Shri Shrichand P. Balchandani, RAJKOT-GUJARAT V. The Deputy Commissioner of Income Tax, Circle-1, RAJKOT-GUJARAT

ITSSA 38/RJT/2013

• Counselvise Citation: [2016] 122 COUNSELVISE.COM (IT) 2763 (ITAT-RAJKOT)
• Duration Of Justice: 2 year(s) 11 month(s) 26 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 25-11-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 17-10-2016
• Assessment Year: misc
• Appeal Filed On: 29-11-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: RD LALCHANDANI
• Keywords: Search and seizure; Reasonable cause; Difference of opinion; Block assessment
• Section: 273B

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL, RAJKOT [CONDUCTED THROUGH E COURT AT AHMEDABAD] BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER AND SHRI AMARJIT SINGH, ACCOUNTANT MEMBER ./ IT(SS)A.NO.38/RJT/2013 [BLOCK PERIOD ASSTT.YEAR 1991-92 TO 2000-2001] SHRI SHRICHAND P. BALCHANDANI PARIJAT 39 PARAS SOCIETY OPP: NIRMALA CONVENT SCHOOL RAJKOT 360 001. VS DY. CIT, CIR.1 RAJKOT. 01 / (APPELLANT) 23 01 / (RESPONDENT) ASSESSEE BY : SHRI R.D. LALCHANDANI, AR REVENUE BY : SHRI YOGESH PANDE, CIT-DR / DATE OF HEARING : 17/10/2016 / DATE OF PRONOUNCEMENT: 25/11/2016 456/ O R D E R PER RAJPAL YADAV, JUDICIAL MEMBER: ASSESSEE IS IN APPEAL BEFORE US AGAINST THE ORDER O F THE LD.CIT9A)-I, RAJKOT DATED 14.10.2013 FOR THE BLOCK PERIOD STARTI NG FROM ASSTT.YEAR 1991- 92 AND ENDING ON 8-8-2000. 2. SOLE GRIEVANCE OF THE ASSESSEE IS THAT THE LD.CI T(A) HAS ERRED IN CONFIRMING THE PENALTY OF RS.50,986/- WHICH WAS IMP OSED BY THE LD.AO UNDER SECTION 158BFA OF THE INCOME TAX ACT, 1961. IT(SS)A NO.38/RJT/2013 2 3. BRIEF FACTS OF THE CASE ARE THAT THE SEARCH AND SEIZURE OPERATION WAS CARRIED OUT AT THE PREMISES OF THE ASSESSEE ON 8.8. 2000. IN RESPONSE TO THE NOTICE UNDER SECTION 158BC, THE ASSESSEE HAS FILED HIS RETURN OF INCOME ON 6.12.2000 DECLARING TOTAL UNDISCLOSED INCOME AT RS. 12,28,000/-. LD. AO DETERMINED TOTAL TAXABLE INCOME OF THE ASSESSEE AT RS.14,94,201/-. AFTER GIVING EFFECT TO THE ORDER OF THE LD.CIT(A), UNDISC LOSED INCOME OF THE ASSESSEE FOR THE BLOCK PERIOD HAS BEEN DETERMINED AT RS.13,0 0,630/- AS AGAINST RS.12,28,000/-. THUS, THERE WAS A DIFFERENCE OF RS .72,630/- IN THE UNDISCLOSED INCOME DECLARED BY THE ASSESSEE FOR THE BLOCK PERIOD VIS--VIS ULTIMATELY DETERMINED BY THE AO. FOR THIS DIFFEREN CE, THE AO INITIATED PENALTY PROCEEDINGS AND IMPOSED PENALTY OF RS.50,98 6/- WHICH IS EQUIVALENT TO THE TAX SOUGHT TO BE EVADED ON THIS ADDITION. 