Shri Arvindbhai V. Bhanusali, Kheda V. The ACIT, Cent. Circle -1(4), Ahmedabad

ITSSA 271/AHD/2013

• Counselvise Citation: [2017] 122 COUNSELVISE.COM (IT) 3168 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 8 month(s) 21 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 06-04-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 29-03-2017
• Assessment Year: 2005-2006
• Appeal Filed On: 16-07-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: BHAVESH SHAH
• Keywords: Income from undisclosed sources; Retraction; Documents seized
• Section: 153A; 234B; 27; 132; 139

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL, B BENCH, AHMEDABAD BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER AND SHRI MANISH BORAD, ACCOUNTANT MEMBER IT(SS)A NO.271 TO 273/AHD/2013 )* + ,-+/ ASSTT. YEAR: 2005-06, 2008-09 AND 2009-10 ARVINDBHAI V. BHANSUSALI 111C, PUNIT PARK SOCIETY OPP: NEW POLICE LINE MAHEMDABAD DIST. KHEDA. PAN : ACBPB 9180 D VS. ACIT, CENT.CIR.1(4) AHMEDABAD. ( APPLICANT ) ( RESPONENT ) ASSESSEE BY : SHRI BHAVESH SHAH, AR REVENUE BY : SHRI JAMES KURIAN, SR.DR / DATE OF HEARING : 29/03/2017 / DATE OF PRONOUNCEMENT: 06 /04/2017 78/ O R D E R PER RAJPAL YADAV, JUDICIAL MEMBER: PRESENT THREE APPEALS ARE DIRECTED AT THE INSTANCE OF THE ASSESSEE AGAINST THE ORDERS OF THE LD.CIT(A)-I, AHMEDABAD DATED 2.5. 2013 PASSED FOR THE ASSTT.YEARS 2005-06, 2008-09 AND 2009-10 RESPECTIVE LY. SINCE COMMON ISSUE IS INVOLVED IN ALL THESE APPEALS, THEY ARE DISPOSED OF BY THIS COMMON ORDER. 2. SOLE GRIEVANCE OF THE ASSESSEE IS THAT THE LD.CI T(A) HAS ERRED IN CONFIRMING PENALTY IMPOSED UNDER SECTION 271(1)(C) OF THE INCOME TAX ACT FOR EACH ASSESSMENT YEAR. IT(SS)A NO.271/AHD/2013 & 2 OTHERS 2 3. BRIEF FACTS OF THE CASE ARE THAT SEARCH AND SEIZ URE OPERATION WAS CARRIED OUT AT THE PREMISES OF THE ASSESSEE ON 4.3.2010. A NOTICE UNDER SECTION 153A WAS ISSUED ON 7.10.2010 AND SERVED UPON THE ASSESSE E. IN RESPONSE TO THE NOTICE, THE ASSESSEE HAS FILED RETURN ON 17.11.2011 IN ALL THESE ASSESSMENT YEARS. THE LD.AO HAS PASSED ASSESSMENT ORDER ON 26 .12.2011. HE INITIATED PENALTY PROCEEDINGS UNDER SECTION 271(1)(C) OF THE INCOME TAX ACT AGAINST THE ASSESSEE IN THESE THREE ASSESSMENT YEARS. IN O RDER TO BUTTRESS THE FACTS OF THE CASE IN MORE SCIENTIFICALLY, WE WOULD LIKE TO T AKE NOTE OF THE DETAILS SUBMITTED BY THE ASSESSEE IN TABULAR FORM EXHIBITIN G ORIGINAL RETURNED INCOME, RETURNED INCOME AS PER RETURN FILED IN RESPONSE TO NOTICE U/S.153A, ASSESSED INCOME AS PER ORDER U/S.143(3) R.W.S 153A, DIFFEREN CE BETWEEN RETURNED FILED U/S.15A AND ASSESSED INCOME, DIFFERENT BETWEEN ORIG INAL RETURNED INCOME AND ASSESSED INCOME AND PENALTY AMOUNT UNDER SECTION 27 1(1)(C) FOR EACH ASSESSMENT YEAR: A.Y. ORIGINAL RETURNED INCOME RETURNED INCOME AS PER RETURN FILED IN RESPONSE TO NOTICE U/S.153A ASSESSED INCOME AS PER ORDER PASSED U/S.143(3) R.W.S. 153A DIFFERENCE BETWEEN RETURN FILED U/S.153A AND ASSESSED INCOME DIFFERENCE BETWEEN ORIGINAL RETURNED INCOME AND ASSESSED INCOME PENALTY U/S.271(1)(C) OF THE ACT. 2005-06 90,353 10,32,883 10,32,883 NIL 9,42,530 2,7 6,794 2008-09 1,85,967 4,91,347 4,91,347 NIL 3,05,380 85, 211 2009-10 5,78,937 6,88,003 6,88,003 NIL 1,09,066 32, 730 4. BEFORE ADVERTING TO THE PROPOSITION, WHETHER THE ASSESSEE DESERVES TO BE VISITED WITH PENALTY UNDER SECTION 271(1)(C) OF THE ACT OR NOT, WE WOULD LIKE TO TAKE NOTE OF THE FINDING RECORDED BY THE AO IN T HE ASSESSMENT YEAR 2005-06 AS UNDER. FACTS ARE SIMILAR IN ALL OTHER YEARS: 4. DISCLOSURE BY THE ASSESSEE DURING THE YEAR THE ASSESSEE HAS MADE DISCLOSURE ON ACCOUNT OF UNACCOUNTED RECEIPT AMOUNTING TO RS.9,42,530/- IN H IS RETURN OF INCOME IT(SS)A NO.271/AHD/2013 & 2 OTHERS 3 FILED IN RESPONSE TO THE NOTICE U/S.153A OF THE INC OME TAX ACT AND PAID TAX THEREON. ACCORDINGLY, PENALTY PROCEEDINGS UNDE R SECTION 271(1) EXPLANATION 5A OF THE INCOME TAX ACT, 1961 ARE INIT IATED ON NOW DISCLOSED INCOME IN THE RETURN OF INCOME FOR THE YE AR UNDER CONSIDERATION. 5. IN VIEW OF THE DISCUSSION WITH THE AR OF THE ASS ESSEE AND DATA MADE AVAILABLE ON RECORD THE TOTAL INCOME OF T HE ASSESSEE IS ASSESSED AS UNDER: TOTAL INCOME AS PER RETURN OF INCOME RS.10,32,883/ - ASSESSED INCOME RS.10,32,883/- THIS ORDER IS PASSED AFTER OBTAINING APPROVAL OF A DDL. CIT, CR- 1, AHMEDABAD VIDE LETTER NO.ADDL.CIT.CR-1/AHD/APPRO VAL U/S.153D/2011-12 DATED 26.12.2011. 