Smt. Samtaben R. Manglani, Godhra V. The Deputy Commissioner of Income Tax, Central Circle-1, Baroda

ITSSA 258/AHD/2017

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 4123 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 8 month(s) 15 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 18-02-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 21-11-2019
• Assessment Year: 2011-2012
• Appeal Filed On: 02-06-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: L P JAIN
• Assessee Lawyers: AMAN SHAH
• Keywords: Document seized; Initiation of penalty proceedings; Documents seized; Set aside
• Section: 143(3); 153A; 153; 153C; 132; 139

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD C BENCH (BEFORE SHRI PRADIP KUMAR KEDIA, ACCOUNTANT MEMBER & SHRI MAHAVIR PRASAD, JUDICIAL MEMBER) IT(SS)A. NOS: 258 & 259/AHD/2017 (ASSESSMENT YEAR: 2011-12) 1. SAMTABEN R. MANGLANI 1215/1, OPPOSITE SWAMINARAYAN COMPLEX BANROLI ROAD, ROAD, GODHRA-389001 PAN NO. APFPM0619B & 2. LAJWANTIBEN M. MANGLANI 1215/1, SWAMINARAYAN COMPLEX BANROLI ROAD, ROAD, GODHRA-389001 PAN NO. ADFPM4822J V/S THE DEPUTY COMMISSIONER OF INCOME TAX CENTRAL CIRCLE-1, BARODA (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI KETAN SHAH AND AMAN SHAH, AR RESPONDENT BY : SHRI L.P. JAIN, SR. D.R. ( )/ ORDER DATE OF HEARING : 21 -11-201 9 DATE OF PRONOUNCEMENT : 18 -02-2020 PER MAHAVIR PRASAD, JUDICIAL MEMBER 1. THESE TWO APPEALS FILED BY THE ASSESSEE ARE DIRECTE D AGAINST THE ORDER OF THE LD. CIT(A). SINCE THE DISPUTE IN BOTH THE APPEALS ARE C OMMON EXCEPT THE PENALTY AMOUNT IT(SS)A NOS. 258 & 259/AHD/2017 . A.Y. 2011-12 2 THEREFORE FOR THE SAKE OF BREVITY, WE WOULD LIKE TO DISPOSE OF ALL APPEALS TOGETHER. THE ASSESSEE HAS TAKEN FOLLOWING GROUNDS OF APPEAL: 1.0 ORDER PASSED UNDER SECTION 271 (1) (C) IS BAD IN LAW . 1.01 ON THE FACTS AND CIRCUMSTANCES OF APPELLANT' S CASE AND IN LAW, THE ID. CIT (APPEAL) HAS ERRED TO APPRECIATE THE INITIATION OF PENALTY P ROCEEDINGS IS BAD IN LAW AS IT WAS SILENT ON WHETHER IT IS CONCEALMENT OF INCOME OR FURNISHIN G OF INACCURATE PARTICULARS OF INCOME AS BOTH CAN NOT EXIST AT THE SAME TIME. 1.02 YOUR APPELLANT THEREFORE PRAYS YOUR HONOUR TO HOLD SO NOW AND TREAT THE PENALTY PROCEEDINGS AS BAD IN LAW. 2.00 IMPOSITION OF PENLATY TO THE TUNE OF RS. 7, 54,231/-ON ADDITION MADE ON ACCOUNT OF UNDISCLOSED INCOME. 