4. APPEAL TO THE CIT(A) DID NOT BRING ANY RELIEF TO THE ASSESSEE. THE LD.COUNSEL FOR THE ASSESSEE WHILE IMPUGNING THE ORD ER OF THE CIT(A) CONTENDED THAT DURING THE COURSE OF SEARCH A CASH O F RS.13,09,081/- WAS FOUND. OUT OF THIS CASH, THE ASSESSEE HAS DISCLOSE D A SUM OF RS.12,28,000/- AS UNDISCLOSED INCOME FOR THE BLOCK PERIOD. WITH REGA RD TO THE REMAINING CASH, THE ASSESSEE HAS EXPLANATION. HE CONTENDED THAT RS .30,000/- WAS SAVINGS OF LADIES. SIMILARLY, A SUM OF RS.51,000/- WAS A LOAN RECEIVED ON 7.8.2000, THAT IS JUST ONE DAY PRIOR TO THE DATE OF SEARCH. THE A SSESSEE HAS FILED CONFIRMATION AND OTHER DOCUMENTS. THE LD.AO HAS UNREASONABLY DI SBELIEVED THE EXPLANATION OF THE ASSESSEE WHILE MAKING ADDITION. SIMILARLY, HE CONTENDED ANOTHER ADDITION CONSIDERED FOR PENALTY IS OF RS.21 ,000/- ON ACCOUNT OF INVESTMENT IN JEWELLERY. THE ASSESSEE HAS GIVEN TH E SOURCE OF THE JEWELLERY ALSO. IT(SS)A NO.38/RJT/2013 3 5. ON THE OTHER HAND, THE LD.DR HAS SUBMITTED WRITT EN SUBMISSIONS VIDE LETTER DATED 25.07.2016. IN THE WRITTEN SUBMISSION , ON THE STRENGTH OF HONBLE GUJARAT HIGH COURT DECISIONS RENDERED IN THE CASE O F CIT VS.BEECHARBHAI P. PARMAR, 341 ITR 499 (GUJ) HAS CONTENDED THAT PENALT Y IMPOSED UNDER SECTION 158BFA(2) IS MANDATORY ONE. THE ADDITION MADE ON T HE BASIS OF ESTIMATION MAY BE ONE OF THE GROUNDS ON WHICH DISCRETION NOT T O IMPOSE PENALTY MAY BE EXERCISED BY THE AO. BUT SUCH DISCRETION IS TO BE EXERCISED BY THE AO AND NOT BY THE TRIBUNAL. HE POINTED OUT THAT THE HON BLE HIGH COURT DID NOT APPROVE EXERCISE OF DISCRETION AT END OF THE TRIBUN AL, AND THEREFORE, THE LD.CIT(A) HAS RIGHTLY CONFIRMED THE PENALTY. HE PL ACED ON RECORD COPY OF THE HONBLE GUJARAT HIGH COURTS DECISION IN THE CASE O F CIT VS.BEECHARBHAI P. PARMAR (SUPRA). 6. WE HAVE DULY CONSIDERED RIVAL CONTENTIONS AND GO NE THROUGH THE RECORD CAREFULLY. AS FAR AS ORDERS RELIED UPON BY THE LD. COUNSEL FOR THE ASSESSEE ARE CONCERNED, THEY ARE QUITE DISTINGUISHABLE ON FACTS. IN ALL THESE CASES PENALTY WAS IMPOSED UNDER SECTION 271(1)(C) OF THE INCOME T AX ACT. A PENALTY UNDER SECTION 271(1)(C) IS TO BE IMPOSED ALTOGETHER UNDER DIFFERENT CIRCUMSTANCES THAN THE ONE IMPOSED UNDER SECTION 158BFA(2) OF THE INCOME TAX ACT. THIS DISTINCTION HAS BEEN ELABORATELY PROPOUNDED IN THE DECISION OF THE HONBLE GUJARAT HIGH COURT RENDERED IN THE CASE OF CIT VS.B EECHARBHAI