5. WITH THE ASSISTANCE OF THE LD.REPRESENTATIVES, W E HAVE GONE THROUGH THE RECORD. THE LD.REVENUE AUTHORITIES FOR CONSTRUING THE ADDITIONAL INCOME DECLARED BY THE ASSESSEE IN RESPONSE TO THE NOTICE UNDER SECTION 153A AS CONCEALED INCOME, HAS FORMED THE BELIEF ON THE BASI S OF EXPLANATION 5(A) APPENDED TO SECTION 271(1)(C) OF THE ACT. REVENUE AUTHORITIES ARE OF THE OPINION THAT SINCE THE ASSESSEE HAS NOT DISCLOSED A DDITIONAL INCOME IN THE ORIGINAL RETURN, MEANING THEREBY, IT IS TO BE ASSUM ED THAT HE HAS DISCLOSED THIS AMOUNT ONLY WHEN SOME INCRIMINATING MATERIAL WAS FO UND, AND THEREFORE THE DEEMING FICTION PROVIDED IN EXPLANATION 5A SHOULD DESERVE TO BE USED AGAINST THE ASSESSEE. TO OUR MIND THIS ASSUMPTION OUGHT TO BE SUPPORTED WITH REFERENCE OF THAT INCRIMINATING MATERIAL. A PERUSA L OF THE ASSESSMENT ORDER WOULD INDICATE THAT NO REFERENCE TO THE SEIZED MATE RIAL IS BEING MADE QUA INCOME DECLARED BY THE ASSESSEE IN THE RETURN FILED UNDER SECTION 153A. WE ARE OF THE VIEW THAT THIS INCOME SHOULD BE REPRESEN TED WITH SOME ASSETS, BULLION, MONEY, JEWELLERY OR ANY ENTRY WHICH HAS UN EARTHED THIS INCOME. BUT NO SUCH THING HAS BEEN EMERGING OUT. THIS ASPECT H AS BEEN CONSIDERED IN THE ORDER OF THE ITAT REPORTED IN THE CASE OF SHRI MANS UKHBHAI R. SORATHIA AND IT(SS)A NO.271/AHD/2013 & 2 OTHERS 4 OTHERS VS. JCIT, RAJKOT IN IT(SS)A.NO.46/RJT/2012 A ND OTHERS. THE DISCUSSION MADE BY THE TRIBUNAL READS AS UNDER: 7. THE LD. COUNSEL FOR THE ASSESSEE RELIED UPON THE JUDGMENT OF THE HONBLE GUJARAT HIGH COURT IN INCOME TAX APPEAL NO. 1181 TO 1185 OF 2010 IN THE CASE OF KIRIT DAYABHAI PATEL VS. ACIT. COPY OF THIS DECISION HAS BEEN PLACED ON THE RECORD. THE HONBLE COURT W HILE CONSTRUING THE MEANING OF EXPLANATION 5 HAS PUT RELIANCE UPON THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE OF ACIT VS. GEBIL AL KANBHAIALAL (HUF), 348 ITR 561 (SC). ACCORDING TO THIS DECISIO N, THE EXPLANATION 5 IS DEEMING PROVISION. IT PROVIDES WHERE IN THE COURSE OF SEARCH UNDER SECTION 132, THE ASSESSEE IS FOUND TO BE OWNER OF U NACCOUNTED ASSET AND HE CLAIMS THAT SUCH ASSETS HAVE BEEN ACQUIRED BY HIM B Y UTILIZING WHOLE OR PART OF HIS INCOME FROM ANY PREVIOUS YEAR, WHICH HA S ENDED BEFORE THE DATE OF SEARCH OR WHICH IS TO END ON OR AFTER THE D ATE OF SEARCH, THEN IN SUCH A SITUATION, NOTWITHSTANDING THAT SUCH INCOME IS DECLARED BY HIM IN ANY RETURN OF INCOME FURNISHED ON OR AFTER THE DATE OF SEARCH, HE SHALL BE DEEMED TO HAVE CONCEALED THE PARTICULARS OF HIS INC OME FOR THE PURPOSE OF IMPOSITION OF PENALTY UNDER SECTION 271(1)(C) OF TH E ACT. THE HONBLE COURT, THEREAFTER, PROPOUNDED THAT SUB-CLAUSE (1) A ND (2) EXPLANATION 5 PROVIDES EXCEPTIONS FOR DEEMING THE CONCEALMENT OF PARTICULARS OF INCOME. IN THAT CASE, THE HONBLE COURT WAS DEALING IN SUB- CLAUSE (2) OF EXPLANATION-5 AND OBSERVED THAT IN ORDER TO CLAIM I MMUNITY AS PER SUB- CLAUSE (2), THREE CONDITIONS HAVE TO BE SATISFIED B Y THE ASSESSEE. THESE THREE CONDITIONS ARE (A) THAT THE ASSESSEE HIMSELF MAKES A STATEMENT UNDER SECTION 132(4) OF THE ACT IN THE COURSE OF SEARCH S TATING THAT THE UNACCOUNTED ASSETS AND INCRIMINATING DOCUMENTS FOUN D FROM HIS POSSESSION DURING THE SEARCH HAVE BEEN ACQUIRED OUT OF HIS INCOME WHICH HAS NOT BEEN DISCLOSED IN THE RETURNS OF INCOME TO BE FURNISHED BEFORE THE EXPIRY OF TIME SPECIFIED IN SECTION 139(1); (B) THA T THE ASSESSEE SHOULD SPECIFY IN HIS STATEMENT UNDER SECTION 132(4) OF TH E ACT, THE MANNER IN WHICH THE INCOME STOOD DERIVED, AND (C) THE ASSESSE E HAS TO PAY TAX TOGETHER WITH INTEREST, IF ANY, IN RESPONSE TO SUCH UNDISCLOSED INCOME. ACCORDING TO THE ASSESSEES PRESENT BEFORE US, THEY HAVE MADE VOLUNTARY DISCLOSURE, FILED RETURNS AND PAID TAXES. THEIR EX PLANATION FOR AVAILING THE BENEFIT OF JUDGMENT OF THE HONBLE GUJARAT HIGH COU RT IN THE CASE OF KIRIT DAHYABHAI PATEL (SUPRA) HAS BEEN REJECTED BY THE LD .FIRST APPELLATE AUTHORITY ON THE GROUND THAT THE EXPLANATION 5 IS A PPLICABLE ON THE CASES WHERE THE SEARCH WAS INITIATED ON OR BEFORE THE 1 ST JUNE, 2007. AFTER 1 ST JULY, 2007, THE EXPLANATION 5A TO SUB-SECTION (1) O F SECTION 271(1)(C) HAS BEEN INSERTED VIDE FINANCE ACT, 2007. ALONG WITH T HIS EXPLANATION, SECTION 271AAA HAS ALSO BEEN INSERTED BY FINANCE AC T, 2007. THE EXPLANATION 5A AND SECTION 271AAA READ AS UNDER: IT(SS)A NO.271/AHD/2013 & 2 OTHERS 5 EXPLANATION 5A. WHERE, IN THE COURSE OF A