M/s H.R. Narrow Fabrics, Ludhiana V. DCIT, Ludhiana

ITA 874/CHANDI/2017

• Counselvise Citation: [2019] 112 COUNSELVISE.COM (IT) 6682 (ITAT-CHANDIGARH)
• Duration Of Justice: 1 year(s) 8 month(s) 30 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-02-2019
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: Not Allotted
• Assessment Year: 2003-2004
• Appeal Filed On: 29-05-2017
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Search and seizure; Document seized; Initiation of penalty proceedings; Revised return; Documents seized
• Section: 271(1)(c); 143(3); 133A; 153A; 274; 139(1); 32; 147; 27; 132; 11; 139

Judgement Text

1 , , IN THE INCOME TAX APPELLATE TRIBUNAL, CHANDIGARH BENCH A , CHANDIGARH , ! #$ % & ' ($, ! BEFORE: SHRI SANJAY GARG, JUDICIAL MEMBER AND SMT.ANNAPURNA GUPTA, ACCOUNTANT MEMBER ./ ITA NOS.874 TO 877/CHD/2017 / ASSESSMENT YEARS : 2003-04 TO 2006-07 M/S H.R. NARROW FABRICS, C.I. JAIN COLONY, SHARMAN ENCLAVE, BAHADURKE ROAD, LLUDHIANA. THE D.C.I.T., CENTRAL CIRCLE-II, LUDHIANA. ./PAN NO: AABFH3645R /ASSESSEE BY : SHRI SUDHIR SEHGAL, ADV. / REVENUE BY : SMT.CHANDERKANTA, SR. DR /DATE OF HEARING : 03.12.2019 /DATE OF PRONOUNCEMENT: 28.02.2019 /ORDER PER BENCH : ALL THE ABOVE APPEALS HAVE BEEN PREFERRED BY THE SA ME ASSESSEE AGAINST SEPARATE ORDERS, ALL DATED 6.2.20 17 OF THE COMMISSIONER OF INCOME TAX (APPEALS), BATHINDA [HER EINAFTER REFERRED TO AS CIT(A)], PASSED U/S 250(6) OF THE IN COME TAX ACT,1961(HEREINAFTER REFERRED TO AS ACT). SINCE THE ISSUE INVOLVED IN ALL THE APPEALS IS IDEN TICAL, THEY WERE HEARD TOGETHER AND ARE BEING DISPOSED OFF BY THIS COMMON ORDER. THE SOLE ISSUE INVOLVED IN THESE APPE ALS RELATES TO LEVY OF PENALTY U/S 271(1)(C) OF THE ACT . WE SHALL BE DEALING WITH THE FACTS IN THE CASE OF THE ASSESS EES APPEAL IN ITA NO.874/CHD/2017 AND OUR DECISION RENDERED TH EREIN WILL APPLY MUTATIS MUNDIS TO THE REST OF THE APPEAL S ALSO. 2 3. BRIEF FACTS RELATING TO THE CASE ARE THAT THE AS SESSEE, A PARTNERSHIP FIRM WAS SUBJECTED TO SURVEY OPERATION UNDER THE PROVISIONS OF SECTION 133A OF THE ACT ON 20.7.2 007 ALONGWITH SEARCH AND SEIZURE OPERATION UNDER THE PR OVISIONS OF SECTION 132(1) IN THE CASE OF THE PARTNER OF THE ASSESSEE FIRM, SHRI B.K.JAIN AND SHRI VINAY JAIN. DURING THE COURSE OF SEARCH CONDUCTED AT THE PREMISES OF THE PARTNERS , BOOKS OF ACCOUNT AND OTHER DOCUMENTS WERE FOUND AND SEIZE D. OUT OF THE SEIZED DOCUMENTS SOME WERE STATED TO BE BELO NGING TO THE ASSESSEE FIRM. THE ASSESSING OFFICER(A.O), ON B EING SATISFIED THAT THE BOOKS OF ACCOUNT OR DOCUMENTS SE IZED HAD A BEARING ON THE DETERMINATION OF THE TOTAL INCOME OF THE ASSESSEE FIRM FOR THE YEAR UNDER CONSIDERATION, ASS UMED JURISDICTION TO ASSESS THE INCOME IN ACCORDANCE WI TH THE PROVISIONS OF SECTION 153A OF THE ACT. ACCORDINGLY NOTICE U/S153C OF THE ACT WAS ISSUED, IN RESPONSE TO WHICH , RETURN OF INCOME WAS FILED BY THE ASSESSEE FIRM DECLARING A TAXABLE INCOME OF RS.5,71,620/-, WHICH INCLUDED A SUM OF RS .4 LACS ON ACCOUNT OF MISCELLANEOUS INCOME SURRENDERED. THE ORIGINAL RETURN FOR THE IMPUGNED ASSESSMENT YEAR WA S FILED U/S 139(1) DECLARING AN INCOME OF RS.1,71,620/-. IN THE ASSESSMENT PROCEEDINGS, THE ASSESSEE WAS ASKED TO E XPLAIN THE ENTRIES IN THE SEIZED DOCUMENTS AND RECORDS, IN RESPONSE TO WHICH IT WAS SUBMITTED THAT THE SAME PERTAINED T O UNDISCLOSED OUT OF THE BOOKS SALE OF HOSIERY GOODS AMOUNTING TO RS.7,01,699/-. ON SUCH SALES, UNDISCLO SED PROFIT WAS WORKED OUT BY THE ASSESSEE AT RS..4 LACS WHICH WAS DECLARED IN THE RETURN FILED IN RESPONSE TO NOT ICE U/S 3 153C OF THE ACT. THE A.O. NOTED IN THE ASSESSMENT O RDER PASSED U/S 153C R.W.S. 143(3) OF THE ACT, THAT DISC LOSURE OF PROFITS FROM OUT OF BOOKS SALE WAS OVER AND ABOVE T HE AMOUNT ARRIVED AT BY APPLYING GP RATE OF 20% ON UND ISCLOSED SALES AND ACCOUNT FOR THE CAPITAL EMPLOYED FOR SUCH SALES. THEREFORE, NO ADDITION WAS MADE TO THE RETURNED INC OME ON ACCOUNT OF UNDISCLOSED PROFITS FROM OUT OF BOOKS SA LES. HOWEVER PENALTY U/S 271(1)(C) OF THE ACT WAS INITIA TED FOR CONCEALMENT OF INCOME IN RESPECT OF RS.4 LACS, WHIC H WAS DECLARED IN THE RETURN FILED IN COMPLIANCE TO NOTIC E U/S 153C AND NOT IN THE ORIGINAL RETURN U/S 139(1) OF THE AC T FILED MUCH EARLIER THAN THE DATE OF SEARCH. NOTICE U/S 27 4 OF THE ACT WAS ISSUED TO THE ASSESSEE SEEKING TO SHOW CAUS E AS TO WHY PENALTY BE NOT IMPOSED U/S 271 OF THE ACT. THER EAFTER AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE FIRM THE A.O. CAME TO THE CONCLUSION THAT THE CONCEALMENT PE NALTY WAS EXIGIBLE IN THE FACTS AND CIRCUMSTANCES OF THE CASE AND PENALTY OF RS.1,47,000/- WAS IMPOSED. 