Shri Prabhudas K. Patel, Ahmedabad v. The ACIT, Circle-3,, Ahmedabad

ITA 1395/AHD/2007 | 1993-1994
Pronouncement Date: 10-12-2010 | Result: Allowed

Appeal Details

RSA Number 139520514 RSA 2007
Assessee PAN AAVPP9828J
Bench Ahmedabad
Appeal Number ITA 1395/AHD/2007
Duration Of Justice 3 year(s) 8 month(s)
Appellant Shri Prabhudas K. Patel, Ahmedabad
Respondent The ACIT, Circle-3,, Ahmedabad
Appeal Type Income Tax Appeal
Pronouncement Date 10-12-2010
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted D
Tribunal Order Date 10-12-2010
Date Of Final Hearing 07-12-2010
Next Hearing Date 07-12-2010
Assessment Year 1993-1994
Appeal Filed On 09-04-2007
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH AHMEDABAD BENCH AHMEDABAD BENCH AHMEDABAD BENCH D DD D BEFORE BEFORE BEFORE BEFORE SHRI SHRI SHRI SHRI N NN N. .. .S. SAINI S. SAINI S. SAINI S. SAINI ACCOUNTANT MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER AND AND AND AND SHRI SHRI SHRI SHRI MAHAVIR SINGH JUDICIAL MEMBER MAHAVIR SINGH JUDICIAL MEMBER MAHAVIR SINGH JUDICIAL MEMBER MAHAVIR SINGH JUDICIAL MEMBER DATE OF HEARING :7-12-10 DRAFTED ON : 7-12-10 ITA NO. 1395 - 1396 /AHD/ 2007 ASSESSMENT YEAR : 1993-94 1994-95 SHRI PRABHUDAS K. PATEL 485/22 VAKIL CLOTH MARKET REVDI BAZAR AHMEDABAD. VS. THE ASSISTANT COMMISSIONER OF INCOME TAX CIRCLE-3 JITENDRA CHAMBERS ASHRAM ROAD AHMEDABAD. PAN/GIR NO. : AAVPP9828 J (A PPELLANT ) .. ( RESPONDEN T ) APPELLANT BY : SHRI DHIREN SHAH C.A. RESPONDENT BY: SHRI ROHIT MEHRA D.R. O R D E R O R D E R O R D E R O R D E R PER N.S.SAINI ACCOUNTANT MEMBER :- THESE ARE THE APPEALS FILED BY THE ASSESSEE AGAIN ST THE CONSOLIDATED ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX(APP EALS)-II AHMEDABAD DATED 26-12-2006 FOR ASSESSMENT YEARS 1993-94 AND 1994-95. 2. THE SOLE GROUND OF APPEAL TAKEN BY THE ASSESSEE IN BOTH THE APPEALS IS THAT THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS ) ERRED IN LAW AND IN FACTS IN CONFIRMING THE LEVY OF PENALTY OF `.86 632 /- IN ASSESSMENT YEAR 1993- 94 AND `.10 13 376/- IN ASSESSMENT YEAR 1994-95 UND ER SECTION 271(1)(C) OF THE ACT. 3. THE BRIEF FACTS OF THE CASE ARE THAT A SEARCH WAS C ONDUCTED IN THE BUSINESS AND RESIDENTIAL PREMISES OF THE APPELLANT ON 28.3.1995. IN COURSE OF SEARCH IT WAS FOUND THAT THE APPELLANT WAS MAINTAIN ING 127 BANK ACCOUNTS IN DIFFERENT NAMES. HE USED TO APPLY FOR SHARES OF DIF FERENT PUBLIC ISSUES IN THESE NAMES AND ROUTED THE MONEY AMONG THESE DIFFERENT BE NAMI SAVINGS ACCOUNTS. THIS FACT OF MAINTAINING AND OPERATING