SEARCH INITIATED UNDER SECTION 132 ON OR AFTER THE 1ST DAY OF JUNE, 2007, THE ASSESSEE IS FOUND TO BE THE OWNER OF (I) ANY MONEY, BULLION, JEWELLERY OR OTHER VALUAB LE ARTICLE OR THING (HEREAFTER IN THIS EXPLANATION REFERRED TO AS ASSET S) AND THE ASSESSEE CLAIMS THAT SUCH ASSETS HAVE BEEN ACQUIRED BY HIM B Y UTILISING (WHOLLY OR IN PART) HIS INCOME FOR ANY PREVIOUS YEA R; OR (II) ANY INCOME BASED ON ANY ENTRY IN ANY BOOKS OF ACCOUNT OR OTHER DOCUMENTS OR TRANSACTIONS AND HE CLAIMS THAT SUCH E NTRY IN THE BOOKS OF ACCOUNT OR OTHER DOCUMENTS OR TRANSACTIONS REPRESENTS HIS INCOME (WHOLLY OR IN PART) FOR ANY PREVIOUS YEAR, WHICH HAS ENDED BEFORE THE DATE OF SEARCH AND, (A) WHERE THE RETURN OF INCOME FOR SUCH PREVIOUS Y EAR HAS BEEN FURNISHED BEFORE THE SAID DATE BUT SUCH INCOME HAS NOT BEEN DECLARED THEREIN; OR (B) THE DUE DATE FOR FILING THE RETURN OF INCOME F OR SUCH PREVIOUS YEAR HAS EXPIRED BUT THE ASSESSEE HAS NOT FILED THE RETU RN, 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 HAVE CONCEALED THE PARTI CULARS OF HIS INCOME OR FURNISHED INACCURATE PARTICULARS OF SUCH INCOME. 271AAA. (1) THE ASSESSING OFFICER MAY, NOTWITHSTAND ING ANYTHING CONTAINED IN ANY OTHER PROVISIONS OF THIS ACT, DIRE CT THAT, IN A CASE WHERE SEARCH HAS BEEN INITIATED UNDER SECTION 132ON OR AF TER THE 1ST DAY OF JUNE, 2007 BUT BEFORE THE 1ST DAY OF JULY, 2012, THE ASSE SSEE SHALL PAY BY WAY OF PENALTY, IN ADDITION TO TAX, IF ANY, PAYABLE BY HIM , A SUM COMPUTED AT THE RATE OF TEN PER CENT OF THE UNDISCLOSED INCOME OF T HE SPECIFIED PREVIOUS YEAR. (2) NOTHING CONTAINED IN SUB-SECTION (1) SHALL APPL Y IF THE ASSESSEE, (I) IN THE COURSE OF THE SEARCH, IN A STATEMENT U NDER SUB-SECTION (4) OF SECTION 132, ADMITS THE UNDISCLOSED INCOME AND S PECIFIES THE MANNER IN WHICH SUCH INCOME HAS BEEN DERIVED; (II) SUBSTANTIATES THE MANNER IN WHICH THE UNDISCL OSED INCOME WAS DERIVED; AND (III) PAYS THE TAX, TOGETHER WITH INTEREST, IF ANY, IN RESPECT OF THE UNDISCLOSED INCOME. (3) NO PENALTY UNDER THE PROVISIONS OF CLAUSE (C) O F SUB-SECTION (1) OF SECTION 271 SHALL BE IMPOSED UPON THE ASSESSEE I N RESPECT OF THE UNDISCLOSED INCOME REFERRED TO IN SUB-SECTION (1). IT(SS)A NO.271/AHD/2013 & 2 OTHERS 6 (4) THE PROVISIONS OF SECTIONS 274 AND 275 SHALL, S O FAR AS MAY BE, APPLY IN RELATION TO THE PENALTY REFERRED TO IN THIS SECTION . EXPLANATION.FOR THE PURPOSES OF THIS SECTION, (A) 'UNDISCLOSED INCOME' MEANS (I) ANY INCOME OF THE SPECIFIED PREVIOUS YEAR REP RESENTED, 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 TRANSACTIONS 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 T HE NORMAL COURSE RELATING TO SUCH PREVIOUS YEAR; OR (B) OTHERWISE NOT BEEN DISCLOSED TO THE 87[PRINCIPA L CHIEF COMMISSIONER OR] CHIEF COMMISSIONER OR 87[PRINCIPAL COMMISSIONER OR] COMMISSIONER BEFORE THE DATE OF SEARCH; OR (II) ANY INCOME OF THE SPECIFIED PREVIOUS YEAR REP RESENTED, EITHER WHOLLY OR PARTLY, BY ANY ENTRY IN RESPECT OF AN EXP ENSE RECORDED IN THE BOOKS OF ACCOUNT OR OTHER DOCUMENTS MAINTAIN ED IN THE NORMAL COURSE RELATING TO THE SPECIFIED PREVIOUS YE AR WHICH IS FOUND TO BE FALSE AND WOULD NOT HAVE BEEN FOUND TO BE SO HAD THE SEARCH NOT BEEN CONDUCTED; (B) 'SPECIFIED PREVIOUS YEAR' MEANS THE PREVIOUS Y EAR (I) WHICH HAS ENDED BEFORE THE DATE OF SEARCH, BU T THE DATE OF FILING THE RETURN OF INCOME UNDER SUB-SECTION (1) OF SECTI ON 139 FOR SUCH YEAR HAS NOT EXPIRED BEFORE THE DATE OF SEARCH AND THE ASSESSEE HAS NOT FURNISHED THE RETURN OF INCOME FOR THE PREVIOUS YEAR BEFORE THE SAID DATE; OR (II) IN WHICH SEARCH WAS CONDUCTED. 8. A PERUSAL OF BOTH THESE SECTIONS TOGETHER WOULD INDICATE THAT THE IMMUNITY AKIN TO EXPLANATION 5 IS AVAILABLE TO THE ASSESSEE UNDER EXPLANATION-5A ALSO, IF HE FULFILLS THE CONDITIONS NARRATED IN SECTION 271AAA. THE EXPLANATION APPENDED TO SECTION 271AAA PROVIDES THE DEFINITION OF UNDISCLOSED INCOME AND SPECIFIED PREV IOUS YEAR. A PERUSAL OF THE EXPRESSION SPECIFIED PREVIOUS YEAR WOULD INDI CATE THAT THE YEAR OF SEARCH AND IMMEDIATELY EARLIER YEAR, IF DUE DATE OF FILING OF THE RETURN HAS NOT EXPIRED AND INCOME-TAX RETURN FOR SUCH YEAR HAS NOT BEEN FILED. SINCE THE ASSESSMENT YEARS INVOLVED BEFORE US ARE THE ASS TT.YEARS 2008-09 AND 2009-10, THE DUE DATE FOR FILING OF THE RETURN FOR THE ASSTT.YEAR 2009-10 IT(SS)A NO.271/AHD/2013 & 2 OTHERS 7 WAS EXPIRED BEFORE THE SEARCH ACTION. THUS, BOTH T HESE