4. THE MATTER WAS CARRIED IN APPEAL BEFORE THE LD.C IT(A) WHERE THE ASSESSEE AGITATED AGAINST THE LEVY OF PEN ALTY STATING THAT SINCE THE UNDISCLOSED INCOME WAS VOLUN TARILY DISCLOSED IN THE RETURN FILED IN RESPONSE TO NOTICE U/S 153C WHICH WAS ACCEPTED BY THE A.O. ALSO WITHOUT MAKING ANY ADDITION AND THE PROVISIONS OF SECTION 153A, 153B A ND 153C BEING A COMPLETE CODE IN THEMSELVES, NO REFERENCE C OULD BE MADE U/S 139 OF THE ACT FOR THE PURPOSE IMPOSITION OF PENALTY. BESIDES, IT WAS ALSO ARGUED THAT THE EXPLA NATION 5A 4 TO SECTION 271(1)(C) OF THE ACT WAS ALSO NOT APPLIC ABLE IN ASSESSEES CASE BECAUSE AS THE PRIMARY CONDITION FO R APPLICABILITY OF THE SAME WAS THAT THE SEARCH ACTIO N SHOULD HAVE BEEN CARRIED OUT ON THE ASSESSEE WHICH WAS NOT THERE IN THE CASE OF THE ASSESSEE, SINCE IT WAS ONLY SUBJ ECTED TO SURVEY. IT WAS ALSO EMPHASIZED THAT THE A.O. HAD NO T SPECIFICALLY SET OUT IN THE ASSESSMENT ORDER THAT S UCH PROCEEDINGS WERE INITIATED FOR THE OFFENCE OF CONCE ALMENT OF INCOME, WHEREAS WHEN THE PENALTY WAS IMPOSED IT WAS JUSTIFIED ON THE STRENGTH OF THE PROVISIONS OF EXPL ANATION-5A TO SECTION 271(1)(C) OF THE ACT, THUS MAKING THE IM POSITION OF PENALTY BAD IN LAW. THE LD.CIT(A) REJECTED THE CONT ENTIONS OF THE ASSESSEE STATING THAT WHEN THE RETURN OF INCOME WAS FILED VOLUNTARILY U/S 139(1) OF THE ACT, THE SAID P ROFITS FROM OUT OF BOOKS SALE HAD NOT BEEN DISCLOSED AND DISCLO SURE OF THE SAME ON SUBSEQUENT SEARCH ACTION, WHEN THE INCRIMINATING MATERIAL WAS FOUND, COULD NOT BE CONS IDERED AS VOLUNTARILY DISCLOSURE OF INCOME. FURTHER THE LD .CIT(A) HELD THAT FOR THE EXPLANATION-5A TO SECTION 271(1)( C) TO BE ATTRACTED, IT WAS NOT NECESSARY THAT THE SEARCH ACT ION BE CARRIED OUT ON THE ASSESSEE AND THE ONLY REQUIREMEN T WAS SEARCH AND SEIZURE OPERATIONS REVEALING THE INFORMA TION ABOUT ANY ASSESSEE BEING THE OWNER OF ANY INCOME WH ICH HAS NOT BEEN DECLARED IN THE RETURN FILED FOR SUCH YEAR . THE LD.CIT(A) ALSO HELD THAT THE A.O. ALL ALONG FOUND T HE ASSESSEE FIRM GUILTY OF CONCEALMENT OF INCOME POINT ING OUT THE SAID FACTS IN THE SHOW CAUSE NOTICE ISSUED U/S 274 OF THE ACT AND ALSO INFORMING THE ASSESSEE ABOUT THE PROVI SIONS 5 CONTAINED IN EXPLANATION-5A TO SECTION 271(1)(C) OF THE ACT BEFORE IMPOSING PENALTY. THE LD.CIT(A) STATED THAT THE NOTICE FOR IMPOSITION OF PENALTY MENTIONED THE OFFENCE OF CONCEALMENT OF INCOME AND PENALTY WAS SUBSEQUENTLY IMPOSED FOR CONCEALMENT OF INCOME AND, THEREFORE, T HE ACTION OF THE A.O. IN IMPOSING THE PENALTY COULD NOT BE F AULTED. ACCORDINGLY, THE ORDER OF THE A.O. LEVYING PENALTY WAS UPHELD. 5. AGGRIEVED BY THE SAME, THE ASSESSEE HAS COME UP IN APPEAL BEFORE US RAISING THE FOLLOWING GROUNDS: 1. THAT THE WORTHY COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN DISMISSING THE APPEAL OF THE APPELLANT FILED AGAINST THE ORDER U/S 271(1)(C) OF THE DOT, CENTRAL CIRCLE-LI, LUDHIANA. 2. THAT THE LD. CIT (A) HAS ERRED IN NOT CONSIDERIN G THE FACT THAT IN THIS CASE, THE ASSESSMENT WAS COMPLETED ON THE BASIS OF RETURNED INCOME FILED U/S 153C AND NO ADDITION WAS MADE AND, HENCE, THERE WAS NO CONCEALMENT U/S 271 (1)(C) OF THE INCOME TAX ACT. 3. THAT THE WORTHY CIT (A) HAS ALSO ERRED IN NOT CONSIDERING THAT EXPLANATION-5 A TO SECTION 271(1)(C) IS NOT APPLICABLE IN THIS CASE AS NO SEARCH OPERATIONS WERE CONDUCTED ON THE ASSESSEE. 4. THAT THE WORTHY CIT(A) HAS ALSO ERRED IN NOT CON SIDERING THAT NEITHER THE PARTICULARS OF INCOME WERE CONCEAL ED AND NOR INACCURATE PARTICULARS OF INCOME WERE FURNISHED. 5. THAT EVEN OTHERWISE, ON MERITS OF THE CASE, THE CV T(A) HAS ERRED IN NOT CONSIDERING THAT NO PENALTY U/S 271(1)(C) IS APPLICABLE WHEN ADDITION HAS BEEN MADE/INCOME HAS BEEN RETURNED ON ESTIMATED BASIS. 6. THAT THE DETAILED SUBMISSIONS FILED DURING THE CO URSE OF HEARING BEFORE THE ASSESSING OFFICER AND ALSO BEFORE THE LD. CIT (A), HAS NOT BEEN CONSIDERED PROPERLY. 7. THAT THE APPELLANT CRAVES LEAVE TO ADD OR AMEND TH E GROUNDS OF APPEAL BEFORE THE APPEAL IS FINALLY HEARD OR DISPOSED OFF. 6 6. DURING THE COURSE OF HEARING BEFORE US THE LD. C OUNSEL FOR ASSESSEE REITERATED THE CONTENTIONS MADE BEFORE THE LOWER AUTHORITIES. WE SHALL BE TAKING UP EACH CONTENTION SEPARATELY. 7. THE FIRST CONTENTION RAISED BY THE LD. COUNSEL F OR ASSESSEE WAS THAT THE ASSESSEE HAD BEEN SUBJECTED T O ASSESSMENT AS PER THE PROVISIONS OF SECTION 153A/B/ C OF THE ACT WHICH WERE A COMPLETE CODE IN THEMSELVES AND TH EY EXCLUDED THE NORMAL ASSESSMENT PROCEDURE AS COVERED U/S 139/147/148/149/151 AND 153 OF THE ACT. IT WAS, THE REFORE, CONTENDED THAT THERE WAS NO NEED TO MAKE ANY REFERE NCE TO THE PROVISIONS OF SECTION 139 OF THE ACT FOR THE PU RPOSE OF DETERMINING WHETHER THERE WAS ANY CONCEALMENT OF IN COME AND THE ASSESSEE HAVING DISCLOSED THE INCOME IN THE RETURN FILED IN RESPONSE TO NOTICE U/S 153A OF THE ACT, WH ICH STOOD ACCEPTED BY THE A.O. ALSO, IT COULD NOT BE SAID THA T THE ASSESSEE HAD CONCEALED ANY PARTICULARS OF INCOME. T HE LD. COUNSEL FOR ASSESSEE HEAVILY RELIED UPON THE DECISI ON OF THE HON'BLE DELHI HIGH COURT IN THE CASE OF PR.CIT