Shri Arvind D.Patel, Baroda v. The ACIT.,Cent.Circle-1,, Baroda

ITA 2916/AHD/2008 | 2004-2005
Pronouncement Date: 28-01-2011 | Result: Dismissed

Appeal Details

RSA Number 291620514 RSA 2008
Assessee PAN AAZPP1867F
Bench Ahmedabad
Appeal Number ITA 2916/AHD/2008
Duration Of Justice 2 year(s) 5 month(s) 16 day(s)
Appellant Shri Arvind D.Patel, Baroda
Respondent The ACIT.,Cent.Circle-1,, Baroda
Appeal Type Income Tax Appeal
Pronouncement Date 28-01-2011
Appeal Filed By Assessee
Order Result Dismissed
Bench Allotted D
Tribunal Order Date 28-01-2011
Date Of Final Hearing 27-01-2011
Next Hearing Date 27-01-2011
Assessment Year 2004-2005
Appeal Filed On 11-08-2008
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH AHMEDABAD (BEFORE S/SHRI BHAVNESH SAINI JM AND D. C. AGRAWAL AM) ITA NO.2914 2915 AND 2916/AHD/2008 A. Y.: 2000-01 2003-04 AND 2004-05 SHRI ARVIND D. PATEL BASEMENT GARDEN VIEW CHAMBER SAYAJIGUNJ BARODA VS THE A. C. I. T. CENTRAL CIRCLE-1 BARODA PA NO. AAZPP 1867 F (APPELLANT) (RESPONDENT) APPELLANT BY SHRI S. N. SOPARKAR AR RESPONDENT BY SHRI G. S. SOURYAWANSI DR O R D E R PER BHAVNESH SAINI: ALL THE APPEALS BY THE ASSESSEE ARE DIRECTED AGAINST DIFFERENT ORDERS OF THE CIT(A)-IV AHMEDABAD DATED 13 TH MARCH 2008 FOR ASSESSMENT YEARS 2000-01 2003-04 AND 2004- 05 CHALLENGING LEVY OF PENALTY U/S 271 (1) (C) OF THE IT ACT. 2. BRIEFLY THE FACTS OF THE CASE ARE THAT A SEARCH ACTION U/S 132 OF THE IT ACT WAS CARRIED OUT ON 04-03-2005 ON KABHAI CHAUHAN GROUP OF CASES AND IN THE CASE OF THE ASSESSEE. NOTICE U/ S 153A OF THE IT ACT WAS ISSUED TO THE ASSESSEE ON 26-10-2005 IN ALL THE CASES. THE ASSESSEE IN RESPONSE TO THIS NOTICE FILED RETURN O F INCOME ON 9-01- 2006 DECLARING INCOME OF RS.7 13 480/- IN ASSESSMEN T YEAR 2000-01 ITA NO.2914 2915 AND 2916/AHD/2008 SHRI ARVIND D. PATEL VS ACIT CENTRAL CIRCLE-1 BA RODA 2 AS AGAINST ORIGINAL RETURN OF INCOME AT RS.1 81 150 /- FILED ON 31-08- 2000. SIMILARLY RETURN U/S 153A OF THE IT ACT WAS FILED IN ASSESSMENT YEAR 2003-04 ON 09-01-2006 DECLARING INCOME OF RS.2 30 855/- AS AGAINST THE ORIGINAL RETURN OF INCOME FILED AT RS.1 36 800/-. IN ASSESSMENT YEAR 2004-05 RETURN OF INCOME U/S 153A O F THE IT ACT WAS FILED ON 09-01-2006 DECLARING INCOME OF RS.2 30 855/- AS AGAINST THE ORIGINAL RETURN OF INCOME FILED AT RS.1 05 170/ -. THE AO NOTED THAT THE ASSESSEE HAS DISCLOSED CERTAIN INCOME IN THE RE TURN NOW FILED U/S 153A OF THE IT ACT WHICH WAS NOT SHOWN IN THE ORIGI NAL RETURN OF INCOME. THEREFORE THE ASSESSEE HAS CONCEALED INCOM E/FURNISHED INACCURATE PARTICULARS OF INCOME. PENALTY PROCEEDIN GS U/S 271 (1) (C) OF THE IT ACT WERE ACCORDINGLY INITIATED. THE ASSES SEE IN RESPONSE TO THE SHOW CAUSE NOTICE ISSUED U/S 271 (1) (C) OF THE IT ACT SUBMITTED BEFORE THE AO THAT WHEN NOTICES WERE RECEIVED HE W AS ADVISED BY HIS CONSULTANT TO DECLARE OTHER INCOME NOT DISCLOSE D IN THE ORIGINAL RETURN OF INCOME. THE AO THEREFORE NOTED IN THE P ENALTY ORDER THAT ADDITIONAL INCOME WAS DECLARED BY THE ASSESSEE WHIC H WAS NOT DECLARED IN THE ORIGINAL RETURN OF INCOME. THE UNDI SCLOSED INCOME WAS INTEREST INCOME RECEIVED ON VARIOUS DEPOSITS F DRS BONDS NSCS ETC. THE INTENTION OF THE ASSESSEE IN NOT DIS CLOSING THIS INCOME INITIALLY WOULD HAVE BEEN TO CONCEAL THE SOURCE OF INVESTMENTS IN HIS SAVINGS INSTRUMENTS. THE AO THEREFORE NOTED THAT SINCE THE ASSESSEE DID NOT DISCLOSE THE ABOVE INCOME IN THE O RIGINAL RETURN OF INCOME AND NO REASONS HAVE BEEN FORWARDED THEREFOR E THE ASSESSEE CONCEALED PARTICULARS OF INCOME AND FILED INACCURATE PARTICULARS OF INCOME AND ACCORDINGLY LEVIED PENALT Y U/S 271 (1) ( C ) OF THE IT ACT. THE LEARNED CIT (A) ON THE SAME REAS ONS CONFIRMED THE ITA NO.2914 2915 AND 2916/AHD/2008 SHRI ARVIND D. PATEL VS ACIT CENTRAL CIRCLE-1 BA RODA 3 PENALTY ORDER BECAUSE THE INTENTION OF THE ASSESSEE WAS CLEAR NOT TO DISCLOSE THE AMOUNT IN THE ORIGINAL RETURN OF INCOM E WHICH HAS NOW BEEN DECLARED IN THE RETURN FILED U/S 153A OF THE I T ACT. THE LEARNED CIT (A) THEREFORE NOTED THAT IT IS EVIDENT THAT T HE ASSESSEE FURNISHED INACCURATE PARTICULARS OF HIS INCOME WITH THE OBJEC T TO CONCEAL INCOME FROM TAXATION. PENALTY APPEALS WERE ACCORDINGLY DIS MISSED. 3. