Super Steel Industries, Kalol V. The Dy.CIT.,Mehsana Circle, Mehsana

ITSSA 180/AHD/2010

• Counselvise Citation: [2012] 121 COUNSELVISE.COM (IT) 8288 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 6 month(s) 9 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 31-08-2012
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Next Hearing Date: 10-05-2012
• Assessment Year: misc
• Appeal Filed On: 19-02-2010
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Keywords: Unexplained investment; Income from undisclosed sources; Search and seizure; Block assessment
• Section: 143(3)

Judgement Text

, , , , IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, AHMEDABAD , . .!'#$, % & BEFORE SHRI MUKUL KR.SHRAWAT, JUDICIAL MEMBER AND SHRI A.K. GARODIA, ACCOUNTANT MEMBER ./ I.T(SS).A. NO.180/AHD/2010 ( BLOCK PERIOD : 1-4-1990 TO 28-6-2000 ) M/S.SUPER STEEL INDUSTIRES PLOT NO.57, GIDC ESTATE HIGHWAY ROAD KALOL (N.G.) ( ( ( ( / VS. DCIT MEHSANA CIRCLE MEHSANA ) % ./*+ ./ PAN/GIR NO. : AAGFS 5711 G ( ), / // / APPELLANT ) .. ( -.), / RESPONDENT ) ), / / APPELLANT BY : MS.URVASHI SHODHAN -.), 0 / / RESPONDENT BY : SHRI RAKESH AGRAWAL, SR.D.R. (1 0 2% / / / / DATE OF HEARING : 13/07/12 3'4 0 2% / DATE OF PRONOUNCEMENT : 31.8.12 5 / O R D E R PER SHRI MUKUL KR. SHRAWAT, JUDICIAL MEMBER : THIS IS AN APPEAL FILED BY THE ASSESSEE ARISIN G FROM THE ORDER OF THE LD.CIT(APPEALS)-GANDHINAGAR DATED 20/11/2009 P ASSED FOR BLOCK PERIOD 1/4/90 TO 28/6/2000 AND THE GROUNDS RAISED A RE AS FOLLOWS:- 1. THE HONBLE COMMISSIONER OF INCOME TAX (APPEALS ) GANDHINAGAR [HEREINAFTER REFERRED TO AS CIT(A)] HAS GROSSLY ERRED IN LAW AND ON FACTS IN CONFIRMING THE ORDER U/S.15B FA(2) IMPOSING IT(SS)A NO.180/ AHD/2010 M/S.SUPER STEEL INDUSTRIES VS. DCIT BLOCK PERIOD : 1-4-1990 TO 28-6-2000 - 2 - A HUGE PENALTY OF RS.3,15,480/- IN TOTAL DISREGARD OF THE FACTS AND SETTLED LAW AND IN THE PROCESS HAS FAILED TO APPREC IATE THAT THE RETURNED UNDISCLOSED INCOME WAS THE HONEST ESTIMATI ON OF THE APPELLATE FIRM UNDER THE GIVEN CIRCUMSTANCES. 2. THE HONBLE CIT(A) HAS GROSSLY ERRED IN LAW AND ON FACTS IN CONFIRMING THE PENALTY OF RS.3,15,480/- WHICH HAS B EEN IMPOSED ON THE ASSESSED UNDISCLOSED INCOME OF RS.4,78,000/- IG NORING THE RETURNED UNDISCLOSED INCOME OF RS.3,00,000/- AND HA S IN THE PROCESS CONFIRMED THE PENALTY U/S.158BFA(2) ON THE ASSESSED UNDISCLOSED INCOME. 