YEARS DO NOT FALL WITHIN THE AMBIT OF SPECIFIED YEARS. SINCE THE P ERIOD OF THESE TWO ASSESSMENT YEARS DOES NOT FALL WITHIN THE EXPRESSIO N SPECIFIED YEAR PROVIDED IN SECTION 271AAA, THEREFORE, WE DO NOT DE EM IT NECESSARY TO CONSTRUE AND EXPLAIN THE MEANING OF EXPLANATION 5A WITHIN THE SCOPE OF SECTION 271AAA. THE ASSESSEES AS SUCH CANNOT CLAIM IMMUNITY AKIN TO ONE AVAILABLE IN SUB-CLAUSE (1) AND (2) OF THE EXPLANAT ION 5, MORE PARTICULARLY, ON THE STRENGTH OF THE JUDGMENT OF HONBLE GUJARAT HIGH COURT IN THE CASE OF KIRIT DAHYABHAI PATEL (SUPRA). THE LD.FIRST APP ELLATE AUTHORITY HAS DEALT WITH THESE SITUATION IN AN ANALYTICAL MANNER AND IN RIGHT PERSPECTIVE. AS FAR AS THE CONSTRUCTION OF MEANING OF EXPLANATIO N 5A TO SECTION 271AAA BY THE LD.FIRST APPELLATE AUTHORITY IS CONCE RNED, WE DO NOT FIND ANY ERROR. 9. AT THE COST OF REPETITION, WE WOULD LIKE TO OBSE RVE THAT AS PER EXPLANATION 5A, IF IN THE COURSE OF SEARCH INITIATE D UNDER SECTION 132 ON OR AFTER THE 1 ST JUNE, 2007, THE ASSESSEE IS FOUND TO BE OWNER OF A NY MONEY, BULLION, JEWELLERY OR OTHER VALUABLE ARTICLE OR THI NGS AND THE ASSESSEE CLAIMS SUCH ASSETS HAVE BEEN ACQUIRED BY HIM BY UTI LSING THE WHOLE OR PARTLY OF HIS INCOME FROM ANY PREVIOUS YEAR OR ANY INCOME BASED ON ANY ENTRY IN ANY BOOKS OF ACCOUNT OR OTHER DOCUMENTS OR TRANSACTIONS FOUND DURING THE COURSE OF SEARCH, AND THE ASSESSEE CLAIM S THAT SUCH ENTRY IN THE BOOKS OF ACCOUNT OR OTHER DOCUMENTS OR TRANSACTIONS REPRESENTS HIS INCOME FROM ANY PREVIOUS YEAR, WHICH HAS ENDED BEFORE THE DATE OF SEARCH, THEN, NOTWITHSTANDING SUCH INCOME IS DECLARED BY HIM IN A NY RETURN OF INCOME FURNISHED ON OR AFTER THE DATE OF SEARCH, HE SHALL FOR THE PURPOSE OF IMPOSITION OF PENALTY UNDER CLAUSE (C) OF SUB-SECTI ON (1) OF THIS SECTION BE DEEMED TO HAVE BEEN CONCEALED PARTICULARS OF INCOME OR FURNISHED INACCURATE PARTICULARS. THE MOOT QUESTION FOR ATTR ACTING THIS EXPLANATION IS THAT IN THE COURSE OF SEARCH MONEY, BULLION, JEW ELLERY OR INCOME BASED ON ANY ENTRY IN THE BOOKS OF ACCOUNTS OR OTHER DOCU MENTS OUGHT TO HAVE BEEN FOUND. IN A GIVEN SITUATION, NO MONEY OR BULL ION OR JEWELLERY OR INCOME MIGHT HAVE FOUND FROM THE ASSESSEES FOR THE ASSESSMENT YEARS WHICH WERE NOT PART OF SPECIFIED PREVIOUS YEAR CO NTEMPLATED IN SECTION 271AAA OR IMMUNITY AVAILABLE TO THE ASSESSEES UNDER SUB-CLAUSE (A) AND (B) OF EXPLANATION 5A, THEN ALSO, IF IN RESPONSE TO THE NOTICE UNDER SECTION 153A, THE ASSESSEE DISCLOSED SOME ADDITIONAL INCOME VOLUNTARILY, WOULD HE BE DEEMED TO HAVE CONCEALED THE INCOME FOR VISITING HIM WITH PENALTY UNDER SECTION 271(1)(C) OF THE ACT ? THE LD.REVENU E AUTHORITIES HAD DRAWN INFERENCE THAT SINCE THE ASSESSEE HAS NOT DISCLOSED ADDITIONAL INCOME IN THE ORIGINAL RETURNS, MEANING THEREBY, IT IS TO BE ASSU MED THAT THEY HAVE DISCLOSED THIS AMOUNT ONLY WHEN SOME INCRIMINATING MATERIAL WAS FOUND. IT(SS)A NO.271/AHD/2013 & 2 OTHERS 8 TO OUR MIND THIS ASSUMPTION OUGHT TO BE SUPPORTED W ITH REFERENCE OF THAT INCRIMINATING MATERIAL. LET US SEE THE FINDING IN THE ASSESSMENT ORDER. 10. WE HAVE PERUSED THE ASSESSMENT ORDER OF SHRI MA NSUKHBHAI R. SORATHIA IN THE ASSTT.YEAR 2008-09. ALL OTHER ASSE SSMENT ORDERS ARE ALSO SIMILARLY WORDED. IT IS A VERY BRIEF ASSESSMENT OR DERS RUNNING ONE-AND- HALF PAGES. IN THE FIRST PAGE, THE LD.AO HAS NARRA TED PROCEDURAL ASPECT ABOUT THE SEARCH ACTION, ISSUANCE OF NOTICE AND FIL ING OF THE RETURN, SERVICE OF NOTICE UNDER SECTION 143(2) ETC. IN THE NEXT P AGE FINDING OF THE AO READ AS UNDER: 2. THE ASSESSEE IS ENGAGED IN THE BUSINESS OF FABR ICATION AND ENGINEERING JOB WORK AND ALSO DERIVES INCOME FROM A GRICULTURAL ACTIVITIES, REMUNERATION AND INTEREST FROM PARTNERS HIP FIRMS ETC. COPIES OF P&L ACCOUNT, CAPITAL ACCOUNT AND BALANCE SHEET, WAS FILED WITH THE RETURN. VARIOUS ISSUES WERE DISCUSSE D AT LENGTH. 2.1 IT IS SEEN THAT THE ASSESSEE HAD MADE DISCLOSU RE UNACCOUNTED INCOME OF RS 22,00,000/- WHICH WAS NOT DISCLOSED IN THE RETURN FILED U/S. 139(1). THIS BEING CONCEALED INCOME, PENALTY PROCEEDINGS U/S. 271(L)(C) OF THE I T ACT IS BEING INITIATED. 