Shri Mahendra B.Kataria, Surat V. The ACIT.,Cent.Circle-1, Surat

ITSSA 318/AHD/2011

• Counselvise Citation: [2016] 122 COUNSELVISE.COM (IT) 1799 (ITAT-AHMEDABAD)
• Duration Of Justice: 5 year(s) 1 month(s) 4 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 02-05-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 17-03-2016
• Assessment Year: 2005-2006
• Appeal Filed On: 29-03-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DINESH SINGH
• Keywords: Income from undisclosed sources
• Section: 143(3); 5(2); 133A; 153A; 132; 139

Judgement Text

, A IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, AHMEDABAD BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER AND SHRI N.K. BILLAIYA, ACCOUNTANT MEMBER ./ IT(SS)A.NO.318/AHD/2011 [ASSTT.YEAR 2005-06] M AHENDRA B. KATARIA PITRUKRUPA BUNGALOW TOKARKHADA SILVASSA, SURAT. VS ACIT, CENT.CIR.1 SURAT. ./ IT(SS)A.NO.319/AHD/2011 [ASSTT.YEAR 2005-06] M/S.SARIKA JEWELLERS SHOP NO.4, MAHAVIR COMPLEX SILVASSA, SURAT. VS ACIT, CENT.CIR.1 SURAT. / (APPELLANT) / (RESPONDENT) ASSESSEE BY : M S.URVASHI SHODHAN, AR REVENUE BY : SHRI DINESH SINGH, SR.DR / DATE OF HEARING : 17/03/2016 / DATE OF PRONOUNCEMENT: 02/05/2016 / O R D E R PER RAJPAL YADAV, JUDICIAL MEMBER: THE ASSESSEES ARE IN APPEAL BEFORE US AGAINST THE O RDERS OF THE LD.CIT(A)-II, SURAT DATED 18.2.2011 PASSED FOR THE ASSTT.YEAR 2005-06 IN THE RESPECTIVE APPEALS OF THE APPELLANTS. IT(SS)A NO.318/AHD/2011 AND 319/AHD/2011 2 2. SOLITARY GRIEVANCE OF THE APPELLANTS IS THAT TH E ID.CIT(A) HAS ERRED CONFIRMING THE PENALTY OF RS.3,91,580/- (IN THE CAS E OF MAHENDRA K. KATARIA) AND RS. 1,80,380/- (IN THE CASE OF M/S.SAR IKA JEWELLERS). THE ID. AO HAS IMPOSED PENALTY UNDER SECTION 271(1)(C) OF T HE INCOME TAX ACT. 3. FACTS ON ALL VITAL POINTS ARE COMMON IN BOTH TH E APPEALS, RATHER, THE ORDERS OF THE ID.CIT(A) ARE ALMOST VERBATIM EXCEPT VARIATIONS IN THE QUANTUM AND CERTAIN DATES. THEREFORE, FOR THE FACIL ITY OF REFERENCE, WE TAKE UP THE FACTS FROM THE CASE OF M/S.MAHENDRA B. KATARIA. 4. BRIEF FACTS OF THE CASE ARE THAT A SEARCH AND S EIZURE OPERATION WAS CONDUCTED ON 27.12.2006 AT THE BUSINESS AS WELL AS RESIDENTIAL PREMISES OF SHRI MAHENDRA B. KATARIA GROUP AT SILVASSA. SURV EY UNDER SECTION 133A WAS ALSO UNDERTAKEN AT VARIOUS PLACES. DURING THE COURSE OF SEARCH, STATEMENT OF SHRI MAHENDRA B. KATARIA WAS R ECORDED UNDER SECTION 132(4) OF THE INCOME TAX ACT. HE ADMITTED T OTAL UNACCOUNTED INCOME OF RS. 1,37,00,000/- VIDE ANSWER TO QUESTION NOS.23 AND 25 OF THE STATEMENT. A DISCLOSURE OF RS. 12.00 LAKHS WAS MADE BY SHRI MAHENDRA B. KATARIYA IN HIS INDIVIDUAL CAPACITY, WH ICH HAS BEEN OFFERED IN THE RETURN IN RESPONSE TO NOTICE UNDER SECTION 1 53 A OF THE ACT. 5. THE ID.AO HAS PASSED AN ASSESSMENT ORDER ON 30. 