2. FACTS IN BRIEF AS EMERGED FROM THE CORRESPON DING ASSESSMENT ORDER PASSED U/S.158BC R.W.S. 143(3) DATED 31.05.2002 AND THE CORRESPONDING PENALTY ORDER PASSED U/S.158BFA(2) DATED 28.07.2009 WERE THAT A SEARCH WAS CONDUCTED ON 28/06/2000. THEREAFTER, A NOTICE U/S.158BC WAS ISSUED ON 6.11.2001 AND IN COMPLIANCE, A RETURN WAS FILED FOR THE BLOCK PERIOD DISCLOSING AN INCOME OF RS.3 LACS. AT THE T IME OF ASSESSMENT, IT WAS ALSO FOUND BY THE AO THAT THERE WAS AN UNACCOU NTED INVESTMENT IN PLANT & MACHINERY TO THE TUNE OF RS.2,87,500/-. TO TAL UNDISCLOSED INCOME WAS THEREFORE DETERMINED AT RS.7,66,702/- AN D AFTER GIVING THE CREDIT OF THE UNDISCLOSED INCOME DECLARED OF RS.3 L ACS, THE FINAL INCOME ASSESSED AT RS.4,66,702/-. IT HAS ALSO BEEN NOTE D BY THE AO THAT THERE WERE SALES OF RS.7,93,786/- DETECTED CONSEQUENT UPO N THE SEARCH OPERATION AS PER ANNEXURE A-12 SEIZED. ACCORDING TO AO, THE SAID AMOUNT WAS UNACCOUNTED SALES OF THE ASSESSEE. ON T HE BASIS OF THE NOTINGS OF SEVERAL PURCHASES AND SALES TRANSACTIONS THE AO THOUGHT IT PROPER TO ARRIVE AT THE UNACCOUNTED INVESTMENT AND HENCE ADOPTED THE PEAK METHOD. ON VERIFICATION OF THE NOTINGS, HE H AD ARRIVED AT THE PEAK IT(SS)A NO.180/ AHD/2010 M/S.SUPER STEEL INDUSTRIES VS. DCIT BLOCK PERIOD : 1-4-1990 TO 28-6-2000 - 3 - AMOUNT OF RS.4,79,202/- AND THAT TOO WAS HELD AS UN DISCLOSED INCOME IN THE HANDS OF THE ASSESSEE. WHILE LEVYING THE PENAL TY U/S.158BFA(2), AT THE OUTSET, AO HAS NOTED THAT ITAT B BENCH AHMEDA BAD VIDE AN ORDER BEARING IT(SS)A NO.85/AHD/2003 FOR THE BLOCK PERIOD 1.4.1990 TO 28.6.2000, DATED 17/04/2007 HAS CONFIRMED THE PEAK ADDITION, HOWEVER, THE PEAK OF UNACCOUNTED SALES AS ASSESSED BY THE AO OF RS.4,79,202/- WAS REDUCED ONLY TO RS.4,78,000/-. THE PENALTY WAS THEREFORE IMPOSED IN RESPECT OF THE SAID ADDITION. BEFORE AO, IT WAS P LEADED THAT THE BLOCK PERIOD RETURN WAS FILED IN GOOD FAITH IN THE ABSENC E OF XEROX COPIES OF SEARCH MATERIAL BEING NOT PROVIDED TO THE ASSESSEE. THE RETURN WAS MERELY ON THE BASIS OF MEMORY WITHOUT HAVING THE BE NEFIT OF THE RECORD SEIZED; THEREFORE THE INCOME SO OFFERED SHOULD BE C ONSIDERED AS A BONA FIDE DISCLOSURE. HOWEVER, AO WAS NOT CONVINCED A ND IMPOSED THE PENALTY ON THE SAID PEAK AMOUNT SINCE THE ASSESSEE HAS NOT RECORDED THE SAID TRANSACTION AND FAILED TO SUBSTANTIATE THE ENT RIES. RELEVANT PORTION OF THE PENALTY ORDER IS REPRODUCED BELOW:- 4. THE CONTENTIONS PUT-FORTH IN THE REPLY ARE CON SIDERED. THE FACT THAT THE TRANSACTION, AS PER ANNEXURE A-12, PA GE 24 IS UNACCOUNTED IS NOT DISPUTED. FURTHER, THE ASSESSEE HAS ALSO NOT ABLE TO GIVE DETAILS IN RESPECT OF THE VARIOUS JOTT INGS, WHICH REFLECTS THE TRANSACTIONS OF UNACCOUNTED MONEY. THE A.O. HA S THUS ADOPTED THE PEAK METHOD AND HAS TAKEN THE PEAK AMOU NT ON THE DEBIT SIDE OF THE ACCOUNT. THE ADOPTION OF THE AMO UNT AS UNACCOUNTED INCOME IS UPHELD THE LEARNED CIT(A) AS WELL AS THE HONOURABLE ITAT. IT MAY ALSO WORTH NOTING THAT THE ASSESSEE HAS ALREADY FILED A RETURN IN RESPONSE