3. AFTER VERIFICATION, THE TOTAL INCOME IS DE TERMINED AS UNDER:- TOTAL INCOME AS PER RETURN OF INCOME RS 28,45,960/ - TOTAL ASSESSED INCOME RS 28,45,960/- AGRICULTURAL INCOME FOR RATE PURPOSE RS.6,14,131/- 4. ASSESSED U/S. 153A OF THE I T ACT, 1961. CHARGE TAX. CHARGE INTEREST U/S. 234A, 234B AND 234C OF THE I T ACT, I F ANY. GIVE CREDIT FOR PREPAID TAXES AFTER DUE VERIFICATION. DEMAND NO TICE AND CHALLAN ISSUED ACCORDINGLY. ISSUE NOTICE U/S. 271(1)(C)OF T HE IT ACT. 11. WE HAVE PERUSED THE PENALTY ORDER ALSO. THERE ARE ONLY THREE PARAGRAPHS I.E. PARA-4, 6 AND 7, WHERE THE AO HAS M ADE SOME OBSERVATION AT HIS OWN, OTHERWISE, IN REST OF THE PARAGRAPHS HE REPRODUCED THE SUBMISSIONS OR THE HEAD-NOTES OF THE CASE LAWS. TH E OBSERVATION OF THE AO IN THESE PARAS READ AS UNDER: 4. I HAVE CAREFULLY CONSIDERED THE SUBMISSIONS MADE BY THE ASSESSES. THE CONTENTION OF THE ASSESSEE IS NOT ACC EPTABLE BECAUSE, THE ADDITIONAL INCOME OFFERED BY THE ASSESSES ONLY SURFACED DUE TO THE SEARCH ACTION CARRIED BY THE DEPARTMENT. HAD TH ERE BEEN NO SEARCH, THE PORTION OF ADDITIONAL INCOME WOULD HAVE REMAINED CONCEALED ETERNALLY. IF IN A REGULAR CASE, ON DETEC TION OF IT(SS)A NO.271/AHD/2013 & 2 OTHERS 9 CONCEALMENT, PENALTY U/S. 271(1)(C) IS LEVIABLE, HO W MUCH MORE PENALTY BECOMES TRUE AND POTENT IN A CASE WHERE THE CONCEALMENT HAS BEEN DETECTED ON ACCOUNT OF PROACTIVE SEARCH AC TION INITIATED BY THE DEPARTMENT. IN THE CASE OF THE ASSESSEE, THE AS SESSEE HAS NOT RECORDED DETAILS OF HIS INCOME AND THE SAME WAS WOR KED OUT ONLY DURING SEARCH AND THAT TOO ON THE BASIS OF THE SEIZ ED MATERIALS. IN FACT, IT IS AN ESTABLISHED JUDICIAL DECISION THAT ' DOCUMENTS SEIZED DURING THE SEARCH CANNOT BE SAID THE BOOKS OF ACCOU NTS MAINTAINED FOR ANY SOURCE OF INCOME, FOR THE PURPOSES OF EXPLA NATION 5 (CIT VS GLAMOUR RESTAURANT (2003) 80 TTJ (MUM) 763. DIARIES FOUND AND SEIZED DURING COURSE OF SEARCH CANNOT BE CONSIDERED AS BOOKS OF ACCOUNT MAINTAINED BY THE ASSESSEE FOR THE PURPOSE OF IMMUNITY TO BE GRANTED TO HIM UNDER THE PROVISIONS OF EXPLANATI ON 5 TO SECTION 271(1)(C) - DR T P KULKARNI VS CIT (2003) 86 ITD 69 6 (MUM). IT HAS ALSO BEEN HELD THAT ONLY BOOKS OF ACCOUNT MAINT AINED IN THE REGULAR COURSE CAN MAKE THE ASSESSEE ELIGIBLE FOR G RANT OF IMMUNITY FROM PENALTY AND NOT JUST ANY OF SUCH BOOKS, WHICH HAVE NOT BEEN MAINTAINED IN REGULAR COURSE OF BUSINESS - BRIJ LAL GOYAL VS CIT (2004) 88 ITD 413 (DELHI). 12. IN THIS BACKGROUND, IF WE APPRECIATE THE EVIDEN CES AVAILABLE ON THE RECORD, THEN IT WOULD REVEAL THE WHOLE CASE OF THE REVENUE FOR VISITING THE ASSESSEE WITH PENALTY IS BASED ON THE STATEMENT OF SHRI JAYANTILAL R. SORATHIA RECORDED DURING THE COURSE OF SEARCH. WE HAVE EXTRACTED THE RELEVANT PART OF THE STATEMENT IN THE FOREGOING PAR AGRAPHS OF THIS ORDER. THE EVIDENTIARY VALUE OF SUCH STATEMENT HAS BEEN EX PLAINED IN VARIOUS AUTHORITATIVE PRONOUNCEMENTS. LET US FIRST TAKE NO TE OF SECTION 132(4) OF THE ACT. THE AUTHORISED OFFICER MAY, DURING THE COURSE OF TH E SEARCH OR SEIZURE, EXAMINE ON OATH ANY PERSON WHO IS FOUND TO BE IN POSSESSION OR CONTROL OF ANY BOOKS OF ACCOUNT, DOCU MENTS, MONEY, BULLION, JEWELLERY OR OTHER VALUABLE ARTICLE OR THI NG AND ANY STATEMENT MADE BY SUCH PERSON DURING SUCH EXAMINATI ON MAY THEREAFTER BE USED IN EVIDENCE IN ANY PROCEEDING UN DER THE INDIAN INCOME- TAX ACT, 1922 (11 OF 1922 ), OR UNDER THIS ACT. EXPLANATION.- FOR THE REMOVAL OF DOUBTS, IT IS HERE BY DECLARED THAT THE EXAMINATION OF ANY PERSON UNDER THIS SUB- SECTI ON MAY BE NOT MERELY IN RESPECT OF ANY BOOKS OF ACCOUNT, OTHER DO CUMENTS OR ASSETS FOUND AS A RESULT OF THE SEARCH, BUT ALSO IN RESPEC T OF ALL MATTERS RELEVANT FOR THE PURPOSES OF ANY INVESTIGATION CONN ECTED WITH ANY IT(SS)A NO.271/AHD/2013 & 2 OTHERS 10 PROCEEDING UNDER THE INDIAN INCOME- TAX ACT, 1922 ( 11 OF 1922 ), OR UNDER THIS ACT. 13. A BARE PERUSAL OF SECTION WOULD REVEAL THAT IT EMPOWERS THE AUTHORIZED OFFICER TO EXAMINE DURING THE COURSE OF SEARCH OR S EIZURE ANY PERSON ON OATH. THE DISCLOSURE MADE DURING THE STATEMENT REC ORDED UNDER THIS SECTION WILL BE ADMITTED IN THE EVIDENCE AND CAN BE USED AGAINST THE ASSESSEE IN THE PROCEEDING. 