SMT. SHIPRA JAIN, Jaipur V. ASSISTANT COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-1, Jaipur

ITA 922/JPR/2018

• Counselvise Citation: [2018] 119 COUNSELVISE.COM (IT) 2735 (ITAT-JAIPUR)
• Duration Of Justice: 3 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-10-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2009-2010
• Appeal Filed On: 30-07-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: J C KULHARI
• Keywords: Unexplained investment; Value adopted by valuation officer; Search and seizure; Initiation of penalty proceedings; Valuation report; Onus to prove
• Section: 143(3); 132

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHE S, JAIPUR JH FOT; IKWY JKO] U;KF;D LNL; ,OA JH FOE FLAG ;KNO] YS[KK LNL; DS LE{K BEFORE: SHRI VIJAY PAL RAO, JM & SHRI VIKRAM SINGH YADAV, AM VK;DJ VIHY LA-@ ITA. NO. 922/JP/2018 FU/KZKJ.K O'K Z@ ASSESSMENT YEARS : 2009-10 SMT. SHIPRA JAIN B-522, MALVIYA NAGAR, JAIPUR CUKE VS. ACIT CENTRAL CIRCLE-1 JAIPUR LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO.: AEHPJ1594F VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT VK;DJ VIHY LA-@ ITA. NO. 920/JP/2018 FU/KZKJ.K O'K Z@ ASSESSMENT YEARS : 2009-10 SH. SAPAN JAIN B-522, MALVIYA NAGAR, JAIPUR CUKE VS. ACIT CENTRAL CIRCLE-1 JAIPUR LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO.: ACEPJ3164G VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDEN T VK;DJ VIHY LA-@ ITA. NO. 921/JP/2018 FU/KZKJ.K O'K Z@ ASSESSMENT YEARS : 2010-11 SH. SAPAN JAIN B-522, MALVIYA NAGAR, JAIPUR CUKE VS. ACIT CENTRAL CIRCLE-1 JAIPUR LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO.: ACEPJ3164G VIHYKFKHZ@ APPELLANT IZR;FKHZ@ R ESPONDENT ITA NO. 922, 920, 921 & 923/JP/2018 SMT. SHIPRA JAIN & SH. SAPNA JAIN, JAIPUR VS. ACIT, JAIPUR 2 VK;DJ VIHY LA-@ ITA. NO. 923/JP/2018 FU/KZKJ.K O'K Z@ ASSESSMENT YEARS : 2010-11 SMT. SHIPRA JAIN B-522, MALVIYA NAGAR, JAIPUR CUKE VS. ACIT CENTRAL CIRCLE-1 JAIPUR LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO.: AEHPJ1594F VIHYKFKHZ@ APPEL LANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ L S@ ASSESSEE BY : SHRI P. C. PARWAL (CA) JKTLO DH VKSJ LS @ REVENUE BY : SHRI J. C. KULHARI (JCIT) LQUOKBZ DH RKJH[ K@ DATE OF HEARING : 03/10/2018 MN?KKS'K.KK DH RKJH[ K@ DATE OF PRONOUNCEMENT : 31/10/2018 VKNS'K@ ORDER PER BENCH: THESE ARE APPEALS FILED BY THE RESPECTIVE ASSESSEE S AGAINST THE ORDER OF LD. CIT(A)-4, JAIPUR FOR ASSESSMENT YEAR 2 009-10 AND ASSESSMENT YEAR 2010-11 CHALLENGING THE LEVY OF PEN ALTY UNDER SECTION 271(1)(C) OF THE ACT. ALL THESE APPEALS WERE HEARD TOGETHER AND ARE BEING DISPOSED OFF BY THIS CONSOLIDATED ORDER. 2. THE GROUNDS OF APPEAL TAKEN ARE AS UNDER:- ITA. NO. 922/JP/2018 FOR AY 2009-10 (1) UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE, ORDER PASSED U/S 271(1)(C) IS ILLEGAL AND BAD IN LAW. (2) THE LD. CIT(A) HAS ERRED ON FACTS AND IN LAW IN CONFIRMING THE LEVY OF PENALTY OF RS. 45,555/- ON ADDITION OF RS. 1,34,025/- MADE ON ACCOUNT OF ALLEGED ESTIMATED UNEXPLAINED INVESTMENT IN CONSTRUCTION OF HOUSE. ITA NO. 922, 920, 921 & 923/JP/2018 SMT. SHIPRA JAIN & SH. SAPNA JAIN, JAIPUR VS. ACIT, JAIPUR 3 ITA. NO. 920/JP/2018 FOR AY 2009-10 1. UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE, ORDER PASSED U/S 271(1)(C) IS ILLEGAL AND BAD IN LAW. 2. THE LD. CIT(A) HAS ERRED ON FACTS AND IN LAW IN CONFIRMING THE LEVY OF PENALTY ON ADDITION OF RS. 1,34,025/- MADE ON ACCOUNT OF ALLEGED ESTIMATED UNEXPLAINED INVESTMENT IN CONSTRU CTION OF HOUSE. ITA. NO. 921/JP/2018 FOR AY 2010-11 1. UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE, ORDER PASSED U/S 271(1)(C) IS ILLEGAL AND BAD IN LAW. 2. THE LD. CIT(A) HAS ERRED ON FACTS AND IN LAW IN CONFIRMING THE LEVY OF PENALTY ON ADDITION OF RS. 4,43,000/- (CORR ECT AMOUNT IS RS. 5,57,000/-) MADE ON ACCOUNT OF ALLEGED ESTIMATED UN EXPLAINED INVESTMENT IN CONSTRUCTION OF HOUSE. ITA. NO. 923/JP/2018 FOR AY 2010-11 1. UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE, ORDER PASSED U/S 271(1)(C) IS ILLEGAL AND BAD IN LAW. 2. THE LD. CIT(A) HAS ERRED ON FACTS AND IN LAW IN CONFIRMING THE LEVY OF PENALTY OF RS. 3,09,000/- ON ADDITION OF RS . 10 LACS MADE ON ACCOUNT OF ALLEGED ESTIMATED UNEXPLAINED INVESTMENT IN CONSTRUCTION OF HOUSE. HE HAS FURTHER ERRED IN CONFIRMING THE ABOVE PENALTY IGNORING THE FACT THAT AFTER THE ORDER OF HONBLE ITAT, ADDI TION IS RESTRICTED TO RS. 5,57,000/- ONLY. ITA. NO. 922 & 920/JP/2018 2. BRIEFLY STATED, THE FACTS OF THE CASE ARE THAT A SEARCH AND SEIZURE OPERATION WAS CARRIED OUT U/S 132 OF THE INCOME TAX ACT, 1961 ON ITA NO. 922, 920, 921 & 923/JP/2018 SMT. SHIPRA JAIN & SH. SAPNA JAIN, JAIPUR VS. ACIT, JAIPUR 4 08.06.2011 AT THE BUSINESS AND RESIDENTIAL PREMISES OF THE ASSESSEES. BOTH THE ASSESSEES, BEING HUSBAND & WIFE, JOINTLY P URCHASED A PLOT FOR CONSIDERATION OF RS.32,65,200/- DURING FY 2005-06 A ND CONSTRUCTED A HOUSE ON IT DURING 2007 TO 2009. IN THE STATEMENT R ECORDED U/S 132(4), SH. SAPAN JAIN STATED THAT HE HAS SPENT RS. 65-70 L AKHS IN CONSTRUCTION OF HOUSE WHICH WAS STARTED IN THE YEAR 2007 AND WAS COMPLETED IN 2009. HE ALSO STATED THAT HE HAS FURTHER MADE INVES TMENT OF RS.20 LACS ON FITTINGS, FURNISHING, FURNITURE, ETC. AFTER THE CONSTRUCTION IN FY 2009- 10. HOWEVER, IN THE RETURN FILED U/S 153A, BOTH THE ASSESSEES DECLARED TOTAL COST OF CONSTRUCTION AT RS.53,21,778/-, I.E. RS.26,60,889/- EACH BY SH. SAPAN JAIN AND SMT. SHIPRA JAIN. 2.1 THE AO REFERRED THE MATTER TO DVO WHO DETERMINE D THE COST OF CONSTRUCTION AT RS.1,05,40,097/- AND THEREBY DETERM INED DIFFERENCE AT RS.52,18,319/-. ACCORDINGLY, AO ADDED THE DIFFERENC E AMOUNT IN THE HANDS OF BOTH THE ASSESSES EQUALLY DURING FY 2006-0 7 TO 2008-09, RESULTING INTO ADDITION OF RS.9,38,800/- IN THE YEA R UNDER CONSIDERATION. ON THIS ADDITION, AO INITIATED PENALTY PROCEEDINGS U/S 271(1)(C) OF THE IT ACT. 2.2 ON APPEAL, ASSESSEES POINTED OUT VARIOUS DEFECT S IN THE DVOS REPORT. THE LD. CIT(A) AFTER CONSIDERING THE DEFECT S RESTRICTED THE ADDITION TO RS. 2,68,051/-. ACCORDINGLY, ADDITION O F RS.1,34,025/- (2,68,051/2) WAS CONFIRMED BY LD. CIT(A) IN THE HAN DS OF BOTH THE ASSESSEES AND THE MATTER HAS ATTAINED FINALITY AS F AR AS QUANTUM PROCEEDINGS ARE CONCERNED. 