VS. SHRI NEERAJ JINDAL IN ITA NO.463 OF 2016 AND DREW OUR AT TENTION TO THE FINDINGS OF THE HON'BLE HIGH COURT AT PARAS 19 TO 21 OF HIS ORDER AS UNDER: 19. THE WHOLE MATTER CAN BE EXAMINED FROM A DIFFEREN T PERSPECTIVE AS WELL. A PROVIDES THE PROCEDURE FOR CO MPLETION OF ASSESSMENT WHERE A SEARCH IS INITIATED UNDER SECTI ON 132 OR BOOKS OF ACCOUNT, OR OTHER DOCUMENTS OR ANY A SSETS ARE REQUISITIONED UNDER SECTION 132A AFTER 31.05.2003. IN SUCH CASES, THE ASSESSING OFFICER SHALL ISSUE NOTICE T O SUCH PERSON REQUIRING HIM TO FURNISH, WITHIN SUCH PERIOD AS MAY BE SPECIFIED IN THE NOTICE, RETURN OF INCOME IN RESPECT OF SIX ASSESSMENT YEARS IMMEDIATELY PRECEDING THE ASSESSMENT YEAR RELEVANT TO THE PREVIOUS YEAR IN WHICH THE SEAR CH WAS 7 CONDUCTED UNDER SECTION 132 OR REQUISITION WAS MADE UNDER SECTION 132A. THE ASSESSING OFFICER SHALL ASSESS OR REASSESS THE TOTAL INCOME OF EACH OF THESE SIX ASSESS MENT YEARS. ASSESSMENT OR REASSESSMENT, IF ANY, RELATING TO ANY ASSESSMENT YEAR FALLING WITHIN THE PERIOD OF SIX ASS ESSMENT YEARS PENDING ON THE DATE OF INITIATION OF THE SEARCH UNDER SECTION 132 OR REQUISITION UNDER SECTION 132A, AS THE CASE MAY BE, SHALL ABATE. [REF TO MEMORANDUM ACCOMPANYI NG THE FINANCE BILL, 2003] SECTION 153A OPENS WITH A NON- OBSTANTE CLAUSE RELATING TO NORMAL ASSESSMENT PROCED URE COVERED BY SECTIONS 139, 147, 148, 149, 151 AND 153 IN RESPECT OF SEARCHES MADE AFTER MAY 31, 2003. THE SECTI ONS, SO EXCLUDED, RELATE TO RETURNS, ASSESSMENT AND REASSESSME NT PROVISIONS. HOWEVER, THE PROVISIONS THAT ARE SAVED A RE THOSE UNDER SECTION 153 B AND 153C, SO THAT THESE THREE SECTIONS 153 A, 153B AND 153C ARE INTENDED T O BE A COMPLETE CODE FOR POST- SEARCH ASSESSMENTS. CONSIDE RING THAT THE NON-OBSTANTE CLAUSE UNDER SECTION 153A EXC LUDES THE APPLICATION OF, INTER ALIA, SECTION 139, IT IS CLE AR THAT THE REVISED RETURN FILED UNDER SECTION 153A TAKES THE PLACE OF THE ORIGINAL RETURN UNDER SECTION 139, FOR THE PURPOSES O F ALL OTHER PROVISIONS OF THE ACT. THIS IS FURTHER BUTTRESSED BY SECTION 153A (1)(A) WHICH READS: 'NOTWITHSTANDING ANYTHING CONTAINED IN SECTION 139, SECTION 147, SECTION 148, SECTION 149, AND SECTION 153, IN T HE CASE OF A PERSON WHERE A SEARCH IS INITIATED UNDER SECTIO N 132 OR BOOKS OF ACCOUNT, OTHER DOCUMENTS OR ANY ASSETS ARE REQUISITIONED UNDER SECTION 132, 132 A AFTER THE 31S T DAY OF MAY, 2003, THE ASSESSING OFFICER SHALL- A) ISSUE NOTICE TO SUCH PERSON REQUIRING HIM TO FURN ISH WITHIN SUCH PERIOD, AS MAY BE SPECIFIED IN THE NOTICE, THE R ETURN OF INCOME IN RESPECT OF EACH ASSESSMENT YEAR FALLING WIT HIN SIX ASSESSMENT YEARS REFERRED TO IN CLAUSE (B), IN THE PR ESCRIBED FORM AND VERIFIED IN THE PRESCRIBED MANNER AND SETT ING FORTH SUCH OTHER PARTICULARS AS MAY BE PRESCRIBED AND THE PROVISIONS OF THIS ACT SHALL, SO FAR AS MAY BE, APPLY ACCORDINGLY AS IF SUCH RETURN WERE A RETURN REQUIRE D TO BE FURNISHED UNDER SECTION 139. 20. THEREFORE, THE POSITION THAT EMERGES FROM THE ABO VE- MENTIONED PROVISION IS THAT ONCE THE ASSESSEE FILES A REVISED RETURN UNDER SECTION 153 A, FOR ALL OTHER PROVISIONS OF THE ACT, THE REVISED RETURN WILL BE TREATED AS THE ORIGI NAL RETURN FILED UNDER SECTION 139. ON SIMILAR LINES, THE GUJAR AT HIGH COURT IN THE CASE OF KIRIT DAHYABHAI PATEL V. ASSISTAN T COMMISSIONER OF INCOME TAX, (2015) 280 CTR (GUJ) 216, HELD THAT: 'IN VIEW OF SPECIFIC PROVISION OF S. 153 A OF THE I.T. ACT. THE RETURN OF INCOME FILED IN RESPONSE TO NOTICE UND ER S. 153 A OF THE I.T. ACT IS TO BE CONSIDERED AS RETURN FILED UNDER S. 139 OF THE ACT, AS THE AO HAS MADE ASSESSMENT ON THE SAID RETURN AND THEREFORE, THE RETURN IS TO BE CONSIDERED FOR THE PURPOSE OF PENALTY UNDER S. 271(1)(C) OF THE I.T. ACT AN D THE PENALTY IS TO BE LEVIED ON THE INCOME ASSESSED OVER AND ABOVE THE INCOME RETURNED UNDER S. 153 A, IF ANY.' 8 21. THUS, IT IS CLEAR THAT WHEN THE A.O. HAS ACCEPTED TH E REVISED RETURN FILED BY THE ASSESSEE UNDER SECTION 153 A, NO OCCASION ARISES TO REFER TO THE PREVIOUS RETURN FILE D UNDER SECTION 139 OF THE ACT. FOR ALL PURPOSES, INCLUD ING FOR THE PURPOSE OF LEVYING PENALTY UNDER SECTION 271 (1) (C) OF THE ACT, THE RETURN THAT HAS TO BE LOOKED AT IS THE O NE FILED UNDER SECTION 153 A. IN FACT, THE SECOND PROVISO TO S ECTION 153A(1) PROVIDES THAT 'ASSESSMENT OR REASSESSMENT, IF ANY, RELATING TO ANY ASSESSMENT YEAR FALLING WITHIN THE P ERIOD OF SIX ASSESSMENT YEARS REFERRED TO IN THIS SUB-SECTION PEN DING ON THE DATE OF INITIATION OF THE SEARCH UNDER SECTION 1 32 OR MAKING OF REQUISITION UNDER SECTION 132A, AS THE CAS E MAY BE, SHALL ABATE.' WHAT IS CLEAR FROM THIS IS THAT SECTI ON 153 A IS IN THE NATURE OF A SECOND CHANCE GIVEN TO THE A SSESSEE, WHICH INCIDENTALLY GIVES HIM AN OPPORTUNITY TO MAKE G OOD OMISSION, IF ANY, IN THE ORIGINAL RETURN. ONCE THE A.O. A CCEPTS THE REVISED RETURN FILED UNDER SECTION 153A, THE ORIG INAL RETURN UNDER SECTION 139 ABATES AND BECOMES NON-EST . NOW, IT IS TRITE TO SAY THAT THE 'CONCEALMENT' HAS TO BE S EEN WITH REFERENCE TO THE RETURN THAT IT IS FILED BY THE ASSES SEE. THUS, FOR THE PURPOSE OF LEVYING PENALTY UNDER SECTION 27 1 (1)(C), WHAT HAS TO BE SEEN IS WHETHER THERE IS ANY CONCEALM ENT IN THE RETURN FILED BY THE ASSESSEE UNDER SECTION 153A , AND NOT VIS-A VIS THE ORIGINAL RETURN UNDER SECTION 139. 