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED T HAT NOTHING WAS RECOVERED DURING THE COURSE OF SEARCH AGAINST T HE ASSESSEE AND THAT THE ASSESSEE DECLARED THE ADDITIONAL INCOME VO LUNTARILY IN RESPONSE TO THE NOTICE ISSUED U/S 153A OF THE IT AC T AND RETURNED INCOME HAS BEEN ACCEPTED ON THE SAME INCOME. THEREF ORE THESE ARE NOT FIT CASES FOR LEVY OF PENALTY. HE HAS RELIED UP ON THE DECISION OF ITAT RAJKOT BENCH IN THE CASE OF DCIT VS M/S. BALAJ I MULTIFLEX PVT. LTD. IN ITSS(A) NO. 64 AND 65/ RJT/2009 DATED 10-08 -2010. 4. ON THE OTHER HAND THE LEARNED DR RELIED UPON TH E ORDERS OF THE AUTHORITIES BELOW AND SUBMITTED THAT SINCE SEARCH W AS CONDUCTED IN THE CASE OF THE ASSESSEE THE ASSESSEE WAS COMPELLE D TO DISCLOSE ADDITIONAL INCOME WHICH WAS CONCEALED FROM THE INCO ME DECLARED IN THE ORIGINAL RETURN OF INCOME. THEREFORE PENALTY W AS RIGHTLY IMPOSED AGAINST THE ASSESSEE. 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND MAT ERIAL AVAILABLE ON RECORD. 6. ITAT AHMEDABAD A BENCH IN THE GROUP CASES OF S MT. RASHMIBEN N. SHAH AND OTHERS VS ACIT IN ITA NO.619 TO ITA NO.2914 2915 AND 2916/AHD/2008 SHRI ARVIND D. PATEL VS ACIT CENTRAL CIRCLE-1 BA RODA 4 639/AHD/2010 VIDE ORDER DATED 19-11-2010 DISMISSED ALL THE APPEALS OF THE ASSESSEES CONFIRMING LEVY OF PENALTY U/S 271 (1) ( C ) OF THE IT ACT. IN THIS CASE ALSO SEARCH WAS CONDUCTED AGAINST THE ASSESSEES AND THE ASSESSEES FILED RETURN OF INCOME AT THE HIG HER INCOME U/S 153A OF THE IT ACT AS AGAINST INCOME DECLARED IN TH E RETURN FILED U/S 139 OF THE IT ACT. IN THIS CASE ALSO IT WAS PLEADED THAT ASSESSMENTS HAVE BEEN COMPLETED U/S 153A/153C OF THE IT ACT WIT HOUT THERE BEING ANY SEIZED MATERIAL THEREFORE PENALTY WAS INVALID . THE LEARNED CIT (A) CONFIRMED THE PENALTY AND THE TRIBUNAL CONSIDER ING THE SUBMISSION OF THE ASSESSEE IN DETAIL AND VARIOUS CA SE LAWS DISMISSED THE APPEALS OF THE ASSESSEES. THE FINDINGS OF THE T RIBUNAL IN PARA 7 TO 9 ARE REPRODUCED AS UNDER: 7 WE HAVE HEARD BOTH THE PARTIES AND GONE THROUGH THE FACTS OF THE CASE. AS IS APPARENT FROM THE FACTS OF THE CASE THESE ASSESSEES WERE SUBJECTED TO SEARCH UNDER SECTION 132 OF THE ACT ON 19-9-2006 AFTER FILING ORIGINAL R ETURNS OF THEIR INCOME AS DETAILED IN CHART ABOVE. IN CONSEQUENCE O F SEARCH PROCEEDINGS U/S 153A OF THE ACT WERE INITIATED. THE REAFTER THE RETURNS FILED BY THESE ASSESSEES IN TERMS OF PROVIS IONS OF SECTION 153A (1) (A) OF THE ACT WERE ACCEPTED BY THE AO EXC EPT IN THE CASE OF SMT. RASHMIBEN N SHAH WHEREIN AN AMOUNT OF RS.5 630/- WAS ALSO ADDED ON ACCOUNT OF UNEXPLAINED GIFTS. BEFORE THE ASSESSING OFFICER AND THE LD. CIT(A) AND EVEN BEFORE US THESE ASSESSEES PLEADED THAT THE RETURNS U/S 153A WERE FILED ON THE BASIS OF ADVISE OF A CA AND A MISTAKE CREPT IN THE ORIGINAL RETURN ON ACCOUNT OF INCOME FROM TAX SAVINGS BONDS AND KVP AN D THUS NO PENALTY COULD BE LEVIED ON SUCH AMOUNTS OFFERED TO TAX. THE LD. AR APPEARING BEFORE US DID NOT CLARIFY AS TO WHETHER O R NOT THE SAID INCOME WAS DECLARED IN THE STATEMENTS OF THE ASSES SEES RECORDED DURING THE COURSE OF SEARCH NOR COPIES OF SUCH STA TEMENTS HAVE BEEN PLACED BEFORE US. IT HAS ALSO NOT BEEN CLARIFI ED AS TO WHY THE SAID INCOME WAS NOT REFLECTED IN THEIR ORIGINAL RET URNS. IT IS WELL SETTLED THAT A PENALTY IS IMPOSED ON ACCOUNT OF THE COMMISSION OF A WRONGFUL ACT AND PLAINLY IT IS THE LAW OPERATING O N THE DATE ON WHICH THE WRONGFUL ACT IS COMMITTED WHICH DETERMINES THE PENALTY. WHERE PENALTY IS IMPOSED FOR CONCEALMENT OF PARTICULARS O F INCOME IT IS ITA NO.2914 2915 AND 2916/AHD/2008 SHRI ARVIND D. PATEL VS ACIT CENTRAL CIRCLE-1 BA RODA 5 THE LAW RULING ON THE DATE WHEN THE ACT OF CONCEALM ENT TAKES PLACE WHICH IS RELEVANT. IN THE CASE UNDER CONSIDERATION THE CONCEALMENT OF THE PARTICULARS OF INCOME WAS EFFECTED BY THE AS SESSEES WHEN THESE ASSESSEES FILED THEIR ORIGINAL RETURNS OF TOT AL INCOME MENTIONED IN CHART ABOVE [BRIJ MOHAN V. CIT [1979] 120 ITR 1 (SC) CIT V. ONKAR SARAN & SONS [1992] 195 ITR 1 2 (SC) B.N. SHARMA V.CIT [1997] 226 ITR 442 (SC)]. THE ASSESSMENT FRAMED UNDER SECTION 153A(1)(B) OF THE ACT AFTER THE SEARCH ACC EPTING THE INCOME AS DISCLOSED BY THE ASSESSEES IN THESE RETU RNS IS