2.3. IN PENALTY PROCEEDINGS, ASSESSEES FILED ITS RE PLY VIDE LETTER DT. 20.03.2017 WHICH WAS NOT FOUND ACCEPTABLE AND THE A O LEVIED PENALTY ITA NO. 922, 920, 921 & 923/JP/2018 SMT. SHIPRA JAIN & SH. SAPNA JAIN, JAIPUR VS. ACIT, JAIPUR 5 OF RS.45,555/- ON ADDITION OF RS.1,34,025/- BY HOLD ING THAT ASSESSEE IS LIABLE FOR PENALTY UNDER EXPLANATION 5A OF 271(1)(C ) OF THE ACT. 2.4 THE LD. CIT(A) CONFIRMED THE PENALTY BY HOLDING THAT AO HAS BASED HIS ADDITION ON THE BASIS OF DVO REPORT WHICH IS VERY SPECIFIC AND REMAIN SIGNIFICANTLY UNREBUTTED AT THE CIT(A) STAGE . THE ESTIMATION OF DVO IS IN CONSONANCE WITH THE STATEMENT RECORDED BY THE DEPARTMENT U/S 132(4) OF THE ACT. FURTHER, THE LD CIT(A) HAS H ELD THAT THE AO HAS INITIATED THE PENALTY EXACTLY SPECIFYING THE LIMB U NDER WHICH HE SOUGHT TO IMPOSE THE PENALTY. NOW, BOTH THE ASSESSEES ARE IN APPEAL AGAINST THE SAID FINDINGS OF THE LD CIT(A). 3. DURING THE COURSE OF HEARING, THE LD. AR SUBMITT ED THAT AT THE OUTSET, IT IS SUBMITTED THAT AO IN THE BODY OF THE ORDER HAS MENTIONED THAT ASSESSEE IS LIABLE FOR PENALTY U/S 271(1)(C) O F THE IT ACT. AT THE END OF THE ORDER, PENALTY PROCEEDINGS ARE INITIATED FOR CONCEALMENT OF INCOME. IN THE NOTICE ISSUED U/S 274 READ WITH SEC. 271(1)(C) DATED 21.03.2014, PENALTY PROCEEDINGS U/S 271(1)(C) WAS I NITIATED FOR CONCEALMENT OF INCOME OR FURNISHING OF INACCURATE P ARTICULARS OF INCOME. AGAIN IN THE NOTICE DT. 20.02.2017, PENALTY PROCEED INGS WAS INITIATED FOR CONCEALMENT OF INCOME/ FURNISHING OF INACCURATE PAR TICULARS OF INCOME. FURTHER IN THE PENALTY ORDER, THE AO WITHOUT SPECIF YING ANY PARTICULAR LIMB UNDER WHICH PENALTY IS LEVIABLE IMPOSED THE PE NALTY U/S 271(1)(C). THUS, IN THE ABSENCE OF ANY SPECIFIC CHARGE AGAINST THE ASSESSEE IN THE PENALTY NOTICE AND IN THE PENALTY ORDER, CONSEQUENT PENALTY IMPOSED BY AO IS ILLEGAL AND BAD IN LAW. RELIANCE IN THIS CONN ECTION WAS PLACED ON THE VARIOUS DECISIONS INCLUDING CIT VS. SSAS EMERA LD MEADOWS (2016) 242 TAXMAN 180 (SC), CIT VS. M/S MANJUNATHA COTTON & GINNING FACTORY &ORS.359 ITR 565 (KAR). ITA NO. 922, 920, 921 & 923/JP/2018 SMT. SHIPRA JAIN & SH. SAPNA JAIN, JAIPUR VS. ACIT, JAIPUR 6 3.1 ON MERITS, IT WAS SUBMITTED THAT THE ENTIRE ADD ITION MADE BY THE AO AND REDUCED BY THE CIT(A) IS ON THE BASIS OF COS T OF CONSTRUCTION ESTIMATED AS PER DVOS REPORT. IN SEARCH, NO EVIDEN CE OF INVESTMENT OVER AND ABOVE THAT DECLARED BY THE ASSESSEE WAS FO UND. THE AO REFERRED TO SURRENDER OF RS. 20 LAKHS BUT THE SAME IS IN RELATION TO FURNISHING ITEMS FOR WHICH ADDITION HAS BEEN MADE I N AY 2010-11 AND IT HAS NO RELEVANCE WITH THE COST OF CONSTRUCTION. HEN CE, ON SUCH ADDITION WHICH IS ON ACCOUNT OF ESTIMATION OF COST OF CONSTR UCTION BY DVO, NO PENALTY IS LEVIABLE. FOR THIS PURPOSE, RELIANCE WAS PLACED ON THE FOLLOWING CASES:- DILIP N. SHROFF VS. JCIT & ANR. (2007) 291 ITR 519 (SC) THE HONBLE SUPREME COURT HELD THAT ONLY BECAUSE TH E OPINION OF REGISTERED VALUER IS NOT ACCEPTED OR SOME OTHER EXP ERT GIVES ANOTHER OPINION, IS NOT BY ITSELF SUFFICIENT FOR ARRIVING A T A CONCLUSION THAT THE ASSESSEE HAD FURNISHED INACCURATE PARTICULARS ATTRA CTING PENALTY U/S 271(1)(C). PRIMARY BURDEN OF PROOF OF FURNISHING IN ACCURATE PARTICULARS OF INCOME IS ON THE REVENUE AND IT IS ONLY ON DISCH ARGE OF PRIMARY BURDEN THAT SECONDARY BURDEN OF PROOF WOULD SHIFT O N THE ASSESSEE. ACCORDINGLY, PENALTY WAS DELETED ON ADDITION MADE O N THE BASIS OF VALUATION REPORT. CIT VS. K.R. CHINNI KRISHNA CHETTY (2000) 246 ITR 1 21 (MAD.) (HC) THE HONBLE MADRAS HIGH COURT HELD THAT PENALTY UND ER SEC. 271(1)(C) COULD NOT BE LEVIED ON ASSESSEE WHOSE INCOME HAD BE EN ASSESSED AT A HIGHER FIGURE SOLELY ON THE BASIS OF THE VALUERS R EPORT WHICH SHOWED THE COST OF CONSTRUCTION AT A FIGURE HIGHER THAN THE ON E REPORTED BY THE ASSESSEE. ITA NO. 922, 920, 921 & 923/JP/2018 SMT. SHIPRA JAIN & SH. SAPNA JAIN, JAIPUR VS. ACIT, JAIPUR 7 CIT VS. APSARA TALKIES (1985) 155 ITR 303 (MAD.) (H C) MERE ESTIMATE OF COST BY DEPARTMENTAL VALUER COULD NOT CONSTITUTE MATERIAL TO CONCEALMENT, MORE SO, THERE WAS NO EVID ENCE OF UNDERSTATEMENT OF CONSTRUCTION EXPENSES BY ASSESSEE , THEREFORE, LEVY OF PENALTY WAS NOT VALID. ACIT VS. PRAKASH INDUSTRIES LTD. (2016) 46 CCH 145 (DEL.) (TRIB.) THE ITAT HELD THAT VALUATION MADE BY DVO WAS ESTIM ATE THAT COULD BE BASIS FOR MAKING ADDITION TO INCOME OF ASSESSEE FOR PURPOSE OF ASSESSMENT BUT SAME ALONE COULD NOT BE BASIS TO CON STRUE CONCEALMENT FOR PURPOSE OF IMPOSING PENALTY U/S 271(1)(C). IN VIEW OF ABOVE, PENALTY IMPOSED BY AO AND CONFIRM ED BY LD. CIT(A) BE DELETED. 4. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. THE AO HAS INVOKED THE DEEMING PROVISIONS OF EXPLANATION 5A TO SECTION 271(1)(C) OF THE ACT TO L EVY PENALTY IN THE INSTANT CASE. SECTION 271(1)(C) OF THE ACT, BEING IN THE NATURE OF PENAL PROVISIONS REQUIRE A STRICT INTERPRETATION AND IT I S TO BE SEEN THAT THE INSTANT CASE FALLS WITHIN THE FOUR CORNERS OF THE S AID PROVISIONS AND CONDITIONS LAID DOWN THEREIN ARE SPECIFICALLY FULFI LLED. THEREFORE, IT WOULD BE RELEVANT TO EXAMINE THE CONDITIONS SPECIFI ED IN EXPLANATION 5A WHICH READS AS UNDER: ITA NO. 922, 920, 921 & 923/JP/2018 SMT. SHIPRA JAIN & SH. SAPNA JAIN, JAIPUR VS. ACIT, JAIPUR 8 EXPLANATION 5A- WHERE, IN THE COURSE OF A SEARCH I NITIATED UNDER SECTION 132 ON OR AFTER THE 1 ST DAY OF JUNE, 2007, THE ASSESSEE IS FOUND TO BE THE OWNER OF: (I) ANY MONEY, BULLION, JEWELLERY OR OTHER VALUABLE ARTICLE OR THING (HEREAFTER IN THIS EXPLANATION REFERRED TO AS ASSET S) AND THE ASSESSEE CLAIMS THAT SUCH ASSETS HAVE BEEN ACQUIRED BY HIM BY UTILISING (WHOLLY OR IN PART) HIS INCOME FOR ANY PR EVIOUS YEAR; OR (II) ANY INCOME BASED ON ANY ENTRY IN ANY BOOKS OF ACCOUNT OR OTHER DOCUMENTS OR TRANSACTIONS AND HE CLAIMS THAT SUCH ENTRY IN THE BOOKS OF ACCOUNT OR OTHER DOCUMENTS OR TRANSACT IONS REPRESENTS HIS INCOME (WHOLLY OR IN PART) FOR ANY P REVIOUS YEAR, WHICH HAS ENDED BEFORE THE DATE OF SEARCH, AND (A) WHERE THE RETURN OF INCOME FOR SUCH PREVIOUS YEAR H AS BEEN FURNISHED BEFORE THE SAID DATE BUT SUCH INCOME HAS NOT BEEN DECLARED THEREIN; OR (B) THE DUE DATE FOR FILING THE RETURN OF INCOME FOR SU CH PREVIOUS YEAR HAS EXPIRED BUT THE ASSESSEE HAS NOT FILED THE RETURN, THEN, NOTWITHSTANDING THAT SUCH INCOME IS DECLARED BY HIM IN ANY RETURN OF INCOME FURNISHED ON OR AFTER 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 HA VE CONCEALED THE PARTICULARS OF HIS INCOME OR FURNISHED IN ACCUR ATE PARTICULARS OF SUCH INCOME. 