14. NO DOUBT, THE DISCLOSURE OR ADMISSION MADE UNDE R SECTION 132(4) OF THE ACT DURING THE COURSE OF SEARCH PROCEEDINGS IS AN A DMISSIBLE EVIDENCE BUT NOT CONCLUSIVE ONE. THIS PRESUMPTION OF ADMISSIBIL ITY OF EVIDENCE IS A REBUTTABLE ONE, AND IF AN ASSESSEE IS ABLE TO DEMON STRATE WITH THE HELP OF SOME MATERIAL THAT SUCH ADMISSION WAS EITHER MISTAK EN, UNTRUE OR BASED ON MISCONCEPTION OF FACTS, THEN SOLELY ON THE BASIS OF SUCH ADMISSION NO ADDITION IS REQUIRED TO BE MADE. IT IS TRUE THAT A DMISSION BEING DECLARATION AGAINST AN INTEREST ARE GOOD EVIDENCE, BUT THEY ARE NOT CONCLUSIVE, AND A PARTY IS ALWAYS AT LIBERTY TO WITHDRAW THE ADMISSIO N BY DEMONSTRATING THAT THEY ARE EITHER MISTAKEN OR UNTRUE. IN LAW, THE RE TRACTED CONFESSION EVEN MAY FORM THE LEGAL BASIS OF ADMISSION, IF THE AO IS SATISFIED THAT IT WAS TRUE AND WAS VOLUNTARILY MADE. BUT THE BASING THE ADDIT ION ON A RETRACTED DECLARATION SOLELY WOULD NOT BE SAFE. IT IS NOT A STRICT RULE OF LAW, BUT ONLY RULE OF PRUDENCE. AS A GENERAL RULE, IT IS UNSAFE TO RELY UPON A RETRACTED CONFESSION WITHOUT CORROBORATIVE EVIDENCE. DUE TO THIS GREY SITUATION, CBDT HAS ISSUED CIRCULAR NO.286/2/2003 PROHIBITING THE DEPARTMENTAL OFFICIALS FROM TAKING CONFESSION IN THE SEARCH. TH E BOARD IS OF THE VIEW THAT OFTEN THE OFFICIALS USED TO OBTAIN CONFESSIONS FROM THE ASSESSEE AND STOP FURTHER RECOVERY OF THE MATERIAL. SUCH CONFES SIONS HAVE BEEN RETRACTED AND THEN THE ADDITION COULD NOT WITHSTAND THE SCRUTINY OF THE HIGHER APPELLATE AUTHORITY, BECAUSE NO MATERIAL WAS FOUND SUPPORTING SUCH ADDITION. 15. AN ISSUE WHETHER ADDITION SOLELY ON THE BASIS O F STATEMENT U/S.132(4) CAN BE MADE WAS CONSIDERED BY THE HONBLE JURISDICT IONAL HIGH COURT IN THE CASE OF KIALASHBEN MANHARLAL CHOKSHI VS. CIT, 2 20 CTR (GUJ) 138. IN THIS CASE, SEARCH WAS CONDUCTED UPON THE ASSESSE E UNDER SECTION 132 OF THE INCOME TAX ACT ON 4.11.1988. THE STATEMENT OF THE ASSESSEE WAS RECORDED UNDER SECTION 132(4) OF THE ACT. HE MADE DISCLOSURE OF RS.7 LAKHS. LATER ON, IN JANUARY, 1989, THE ASSESSEE RE TRACTED FROM THE DISCLOSURE AND STATED THE DISCLOSURE OF RS.50,000/- WAS ACCEPTABLE TO HIM. THE LD.AO MADE AN ADDITION OF RS.7 LAKHS ON THE BAS IS OF HIS STATEMENT AND OBSERVED THAT THE RETRACTION WAS MADE AFTER A LAPSE OF 2 MONTHS. THE ASSESSEE DID NOT HAVE ANY REASON FOR RETRACTING FRO M THE DISCLOSURE. THE LD.FIRST APPELLATE AUTHORITY CONCURRED WITH THE AO AND CONFIRMED THE IT(SS)A NO.271/AHD/2013 & 2 OTHERS 11 ADDITION OF RS.7 LAKHS TO HIS INCOME. THE TRIBUNAL HAS ALSO CONFIRMED THE ADDITION BY OBSERVING THAT THERE WAS NOTHING ON REC ORD WHICH INDICATED THAT THE DISCLOSURE WAS TAKEN FROM THE ASSESSEE UND ER DURESS, PRESSURE OR COERCION. THE RETRACTION AFTER LAPSE OF TWO MONTHS FROM THE DATE OF DISCLOSURE BY THE ASSESSEE WAS CONSIDERED AS AFTER- THOUGHT. THE ISSUE TRAVELLED BEFORE THE HONBLE HIGH COURT. THE HONB LE HIGH COURT HAS DELETED THE ADDITION BY OBSERVING THAT MERELY ON TH E BASIS OF DISCLOSURE, ADDITION CANNOT BE MADE. THERE SHOULD BE SOME CORR OBORATIVE MATERIAL. THE FOLLOWING OBSERVATIONS IN PARA-26 OF THE JUDGEM ENT OF HONBLE COURT ARE WORTH TO NOTE. IT READS AS UNDER: 26. IN VIEW OF WHAT HAS BEEN STATED HEREINABOVE WE ARE OF THE VIEW THAT THIS EXPLANATION SEEMS TO BE MORE CONVINCING, HAS NOT BEEN CONSIDERED BY THE AUTHORITIES BELOW AND ADDITIONS W ERE MADE AND/OR CONFIRMED MERELY ON THE BASIS OF STATEMENT RECORDED UNDER SECTION 132(4) OF THE ACT. DESPITE THE FACT THAT THE SAID S TATEMENT WAS LATER ON RETRACTED NO EVIDENCE HAS BEEN LED BY THE REVENU E AUTHORITY. WE ARE, THEREFORE, OF THE VIEW THAT MERELY ON THE BASI S OF ADMISSION THE ASSESSEE COULD NOT HAVE BEEN SUBJECTED TO SUCH ADDI TIONS UNLESS AND UNTIL, SOME CORROBORATIVE EVIDENCE IS FOUND IN SUPP ORT OF SUCH ADMISSION. WE ARE ALSO OF THE VIEW THAT FROM THE ST ATEMENT RECORDED AT SUCH ODD HOURS CANNOT BE CONSIDERED TO BE A VOLU NTARY STATEMENT, IF IT IS SUBSEQUENTLY RETRACTED AND NECESSARY EVIDE NCE IS LED CONTRARY TO SUCH ADMISSION. HENCE THERE IS NO REASON NOT TO DISBELIEVE THE RETRACTION MADE BY THE ASSESSING OFFICER AND EXPLAN ATION DULY SUPPORTED BY THE EVIDENCE. WE ARE, THEREFORE, OF TH E VIEW THAT THE TRIBUNAL WAS NOT JUSTIFIED IN MAKING ADDITION OF RS . 6 LAKHS ON THE BASIS OF STATEMENT RECORDED BY THE ASSESSING OFFICE R UNDER SECTION 132(4) OF THE ACT. THE TRIBUNAL HAS COMMITTED AN ER ROR IN IGNORING THE RETRACTION MADE BY THE ASSESSEE. 27. IN THE ABOVE VIEW OF THE MATTER, ADDITION OF RS . 1 LAKH MADE ON ACCOUNT OF UNACCOUNTED CASH IS CONFIRMED AND THE AD DITION OF RS. 6 LAKHS IS HEREBY DELETED. 