TO NOTICE U/S.15 8BC SHOWING TOTAL UNDISCLOSED INCOME OF RS.3,00,000/-. IN VIEW OF THE FACTS, IT IS ESTABLISHED THAT THE CONTENTS OF ANNEXURE A-12, PAG E 24 IS THE UNDISCLOSED INCOME OF THE ASSESSEE. THE ASSESSEE H AS FAILED TO SUBSTANTIATE WITH EVIDENCES BEFORE THE ASSESSING OF FICER, BEFORE THE LEARNED CIT(A) AS WELL AS BEFORE THE HONORABLE ITAT IN IT(SS)A NO.180/ AHD/2010 M/S.SUPER STEEL INDUSTRIES VS. DCIT BLOCK PERIOD : 1-4-1990 TO 28-6-2000 - 4 - RESPECT OF ENTRIES OF ANNEXURE A-14, PAGE-4. THE O NUS TO SUBSTANTIATE THE ENTRIES WITH EVIDENCES LIES UPON T HE ASSESSEE, THE ASSESSEE HAS FAILED TO DO SO. IN VIEW OF THE ABOVE FACTS AND CIRCUMSTANCES OF THE CASE, I AM SATISFIED THAT THE ASSESSEE HAS CONCEALED ITS INCOME TO THE EXTENT DISCUSSED ABOVE. THE A.O. HAS RIGHTLY MADE THE ADDITION BEING THE UNACCOUNTED INC OME BASED ON THE ANNEXURE A-12 PAGE-24. THIS FACT IS ALSO CORRO BORATED BY THE DECISION OF LEARNED CIT(A) AND ITAT. 5. IN THE CIRCUMSTANCES, I HEREBY LEVY A MINIMUM PE NALTY OF RS.3,15,480/- BEING THE 100% OF TAX SOUGHT TO BE EV ADED AS AGAINST MAXIMUM LEVIABLE OF RS.9,46,440/-. 3. BEING AGGRIEVED, THE MATTER WAS CARRIED BEFORE T HE FIRST APPELLATE AUTHORITY WHO HAS AFFIRMED THE ACTION OF THE AO PRI MARILY ON THE GROUND THAT CERTAIN PAPERS BELONGING TO THE ASSESSEE WERE FOUND FROM THE PREMISES OF THE ASSESSEE, THEREFORE THE UNDISCLOSED INCOME BASED UPON THOSE PAPERS WAS RIGHTLY MADE THE BASIS FOR LEVY O F PENALTY. THE REASONS ASSIGNED BY LD.CIT(A) WERE AS FOLLOWS:- 5. THE MATTER HAS BEEN CONSIDERED AND I AM AFRAID I CANNOT AGREE WITH THE AUTHORISED REPRESENTATIVE. THE ADDI TION MADE BY THE ASSESSING OFFICER AND AS CONFIRMED BY THE CIT(A ) AS WELL AS THE ITAT IS BASED ON A PAPER FOUND IN THE PREMISES OF THE ASSESSEE. MERELY BECAUSE THE INCOME HAS BEEN COMPUTED BY WORK ING OUT THE PEAK OF THE TRANSACTIONS DOES NOT RENDER THE COMPUT ATION OF INCOME AS AN ESTIMATE, AS NORMALLY UNDERSTOOD. I N FACT, THE SO CALLED ESTIMATE HAS GONE IN THE ASSESSEES FAVOUR O NLY IN AS MUCH AS THE BENEFIT OF THE ROTATION OF FUNDS WAS GIVEN. THE PRESUMPTION OF PAPER BELONGING TO THE ASSESSEE IS VERY STRONG I F THE SAME IS FOUND FROM THE ASSESSEES PREMISES, AS HAS BEEN HEL D BY JUDICIAL DECISIONS AND WHICH FORMS THE BASIS OF UPHOLDING TH E ADDITION IN THE ASSESSEES CASE BY THE APPELLANT AUTHORITIES. IF ANY INCOME OF THE ASSESSEE IS TO BE COMPUTED ON THE BASIS OF RETU RN FILED IT(SS)A NO.180/ AHD/2010 M/S.SUPER STEEL INDUSTRIES VS. DCIT BLOCK PERIOD : 1-4-1990 TO 28-6-2000 - 5 - U/S.158BC AND SUCH AN INCOME STANDS THE TEST OF APP EAL, OBVIOUSLY IT FALLS WITHIN THE AMBIT OF SECTION 158BFA(2), AS IN SUCH A SITUATION THERE CANNOT BE A CASE OF REASONABLE