4.1 IN THE INSTANT CASE, IN THE COURSE OF SEARCH WH ICH HAS BEEN CARRIED OUT U/S 132 ON 08.06.2011, SH. SAPAN JAIN A LONG WITH HIS WIFE SMT. SHIPRA JAIN WAS FOUND TO BE THE JOINT OWNER OF A RESIDENTIAL HOUSE AT PLOT NO. 6 USHA COLONY, MALVIYA NAGAR, JAIPUR. I N THE STATEMENT RECORDED U/S 132(4), SH. SAPAN JAIN STATED THAT HE HAS SPENT RS. 65-70 LAKHS IN CONSTRUCTION OF THE HOUSE WHICH WAS STARTE D IN THE YEAR 2007 AND COMPLETED IN THE YEAR 2009. IN THE RETURN OF IN COME FILED PURSUANT TO NOTICE U/S 153A, THE ASSESSEE DID NOT DISCLOSE T HE FULL COST OF ITA NO. 922, 920, 921 & 923/JP/2018 SMT. SHIPRA JAIN & SH. SAPNA JAIN, JAIPUR VS. ACIT, JAIPUR 9 CONSTRUCTION/INVESTMENT SO STATED IN HIS STATEMENT RECORDED U/S 132(4) AND THEREAFTER, THE AO REFERRED THE MATTER TO THE D VO WHO DETERMINED THE COST OF CONSTRUCTION AT RS. 1,05,40,097/- AS AG AINST RS. 52,18,319/- DETERMINED BY THE ASSESSEE AND THEREAFTER, THE DIFF ERENTIAL AMOUNT WAS BROUGHT TO TAX IN THE HANDS OF THE ASSESSEE EQUALLY ALONG WITH HIS WIFE. THEREFORE, AS FAR AS INVOCATION OF EXPLANATION 5A T O SECTION 271(1)(C) OF THE ACT IS CONCERNED, NO FAULT CAN BE FOUND WITH TH E AO. A SEARCH HAS BEEN INITIATED U/S 132 ON OR AFTER THE 1 ST DAY OF JUNE, 2007 AND THE ASSESSEE HAS BEEN FOUND TO BE JOINT OWNER OF RESIDE NTIAL HOUSE AT PLOT NO. 6 USHA COLONY, MALVIYA NAGAR, JAIPUR AND A PART OF THE INVESTMENT/COST OF CONSTRUCTION OF SUCH HOUSE HAS B EEN STATED BY THE ASSESSEE TO HAVE BEEN MADE OUT OF HIS INCOME FOR TH E PREVIOUS YEAR 2008-09 WHICH HAS ENDED BEFORE THE DATE OF SEARCH W HICH WAS CONDUCTED ON 8.6.2011. AND IT IS ALSO CLEAR THAT I N THE ORIGINAL RETURN OF INCOME FILED U/S 139(1) WHICH HAS BEEN FURNISHED ON 29.09.2009, SUCH INCOME HAS NOT BEEN DISCLOSED THEREIN. GIVEN THAT BOTH THE CONDITIONS SO SPECIFIED HAS BEEN SATISFIED IN THE INSTANT CASE , THE PROVISIONS OF EXPLANATION 5A ARE CLEARLY APPLICABLE. FURTHER, NO SPECIFIC ARGUMENTS HAVE BEEN TAKEN BY THE LD. AR TO DISPUTE THE APPLIC ABILITY OF EXPLANATION 5A. IN LIGHT OF THESE UNDISPUTED FACTS, WE DONOT SE E ANY INFIRMITY IN INVOCATION OF THE PROVISIONS OF EXPLANATION 5A TO S ECTION 271(1)(C) OF THE ACT. HOWEVER, THE CONTENTIONS OF THE AR ON MER ITS NEED TO BE CONSIDERED WHICH WE HAVE DISCUSSED IN SUBSEQUENT PA RAGRAPHS. 4.2 NOW COMING TO THE FIRST CONTENTION SO RAISED BY THE LD. AR THAT IN THE ABSENCE OF ANY SPECIFIC CHARGE AGAINST THE ASSE SSEE IN THE PENALTY NOTICE AND SUBSEQUENTLY IN THE PENALTY ORDER, CONSE QUENT PENALTY IMPOSED BY AO IS ILLEGAL AND BAD IN LAW. WE FIND TH AT EXPLANATION 5A TO SECTION 271(1)(C) IS A DEEMING PROVISION AND SUBJEC T TO FULFILLING THE ITA NO. 922, 920, 921 & 923/JP/2018 SMT. SHIPRA JAIN & SH. SAPNA JAIN, JAIPUR VS. ACIT, JAIPUR 10 REQUISITE CONDITIONS, IT DEEMS THE ASSESSEE TO HAVE CONCEALED THE PARTICULARS OF HIS INCOME OR FURNISHED INACCURATE P ARTICULARS OF SUCH INCOME SIMILAR TO WHAT HAS BEEN PROVIDED IN CLAUSE (C) TO SECTION 271(1) OF THE ACT. IN SEARCH CASES AS WELL, THE LE GISLATURE HAS THUS ENVISAGED APPLICABILITY OF ONE OR BOTH OF THESE CHA RGES. IT IS SETTLED POSITION NOW AS HELD BY CATENA OF JUDICIAL PRONOUNC EMENTS THAT THE NOTICE INITIATING THE PENALTY PROCEEDINGS SHOULD SP ECIFY THE CHARGE AGAINST THE ASSESSEE AND EVEN WHERE THE CHARGE IS U NCERTAIN AT THE TIME OF INITIATION OF PENALTY PROCEEDINGS, SUBSEQUE NTLY DURING THE PENALTY PROCEEDINGS, THE AO MUST GET DECISIVE, WHIC H SHOULD BE REFLECTED IN THE PENALTY ORDER, AS TO WHETHER THE A SSESSEE IS GUILTY OF 'CONCEALMENT OF PARTICULARS OF INCOME' OR 'FURNISHI NG OF INACCURATE PARTICULARS OF SUCH INCOME'. 4.3 IN THIS REGARD, USEFUL REFERENCE CAN BE DRAWN T O THE DECISION OF THE COORDINATE BENCH IN CASE OF HPCL MITTAL ENERGY VS ADD. CIT REPORTED IN 96 TAXMAN.COM 3 WHERE THE MATTER WAS RE FERRED TO THE THIRD MEMBER TO DECIDE ON THE ISSUE AS TO 'WHETHER, IN CASE WHERE THE SATISFACTION OF THE AO WHILE INITIATING PENALTY PRO CEEDINGS U/S. 271(L)(C) OF THE INCOME-TAX ACT, 1961 IS WITH REGARD TO ALLEG ED CONCEALMENT OF INCOME BY THE ASSESSEE, WHEREAS THE IMPOSITION OF T HE PENALTY IS FOR 'CONCEALMENT/FURNISHING INACCURATE PARTICULARS OF I NCOME', THE LEVY OF PENALTY IS NOT SUSTAINABLE?'. AFTER ANALYZING CATENA OF JUDICIAL PRONOUNCEMENTS I NCLUDING THE DECISIONS WHICH HAVE BEEN CITED BY THE LD AR, THE C OORDINATE BENCH SPEAKING THROUGH THE THIRD MEMBER HAS HELD AS UNDER : 9. ON AN ANALYSIS OF THE FACTUAL MATRIX NARRATED A BOVE, IT IS MANIFESTED THAT THE AO RECORDED SATISFACTION QUA TH E THREE ITEMS ITA NO. 922, 920, 921 & 923/JP/2018 SMT. SHIPRA JAIN & SH. SAPNA JAIN, JAIPUR VS. ACIT, JAIPUR 11 OF DISALLOWANCE/ADDITIONS LEADING TO PENALTY, AS 'C ONCEALMENT OF INCOME' IN ALL THE ASSESSMENT ORDERS; INITIATED PEN ALTY IN ALL THE FOUR CASES BY TREATING THEM AS COVERED UNDER THE EX PRESSION 'CONCEALMENT OF PARTICULARS OF INCOME'; AND THEN FI NALLY PASSED PENALTY ORDERS ON THE ASSESSEES FINDING THEM GUILTY OF 'CONCEALMENT OF PARTICULARS OF INCOME/FURNISHING IN ACCURATE PARTICULARS OF SUCH INCOME'. AS AGAINST THAT, THE A CTUAL POSITION IS THAT ALL THE THREE ITEMS OF DISALLOWANCE/ADDITIONS FALL ONLY UNDER THE CATEGORY OF 'FURNISHING OF INACCURATE PARTICULA RS OF INCOME'. NOW THE QUESTION ARISES IF THE PENALTY IS SUSTAINAB LE IN SUCH CIRCUMSTANCES? 