P. PARMAR (SUPRA) REFERRED TO BY THE LD.DR. BEFORE EMBARKING UPON AN INQUIRY ON THE FACTS OF THE PRESENT CASE, WE DEEM IT APPROPRIATE T O TAKE NOTE OF THE FINDING RECORDED BY THE HONBLE GUJARAT HIGH COURT IN THE C ASE OF CIT VS.BEECHARBHAI P. PARMAR. THE HONBLE COURT HAS TA KEN NOTE OF SECTION 158BFA, AND THEREAFTER EXPOUNDED THE MEANING AND IN TERPRETATION OF THIS SECTION. THE DISCUSSION MADE BY THE HONBLE COURT FROM PARA 8 TO 9 IN THIS REGARD READS AS UNDER: IT(SS)A NO.38/RJT/2013 4 8. HAVING THUS HEARD LEARNED COUNSEL FOR THE PARTI ES, WE MAY TAKE NOTE OF THE RELEVANT STATUTORY PROVISIONS. SEC. 158 BFA OF THE ACT IS PART OF CHAPTER XIV-B, WHICH LAYS DOWN SPECIAL PROCEDURE FOR ASSESSMENT OF SEARCH CASES. SEC. 158BFA PERTAINS TO LEVY OF INTER EST AND PENALTY IN CERTAIN CASES. SUB-S. (2) OF S. 158BFA, WHICH IS RE LEVANT FOR OUR PURPOSE, READS AS UNDER: '158BFA. LEVY OF INTEREST AND PENALTY IN CERTAIN CA SES(1) ................... (2) THE AO OR THE CIT(A), IN THE COURSE OF ANY PROC EEDINGS UNDER THIS CHAPTER, MAY DIRECT THAT A PERSON SHALL PAY BY WAY OF PENALTY A SUM WHICH SHALL NOT BE LESS THAN THE AMOUNT OF TAX LEVI ABLE BUT WHICH SHALL NOT EXCEED THREE TIMES THE AMOUNT OF TAX SO LEVIABL E IN RESPECT OF THE UNDISCLOSED INCOME DETERMINED BY THE AO UNDER CL. ( C) OF S. 158BC : PROVIDED THAT NO ORDER IMPOSING PENALTY SHALL BE MA DE IN RESPECT OF A PERSON IF (I) SUCH PERSON HAS FURNISHED A RETURN UNDER CL. (A ) OF S. 158BC; (II) THE TAX PAYABLE ON THE BASIS OF SUCH RETURN HA S BEEN PAID OR, IF THE ASSETS SEIZED CONSIST MONEY, THE ASSESSEE OFFERS TH E MONEY SO SEIZED TO BE ADJUSTED AGAINST THE TAX PAYABLE; (III) EVIDENCE OF TAX PAID IS FURNISHED ALONG WITH THE RETURN; AND (IV) AN APPEAL IS NOT FILED AGAINST THE ASSESSMENT OF THAT PART OF INCOME WHICH IS SHOWN IN THE RETURN : PROVIDED FURTHER THAT THE PROVISIONS OF THE PRECEDI NG PROVISO SHALL NOT APPLY WHERE THE UNDISCLOSED INCOME DETERMINED BY TH E AO IS IN EXCESS OF THE INCOME SHOWN IN THE RETURN AND IN SUCH CASES THE PENALTY SHALL BE IMPOSED ON THAT PORTION OF UNDISCLOSED INCOME DETER MINED WHICH IS IN EXCESS OF THE AMOUNT OF UNDISCLOSED INCOME SHOWN IN THE RETURN.' 