The Asstt. Commissioner of Income Tax, Surat V. M/s Radhakrishna& Co, Surat

ITA 963/AHD/2009

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 5961 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 3 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-07-2011
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 28-07-2011
• Assessment Year: 2006-2007
• Appeal Filed On: 01-04-2009
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: S K MEENADR
• Assessee Lawyers: S KABRA
• Keywords: Search and seizure; Principle of natural justice; Revised return
• Section: 153A; 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH 'A' BEFORE SHRI BHAVNESH SAINI,JM & SHRI A N PAHUJA,AM ITA NO.963/AHD/2009 (ASSESSMENT YEAR:-2006-07) ASSISTANT COMMISSIONER OF INCOME-TAX, CENTRAL CIRCLE- 2, SURAT V/S M/S RADHAKRISHNA & CO., 4019, JASH TEXTILE MARKET, RING ROAD, SURAT PAN: AABTR 0308 R [APPELLANT] [RESPONDENT] REVENUE BY :- SHRI S K MEENA,DR ASSESSEE BY:- SHRI S KABRA, AR O R D E R A N PAHUJA: THIS APPEAL BY REVENUE AGAINST AN ORDER DATED 09-0 1- 2009 OF THE LD. CIT(APPEALS)-II, AHMEDABAD, FOR THE ASSESSMENT YEAR 2006-07, RAISES THE FOLLOWING GROUNDS:- [1] THE CIT(A) HAS ERRED IN LAW AND ON FACTS IN DE LETING THE PENALTY LEVIED BY THE AO U/S 271(1)(C) OF THE IT AC T WHEN THE ASSESSEE FAILED TO COMPLY WITH THE PROVISIONS O F EXPLANATION 5 TO SECTION 271(1)(C) OF THE IT ACT. [2] THE CIT(A) HAS ERRED IN LAW AND ON FACTS IN DEL ETING THE PENALTY WHEN THE DECISION OF THE HONBLE HIGH COURT OF PUNJAB & HARYANA REPORTED IN 287 ITR 376 IS SQUAREL Y APPLICABLE IN THE CASE OF THE ASSESSEE. [3] ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW, THE CIT(A) OUGHT TO HAVE UPHELD THE ORDER OF T HE AO. [4] IT IS, THEREFORE, PRAYED THAT THE ORDER OF THE CIT(A) BE SET ASIDE AND THAT OF THE AO BE RESTORED TO THE ABOVE EXTENT. 2 FACTS, IN BRIEF, AS PER RELEVANT ORDERS ARE THAT A SEARCH UNDER SECTION 132 OF THE INCOME-TAX ACT, 1961 [HEREINAFTE R REFERRED TO AS THE ACT] WAS CONDUCTED IN THE CASE OF THE ASSESSE E ON 24-08-2005. CONSEQUENTLY, A NOTICE U/S 153A OF THE ACT WAS ISSU ED . IN RESPONSE, THE ASSESSEE FILED RETURN DECLARING INCOM E OF 2 ITA NO.963/AHD/2009 RS.2,00,00,000/- ON 7-12-2007. TO A QUERY BY THE A SSESSING OFFICER [AO IN SHORT] DURING THE COURSE OF ASSESSMENT PRO CEEDINGS, THE ASSESSEE EXPLAINED THAT THE SAID INCOME WAS EARNED OUT OF BUSINESS OF PURCHASE AND SALE OF LAND PROPERTIES AND THE ASS ESSEE DID NOT MAINTAIN ANY BOOKS OF ACCOUNT. IT