10. AT THIS JUNCTURE, IT IS PERTINENT TO NOTE THAT PEN ALTY PROCEEDINGS ARE DISTINCT FROM THE ASSESSMENT PROCEE DINGS. MERELY BECAUSE AN ADDITION HAS BEEN MADE OR CONFIRMED IN T HE ASSESSMENT, DOES NOT, PER SE, LEAD TO IMPOSITION OF PENALTY U/S. 271(L)(C). PENALTY PROCEEDINGS ARE SEPARATELY INITI ATED ON CONCLUSION OF THE ASSESSMENT, IN WHICH THE ASSESSEE IS GIVEN AN OPPORTUNITY TO EXPLAIN HIS POSITION QUA THE IMPOSIT ION OF PENALTY ON THE ADDITIONS/DISALLOWANCES MADE IN THE ASSESSME NT. THE AO CONSIDERS THE EXPLANATION OF THE ASSESSEE AND THEN DECIDES IF THE PENALTY IS IMPOSABLE OR NOT. FURTHER, THE OPINION O F THE AO AS TO CONCEALMENT OF PARTICULARS OF INCOME OR FURNISHING OF INACCURATE PARTICULARS OF SUCH INCOME HAS TO BE SEEN WITH REFE RENCE TO THE DAY ON WHICH HE INITIATES/IMPOSES PENALTY. LATER EV ENTS, LIKE CONFIRMATION OR DELETION OF ADDITIONS/DISALLOWANCES IN QUANTUM APPEALS, ARE IRRELEVANT IN THIS CONTEXT. ITA NO. 922, 920, 921 & 923/JP/2018 SMT. SHIPRA JAIN & SH. SAPNA JAIN, JAIPUR VS. ACIT, JAIPUR 12 11. IT TRANSPIRES FROM THE ABOVE DISCUSSION THAT, INSO FAR AS THE ISSUE BEFORE ME IS CONCERNED, THERE ARE BROADLY TWO DIFFERENT STAGES HAVING BEARING ON THE IMPOSITION OF PENALTY, NAMELY, ASSESSMENT AND PENALTY. AT THE ASSESSMENT STAGE, TH E AO HAS TO RECORD A SATISFACTION IN THE ASSESSMENT ORDER AS TO WHETHER THE ADDITIONS/DISALLOWANCES, ON WHICH PENALTY IS LIKELY TO BE IMPOSED, REPRESENT CONCEALMENT OF PARTICULARS OF INCOME OR F URNISHING OF INACCURATE PARTICULARS OF INCOME. THERE CAN BE TWO SUB-STAGES IN PENALTY PROCEEDINGS REQUIRING THE AO TO RECORD SUCH SATISFACTION, VIZ., AT THE TIME OF INITIATING THE PENALTY PROCEED INGS AND AT THE TIME OF PASSING THE PENALTY ORDER. I WILL DEAL WITH SUCH TWO STAGES IN THE PRESENT CONTEXT. (A) RECORDING OF SATISFACTION AT THE ASSESSMENT STA GE. 12. IT HAS BEEN NOTICED HEREINABOVE THAT THE FIRST STA GE OF IMPOSITION OF PENALTY IS RECORDING OF SATISFACTION BY THE AO IN THE ASSESSMENT ORDER AS TO WHETHER THE ASSESSEE CONCEAL ED THE PARTICULARS OF INCOME OR FURNISHED INACCURATE PARTI CULARS OF INCOME. THERE WAS A LOT OF LITIGATION ON THIS POINT . THE ASSESSEES WERE CONTENDING BEFORE THE APPELLATE COURTS THAT TH E AO HAD NOT RECORDED PROPER SATISFACTION IN THE ASSESSMENT ORDE R AND HENCE THE PENALTY SHOULD BE DELETED. ON THE OTHER HAND, T HE DEPARTMENT WAS CONTENDING THAT THE SATISFACTION WAS PROPERLY RECORDED. CONSIDERING THE MAGNITUDE OF LITIGATION O N THE POINT, THE FINANCE ACT, 2008, INSERTED SUB-SECTION (1B) TO SECTION 271, W.R.E.F. 1.4.1989, WHICH RUNS AS UNDER: 'WHERE ANY AMOUNT IS ADDED OR DISALLOWED IN COMPUTI NG THE TOTAL INCOME OR LOSS OF AN ASSESSEE IN ANY ORDER OF ASSES SMENT OR ITA NO. 922, 920, 921 & 923/JP/2018 SMT. SHIPRA JAIN & SH. SAPNA JAIN, JAIPUR VS. ACIT, JAIPUR 13 REASSESSMENT AND THE SAID ORDER CONTAINS A DIRECTIO N FOR INITIATION OF PENALTY PROCEEDINGS UNDER CLAUSE (C) OF SUB-SECT ION (1), SUCH AN ORDER OF ASSESSMENT OR REASSESSMENT SHALL BE DEE MED TO CONSTITUTE SATISFACTION OF THE ASSESSING OFFICER FO R INITIATION OF THE PENALTY PROCEEDINGS UNDER THE SAID CLAUSE (C).' 13. THE EFFECT OF THIS INSERTION IS THAT WHEN AN AMOUN T IS ADDED OR DISALLOWED IN AN ASSESSMENT AND THE ORDER CONTAI NS A DIRECTION FOR INITIATION OF PENALTY PROCEEDINGS U/S. 271(L)(C ), IT SHALL BE DEEMED TO CONSTITUTE SATISFACTION OF THE AO FOR INI TIATION OF THE PENALTY PROCEEDINGS. CRUX OF THE NEW PROVISION IS T HAT A MERE DIRECTION IN THE ASSESSMENT ORDER TO INITIATE PENAL TY PROCEEDINGS UNDER CLAUSE (C) IS SUFFICIENT TO CONCLUDE THAT THE AO RECORDED PROPER SATISFACTION AS TO WHETHER THE ADDITIONS/DIS ALLOWANCES ARE 'CONCEALMENT OF PARTICULARS OF INCOME' OR 'FURNISHI NG OF INACCURATE PARTICULARS OF INCOME' OR BOTH. IT IS INCORRECT TO ARGUE THAT EVEN AFTER THE INSERTION OF SUB-SECTION (1B), THE AO STI LL NEEDS TO SPECIFICALLY RECORD AS TO WHETHER EACH ITEM OF ADDITION/DISALLOWANCE IS A CASE OF CONCEALMENT OF P ARTICULARS OF INCOME OR FURNISHING OF INACCURATE PARTICULARS OF I NCOME. DEEMING 'SATISFACTION' UNDER CLAUSE (C) IN TERMS OF SUB-SEC TION (1B) MEANS DEEMING 'PROPER SATISFACTION' AND 'PROPER SATISFACT ION' MEANS GETTING SATISFIED AS TO WHETHER IT IS A CASE OF CON CEALMENT OF PARTICULARS OF INCOME OR FURNISHING OF INACCURATE P ARTICULARS OF SUCH INCOME. IT CANNOT BE CONCEIVED THAT A DIRECTIO N TO INITIATE PENALTY PROCEEDINGS IN THE ASSESSMENT ORDER IS ONLY 'SATISFACTION' AND NOT 'PROPER SATISFACTION'. THIS CONTENTION, IF TAKEN TO A LOGICAL CONCLUSION, WOULD MEAN THAT AFTER SUCH A DIRECTION IN THE ASSESSMENT ORDER CONSTITUTING HIS SATISFACTION, THE AO SHOULD ITA NO. 922, 920, 921 & 923/JP/2018 SMT. SHIPRA JAIN & SH. SAPNA JAIN, JAIPUR VS. ACIT, JAIPUR 14 ONCE AGAIN SPECIFICALLY RECORD SATISFACTION WITH RE FERENCE TO EACH ADDITION OR DISALLOWANCE AS TO WHETHER IT IS A CASE OF CONCEALMENT OR FURNISHING OF INACCURATE PARTICULARS. IT IS OBVI OUSLY AN ABSURD PROPOSITION AND GOES AGAINST THE UNAMBIGUOUS LANGUA GE OF THE PROVISION. THUS, IT IS OVERT THAT AFTER INSERTION O F SUB-SECTION (1B) TO SECTION 271, INVARIABLY, THE AO SHOULD BE DEEMED TO HAVE RECORDED PROPER SATISFACTION WITH REFERENCE TO EACH ADDITION/DISALLOWANCE AS TO CONCEALMENT OR FURNISHI NG OF INACCURATE PARTICULARS, ONCE A DIRECTION IS CONTAIN ED IN THE ASSESSMENT ORDER TO INITIATE PENALTY U/S. 271(L)(C) OF THE ACT. REQUIRING THE RECORDING OF SEPARATE SATISFACTION, O NCE AGAIN, BY THE AO WOULD MILITATE AGAINST THE DEEMING PROVISION CONTAINED IN SUB-SECTION (1B). ADMITTEDLY, IN ALL THE FOUR APPEA LS UNDER CONSIDERATION, THE AO DIRECTED TO INITIATE PENALTY U/S. 271(L)(C) OF THE ACT IN THE ASSESSMENT ORDERS. THUS, THE REVENUE CAN BE SAFELY CONSIDERED TO HAVE SUCCESSFULLY PASSED OUT T HE FIRST STAGE. (B) RECORDING OF SATISFACTION AT THE PENALTY STAGE 14. IT HAS BEEN NOTED ABOVE THAT PENALTY PROCEEDINGS A RE SEPARATE FROM ASSESSMENT PROCEEDINGS, WHICH GET KIC KED WITH THE ISSUE OF NOTICE U/S. 274 AND CULMINATE IN THE PENAL TY ORDER U/S. 271(L)(C) OF THE ACT. MANY A TIMES, PENALTY INITIAT ED IN THE ASSESSMENT ORDER ON ONE OR MORE COUNTS BY MEANS OF NOTICE U/S. 274, IS NOT EVENTUALLY IMPOSED BY THE AO ON GETTING SATISFIED WITH THE EXPLANATION TENDERED BY THE ASSESSEE IN THE PEN ALTY PROCEEDINGS. IN ANY CASE, CONFRONTING THE ASSESSEE WITH THE CHARGE AGAINST HIM IS SINE QUA NON FOR ANY VALID PE NALTY PROCEEDINGS. IT IS ONLY WHEN THE ASSESSEE IS MADE A WARE OF SUCH ITA NO. 922, 920, 921 & 923/JP/2018 SMT. SHIPRA JAIN & SH. SAPNA JAIN, JAIPUR VS. ACIT, JAIPUR 15 A CHARGE AGAINST HIM THAT HE CAN PRESENT HIS SIDE. THUS PRESCRIBING THE CHARGE IN THE PENALTY NOTICE AND PE NALTY ORDER IS MUST. ABSENCE OF A CHARGE IN THE PENALTY NOTICE OR NOT FINDING THE ASSESSEE GUILTY OF A CLEAR OFFENCE IN THE PENALTY O RDER, VITIATES THE PENALTY ORDER. 