12.008. ME DETERMINED THE TAXABLE INCOME OF THE ASSESSEE AT RS . 12,46,551/- WHICH WAS DECLARED INCOME OF THE ASSESSEE. 6. IN THE CASE OF SARIKA JEWELLERS, A SURVEY UNDER SECTION 133A OF THE ACT WAS CARRIED OUT AT THE BUSINESS PREMISES OF THE FIRM ON 27.12.2006. DURING THE COURSE OF SURVEY ACTION, VALUE OF STOCK AND GOLD AND SILVER ITEMS WAS WORKED OUT AND INVENTORIED AS PER ANNEXUR E -C/F. SHRI IT(SS)A NO.318/AHD/2011 AND 319/AHD/2011 3 SAJJANRAJ POKHRAJ SHAH, ONE OF THE PARTNERS OF THE ASSESSEE FIRM, HAD ADMITTED RS.43.00 LAKHS AS ADDITIONAL UNDISCLOSED I NCOME OF THE ASSESSEE-FIRM. IN RESPONSE TO THE NOTICE UNDER SECT ION 153C, THE ASSESSEE HAS FILED ITS RETURN OF INCOME ON 18.1.2008 DECLARI NG TOTAL INCOME AT RS.4,52,175/-. THE AO HAS PASSED AN ASSESSMENT ORDE R UNDER SECTION 143(3) R.W.S. SECTION 153C OF THE ACT ON 26.12.2008 . HE WORKED OUT THE TAXABLE INCOME OF THE ASSESSEE EQUIVALENT TO THE ON E DISCLOSED BY THE ASSESSEE. THE AO HAS INITIATED PENALTY PROCEEDINGS UNDER SECTION 271(L)(C) OF THE ACT AND ULTIMATELY IMPOSED PENALTY OF RS. 1,80,380/- IN THE CASE OF M/S.SARIKA JEWELLERS AND RS.3,91,580/- IN THE CASE OF MAHENDRA B. KATARIA. THE ASSESSEE HAS WRONGLY MENTI ONED THE AMOUNT OF RS. 1,80,3807- IN GROUND OF APPEAL TAKEN IN THE CASE OF SHRI MAHENDRA B. KATARIA. WE TOOK THE CORRECT FIGURE AT RS.3,91, 580/- AS POINTED OUT TO US DURING THE COURSE OF HEARING. 7. SHORT CONTROVERSY BEFORE US IS THAT WHETHE R BOTH THE ASSESSEES ARE ENTITLED FOR IMMUNITY AS PER CLAUSE (2) OF EXPLANAT ION (5) OF SECTION 271(L)(C) OF THE ACT. THE ID.COUNSEL FOR THE ASSESS EES, WHILE IMPUGNING THE ORDERS OF THE REVENUE AUTHORITIES HAS POINTED O UT THAT THE ISSUE IN DISPUTE IS SQUARELY COVERED IN FAVOUR OF THE ASSESS EE BY THE DECISION OF THE HON'BLE GUJARAT HIGH COURT IN THE CASE OF KIRIT DAYABHAI PATEL, 121 ITD 159 (AHD)(TM) = TAX APPEAL NOS.1181, 1182 AND 1 185 OF 2010. SHE PLACED ON RECORD COPY OF THE JUDGMENT OF THE HO N'BLE HIGH COURT. SHE FURTHER CONTENDED THAT THIS JUDGMENT WAS RELIED UPON BY THE TRIBUNAL IN THE CASE OF MALEKA HAJI AMIN GADAWALA V S. ACIT, IN IT(SS)A.NO.464, 465 AND 466/AHD/2011. ACCORDING TO THE ID.COUNSEL FOR THE ASSESSEE IN ORDER TO ATTRACT IMMUNITY UNDER CLAUSE (2) OF EXPLANATION (5), THE UNACCOUNTED INCOME WAS DISCLOSED IN A STATEMENT IT(SS)A NO.318/AHD/2011 AND 319/AHD/2011 4 UNDER SECTION 132(4) OF THE INCOME TAX ACT, (II) DE CLARANT HAS DECLARED THE MANNER IN WHICH SUCH INCOME IS SOURCED, AND (III) T AXES TOGETHER WITH INTEREST ARE PAID ON SUCH INCOME. SHE EMPHASIZED TH AT THE ASSESSEES HAVE FILED THEIR RETURN OF INCOME, DISCLOSED THE INCOME ON THE BASIS OF DECLARATION MADE IN THE STATEMENT UNDER SECTION 132 OF THE INCOME TAX ACT. THEY HAVE PAID TAXES ALONG WITH INTEREST AND T HE AO HAS NEITHER MADE REFERENCE TO ANY MATERIAL NOR MADE ANY ADDITION. HE SIMPLY ACCEPTED THE RETURN OF INCOME. 