8. THE LD. DR, ON THE OTHER HAND, HEAVILY RELIED UP ON THE FINDINGS OF THE LD.CIT(A) IN THIS REGARD. DRAWING O UR ATTENTION TO PARA 7 WHEREIN THE LD.CIT(A) HAD DISMI SSED THIS CONTENTION OF THE ASSESSEE AS UNDER: 7. THE SUBMISSIONS OF THE APPELLANT HAVE BEEN CONSIDERED. IT IS A FACT ON RECORD THAT THE APPELLA NT FIRM HAD INDULGED IN UNDISCLOSED SALES OUTSIDE THE REGULAR BOOKS OF ACCOUNTS, WHICH FACT WAS UNEARTHED PURSUANT TO THE SEARCH AND SEIZURE ACTION AT THE RESIDENTIAL PREMISES OF THE PARTNERS OF THE APPELLANT FIRM. NEEDLESS TO SAY THAT SUCH OUT OF BOOKS SALES AN D PROFITS THEREON WERE NOT DISCLOSED TO THE DEPARTMENT TILL THE DATE OF SEARCH AND RETURN FILED IN RESPONSE TO NOTICE UNDER THE PROVISIONS OF SECTION 153C. THAT THERE WA S CONCEALMENT OF INCOME OVER A PERIOD OF TIME BY WAY O F UNDISCLOSED SALES WAS NOT ONLY ADMITTED BY THE APPELLANT FIRM BUT ALSO PROVED ON THE BASIS OF THE S EIZED DOCUMENTS AND RECORDS. THE SAID ADMITTANCE WAS ALSO NOT IN THE NATURE OF ACCEPTING CONCEALMENT TO AVOID PROTRACTED LITIGATION OR TO BRING ABOUT A CLOSURE OF THE MATTER. ON THE CONTRARY, IT IS NOTED FROM THE ASSESSM ENT ORDER THAT THE SEIZED DOCUMENTS HAVE BEEN PROPERLY APPRAISED AND THE ENTRIES IN DEPRESSED FIGURES HAVE BEEN EXPLAINED TO REPRESENT THE ACTUAL FIGURES OF SAL ES, PURCHASES AND OTHER PETTY EXPENDITURE. IT IS, THUS, CERTAIN THAT THERE WAS CONCEALMENT OF INCOME AND TH AT IS 9 EASILY DISCERNIBLE FROM THE ASSESSMENT ORDER. HAD IT NOT BEEN FOR THE SEARCH AND SEIZURE OPERATION, THERE WOULD NOT HAVE BEEN A DISCLOSURE OF THE HITHERTO UNDISCLOSED PROFITS. WHEN THE RETURN OF INCOME WAS FI LED VOLUNTARILY UNDER THE PROVISIONS OF SECTION 139(1) ON 29/10/2005 PRIOR TO THE DATE OF SEARCH, THE APPELLANT FIRM NEVER DISCLOSED THE SAID PROFITS FROM OUT OF BO OKS SALES. IN THIS VIEW OF THE MATTER, THE APPELLANT FIRM'S ACTION OF INCORPORATING THE UNDISCLOSED PROFITS IN T HE RETURN OF INCOME FILED IN RESPONSE TO NOTICE UNDER SECTION 153C CANNOT POSSIBLY BE CONSIDERED AS VOLUNTARY ACTION OF DISCLOSURE. THE DECISION OF THE HON'BLE SUPREME COURT IN THE CASE OF SIR SHADILAL SU GAR & GENERAL MILLS LTD. HAS, THEREFORE, NO APPLICATION IN TH E FACTS AND CIRCUMSTANCES OF THIS CASE. WHILE RECORDING THE INITIATION OF PENALTY PROCEEDINGS IN THE ASSESSMENT ORDER, THE AO IS SEEN TO HAVE CATEGORICALLY AND SPECIFICALLY NOTED THE FOLLOWING: 'PENALTY PROCEEDINGS U/S 271(1)(C) HAVE BEEN INITIATED SEPARATELY FOR CONCEALMENT OF PARTICULARS OF INCOME IROO INCOME OF RS.4,00,000/- DECLARED IN THE RETURN FILED IN COMPLIANCE TO NOTICE U/S 153C OF THE I.T. ACT, 1961. 9. IT WAS POINTED OUT THAT IN VIEW OF THE FACT THAT THE IMPUGNED INCOME HAD NOT BEEN DISCLOSED IN THE ORIGI NAL RETURN OF INCOME AND IT WAS ONLY WHEN SEARCH WAS CO NDUCTED AND INCRIMINATING DOCUMENTS FOUND THAT THE ASSESSEE HAD DISCLOSED THE SAME IN HIS RETURN FILED IN RESPONSE TO NOTICE U/S 153C OF THE ACT. THEREFORE, THE DISCLOSURE BY A NY COUNT COULD NOT BE SAID TO BE VOLUNTARILY DISCLOSURE AND THE ASSESSEE WAS LIABLE TO PENALTY ON THE SAME U/S 271( 1)(C) OF THE ACT. 10. WE HAVE HEARD THE RIVAL CONTENTIONS. WE ARE NOT IN AGREEMENT WITH THE CONTENTION OF THE LD.COUNSEL FOR THE ASSESSEE THAT SINCE THE SURRENDERED INCOME STOOD DI SCLOSED IN THE RETURN FILED U/S 153A OF THE ACT, THE ASSESS EE COULD NOT BE CHARGED WITH HAVING CONCEALED ANY PARTICULAR S OF INCOME. THE REASONING BEING THAT PENALTY HAS BEEN L EVIED IN 10 THE PRESENT CASE BY APPLYING EXPLANATION 5A TO SECT ION 271(1)(C) OF THE ACT. THE SAID EXPLANATION READS AS UNDER: 'EXPLANATION 5A WHERE, IN THE COURSE OF A SEARCH IN ITIATED 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 VALUAB LE ARTICLE OR THING (HEREAFTER IN THIS EXPLANATION REFE RRED TO AS ASSETS) AND THE ASSESSEE CLAIMS THAT SUCH ASSET S HAVE BEEN ACQUIRED BY HIM BY UTILISING (WHOLLY OR I N 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 CLAIMS THAT SUCH ENTRY IN THE BOOKS OF ACCOUNT OR OT HER 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 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 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 D ATE OF SEARCH, HE SHALL, FOR THE PURPOSES OF IMPOSITION OF A PE NALTY UNDER CLAUSE (C) OF SUB-SECTION (1) OF THIS SECTION, BE DEEMED TO HAVE CONCEALED THE PARTICULARS OF HIS INCOME OR FURNI SHED INACCURATE PARTICULARS OF SUCH INCOME.' 