15. THE MOOT QUESTION IS THAT WHAT SHOULD BE THE NATUR E OF SPECIFICATION OF A CHARGE BY THE AO AT THE STAGE OF INITIATION OF PENALTY PROCEEDINGS AND AT THE TIME OF PASSING THE PENALTY ORDER. IS THE AO REQUIRED TO SPECIFY IN THE PENALTY NOTICE /ORDER AS TO WHETHER IT IS A CASE OF 'CONCEALMENT OF PARTICULARS OF INCOME'; OR 'FURNISHING OF INACCURATE PARTICULARS OF INCOME'; O R BOTH OF THEM, WHICH CAN BE EXPRESSED BY USING THE WORD 'AND' BETW EEN THE TWO EXPRESSIONS. WHEN THE AO IS SATISFIED THAT IT IS A CLEAR-CUT CASE OF CONCEALMENT OF PARTICULARS OF INCOME, HE MUST SPECI FY IT SO IN THE NOTICE AT THE TIME OF INITIATION OF PENALTY PROCEED INGS AND ALSO IN THE PENALTY ORDER. THE AO CANNOT INITIATE PENALTY O N THE CHARGE OF 'CONCEALMENT OF PARTICULARS OF INCOME', BUT ULTI MATELY FIND THE ASSESSEE GUILTY IN THE PENALTY ORDER OF 'FURNISHING INACCURATE PARTICULARS OF INCOME'. IN THE SAME MANNER, HE CANN OT BE UNCERTAIN IN THE PENALTY ORDER AS TO CONCEALMENT OR FURNISHING OF INACCURATE PARTICULARS OF INCOME BY USING SLASH BET WEEN THE TWO EXPRESSIONS. WHEN THE AO IS SATISFIED THAT IT IS A CLEAR-CUT CASE OF 'FURNISHING OF INACCURATE PARTICULARS OF INCOME', H E MUST AGAIN SPECIFY IT SO IN THE NOTICE AT THE TIME OF INITIATI ON OF PENALTY PROCEEDINGS AND ALSO IN THE PENALTY ORDER. AFTER IN ITIATING PENALTY ON THE CHARGE OF 'FURNISHING OF INACCURATE PARTICUL ARS OF INCOME', HE CANNOT IMPOSE PENALTY BY FINDING THE ASSESSEE GU ILTY OF 'CONCEALMENT OF PARTICULARS OF INCOME'. AGAIN, HE C ANNOT BE ITA NO. 922, 920, 921 & 923/JP/2018 SMT. SHIPRA JAIN & SH. SAPNA JAIN, JAIPUR VS. ACIT, JAIPUR 16 UNCERTAIN IN THE PENALTY ORDER AS TO CONCEALMENT OR FURNISHING OF INACCURATE PARTICULARS OF INCOME BY USING SLASH BET WEEN THE TWO EXPRESSIONS. WHEN THE AO IS SATISFIED THAT IT IS A CLEAR-CUT CASE OF IMPOSITION OF PENALTY U/S. 271(L)(C) OF THE ACT ON TWO OR MORE ADDITIONS/DISALLOWANCES, ONE OR MORE FALLING UNDER THE EXPRESSION 'CONCEALMENT OF PARTICULARS OF INCOME' AND THE OTHE R UNDER THE 'FURNISHING OF INACCURATE PARTICULARS OF INCOME', H E MUST SPECIFY IT SO BY USING THE WORD 'AND' BETWEEN THE TWO EXPRESSI ONS IN THE NOTICE AT THE TIME OF INITIATION OF PENALTY PROCEED INGS. IF HE REMAINS CONVINCED IN THE PENALTY PROCEEDINGS THAT T HE PENALTY WAS RIGHTLY INITIATED ON SUCH COUNTS AND IMPOSES PE NALTY ACCORDINGLY, HE MUST SPECIFICALLY FIND THE ASSESSEE GUILTY OF 'CONCEALMENT OF PARTICULARS OF INCOME' AND ALSO 'FU RNISHING OF INACCURATE PARTICULARS OF INCOME' IN THE PENALTY OR DER. IF THE CHARGE IS NOT LEVIED IN THE ABOVE MANNER IN ALL THE THREE CLEAR-CUT SITUATIONS DISCUSSED ABOVE IN THE PENALTY NOTICE AN D ALSO IN THE PENALTY ORDER, THE PENALTY ORDER BECOMES UNSUSTAINA BLE IN LAW. 16. THE HON'BLE KARNATAKA HIGH COURT IN CIT V. MANJUNA THA COTTON AND GINNING FACTORY [2013] 359 ITR 565/218 TAXMAN 423/35 TAXMANN.COM 250 HAS HELD THAT A PERSON WHO IS ACCUSED OF THE CONDITIONS MENTIONED IN SECTION 271 SHOULD B E MADE KNOWN ABOUT THE GROUNDS ON WHICH THEY INTEND IMPOSI NG PENALTY ON HIM AS SECTION 274 MAKES IT CLEAR THAT ASSESSEE HAS A RIGHT TO CONTEST SUCH PROCEEDINGS AND SHOULD HAVE FULL OPPOR TUNITY TO MEET THE CASE OF THE DEPARTMENT AND SHOW THAT THE C ONDITIONS STIPULATED IN SECTION 271(L)(C) DO NOT EXIST AS SUC H HE IS NOT LIABLE TO PAY PENALTY. THE HON'BLE HIGH COURT WENT ON TO H OLD THAT: 'CLAUSE (C) DEALS WITH TWO SPECIFIC OFFENCES, THAT IS TO SAY, ITA NO. 922, 920, 921 & 923/JP/2018 SMT. SHIPRA JAIN & SH. SAPNA JAIN, JAIPUR VS. ACIT, JAIPUR 17 CONCEALING PARTICULARS OF INCOME OR FURNISHING INAC CURATE PARTICULARS OF INCOME.... BUT DRAWING UP PENALTY PR OCEEDINGS FOR ONE OFFENCE AND FINDING THE ASSESSEE GUILTY OF ANOT HER OFFENCE OR FINDING HIM GUILTY FOR EITHER THE ONE OR THE OTHER CANNOT BE SUSTAINED IN LAW.. THUS ONCE THE PROCEEDINGS ARE I NITIATED ON ONE GROUND, THE PENALTY SHOULD ALSO BE IMPOSED ON T HE SAME GROUND. WHERE THE BASIS OF THE INITIATION OF PENALT Y PROCEEDINGS IS NOT IDENTICAL WITH THE GROUND ON WHICH THE PENALTY WAS IMPOSED, THE IMPOSITION OF PENALTY IS NOT VALID'. 17. IN MANU ENGG. WORKS (SUPRA) PENALTY WAS IMPOSED BY NOTING: 'THAT THE ASSESSEE HAD CONCEALED ITS INCOME AND/OR THAT IT HAD FURNISHED INACCURATE PARTICULARS OF SUCH INCOME '. STRIKING DOWN THE PENALTY, THE HON'BLE HIGH COURT HELD THAT: 'IT WAS INCUMBENT UPON THE IAC TO COME TO A POSITIVE FINDIN G AS TO WHETHER THERE WAS CONCEALMENT OF INCOME BY THE ASSE SSEE OR WHETHER ANY INACCURATE PARTICULARS OF SUCH INCOME H AD BEEN FURNISHED BY THE ASSESSEE. NO SUCH CLEAR-CUT FINDIN G WAS REACHED BY THE IAC AND, ON THAT GROUND ALONE, THE ORDER OF PENALTY PASSED BY THE IAC WAS LIABLE TO BE STRUCK DOWN.' 18. IN PADMA RAM BHARALI (SUPRA), THE HON'BLE HIGH COU RT DID NOT SUSTAIN PENALTY LEVIED U/S. 271(L)(C) WHEN: 'TH E INITIATION OF THE PENALTY PROCEEDING WAS FOR CONCEALMENT OF THE P ARTICULARS OF INCOME. BUT THE TRIBUNAL FINALLY HELD THAT THE ASSE SSEE WOULD BE DEEMED TO HAVE CONCEALED THE PARTICULARS OF INCOME OR TO HAVE FURNISHED INACCURATE PARTICULARS OF SUCH INCOME.' 