CAUS E. IN THE INSTANT CASE, THE PENALTY LEVIED IS NOT AN AUTOMATI C PENALTY BUT HAS BEEN CORRELATED WITH THE DEFAULT OF THE ASSESSEE. IF THE PROVISIONS OF SECTION 158BFA(2) ARE AKIN TO SECTION 271(1)(C) IN SUCH CASES, AS DECIDED BY HON'BLE SUPRME COURT IN THE CASE OF D HARMENDRA TEXTILE PROCESSORS 306 ITR 227, WHEREIN THE APEX CO URT GAVE A FINDING THAT THE PENALTY U/S.271(1)(C) IS A CIVIL L IABILITY AND R.W.EXPLANATION DO INDICATE THAT THE SECTION HAS BE EN ENACTED TO PROVIDE FOR REMEDY FOR LOSS OF REVENUE, I DO NOT TH INK THE ASSESSING OFFICER WAS REQUIRED TO BRING ANYTHING FURTHER ON R ECORD. FURTHER, IT WAS STATED THAT WILLFUL CONCEALMENT IS NOT AN ES SENTIAL INGREDIENT FOR ATTRACTING CIVIL LIABILITY AS SEPARATE SECTION 276C EXISTS FOR THE PURPOSE. 6. THEREFORE, KEEPING ALL THE FACTS IN VIEW, PENAL TY OF RS.3,15,480/- IS CONFIRMED. 4. FROM THE SIDE OF THE ASSESSEE-APPELLANT, LD.AR M S.URVASHI SHODHAN APPEARED AND OPPOSED THE LEVY OF PENALTY. SHE HAS CONTESTED THAT CONSEQUENT UPON THE SEARCH DATED 28/06/2000, A RETURN WAS FILED FOR THE BLOCK PERIOD ON 07/12/2001 IN COMPLIANCE OF NOT ICE U/S.158BC SHOWING UNDISCLOSED INCOME OF RS.3 LACS. SHE HAS FURTHER CONTESTED THAT THE INCOME DISCLOSED AT RS.3 LACS AS PER THE SAID R ETURN SHOULD BE CONSIDERED AS A BONA FIDE DISCLOSURE FROM THE SIDE OF THE ASSESSEE BECAUSE THE REVENUE DEPARTMENT HAD NOT PROVIDED THE PHOTOCO PIES OF THE SEIZED MATERIAL. SHE HAS THEN CONTESTED THAT THE LEVY OF PENALTY U/S.158BFA(2) IS NOT AUTOMATIC BUT DISCRETIONARY BECAUSE THE STAT UTE HAS USED THE WORD MAY INSTEAD OF THE EXPRESSION SHALL. HER NEXT PLANK OF ARGUMENT WAS THAT IN THE LIGHT OF THE DECISION OF THIRD MEMBER I N THE CASE OF DCIT VS. IT(SS)A NO.180/ AHD/2010 M/S.SUPER STEEL INDUSTRIES VS. DCIT BLOCK PERIOD : 1-4-1990 TO 28-6-2000 - 6 - HEERA CONSTRUCTIONS CO.PVT.LTD. 121 ITD 407 (TM)CO CHIN) THE ASSESSEE SHOULD GET THE BENEFIT OF THE AMOUNT OF UNDISCLOSED INCOME AS SHOWN IN THE RETURN OF INCOME FOR THE PURPOSE OF COMPUTATION OF PENALTY. LD.AR HAS ALSO REFERRED THE DECISION OF HONBLE JURISDICT IONAL HIGH COURT IN THE CASE OF KANDOI BHOGILAL MULCHAND VS. DY.CIT REPORTE D AT [2012] 341 ITR 271 (GUJ.). 5. FROM THE SIDE OF THE REVENUE, LD.SR.DR MR.RAKESH AGRAWAL APPEARED AND VEHEMENTLY ARGUED THAT THE DISCRETION AS GIVEN IN THE SECTION BY USING THE WORD MAY DOES NOT MEAN THAT THE DISCRETION SHOULD ALWAYS GO IN FAVOUR OF THE ASSESSEE. LD.DR HAS FUR THER CONTESTED THAT THE PENALTY HAS TO BE IMPOSED ON THE UNDISCLOSED INCOME AS ASSESSED AND IT WAS INCORRECT TO ARGUE THAT ONLY THE DIFFERENCE SHO ULD BE MADE THE BASIS FOR LEVY OF PENALTY. LD.DR HAS ALSO POINTED OUT I N TERMS OF PROVISO (IV) OF 158BFA(2) THE