BE NAMI BANK ACCOUNTS WERE ADMITTED BY HIM IN COURSE OF STATEMENT UNDER SECTIO N 132(4) ON 28-3-1995 AND 29-3-1995. IN COURSE OF STATEMENT UNDER SECTION 132(4) ON 29-3-1995 THE PAGE 2 OF 8 APPELLANT DECLARED UNDISCLOSED INCOME OF `.65 LACS. SUBSEQUENTLY ON 25-5-98 HE WROTE A LETTER ADDRESSED TO (I) DIRECTOR OF INCO ME TAX (INVESTIGATION) (II) CIT GUJARAT-I (III) DY. DIT. AAYAKAR BHAVAN AND ( IV) ADIT (INV.) UNIT-II AND DISCLOSED INCOME OF `. 70 LAKHS BUT STATED THAT THI S 70 LACS RELATED TO THREE DIFFERENT ASSESSMENT YEARS I.E. 1993-94 1994-95 AN D 1995-96. IT WAS ALSO SUBMITTED THAT DETAILED WORKING HAS TO BE DONE ON T HE BASIS OF MATERIALS WHICH WERE FOUND AND SEIZED. SUBSEQUENTLY HE REDUC ED THE UNDISCLOSED INCOME TO `.52 35 000/- FOR A.Y. 1993-94 TO 1995-96 AND ACCORDINGLY FILED REVISED RETURN OF INCOME FOR A.Y. 1993-94 AND 1994- 95 AND RETURN OF INCOME FOR A.Y. 1995-96 WHERE THE ADDITIONAL INCOME DISCLO SED WAS OFFERED AS UNDER:- ASSESSMENT YEAR . AMOUNT. 1993-94 2 21 000 1994-95 23 32 000 1995-96 26 82 000 TOTAL. 52 55 000/- 4. THE LEARNED ASSESSING OFFICER AFTER CONSIDERING THE VARIOUS DETAILS AND EXPLANATIONS AND TAKING INTO ACCOUNT THE TRANSA CTIONS IN ALL THE BENAMI SAVINGS BANK ACCOUNT COMPUTED THE INCOME UNDER SEC TION 143(3) R.W.S. 147 BY MAKING CERTAIN ADDITIONS ON ACCOUNT OF PEAK CRED IT IN THE BENAMI BANK ACCOUNTS. ON APPEAL THE LD.CIT (A) RESTRICTED THE ADDITIONS ON ACCOUNT OF PEAK CREDIT AS UNDER:- ASST.YEAR. DATE OF ORIGINAL RETURN INCOME. DATE OF REVISED RETURN INCOME. ADDL. INCOME OFFERED AS PER REVISED RETURN. ADDITION MADE BY LEARNED ASSESSING OFFICER TO ORIGINAL INCOME. ADDITION CONFIRMED BY CIT(A) 1993 - 94 31 - 8 - 1993 `.85 204 24 - 9 - 1996 `.3 06 270 `.2 21 000 `.3 81 000 `.2 21 000 1994 - 95 26 - 7 - 1994 `. 75 400 24 - 9 - 1996 `.24 07 390 `.23 32 000 `.76 22 552 `.23 32 000 5. FROM THE ABOVE IT IS CLEAR THAT THE ADDITIONAL I NCOME OFFERED BY THE APPELLANT AS PER REVISED RETURN SUBSEQUENT TO SEARC H WERE ACCEPTED BY THE PAGE 3 OF 8 LEARNED COMMISSIONER OF INCOME TAX (APPEALS). ADDIT IONS MADE BY THE LEARNED ASSESSING OFFICER TO THE REVISED RETURN OF INCOME WERE DELETED. AFTER RECEIPT OF THE ORDER OF LEARNED COMMISSIONER OF INC OME TAX (APPEALS) THE LEARNED ASSESSING OFFICER TOOK UP THE PENALTY PROCE EDINGS AND AFTER CONSIDERING THE EXPLANATION AND OBJECTIONS RAISED B Y THE APPELLANT HE TREATED THE INCOME WHICH WERE DETECTED IN THE COURS E OF SEARCH AND OFFERED BY THE APPELLANT AS ADDITIONAL INCOME IN THE REVISE D RETURN OF INCOME AS CONCEALED INCOME IN RESPECT OF WHICH APPELLANT HAS FURNISHED INACCURATE PARTICULARS OF INCOME AND LEVIED PENALTY UNDER SECT ION 271(1)(C) . 