8. UPON PERUSAL OF SUB-S. (2) OF S. 158BFA OF THE A CT, IT WOULD EMERGE THAT THE AO OR CIT(A) HAS THE POWER TO IMPOSE PENAL TY IN COURSE OF ANY PROCEEDINGS UNDER THE SAID CHAPTER, WHICH PENALTY W OULD RANGE BETWEEN 100 PER CENT TO 300 PER CENT OF THE TAX LEV IABLE ON THE UNDISCLOSED INCOME DETERMINED BY THE AO UNDER CL. ( C) OF S. 158BC OF THE ACT. IT(SS)A NO.38/RJT/2013 5 8.1 PROVISO TO SUB-S. (2) OF S. 158BFA OF THE ACT, HOWEVER, PROVIDES FOR FOUR CONDITIONS, UPON SATISFACTION OF WHICH, THE AS SESSEE WOULD GET IMMUNITY FROM SUCH PENALTY. SUCH CONDITIONS ARE TO BE SATISFIED CUMULATIVELY. IN ESSENCE, IT PROVIDES THAT THE PENA LTY SHALL NOT BE IMPOSED IF THE ASSESSEE FURNISHES A RETURN UNDER CL . (A) OF S. 158BC; ALSO PAYS TAX ON THE BASIS OF SUCH RETURN, OR OFFER S FOR ADJUSTMENT ANY MONEY SEIZED, OR PRODUCES EVIDENCE OF HAVING PAID S UCH TAX, AND ALSO DOES NOT FILE APPEAL AGAINST ASSESSMENT ON THAT PAR T OF THE INCOME WHICH IS SHOWN IN THE RETURN. IN OTHER WORDS, IN CA SES OF PROCEEDINGS FOR BLOCK ASSESSMENT, THE ASSESSEE WOULD HAVE AN AD DITIONAL CHANCE TO AVOID PENALTY BY FURNISHING A RETURN, PAYING TAX ON SUCH UNDISCLOSED RETURN AND ACCEPTING FINALITY WITH RESPECT TO THE S AME. 8.2 FURTHER PROVISO TO SUB-S. (2) OF S. 158BFA IS M ERELY IN NATURE OF CLARIFICATION AND PROVIDES THAT THE FIRST PROVISO W OULD NOT APPLY WHERE UNDISCLOSED INCOME DETERMINED BY THE AO IS IN EXCES S OF THE INCOME SHOWN IN THE RETURN AND IN SUCH CASES, PENALTY SHAL L BE IMPOSED ON THAT PORTION OF THE UNDISCLOSED INCOME DETERMINED, WHICH IS IN EXCESS OF THE AMOUNT OF UNDISCLOSED INCOME SHOWN IN THE RETURN. 8.3 CLOSELY SEEN, SUB-S. (2) OF S. 158BFA MAKES IT CLEAR THAT IT IS WELL WITHIN THE DISCRETION OF THE AO, WHILE FRAMING THE ASSESSMENT FOR THE BLOCK PERIOD, WHETHER OR NOT TO IMPOSE ANY PENALTY OR NOT. THE WORDS, 'MAY DIRECT' HAVE TO BE GIVEN ITS NORMAL MEANING, L EAVING DISCRETION TO THE OFFICER. IN ABSENCE OF ANY SPECIAL REASON THE W ORD, 'MAY' CANNOT BE READ AS 'SHALL'. 8.4 IN CASE OFHINDUSTAN STEEL LTD. VS. STATE OF ORI SSA (1972) 83 ITR (SC) 26 THE APEX COURT IN CONNECTION WITH PENALTY P RESCRIBED IN ORISSA SALES-TAX ACT OBSERVED : '.. ..AN ORDER IMPOSING PENALTY FOR FAILURE TO CARR Y OUT A STATUTORY OBLIGATION IS THE RESULT OF A QUASI-CRIMINAL PROCEE DING, AND PENALTY WILL NOT ORDINARILY BE IMPOSED UNLESS THE PARTY OBLIGED, EITHER ACTED DELIBERATELY IN DEFIANCE OF LAW OR WAS GUILTY OF CO NDUCT CONTUMACIOUS OR DISHONEST, OR ACTED IN CONSCIOUS DISREGARD OF IT S OBLIGATION. PENALTY WILL NOT ALSO BE IMPOSED MERELY BECAUSE IT IS LAWFU L TO DO SO. WHETHER PENALTY SHOULD BE IMPOSED FOR FAILURE TO PERFORM A STATUTORY OBLIGATION IS A MATTER OF DISCRETION OF THE AUTHORITY TO BE EX ERCISED