8. THE ID.DR, ON THE OTHER HAND, RELIED UPON THE O RDERS OF THE REVENUE AUTHORITIES. 9. ON DUE CONSIDERATIONS OF THE ABOVE FACTS AND CI RCUMSTANCES, WE FIND THAT THE TRIBUNAL HAS EXTENSIVELY MADE REFERENCE TO THE DECISION OF THE HON'BLE GUJARAT HIGH COURT IN THE CASE OF KIRIT DAH YABHAI PATEL (SUPRA) WHILE DECIDING THE APPEAL OF MALEKA HAJI AMIN GADAW ALA (SUPRA). THE DISCUSSION MADE BY THE TRIBUNAL IN THIS REGARD IS W ORTH TO NOTE. IT READS AS UNDER: '8. WE HAVE HEARD THE RIVAL CONTENTIONS, PURSUED TH E MATERIAL ON RECORD AND DULY CONSIDERED FACTS OF THE CASE, IN TH E LIGHT OF THE APPLICABLE LEGAL POSITION. 9. AS LEARNED COUNSEL FOR THE ASSESSEE RIGHTLY POIN TS OUT, THE ISSUE IS NOW COVERED, IN FAVOUR OF THE ASSESSES, BY HONBLE JURISDICTIONAL HIGH COURT'S JUDGEMENT IN THE CASE O F KIRIT DAHYABHAI PATEL VS. ACIT (ITA NOS.1181, 1182 & 1185 OF 2010; JUDGEMENT DATED 03.12.2014), WHEREIN REVERSIN G THE VERY THIRD MEMBER DECISION OF THIS TRIBUNAL WHICH W AS RELIED UPON BY THE CIT(A), THEIR LORD SHIPS HAVE OBSERVED AS FOLLOWS: IT(SS)A NO.318/AHD/2011 AND 319/AHD/2011 5 '8. WE HAVE HEARD LEARNED ADVOCATES FOR THE PARTIES AND PERUSED THE MATERIAL ON RECORD. BEFORE DEALING WITH THE CONTENTIONS, IT WOULD BE RELEVANT TO REPRODUCE EXPLANATION 5 TO SECTION 271 (1) (C) OF THE INCOME TAX ACT, WHICH READS AS UNDER: 'EXPLANATION 5. WHEREIN IN THE COURSE OF A [SEARCH INITIATED UNDER SECTION 132 BEFORE THE 1ST DAY OF J UNE, 2007], THE ASSESSEE IS FOUND TO BE THE OWNER OF ANY MONEY BULLION, JEWELLERY OR OTHER VALUABLE ARTICLE OR THING (HEREAFTER IN THIS EXPLANATION REFERRED TO AS ASSETS) AND THE ASSESSEE CLAIMS THAT SUCH ASSETS HAVE BEEN ACQUIRED BY HIM BY UTILISING (WHOLLY OR IN PART) HI S INCOME- (A) FOR ANY PREVIOUS YEAR WHICH HAS ENDED BEFORE THE DATE OF THE SEARCH, BUT THE RETURN OF INCOME FO R SUCH YEAR HAS NOT BEEN FURNISHED BEFORE THE SAID DATE OR, WHEREIN SUCH RETURN HAS 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 THE 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 SUBSECTION (1) OF THIS SECTION, BE DEEMED TO HAVE CONCEALED THE PARTICULARS OF HIS INCOME OR FURNISHED INACCURATE PARTICULARS OF SUCH INCOME, UNLESS, - (1) SUCH INCOME IS, OR THE TRANSACTIONS RESULTING I N SUCH INCOME ARE RECORDED, (I) IN