OVER AND ABOVE WHAT WAS DISCLOSED IN THE ORIGINAL RETURN. SI NCE THE ASSESSEES HAD TO DISCLOSE THEIR REAL TOTAL INCOME I N THE ORIGINAL RETURN FILED UNDER SECTION 139 IF THEY HAD FAILED TO DO SO BUT CONCEALED OR FURNISHED INACCURATE PARTICULARS IN TH AT RETURN THE OFFENCE BECOMES COMPLETE. THUS THE OFFENCE OF CONC EALMENT IS COMPLETE AND FINAL WHEN THE ASSESSEES DID NOT DISCL OSE THE REAL INCOME IN THEIR ORIGINAL RETURN. IF THE PLEA ON BEH ALF OF THE ASSESSEES THAT SINCE THERE WAS NO DIFFERENCE IN THE INCOME RETURNED AFTER THE SEARCH AND THE ASSESSED INCOME IS ACCEPTED AN ANOMALOUS RESULT WILL FOLLOW IN CERTAIN GLARING CAS ES OF CONCEALMENT. LET US TAKE THE FOLLOWING ILLUSTRATION. AN ASSESSEE CONCEALS INCOME IN HIS ORIGINAL RETURN. HE GETS AWAY WITH IT AND TH E ORIGINAL ASSESSMENT IS COMPLETED WITHOUT DETECTING THE CONCE ALMENT. SUBSEQUENTLY A NOTICE IS GIVEN FOR ASSESSING THE E SCAPED OR UNDISCLOSED INCOME. IN THESE PROCEEDINGS THE ASSES SEE FILES A RETURN OF INCOME INCLUDING THE ESCAPED OR UNDISCLOS ED INCOME. IN THIS SITUATION THE ARGUMENT ON BEHALF OF THE ASSES SEE IF ACCEPTED WILL RESULT IN THE CONCLUSION THAT THE DEPARTMENT W ILL BE HELPLESS IN IMPOSING A PENALTY IN SUCH A CASE. THAT CERTAINLY C ANNOT BE THE EFFECT OF THE LEGAL PROVISIONS. AGAIN AN ASSESSEE WOULD COMPLETELY ESCAPE PENALTY IF HE DOES NOT AT ALL FILE A RETURN IN RESPONSE TO THE NOTICE UNDER SECTION 153A OF THE ACT. THE ARGUMENT COULD BE THAT SINCE A PENALTY CAN BE IMPOSED ONLY WITH REGARD TO THE RETURN FILED IN THE REASSESSMENT PROCEEDINGS AND SINCE HE HAD FI LED NO SUCH RETURN HE CANNOT BE PENALISED AT ALL. IF THE ORIGI NAL RETURN COULD FORM THE BASIS FOR DETERMINING THE QUANTUM OF PENAL TY IMPOSABLE ON THE REASSESSMENT THERE IS NO REASON WHY THE ORIGIN AL RETURN SHOULD ALSO NOT FORM THE BASIS FOR DETERMINING THE DATE ON WHICH THE CONCEALMENT WAS EFFECTED BY THE ASSESSEE. THUS IT IS WELL SETTLED THAT THE CONCEALMENT OF THE PARTICULARS OF INCOME W AS EFFECTED BY THESE ASSESSEES WHEN THESE ASSESSEE FILED THEIR ORI GINAL RETURNS OF TOTAL INCOME MENTIONED IN CHART ABOVE. 7.1 IN THE CASE UNDER CONSIDERATION THE LD. CIT(A) UP HELD THE LEVY OF PENALTY SINCE THESE ASSESSEES CONCEALED THE PARTICULARS OF ADDITIONAL INCOME DISCLOSED IN THE RETURN FILED AF TER THE SEARCH BUT WHICH WAS NOT DISCLOSED IN THE ORIGINAL RETURN OF I NCOME. THE PLEA ITA NO.2914 2915 AND 2916/AHD/2008 SHRI ARVIND D. PATEL VS ACIT CENTRAL CIRCLE-1 BA RODA 6 OF THE ASSESSEES THAT THE SAID ADDITIONAL INCOME WA S NOT DISCLOSED IN THE ORIGINAL RETURN DUE TO INADVERTENT MISTAKE A ND SUBSEQUENT ADVISE OF THE CA IS NOT SUPPORTED BY ANY EVIDENCE O N RECORD. AS IS EVIDENT FROM THE CL. (C) OF S. 271(1) OF THE ACT T HE WORDS USED ARE 'HAS CONCEALED THE PARTICULARS OF HIS INCOME' OR FU RNISHED 'INACCURATE PARTICULARS OF SUCH INCOME'. THUS BOTH IN CASE OF CONCEALMENT AND INACCURACY THE PHRASE 'PARTICULARS OF INCOME' HAS BEEN USED. THE LEGISLATURE HAS NOT USED THE WORDS ' CONCEALED HIS INCOME'. FROM THIS IT WOULD BE APPARENT THAT PENAL PROVISION WOULD OPERATE WHEN THERE IS A FAILURE TO DISCLOSE FULLY O R TRULY ALL THE PARTICULARS. THE WORDS 'PARTICULARS OF INCOME' REFE R TO THE FACTS WHICH LEAD TO THE CORRECT COMPUTATION OF INCOME IN ACCORDANCE WITH THE PROVISIONS OF THE ACT. SO WHEN ANY FACT MATERIA L TO THE DETERMINATION OF AN ITEM AS INCOME OR MATERIAL TO T HE CORRECT COMPUTATION IS NOT FILED OR THAT WHICH IS FILED IS NOT ACCURATE THEN THE ASSESSEE WOULD BE LIABLE TO PENALTY UNDER S. 27 1(1)(C) OF THE ACT. THE EXPRESSION 'HAS CONCEALED THE PARTICULARS OF IN COME' AND 'HAS FURNISHED INACCURATE PARTICULARS OF INCOME' HA VE NOT BEEN DEFINED EITHER IN SECTION 271 OR ELSEWHERE IN THE A CT. HOWEVER NOTWITHSTANDING THE DIFFERENCE IN THE TWO CIRCUMSTA NCES IT IS NOW WELL ESTABLISHED THAT THEY LEAD TO THE SAME EFFECT NAMELY KEEPING OFF A CERTAIN PORTION OF THE INCOME FROM THE RETURN . ACCORDING TO LAW LEXICON THE WORD 'CONCEAL' MEANS: 'TO HIDE OR KEEP SECRET. THE WORD 'CONCEAL' IS CON +CELARE WHICH IMPLIES TO HIDE. IT MEANS TO HIDE OR WITHDRAW FROM OBSERVATION; TO COVER OR KEEP FROM SIGHT; TO PREVEN T THE DISCOVERY OF; TO WITHHOLD KNOWLEDGE OF. THE OFFENCE OF CONCEALMENT IS THUS A DIRECT ATTEMPT TO HIDE AN I TEM OF INCOME OR A PORTION THEREOF FROM THE KNOWLEDGE OF T HE INCOME-TAX AUTHORITIES.' IN WEBSTER'S DICTIONARY 'INACCURATE' HAS BEEN DEFI NED AS : 'NOT ACCURATE NOT EXACT OR CORRECT; NOT ACCORDING TO TRUTH; ERRONEOUS ; AS AN INACCURATE STATEMENT COPY OR TRA NSCRIPT.' 