CONCESSION FOR NOT IMPOSITION OF P ENALTY GRANTED ONLY IF NO APPEAL IS FILED BY THE ASSESSEE AGAINST THE I NCOME OF THAT PART OF INCOME WHICH IS SHOWN IN THE RETURN. HOWEVER, THE ASSESSEE HAS CONTESTED RS.3 LACS BEFORE CIT(A) WHICH WAS DISCLOS ED AS PER THE RETURN. LD.DR HAS FURTHER PLEADED THAT AS PER THE LANGUAGE OF SECTION 158BFA(2) FOR THE PURPOSE OF LEVY OF PENALTY, THE INCOME CONC EALED BY THE ASSESSEE IS NOT TO BE CONSIDERED AND THE LANGUAGE DO NOT SUB SCRIBE FOR CONCEALMENT OF INCOME BUT A PENALTY IS TO BE LEVIED ON THE AMOUNT OF UNDISCLOSED INCOME DETERMINED BY THE AO. ACCOR DING TO LD.DR, AFTER THE ORDER OF THE TRIBUNAL, THE UNDISCLOSED INCOME DETERMINED WAS AT RS.4,78,000/-, AS NOTED BY THE AO WHILE LEVYING THE PENALTY, THEREFORE IT(SS)A NO.180/ AHD/2010 M/S.SUPER STEEL INDUSTRIES VS. DCIT BLOCK PERIOD : 1-4-1990 TO 28-6-2000 - 7 - THERE WAS NO INFIRMITY IN LEVYING THE PENALTY. L D.DR HAS PLACED RELIANCE ON THE FOLLOWING CASE LAWS: SL.NO(S) DECISION IN THE CASE OF REPORTED IN 1. CIT VS. BECHARBHAI P.PARMAR [2012) 341 ITR 499 (GUJ.) 2. CIT VS. SMT.ANJU R.INNANI [2010} 191 TAXMAN 350 (BOM) 3. SMT.MADHUBEN R.BAROT VS. ASST.CIT (2012) 18 TAXMANN.COM 227 (AHD.) 4. SUNIL DUA VS. DY.CIT (2010) 130 TTJ 313 (DELHI) 6. WE HAVE HEARD BOTH THE SIDES AT SOME LENGTH. WE HAVE PERUSED THE RELEVANT ORDERS OF THE REVENUE AUTHORITIES IN THE L IGHT OF THE CASE LAWS CITED. AS PER SECTION 158BFA(2), THE AO IN THE COUR SE OF ANY PROCEEDINGS OF UNDER CHAPTER-XIV B MAY DIRECT THAT A PERSON SHALL PAY BY WAY OF PENALTY A SUM WHICH SHALL NOT BE LESS THA N THE AMOUNT OF TAX LEVIABLE BUT WHICH SHALL NOT EXCEED THREE TIMES OF THE AMOUNT OF TAX SO LEVIABLE IN RESPECT OF THE UNDISCLOSED INCOME DETER MINED BY THE ASSESSEE U/S.158BC(C) OF IT ACT. ON DUE CONSIDERATION OF TH E ARGUMENTS, WE HAVE NOTICED THAT OUR ATTENTION HAS BEEN DRAWN ON THE EX PRESSION MAY USED IN THIS SECTION. IN THIS REGARD, IT WAS PLEADED TH AT BY USING THE WORD MAY THE STATUTE HAS GIVEN DISCRETIONARY POWER FOR LEVY OF PENALTY. IT HAS FURTHER BEEN ARGUED THAT THE STATUTE HAS NOT US ED THE WORD SHALL OTHERWISE THE PENALTY SHOULD HAVE BEEN AUTOMATIC. WE HAVE GIVEN DUE THOUGHT ON THIS ARGUMENT, HOWEVER, NOT CONVINCED TH AT THE DISCRETION IF ANY GIVEN BY THE STATUTE SHOULD ALWAYS BE TILTED IN FAVOUR OF THE ASSESSEE. IT(SS)A NO.180/ AHD/2010 M/S.SUPER STEEL INDUSTRIES VS. DCIT BLOCK PERIOD : 1-4-1990 TO 28-6-2000 - 8 - IN OUR HUMBLE UNDERSTANDING OF LAW, DISCRETION HAS TO BE APPLIED JUDICIALLY. A DISCRETION DO NOT GIVE AN ARBITRARY POWER TO AN AUTHORITY. AS PER THE ACCEPTED NORMS OF THE INTERPRETATION OF THE STATUTE, THE LANGUAGE CHOSEN IS SUCH THAT IT MAY NOT LEAD TO AN AMBIGUITY AS ALSO IT