A CASE FALLING UNDER CLAUSE(A), BEFORE DATE OF THE SEARCH; AND (II) IN A CASE FALLING UNDER CLAUSE(B), ON OR BEFORE SUCH DATE; IN THE BOOKS OF ACCOUNT, IF ANY, MAINTAINED BY HIM FOR ANY SOURCE OF INCOME OF SUCH INCOME IS OTHERWISE DISCLOSED TO THE [PRINCIPAL CHIEF COMMISSIONER OR COMMISSIONER OR] CHIEF IT(SS)A NO.318/AHD/2011 AND 319/AHD/2011 6 COMMISSIONER OR [PRINCIPAL COMMISSIONER OR] COMMISSIONER] BEFORE THE SAID DATE; OR (2) HE IN THE COURSE OF THE SEARCH, MAKES A STATEMENT UNDER SUBSECTION (4) OF SECTION 132 THAT ANY MONEY, BULLION, JEWELLERY OR OTHER VALUABLE ARTICLE OF THING FOUND IN HIS POSSESSION OR UNDER HIS CONTROL, HAS BEEN ACQUIRED OUT OF HIS INCOME WHICH HAS NOT BEEN DISCLOSED SO FAR IN HIS RETURN OF INCOME TO BE FURNISHED BEFORE THE EXPIRY OF TIME SPECIFIED IN SUB SECTION (1) OF SECTION 139 AND ALS O SPECIFIES IN THE STATEMENT THE MANNER IN WHICH SUCH INCOME HAS BEEN DERIVED AND PAYS THE TAX, TOGETHER WITH INTEREST, IF ANY, IN RESPECT OF SUCH INCOME. 9. THE HIGH COURT OF MADRAS IN THE CASE OF S.D.V. CHANDRU (SUPRA) HELD THAT IN A CASE WHERE THE ASSES SEE HAD NOT DISCLOSED HIS INCOME IN THE RETURNS FILED F OR THE PREVIOUS YEAR WHICH HAVE ENDED PRIOR TO THE DATE OF THE SEARCH AND, IN THE STATEMENT GIVEN UNDER SECTION 13 2(4) THE ASSESSEE ADMITTED THE RECEIPT OF UNDISCLOSED IN COME FOR THOSE YEARS AND ALSO SPECIFIED THE MANNER IN WH ICH SUCH INCOME HAD BEEN DERIVED AND THEREAFTER PAYS TH E TAX ON THAT UNDISCLOSED INCOME WITH INTEREST, THEN SUCH UNDISCLOSED INCOME WOULD GET IMMUNISED FROM THE LEV Y OF PENALTY. 10. LOOKING TO THE FACTS AND CIRCUMSTANCES OF THE CASE, IT WOULD BE RELEVANT TO REFER THE DECISION RE LIED UPON BY LEARNED SENIOR ADVOCATE FOR THE APPELLANT I N THE CASE OF GEBILAL KANBHAIALAL (HUF)(SUPRA), WHEREIN T HE APEX COURT IN PARAGRAPH NO.6 HAS OBSERVED AS UNDER: 6. EXPLANATION 5 IS A DEEMING PROVISION. IT PROVIDES THAT WHERE, IN THE COURSE OF SEARCH UNDER SECTION 132, THE ASSESSEE IS FOUND TO BE THE OWNER OF UNACCOUNTED ASSETS AND THE ASSESSEE CLAIMS THAT SUCH ASSETS HAVE BEEN ACQUIRED BY HIM BY UTILIZING, WHOLLY OR PARTLY, HIS INCOME FOR ANY PREVIOUS YEAR WHICH HAS ENDED BEFORE THE DATE OF IT(SS)A NO.318/AHD/2011 AND 319/AHD/2011 7 SEARCH OR WHICH IS TO END ON OR AFTER THE DATE 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 INCOME FOR THE PURPOSE OF IMPOSITION OF PENALTY UNDER SECTION 271(1) (C). THE ONLY EXCEPTIONS TO SUCH A DEEMING PROVISION OR TO SUCH A PRESUMPTION OF CONCEALMENT ARE GIVEN IN SUB-CLAUSES (1) AND (2) OF EXPLANATION 5. IN THIS CASE, WE ARE CONCERNED WITH INTERPRETATION OF CLAUSE (2) OF EXPLANATION 5, WHICH HAS