WAS EXPLAINED THA T CASH OF RS. 33,16,000/- FOUND DURING SEARCH WAS PART OF DISCLOS URE . HOWEVER, BASIS OF RS. 2 CRORE AND AS TO WHETHER OR NOT THE S AID CASH IS INCLUDED IN THE AMOUNT OF RS. 2 CRORE IS NOT EVIDEN T FROM THE ASSESSMENT ORDER. IN THESE CIRCUMSTANCES, ASSESSMEN T WAS COMPLETED ON THE INCOME OF RS.2,00,00,000/-.INTER A LIA, PENALTY PROCEEDINGS U/S 271(1)(C) OF THE ACT WERE INITIATED . 3 SUBSEQUENTLY, IN RESPONSE TO A SHOW CAUSE NOTICE BEFORE LEVY OF PENALTY U/S 271(1)(C) OF THE ACT, THE ASSESSEE R EPLIED THAT NO ADDITION WAS MADE NOR ANY CONCEALMENT WAS FOUND DUR ING THE COURSE OF ASSESSMENT PROCEEDINGS AND DECLARED AMOUN T WAS ASSESSED AS ITS INCOME. SINCE THE DISCLOSURE WAS MA DE TO BUY PEACE AND THE ASSESSEE CO-OPERATED WITH THE DEPART MENT, IT WAS PLEADED THAT NO PENALTY SHOULD BE LEVIED. INTER ALI A, THE ASSESSEE PLEADED THAT DECLARATION OF INCOME WAS MADE IN TERM S OF EXCEPTION PROVIDED IN EXPLANATION TO 5 TO SECTION 271(1)(C) O F THE ACT AND THEREFORE NO PENALTY COULD BE LEVIED. HOWEVER, THE AO DID NOT ACCEPT THE SUBMISSIONS OF THE ASSESSEE ON THE GROUN D THAT THE IMMUNITY UNDER EXPLANATION 5 TO SEC. 271(1)(C) OF THE ACT WAS NOT AVAILABLE TO THE ASSESSEE. ACCORDINGLY, PENALTY OF RS. RS.67,48,830/-@ 100% OF THE TAX SOUGHT TO BE EVADED , WAS LEVIED ON THE AFORESAID INCOME OF RS.2,00,00,000/- FOR FUR NISHING INACCURATE PARTICULARS OF INCOME. INTER ALIA, THE A O RELIED UPON THE DECISIONS OF THE HON'BLE SUPREME COURT IN THE CASES OF N K JAIN VS. C K SHAH (SC) [1991 AIR 1289], STATE OF JHARKHAND A ND OTHERS VS. AMBAY CEMENTS; APPEAL (CIVIL) 7994 OF 2003. 3 ITA NO.963/AHD/2009 4 ON APPEAL, THE LEARNED CIT(A MERELY FOLLOWED THE DECISION OF THE HONBLE GUJARAT HIGH COURT IN THE CASE OF MAHEN DRA C SHAH VS. CIT (2008) 299 ITR 305 (GUJ) AND CANCELLED THE PENA LTY IN THE FOLLOWING TERMS:- 4. I HAVE CONSIDERED THE FACTS AND THE SUBMISSIONS. I AGREE WITH THE APPELLANT'S VIEW. THE RATIO OF DECISION OF HON'BLE GUJA RAT HIGH COURT RELIED UPON BY THE APPELLANT IN THE CASE OF CIT VS. MAHENDRA C.SHAH 299 ITR 305 (GUJ.), IS APPLICABLE TO THE FACTS OF THE CASE. IN T HAT CASE, FOR A.Y. 1988-89, SEARCH TOOK PLACE ON 3/7/1987. DURING THE SEAR CH, DIAMONDS WORTH RS,5,05:712/- WERE FOUND AND SEIZED WHICH THE ASS ESSEE ADMITTED IN THE STATEMENT U/S. 132(4) OF THE ACT. THE ASSESSEE FILE D RETURN OF INCOME ON 17/10/1989 SHOWING INCOME OF RS.20,880/-. THIS WAS FO LLOWED BY REVISED RETURN FILED ON 27/09/1990 DECLARING TOTAL INCO ME RS.5,77,600/- INCLUDING