MAY NOT LEAD TO A HARDSHIP TO PUBLIC AT LARGE. DUE TO THIS REASON, THE PRESENT SECTION USED THE WORD MAY TO COVER UP ALL SUCH SITUATIONS WHICH MAY ARISE IN FUTURE ALTHOUGH COULD NOT BE FOR ESEEN WHILE DRAFTING THIS SECTION. THE PURPOSE OF USING THE WORD MAY IS THUS THEREFORE TO AVOID A WATER-TIGHT APPLICATION OF LEVY OF PENALTY . THIS ARGUMENT IN FACT HAD BEEN RAISED BEFORE THE HONBLE JURISDICTIO NAL HIGH COURT IN THE CASE OF KANDOI BHOGILAL MULCHAND VS. DY.CIT REPORT ED AT [2012] 341 ITR 271 (GUJ.) (SUPRA), BUT HAVING CONSIDERED THE F ACTS AS ALSO THE LANGUAGE OF THE STATUTE THE HONBLE COURT HAS OPINE D AND FINALLY HELD THAT NO ERROR WAS COMMITTED BY THE AO IN IMPOSING T HE PENALTY. 6.1. AS FAR AS THE ALLEGATION OF NON-SUPPLY OF XERO X COPIES OF SEIZED MATERIAL IS CONCERNED, WE FIND NO FORCE BECAUSE THE REVENUE HAS ALSO DEMONSTRATED THAT THE REQUISITE INFORMATION WAS VER Y MUCH IN POSSESSION OF THE ASSESSEE AND ONLY ON THAT BASIS THE ASSESSEE HAS NOT ONLY FILED THE RETURN BUT POINT-WISE GIVEN THE REPLY DURING THE AS SESSMENT PROCEEDINGS BY REFERRING THE SEIZED MATERIAL. WE THEREFORE HOL D THAT UNDISCLOSED INCOME SHOWN AS PER THE RETURN FILED FOR THE BLOCK PERIOD IN COMPLIANCE OF NOTICE U/S.158BC OF RS.3 LACS WAS THE ONLY INCOM E WHICH WAS CONSCIOUSLY INTENDED TO BE OFFERED BY THIS ASSESSE E. IT(SS)A NO.180/ AHD/2010 M/S.SUPER STEEL INDUSTRIES VS. DCIT BLOCK PERIOD : 1-4-1990 TO 28-6-2000 - 9 - 6.2. WE HAVE PERUSED THE ORDERS CITED FROM THE SIDE OF THE REVENUE AND THE PERTINENT ONE IS AN ORDER OF THE JURISDICTIONAL HIGH COURT PRONOUNCED IN THE CASE OF CIT VS. BECHARBHAI P.PARMAR (012) 3 41 ITR 499(SUPRA), WHEREIN AS WELL THE EXPRESSION MAY WAS ADJUDICATE D UPON AND FINALLY HELD THAT THE TRIBUNAL HAD COMMITTED A GRAVE ERROR IN INTERFERING WITH THE PENALTIES IMPOSED BY THE REVENUE DEPARTMENT. THE ORDER OF THE TRIBUNAL WAS SET ASIDE AND RESTORED FOR FRESH CONSI DERATION. LIKEWISE, IN THE CASE OF CIT VS. SMT.ANJU R.INNANI (2010) 191 TA XMAN 350 (BOM) (SUPRA), THE QUESTION OF LEVY OF PENALTY U/S.158BFA (2) WAS DECIDED IN FAVOUR OF THE REVENUE AND AN IMPORTANT FINDING WAS GIVEN THAT IN CASE THE ASSESSEE FAILED TO COMPLY WITH THE CONDITION PR ESCRIBED UNDER CLAUSE (IV) OF THE FIRST PROVISO TO SECTION 158BFA(2), I.E . NON-FILING OF AN APPEAL AGAINST THE ORDER OF BLOCK ASSESSMENT, THEN NOT ENT ITLED FOR THE BENEFIT OF THE SAID PROHIBITORY. PROVISION. 