6. IN COURSE OF HEARING BEFORE THE LEARNED COMMISS IONER OF INCOME TAX(APPEALS) THE LEARNED AUTHORISED REPRESENTATIVE OF THE ASSESSEE CONTENDED THAT THE LEARNED ASSESSING OFFICER IS NOT JUSTIFIED IN LEVYING PENALTY UNDER SECTION 271(1)(C). IN SUPPORT OF THI S ARGUMENT HE STATED THE FOLLOWING:- 7. ADDITIONS MADE BY THE LEARNED ASSESSING OFFICER HAS BEEN DELETED BY THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) T HEREFORE PENALTY CANNOT BE LEVIED. HE RELIED ON THE CASE K. C.BUILDE RS VS. ACIT 265 ITR 562 (SC). 8. AFTER CONSIDERING THE SUBMISSIONS OF THE LEARNED AUTHORISED REPRESENTATIVE OF THE ASSESSEE THE LEARNED COMMISSI ONER OF INCOME TAX (APPEALS) OBSERVED AS UNDER :- 3.1.1. I HAVE CONSIDERED THE ABOVE ARGUMENT OF THE APPELLANT. ION THE CASE OF K. C. BUILDERS VS. ACIT (SUPRA) TH E HON'BLE S.C. HAS MADE THE FOLLOWING OBSERVATIONS :- WHERE THE ADDITIONS MADE IN THE ASSESSMENT ORDER O N THE BASIS OF WHICH PENALTY FOR CONCEALMENT IS LEVIED A RE DELETED THERE REMAINS NO BASIS AT ALL FOR LEVYING PENALTY F OR CONCEALMENT AND THEREFORE IN SUCH A CASE NO PENALTY CAN SURVI VE AND THE PENALTY IS LIABLE TO BE CANCELLED. HOWEVER THE ABOVE DECISION OF HON'BLE SUPREME COUR T IS NOT APPLICABLE TO THE FACTS OF THE APPELLANTS CASE. TH E APPELLANT WANTS TO MAKE OUT A CASE THAT ADDITION MADE TO THE INCOME DI SCLOSED IN THE REVISED RETURN HAS BEEN DELETED BY LEARNED COMMISSI ONER OF INCOME TAX (APPEALS) THEREFORE PENALTY IS NOT LEVIABLE. IT IS TO BE NOTED HERE THAT THE PENALTY IS NOT BASED ON THE ADDITIONS WHIC H HAVE BEEN DELETED BY CIT(A) RATHER ON THE ADDITIONAL INCOME OFFERED B Y THE APPELLANT AS A PAGE 4 OF 8 SEQUEL TO SEARCH OPERATION UNDER SECTION 132 DATED 28.3.95. AS MENTIONED EARLIER THE APPELLANT HAS DISCLOSED INCO MES O F`. 85 204/- (FOR A.Y.93-94) AND `.75 400/- (FOR A.Y. 94-95) BUT THESE INCOMES WERE REVISED AND ADDITIONAL INCOME OF `. 2 21 000/- (93- 94) AND `.23 32 000/- (94-95) WERE OFFERED BECAUSE OF DETEC TION BY THE DEPARTMENT IN COURSE OF SEARCH THAT APPELLANT HAS O PENED BENAMI SAVING BANK ACCOUNT IN 127 DIFFERENT NAMES AND COND UCTED BUSINESS OF APPLYING FOR SHARES AND SELLING THE SHARES IN THESE NAMES. THUS CONCEALMENT OF INCOME BY THE ASSESSEE WAS ESTABLISH ED BY THE DEPARTMENT ON THE BASIS OF DOCUMENTS FOUND IN COURS E OF SEARCH AND POST SEARCH INVESTIGATION . IN THE CASE OF K.C. BUI LDERS VS. ACIT THE ASSESSEE FIRM WADS ENGAGED IN THE