2.01 ON THE FACTS AND CIRCUMSTANCES OF APPELLANT' S CASE AND IN LAW, THE ID. CIT (APPEALS) HAS ERRED IN CONFIRMING THE LEVY OF PENALTY TO THE TUNE OF RS. 7,54,231 /- UNDER SECTION 271 (1)( C) OF THE ACT BY THE ID. AO ON ADDITION MA DE ON ACCOUNT OF DISCLOSURE OF ADDITIONAL INCOME WHILE FILING RETURN AS PART OF SE ARCH PROCEEDINGS. WHILE DOING SO, THE ID. CIT (APPEALS) FAILED TO APP RECIATE THAT THERE WAS NO ADDITION MADE BY THE ID. AO DURING THE COURSE OF ASSESSMENT PROCEEDINGS U/S 143(3) R.W.S 153A OF THE ACT TO THE RETURNED INCOME UNDER SECTION 153 A OF THE ACT, AND THEREFORE APPELLANT CANNOT BE TREATED TO BE ASSESSEE CONCEALING INCOME. 2.02 YOUR APPELLANT PRAYS TO HOLD SO NOW AND DELETE THE IMPUGNED PENALTY. 2. FACTS OF THE CASE AS EMANATED FROM THE PENALTY ORDER : AN ACTION U/S. 132 WAS CARRIED OUT ON DHANJI MAMA GROUP OF BARODA ON 3/7/2012, WHICH ALSO INCLUDED THE ASSESSEE-APPELLANT. IT HAS BEEN NOTED BY THE AO THAT THERE IS UPWARD REVISION IN THE INCOME DISCLOSED U/S 153A VI S-A-VIS THAT U/S 139 AND THE RETURNED INCOME INCLUDES ADDITIONAL INCOME DISCLOSED U/S 132 (4) NOT RECORDED IN REGULAR BOOKS OF ACCOUNTS. THE RETURN FILED U/S 153A INCLUDED 'UNDIS CLOSED INCOME' NOT HITHERTO DISCLOSED U/S 139, TO THE TUNE OF RS.25,65,316/-. THE AO INIT IATED THE PENALTY PROCEEDINGS WHILE FRAMING THE ASSESSMENTS U/S 153A (AND WHILE ADOPTIN G THE RETURNED INCOME) BY OBSERVING THAT THE ADDITIONAL INCOME DISCLOSED DURI NG THE COURSE OF SEARCH U/S 132(4) AND FURTHER HONOURED BY THE APPELLANT IN RETURNS U/ S 153A FOR THE RELEVANT YEARS WAS NOT DISCLOSED IN THE ORIGINAL RETURNS FILED U/S 139 OR RECORDED IN THE REGULAR BOOKS OF ACCOUNTS. THE LD, AO FURTHER CALLED UPON THE APPELL ANT VIDE NOTICE DATED 14/5/2015 TO SHOW CAUSE AS TO WHY PENALTY SHOULD NOT BE LEVIED. THE SUBMISSION DATED 16/6/2015 MADE BY THE APPELLANT HAS BEEN REPRODUCED BY THE AO ON PAGES 2-6 OF THE PENALTY ORDER. THE MAIN SUBMISSION OF THE APPELLANT BEFORE THE AO WAS THAT THE INCOME RETURNED U/S 153A HAS BEEN ACCEPTED IN ORDER U/S 143(3) R.W.S. 1 53A AND THEREFORE, THERE IS NO CASE IT(SS)A NOS. 258 & 259/AHD/2017 . A.Y. 2011-12 3 FOR LEVY OF PENALTY U/S 271(L)(C). -THE APPELLANT A LSO SUBMITTED THAT INITIATION OF PENALTY PROCEEDINGS IS BAD IN LAW AND IN VIOLATION OF LAW A S LAID DOWN IN SORATHIA ENGINEERING CO. 282 ITR 642 (GUJ) AS THE NOTICE DID NOT SPECIFY WHE THER THE APPELLANT IS CHARGED WITH CONCEALMENT OF PARTICULARS OF INCOME OR WITH FURNIS HING OF INACCURATE PARTICULARS OF INCOME. THE APPELLANT RELIED HEAVILY ON THE FACTS T HAT THE AO HAS MERELY ACCEPTED THE INCOME RETURNED U/S.LSSA, HAS NOT, WHILE INITIATING PENAL PROCEEDINGS, RELIED ON ANY SEIZED