THE VALUE OF DIAMONDS FOUND WORTH RS.5,06,712 /-. THE ASSESSING OFFICER LEVIED THE PENALTY WHICH WAS DELETED BY THE HOB' BLE ITAT. THE MATTER WENT BEFORE HON'BLE GUJARAT HIGH COURT WHERE IN HON'BLE GUJARAT HIGH COURT OBSERVED THAT - '12. THE CONTENTIONS RAISED ON BEHALF OF THE REVENUE A RE NOT REQUIRED TO BE ACCEPTED FOR THE SIMPLE REASON THAT IN T HE FIRST INSTANCE, THERE IS NO PRESCRIPTION AS TO THE POINT OF TI ME WHEN THE TAX HAS TO BE PAID QUA THE AMOUNT OF INCOME DECLARED IN THE STATEMENT MADE UNDER SECTION 132(4) OF THE ACT. THE TRI BUNAL WAS JUSTIFIED IN HOLDING THAT THERE WOULD BE SUFFICIENT COM PLIANCE OF THE PROVISIONS IF TAX IS SHOWN TO HAVE BEEN PAID BEFORE THE ASS ESSMENT WAS COMPLETED. THE REASONING WHICH HAS WEIGHED WITH THE TRIBUNAL IS THAT THE SEARCH PROCEEDINGS WERE CONDUCTED ON 3RD JULY,19 87 WHEN THE STATEMENT U/S.132(4) OF THE ACT WAS MADE. THE LAST DATE FOR PAYMENT OF ADVANCE TAX QUA THE LAST INSTALMENT OF AD VANCE TAX WAS 15TH DEC.,1987 IN SUCH A CASE, ACCORDING TO THE TRIBUN AL, AND IN THE EVENT, THE ASSESSEE DID NOT PAY TAX QUA THE INCOME DECLARED IN THE STATEMENT MADE U/S 132(4) OF THE ACT, THE ASSESSEE BECAME LIABLE TO PAY INTEREST IN ACCORDANCE WITH THE RELEVANT PROVISIONS OF THE ACT BECAUSE EXCEPTION NO.2 ITSELF SPECIFIES PAYMENT OF TAX, TOGETHER WITH INTEREST, IF ANY, INDICATING THAT LEGISLA TURE DID NOT STIPULATE ANY SPECIFIED TIME LIMIT FOR PAYMENT OF TAX. T HERE IS NO INFIRMITY IN THIS REASONING. 13. HOWEVER, THE OUTER LIMIT HAS TO BE THE POINT OF TIME WHEN THE ASSESSMENT PROCEEDINGS ARE UNDERTAKEN BY THE A.O. BECAUSE THE OPENING PORTION OF SECTION 271(1){C) OF THE ACT REQUI RES THE A.O. TO RECORD SATISFACTION IN THE COURSE OF SUCH PROCEEDINGS, AND THE SATISFACTION HAS TO BE AS REGARDS THE CONCEALMENT OF PARTICU LARS OF INCOME OF FURNISHING INACCURATE PARTICULARS OF INCOME. IN OTHER WORDS, A SATISFACTION AS TO CONCEALMENT CAN BE ARRIVED AT THE 4 ITA NO.963/AHD/2009 EARLIEST POINT OF TIME ONLY IN THE COURSE OF ASSESSMENT PR OCEEDINGS AND FOR THAT PURPOSE THE A.O. IS REQUIRED TO VERIFY AND ASCERTAIN WHETHER THE INCOME HAS BEEN DECLARED AND TAX PAID THERE ON. FOR THE PURPOSE OF EXPLN. 