7.2 IF THE DISCLOSURE OF FACTS IS INCORRECT OR FA LSE TO THE KNOWLEDGE OF THE ASSESSEE AND IT IS ESTABLISHED THEN SUCH DI SCLOSURE CANNOT TAKE IT OUT FROM THE PURVIEW OF THE ACT OF CONCEALM ENT OF PARTICULARS OR FURNISHING INACCURATE PARTICULARS THEREOF FOR TH E PURPOSE OF LEVY OF PENALTY. IN THE INSTANT CASE ADMITTEDLY THE AFORE SAID ADDITIONAL INCOME DISCLOSED AFTER THE SEARCH WAS NEVER DISCLOS ED IN THE RETURN FILED ORIGINALLY. THUS THE FACTUM OF CONCEALMENT I S ESTABLISHED. EVEN THE SUBSEQUENT EXPLANATION OF THESE ASSESSEES THAT INCOME WAS NOT RETURNED ORIGINALLY INADVERTENTLY OR WAS BA SED ON SOME ITA NO.2914 2915 AND 2916/AHD/2008 SHRI ARVIND D. PATEL VS ACIT CENTRAL CIRCLE-1 BA RODA 7 BANK A CERTIFICATE IS NOT SUPPORTED BY ANY EVIDENCE WHAT SO EVER. THE PENALTY U/S 271(1)(C) OF THE ACT IS LEVIABLE IF THE AO IS SATISFIED IN THE COURSE OF ANY PROCEEDINGS UNDER THIS ACT THAT ANY PERSON HAS CONCEALED THE PARTICULARS O F HIS INCOME OR FURNISHED INACCURATE PARTICULARS OF SUCH INCOME. THE ASSESSEE HAD INTER ALIA PLEADED BEFO RE THE AO THAT ADDITIONAL INCOME OF RS. 6 000/- IN THE CASE OF SMT. RASHMIBEN N SHAH ONLY TO BUY PEACE AND TO AVOID LITIGATION. WHETHER THIS DISCLOSURE CAN BE CONSIDERED VOLUNTARY AND TO PURCHASE PEACE HAS TO BE EXAMINED. IT HAS BEEN HELD IN TRIBHOVANDAS BHIMJI ZAVERI VS. UNION OF IND IA 203 ITR 369 (SC) AND IN NATWARLAL JOITRAM RAVAL VS. CIT 115 CT R (BOM) 518 THAT DISCLOSURE MADE SUBSEQUENT TO SEIZURE OF INCRI MINATING MATERIAL WOULD NOT BE VOLUNTARY. THERE IS NO COGENT EXPLANATION GIVEN WHY THE AFORESAID AMOUNT WAS NOT OFFERED TO T AX AT THE TIME OF FILING ORIGINAL RETURN. IN THE ABSENCE OF ANY BONAFIDE EXPLANATION AS TO WHY THE ADDITIONAL INCOME WAS NOT DISCLOSED I N THE ORIGINAL RETURN APPARENTLY THE ASSESSEE HAS FAILED TO REBU T THE ONUS LAID DOWN UPON THESE ASSESSEE IN TERMS OF EXPLANATION 1 TO SEC. 271(1)(C) OF THE ACT. SINCE THE ASSESSEE DISCLOSED ADDITIONAL INCOME ONLY IN CONSEQUENCE OF THE SEARCH WE ARE OF THE OPINION THAT THE A.O. AND THE CIT(A) ARE CORRECT IN LEVYING PENALTY EVEN THOUGH THEIR REASONS ARE DIFFERENT. 7.3. AS REGARDS A FEEBLE PLEA ON BEHALF OF THESE ASSESSEES REGARDING APPLICABILITY OF THE EXPLANATION 5 TO SE CTION 271(1)(C) OF THE ACT IT IS NOTICED THAT PRIOR TO THE INSERTION OF EXPLANATION 5 TO SECTION 271 BY THE TAXATION LAWS (AMENDMENT) ACT 1 984 WITH EFFECT FROM 1-10-1984 AN ASSESSEE WHO WAS FOUND T O BE THE OWNER OF ANY MONEY BULLION JEWELLERY ETC. RECOVE RED DURING THE COURSE OF SEARCH WAS ENTITLED TO EXPLAIN THAT SUCH ASSETS WERE ACQUIRED BY HIM BY UTILISING HIS INCOME RELATING TO ANY PREVIOUS YEAR WHETHER IT ENDED BEFORE THE DATE OF THE SEARC H OR IS TO END ON OR AFTER THE DATE OF THE SEARCH. BY DOING SO THE AS SESSEE COULD ESCAPE THE LIABILITY TO PENALTY UNDER SECTION 271(1 )(C) OF THE ACT. IN ORDER TO PLUG THE LOOPHOLE EXPLANATION 5 WAS INSER TED WITH EFFECT FROM 1-10-1984 AND IS APPLICABLE TO A SITUATION WH ERE IN THE COURSE OF A SEARCH UNDER SECTION 132 OF THE ACT THE ASSESS EE IS FOUND TO BE THE OWNER OF ANY MONEY BULLION JEWELLERY OR OT HER VALUABLE ARTICLE OR THING AND THE ASSESSEE CLAIMS THAT SUCH ASSETS HAVE BEEN ACQUIRED BY HIM BY UTILISING WHOLLY OR IN PART H IS INCOME FOR ANY PREVIOUS YEAR WHICH HAS ALREADY ENDED BEFORE THE DA TE OF THE SEARCH OR WHICH IS TO END ON OR AFTER THE DATE OF T HE SEARCH. IN VIEW OF THE EXPLANATION NOTWITHSTANDING THE FACT THAT S UCH INCOME IS DECLARED BY HIM IN ANY RETURN OF INCOME FURNISHED O N OR AFTER THE DATE OF THE SEARCH HE SHALL FOR THE PURPOSES OF S ECTION 271(1)(C) ITA NO.2914 2915 AND 2916/AHD/2008 SHRI ARVIND D. PATEL VS ACIT CENTRAL CIRCLE-1 BA RODA 8 BE DEEMED TO HAVE CONCEALED THE PARTICULARS OF HIS INCOME OR FURNISHED INACCURATE PARTICULARS OF SUCH INCOME EXC EPT IN CASES WHERE SUCH INCOME IS OR THE TRANSACTIONS RESULTING IN SUCH INCOME ARE RECORDED ON OR BEFORE THE DATE OF THE SEARCH I N THE BOOKS OF ACCOUNT IF ANY MAINTAINED BY HIM FOR ANY SOURCE O F INCOME OR SUCH INCOME IS OTHERWISE DISCLOSED TO THE COMMISSIONER B EFORE THE DATE OF THE SEARCH. THUS BY THE DEEMING PROVISIONS OF E XPLANATION 5 THE ASSESSEE IS FASTENED WITH THE LIABILITY TO PENA LTY UNDER SECTION 271(1)(C) IN CASE HE EXPLAINS THE ACQUISITION OF AS SETS RECOVERED IN THE COURSE OF SEARCH FROM OUT OF INCOME OF A PREVI OUS YEAR WHICH HAS ALREADY ENDED BEFORE THE DATE OF THE SEARCH OR WHICH IS TO END ON OR AFTER THE DATE OF SEARCH. 