QUOTED ABOVE. THREE CONDITIONS HAVE GOT TO BE SATISFIED BY THE ASSESSEE FOR CLAIMING IMMUNITY FROM PAYMENT OF PENALTY UNDER CLAUSE (2) OF EXPLANATION 5 TO SECTION 271(1(C). THE FIRST CONDITION WAS THAT THE ASSESSEE MUST MAKE A STATEMENT UNDER SECTION 132(4) IN THE COURSE OF SEARCH STATING THAT THE UNACCOUNTED ASSETS AND INCRIMINATING DOCUMENTS FOUND FROM HIS POSSESSION DURING THE SEARCH HAVE BEEN ACQUIRED OUT OF HIS INCOME, WHICH HAS NOT BEEN DISCLOSED IN THE RETURN OF INCOME TO BE FURNISHED BEFORE EXPIRY OF TIME SPECIFIED IN SECTIO N 139(1). SUCH STATEMENT WAS MADE BY THE KARTA DURING THE SEARCH WHICH CONCLUDED ON AUGUST 1, 1987. IT IS NOT IN DISPUTE THAT CONDITION NO.1 WAS FULFILLED. THE SECOND CONDITION FOR AVAILING OF THE IMMUNITY FROM PENALTY UNDER SECTION 271(1)(C) WAS THAT THE ASSESSEE SHOULD SPECIFY, IN HIS STATEMENT UNDER SECTION 132(4), THE MANNER IN WHICH INCOME STOOD DERIVED. ADMITTEDLY, THE SECOND CONDITION, IN THE PRESENT CASE ALSO STOOD SATISFIED. ACCORDING TO THE DEPARTMENT, THE ASSESSEE WAS NOT ENTITLED TO IMMUNITY UNDER CLAUSE (2) AS HE DID NOT SATISFY THE CONDITION FOR AVAILING THE BENEFIT OF WAIVER OF PENALTY UNDER SECTION 271(1)(C) AS THE ASSESSEE FAILED TO FILE HI S RETURN OF INCOME ON 31ST JULY, 1987 AND PAY TAX THEREON PARTICULARLY WHEN THE ASSESSEE CONCEALED ON AUGUST 1, 1987 THAT THERE WAS CONCEALMENT OF INCOME. THE THIRD CONDITION UNDER CLAUSE (2) WAS IT(SS)A NO.318/AHD/2011 AND 319/AHD/2011 8 THAT THE ASSESSEE HAD TO PAY THE TAX TOGETHER WITH INTEREST, IF ANY, IN RESPECT OF SUCH UNDISCLOSED INCOME. HOWEVER, NO TIME LIMIT FOR PAYMENT OF SUCH TAX STOOD PRESCRIBED UNDER CLAUSE(2). THE ONLY REQUIREMENT STIPULATED IN THE THIRD CONDITION WAS FOR THE ASSESSEE TO PAY TAX TOGETHER WITH INTEREST. IN THE PRESENT CASE, THE THIRD CONDITION ALSO STOOD FULFILLED. THE ASSESSEE HAS PAID TAX WIT H INTEREST UPTO THE DATE OF PAYMENT. THE ONLY CONDITION WHICH WAS REQUIRED TO BE FULFILLED FOR GETTING THE IMMUNITY, AFTER THE SEARCH PROCEEDINGS GOT OVER, WAS THAT THE ASSESSEE HAD TO PAY THE TAX TOGETHER WITH INTEREST IN RESPECT OF SUCH UNDISCLOSED INCOME UPTO THE DATE OF PAYMENT. CLAUSE(2) DID NOT PRESCRIBE THE TIME LIMIT WITHIN WHICH THE ASSESSEE SHOULD PAY TAX ON INCOME DISCLOSED IN THE STATEMENT UNDER SECTION 132(4). 11. EVEN, THE HIGH COURT OF CHATTISGARH IN THE CASE OF ABDUL RASHID(SUPRA) HAS HELD THAT IN ORDER TO GET THE BENEFIT OF IMMUNITY UNDER CLAUSE(2) OF EXPLANATION 5 TO SECTION 271(1)(C) OF THE INCOME TAX ACT, IT IS NOT NECESSARY TO FILE THE RETURN BEF ORE THE DUE DATE PROVIDED THAT THE ASSESSEE HAD MADE A STATEMENT, DURING THE SEARCH AND EXPLAINED THE MANNER IN WHICH THE SURRENDERED AMOUNT WAS DERIVED, AND PAID TAX AS WELL AS INTEREST ON THE SURRENDERED AMOUNT. 