ASSETS/DOCUMENTS, LEVY OF PENALTY IS NOT AUT OMATIC, AND THAT RELIANCE MERELY ON STATEMENT U/S 132(4) MAY POSSIBLY JUSTIFY ADDITION BUT CANNOT JUSTIFY LEVY OF PENALTY. THE APPELLANT ALSO RELIED ON VARIOUS AUTHORITIES AS PER PAGE 4 TO 6 OF THE PENALTY ORDER TO ARGUE, THAT NO PENALTY U/S 271(L)(C) IS LEVIABLE ON INCOME ALREADY DISCLOSED IN RETURN U/S 153A. THE AO HAS, AFTER MINUTELY ANALYZING THE FACT S AND THE PROVISIONS OF EXPLANATION 5A TO SECTION 271(L)(C), OBSERVED THAT THE ADDITION AL INCOME DISCLOSED IN RETURNS FILED U/S 153A ON THE BASIS OF AND ON ACCOUNT OF INCRIMINATIN G SEIZED DOCUMENTS/ SEIZED ASSETS EVIDENCING UNDISCLOSED INCOME NOT HITHERTO DISCLOSE D IN EARLIER RETURNS FILED U/S 139 CLEARLY ATTRACTS LEVY OF PENALTY U/S 271(L}(C) READ WITH EXPLANATION 5A, THE AO HAS SUMMED UP THE ISSUE IN PARA 5-6 OF THE PENALTY ORDE R, AND HELD THAT ON FACTS, EXPLANATION 5A TO SECTION 271(L)(C) IS APPLICABLE A ND THEREFORE, HE HAS LEVIED THE MINIMUM PENALTY AT 100% OF THE TAX SOUGHT TO BE EVA DED AMOUNTING TO RS.7,54,231/-. 3. AGAINST THE IMPOSITION OF PENALTY, ASSESSEE PREFERR ED FIRST STATUTORY APPEAL BEFORE THE LD. CIT(A) WHO CONFIRMED THE ACTION OF THE LD. A.O. 4. NOW ASSESSEE HAS COME BEFORE US. 5. IN THIS CASE, A SEARCH /SURVEY U/S 132/133A WAS CON DUCTED IN THE DHANJIMAMA GROUP OF CASES ON 03.07.2012. IN THE SEARCH/SURVEY P ROCEEDINGS, BASED ON DOCUMENTS FOUND, THE PARTNER OF THE ASSESSEE FIRM ON BEHALF OF THE FIRM HAS DISCLOSED AN AMOUNT OF RS. 07,54,231/- FOR THE YEAR UNDER CONS IDERATION. 6. THE REVENUE CONTENTION IS THAT THE DISCLOSURE OF RS . 07,54,231/-WAS MADE DUE TO SEARCH AND SURVEY AT THE PREMISES OF DHANJIMAMA GROUP W ERE ASSESSEE IS PARTNER OF THE FIRM. IT(SS)A NOS. 258 & 259/AHD/2017 . A.Y. 2011-12 4 7. ON THE OTHER HAND, LD. A.R. CONTENTION IS THAT NO S EARCH AND SURVEY HAS TAKEN PLACE AT THE PREMISES OF THE ASSESSEE AND ASSESSEE HAS VOLUNT ARILY DISCLOSED THE INCOME OF THE DEPARTMENT. THUS, IN SUCH CASE, PENALTY CANNOT BE IMP OSED. 8. AND FURTHER STATED THAT IN A RECENT DECISION OF SUP REME COURT IN THE CASE OF RAJKUMAR GULAB BADGUJAR 111 TAXMANN.COM 257 WHEREIN IT IS HELD THAT WHEREIN THE RETURNED INCOME HAS BEEN ACCEPTED U/S 153C AND THER EFORE, IT IS HELD THAT IN SUCH CASE, PENALTY CANNOT BE IMPOSED. 