16. THIS DECISION HAS BEEN FOLLOWED BY THE HONBLE HIGH COURT IN THE CASE OF CIT VS. CHANDRAKUMAR JETHMAL KOCHAR, 55 TAXMANN. COM 292 (GUJ). THE HONBLE HIGH COURT HAS REPRODUCED THE DISCUSSIO N MADE BY THE TRIBUNAL, AND THEREAFTER, CONCURRED WITH THE CONCLU SIONS OF THE TRIBUNAL BY OBSERVING AS UNDER: 6. IN VIEW OF THE ABOVE DISCUSSION AND CONSIDERING THE PRINCIPAL LAID DOWN IN THE CASE OF KAILASHBEN MANHARLAL CHOKS HI (SUPRA),WE ARE OF THE CONSIDERED OPINION THAT THE VIEW TAKEN B Y THE TRIBUNAL IS JUST AND PROPER. WE ARE NOT CONVINCED WITH THE SUBM ISSIONS MADE BY IT(SS)A NO.271/AHD/2013 & 2 OTHERS 12 MR. MEHTA, LEARNED ADVOCATE FOR THE APPELLANT THAT THE TRIBUNAL HAS NOT GIVEN COGENT REASONS. THEREFORE, THE ANSWER TO THE FIRST QUESTION WOULD BE AGAINST THE REVENUE AND IN FAVOUR OF THE A SSESSEE. THE SECOND QUESTION WILL ALSO ENURE FOR THE BENEFIT OF THE ASSESSEE AS FROM THE RECORD IT IS CLEAR THAT OTHER CONCERNS WER E NOT BENAMI CONCERNS OF THE ASSESSEE. 7. FOR THE FORGING REASONS, THE PRESENT APPEAL IS D ISMISSED. ACCORDINGLY, BOTH THE QUESTIONS WHICH WERE REFERRED TO THIS COURT ARE ANSWERED IN FAVOUR OF THE ASSESSEE AND AGAINST THE REVENUE. 17. HAD THIS STATEMENT BEEN RETRACTED BY THE ASSESS EE, AND THEY HAVE NOT OFFERED THIS UNDISCLOSED INCOME, FORGET TO TAKE ACT ION OF LEVYING THE PENALTY, EVEN ADDITIONS WOULD NOT HAVE BEEN SUSTAIN ED. THE INFERENCE OF OWNERSHIP OF ANY MONEY, BULLION, JEWELLERY OR OTHER VALUABLE ARTICLES, TO OUR MIND, OUGHT NOT TO BE BASED ON THIS STATEMENT. WHEN THE ASSESSEES HAVE TAKEN SPECIFIC PLEA THAT NO MONEY, BULLION OR JEWELLERY OR INCOME BASED ON ANY ENTRIES FOR THESE TWO ASSESSMENT YEARS WAS FOUND DURING THE COURSE OF SEARCH, THE AO OUGHT TO HAVE IMMEDIATELY REFERRED THE DOCUMENTS, ENTRIES OR ANY ASSET FOUND WHICH IS RELE VANT TO THESE ASSESSMENT YEARS IN THE PENALTY PROCEEDINGS. HE SH OULD HAVE REJECTED THE EXPLANATION OF THE ASSESSEE BY DEMONSTRATING IT AS FACTUALLY INCORRECT. RATHER, THE AUTHORITIES HAVE PROCEEDED ON THE ASSUM PTION THAT HAD THERE BEEN NO MONEY, BULLION, JEWELLERY OR INCOME BASED O N ENTRIES WAS NOT FOUND, THE ASSESSEE WOULD HAVE NOT MADE VOLUNTARY D ISCLOSURE OF THE INCOME IN THESE RETURNS. THEY FAILED TO NOTE THE Q UESTION NO.25 ALSO, WHERE THE ASSESSEES CLAIMED IMMUNITY FROM PENALTY, AND PE ACE FROM LITIGATION. TO OUR MIND INFERENCE OF AVAILABILITY OF MONEY, BUL LION OR ASSETS EMBEDDED IN THE ENTRIES CANNOT BE DRAWN FROM THE STATEMENT O F THE ASSESSEE (EXTRACTED SUPRA). THEY SHOULD HAVE BEEN FOUND IN PHYSICAL FORM AND PERTAINING TO THESE YEARS, ONLY THEN, DEEMING FICTI ON OF CONCEALMENT WOULD TRIGGER. THUS, THE REVENUE AUTHORITIES HAVE NOT REF ERRED ANY DOCUMENTARY EVIDENCES DEMONSTRATING THE FACT THAT VOLUNTARY INC OME OFFERED BY ASSESSEES IN THESE TWO YEARS ACTUALLY UNEARTHED DUR ING THE COURSE OF SEARCH. THEREFORE, TO OUR MIND, THE ASSESSEES DO N OT DESERVE TO BE VISITED WITH PENALTIES. WE ALLOW ALL THE APPEALS OF THE AS SESSEES AND DELETE PENALTIES. 6. SIMILARLY, HONBLE DELHI HIGH COURT IN THE CASE OF PR.CIT VS. NEERAJ JINDAL & OTHERS, IN ITA NO.463/2016 AND OTHERS HAS CONSIDERED THIS ASPECT AND OBSERVED THAT EXPLANATION 5 COULD BE INVOKED IF THE INCOME DECLARED BY THE ASSESSEE HAS A NEXUS WITH ANY SEIZED MATERIAL. THE DISCUSSION MADE BY IT(SS)A NO.271/AHD/2013 & 2 OTHERS 13 THE HONBLE DELHI HIGH COURT IN PARA-25 AND 26 IS W ORTH TO NOTE. IT READS AS UNDER: 25. THIS SHOWS THAT EXPLANATION-5 WAS SPECIFICALLY INSERTED TO DEAL WITH THE SITUATION WHERE HIGHER INCOME WAS DISCLOSE D IN THE RETURN FILED CONSEQUENT TO A SEARCH OPERATION, AND THE ASSESSEE CLAIMED THAT SUCH ADDITION OF INCOME DID NOT IMPLY THAT THERE WAS CON CEALMENT. IN OTHER WORDS, BUT FOR THE INSERTION OF EXPLANATION-5, IT W OULD BE OPEN TO THE ASSESSEE TO CONTEND THAT ADDITIONS MADE TO HIS INCO ME IN THE RETURN FILED AFTER THE SEARCH OPERATION, WERE ONLY TO BUY PEACE AND DID NOT TANTAMOUNT TO CONCEALMENT. THIS ALSO FLOWS FROM THE LANGUAGE OF EXPLANATION-5 ITSELF, WHEREIN THE WORDS USED BY THE LEGISLATURE ARE BE DEEMED TO HAVE CONCEALED THE PARTICULARS OF HIS INC OME, WHICH SHOWS THAT THERE IS A DEEMING FICTION BY VIRTUE OF WHICH SUCH ADDITIONAL INCOME IS CONSIDERED AS CONCEALMENT. IF SUCH ADDITI ONS IN THE INCOME IN THE RETURN FILED CONSEQUENT TO A SEARCH, WERE TO AU TOMATICALLY EVIDENCE CONCEALMENT UNDER SECTION 271(1)(C), THERE WOULD BE NO NEED FOR PARLIAMENT TO ENACT A DEEMING FICTION IN THE FORM O F EXPLANATION-5; SUCH A READING WOULD RENDER EXPLANATION-5 OTIOSE AN D WITHOUT ANY PURPOSE. THIS IS ALSO CONSONANT WITH THE VIEW ARRIV ED AT IN THE EARLIER PART OF THIS DECISION, I.E. MERE INCREASE OF INCOME IN THE RETURN FILED PURSUANT TO SECTION 153A WOULD NOT BE SUFFICIENT TO SHOW CONCEALMENT UNDER SECTION 271(1)(C). 