7.4 IN THE PRESENT CASE THE RESPECTIVE ASSESSEES FILED THEIR ORIGINAL RETURNS OF INCOME AS INDICATED IN CHART AB OVE BEFORE THE DATE OF SEARCH. ADMITTEDLY INCOME DISCLOSED IN THE RETURNS FILED IN PURSUANCE TO NOTICE UNDER SECTION 153A OF THE ACT W AS NOT DECLARED IN THESE RETURNS. THEREAFTER SEARCH UNDER SECTION 132 TOOK PLACE ON 19-9-2006. THERE IS NOTHING TO SUGGEST THAT ADD ITIONAL INCOME DISCLOSED IN THE RETURN FILED AFTER THE SEARCH WAS EVER OFFERED TO TAX IN THEIR STATEMENTS RECORDS U/S 132(4) OF THE ACT A ND AS ALREADY MENTIONED NO SUCH STATEMENTS HAVE EVEN BEEN PLACED BEFORE US . IN THESE CIRCUMSTANCES THE PLEA ON BEHALF OF THE AS SESSEES FOR BENEFIT PROVIDED IN THE EXCEPTIONS TO EXPLANATION 5 TO SEC. 271(1)(C) OF THE ACT IS NOT TENABLE SINCE THERE IS NOTHING TO SUGGEST THAT THESE ASSESSEES FULFILLED THE CONDITI ONS STIPULATED IN THE SAID EXPLANATION. ADMITTEDLY AND AS IS EVIDENT FROM THE RELEVANT ASSESSMENT ORDERS THE ASSESSEES HAVE EARNED UNDISC LOSED INCOME AND WHERE ASSESSEE HAD ADMITTED TO CONCEALME NT DURING THE COURSE OF ENQUIRY OR ASSESSMENT PROCEEDINGS AND IN THIS CASE IN THE RETURN OF INCOME FILED UNDER SECTION 153A(A) OF THE ACT ITSELF NO INDEPENDENT ENQUIRY TO PROVE CONCEALMENT IS NECE SSARY FOR LEVY OF PENALTY UNDER SECTION 271(1)(C) OF THE ACT. AS A LREADY MENTIONED THE OFFENCE OF CONCEALING THE PARTICULARS OF INCOME OR FURNISHING INACCURATE PARTICULARS OF INCOME IN THE INSTANT CAS E HAS TO BE CONSIDERED IN RELATION TO THE ORIGINAL RETURNS WHIC H WERE SUBMITTED BY THESE ASSESSEES AND WHEREIN THIS CONCEALMENT OF PARTICULARS OF INCOME OR FURNISHING INACCURATE PARTICULARS OF SUCH INCOME HAS OCCURRED. SO IN DETERMINING THE QUANTUM OF PENALTY THE AMOUNT OF INCOME THE PARTICULARS OF WHICH WERE CONCEALED OR INACCURATE PARTICULARS OF WHICH WERE FURNISHED HAS TO BE TAKE N INTO CONSIDERATION [G.C. AGRAWAL V. CIT[1990] 186 ITR 57 1 (SC)]. 7.5 IN THE CASE OF CIT V. C. ANANTHAN CHETTIAR [2005] 273 ITR 401 THE HONBLE MADRAS HIGH COURT WAS CONSIDERING A S IMILAR ISSUE. IN THAT CASE THE INCOME-TAX DEPARTMENT IN A SEARCH AND ITA NO.2914 2915 AND 2916/AHD/2008 SHRI ARVIND D. PATEL VS ACIT CENTRAL CIRCLE-1 BA RODA 9 SEIZURE OPERATION CONDUCTED IN THE ASSESSEES SHOP AND RESIDENCE SEIZED CASH JEWELLERY AND CERTAIN DOCUMENTS. THEREAFTER THE ASSESSEE FILED A REVISED RETURN FOR THE ASSESSMENT YEAR 1986-87 DISCLOSING ADDITIONAL INCOME WHICH WAS ACCEPTED AND ASSESSMENT WAS MADE ON THE BASIS OF REVISED RETURN. THE ASSESSEE TOOK THE STAND THAT THERE WAS NO CONCEALME NT AND IT WAS ONLY FOR THE PURPOSE OF BUYING PEACE WITH THE DEPAR TMENT THAT THE ADDITIONAL INCOME WAS DISCLOSED AND REVISED RETURN WAS FILED. THE TRIBUNAL ACCEPTED THIS PLEA OF THE ASSESSEE AND HEL D THAT NO PENALTY IN THE CIRCUMSTANCES WAS LEVIABLE BY RELY ING ON THE SUPREME COURT DECISION IN SIR SHADILAL SUGAR & GENE RAL MILLS LTD. V. CIT [1987] 168 ITR 705. ON THE REFERENCE THE MA DRAS HIGH COURT SET ASIDE THE ORDER AND OBSERVED: 'LEARNED COUNSEL FOR THE REVENUE SUBMITTED THAT THE ORDER OF THE TRIBUNAL IS NOT IN ACCORDANCE WITH LAW AS IT H AS IGNORED THE EXPLANATION TO SECTION 271(1)(C) OF THE ACT. LE ARNED COUNSEL ALSO PLACED RELIANCE ON THE DECISION IN THE CASE OF K.P. MADHUSUDHANAN V. CIT [2001] 251 ITR 99 (SC) WHEREIN IT WAS HELD THAT THE LAW DECLARED BY THE CO URT IN THE CASE OF SIR SHADILAL SUGAR & GENERAL MILLS LTD. V. CIT [1987] 168 ITR 705 (SC) WAS NO LONGER APPLICABLE BY REASON OF THE ADDITION OF THE EXPLANATION TO SECTION 271. THAT EX PLANATION CASTS A BURDEN ON THE ASSESSEE TO SHOW THAT THE ADD ITIONAL INCOME THAT HAD NOT BEEN DISCLOSED WAS NOT DUE TO F RAUD OR NEGLECT. IN THIS CASE THE ASSESSEE OFFERED NO EXPLANATION A T ALL EXCEPT TO ASSERT THAT HE DISCLOSED THE INCOME ONLY TO BUY PEACE WITH THE DEPARTMENT AND WHAT WAS DISCLOSED I N FACT WAS ADDITIONAL INCOME. THE REASON FOR NOT HAVING DI SCLOSED THE INCOME EARLIER WAS NOT STATED. IN THESE CIRCUMS TANCES THE ITAT WAS IN ERROR IN SETTING ASIDE THE PENALTY. THE QUESTION IS ANSWERED IN FAVOUR OF THE REVENUE AND A GAINST THE ASSESSEE IN THE LIGHT OF THE LATER DECISION OF THE THREE JUDGE BENCH OF THE SUPREME COURT IN THE CASE OF K.P . MADHUSUDHANAN V. CIT [2001] 251 ITR 99.' 