9. LD. A.R. ALSO CITED AN ORDER OF CO-ORDINATE BENCH I N THE MATTER OF PARAG V. CHUGH VS. DCIT IN ITA NOS. 581 TO 586/AHD/2018 WHEREIN IN SIMILAR FACTS AND CIRCUMSTANCES OF THE CASE ITAT HAS DECIDED THE MATTE R IN FAVOUR OF THE ASSESSEE WITH FOLLOWING OBSERVATION: 17. THE ASSESSEE HAS DISCLOSED ADDITIONAL INCOME OF 6,34,172.00 IN PURSUANCE TO THE RETURN FILED UNDER SECTION 153A OF THE ACT. THE AO ACCORDINGLY ON SUCH ADDITIONAL INCOME DISCLOSED BY THE ASSESSEE LEVIED THE PENALTY AT THE RATE OF 10% OF ADDITIONAL INCOME BEING 63,417.00 UNDER THE PROVISIONS OF SECTION 271 AAB OF THE ACT. THE LEARNED CIT (A) ALSO CONFIRMED THE ORDER OF THE AO. BEING AGGRIEVED BY THE ORDER OF THE LEARNED CIT (A) , THE ASSESSEE IS IN APPEAL BEFORE US. 18. THE LEARNED AR BEFORE US SUBMITTED THAT THERE W AS NO UNDISCLOSED INCOME AVAILABLE TO THE ASSESSEE WITHIN THE MEANING OF EXPLANATION ( C) TO SECTION 271 AAB OF THE ACT. THEREFORE, THERE CANNOT BE ANY PENALTY. 19. ON THE OTHER HAND, THE LEARNED DR VEHEMENTLY SU PPORTED THE ORDER OF THE AUTHORITIES BELOW. 20. WE HAVE HEARD THE RIVAL CONTENTIONS OF BOTH THE PARTIES AND PERUSED THE MATERIALS AVAILABLE ON RECORD. AT THE OUTSET WE NOTE THAT THE EXPLANATION TO SECTION 271AAB OF THE ACT HAS A DIRECT BEARING ON THE ON THE ISSUE ON HAND WHICH READS AS UNDER: '48[PENALTY WHERE SEARCH HAS BEEN INITIATED. 271AAB. (1) THE ASSESSING OFFICER MAY, NOTWITHSTAND ING ANYTHING CONTAINED IN ANY OTHER PROVISIONS OF THIS ACT, DIRECT THAT, IN A CASE WHERE SEARCH HAS BEEN INITIATED UNDER SECTION 132 ON OR AFTER THE 1ST DAY OF JULY, 2012 49[BUT BEFORE THE IT(SS)A NOS. 258 & 259/AHD/2017 . A.Y. 2011-12 5 DATE ON WHICH THE TAXATION LAWS (SECOND AMENDMENT) BILL, 2016 RECEIVES THE ASSENT OF THE PRESIDENT50], THE ASSESSEE SHALL PAY BY WAY OF PENALTY, IN ADDITION TO TAX, IF ANY, PAYABLE BY HIM,-- XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX (C) 'UNDISCLOSED INCOME' MEANS-- (I) ANY INCOME OF THE SPECIFIED PREVIOUS YEAR REPRE SENTED, EITHER WHOLLY OR PARTLY, BY ANY MONEY, BULLION, JEWELLERY OR OTHER VALUABLE ARTICLE OR THING OR ANY ENTRY IN THE BOOKS OF ACCOUNT OR OTHER DOCUMENTS OR TRANSACT IONS FOUND IN THE COURSE OF A SEARCH UNDER SECTION 132, WHICH HAS-- (A) NOT BEEN RECORDED ON OR BEFORE THE DATE OF SEAR CH IN THE BOOKS OF ACCOUNT OR OTHER DOCUMENTS MAINTAINED IN THE NORMAL COURSE REL ATING TO SUCH PREVIOUS YEAR; OR (B) OTHERWISE NOT BEEN DISCLOSED TO THE 54[PRINC IPAL CHIEF COMMISSIONER OR] CHIEF COMMISSIONER OR 54[PRINCIPAL COMMISSIONER OR] COMMISSIONER BEFORE THE DATE OF SEARCH; OR (II) ANY INCOME OF THE SPECIFIED PREVIOUS YEAR REPR ESENTED, EITHER WHOLLY OR PARTLY, BY ANY ENTRY IN RESPECT OF AN EXPENSE RECORDED IN T HE BOOKS OF ACCOUNT OR OTHER DOCUMENTS MAINTAINED IN THE NORMAL COURSE RELATING TO THE