26. NOW FOR THE REVENUE TO INVOKE EXPLANATION-5, IT WOULD HAVE TO PROVE THAT ITS REQUIREMENTS ARE CLEARLY FULFILLED I N THE PRESENT CASE. IN ORDER FOR EXPLANATION-5 TO APPLY, IT IS NECESSARY T HAT THERE MUST BE CERTAIN ASSETS (SUCH AS MONEY, BULLION ETC.) FOUND IN THE POSSESSION OF THE ASSESSEE DURING THE SEARCH, AND THAT THE ASSESS EE MUST CLAIM THAT SUCH ASSETS HAVE BEEN ACQUIRED BY HIM BY UTILISING (WHOLLY OR IN PART) HIS INCOME. MOREOVER, SUCH INCOME MUST BE IN RELATI ON TO A PARTICULAR PREVIOUS YEAR THAT HAS EITHER ENDED BEFORE THE DATE OF THE SEARCH OR IS TO END ON OR AFTER THE DATE OF THE SEARCH AND SUCH INCOME IS DECLARED SUBSEQUENTLY IN THE RETURN OF INCOME FILED AFTER TH E SEARCH. THEREFORE, IT IS ONLY WHEN ASSETS ARE FOUND DURING THE SEARCH WHI CH THE ASSESSEE CLAIMS HAVE BEEN ACQUIRED BY HIM BY UTILIZING (WHOL LY OR IN PART) HIS INCOME FOR ANY PARTICULAR PREVIOUS YEAR, AND THEN D ECLARES SUCH INCOME (WHICH HE UTILIZED IN ACQUIRING THE ASSETS F OUND) IN A SUBSEQUENT RETURN FILED AFTER THE DATE OF SEARCH, W OULD IT BE DEEMED THAT THE ASSESEE HAS CONCEALED HIS INCOME. IN OTHER WORD S, THE ASSETS SEIZED DURING THE SEARCH MUST RELATE TO THE INCOME OF THE PARTICULAR ASSESSMENT YEAR WHOSE RETURN IS FILED AFTER THE DAT E OF THE SEARCH. SUCH IT(SS)A NO.271/AHD/2013 & 2 OTHERS 14 A CONCLUSION IS ONLY LOGICAL, CONSIDERING THAT ASSE SSMENT UNDER THE ACT IS WITH RESPECT TO A PARTICULAR ASSESSMENT YEAR AND THE PENALTY IMPOSED UNDER SECTION 271(1)(C) WOULD ALSO BE FOR CONCEALIN G INCOME IN THAT PARTICULAR ASSESSMENT YEAR, WHICH CONCEALMENT WAS R EVEALED BY THE DISCOVERY OF CERTAIN ASSETS IN THE ASSESSEES POSSE SSION DURING THE SEARCH CONDUCTED UNDER SECTION 132. HERE, IT WOULD BE BENEFICIAL TO REPRODUCE THE DICTUM OF THE RAJASTHAN HIGH COURT IN COMMISSIONER OF INCOME TAX V. KANHAIYALAL, (2008) 299 ITR 19 (RAJ), WHERE IT HELD THAT- WE MAY CONSIDER THE THINGS FROM YET ANOTHER ASPECT, VIZ., THAT UNDER THE SET UP OF IT ACT, IN WHATEVER EVENTUALITY THE ASSESSMENT MAY HAVE TO BE MADE, I.E. WHETHER A REGULAR ASSESSM ENT, OR ASSESSMENT CONSEQUENT UPON ESCAPEMENT OF INCOME, OR ASSESSMENT OF A BLOCK PERIOD, BUT IN EITHER CASE, T HE ASSESSMENT HAS TO BE, WITH RESPECT TO THE PARTICULAR ASSESSMEN T YEAR, RELATING TO THE CONCERNED PREVIOUS YEAR, AND THE INCOME DERI VED, OR FOUND BY THE DEPARTMENT TO HAVE BEEN DERIVED, OR EARNED, BY THE ASSESSEE, DURING PARTICULAR PREVIOUS YEAR, HAS TO B E ASSESSED DURING THE RELEVANT ASSESSMENT YEAR ONLY, AND ASSES SMENT OF SUCH INCOME CANNOT BE SHIFTED TO ANY OTHER PAST OR FUTUR E YEARS, SO MUCH SO THAT THERE MAY BE CASES, WHERE THE RIGHT OF THE DEPARTMENT TO ASSESSMENT MAY HAVE BEEN LOST ON ACCO UNT OF PASSAGE OF LIMITATION ALSO. THUS, IT IS CLEAR THAT THE REVENUE HAS TO ESTABLISH THAT THE ASSETS SEIZED DURING THE SEARCH CONDUCTED ON THE ASSESSEE, RELATED TO THE INCOME OF THE ASSESSEE FOR THE RELEVANT ASSESSM ENT YEARS I.E. AY 2005-06 AND AY 2006-07. 7. THUS, IN BOTH THESE ORDERS IT HAS BEEN OBSERVED THAT DEEMING FICTION PROVIDED IN EXPLANATION 5A WOULD TRIGGER IF THE INCOME DECLARED BY THE ASSESSEE IS BASED ON SOME MONEY, BULLION, JEWELLERY OR AN ENTRY FOUND DURING THE COURSE OF SEARCH. IF THE ASSESSEE HAS DECLARED SUCH INCOME VOLUNTARILY WITHOUT UNEARTHING SUCH INCOME DURING THE COURSE OF SEARCH, THEN IT WOULD NOT BE CONSIDERED THAT THE ASSESSEE HAS CONCEALED THE I NCOME. EXPLANATION 5A IT(SS)A NO.271/AHD/2013 & 2 OTHERS 15 WOULD NOT BE APPLICABLE. IN THE RESULT, ALL THE AP PEALS ARE ALLOWED AND IMPUGNED PENALTIES ARE DELETED. 8. IN THE RESULT ALL THE APPEALS OF THE ASSESSEE AR E ALLOWED. ORDER PRONOUNCED IN THE COURT ON 6 TH APRIL, 2017 AT AHMEDABAD. SD/ - (MANISH BORAD) ACCOUNTANT MEMBER SD/ - (RAJPAL YADAV) JUDICIAL MEMBER AHMEDABAD; DATED 06/04/2017 78 9 :);<= >7=-; / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ! / CONCERNED CIT 4. ! ( ) / THE CIT(A) 5. $%& '' , / DR, ITAT, 6. &)* + / GUARD FILE. 78* ? @ / BY ORDER, A/@ BC ( DY./ASSTT.REGISTRAR) , / ITAT, AHMEDABAD 1. DATE OF DICTATION- 06-04-2017 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 06.04.2017 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 FILE GOES TO THE BENCH CLERK .. : 06/04/2017 6. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK . 7. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER.. DATE OF DESPATCH OF THE ORDER