12. AT THIS STAGE, IT IS REQUIRED TO BE NOTED THAT THE APEX COURT IN THE CASE OF COMMISSIONER OF INCOME TAX, WEST BANAGALI VS. VEGETABLE PRODUCTS LTD. (SUPRA), HAS HELD THAT IF THE COURT FINDS THAT THE LANGUAGE OF A TAXING PROVISION IS AMBIGUOUS OR CAPABLE OF MORE MEANING THAN ONE, THEN THE COURT HAS TO ADOPT THE INTERPRETATION WHICH FAVOURS THE ASSESSEE, MORE PARTICULARLY SO WHERE THE PROVISION RELATES TO THE IMPOSITION OF A PENALTY. IT(SS)A NO.318/AHD/2011 AND 319/AHD/2011 9 13. CONSIDERING THE FACTS AND CIRCUMSTANCES OF THE CASE AND ALSO CONSIDERING THE DECISIONS RELIED UPON BY LEARNED SENIOR ADVOCATE FOR THE APPELLANT, WE ARE OF THE CONSIDERED OPINION THAT THE VIEW TAKEN BY THE TRIBUNAL IS ERRONEOUS. THE CIT(A) RIGHTLY HELD THAT IT IS NOT RELEVANT WHETHER ANY RETURN OF INCOME WAS FILED BY THE ASSESSEE PRIOR TO THE DATE OF SEARCH AND WHETHER ANY INCOME WAS UNDISCLOSED IN THAT RETURN OF INCOME. IN VIEW OF SPECIFIC PROVISION OF SECTION 153A OF THE I.T. ACT, THE RETURN OF INCOME FILED IN RESPONSE TO NOTICE UNDER SECTION 153(A) OF THE I.T. ACT IS TO BE CONSIDERED AS RETURN FILED UNDER SECTION 139 OF THE ACT, AS THE ASSESSING OFFICER HAS MADE ASSESSMENT ON THE SAID RETURN AND THEREFORE, THE RETURN IS TO BE CONSIDERED FOR THE PURPOSE OF PENALTY UNDER SECTION 271(1)(C ) OF THE I.T. ACT AND THE PENALTY IS TO BE LEVIED ON THE INCOME ASSESSED OVER AND ABOVE THE INCOME RETURNED UNDER SECTION 153A, IF ANY. 14. FURTHER, IN THE PRESENT CASE, IT APPEARS FROM THE RECORD THAT THE ASSESSEES HAD SATISFIED ALL THE CONDITIONS WHICH ARE REQUIRED FOR CLAIMING IMMUNITY FROM PAYMENT OF PENALTY UNDER SECTION 271(1) OF THE ACT. THE PROVISION DOES NOT SPECIFY ANY TIME LIMIT DURING WHICH THE AFORESAID AMOUNT I.E. THE AMOUNT OF PENALTY WITH INTEREST HAS TO BE PAID. ADMITTEDLY WHEN THE ASSESSEES HEREIN HAVE PAID THE ENTIRE AMOUNT WITH INTEREST, THE ASSESSING OFFICER OUGHT TO HAVE GRANTED THEM IMMUNITY AVAILABLE UNDER SECTION 271(1)(C ) OF THE INCOME TAX ACT. 15. THE DECISION RELIED UPON BY LEARNED ADVOCATE FOR THE RESPONDENT WILL NOT APPLY TO THE FACTS OF THE PRESENT CASE. 16. IN VIEW OF THE AFORESAID FACTS OF THE CASE AND ALSO THE PRINCIPLE LAID DOWN IN THE DECISIONS RELIE D UPON BY THE LEARNED SENIOR COUNSEL FOR THE IT(SS)A NO.318/AHD/2011 AND 319/AHD/2011 10 APPELLANT MORE PARTICULARLY THE PRINCIPLE LAID DOWN IN THE CASE OF ASSISTANT COMMISSIONER OF INCOME TAX VS. GEBILAL KANHAILAL (SUPRA) AND COMMISSIONER OF INCOME TAX VS. ABDUL RASHID (SUPRA), WE ARE OF THE CONSIDERED OPINION THAT THE