SPECIFIED PREVIOUS YEAR WHICH IS FOUND TO BE FALSE AND WOULD NOT HAVE BEEN FOUND TO BE SO HAD THE SEARCH NOT BEEN CONDUCTED.]' FROM THE ABOVE PROVISION, IT IS CLEAR THAT THE PENA LTY SHALL BE IMPOSED UNDER SECTION 271AAB OF THE ACT WHERE THERE IS UNDISCLOSED INCOME WITHIN THE MEANING OF THE EXPLANATION TO 271AAB OF THE ACT. HOWEVER, WE NOT E THAT THERE WAS NO DOCUMENTARY EVIDENCE FOUND BY THE SEARCH TEAM SUGGESTING THAT T HERE WAS ANY UNDISCLOSED INCOME OF THE ASSESSEE. AS SUCH THE INCOME DISCLOSED BY THE A SSESSEE WAS VOLUNTARILY WITHOUT HAVING FOUND ANY DOCUMENT IN THE COURSE OF SEARCH. WE ALSO NOTE THAT THERE NO REFERENCE MADE BY THE AUTHORITIES BELOW TO THE DOCU MENTS OF INCRIMINATING NATURE HAVING BEARING ON THE INCOME OF THE ASSESSEE IN THE IR RESPECTIVE ORDERS. THE LD. DR HAS NOT ADVANCED ANY ARGUMENTS AGAINST THE CONTENTIONS RAISED BY THE LD. AR FOR THE ASSESSEE. IN HOLDING SO WE DRAW SUPPORT AND GUIDANC E FROM THE ORDER OF THE TRIBUNAL IN THE CASE OF ACIT VS. MARVEL ASSOCIATES REPORTED IN 170 ITD 353 WHEREIN IT WAS HELD AS UNDER: '9. PENALTY U/S 271AAB ATTRACTS ON UNDISCLOSED INCO ME BUT NOT ON ADMISSION MADE BY THE ASSESSEE U/S 132(4). THE AO MUST ESTABL ISH THAT THERE IS UNDISCLOSED INCOME ON THE BASIS OF INCRIMINATING MATERIAL. IN T HE INSTANT CASE A LOOSE SHEET WAS FOUND ACCORDING TO THE A.O., IT WAS INCRIMINATI NG MATERIAL EVIDENCING THE UNDISCLOSED INCOME. IN THE PENALTY ORDER THE AO OBS ERVED THAT LOOSE SHEET SHOWS THE COST PER SQUARE FEET IS RS.3571/- PER SFT. AND ASSESSEE STATED TO HAVE SUBMITTED IN SWORN STATEMENT COST PER SQ. FEET AT R S.2200/- TO RS.2300/- PER SQ. FEET. HOWEVER NEITHER THE AO NOR THE LD.CIT(A) HAS VERIFIED THE COST OF CONSTRUCTION WITH THE BOOKS AND PROJECTIONS FOUND A T THE TIME OF SEARCH. THE COUNSEL ARGUED THAT IT WAS MERE PROJECTION BUT NOT THE ACTUALS. THE WRITE UP IT(SS)A NOS. 258 & 259/AHD/2017 . A.Y. 2011-12 6 HEADING ALSO MENTIONED THAT SUMMARY OF THE PROJECTE D PROFITABILITY STATEMENT. THERE IS NO EVIDENCE TO ESTABLISH THAT PROJECTIONS REFLECTED IN THE LOOSE SHEET IS REAL. NO OTHER MATERIAL WAS FOUND DURING THE COURSE OF SEARCH INDICATING THE UNDISCLOSED INCOME. THERE WAS NO MONEY, BULLION, JE WELLERY OR VALUABLE ARTICLE OR THING OR ENTRY IN THE BOOKS OF ACCOUNTS OR DOCUMENT S TRANSACTIONS WERE FOUND DURING THE COURSE OF SEARCH INDICATING THE ASSETS N OT RECORDED IN THE BOOKS OF ACCOUNTS OR OTHER DOCUMENTS MAINTAINED IN THE NORMA L COURSE, WHOLLY OR PARTLY. THE REVENUE DID NOT FIND ANY UNDISCLOSED ASSET, ANY OTHER