 5. DR, ITAT, MUMBAI 6. GUARD FILE BY ORDER, (DY./ASSTT. REGISTRAR) ITAT, MUMBAI