5, WHICH COMES INTO PLAY ONLY IN CASE OF SEARCH AND SEIZURE PROCEEDINGS, RETURN OF INCOME PER SE WO ULD HAVE NO RELEVANCE IF ONE READS ENTIRE EXPLN.5, INCLUDIN G THE TWO EXCEPTIONS. THE EMPHASIS ON DISCLOSURE IN THE RETURN OF INCO ME IS RELEVANT ONLY FOR THE PURPOSES OF AVOIDING THE DEEMING FICTION OF CONCEALMENT IN RELATION TO THE PREVIOUS YEAR WHICH HAS AL READY ENDED BEFORE THE DATE OF SEARCH BUT RETURN OF INCOME F OR SUCH YEAR HAD NOT BEEN FURNISHED, OR WHERE RETURN HAS BEEN FILE D SUCH INCOME HAS NOT BEEN DISCLOSED. IN SO FAR AS A PREVIOUS YEAR WHICH IS TO END ON OR AFTER THE DATE OF SEARCH RETURN OF INCOME WOULD HAVE HARDLY ANY RELEVANCE BECAUSE THE EXPLANATION ITSELF STIPULATES THA T REGARDLESS OF SUCH INCOME HAVING BEEN DECLARED IN ANY RET URN OF INCOME FURNISHED ON OR AFTER THE DATE OF SEARCH THE ASSE SSEE WOULD BECOME LIABLE TO IMPOSITION OF PENALTY, THE ONLY EXCEPTIO N BEING A DECLARATION AT THE TIME OF SEARCH. AS TO WHAT THAT DECLA RATION HAS TO BE ALREADY BEEN EXAMINED HEREINBEFORE AND IT IS NOT N ECESSARY TO REPEAT THE SAME.' THIS CASE IS CLEARLY APPLICABLE TO THE PRESENT CASE AS HERE TH E APPELLANT SHOWED, THE DISCLOSED INCOME IN HIS RETURN OF INCOME AND PAID TAXES THEREON. FOLLOWING THE DECISION OF HON'BLE GUJARAT HI GH IN THE CASE OF MAHENDRA .C. SHAH V/S. CIT (2008) 299 ITR 305 (GUJ. HC), WHICH IS JURISDICTIONAL HIGH COURT, THE APPELLANT IS ALLOWED RE LIEF. 5 THE REVENUE IS NOW IN APPEAL BEFORE US AGAINST TH E AFORESAID FINDINGS OF THE LEARNED CIT(A). THE LEARNED DR SUP PORTED THE FINDINGS OF THE AO LEVYING THE PENALTY WHILE THE LE ARNED AR ON BEHALF OF THE ASSESSEE RELIED UPON THE DECISION OF THE HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF MAHENDRA C SHAH VS. CIT (2008) 299 ITR 305 (GUJ) AS ALSO ON THE DECISION D ATED 30-04-2010 OF THE ITAT, AHMEDABAD BENCH-D IN THE CASE OF KAUSH AL M KHANNA AND SANGEETABEN K KHANNA IN ITA NOS.2883, 2885 & 2848/AHD/2009. 6. WE HAVE HEARD BOTH THE PARTIES AND GONE THROUGH THE FACTS OF THE CASE AS ALSO THE AFORESAID DECISION IN MC SHAH( SUPRA) AND DECISION DATED 30-04-2010 OF THE ITAT IN THE CASE O F KAUSHAL M KHANNA AND SANGEETABEN K KHANNA(SUPRA). ADMITTEDLY, THE 5 ITA NO.963/AHD/2009 ASSESSEE WAS NOT ASSESSED TO TAX PRIOR TO SEARCH NO R FILED ANY RETURN OF INCOME. FOR THE FIRST TIME, THE ASSESSEE FILED RETURN DECLARING INCOME OF RS. 2 CRORES IN THIS ASSESSMENT YEAR ALONG WITH RETURN DECLARING INCOME OF 10 LACS FOR THE AY 2005 -06 FROM HIS BUSINESS OF PURCHASE AND SALE OF LAND PROPERTIES ON 7.12.2007 IN PURSUANCE TO A NOTICE ISSUED UNDER SEC. 153A OF THE ACT. 6.1 ADMITTEDLY, THIS IS THE CASE OF A NEW ASSESS EE , NO RETURN HAVING BEEN FILED PRIOR TO SEARCH. IN THE INSTANT C ASE , THE LD. CIT(A) CANCELLED THE PENALTY MERELY RELYING UPON THE AFOR ESAID DECISION IN MAHENDRA C