6.3. LASTLY, WE ARE LEFT WITH THE ALTERNATE PLEA OF THE ASSESSEE THAT IN THE LIGHT OF THIRD MEMBER DECISION PRONOUNCED IN THE C ASE OF HEERA CONSTRUCTIONS CO.PVT.LTD. 121 ITD 407 (TM)COCHIN)[ SUPRA], THE BENEFIT OF DISCLOSURE OF UNDISCLOSED INCOME AS PER THE RETU RN FILED MAY BE GRANTED FOR COMPUTING THE PENALTY U/S.158BFA(2) OF IT ACT. THE LANGUAGE OF THE SECOND PROVISO TO SECTION BFA(2) IS AS UNDER:- 158BFA. (1) (2) PROVIDED . PROVIDED FURTHER THAT THE PROVISIONS OF THE PRECEDING PROVISO SHALL NOT APPLY WHERE THE UNDISCLOSED INCOME DETERMINED B Y THE ASSESSING OFFICER IS IN EXCESS OF THE INCOME SHOWN IN THE RETURN IT(SS)A NO.180/ AHD/2010 M/S.SUPER STEEL INDUSTRIES VS. DCIT BLOCK PERIOD : 1-4-1990 TO 28-6-2000 - 10 - AND IN SUCH CASES THE PENALTY SHALL BE IMPOSED ON T HAT PORTION OF UNDISCLOSED INCOME DETERMINED WHICH IS IN EXCESS OF THE AMOUNT OF UNDISCLOSED INCOME SHOWN IN THE RETURN. 6.4. THE RESPECTED THIRD MEMBER DECISION(SUPRA) IS, THEREFORE, APPLICABLE ON THE FACTS AND CIRCUMSTANCES OF THIS C ASE. IN THAT CASE OF M/S.HEERA CONSTRUCTION CO.(SUPRA), THE LD.AM HAS EX PRESSED THAT THE DISCLOSED INCOME AS PER THE BLOCK RETURN IS TO BE E XCLUDED. AGREEING WITH THE SAID VIEW, THE RESPECTED THIRD MEMBER HAS OPINED THAT THERE WAS NO REQUIREMENT IN SUCH A SITUATION TO CONSIDER THE FIRST PROVISO. IN FACT, AS PER THE CLEAR LANGUAGE OF THE SECTION PROV ISO, PROVISIONS OF FIRST PROVISO SHALL NOT APPLY IF THE CASE IS COVERED BY T HE SECOND PROVISO. RATHER, IT WAS HELD THAT THERE WAS NO JUSTIFICATION TO ACT CONTRARY TO THE MANDATE OF THE STATUTORY PROVISION. WE, THEREFORE, HOLD THAT THIS IS A CASE WHERE THE PENALTY IS RIGHTLY IMPOSED, HOWEVER, THE PENALTY QUANTUM IS TO BE COMPUTED IN THE LIGHT OF THE SECOND PROVISO TO S ECTION 158BFA(2) OF THE I.T.ACT. WE ORDER ACCORDINGLY. 7. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PAR TLY ALLOWED THAT TOO FOR STATISTICAL PURPOSES. SD/- SD/- ( . .!'#$ ) ( ) % ( A.K. GARODIA ) ( M UKUL KR. SHRAWAT ) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD; DATED 31/ 08 /2012 62..(, .(../ T.C. NAIR, SR. PS IT(SS)A NO.180/ AHD/2010 M/S.SUPER STEEL INDUSTRIES VS. DCIT BLOCK PERIOD : 1-4-1990 TO 28-6-2000 - 11 - 5 0 -7 8 74 5 0 -7 8 74 5 0 -7 8 74 5 0 -7 8 74/ COPY OF THE ORDER FORWARDED TO : 1. ), / THE APPELLANT 2. -.), / THE RESPONDENT. 3. 9 / CONCERNED CIT 4. 9() / THE CIT(A)-GANDHINAGAR 5. 7 >> >/ // / * * * * ( DY./ASSTT.REGISTRAR) , , , , / ITAT, AHMEDABAD 1. DATE OF DIRECT DICTATION ON COMPUTER : 25.8.12 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 28.8.12 OTHER MEMBER 3. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.P. S./P.S.. 4. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT 5. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR.P .S./P.S31.8.12 6. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 31.8.12 7. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK . 8. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER.. 9. DATE OF DESPATCH OF THE ORDER