BUSINESS OF CONST RUCTION. IT HAS RETURNED INCOME IN A.Y. 83-84 TO 86-87 AT CERTAIN F IGURES OF COST OF CONSTRUCTION. THEREAFTER WHEN INQUIRIES WERE MADE B Y THE DEPARTMENT THE FIRM FILED REVISED RETURN DISCLOSING HIGHER COS T OF CONSTRUCTION ON THE BASIS OF AN APPROVED VALUERS REPORT. THE REVIS ED RETURNS WERE ACCEPTED BY THE DEPARTMENT AND ASSESSMENTS WERE COM PLETED. THE PENALTY IMPOSED ON THE BASIS OF DIFFERENCE BETWEEN REVISED RETURN AND ORIGINAL RETURN WAS DELETED BY ITAT AND THE ORDER O F ITAT WAS APPROVED BY HON'BLE S.C. THUS IN THE CASE OF K. C . BUILDERS THERE WAS NO FINDING OR DETECTION OF CONCEALMENT. ONLY REVISE D RETURN SHOWING HIGHER INCOME WAS FILED IN RESPONSE TO INQUIRIES MA DE BY THE DEPARTMENT. THE FACTS OF THE APPELLANTS CASE ARE E NTIRELY DIFFERENT WHERE CONCEALMENT HAS BEEN CLEARLY ESTABLISHED. TH EREFORE THE APPELLANTS ARGUMENT ON THIS ACCOUNT IS NOT ACCEPTA BLE HENCE REJECTED. 3.2. THE NEXT ARGUMENT TAKEN BY THE APPELLANT IS T HAT IT HAS FILED REVISED RETURN SUO MOTO BY OFFERING MORE INCOME. TH EREFORE PENALTY IS NOT LEVIABLE. RELIANCE HAS BEEN PLACED ON THE DECIS ION OF HON'BLE SUPREME COURT IN THE CASE OF CIT VS. SURESHCHANDRA MITTAL 251 ITR 9 (2001). 3.2.1. I HAVE CONSIDERED THE ABOVE ARGUMENT. IN THE CASE OF CIT VS. SURESHCHANDRA MITTAL (SUPRA) THE HON'BLE SUPREME C OURT HAS HELD AS UNDER:- THE ASSESSEE HAD ORIGINALLY FILED RETURNS SHOWING MEAGER INCOME. WHEN AFTER ACTION UNDER SECTION 132 OF THE INCOME TAX ACT A NOTICE UNDER SECTION 148 WAS SERVED ON HIM HE FILED REVISED RETURNS SHOWING HIGHER INCOME. EVENTUALLY ASSESSMENT ORDERS WERE PASSED AND THE RETURNS SUBMITTED REGULA RIZED UNDER SECTION 148. IN PENALTY PROCEEDING UNDER SECTION 27 1 THE ASSESSEE CLAIMED THAT HE HAD OFFERED ADDITIONAL INC OME TO BUY PEACE OF MIND AND AVOID LITIGATION. PENALTY ORDERS WERE PASSED AND THE COMMISSIONER (APPEALS) CONFIRMED THE ORDERS . BUT THE APPELLATE TRIBUNAL HELD THAT THE DEPARTMENT HAD NOT DISCHARGED ITS BURDEN OF PROVING CONCEALMENT AND HAD SIMPLY RE STED ITS CONCLUSION ON THE ACT OF VOLUNTARY SURRENDER DONE B Y THE ASSESSEE IN GOOD FAITH AND THAT PENALTY COULD NOT BE LEVIED. ON A REFERENCE THE HIGH COURT HELD THAT NO PENALTY CO ULD BE LEVIED FOR CONCEALMENT [SEE. 241 ITR 124 (2000)]. THE DEPA RTMENT PREFERRED APPEALS TO THE SUPREME COURT. THE SUPREME COURT PAGE 5 OF 8 DISMISSED THE APPEALS HOLDING THAT NO INTERFERENCE WITH THE ORDER OF THE HIGH COURT WAS CALLED FOR. THE FACTS OF THE APPELLANTS CASE ARE ENTIRELY DIFF ERENT. IN THE CASE OF SURESHCHANDRA MITTAL AFTER