11. IT IS CLEAR FROM A BARE READING OF THE ABOVE TH AT EVEN IF THE SURRENDERED INCOME IS DISCLOSED IN THE RETURN F ILED AFTER THE SEARCH, THE ASSESSEE SHALL BE DEEMED TO HAVE CO NCEALED PARTICULARS OF INCOME WHERE IN THE COURSE OF SEARCH HE IS FOUND TO BE THE OWNER OF ANY MONEY, BULLION, JEWELL ERY, ETC. WHICH HE CLAIMS TO HAVE ACQUIRED BY UTILIZING THE I NCOME OF PREVIOUS YEARS WHICH HAS NOT BEEN THE DECLARED IN T HE RETURN FILED FOR THOSE YEARS. THUS CLEARLY THE ACT OF DISC LOSURE OF INCOME IN HIS RETURN FILED IN RESPONSE TO NOTICE U/ S 153C OF 11 THE ACT BY ITSELF DOES NOT SAVE THE ASSESSEE FROM T HE IMPOSITION OF PENALTY U/S 271(1)(C) OF THE ACT IN V IEW OF EXPLANATION-5A TO THE SAME. THE RELIANCE PLACED BY THE LD. COUNSEL FOR ASSESSEE ON THE DECISION OF THE HON'BLE DELHI HIGH COURT IN THE CASE OF SHRI NEERAJ JINDAL (SUPRA ) IS MISPLACED SINCE THE FINDINGS OF THE HON'BLE HIGH CO URT, WHICH HAS BEEN POINTED OUT TO US BY THE LD.COUNSEL FOR THE ASSESSEE, WERE IN THE CONTEXT OF A SPECIFIC QUESTIO N RAISED BEFORE IT AND WERE DEHORS THE APPLICABILITY OF EXPL ANATION- 5/5A OF SECTION 271(1)(C) OF THE ACT. THE HON'BLE H IGH COURT WHILE ANSWERING THE QUESTION RAISED BEFORE IT AS U NDER: (I) WHETHER UNDER SECTION 271(1)(C) AS IT STOOD PRIOR TO THE INSERTION OF EXPLANATION 5, LEVY OF PENALTY IS AUTOMATIC IF RETURN FILED BY THE ASSESSE E UNDER SECTION 153A OF THE ACT DISCLOSES HIGHER INCOME THAN IN THE RETURN FILED UNDER SECTION 139(1)? HELD THAT THE ASSESSEE COULD NOT BE SAID TO HAVE CO NCEALED THE PARTICULARS OF INCOME IF THE SAME STOOD DECLARE D IN THE RETURN FILED IN RESPONSE TO NOTICE U/S 153A/153C OF THE ACT. AND IN THE LATER PART OF THE ORDER IT WAS CLARIFIED THAT THE SAID CASES WERE TO BE COVERED UNDER EXPLANATION-5/5 A TO SECTION 271(1)(C) OF THE ACT. THE RELEVANT FINDINGS OF THE HON'BLE HIGH COURT IN THIS REGARD ARE AS UNDER: 23. EXPLANATION-5 TO SECTION 271(1) WAS INSERTED BY THE TAXATION LAWS (AMENDMENT) ACT , 1984, WITH EFFECT FROM 1 OCTOBER, 1984. THE EXPLANATION IS APPLICABLE TO CASES WHERE IN THE COURSE OF A SEARCH UNDER SECTION 132 OF THE ACT, THE ASSESSEE IS FOUND TO BE THE OWNER OF ANY MONEY, BULLI ON, JEWELLERY OR OTHER VALUABLE ARTICLE OR THING. IN SUCH CASE S, IF THE ASSESSEE CLAIMS THAT THESE ASSETS HAVE BEEN ACQU IRED BY HIM BY UTILIZING (WHOLLY OR IN PART) HIS INCOME FOR AN Y PREVIOUS YEAR WHICH HAS ENDED BEFORE THE DATE OF THE SEARCH, BUT THE RETURN OF INCOME FOR SUCH YEAR HAS NOT BEEN FURNISH ED BEFORE THE SAID DATE, OR WHERE SUCH RETURN HAS BEEN FURNISH ED BEFORE 12 THE SAID DATE, SUCH INCOME HAS NOT BEEN DECLARED IN THE RETURN, OR SUCH PREVIOUS YEAR IS TO END ON OR AFTER T HE DATE OF THE SEARCH, THE ASSESSEE SHALL, FOR THE PURPOSES OF IMPO SITION OF PENALTY UNDER SECTION 271(1)(C) OF THE ACT, BE DEE MED TO HAVE CONCEALED THE PARTICULARS OF HIS INCOME. THIS EX PLANATION HAS BEEN INSERTED TO ADDRESS SITUATIONS WHERE CONSE QUENT TO A SEARCH, ASSETS AND VALUABLES ARE DISCOVERED TO BE IN THE POSSESSION OF THE ASSESSEE, AND THEREAFTER THE ASSES SEE FILES RETURN OF INCOME AFTER THE DATE OF SEARCH. IN SUCH CASES, EVEN IF THE ASSESSEE INCLUDES THE AMOUNTS UTILIZED BY HIM IN ACQUIRING THE ASSETS FOUND IN HIS POSSESSION DURING THE SEARCH OPERATIONS AS HIS INCOME IN THE RETURN FILED AFTER T HE SEARCH, THE ASSESSEE WOULD BE DEEMED TO HAVE CONCEALED HIS IN COME. THUS, PARLIAMENT HAS CREATED A DEEMING FICTION BY VIR TUE OF WHICH IN SUCH CASES, EVEN IF THE ASSESSEE INCLUDES SU CH INCOME (WHICH REPRESENTS THE VALUE OF THE ASSETS FOU ND IN HIS POSSESSION DURING THE SEARCH) IN HIS RETURN FILED AF TER THE SEARCH, IT WILL BE DEEMED THAT SUCH RETURN DISCLOSING H IGHER INCOME WAS FILED ONLY BECAUSE THE ASSETS WERE FOUND I N HIS POSSESSION DURING THE SEARCH. PUT DIFFERENTLY, IF NOT FOR THE SEARCH, THE LEGISLATURE DEEMS THAT THE ASSESSEE WOULD NOT HAVE DISCLOSED SUCH INCOME IN THE RETURN FILED SUBSEQ UENTLY. EXPLANATION-5 ALSO CONTAINS TWO EXCEPTIONS, WHERE THE ASSESSEE WOULD NOT BE DEEMED TO HAVE CONCEALED HIS IN COME AND WOULD GAIN IMMUNITY FROM LEVY OF PENALTY- FIRST, IF S UCH INCOME IS OR THE TRANSACTIONS RESULTING IN SUCH INC OME ARE RECORDED IN THE BOOKS OF ACCOUNT MAINTAINED BY THE A SSESSEE FOR ANY SOURCE OF INCOME OR SUCH INCOME WAS OTHERWI SE DISCLOSED TO THE PRINCIPAL CHIEF COMMISSIONER OR CHIE F COMMISSIONER OR PRINCIPAL COMMISSIONER OR COMMISSION ER BEFORE THE DATE OF THE SEARCH; SECOND, IN THE COURSE OF THE SEARCH, THE ASSESSEE MA KES A STATEMENT UNDER SECTION 132(4) THAT THE ASSETS FOUND IN HIS POSSESSION HAVE BEEN ACQUIRED OUT OF HIS INCOME WHI CH HAS NOT BEEN DISCLOSED SO FAR IN HIS RETURN OF INCOME TO BE FURNISHED BEFORE THE EXPIRY OF THE TIME SPECIFIED IN SECTION 139(1) , AND ALSO SPECIFIES IN THE STATEMENT THE MANNER IN WHICH SUCH INCOME HAS BEEN DERIVED AND PAYS THE TAX TOGETHER WITH INTEREST, IF ANY, IN RESPECT OF SUCH INCOME . 