19. THUS IT IS EVIDENT THAT WHEN THE AO IS SATISFIED A T THE STAGE OF INITIATION OF PENALTY PROCEEDINGS OF A CLEAR-CUT CHARGE AGAINST ITA NO. 922, 920, 921 & 923/JP/2018 SMT. SHIPRA JAIN & SH. SAPNA JAIN, JAIPUR VS. ACIT, JAIPUR 18 THE ASSESSEE IN ANY OF THE THREE SITUATIONS DISCUSS ED ABOVE (SAY, CONCEALMENT OF PARTICULARS OF INCOME), BUT IMPOSES PENALTY BY HOLDING THE ASSESSEE AS GUILTY OF THE OTHER CHARGE (SAY, FURNISHING OF INACCURATE PARTICULARS OF INCOME) OR AN UNCERTAI N CHARGE (CONCEALMENT OF PARTICULARS OF INCOME/FURNISHING OF INACCURATE PARTICULARS OF INCOME), THE PENALTY CANNOT BE SUSTA INED. 20. ANOTHER CRUCIAL FACTOR TO BE KEPT IN MIND IS THAT THE SATISFACTION OF THE AO AS TO A CLEAR-CUT CHARGE LEV ELED BY HIM IN THE PENALTY NOTICE OR THE PENALTY ORDER MUST CONCUR WITH THE ACTUAL DEFAULT. IF THE CLEAR-CUT CHARGE IN THE PENA LTY NOTICE OR THE PENALTY ORDER IS THAT OF 'CONCEALMENT OF PARTICULAR S OF INCOME', BUT IT TURNS OUT TO BE A CASE OF 'FURNISHING OF INACCUR ATE PARTICULARS OF SUCH INCOME' OR VICE-VERSA, THEN ALSO THE PENALTY O RDER CANNOT LEGALLY STAND. 21. APART FROM THE ABOVE THREE SITUATIONS IN WHICH THE AO HAS CLEAR-CUT SATISFACTION, THERE CAN BE ANOTHER FOURTH SITUATION AS WELL. IT MAY BE WHEN IT IS DEFINITELY A CASE OF UND ER-REPORTING OF INCOME BY THE ASSESSEE FOR WHICH AN ADDITION/DISALL OWANCE HAS BEEN MADE, BUT THE AO IS NOT SURE AT THE STAGE OF I NITIATION OF PENALTY PROCEEDINGS OF THE PRECISE CHARGE AS TO 'CO NCEALMENT OF PARTICULARS OF INCOME' OR 'FURNISHING OF INACCURATE PARTICULARS OF INCOME'. IN SUCH CIRCUMSTANCES, HE MAY USE SLASH BE TWEEN THE TWO EXPRESSIONS AT THE TIME OF INITIATION OF PENALT Y PROCEEDINGS. HOWEVER, DURING THE PENALTY PROCEEDINGS, HE MUST GE T DECISIVE, WHICH SHOULD BE REFLECTED IN THE PENALTY ORDER, AS TO WHETHER THE ASSESSEE IS GUILTY OF 'CONCEALMENT OF PARTICULARS O F INCOME' OR 'FURNISHING OF INACCURATE PARTICULARS OF SUCH INCOM E'. UNCERTAIN ITA NO. 922, 920, 921 & 923/JP/2018 SMT. SHIPRA JAIN & SH. SAPNA JAIN, JAIPUR VS. ACIT, JAIPUR 19 CHARGE AT THE TIME OF INITIATION OF PENALTY, MUST N ECESSARILY BE SUBSTITUTED WITH A CONCLUSIVE DEFAULT AT THE TIME O F PASSING THE PENALTY ORDER. IF THE PENALTY IS INITIATED WITH DOU BT AND ALSO CONCLUDED WITH A DOUBT AS TO THE CONCEALMENT OF PAR TICULARS OF INCOME OR FURNISHING OF INACCURATE PARTICULARS OF S UCH INCOME ETC., THE PENALTY ORDER IS VITIATED. IF ON THE OTHER HAND , IF THE PENALTY IS INITIATED WITH AN UNCERTAIN CHARGE OF 'CONCEALMENT OF PARTICULARS OF INCOME/FURNISHING OF INACCURATE PARTICULARS OF I NCOME' ETC., BUT THE ASSESSEE IS ULTIMATELY FOUND TO BE GUILTY OF A SPECIFIC CHARGE OF EITHER 'CONCEALMENT OF PARTICULARS OF INCOME' OR 'FURNISHING OF INACCURATE PARTICULARS OF INCOME', THEN NO FAULT CA N BE FOUND IN THE PENALTY ORDER. 22. IN MANU ENGINEERING WORKS (SUPRA), THE HON'BLE GUJ ARAT HIGH COURT NOTICED THAT THE CHARGE AT THE STAGE OF INITI ATION OF PENALTY PROCEEDINGS AS WELL IN THE PENALTY ORDER WAS UNCERT AIN AND THE EXPRESSION USED AT BOTH THE STAGES WAS CONCEALMENT OF PARTICULARS OF INCOME AND/OR FURNISHING OF INACCURA TE PARTICULARS OF SUCH INCOME. IT STRUCK DOWN THE PENALTY BY HOLDI NG THAT THE ASSESSEE MUST HAVE BEEN FOUND TO BE GUILTY OF A CER TAIN CHARGE IN THE PENALTY ORDER. IT, HOWEVER, DID NOT FIND ANYTHI NG AMISS WITH THE INITIATION OF PENALTY ON SUCH UNCERTAIN CHARGE, WHICH IS VIVID FROM THE FOLLOWING OBSERVATIONS : 'WE FIND FROM THE ORDER OF THE IAC, IN THE PENALTY PROCEEDINGS, THAT IS, THE FINAL CONCLUSION AS EXPRESSED IN PARA. 4 OF THE ORDER: 'I AM OF THE OPINION THAT IT WILL HAVE TO BE SAID T HAT THE ASSESSEE HAD CONCEALED ITS INCOME AND/OR THAT IT HAD FINISHE D INACCURATE PARTICULARS OF SUCH INCOME'. NOW, THE LANGUAGE OF ' AND/OR' MAY BE PROPER IN ISSUING A NOTICE AS TO PENALTY ORDER O R FRAMING OF ITA NO. 922, 920, 921 & 923/JP/2018 SMT. SHIPRA JAIN & SH. SAPNA JAIN, JAIPUR VS. ACIT, JAIPUR 20 CHARGE IN A CRIMINAL CASE OR A QUASI-CRIMINAL CASE, BUT IT WAS INCUMBENT UPON THE IAC TO COME TO A POSITIVE FINDIN G AS TO WHETHER THERE WAS CONCEALMENT OF INCOME BY THE ASSE SSEE OR WHETHER ANY INACCURATE PARTICULARS OF SUCH INCOME H AD BEEN FURNISHED BY THE ASSESSEE.' 23. IT IS THUS EVIDENT THAT UNCERTAIN CHARGE AT THE ST AGE OF INITIATION OF PENALTY PROCEEDINGS CAN BE MADE GOOD WITH A CLEAR- CUT CHARGE IN THE PENALTY ORDER. IN ANY CASE, EXIST ENCE OF A CLEAR- CUT CHARGE IN PENALTY ORDER IS A MUST SO AS TO VALI DATE ANY PENALTY ORDER. 4.4 IN THE INSTANT CASE, THE ASSESSING OFFICER HAS RECORDED HIS SATISFACTION IN RESPECT OF THE FIVE ITEMS OF DISALL OWANCE/ADDITIONS INCLUDING UNDISCLOSED INVESTMENT ON CONSTRUCTION OF HOUSE AMOUNTING TO RS 938,800 LEADING TO PENALTY, AS 'CONCEALMENT OF I NCOME' IN THE ASSESSMENT ORDER PASSED UNDER SECTION 143(3) R/W 15 3A, THEREAFTER INITIATED PENALTY BY ISSUANCE OF NOTICE U/S 274 R/W 271 DATED 21.30.2014 IN RESPECT OF ALL THE FIVE ITEMS OF DISA LLOWANCE/ADDITIONS BY TREATING THEM AS COVERED UNDER THE EXPRESSION CONC EALMENT PARTICULARS OF INCOME OR FURNISHED INACCURATE PARTICULARS OF IN COME AND THEN FINALLY PASSED THE IMPUNGED PENALTY ORDER U/S 271(1)(C) IN RESPECT OF UNDISCLOSED INVESTMENT ON CONSTRUCTION OF HOUSE AMO UNTING TO RS 134,025 (TO THE EXTENT SUSTAINED BY THE LD CIT(A) O UT OF RS 938,800) AND LEVIED PENALTY U/S 271(1)(C) AMOUNTING TO RS 45 ,555 BY STATING AS UNDER: 6. IN VIEW OF ABOVE STATED FACTS AND LEGAL POSITIO N, THE ASSESSEE UNDER CONSIDERATION IS, CLEARLY LIABLE FOR PENALTY U/S 271(1)(C) OF THE ACT IS IMPOSED UPON HIM AS PER FOLLOWING COMPUTATION:- ITA NO. 922, 920, 921 & 923/JP/2018 SMT. SHIPRA JAIN & SH. SAPNA JAIN, JAIPUR VS. ACIT, JAIPUR 21 TOTAL UNDISCLOSED/CONCEALED INCOME LIABLE TO PENALT Y U/S 271(1)(C) RS. 1,34,025 PENALTY IMPOSABLE (100% OF TAX SOUGHT TO EVADED) PENALTY IMPOSABLE (300% OF TAX SOUGHT TO EVADED) RS. 45,555/- RS. 1,36,665/- PENALTY LEVIED (100% OF THE TAX SOUGHT TO EVADED R S. 45,555/- IN VIEW OF THE ABOVE, A PENALTY OF RS. 45,555/- IS HEREBY LEVIED U/S 271(1)(C) OF THE INCOME-TAX ACT, 1961. ISSUED D EMAND NOTICE. 