SEARCH NOTICE UNDER SECTION 148 WAS ISSUED. IN RESPONSE TO THIS NOTICE THE ASSESSEE FILED REVISED RETURN BY OFFERING ADDITIONAL INCOME TO BUY PEACE AND AVOI D LITIGATION. THE PENALTY LEVIED ON THE BASIS OF REVISED RETURN WAS D ELETED ON THE GROUND THAT THE DEPARTMENT HAS NOT DISCHARGED ITS BURDEN OF PROVING CONCEALMENT AND HAS SIMPLY RESTED ITS CONCLUSION ON THE ACT OF VOLUNTARY SURRENDER DONE BY THE ASSESSEE WHEREAS IN THE APPELLANTS CASE CONCEALMENT HAS BEEN DETECTED IN COURSE OF SEA RCH WHEN 127 BENAMI SAVINGS BANK ACCOUNT OPERATED BY THE APPELLA NT IN DIFFERENT NAMES HAVE BEEN DETECTED. THE TRANSACTIONS INVOLVED IN THESE ACCOUNTS ARE CLEARLY THE INCOME OF THE APPELLANT WH ICH HAS NOT BEEN OFFERED FOR TAXATION IN THE ORIGINAL RETURN. IN SUC H A BACK GROUND THE APPELLANT HAS FILED REVISED RETURN OFFERING THE ADD ITIONAL INCOME. THEREFORE APPELLANTS CASE IS DIFFERENT FROM THAT OF THE CASE OF SURESHCHANDRA MITTAL. THE APPELLANT CANNOT BE SAID TO HAVE FILED REVISED RETURN VOLUNTARILY BECAUSE OPERATION OF 127 BENAMI SAVINGS ACCOUNT HAS BEEN DETECTED BY THE DEPARTMENT. THE TR ANSACTIONS IN THESE ACCOUNTS ARE INCOME NOT OFFERED FOR TAXATION IN THE ORIGINAL RETURN. AGAINST THIS BACKGROUND THE ASSESSEE HAS NO ALTERNATIVE BUT TO OFFER ADDITIONAL INCOME FOR TAXATION. 3.2.2. THE APPELLANTS CASE IS RATHER COVERED BY T HE DECISION OF HON'BLE S.C. IN THE CASE OF K. P. MADHUSUDANAN VS. CIT 251 ITR 99. IN THIS CASE THE ASSESSEE HAD TAKEN CERTAIN BANK DRAFTS FOR PAYM ENTS TO SUPPLIERS OF RICE IN ANDHRA PRADESH IT HAD MADE THE ENTRIES IN ITS ACCOUNTS NOT ON THE DATES ON WHICH THEY WERE OBTAINED BUT A FEW DAYS LATER. THE EXPLANATION OF THE ASSESSEE WAS THAT SUFFICIENT CAS H BALANCE WAS NOT AVAILABLE ON THOSE DATES IT HAD OBTAINED HAND LOAN S FROM FRIENDS AND AS IT HAD EXPECTED TO REPAY SUCH LOANS WITHIN A SHO RT TIME NO ENTRIES WERE MADE IN ITS BOOKS OF ACCOUNT IN RESPECT THEREO F. THE ASSESSEE ALSO STATED THAT SINCE IT WAS UNABLE TO FURNISH EVI DENCE FOR SUCH LOANS IF OFFERED THE AMOUNT OF `.93 000 AS ADDITIONAL INCOME . PENALTY PROCEEDINGS WERE INITIATED BY THE ASSESSING OFFICER UNDER SECTION 271(1)(C) OF THE INCOME TAX ACT 1961. THE A.O. FOUN D THE ASSESSEES EXPLANATION UNACCEPTABLE NOTED THAT IT HAD OFFERED THE AMOUNT OF `.93 000/.