12. IN VIEW OF THE ABOVE WE DISMISS THE CONTENTION OF THE ASSESSEE THAT SINCE THE SURRENDERED INCOME STOOD DI SCLOSED IN THE RETURN FILED U/S 153C OF THE ACT, THE ASSESS EE COULD NOT BE CHARGED WITH HAVING CONCEALED ANY PARTICULAR S OF INCOME. 13. THE NEXT CONTENTION RAISED BY LD. COUNSEL FOR A SSESSEE WAS THAT THE EXPLANATION-5A TO SECTION 271(1)(C) IN ANY CASE 13 WAS NOT APPLICABLE SINCE NO SEARCH WAS CONDUCTED ON THE ASSESSEE WHO WAS IN FACT SUBJECTED TO SURVEY ACTION ONLY AND FOR THE APPLICABILITY EXPLANATION-5A IT WAS ESSENTI AL PERQUISITE THAT THE SEARCH BE CONDUCTED ON THE ASSE SSEE IN THE COURSE OF WHICH ASSET, BULLION, ETC. ARE FOUND WHICH ARE CLAIMED BY THE ASSESSEE TO HAVE BEEN ACQUIRED OUT O F EARLIER UNDISCLOSED INCOMES. 14. THE LD. DR, ON THE OTHER HAND, HEAVILY RELIED U PON THE FINDINGS OF THE LD.CIT(A) AT PARA 8 OF HIS ORDER AS UNDER: 8. NOW THE QUESTION WHICH ARISES FOR CONSIDERATION IS WHETHER THE UNDISCLOSED INCOME DECLARED BY THE APPEL LANT FIRM IN PURSUANCE TO NOTICE UNDER SECTION 153C IS S UBJECT TO PENALTY UNDER EXPLANATION 5A TO SECTION 271(1)(C) IN THE AFORESAID FACTS AND CIRCUMSTANCES. IT IS A FACT ON RECORD THAT THE APPELLANT FIRM WAS NOT SUBJECTED TO SEARCH AND SEIZURE ACTION UNDER SECTION 132(1) OF THE ACT. HOW EVER, THIS DOES NOT IN ANYWAY ATTENUATE THE ACT OF CONCEALM ENT ON THE PART OF THE APPELLANT FROM. BESIDES, A BARE READING OF THE PROVISIONS CONTAINED IN EXPLANATION 5A, AS EXTRACTED ABOVE, SHOWS NO REQUIREMENT OF THE PENALISED ASSESSEE TO HAVE BEEN SUBJECTED TO SEARCH AND SEIZURE OPERATION PRIOR TO THE IMPOSITION OF CONCEA LMENT PENALTY. FOR THE EXPLANATION 5A TO BECOME APPLICABL E, THE ONLY REQUIREMENT IS THE CONDUCT OF SEARCH AND SEIZU RE OPERATION ON OR AFTER THE FIRST DAY OF JUNE, 2007, WHICH SEARCH REVEALS INFORMATION ABOUT ANY ASSESSEE BEING THE OWNER OF ANY INCOME WHICH HAS NOT BEEN DECLARED IN THE RETURN FILED FOR SUCH YEAR OR THE DUE DATE FOR FILI NG THE RETURN OF INCOME FOR SUCH YEAR HAS EXPIRED AND NO R ETURN HAS BEEN FILED. IN SUCH A SITUATION, ANY DECLARATION OF SUC H INCOME ON OR AFTER THE DATE OF SEARCH SHALL BE CONSI DERED TO BE CONCEALMENT FOR THE PURPOSES OF IMPOSITION OF PENALTY. EARLIER, FOR THE SEARCH AND SEIZURE OPERAT IONS HAVING BEEN CONDUCTED BEFORE THE FIRST DAY OF JUNE, 2007, THERE WAS AN IMMUNITY PROVISION BY WAY OF EXPLANATI ON 5, WHEREBY IF THERE WAS A DECLARATION/STATEMENT OF UNDISCLOSED INCOME DURING THE COURSE OF THE SEARCH UNDER THE PROVISIONS OF SECTION 132(4) AND TAX AND INTERES T ON SUCH INCOME STOOD PAID, THEN CONCEALMENT PENALTY WAS NOT LEVIABLE. SUCH AN IMMUNITY STANDS WITHDRAWN WIT H THE INSERTION OF EXPLANATION 5A W.E.F. 01/06/2007 F OR SEARCH & SEIZURE OPERATIONS CONDUCTED ON OR AFTER THE SAID DATE. IN THE APPELLANT'S CASE, A SEARCH AND SEIZURE OPERATION HAD BEEN CONDUCTED ON 20/07/2007 AT THE RESIDENTIAL PREMISES OF THE PARTNERS OF THE APPELLA NT FIRM. 14 THE SAID SEARCH REVEALED INFORMATION, BY WAY OF SEI ZED RECORDS & DOCUMENTS, ABOUT THE UNDISCLOSED INCOME O F THE APPELLANT FIRM, PURSUANT TO WHICH PROCEEDINGS UNDER THE PROVISIONS OF SECTION 153C WAS INITIATED. THEREAFTER, THE APPELLANT FIRM FILED THE RETURN OF INCOME FOR THE YEAR UNDER CONSIDERATION IN WHICH THE SAID UNDISCLOSED INCOME WAS INCORPORATED. THUS, ALL THE INGREDIENTS OF EXPLANATION 5A ARE MET IN THE INSTAN T CASE, MAKING THE SAID EXPLANATION APPLICABLE FOR IMPOSITI ON OF PENALTY. 15. REFERRING TO THE SAME, HE STATED THAT A BARE RE ADING OF THE PROVISIONS OF EXPLANATION-5A SHOWS THERE IS NO REQUIREMENT THAT THE ASSESSEE BEING PENALIZED OUGHT TO HAVE BEEN SUBJECTED TO SEARCH PRIOR TO THE IMPOSITION OF PENALTY. THE LD. DR FURTHER STATED THAT THE I.T.A.T. IN A NU MBER OF DECISIONS HAS AFFIRMED THE VIEW OF THE LD.CIT(A). O UR ATTENTION WAS DRAWN TO THE DECISION OF THE I.T.A.T. MUMBAI BENCH IN THE CASE OF M/S RAJESH D.DEDHIA VS. ACIT I N M.A.NO.217/MUM/2017 DATED 24.7.2018. 16. THE LD. COUNSEL FOR ASSESSEE, ON THE OTHER HAND , RELIED UPON THE DECISION OF THE I.T.A.T. HYDERABAD BENCH I N THE CASE OF RAGHUVEER SINGH VS. DCIT IN ITA NO.522 & 523/HYD/2015 DATED 18.11.2015. 17. WE HAVE HEARD THE RIVAL SUBMISSIONS. WE DO NOT FIND ANY MERIT IN THIS CONTENTION OF THE LD.COUNSEL FOR THE ASSESSEE ALSO THAT NO PENALTY AS PER EXPLANATION 5A TO SECTION 271(1)(C) OF THE ACT WAS LEVIABLE IN THE PR ESENT CASE SINCE THE ASSESSEE WAS NOT SUBJECTED TO SEARCH PROC EEDINGS AS PER SECTION 132 OF THE ACT. UNDISPUTEDLY ASSESS MENT IN THE PRESENT CASE WAS FRAMED ON THE ASSESSEE U/S 153 C OF THE ACT ,ON ACCOUNT OF INCRIMINATING DOCUMENTS PERTAINI NG TO IT FOUND DURING SEARCH CONDUCTED ON OTHER PERSONS. A B ARE 15 PERUSAL OF THE PROVISIONS OF THE SAID SECTION REVEA LS THAT THE SUCH ASSESSES,THOUGH NOT ACTUALLY SUBJECTED TO SEAR CH ACTION U/S 132 OF THE ACT,ARE TO BE TREATED/DEEMED AS SUB JECTED TO THE SAME. SECTION 153C IS REPRODUCED HEREUNDER FOR CLARITY: 153C. NOTWITHSTANDING