SHAH(SUPRA), WITHOUT EVEN CARING TO ASCE RTAIN AS TO WHETHER OR NOT FACTS AND CIRCUMSTANCES IN THE INSTA NT CASE WERE SIMILAR TO FACTS AND CIRCUMSTANCES IN THE AFORECITE D DECISION IN MAHENDRA C SHAH(SUPRA) .EVEN BEFORE US, THE LD. AR DID NOT DEMONSTRATE SO NOR EVEN EXPLAINED AS TO WHETHER OR NOT ANY MONEY, BULLION, JEWELLERY AND OTHER VALUABLE ARTICLE OR T HING WAS FOUND DURING THE SEARCH. IN THE CASE OF MAHENDRA C SHAH(S UPRA) ISSUE WAS IN THE CONTEXT OF BENEFIT OF IMMUNITY FROM LEVY OF PENALTY PROVIDED I N EXPLN. 5 TO S. 271(1)(C) OF THE ACT IN RELATION TO TH E INCLUSION OF INCOME OF RS. 5,06,712, REPRESENTING THE VALUE OF DIAMONDS. IN THE INSTANT CASE, THERE IS NOT EVEN A WHISPER IN THE IMPUGNED ORDER AS TO WHETHER O R NOT THE AMOUNT OF RS. 2 CRORES REPRESENTED VALUE OF ANY MONEY, BULLION, JEWELL ERY AND OTHER VALUABLE ARTICLE OR THING WAS FOUND DURING THE SEA RCH IN TERMS OF EXPLANATION 5 TO SEC. 271(1)(C) OF THE ACT NOR THE LD. AR OR DR THREW ANY LIGHT ON THIS ASPECT. BEFORE PROCEEDING FURTHER , WE MAY HAVE A LOOK AT THE RELEVANT EXPLANATION 5 TO SEC. 271(1)(C ) OF THE ACT, WHICH READS AS UNDER: EXPLANATION 5.-WHERE IN THE COURSE OF A SEARCH UNDER SECT ION 132 , THE ASSESSEE IS FOUND TO BE THE OWNER OF ANY MONEY, BULLION, J EWELLERY OR OTHER VALUABLE ARTICLE OR THING (HEREAFTER IN THIS EXPLANATIO N REFERRED TO AS ASSETS) AND THE ASSESSEE CLAIMS THAT SUCH ASSETS HAVE BEEN ACQUIRED BY HIM BY UTILISING (WHOLLY OR IN PART) HIS INCOME,- 6 ITA NO.963/AHD/2009 (A) FOR ANY PREVIOUS YEAR WHICH HAS ENDED BEFORE THE DAT E OF THE SEARCH, BUT THE RETURN OF INCOME FOR SUCH YEAR HAS NOT BE EN FURNISHED BEFORE THE SAID DATE OR, WHERE SUCH RETURN HA S BEEN FURNISHED BEFORE THE SAID DATE, SUCH INCOME HAS NOT BEEN DECLARED THEREIN; OR (B) FOR ANY PREVIOUS YEAR WHICH IS TO END ON OR AFTER T HE DATE OF THE SEARCH, THEN,NOTWITHSTANDING THAT SUCH INCOME IS DECLARED BY HIM IN ANY RETURN OF INCOME FURNISHED ON OR AFTER THE DATE OF THE SEARCH, HE SHALL, FOR THE PURPOSES OF IMPOSITION OF A PENALTY UNDER CLAUSE (C) OF S UB-SECTION (1) OF THIS SECTION, BE DEEMED TO HAVE CONCEALED THE PARTICULARS O F HIS INCOME OR FURNISHED INACCURATE PARTICULARS OF SUCH INCOME, UNLESS,- (1) SUCH INCOME IS, OR THE TRANSACTIONS RESULTING IN SUCH I NCOME ARE RECORDED,- (I) IN A CASE FALLING UNDER CLAUSE (A), BEFORE THE DATE OF THE SEARCH; AND (II) IN A CASE FALLING UNDER CLAUSE (B), ON OR BEFORE SU CH DATE, IN THE BOOKS OF ACCOUNT, IF ANY, MAINTAINED BY HIM FOR ANY SOURCE OF INCOME OR