JUDICIALLY AND ON A CONSIDERATION OF ALL THE RELEVANT CIRCUMSTANCE S. EVEN IF A MINIMUM PENALTY IS PRESCRIBED, THE AUTHORITY COMPET ENT TO IMPOSE THE PENALTY WILL BE JUSTIFIED IN REFUSING TO IMPOSED PE NALTY, WHEN THERE IS A IT(SS)A NO.38/RJT/2013 6 TECHNICAL OR VENIAL BREACH OF THE PROVISIONS OF THE ACT OR WHERE THE BREACH FLOWS FROM ABONA FIDE BELIEF THAT THE OFFEND ER IS NOT LIABLE TO ACT IN THE MANNER PRESCRIBED BY THE STATUTE.' 9. THE CONTENTION OF THE COUNSEL FOR THE REVENUE TH AT ONLY UPON SATISFACTION OF THE CONDITIONS CONTAINED IN PROVISO TO SUB-S. (2) THAT THE ASSESSEE, IN CASE OF THE BLOCK ASSESSMENT CAN BE SP ARED OF THE PENALTY CANNOT BE ACCEPTED. IT IS, OF COURSE, TRUE THAT UPO N SATISFYING SUCH CONDITIONS, THE ASSESSEE WOULD GET IMMUNITY FROM PE NALTY. NEVERTHELESS, THIS IS NOT A THING AS TO SUGGEST THA T IN NO OTHER CASE, OR ON NO OTHER GROUND, THE AO MAY AT HIS DISCRETION, N OT IMPOSE PENALTY THE MOMENT ADDITIONS UNDER CL. (C) OF S. 158BC ARE SUSTAINED. IN OTHER WORDS, WE ARE UNABLE TO HOLD THAT THE PENALTY UNDER S. 158BFA(2) IS MANDATORY IN NATURE. 9.1 IT IS TRUE THAT S. 273B OF THE ACT WHICH PROVID ES THAT PENALTY SHALL NOT BE IMPOSED IN CERTAIN CASES ON THE ASSESSEE PRO VING THAT THERE WAS REASONABLE CAUSE FOR FAILURE TO PAY TAX REFERS TO S EVERAL PROVISIONS SUCH AS SS. 271, 271A, ETC., MAKES NO MENTION OF S. 158B FA(2). THIS STILL DOES NOT MEAN THAT PENALTY UNDER S. 158BFA(2) IS MA NDATORY. 7. THE HONBLE COURT, THEREAFTER, OBSERVED THAT THE TRIBUNAL IN THAT CASE HAS DELETED PENALTY FOR THREE REASONS VIZ. (A) ADDI TION WAS MADE ONLY ON ESTIMATION, (B) THERE IS NO CONCEALMENT OF PARTICUL ARS BY THE ASSESSEE, AND (C) CERTAIN ADDITIONS WOULD NOT GIVE RISE TO PENALTY PR OCEEDINGS. THESE REASONS DID NOT GET APPROVAL OF THE HONBLE COURT, AND THER EFORE, PENALTY IN THE CASE OF CIT VS.BEECHARBHAI P. PARMAR (SUPRA) WAS RESTORE D. ON THE STRENGTH OF THIS DECISION, IT WAS CONTENDED BY THE LD.DR THAT T HOUGH IMPOSITION OF PENALTY UNDER SECTION 158BFA(2) MAY NOT BE MANDATORY, BUT O NCE A DISCRETION WAS EXERCISED BY THE AO TO VISIT THE ASSESSEE WITH PENA LTY, THEN THE TRIBUNAL HAS NO POWER TO REPLACE DISCRETION EXERCISED BY THE AO WITH THAT OF THE TRIBUNAL. 