ANYTHING CONTAINED IN SECTION 139, SECTION 147, SECTION 148, SECTION 149, SECTION 15 1 AND SECTION 153, WHERE THE ASSESSING OFFICER IS SATISFIED THA T,- (A) ANY MONEY, BULLION, JEWELLERY OR OTHER VALUABLE ARTICLE OR THING, SEIZED OR REQUISITIONED, BELONGS TO; OR (B) ANY BOOKS OF ACCOUNT OR DOCUMENTS, SEIZED OR REQUISITIONED, PERTAINS OR PERTAIN TO, OR ANY INFORMATION CONTAINED THEREIN, RELATES TO, A PERSON, OTHER THAN THE PERSON REFERRED TO IN SECTI ON 153A, THEN, THE BOOKS OF ACCOUNT OR DOCUMENTS OR ASSETS, SE IZED OR REQUISITIONED SHALL BE HANDED OVER TO THE ASSESSING O FFICER HAVING JURISDICTION OVER SUCH OTHER PERSON AND THAT ASSESSING OFFICER SHALL PROCEED AGAINST EACH SUCH OTHER PERSON AND ISSUE NOTICE AND ASSESS OR REASSESS THE INCOME OF T HE OTHER PERSON IN ACCORDANCE WITH THE PROVISIONS OF SECTION 153A, IF THE ASSESSING OFFICER IS SATISFIED THAT THE BOOKS O F ACCOUNT OR DOCUMENTS OR ASSETS SEIZED OR REQUISITIONED HAVE A B EARING ON THE DETERMINATION OF THE TOTAL INCOME OF SUCH OTHER PERSON FOR SIX ASSESSMENT YEARS IMMEDIATELY PRECEDING THE ASSESS MENT YEAR RELEVANT TO THE PREVIOUS YEAR IN WHICH SEARCH IS CONDUCTED OR REQUISITION IS MADE AND FOR THE RELEVANT ASSESSMENT YEAR OR YEARS REFERRED TO IN SUB-SECTION (1 ) OF SECTION 153A]: PROVIDED THAT IN THE CASE OF SUCH OTHER PERSON, THE REFERENCE TO THE DATE OF INITIATION OF THE SEARCH UNDER SECTION 132 OR MAKING OR MAKING OF REQUISITION UNDER SECTION 132A IN THE SECOND PROVISO TO SUB-SECTION (1) OF SECTION 153A SHA LL BE CONSTRUED AS REFERENCE TO THE DATE OF RECEIVING THE BOOKS OF ACCOUNT OR DOCUMENTS OR ASSETS SEIZED OR REQUISITION ED BY THE ASSESSING OFFICER HAVING JURISDICTION OVER SUCH OTHER PE RSON. 18. THE FIRST PROVISO TO THE SECTION SPECIFICALLY P ROVIDES THAT THE REFERENCE TO THE DATE OF SEARCH IN SUCH CA SES IS TO BE THE DATE OF RECEIVING THE BOOKS OF ACCOUNTS OR D OCUMENTS OR ASSETS SEIZED OR REQUISITIONED BY THE ASSESSING OFFICER HAVING JURISDICTION OVER THE PERSON SEARCHED. THIS REFERENCE TO THE DATE OF SEARCH PROVIDED IN THESE CASES MAKES IT AMPLY 16 CLEAR THAT ASSESSEES SUBJECTED TO ASSESSMENT U/S 15 3C OF THE ACT ARE TO BE TREATED AS SEARCHED U/S 132 OF TH E ACT. OUR VIEW IS STRENGTHENED BY THE INCLUSION OF THE PROVIS IONS OF SECTION 153C IN CHAPTER XIV OF THE ACT UNDER THE SP ECIFIC HEADING 'ASSESSMENT IN CASE OF SEARCH OR REQUISITIO N'. THE LD.COUNSEL FOR THE ASSESSEE WAS CONFRONTED WITH THI S DURING THE COURSE OF HEARING, TO WHICH NO REBUTTAL WAS GIV EN. FURTHER IT IS BECAUSE PERSONS ASSESSED U/S 153C O F THE ACT ARE TREATED AS DEEMED TO BE SEARCHED, THAT THE PRO VISIONS OF EXPLANATION-5A TO SECTION 271(1) ,LEVYING PENALTY IN SEARCH CASES,ARE SO WORDED SO AS TO PENALIZE ALL ASSESSES RELATING TO WHOM MONEY,BULLION ,JEWELERY,OR DOCUMENTS ETC.ARE F OUND DURING SEARCH,IRRESPECTIVE OF THE FACT THAT THE PER SON WAS ACTUALLY SEARCHED OR NOT.THE LD.CIT(A),HAS WE HOLD, RIGHTLY HELD THAT THE ONLY REQUIREMENT FOR THE APPLICABILIT Y OF EXPLANATION-5A IS THE CONDUCT OF SEARCH AFTER THE F IRST DAY OF JUNE, 2007 REVEALING INFORMATION ABOUT ANY ASSESSEE BEING THE OWNER OF ANY INCOME WHICH HAS NOT BEEN DECLARED IN THE RETURN FILED FOR THAT YEAR AND IT THEREFORE COVERS ASSESSES ASSESSED U/S 153C OF THE ACT. THE I.T.A.T. IN THE C ASE OF M/S RAJESH D.DEDHIA (SUPRA) HAS HELD SO WHILE ADDRESSIN G THE ISSUE RAISED IN THE MISCELLANEOUS APPLICATION BEFOR E IT, WHETHER THE PENALTY UNDER THE PROVISIONS OF EXPLANA TION-5A TO SECTION 271(1)(C) OF THE ACT COULD BE IMPOSED WH ERE THE ASSESSEE WAS COVERED BY SURVEY U/S 133A AND NOT BY SEARCH ACTION U/S 132 OF THE ACT. THE ITAT IN THE SAID DEC ISION HAD REFERRED TO THE DECISION OF THE I.T.A.T. KOLKATA BE NCH IN THE CASE OF DCIT VS. SRI SHYAM SUNDER DHANKA IN ITA NO. 1869 17 & 1870/KOL/2013 WHEREIN IT WAS HELD THAT THERE IS N O REQUIREMENT FOR LEVY OF PENALTY UNDER THE PROVISION S OF EXPLANATION-5A TO SECTION 271(1)(C) OF THE ACT THAT THE PARTY SHOULD BE SEARCHED U/S 132 OF THE ACT. THE RELEVAN T FINDINGS OF THE I.T.A.T. AT PARAS 4.2 TO 4.3 OF THE ORDER ARE AS UNDER: 4.2 THE ISSUE RAISED IN THIS MA IS WHETHER PENALTY UNDE R PROVISIONS OF EXPLANATION 5A TO SECTION 271(L)(C) CAN BE IMPOSED IN THE PRESENT CASE WHERE THE ASSESSEE-HUF W AS COVERED BY SURVEY U/S 133A AND NOT BY SEARCH AND SE IZURE ACTION U/S 132 OF THE ACT AND CONSEQUENTLY ASSESSME NT WAS MADE U/S 153C AND NOT U/S 153A . FOR CLARITY, THE PRO VISIONS OF EXPLANATION 5A TO SECTION 271(L)(C) ARE EXTRACTED BELOW . '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 VALUAB LE ARTICLE OR THING (HEREAFTER IN THIS EXPLANATION REFE RRED TO AS ASSETS) AND THE ASSESSEE CLAIMS THAT SUCH ASSET S HAVE BEEN ACQUIRED BY HIM BY UTILISING (WHOLLY OR I N 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 CLAIMS THAT SUCH ENTRY IN THE BOOKS OF ACCOUNT OR OT HER 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 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 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 D ATE OF SEARCH, HE SHALL, FOR THE PURPOSES OF IMPOSITION OF A PE NALTY UNDER CLAUSE (C) OF SUB-SECTION (1) OF THIS SECTION, BE DEEMED TO HAVE CONCEALED THE PARTICULARS OF HIS INCOME OR FURNI SHED INACCURATE PARTICULARS OF SUCH INCOME.' 