SUCH INCOME IS OTHERWISE DISCLOSED TO THE CHIEF COMMISSIONER OR COMMISSIONER BEFORE THE SAID DATE; OR (2) HE, IN THE COURSE OF THE SEARCH, MAKES A STATEMENT UN DER SUB- SECTION (4) OF SECTION 132 THAT ANY MONEY, BULLION, JEW ELLERY OR OTHER VALUABLE ARTICLE OR THING FOUND IN HIS POSSESSION OR UNDE R HIS CONTROL, HAS BEEN ACQUIRED OUT OF HIS INCOME WHICH HAS NOT BEEN DI SCLOSED SO FAR IN HIS RETURN OF INCOME TO BE FURNISHED BEFORE T HE EXPIRY OF TIME SPECIFIED IN SUB-SECTION (1) OF SECTION 139, AND ALSO SPECIFIES IN THE STATEMENT THE MANNER IN WHICH SUCH INCOME HAS BE EN DERIVED AND PAYS THE TAX, TOGETHER WITH INTEREST, IF ANY, IN RESPECT OF SUCH INCOME. 6.2 A MERE GLANCE AT THE AFORESAID EXPLANATION R EVEALS THAT IN ORDER TO APPLY AFORESAID EXPLANATION OR BENEFIT OF EXCEPTIONS PROVIDED THEREIN, IN THE COURSE OF A SEARCH UNDER SECTION 132 OF THE ACT , THE ASSESSEE HAS TO BE THE OWNER OF ANY MONEY, BULLION, JEW ELLERY OR OTHER VALUABLE ARTICLE OR THING AND THE ASSESSEE CLAIMS THAT SUCH ASSETS HAVE BEEN ACQUIRED BY HIM BY UTILISING (WHOLLY OR IN PART) HIS INCOME. IN THE INSTANT CASE, NO SUCH FINDING OF OWNERSHIP OF ANY MONEY, BULLION, JEWELLERY OR OTH ER VALUABLE ARTICLE OR THING, HAS BEEN RECORDED BY THE LD. CIT(A), WHO MECHANICALLY A PPLIED THE AFORECITED 7 ITA NO.963/AHD/2009 DECISION IN MAHENDRA C SHAH(SUPRA). THE LD. AR APPEA RING BEFORE US ALSO DID NOT ATTEMPT TO DEMONSTRATE AS TO HOW THIS DECISION IS APPLICABLE IN THE INSTANT CASE. WE MAY POINT OUT THAT IN THE DECISION DATED 30-04-2010 OF THE ITAT IN THE CASE O F KAUSHAL M KHANNA AND SANGEETABEN K KHANNA(SUPRA), ALSO RELIE D UPON BY LD. AR, THE ITAT CONCLUDED THAT EXPLANATION 5 TO SEC. 2 71(1)(C) OF THE ACT IS NOT APPLICABLE IN A CASE WHERE NO MONEY, BU LLION, JEWELLERY AND OTHER VALUABLE ARTICLE OR THING IS FOUND DURIN G THE SEARCH. 6.3 IN THE LIGHT OF AFORESAID DISCUSSION, IT IS AMPLY CLEAR THAT THE LD. CIT(A) DID NOT EXAMINE THE APPLICABILITY EITHER OF EXPLANATION 5 TO SEC. 271(1)(C) OF THE ACT OR OF THE DECISION CITED BY THE ASSESSEE BEFORE HIM. APPARENTLY, THE AFORESAID ORDER OF THE LD. CIT(A) IS NOT A SPEAKING ORDER. THE LD. CIT(A) WHILE CANCELLING THE PENALTY DID NOT ANALYSE THE ISSUES IN PROPER PERSPECTIVE. A MERE GL ANCE AT THE IMPUGNED ORDER REVEALS THAT THE ORDER PASSED BY THE LD. CIT(A) IS CRYPTIC AND GROSSLY VIOLATIVE OF ONE OF THE FACETS OF THE RULES OF NATURAL JUSTICE, NAMELY, THAT EVERY JUDICIAL/QUASI- JUDICIAL BODY/AUTHORITY MUST PASS REASONED ORDER, WHICH SHOU LD