4.5 IT IS THUS A CASE WHERE THE AO HAS RECORDED THE SATISFACTION IN THE ASSESSMENT ORDER STATING THAT THE ASSESSEE HAS CONCEALED HIS PARTICULARS OF INCOME WHEREBY THE ASSESSEE HAS NOT DISCLOSED HIS INVESTMENT IN CONSTRUCTION OF THE HOUSE TO THE EXTE NT OF EXPENDITURE INCURRED DURING THE PREVIOUS YEAR RELEVANT TO IMPUN GED ASSESSMENT YEAR. THEREFORE, THE NOTICE INITIATING THE PENALTY PROCEEDINGS IS UNCERTAIN WHERE HE USES THE EXPRESSION CONCEALMENT PARTICULARS OF INCOME OR FURNISHED INACCURATE PARTICULARS OF INCOM E. HOWEVER, DURING THE PENALTY PROCEEDINGS, HE HAS GIVEN A DECISIVE FI NDING AS REFLECTED IN THE PENALTY ORDER THAT THE ASSESSEE IS GUILTY OF 'C ONCEALMENT OF PARTICULARS OF INCOME' BY NOT DISCLOSING THE INVEST MENT IN THE CONSTRUCTION OF HIS HOUSE. AS HELD BY THE COORDINA TE BENCH (SUPRA), THE UNCERTAIN CHARGE AT THE TIME OF INITIATION OF PENAL TY HAS BEEN MADE GOOD AND SUBSTITUTED WITH A CONCLUSIVE DEFAULT AT T HE TIME OF PASSING THE PENALTY ORDER AND THAT IN SUCH A CASE, NO FAULT CAN BE FOUND IN THE PENALTY ORDER. IN SUCH A CASE, WE DONOT SEE ANY I NFIRMITY IN THE PENALTY ORDER SO PASSED BY THE ASSESSING OFFICER AN D THE CONTENTIONS SO RAISED BY THE LD AR IN THIS REGARD ARE NOT ACCEPTED . 4.6 FURTHER, COMING TO THE CONTENTIONS OF THE LD AR ON MERITS THAT WHERE THE ENTIRE ADDITION MADE BY THE AO AND REDUCED BY T HE CIT(A) IS ON THE ITA NO. 922, 920, 921 & 923/JP/2018 SMT. SHIPRA JAIN & SH. SAPNA JAIN, JAIPUR VS. ACIT, JAIPUR 22 BASIS OF COST OF CONSTRUCTION ESTIMATED AS PER DVOS REPORT AND IN SEARCH PROCEEDINGS, NO EVIDENCE OF INVESTMENT OVER AND ABO VE THAT DECLARED BY THE ASSESSEE WAS FOUND, THE PENALTY SHOULD NOT BE L EVIED. IN THIS REGARD, AS WE HAVE NOTED ABOVE, THE AO HAS INVOKED THE PROVISIONS OF EXPLANATION 5A AND THE PRESUMPTION THEREIN IS THAT THE ASSESSEE HAS CONCEALED PARTICULARS OF HIS INCOME OR FURNISHED IN ACCURATE PARTICULAR OF INCOME. AS HELD IN CASE OF MANJUNATHA COTTON & GRIN NING FACTORY (SUPRA) THAT THE PRESUMPTION FOUND IN EXPLANATION 1 IS A REBUTTA BLE PRESUMPTION, TO OUR MIND , THE PRESUMPTION UNDER SECTION 5A IS ALSO A REBUTTABLE PRESUMPTION AND THE BONAFIDE OF THE EXPL ANATION SO SUBMITTED BY THE ASSESSEE NEEDS TO BE EXAMINED BEFO RE A FINAL VIEW IS TAKEN ON THE LEVY OF PENALTY. IN THE INSTANT CASE, THE ASSESSING OFFICER IN HIS ASSESSMENT ORDER STATES THAT THE COST OF CON STRUCTION ESTIMATED BY THE ASSESSEES VALUATION OFFICER (AVO) IS NOT CORRECT AND ACCEPTABLE, AND THE COST OF CONSTRUCTION ESTIMATED BY THE DVO BEING MADE BY A GOVT. TECHNICAL PERSON AND SUCH VALUATION IS MORE SCIENTIFIC WHICH IS BASED ON CORRECT PLINTH AREA RATES WAS FOUND ACCEPTABLE AND ADDITION OF RS 52,18,319 IN VARIOUS YEARS INCLUDING THE YEAR UNDER CONSIDERATION (RS 938,800) WAS MADE BY THE HIM. THE LD CIT(A) ON REVIEW OF THE SAID DVO REPORT AND THE OBJECTIONS/EXPLANATIONS SO FILED BY THE ASSESSEE HELD THAT THE ASSESSEE HAS BEEN ABLE TO EXPLAIN THE DIFFERENC E IN THE VALUATION BETWEEN THE TWO VALUATIONS TO THE EXTENT OF RS 49,50,171 (OUT OF RS 52,18,319) AND THE BALANCE ADDITION OF RS 2,68,051 WAS SUSTAINED EQUALLY AMONG THE TWO ASSESSEES. THE SAID ADDITION FORMS THE BASIS OF IMPUNGED PENALTY ORDERS DRAWING SOLELY AND HEAVILY ON THE FINDINGS OF THE ASSESSMENT ORDER AND THERE IS NO FURTHER FINDIN G SO RECORDED BY THE AO DURING THE COURSE OF PENALTY PROCEEDINGS. WE THU S FIND THAT THE EXPLANATION OF THE ASSESSEE HAS BEEN ACCEPTED TO A LARGE EXTENT BY THE LD CIT(A) WHERE HE DELETES THE ADDITION OF RS 49,50 ,171 OUT OF RS ITA NO. 922, 920, 921 & 923/JP/2018 SMT. SHIPRA JAIN & SH. SAPNA JAIN, JAIPUR VS. ACIT, JAIPUR 23 52,18,319 AND THE BONAFIDE OF SUCH EXPLANATIONS ARE THUS ESTABLISHED. IN RESPECT OF REMAINING ADDITIONS OF RS 268,051 WHI CH IS SO SUSTAINED, IT IS AGAIN SOLELY BASED ON ESTIMATION BY THE DVO WHIC H IS FOUND MORE SCIENTIFIC AS AGAINST THE VALUATION WHICH THE ASSES SEE HAS GOT DONE THROUGH ITS OWN VALUER. TO OUR MIND, SUCH MINOR DI FFERENCES IN ESTIMATION AND CONSEQUENT VALUATION ARE BUT NATURAL AND SO LONG AS FUNDAMENTAL METHODOLOGY SO ADOPTED BY THE VALUATION OFFICER ARE NOT DISPUTED, SUCH MINOR DIFFERENCES IN VALUATION CANNO T FORM THE BASIS FOR LEVY OF PENALTY AS HELD BY VARIOUS COURTS INCLUDING THE HONBLE SUPREME COURT IN CASE OF DILIP N. SHROFF (SUPRA) WHEREIN IT WAS HELD THAT ONLY BECAUSE THE OPINION OF REGISTERED VA LUER IS NOT ACCEPTED OR SOME OTHER EXPERT GIVES ANOTHER OPINION, IS NOT BY ITSELF SUFFICIENT FOR ARRIVING AT A CONCLUSION THAT THE ASSESSEE HAD FURN ISHED INACCURATE PARTICULARS ATTRACTING PENALTY U/S 271(1)(C). IN L IGHT OF THE SAME, THE PENALTY SO LEVIED U/S 271(1)(C) OF THE ACT IS HEREB Y DIRECTED TO BE DELETED IN HANDS OF SH. SAPAN JAIN. UNDER IDENTICA L FACTS AND CIRCUMSTANCES OF THE CASE, THE PENALTY HAS BEEN LEV IED IN CASE OF SMT. SHIPRA JAIN AND OUR PRESENT FINDINGS APPLY EQUALLY IN HER CASE AS WELL. IN THE RESULT, BOTH THE APPEALS ARE ALLOWED. ITA. NO. 921 & 923/JP/2018 FOR AY 2010-11 5. BRIEFLY STATED, THE FACTS OF THE CASE ARE THAT A SEARCH AND SEIZURE SURVEY OPERATION WAS CARRIED OUT U/S 132 OF THE INC OME TAX ACT, 1961 ON 08.06.2011 AT THE BUSINESS AND RESIDENTIAL PREMI SES OF THE ASSESSEES. BOTH THE ASSESSEES, BEING HUSBAND & WIFE , JOINTLY PURCHASED A PLOT FOR CONSIDERATION OF RS.32,65,200/- DURING F Y 2005-06 AND CONSTRUCTED A HOUSE ON IT DURING 2007 TO 2009. IN T HE STATEMENT RECORDED U/S 132(4), SH. SAPAN JAIN STATED THAT HE HAS SPENT RS. 65-70 LAKHS IN CONSTRUCTION OF HOUSE WHICH WAS STARTED IN THE YEAR 2007 AND WAS COMPLETED IN 2009. HE ALSO STATED THAT HE HAS F URTHER MADE ITA NO. 922, 920, 921 & 923/JP/2018 SMT. SHIPRA JAIN & SH. SAPNA JAIN, JAIPUR VS. ACIT, JAIPUR 24 INVESTMENT OF RS.20 LACS ON FITTINGS, FURNISHING, F URNITURE, ETC. AFTER THE CONSTRUCTION IN FY 2009-10 OUT OF UNDISCLOSED INCOM E WHICH HE OFFERED FOR TAX. HOWEVER, IN THE RETURN FILED U/S 153A, NO SUCH DISCLOSURE WAS MADE BY EITHER OF THE TWO ASSESSEES. 