8. IT IS PERTINENT TO MENTION HERE THAT CHAPTER XIV B STARTING FROM SECTION 158B PROVIDE SPECIAL PROCEDURE FOR ASSESSMENT OF SE ARCH CASES UPTO THE SEARCH CONDUCTED PRIOR TO 31.5.2003. UNDER THE SCH EME OF BLOCK ASSESSMENT, IT(SS)A NO.38/RJT/2013 7 INCOME OF AN ASSESSEE FOR THE BLOCK PURPOSE IS TO B E COMPUTED UNDER SECTION 158BB. IN A SERIES OF DECISIONS, IT HAS BEEN HELD THAT INCOME FROM THE BLOCK IS TO BE COMPUTED ON THE BASIS OF SEIZED MATERIAL. IN OTHER WORDS, WHEN THE AO ISSUES NOTICE UNDER SECTION 158BC OF THE ACT, IN VITING THE ASSESSEE TO FILE RETURN FOR THE UNDISCLOSED INCOME, HE WOULD SUPPLY COPIES OF SEIZED MATERIAL ON THE BASIS OF WHICH THE ASSESSEE HAS TO COMPUTE T RUE UNDISCLOSED INCOME. IN OTHER WORDS, MATERIAL ON THE BASIS OF WHICH INCO ME OF AN ASSESSEE HAS TO BE DETERMINED FOR THE PURPOSE OF BLOCK PERIOD IS COMMO N. IT IS THE MATERIAL COLLECTED DURING THE COURSE OF SEARCH. IN THESE CI RCUMSTANCES, THE ALLEGATIONS OR THE CHARGE AGAINST AN ASSESSEE SHOULD BE WHY HE FAILED TO COMPUTE TRUE UNDISCLOSED INCOME. LIKE IN THE PRESENT CASE, THE ASSESSEE HAS DISCLOSED AN INCOME OF RS.12,28,000/- FOR THE BLOCK PERIOD. THE AO HAS DETERMINED THE TAXABLE INCOME OF THE ASSESSEE AT RS.13,00,630 (AFT ER GIVING EFFECT TO CIT(A_S ORDER). ALLEGATION FOR VISITING THE ASSES SEE WITH PENALTY UNDER SECTION 158BFA(2) CAN BE WHY THE ASSESSEE FAILED TO COMPUTE HIS TRUE UNDISCLOSED INCOME. INGREDIENTS OF SECTION 271(1)( C) I.E. REVENUE HAS TO ESTABLISH THAT THE ASSESSEE HAD EITHER CONCEALED PA RTICULARS OF INCOME OR FURNISHED INACCURATE PARTICULARS OF SUCH INCOME, HA S NO SUCH PLACE FOR VISITING THE ASSESSEE WITH PENALTY UNDER SECTION 158BFA(2), AND FOR THIS REASON WE HAVE DISTINGUISHED DECISION REFERRED TO BY THE LD.C OUNSEL FOR THE ASSESSEE. 9. IN THE LIGHT OF THE ABOVE, IF WE EXAMINE THE FAC TS OF THE PRESENT CASE, THEN IT WOULD REVEAL THAT WHILE FILING HIS RETURN O F INCOME FOR THE BLOCK PERIOD HAS OFFERED THE AMOUNT FOUND IN CASH AT THE TIME OF SEARCH. HE HAS OFFERED A SUM OF RS.12,28,000/- OUT OF RS.13,09,081/-. ONE O F THE CONTENTIONS OF THE ASSESSEE WAS THAT A SUM OF RS.51,000/- WAS RECEIVED AS LOAN JUST ONE DAY PRIOR TO THE SEARCH. THIS FACTS HAVE OPERATED IN THE MIN D OF THE ASSESSEE FOR NOT INCLUDING A SMALL PORTION OF RS.72,630/- IN THE TOT AL UNDISCLOSED INCOME IT(SS)A NO.38/RJT/2013 8 COMPUTED BY HIM ON THE BASIS OF SEIZED MATERIAL. W HEN THE ASSESSEE HAS COMPUTED HIS INCOME FOR THE BLOCK PERIOD, THE FACT OF AVAILING LOAN ONE DAY PRIOR TO SEARCH MUST HAVE OPERATED ON HIS BACK OF M IND. ON ONE HAND, THERE ARE CHANCES OF LEVY OF PENALTY UNDER SECTION 158BFA AND ON THE OTHER HAND, THERE WAS CHANCE OF EXCLUSION OF THIS AMOUNT FROM T OTAL UNDISCLOSED INCOME FOR THE BLOCK PERIOD. 