REFLECT APPLICATION OF MIND BY THE CONCERNED AUTHORITY TO T HE ISSUES/POINTS RAISED BEFORE IT. THE APPLICATION OF MIND TO THE MA TERIAL FACTS AND THE ARGUMENTS SHOULD MANIFEST ITSELF IN THE ORDER. SECT ION 250(6) OF THE ACT MANDATES THAT THE ORDER OF THE CIT(A) WHILE DIS POSING OF THE APPEAL SHALL BE IN WRITING AND SHALL STATE THE POIN TS FOR DETERMINATION, THE DECISION THEREON AND THE REASON FOR THE DECISION. AS IS APPARENT, THE IMPUGNED ORDER SUFFERS FROM LAC K OF REASONING AND IS NOT A SPEAKING ORDER. IN VIEW OF THE FORE GOING, ESPECIALLY WHEN THE LD. CIT(A) HAS NOT PASSED A SPEAKING ORDER ON THE ISSUE OF LEVY OF PENALTY RAISED IN GROUND NOS. 1 & 2 IN T HE APPEAL BEFORE US NOR EXAMINED THE APPLICABILITY OF EXPLANATION 5 TO SEC. 271(1)(C) OF THE ACT AND NOR EVEN ANALYSED THE FACTS AND CIRCUMS TANCES OF THE AFORESAID DECISION IN MAHENDRA C SHAH(SUPRA) RELIED UPON BEFORE HIM BY THE ASSESSEE VIS-A-VIS FACTS AND CIRCUMSTANC ES IN THE INSTANT 8 ITA NO.963/AHD/2009 CASE , WE CONSIDER IT FAIR AND APPROPRIATE TO SET A SIDE THE ORDER OF THE LD. CIT(A) AND RESTORE THE MATTER TO HIS FILE F OR DECIDING THE ISSUE OF LEVY OF PENALTY AFRESH IN ACCORDANCE WITH LAW, AFTER ALLOWING SUFFICIENT OPPORTUNITY TO BOTH THE PARTIES. NEEDLES S TO SAY THAT WHILE REDECIDING THE APPEAL, THE LEARNED CIT(A) SHALL PAS S A SPEAKING ORDER, KEEPING IN MIND, INTER ALIA, THE MANDATE OF PROVISIONS OF SEC. 250(6) OF THE ACT, BRINGING OUT CLEARLY AS TO WHETH ER OR NOT THE EXPLANATION 5 TO SEC. 271(1)(C) OF THE ACT OR EXC EPTIONS PROVIDED THEREIN OR EVEN THE AFORECITED DECISION RELIED UPO N BY THE ASSESSEE BEFORE HIM, ARE APPLICABLE IN THE FACT SITUATION OF THE INSTANT CASE. WITH THESE DIRECTIONS, GROUND NOS. 1 & 2 IN THE APP EAL ARE DISPOSED OF. 7. GROUND NOS.2 AND 3 IN THE APPEAL BEING MERE PRAYE R NOR ANY SUBMISSIONS HAVING BEEN MADE ON THESE GROUNDS, DO NOT REQUIRE AN Y SEPARATE ADJUDICATION AND ARE, THEREFORE, DISMISSED. 8. IN THE RESULT, APPEAL IS ALLOWED BUT FOR STATISTICA L PURPOSES. ORDER PRONOUNCED IN THE COURT TODAY ON 29-07-2011 SD/- SD/- ( BHAVNESH SAINI ) JUDICIAL MEMBER ( A N PAHUJA ) ACCOUNTANT MEMBER DATED : 29 -07-2011 COPY OF THE ORDER FORWARDED TO: 1. M/S RADHAKRISHNA & CO., 4019, JASH TEXTILE MARKE T, RING ROAD, SURAT 2. ASST. COMMISSIONER OF INCOME-TAX, CENTRAL CIRCLE -2, SURAT 3. CIT CONCERNED 4. CIT(A)-II, AHMEDABAD 5. DR, ITAT, AHMEDABAD BENCH-A, AHMEDABAD 6. GUARD FILE BY ORDER 9 ITA NO.963/AHD/2009 DEPUTY REGISTRAR ASSISTANT REGISTRAR ITAT, AHMEDABAD