5.1 THE AO ON THE BASIS OF STATEMENT OF SH. SAPAN J AIN DETERMINED THE UNDISCLOSED EXPENDITURE ON THESE ITEMS AT RS.20 LACS AND THEREBY MADE ADDITION OF RS.10 LACS IN HANDS OF BOTH THE AS SESSEES. ON THIS ADDITION, THE AO ALSO INITIATED PENALTY PROCEEDINGS U/S 271(1)(C) OF THE IT ACT. 5.2 AGAINST THE ADDITION, THE ASSESSEE FILED AN APP EAL BEFORE THE LD. CIT(A) WHO CONFIRMED THE ADDITION. THE TRIBUNAL VID E ITS ORDER DT. 15.05.2017 RESTRICTED THE ADDITION TO RS.11,14,000/ -, THEREBY CONFIRMED THE ADDITION OF RS.5,57,000/- IN EACH HAND. 5.3 IN PENALTY PROCEEDINGS, THE AO REJECTED THE ASS ESSEES SUBMISSION/EXPLANATION AND LEVIED PENALTY ON ADDITI ON OF RS.10 LACS (SUSTAINED BY THE LD CIT(A)) AND REFERRING TO EXPLA NATION 5A HELD THAT THE ASSESSEE CASE IS CLEARLY COVERED AND LIABLE FOR PENALTY UNDER SECTION 271(1)(C) OF THE ACT. 5.4 ON APPEAL AGAINST THE SAID LEVY OF PENALTY, THE LD. CIT(A) HELD THAT EXPLANATION 5A TO SECTION 271(1)(C) OF THE ACT . IN CASE OF SMT. SHIPRA JAIN, HE CONFIRMED THE LEVY OF PENALTY ON AD DITION OF RS.10 LACS HOWEVER WITHOUT GIVING EFFECT TO THE ORDER OF THE T RIBUNAL IN QUANTUM PROCEEDINGS. IN CASE OF SH. SAPAN JAIN, HE CONFIRME D THE LEVY OF PENALTY ON THE ADDITION WHICH WAS SUSTAINED BY THE TRIBUNAL BUT TOOK THE AMOUNT AT RS. 4,43,000/- INSTEAD OF RS.5,57,000 /-. ITA NO. 922, 920, 921 & 923/JP/2018 SMT. SHIPRA JAIN & SH. SAPNA JAIN, JAIPUR VS. ACIT, JAIPUR 25 6. DURING THE COURSE OF HEARING, THE LD. AR SUBMITT ED THAT THE AO IN THE BODY OF THE ORDER HAS MENTIONED THAT ASSESSEE I S LIABLE FOR PENALTY U/S 271(1)(C) OF THE IT ACT. AT THE END OF THE ORDE R, PENALTY PROCEEDINGS ARE INITIATED FOR CONCEALMENT OF INCOME . IN THE NOTICE ISSUED U/S 274 READ WITH SEC. 271(1)(C) DATED 21.3. 2014, PENALTY PROCEEDINGS U/S 271(1)(C) WAS INITIATED FOR CONCEAL MENT OF INCOME OR FURNISHING OF INACCURATE PARTICULARS OF INCOME. AGA IN IN THE NOTICE DT. 20.02.2017, PENALTY PROCEEDINGS WAS INITIATED FOR C ONCEALMENT OF INCOME/FURNISHING OF INACCURATE PARTICULARS OF INCO ME. FURTHER IN THE PENALTY ORDER, AO WITHOUT SPECIFYING ANY PARTICULAR LIMB UNDER WHICH PENALTY IS LEVIABLE IMPOSED THE PENALTY U/S 271(1)( C). THUS, IN THE ABSENCE OF ANY SPECIFIC CHARGE AGAINST THE ASSESSEE IN THE PENALTY NOTICE AND IN THE PENALTY ORDER, CONSEQUENT PENALTY IMPOSED BY AO IS ILLEGAL AND BAD IN LAW. RELIANCE IN THIS CONNECTION WAS PLACED ON THE VARIOUS DECISIONS INCLUDING CIT VS. SSAS EMERALD M EADOWS (2016) 242 TAXMAN 180 (SC), CIT VS. M/S MANJUNATHA COTTON & GI NNING FACTORY &ORS. 359 ITR 565 (KAR). 6.1 ON MERITS, IT WAS SUBMITTED THAT AFTER THE ORDE R OF TRIBUNAL, ADDITION OF RS.20 LACS MADE BY AO ON ACCOUNT OF ALL EGED ESTIMATED UNEXPLAINED INVESTMENT IN CONSTRUCTION OF HOUSE WAS RESTRICTED TO RS.11,14,000/-, I.E. RS.5,57,000/- IN EACH HAND. HO WEVER, LD. CIT(A) IN CASE OF SHIPRA JAIN CONFIRMED THE PENALTY ON ADDITI ON OF RS.10 LACS. HENCE, PENALTY LEVIED ON ADDITION OF RS.4,43,000/- (10,00,000-5,57,000) IS UNCALLED FOR AND BE DELETED. 6.2 SO FAR AS PENALTY LEVIED WITH REFERENCE TO THE ADDITION OF RS.5,57,000/- IS CONCERNED, IT WAS SUBMITTED THAT A O SOLELY ON THE BASIS OF THE STATEMENT OF SH. SAPAN JAIN AND CONSIDERING THE FACT THAT IN SEARCH, AIR CONDITIONERS, LCD, PAINTINGS, DOUBLE BE D AND OTHER FURNITURE ITA NO. 922, 920, 921 & 923/JP/2018 SMT. SHIPRA JAIN & SH. SAPNA JAIN, JAIPUR VS. ACIT, JAIPUR 26 WERE FOUND FOR WHICH ASSESSEE ADMITTED INVESTMENT O F RS.20 LAKHS, MADE THE ADDITION OF RS.10 LAKHS IN EACH HAND WHICH IS CONFIRMED BY THE LD. CIT(A). HOWEVER, THE TRIBUNAL RESTRICTED TH E ADDITION TO RS.5,57,000/- (11,14,000/2) BY ADOPTING THE ESTIMAT ED VALUE OF THE ITEMS FOUND IN SEARCH WHICH IS LISTED AT PG 9 OF TH E ASSESSMENT ORDER. IT IS A FACT ON RECORD THAT IN SEARCH NO EVIDENCE WAS FOUND THAT ASSESSEES HAVE MADE INVESTMENT IN THESE ITEMS. THE ADDITION I S MADE ONLY ON THE BASIS OF THE STATEMENT OF SH. SAPAN JAIN AND NOT ON THE BASIS OF ANY INCRIMINATING MATERIAL FOUND IN SEARCH. HENCE, ADDI TION OF RS.10 LAKHS WAS ONLY ON ESTIMATION WHICH IS REDUCED TO RS.5.57 LAKHS ONLY ON ESTIMATION. ON SUCH ESTIMATED ADDITION, NO PENALTY IS LEVIABLE AS HELD IN CASE OF SHIV LAL TAK VS. CIT 251 ITR 353 (RAJ) AND CIT VS. KRISHI TYRE RETREATING AND RUBBER IND. [2014] 44 TAXMANN.COM 9 (RAJ). 7. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. UNDISPUTEDLY, THE FACTS AND C IRCUMSTANCES OF THE CASE ARE IDENTICAL TO THE FACTS AND CIRCUMSTANCES I N AY 2009-10 EXCEPT FOR THE FACT THAT THERE IS AN ADMISSION BY THE ASSE SSEE U/S 132(4) DURING THE COURSE OF SEARCH THAT HE HAS MADE INVEST MENT TO THE TUNE OF RS 20 LACS ON FURNITURE, FITTINGS AND ELECTRICAL HO USEHOLD ITEMS AND WHICH HAS FORMED THE BASIS OF ADDITION IN THE QUANT UM PROCEEDINGS. HOWEVER, THE COORDINATE BENCH ON APPEAL HAS SUSTAIN ED SUCH ADDITION TO THE TUNE OF RS 11,40,000 ONLY. THEREFORE, THE VE RY BASIS FOR LEVY OF PENALTY STAND MODIFIED TO RS 11,40,000 AND TO THE E XTENT OF RS 557,000 IN HANDS OF BOTH THE ASSESSEES. WE FIND THAT SAID A DDITION OF RS 557,000 IS AGAIN BASED ON ESTIMATION AS THERE AR E NO SPECIFIC DETAILS IN TERMS OF BILLS/VOUCHERS ETC. WHICH WERE FOUND DU RING THE COURSE OF SEARCH EXCEPT THE INVENTORY OF SUCH ITEMS FOUND INS TALLED IN THE RESIDENTIAL PREMISES WHICH WAS PREPARED AT THE TIME OF SEARCH. THE ITA NO. 922, 920, 921 & 923/JP/2018 SMT. SHIPRA JAIN & SH. SAPNA JAIN, JAIPUR VS. ACIT, JAIPUR 27 SAME COULD BE A BASIS FOR MAKING THE ADDITION IN TH E QUANTUM PROCEEDINGS BUT NOT FOR LEVYING PENALTY. THEREFORE , OUR FINDINGS AND DIRECTIONS CONTAINED IN ITA NO. 922 & 920 SHALL APP LY EQUALLY IN THE PRESENT SET OF APPEALS. IN THE RESULT, THE PENALTY SO LEVIED U/S 271(1)(C) IS HEREBY DELETED AND APPEALS ARE ALLOWED . ORDER PRONOUNCED IN THE OPEN COURT ON 31/10/20 18. SD/- SD/- FOT; IKWY JKO FOE FLAG ;KNO (VIJAY PAL RAO) (VIKRAM SINGH YADAV) U;KF;D LNL;@ JUDICIAL MEMBER YS[KK LNL;@ ACCOUNTANT MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 31/10/2018 * GANESH KR. VKNS'K DH IZFRFYFI VXZSFKR@ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ@ THE APPELLANT- SMT. SHIPRA JAIN, JAIPUR & SMT. SAPN A JAIN, JAIPUR 2. IZR;FKHZ@ THE RESPONDENT- ACIT, JAIPUR 3. VK;DJ VK;QDR@ CIT 4. VK;DJ VK;QDR@ CIT(A) 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ@ DR, ITAT, JAIPUR. 6. XKMZ QKBZY@ GUARD FILE { ITA NO. 922, 920, 921 & 923/JP/2018} VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASST. REGISTRAR