7.6 THE ISSUE WHETHER IMMUNITY IS AVAILABLE TO THE ASSE SSEE IN TERMS OF EXPLANATION 5 TO SEC. 271(1)(C) OF THE ACT WHEN ADDITIONAL INCOME WAS DISCLOSED IN THE RETURN U/S 153A WAS ALS O CONSIDERED BY A CO-ORDINATE BENCH IN THE CASE OF ACIT VS. KIRI T DAHYABHAI PATEL REPORTED IN 121 ITD 159 (TM) WHEREIN IT WAS HELD THAT THE IMMUNITY IS NOT AVAILABLE TO THE ASSESSEES UNDER EX PLN. 5(2) TO S. ITA NO.2914 2915 AND 2916/AHD/2008 SHRI ARVIND D. PATEL VS ACIT CENTRAL CIRCLE-1 BA RODA 10 271(1)(C) OF THE ACT . INTER ALIA IT WAS OBSERVE D IN THE SAID DECISION THAT 10.11 IN THE CASE UNDER CONSIDERATION AS IS EVIDENT FROM THE RELEVANT ASSESSMENT ORDERS NOT ONLY THAT THE DEPARTMENT HAD INCRIMINATING MATERIAL THE ASSESSEE S THEMSELVES ADMITTED TO HAVE EARNED UNDISCLOSED INCO ME AND UTILIZED THE SAME IN ACQUIRING VARIOUS ASSETS WHICH FORMED THE BASIS OF INCOME DISCLOSED AND ASSESSED. YET THE COMPULSION OF THE CIRCUMSTANCES THAT UNFOLDED THEMS ELVES CONSEQUENT UPON THE SEARCH AND SEIZURE OPERATIONS W OULD ITSELF CONSTITUTE A CONSTRAINT EFFECTIVE ENOUGH TO RENDER THE FILING OF RETURNS BY THEM 'INVOLUNTARY'. THE DISCLO SURE MADE IN THE RETURNS ACTUALLY TANTAMOUNTS TO AN ADMISSION ON THE PART OF THE ASSESSEES HAVING EARNED CONCEALED INCOM E WHICH ACCORDING TO THE ASSESSMENT ORDERS HAS BEEN ADMITTED BY THE ASSESSEES. THE DISCLOSURE CANNOT EV EN BE TERMED AS ONE MADE IN GOOD FAITH. THE EXPRESSION 'G OOD FAITH' MEANS AN ACT DONE HONESTLY EVEN IF THE SAME BE TAINTED WITH NEGLIGENCE OR MISTAKE. SECTION 2(22) O F THE GENERAL CLAUSES ACT LENDS A SIMILAR MEANING TO THE SAID EXPRESSION. IN ORDER THAT A DISCLOSURE IS TERMED AS HAVING BEEN MADE IN GOOD FAITH THE SAME MUST BE DEMONSTRA BLY HONEST. A DISCLOSURE WHICH IS MADE UNDER THE COMPUL SION OF A POSSIBLE PENALTY OR OTHER PROCEEDINGS CANNOT BE T ERMED HONEST OR ONE MADE IN GOOD FAITH THE UNDERLYING OB JECT OF ANY SUCH DISCLOSURE BEING NOT TO COME CLEAN ON THE SUBJECT BUT TO AVOID THE ADVERSE CONSEQUENCES THAT MAY FOLL OW A NON-DISCLOSURE. BLAMEWORTHINESS ATTACHED TO THE ASS ESSEES WITH REFERENCE TO THE ORIGINAL RETURN CANNOT BE AVO IDED BY FILING A FRESH RETURN AFTER CONCEALMENT WAS DETECTE D BY THE ASSESSING AUTHORITY. WHERE THE SURRENDER OF INCOME MADE IN THE SUBSEQUENT RETURN WAS NOT VOLUNTARY BUT WAS AS A RESULT OF DETECTION BY THE ASSESSING AUTHORITY THE FILING OF THE SUBSEQUENT RETURN WOULD NOT BE A MITIGATING CIRCUMS TANCE. IN THE FACTS AND CIRCUMSTANCES OF THE CASE UNDER CONSI DERATION IT IS CLEAR THAT THE ORIGINAL RETURN FILED BY THE A SSESSEES WHEN COMPARED WITH THE RETURNS FILED PURSUANT TO TH E NOTICE ISSUED UNDER SECTION 153A OF THE ACT FORMS THE BASI S FOR THE SATISFACTION OF THE ASSESSING OFFICER FOR INITIATIN G PENALTY PROCEEDINGS UNDER SECTION 271(1)(C) OF THE ACT. THE ASSESSING OFFICER THEREFORE HAS RIGHTLY REACHED T HE SATISFACTION THAT THE ASSESSEE HAD CONCEALED INCOME IN THE ORIGINAL RETURN BY WAY OF INDICATING HIS SATISFACTI ON THAT THE PENALTY PROCEEDINGS ARE PROPOSED TO BE INITIATED. I N THESE CIRCUMSTANCES OF THE CASE AND THE LAW DISCUSSED ITA NO.2914 2915 AND 2916/AHD/2008 SHRI ARVIND D. PATEL VS ACIT CENTRAL CIRCLE-1 BA RODA 11 HEREINABOVE IN OUR CONSIDERED OPINION THESE ASSESS EES DID NOT ACT VOLUNTARILY AND BONAFIDELY IN FILING THE RE TURN OFFERING THE ADDITIONAL INCOME. ADMITTEDLY THE RETURN WAS N OT FILED BEFORE SEARCH AND SEIZURE WAS CONDUCTED AND INCRIMI NATING DOCUMENTS WERE RECOVERED SHOWING UNDISCLOSED INCOME OF THE ASSESSEE. EXPLANATION 5 HAS BEEN ADDED IN SECTI ON 271(1)(C) OF THE ACT IN ORDER TO MEET SUCH SITUATIO NS. AS REGARDS RELIANCE ON THE DECISION IN THE CASE OF SUR ESH CHANDRA MITTAL (SUPRA) IN THAT CASE ISSUE WAS AS T O WHETHER THE TRIBUNAL WAS JUSTIFIED IN COMING TO THE CONCLUS ION THAT BURDEN OF PROVING CONCEALMENT NOT DISCHARGED AND PE NALTY CANNOT BE LEVIED? HOW THIS DECISION IS RELEVANT IS NOT UNDERSTOOD ESPECIALLY WHEN ADMITTEDLY THESE ASSES SEES DID NOT REFLECT THEIR INCOME FOUND TO HAVE BEEN EAR NED IN TERMS OF THE DOCUMENTS SEIZED DURING THE SEARCH IN THEIR ORIGINAL RETURNS OF INCOME AND EVEN ACCEPTED THAT T HEY HAD UTILIZED THEIR UNDISCLOSED INCOME IN HAVING VALUABL E ARTICLES OR THINGS IN THEIR NAME OR IN THE NAME OF THEIR REL ATIONS. THUS RELIANCE ON THE SAID DECISION IS TOTALLY MISP LACED. 