UNDISCLOSED INCOME OR THE INFLATION OF EXPENDITURE DURING THE SEARCH/ ASS ESSMENT PROCEEDINGS. THOUGH A LOOSE SHEET OF PAGE NO.107 OF ANNEXURE A/GS/MA/1 WAS FOUND THAT DOES NOT INDICATE ANY SUPPRESSION OF INCOME BUT IT IS ONLY P ROJECTION OF PROFIT STATEMENT. THE AMOUNT OF RS.3571/- MENTIONED IN THE PROJECTION S REFERS TO COST AND PROFIT WHICH IS APPROXIMATE SALE PRICE BUT NOT THE COST AS STATED BY THE AO IN THE PENALTY ORDER. THE COST OF CONSTRUCTION IN THE PROJ ECTIONS PROJECTED AT RS.2177/- WHICH IS IN SYNCH WITH THE STATEMENT GIVEN BY THE A SSESSEE. THE AO WAS HAPPY WITH THE DISCLOSURE GIVEN BY THE ASSESSEE AND DID N OT VERIFY THE FACTUAL POSITION WITH THE BOOKS OF ACCOUNTS AND PROJECTIONS AND BRIN G THE EVIDENCE TO UNEARTH THE UNDISCLOSED INCOME. NEITHER THE A.O. NOR THE IN VESTIGATION WING LINKED THE COST OF PROFIT OR COST OF ASSET TO THE ENTRIES IN T HE BOOKS OF ACCOUNTS OR TO THE SALES CONDUCTED BY THE ASSESSEE TO THE SALE DEEDS. THEREFORE, WE ARE UNABLE TO ACCEPT THE CONTENTION OF THE REVENUE THAT THE LOOSE SHEET FOUND DURING THE COURSE OF SEARCH INDICATES ANY UNDISCLOSED INCOME O R ASSET OR INFLATION OF EXPENDITURE. THE HON'BLE ITAT DELHI BENCH IN THE CA SE OF AJAY SHARMA V. DY.CIT [2013] 30 TAXMANN.COM 109 HELD THAT WITH RESPECT TO THE ADDITION ON ACCOUNT OF ALLEGED RECEIVABLES AS PER SEIZED PAPER, THERE IS N O DIRECT MATERIAL WHICH LEADS AND ESTABLISHES THAT ANY INCOME RECEIVED BY THE ASS ESSEE HAS NOT BEEN DECLARED BY THE ASSESSEE. AN ADDITION HAS BEEN MADE ON THE B ASIS OF LOOSE DOCUMENT, WHICH DID NOT CLOSELY PROVE ANY CONCEALMENT OR FURN ISHING OF INACCURATE PARTICULARS BY THE ASSESSEE. HENCE PENALTY U/S 158B FA (2) OF THE ACT IS NOT LEVIABLE. THE FACTS OF THE ASSESSEE'S CASE SHOWS TH AT THERE WAS NO UNDISCLOSED INCOME FOUND DURING THE COURSE OF SEARCH AND NO INC RIMINATING MATERIAL WAS FOUND, HENCE WE HOLD THAT THERE IS NO CASE FOR IMPO SING PENALTY U/S 271AAB OF THE ACT, ACCORDINGLY, WE SET ASIDE THE ORDER OF THE LOWER AUTHORITIES AND CANCEL THE PENALTY U/S 271AAB OF THE ACT.' IN VIEW OF THE ABOVE, WE ARE NOT CONVINCED WITH THE PENALTY LEVIED BY THE AUTHORITIES BELOW. HENCE WE REVERSE THE ORDER OF THE AUTHORITIE S BELOW AND DIRECT THE AO TO DELETE THE PENALTY LEVIED BY HIM UNDER SECTION 271 AAB OF THE ACT. HENCE THE GROUND OF APPEAL OF THE ASSESSEE IS ALLOWED. 21. IN THE RESULT THE APPEAL OF THE ASSESSEE IS ALL OWED. IT(SS)A NOS. 258 & 259/AHD/2017 . A.Y. 2011-12 7 22. IN THE COMBINED RESULT, ALL THE SIX APPEALS FIL ED BY THE ASSESSEE ARE ALLOWED. 