10. IN SUCH SITUATION, WHILE COMPUTING TRUE UNDISCL OSED INCOME, ASSESSEE COULD NOT INCLUDE THE ALLEGED UNEXPLAINED INVESTMEN T JEWELLERY AND CASH COMPUTED BY THE AO. HAD THE ASSESSEE INCLUDED IT, THEN WHEN IT WILL GET CHANCE TO REBUT THIS ASSUMPTION. THE HONBLE GUJAR AT HIGH COURT IN THE CASE OF CIT VS.BEECHARBHAI P. PARMAR (SURPA) HAS OBSERVE D IN PARA 8.1 IN OTHER WORDS, IN CASES OF PROCEEDINGS FOR BLOCK ASSESSMENT , THE ASSESSEE WOULD HAVE AN ADDITIONAL CHANCE TO AVOID PENALTY BY FURNISHING A RETURN, PAYING TAX ON SUCH UNDISCLOSED RETURN AND ACCEPTING FINALITY WITH RESPECT TO THE SAME. THIS WAS OBSERVED WHILE CONSTRUING THE MEANING OF SECTIO N 158BFA AND EXPOUNDING UNDER WHICH CONDITION THE ASSESSEE COULD GET IMMUNITY FROM SUCH PENALTY. NOW, THIS IS THE AREA WHICH WOULD GIVE RI SE TO THE LITIGATION, HOW THE ASSESSEE WOULD COMPUTE HIS TRUE UNDISCLOSED INCOME AND WHERE THERE IS A DEBATE ABOUT THE COMPUTATION OF PARTICULAR AMOUNT O N THE BASIS OF ALLEGED SEIZED MATERIAL, THEN, THERE WOULD BE DIFFERENCE OF OPINION BETWEEN THE ASSESSEE VIS--VIS THE AO. IF IT IS DEMONSTRATED T HAT WITH THE HELP OF CIRCUMSTANTIAL EVIDENCE THAT INCLUSION OF A PARTICU LAR ITEM IN THE ULTIMATE UNDISCLOSED INCOME DETERMINED BY THE AO WAS NOT CER TAIN, RATHER THERE CAN BE TWO OPINIONS ABOUT ITS INCLUSION OR EXCLUSION, THEN TO OUR MIND THE ASSESSEE SHOULD NOT BE VISITED WITH PENALTY. JUDGMENT OF THE HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT VS.BEECHARBHAI P. PAR MAR (SUPRA) HAS CATEGORICALLY LAID DOWN THAT IT IS NOT MANDATORY TO IMPOSE PENALTY UNDER IT(SS)A NO.38/RJT/2013 9 SECTION 158BFA(2). SIMILARLY CONDITIONS REQUIRED T O BE FULFILLED FOR THE PURPOSE OF VISITING AN ASSESSEE WITH PENALTY UNDER SECTION 271(1)(C) ARE ALSO NOT TO BE EVALUATED FOR DECIDING THE FACTOR WHETHER THE ASSESSEE SHOULD BE VISITED WITH PENALTY OR NOT. IN OUR OPINION, CIRCU MSTANCES FOR DECIDING THE FACTOR FOR VISITING AN ASSESSEE WITH PENALTY UNDER SECTION 158BFA(2) ARE ALTOGETHER DIFFERENT THAN THE ONE UNDER SECTION 271 (1)(C) OF THE ACT. IN VIEW OF THE ABOVE DISCUSSION, WE ALLOW THE APPEAL OF THE ASSESSEE AND DELETE THE PENALTY. 11. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWE D. ORDER PRONOUNCED IN THE COURT ON 25 TH NOVEMBER, 2016 AT AHMEDABAD. SD/- SD/- (AMARJIT SINGH) ACCOUNTANT MEMBER (RAJPAL YADAV) JUDICIAL MEMBER AHMEDABAD; DATED 25/11/2016