7.7 EVEN THE DECISION DATED 23-09-2010 OF THE IT AT RAJKOT DIVISION BENCH IN THE CASE OF SHABBIR ALLA UDDIN LATIWALA VS DCIT IN ITA NOS.1054 TO 1056/RJT/2010 F OR AYS 2001-02 2004-05 AND 2005-06 RELIED UPON BY TH E LEARNED AR ON BEHALF OF THE ASSESSEE FOLLOWS THE VIEW OF TM IN THE AFORESAID DECISION IN THE FOLLOWING TERMS: 7(B) REGARDING THE FIRST ISSUE OF ELIGIBILITY OR O THERWISE OF THE BUILT-IN IMMUNITY AS PRESCRIBED IN EXPLANATION-5(2) U/S 271(1)(C) THERE IS CLEARLY NO DOUBT THAT THE TERMS AND CONDITIONS PRESCRIBED IN THE EXPLANATION HAVE CLEAR LY NOT BEEN FULFILLED AND THE ASSESSEE CAN NEVER CLAIM SUC H IMMUNITY FROM PENALTY IN SO FAR AS THE COMPLETED YE ARS ARE CONCERNED IF EITHER THE RETURNS THEREOF WERE ALREA DY FURNISHED OR THE TIME LIMIT PRESCRIBED U/S 139(1) H AS ALREADY EXPIRED. IT IS NOTICED FROM THE RECORD THAT IN EACH OF THE EIGHT YEARS SUBJECT MATTER OF THIS COMMON ORDER THE ASS ESSEES FAILED IN COMPLYING WITH THIS BASIC REQUIREMENT. TH EY ARE THUS CLEARLY NOT ELIGIBLE FOR CLAIMING ANY IMMUNITY FROM LEVY OF PENALTY. THE RATIO OF THE JUDGMENT OF HON'BLE AH MEDABAD TRIBUNAL IN A THIRD MEMBER CASE OF KIRIT DAHYABHAI PATEL (SUPRA) CLEARLY APPLY IN THIS SITUATION AND RESPECT FULLY FOLLOWING THE SAME WE HOLD THAT THE ASSESSEES ARE NOT COVERED UNDER THE BUILT-IN IMMUNITY FROM LEVY OF PE NALTY. ITA NO.2914 2915 AND 2916/AHD/2008 SHRI ARVIND D. PATEL VS ACIT CENTRAL CIRCLE-1 BA RODA 12 7.71 THE CONCLUSIONS DRAWN IN THE OTHER DECISION DA TED 4.11.2010 IN THE CASE OF BANKIM CHANDULAL MODI IN I TA NO.3431/AHD/2007 RELIED UPON ON BEHALF OF THE ASSES SEE ARE NOT APPLICABLE TO THE FACTS OF THE PRESENT CASE SINCE DESPITE SPECIFIC REQUEST MADE THE LEARNED AR DID N OT DEMONSTRATE BEFORE US AS TO HOW THE DECISION IS REL EVANT TO THE FACTS AND CIRCUMSTANCES IN THE INSTANT CASE. 7.8 WE MAY ALSO POINT OUT THAT IN TERMS OF PRO VISIONS OF SEC. 271(1)(C) OF THE ACT READ WITH EXPLANATION 1 THERET O AND THE JUDICIAL PRONOUNCEMENTS IN THE CASE OF B.A. BALASUBRAMANIAM & BROS. CO. V. CIT [1999] 157 CTR 556(SC) CIT V. B.A. BALASUBR AMANIAM & BROS. [1984] 40 CTR (MAD.)/[1985] 152 ITR 529 (MAD.) CIT V. MUSSADILAL RAM BHAROSE [1987] 60 CTR (SC) 34/[ 1987 ] 165 ITR 14 (SC); TC 50 R. 474; CIT V. K.R. SADAYAPPAN [1990] 86 CTR (SC) 120; [1990] 185 ITR 49 (SC); TC 50 R. 795 ADDL. CIT V. JEEVAN LAL SAH [1994] 117 CTR (SC) 130; [1994] 205 ITR 244 (SC); TC 50 R. 973 AND K.P.MADHUSUDANAN VS. CIT 25 1 ITR 99(SC) IT IS WELL ESTABLISHED THAT WHENEVER THERE IS DIFFERENCE BETWEEN THE RETURNED AND ASSESSED INCOME THERE IS INFERENCE OF CONCEALMENT. THE EXPLANATION 1 TO SEC. 271(1)(C) OF THE ACT RAISES A PRESUMPTION THAT CAN BE REBUTTED BY THE ASSESSEE WITH REFERENCE TO FACTS OF THE CASE. THUS THE ONUS IS ON THE ASSE SSEE TO REBUT THE INFERENCE OF CONCEALMENT. THE ABSENCE OF EXPLANATIO N ITSELF WOULD ATTRACT PENALTY. THE EXPLANATION OFFERED BY THE ASS ESSEE SHOULD NOT BE FALSE. THE ONUS LAID DOWN UPON THE ASSESSEE TO REBUT THE PRESUMPTION RAISED UNDER EXPLANATION 1 WOULD NOT BE DISCHARGED BY ANY FANTASTIC OR FANCIFUL EXPLANATION. IT IS NOT THE LAW THAT ANY AND EVERY EXPLANATION HAS TO BE ACCEPTED. IN THE IN STANT CASE THERE IS NOTHING TO SUGGEST THAT THESE ASSESSEE DISCHARGE D THE ONUS LAID DOWN UPON THEM EVEN IN TERMS OF EXPLANATION 1 TO SE CTION 271(1)(C) OF THE ACT. 7.9 IN THE CASE OF CIT V. PRATHI HARDWARE STORES [1993] 203 ITR 641 (ORI.) HONBLE ORISSA HIGH COURT HAVE LAID DOWN T HE FOLLOWING PROPOSITION OF LAW: I). EXPLANATION TO SECTION 271(1)(C) IS THE RULE O F EVIDENCE. II) . THE INITIAL BURDEN OF