- AS ADDITIONAL INCOME AND APPLYING EXPL ANATION 1(B) TO SECTION 271 IMPOSED A PENALTY ON THE ASSESSEE. THE APPELLATE TRIBUNAL CANCELLED THE PENALTY INTER ALIA FOR THE REASON T HAT IN THE NOTICE INITIATING PENALTY PROCEEDINGS THE ASSESSEE WAS NOT INTIMATED ABOUT THE PROPOSED ACTION UNDER EXPLANATION 1(B) TO SECTI ON 271(1)(C); BUT THE HIGH COURT ON A REFERENCE HELD THAT THE IMPOS ITION OF PENALTY WAS VALID. ON APPEAL TO THE SUPREME COURT: HELD AFFIRMING THE DECISION OF THE HIGH COURT TH AT THE PENALTY WAS VALIDLY LEVIED. IN THE INSTANT CASE T HE FACT OF BENAMI ACCOUNT IS ADMITTED BY THE ASSESSEE AND IT IS ALSO ADMITTED THAT TRANSACTION IN THESE ACCOUNTS ARE MADE BY HIM. IN V IEW OF THE PAGE 6 OF 8 ABOVE ADMISSION THE FACT OF CONCEALMENT OF INCOME IS CLEARLY ESTABLISHED. 3.2.3. WHEN THE APPELLANT HAS AGREED THAT IT HAS NO T DISCLOSED CERTAIN INCOME IN THE ORIGINAL RETURN THE INCOME SO NOT DI SCLOSED AMOUNTS TO CONCEALMENT OF INCOME JUSTIFYING LEVY OF PENALTY UN DER SECTION 271(1)(C). IN THE CASE OF GANESH TEXTILES VS CIT 25 3 ITR 216 HON'BLE GUJARAT HIGH COURT HELD THAT EVEN FAILURE TO DISCLO SE INTEREST PAID BY A FIRM TO ITS PARTNER MERIT PENALTY BECAUSE IN THIS C ASE THE ASSESSEE HAS TWO BANK ACCOUNTS IN TWO DIFFERENT NAMES FOR DEPOSI T AND WITHDRAWAL OF AMOUNTS. 3.2.4. IN THE CASE OF CIT VS. SUDARSHAN SILKS & SAR EES 253 ITR 145 THE HON'BLE KARNATAKA HIGH COURT HAVE HELD THAT WHEN TH ERE WAS AN OFFER OF HIGHER INCOME CONSEQUENT TO SURVEY PENALTY CANN OT BE AVOIDED BY MERELY FILING A REVISED RETURN. 3.2.5. IN THE CASE OF BANARAS CHEMICALS FACTORY VS. CIT 108 ITR 96 THE HON'BLE ALLAHABAD HIGH COURT HELD THAT PENALTY IS L EVIABLE IN RESPECT OF INCOME SURRENDERED CONSEQUENT TO SEARCH OPERATION. IN THIS CASE THE HONBLE HIGH COURT HELD AS UNDER:- HELD THAT INASMUCH AS THE ASSESSEE HAVING BY A V OLUNTARY DISCLOSURE DISCLOSED A CONCEALED INCOME OF `. 6 LA CS THERE COULD BE NO MANNER OF DOUBT THAT THE ASSESSEE WAS GUILTY OF CONCEALMENT AND AS SUCH WAS LIABLE TO PENALTY. TH E LAW DOES NOT PROVIDE THAT IF AN ASSESSEE MAKES A VOLUNTARY DISCL OSURE OF ITS CONCEALED INCOME IT HAS TO BE ABSOLVED FROM PENALT Y. IT IS A CIRCUMSTANCES TO BE TAKEN INTO CONSIDERATION WHILE DETERMINING THE QUANTITY OF PENALTY AND IN THIS CASE ONLY THE MINIMUM PENALTY HAD BEEN LEVIED BY THE TRIBUNAL. THJE LEVY OF PENALTY WAS THEREFORE JUSTIFIED. THE APPELLANTS CASE IS SQUARELY COVERED BY THE A BOVE DECISION. 4. IN VIEW OF THE FACTS OF THE APPELLANTS CASE AND THE CASE LAWS CITED ABOVE I HOLD THAT A.O.IS JUSTIFIED IN TREATING THE ADDITIONAL INCOME OF `.2 21 000 OFFERED FOR A.Y.1993-94 AND ADDITIONAL I NCOME `.23 32 000/- OFFERED A.Y. 94-95 AS CONCEALED INCOME. THE PENALT IES LEVIED UNDER SECTION 71(1)(C) AMOUNTING TO `.86 632/- FOR A.Y. 9 3-94 AND `.10 13 376/- FOR A.Y. 94-95 ARE HELD TO BE JUSTIFI ED AND THEREFORE CONFIRMED. 