PENALTY UNDER SECTION 271(1)(C) OF THE INCOME TAX ACT CANNOT BE LEVIED ON THE INCOME SHOWN IN THE RETURN FILED UNDER SECTION 153 OF THE I.T. ACT. 17. CONSIDERING THE FACTS AND CIRCUMSTANCES OF THE CASE AND ALSO CONSIDERING THE DECISION OF THE MADRAS HIGH COURT IN THE CASE OF S.D.V. CHANDRU (SUPRA), WE ARE OF THE OPINION THAT THE APPELLANT I S ENTITLED TO THE BENEFIT OF THE PROVISIONS OF EXPLANATION 5(2) TO SECTION 271(1)(C) OF THE INCOME TAX ACT. 10. RESPECTFULLY FOLLOWING THE ESTEEMED VIEWS OF HONBLE JURISDICTIONAL HIGH COURT, WE UPHOLD THE GRIEVANCE OF THE ASSESSEE. IN VIEW OF THE FACT THA T THE INCOME IN QUESTION WAS COVERED BY THE DECLARATION M ADE IN THE STATEMENT RECORDED UNDER SECTION 132(4) AND THE TAX THEREON WAS DULY PAID BY THE ASSESSEE, THE PROV ISIONS OF EXPLANATION 5 TO SECTION 271(1)(C) OF THE ACT WI LL COME INTO PLAY ON THE FACTS OF THIS CASE. ACCORDIN GLY, AS THE ASSESSEE RIGHTLY CONTENDS, PENALTY UNDER SECTIO N 271(1)(C) CANNOT BE SUSTAINED IN LAW. IN ANY EVEN T, AS HELD BY THE HONBLE JURISDICTIONAL HIGH COURT ABOVE , THE PENALTY UNDER SECTION 271(1)(C) OF THE ACT CAN ONLY BE IMPOSED IN RESPECT OF AN INCOME OVER AND ABOVE THE INCOME DISCLOSED IN THE RETURN FILED UNDER SECTION 153A, AND SINCE THE INCOME IN QUESTION WAS INCLUDED IN TH E RETURN FILED BY THE ASSESSEE UNDER SECTION 153A, TH E IMPUGNED PENALTY IS UNSUSTAINABLE. FOR THIS REASON ALSO, THE IMPUGNED PENALTIES OF RS.79,070/- FOR A.Y . 2003-04, RS.82,070/- FOR A.Y. 2004-05 AND RS.65,025 /- FOR THE A.Y. 2005-06 ARE, THEREFORE, DELETED. THE ASSESSEE GETS THE RELIEF ACCORDINGLY. IT(SS)A NO.318/AHD/2011 AND 319/AHD/2011 11 10. AS OBSERVED EARLIER, THE ID.COUNSEL FOR THE ASS ESSEE HAS DEMONSTRATED THAT THE ADDITIONAL INCOME DECLARED IN RESPONSE TO THE NOTICE RECEIVED UNDER SECTION 153(A) AND 153(C) OF THE ACT ARE BASED ON T HE DECLARATION MADE IN THE STATEMENT UNDER SECTION 132(4) OF THE ACT. SHRI MAHENDRA B. KATARIA HAS DISCLOSED THAT INCOME WAS EARNED FOR ACCEPTING ON-MONEY. RS.12 LAKHS HAS BEEN ACCOUNTED FOR IN THE INDIVIDUAL ACCOUNTS. SIMILARLY, IN THE CASE OF SARIKHA JEWELLERS, IT WAS ALLEGED THAT THE INCOME W AS ON ACCOUNT OF UNDISCLOSED STOCK OF GOLD. THESE ASPECTS HAVE BEEN DISCUSSED DURING THE COURSE OF SEARCH, AND THE INCOMES HAVE BEEN OFFERED . THESE ASSESSEES HAVE FULFILLED THE CONDITIONS ENUMERATED IN THE JUDGMENT CITED SUPRA. WE ALLOW THE APPEALS OF THE ASSESSEE AND DELETED THE IMPUGNE D PENALTY. 11. IN THE RESULT, THE APPEALS OF THE ASSESSEES ARE ALLOWED. ORDER PRONOUNCED IN THE COURT ON 2 ND MAY, 2016 AT AHMEDABAD. SD/- SD/- ( N.K. BILLAIYA ) ACCOUNTANT MEMBER (RAJPAL YADAV) JUDICIAL MEMBER