10. RESPECTFULLY FOLLOWING THE JUDGMENT OF HONBLE SUPRE ME COURT AND IN PARITY WITH THE CO-ORDINATE BENCH OF ITAT, WE ALLOW THE APPEAL OF T HE ASSESSEE. 11. NOW WE COME TO IT(SS)A NO. 259/AHD/2017 FOR A.Y. 2011-1 2, ASSESSEE HAS TAKEN FOLLOWING GROUNDS OF APPEAL: 1.0 ORDER PASSED UNDER SECTION 271 (1) (C) IS BAD IN LAW. 1.01 ON THE FACTS AND CIRCUMSTANCES OF APPELLANT' S CASE AND IN LAW, THE ID. CIT (APPEAL) HAS ERRED TO APPRECIATE THE INITIATION OF PENALTY PROCEEDINGS IS BAD IN LAW AS IT WAS SILENT ON WHETHER IT IS CONCEALMENT O F INCOME OR FURNISHING OF INACCURATE PARTICULARS OF INCOME AS BOTH CAN NOT EX IST AT THE SAME TIME. 1.02 YOUR APPELLANT THEREFORE PRAYS YOUR HONOUR TO HOLD SO NOW AND TREAT THE PENALTY PROCEEDINGS AS BAD IN LAW. 2.00 IMPOSITION OF PENLATY TO THE TUNE OF RS. 14 , 43,411/-ON ADDITION MADE ON ACCOUNT OF UNDISCLOSED INCOME. 2.01 ON THE FACTS AND CIRCUMSTANCES OF APPELLANT' S CASE AND IN LAW, THE ID. CIT (APPEALS) HAS ERRED IN CONFIRMING THE LEVY OF PENAL TY TO THE TUNE OF RS. 14,43,411 /- UNDER SECTION 271 (1)( C) OF THE ACT BY THE ID. AO ON ADDITION MADE ON ACCOUNT OF DISCLOSURE OF ADDITIONAL INCOME WHILE FILING RET URN AS PART OF SEARCH PROCEEDINGS. WHILE DOING SO, THE ID. CIT (APPEALS) FAILED TO APP RECIATE THAT THERE WAS NO ADDITION MADE BY THE ID. AO DURING THE COURSE OF AS SESSMENT PROCEEDINGS U/S 143(3) R.W.S 153A OF THE ACT TO THE RETURNED INCOME UNDER SECTION 153A OF THE ACT, AND THEREFORE APPELLANT CANNOT BE TREATED TO B E ASSESSEE CONCEALING INCOME. WHILE DOING SO, THE LD. CIT(A) HAS ERRED IN TREATIN G APPELLANT AS RELYING ON DECISION OF KIRIT DAHYABHAI OF THE JURISDICTIONAL H IGH COURT THOUGH THAT WAS NOT THE CASE. 2.02 YOUR APPELLANT PRAYS TO HOLD SO NOW AND DELETE THE IMPUGNED PENALTY. 12. SINCE ON SIMILAR FACTS AND CIRCUMSTANCES OF THE CASE , WE HAVE GIVEN RELIEF TO THE ASSESSEE IN CONNECTED IT(SS)A NO. 258/AHD/2017. THUS , IN PARITY WITH THE SAID APPEAL, WE ALLOW THE APPEAL OF THE ASSESSEE. IT(SS)A NOS. 258 & 259/AHD/2017 . A.Y. 2011-12 8 13. IN THE RESULT, BOTH THE APPEALS OF THE ASSESSEES AR E ALLOWED AND WE DIRECT THE A.O. TO DELETE THE PENALTY. ORDER PRONOUNCED IN OPEN COURT ON 18 - 02- 2020 SD/- SD/- (PRADIP KUMAR KEDIA) (MAHAVIR PRASAD) ACCOUNTANT MEMBER TRUE COPY JUDICIAL MEMBER AHMEDABAD: DATED 18/02/2020 RAJESH COPY OF THE ORDER FORWARDED TO: - 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT (APPEALS) 4. THE CIT CONCERNED. 5. THE DR., ITAT, AHMEDABAD. 6. GUARD FILE. BY ORDER DEPUTY/ASSTT.REGISTRAR ITAT,AHME DABAD