9. THE LEARNED AUTHORISED REPRESENTATIVE OF THE ASS ESSEE SUBMITTED THAT THE CASE OF THE ASSESSEE IS COVERED BY THE DECISION OF HON'BLE SUPREME COURT IN THE CASE OF CIT VS. SURESHCHANDRA MITTAL 251 ITR 9 WHERE IN THE SIMILAR FACTS AND CIRCUMSTANCES OF THE CASE THE ASSESSEE AF TER SEARCH UNDER SECTION 132 OF THE ACT FILED REVISED RETURN SHOWING HIGHER INCOME WHICH WAS ACCEPTED IN THE ASSESSMENT AND LEVY OF PENALTY U/S. 271(1)(C) WAS DELETED BY PAGE 7 OF 8 THE SUPREME COURT ON THE GROUND THAT THE DEPARTMENT HAS NOT DISCHARGED ITS BURDEN OF PROVING CONCEALMENT AND HAD SIMPLY RESTE D ITS CONCLUSION ON THE ACT OF VOLUNTARY SURRENDER DONE BY THE ASSESSEE IN GOOD FAITH. 10. HE FURTHER SUBMITTED THAT THE CASE OF THE ASSES SEE IS ALSO COVERED BY THE DECISION OF AHMEDABAD BENCH-B OF THE TRIBUNAL I N THE CASE OF ACIT AHMEDABAD-3 VS. JAYENDRA K. DOSHI IN ITA NO.26 & 15 43/AHD/2006 A1985-86 ORDER DATED 7-9-09 WHERE ALSO PENALTY LEVIED IN THE SIMILAR FACTS AND CIRCUMSTANCES OF THE CASE WAS DELETED BY THE TRIBUN AL FOR THE REASON THAT THE ASSESSEE WAS PROTECTED BY P[PROVISIONS OF EXPLANATI ON 5 TO SECTION 271(1)(C) WHEN AFTER THE SEARCH/S .132 OF THE ACT THE ASSESSE E DECLARED HIGHER INCOME IN THE RETURN FILED IN RESPONSE TO NOTICE UNDER SEC TION 148. 12. THE LEARNED DEPARTMENTAL REPRESENTATIVE ON THE OTHER HAND SUPPORTED THE ORDERS OF THE LOWER AUTHORITIES. 13. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIALS AVAILABLE ON RECORD. IN THE INSTANT CASE A SEARCH UNDER SECTION 132 OF THE ACT WAS CARRIED OUT AT THE BUSINESS AND RESIDENTIAL PRE MISES ON 28-3-95. THE ASSESSEE IN THE STATEMENT RECORDED UNDER SECTION 13 2(4) ON 29-3-95 DECLARED UNDISCLOSED INCOME OF `.65 LAKHS WHICH INC LUDED `. 2 21 000/- FOR ASSESSMENT YEAR 1993-94 AND `.23 32 000/- FOR ASSES SMENT YEAR 1994-95 WHICH WAS FOUND TO BE CORRECT AND COMPLETE IN THE A SSESSMENT MADE. IN THE SIMILAR FACTS THE TRIBUNAL IN THE CASE OF ACIT AHM EDABAD-3 VS. JAYENDRA K. DOSHI IN ITA NOS.26 & 1543/AHD/2006 A.Y. 1985-86 OR DER DATED 7-9-09 DELETED THE PENALTY LEVIED UNDER SECTION 271(1)(C) BY OBSERVING AS UNDER:- 8. WE HAVE HEARD BOTH THE PARTIES WE HAVE ALSO GO NE THROUGH THE PROVISIONS OF EXPLANATION 5 TO SECTION 271(1)(C) OF THE ACT AND ALSO GONE THROUGH THE SUPREME COURT DECISIO N RELIED UPON BY THE A.R. WE FIND THAT IN THE PRESENT CASE THE SE ARCH ACTION WAS TAKEN ON8-8-1990 AND THE STATEMENT OF ASSESSEE WAS RECORDED ON 20-8-1990 UNDER SECTION 132(4) R. W. SECTION 271(1) (C) AND EXPLANATION5 