4.3 A SIMILAR ISSUE AROSE BEFORE THE ITAT 'C' BENC H KOLKATA IN THE CASE OF DCIT V. SRI SHY AM SUNDER DH ANKA (ITA NO. 1869-1870/KOL/2013) FOR AY 2006-07. IN THAT CASE THERE WAS A SEARCH OPERATION CONDUCTED IN THE PREMISES OF SALTEE GROUP AND DURING THE COURSE OF SEARCH CERTAIN DOCUME NTS WERE IMPOUNDED WITH REGARD TO SOME TRANSACTION FOR THE 18 PURCHASE OF LAND. ON QUERY BY THE AO, THE ASSESSEE SUBMITTED THAT THESE ARE THE PAPERS BELONGING TO M/S MAYUR SALE S PVT. LTD. AND KAMAL GANDHI. THE TRIBUNAL FOUND THAT, AS SUCH THERE WAS NO ROLE OF THE SEARCH PARTY. ACCORDINGLY, THE AO ISSUED NOTICE TO THE ASSESSEE WHO VOLUNTARILY ADMIT TED THE UNDISCLOSED INCOME AND REVISED INCOME TAX RETURN AND PAID TAX THEREON BY FILING REVISED RETURN WHICH WAS ACCEP TED BY THE AO. THE AO ALSO INITIATED THE PENALTY WHICH WAS SUB SEQUENTLY DELETED BY THE LD. CIT(A) IN APPELLATE STAGE ON THE G ROUND THAT THERE WAS NO MISMATCH IN THE INCOME OF THE ASSESSEE WHICH WAS DECLARED U/S 153C AND THE ASSESSEE WAS NOT SEAR CH PARTY U/S 132 OF THE ACT. THEREFORE, THE LD. CIT(A) HELD THAT THE UNDISCLOSED INCOME IS OUT OF THE PURVIEW OF THE PROVISIO NS UNDER EXPLANATION 5A TO SECTION 271(L)(C] OF THE ACT. A Q UESTION WAS RAISED BEFORE THE TRIBUNAL BY THE REVENUE TO ADJUDI CATE AS TO WHETHER THE UNDISCLOSED INCOME DECLARED BY THE ASSE SSEE IN PURSUANCE TO NOTICE U/S 153C OF THE ACT IS SUBJECT TO PENALTY UNDER EXPLANATION 5A TO SECTION 271(L)(C) OF THE ACT I N THE AFORESAID FACTS AND CIRCUMSTANCES. THE TRIBUNAL FOUND THAT THE NAME OF THE ASSESSEE WAS NOWHERE RECORDED IN SE IZED DOCUMENTS BUT ASSESSEE HIMSELF CAME FORWARD AND OFFERE D THE UNDISCLOSED INCOME U/S 147 OF THE ACT. THE TRIBUNAL DID NOT AGREE WITH THE FINDINGS OF THE LD. CIT(A) THAT THE ASSESSEE WAS NOT SEARCHED U/S 132 OF THE ACT, THEREFORE, THE PROVISIONS OF EXPLANATION 5A TO SECTION 271(L)(C] OF T HE ACT IS NOT APPLICABLE TO THE ASSESSEE. THE TRIBUNAL VIDE ORDE RED 20.07.2016 REFERRING TO THE PROVISION OF EXPLANATION 5A TO SECTION 271(L)(C) HELD AS UNDER: 'FROM A BARE READING, WE FIND THAT IT IS CLEAR THAT T HERE IS NO REQUIREMENT FOR LEVYING THE PENALTY UNDER EXPLANATION 5A TO SEC. 271(L)(C) THAT THE PARTY TO WHOM THE ASSESSMENT PROCEEDINGS INITIATED U/S 153C OF THE ACT SHOULD BE SEARCHED U/S. 132 OF THE ACT. THEREFORE, WE REJECT THE FINDING OF LD CIT(A). WE ALSO DO NOT AG REE WITH THE FINDING OF LD CIT(A) THAT THE INCOME FURNISH ED IN RESPONSE TO NOTICE U/S. 153C OF THE ACT WAS ACCEP TED BY AO IN ASSESSMENT PROCEEDINGS FRAMED U/S. 153C OF THE ACT WITHOUT MAKING ANY SUCH ADDITION. IN THE INSTA NT CASE, IT IS PERTINENT TO NOTE THAT THE ASSESSEE OFFE RED ITS UNDISCLOSED INCOME ONLY AFTER INITIATION OF SEARCH U/S 132 OF THE ACT ON M/S SALTEE GROUP AND AFTER ISSUIN G THE NOTICE U/S 153C OF THE ACT. SO IN OUR VIEW, IT IS NOT THE CASE THAT ASSESSEE HAS VOLUNTARILY OFFERED THE UNDISCLOSED INCOME TO TAX. THEREFORE THE REASONS GIV EN BY THE ID. CIT(A) WITH REGARD TO THE DELETION OF PENA LTY ARE NOT TENABLE.' 19. IN VIEW OF THE ABOVE WE FIND THAT THE ISSUE IS SQUARELY COVERED BY THE DECISION OF THE I.T.A.T. IN THE AFOR ESAID CASE AND THE LD.CIT(A), THEREFORE, HAS RIGHTLY HELD THAT THE SEARCH ACTION ON THE ASSESSEE IS NOT A NECESSARY CONDITION FOR 19 ATTRACTING PENALTY AS PER EXPLANATION-5A TO SECTION 271(1)(C) OF THE ACT. RELIANCE PLACED BY THE LD. COUNSEL FOR ASSESSEE ON THE DECISION OF THE RAGHUVEER SINGH (SUPRA) IS M ISPLACED. IN THAT CASE THE I.T.A.T. HAD RECORDED FINDINGS THA T NO INCRIMINATING MATERIAL WAS FOUND, WHILE IN THE PRES ENT CASE, THERE IS NO DENIAL OF THE FACT THAT INCRIMINATING M ATERIAL WAS FOUND. THEREFORE, THE SAID DECISION WOULD NOT APPLY TO THE PRESENT CASE. IN VIEW OF THE SAME, WE DISMISS THIS CONTENTION OF THE LD. COUNSEL FOR ASSESSEE ALSO. NO OTHER ARGUMENTS WERE RAISED BEFORE US. ALL GROUN DS RAISED BY THE ASSESSEE ARE THEREFORE DISMISSED . WE THEREFORE UPHOLD THE ORDER OF THE LD.CIT(A) IN CONFIRMING THE LEVY OF PENALTY U/S 271(1)(C) OF THE ACT. THE APPEAL FILED BY THE ASSESSEE IS THEREFORE DISMI SSED. 20. IN THE RESULT, ALL THE APPEALS FILED BY THE ASS ESSEE ARE, THEREFORE, DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT. SD/- SD/- % & ' ($ (SANJAY GARG) (ANNAPURNA GUPTA) ! /JUDICIAL MEMBER ! /ACCOUNTANT MEMBER /DATED: 28 TH FEBRUARY, 2019 * * / COPY OF THE ORDER FORWARDED TO : / THE APPELLANT ! / THE RESPONDENT ' # / CIT ' # ( )/ THE CIT(A) , , &'() / DR, ITAT, CHANDIGARH ( / GUARD FILE ' / BY ORDER, / ASSISTANT REGISTRAR P