THERETO. THE STATEMENT UNDER SECTION 1 32(4) ON 11-10- 90 IN WHICH THE ASSESSEE DECLARED HIS UNDISCLOSED I NCOME OF `.103.75 LAKHS WHICH INCLUDES `.38 60 531/-. WE FIN D THAT THE EXP[LANATION5 TO SECTION 271(1)(C) SAYS THAT : PROVISIONS OF SECTION 271(1)(C) AND EXPLANATION 5 T O SECTION 271(1)(C) CLEARLY PROVIDED WHERE THE ASSESSEE HAS N OT DISCLOSED HIS INCOME IN THE RETURN FILED FOR PREVIOUS YEAR WH ICH ENDED PRIOR PAGE 8 OF 8 TO END OF SEARCH AND THE STATEMENT GIVEN UNDER SECT ION 132 (4) THE ASSESSEE ADMITTED UNDISCLOSED INCOME OF THIS YE AR AND SPECIFICALLY MANNER IN WHICH THE INCOME HAS BEEN DE RIVED AND THEREAFTER PAYS THE TAX THEREON ON UNDISCLOSED INCO ME WITH INTEREST SUCH UNDISCLOSED INCOME IMMUNIZE FROM LEVY OF PENALTY. ACCORDINGLY FOLLOWING THE PROVISIONS OF EXPLANATIO N 5 TO SECTION 271(1)(C) IMMUNIZE FROM LEVY OF PENALTY. WE ALSO FIND FROM THE DECISION OF THE HON'BLE SUPREME COURT THAT AFTE R ISSUANCE OF NOTICE UNDER SECTION 148 THE ASSESSING OFFICER HAS TO GIVE SPECIFIC REASONS TO THE REPLY FILED BY THE ASSESSEE. IN THE PRESENT CASE THE ASSESSEE IN RESPONSE TO THE NOTICE THE ASSESSEE HA S FILED REVISED RETURN DECLARING INCOME OF `. 38 60 531/- I.E. BEFO RE THE END OF SEARCH PROCEEDINGS. THEREFORE THE PROVISIONS OF EX PLANATION 5 TO THE SECTION 271(1)(C). PROTECT THE ASSESSEE FROM PENALT Y. THEREFORE WE SEE NO REASONS TO INTERFERE IN THE ORDER OF THE CIT (A). ACCORDINGLY WE DISMISS THE APPEAL OF THE REVENUE. 14. REVENUE COULD NOT BRING ON RECORD ANY MATERIAL TO SHOW THAT THE ABOVE CITED DECISION OF THE TRIBUNAL IS NOT SQUARELY APPL ICABLE TO THE FACTS OF THE INSTANT CASE OR TO SHOW THAT THE INCOME DECLARED IN THE REVISED RETURN IS NOT COVERED BY THE PROVISO OF EXPLANATION 5 TO SECTION 2712(1)(C). ON THE ABOVE FACTS WE RESPECTFULLY FOLLOWING THE DECISION OF TH E TRIBUNAL QUOTED ABOVE DELETE THE PENALTY OF `.86 632/- IN THE ASSESSMENT YEAR 1993-94 AND `10 32 000/- IN A.Y. 1994-95 AND HOLD THAT THE INCO ME DECLARED ARE COVERED BY THE EXPLANATION 5 TO SECTION 271(1)(C) OF THE AC T. 15. THUS BOTH THE APPEALS OF THE ASSESSEE ARE ALLO WED. ORDER SIGNED DATED AND PRONOUNCED IN THE COURT ON 10TH DAY OF DECEMBER 2010. SD/- SD/- ( MAHAVIR SINGH) (N.S. S AINI) JUDICIAL MEMBER A CCOUNTANT MEMBER DATED: AHMEDABAD 10TH DAY OF DECEMBER 2010 COMPILED AND COMPARED BY: PATKI COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT CONCERNED 4 . THE LD. CIT (APPEALS)-VII ABAD. 5. THE DR AHMEDABAD BENCH 6. THE G UARD FILE. BY ORDER //TRUE COPY// (DY./ASSTT.REGISTRAR) ITAT AHMEDABAD.