REBUTTAL IS ON THE ASSE SSEE BECAUSE THE BASIC FACTS ARE WITHIN THE SPECIAL KNOWLEDGE OF THE ASSESSEE. SECTION 106 OF THE INDIAN EVIDENCE ACT. 1872 GIVES STATUTORY RECOGNITION TO THIS UNIVERSALLY ACCEPTED RULE OF EV IDENCE. III) THERE IS NO DISCRETION ON THE ASSESSING OFFICE R AS TO WHETHER HE CAN INVOKE THE EXPLANATION OR NOT. ITA NO.2914 2915 AND 2916/AHD/2008 SHRI ARVIND D. PATEL VS ACIT CENTRAL CIRCLE-1 BA RODA 13 7.10 IN THE CASE OF USHA FERTILISERS VS. CIT 26 9 ITR 591(GUJ) WHILE UPHOLDING THE LEVY OF PENALTY HONBLE JURISD ICTIONAL HIGH COURT OBSERVED THAT .THE SUPREME COURT IN THE CASE OF MUSSADILAL RAM BHAROSE [1987] 165 ITR 14 HAS SPECIFICALLY LAID DOWN THE SCOPE OF THE EXPLANATION IN THE FOLLOWING WORDS: 'THE POSITION THEREFORE IN LAW IS CLEAR. IF THE R ETURNED INCOME IS LESS THAN 80 PER CENT OF THE ASSESSED IN COME THE PRESUMPTION IS RAISED AGAINST THE ASSESSEE THAT THE ASSESSEE IS GUILTY OF FRAUD OR GROSS OR WILLFUL NEG LECT AS A RESULT OF WHICH HE HAS CONCEALED THE INCOME BUT THI S PRESUMPTION CAN BE REBUTTED. THE REBUTTAL MUST BE O N MATERIALS RELEVANT AND COGENT.' AS TO WHAT COULD BE THE EXPLANATION BY WHICH THE AS SESSEE CAN REBUT THE PRESUMPTION RAISED AGAINST IT IS STA TED BY THE APEX COURT IN THE SAME DECISION IN THE FOLLOWING WO RDS WHILE CONFIRMING THE VIEW EXPRESSED BY THE FULL BENCH OF THE PATNA HIGH COURT IN THE CASE OF CIT V. NATHULAL AGA RWALA AND SONS [1985] 153 ITR 292 : 'THE PATNA HIGH COURT EMPHASISED THAT AS TO THE NAT URE OF THE EXPLANATION TO BE RENDERED BY THE ASSESSEE IT WAS PLAIN ON PRINCIPLE THAT IT WAS NOT THE LAW THAT THE MOMEN T ANY FANTASTIC OR UNACCEPTABLE EXPLANATION WAS GIVEN TH E BURDEN PLACED UPON HIM WOULD BE DISCHARGED AND THE PRESUMP TION REBUTTED WE AGREE. WE FURTHER AGREE THAT IT IS NOT THE LAW THAT ANY AND EVERY EXPLANATION BY THE ASSESSEE MUST BE ACCEPTED. IT MUST BE AN ACCEPTABLE EXPLANATION ACC EPTABLE TO A FACT-FINDING BODY. WE ARE AWARE THAT IT WOULD NOT BE POSSIBLE FOR THE HIGH COURT TO ENTER INTO A FACT-FINDING EXERCISE OR REAP PRECIATE THE EVIDENCE AND WE DO NOT PROPOSE TO DO SO. HOWEVER A T THE SAME TIME IT IS APPARENT THAT THE BURDEN WHICH IS CAST ON THE ASSESSEE REMAINS UNDISCHARGED WHEN ONE APPLIES THE PRINCIPLES LAID DOWN BY THE APEX COURT. AS OBSERVED THE EXPLANATION HAS TO BE ONE WHICH IS NOT FANTASTIC OR UNACCEPTABLE. IT IS NOT THE LAW THAT ANY AND EVERY EXPLANATION BY THE ASSESSEE MUST BE ACCEPTED. .' 8. IN THE LIGHT OF THE DISCUSSION MADE ABOVE E SPECIALLY WHEN THE ASSESSEE MISERABLY FAILED TO DISCHARGE THE ONUS LAI D DOWN UPON ITA NO.2914 2915 AND 2916/AHD/2008 SHRI ARVIND D. PATEL VS ACIT CENTRAL CIRCLE-1 BA RODA 14 THEM IN TERMS OF EXPLANATION 1 AND EXPLANATION 5 TO SEC. 271(1)(C) OF THE ACT BEFORE THE LOWER AUTHORITIES AND EVEN B EFORE US WE HAVE NO HESITATION IN UPHOLDING THE ORDER OF THE LD . CIT(A) IN CONFIRMING THE PENALTY IMPOSED BY THE AO UNDER S. 2 71(1)(C) OF THE ACT . 9 IN THE RESULT ALL THESE APPEALS FILED BY THE SIX ASSESSEES ARE DISMISSED. 7. ITAT AHMEDABAD B BENCH IN THE CASE OF DCIT VS M/S. JAYANTILAL AMBALAL CHOKSHI IN ITA NO.674/AHD/2008 F OR ASSESSMENT YEAR 2005-06 VIDE ORDER DATED 31-12-2010 REVERSED T HE ORDER OF THE LEARNED CIT(A) IN CANCELING THE PENALTY U/S 271 (1) ( C ) OF THE IT ACT AND RESTORED THE ORDER OF THE AO ON PENALTY. IN THI S CASE ALSO SEARCH WAS CONDUCTED AND PROCEEDINGS U/S 153C/153A OF THE IT ACT WERE INITIATED AND ORIGINAL RETURN OF INCOME WAS FILED D ECLARING NIL INCOME BUT IN THE RETURN FILED IN RESPONSE TO THE NOTICE U /S 153A/153C OF THE IT ACT THE ASSESSEE DECLARED RS.20 00 000/- AS TOT AL INCOME. THE LEARNED CIT (A) CANCELLED THE PENALTY ON SUCH FACTS ; HOWEVER THE TRIBUNAL SET ASIDE THE ORDER OF THE LEARNED CIT (A) AND RESTORED THE PENALTY ORDER OF THE AO. THE FINDINGS OF THE TRIBUN AL IN PARA 7 TO 9 ARE REPRODUCED AS UNDER: 7. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND THE MATERIAL AVAILABLE ON RECORD. THE HONBLE BOMBAY H IGH COURT IN THE CASE OF JYOTI LAXMAN KONKAR VS CIT 292 ITR 163 HELD AS UNDER: THE ASSESSEE HAD FILED A RETURN FOR THE ASSESSMENT YEAR 1999-2000 DECLARING AN INCOME OF RS.7 40 510. NOT SATISFIED THEREWITH THE ASSESSING OFFICER CARRIED OUT A SURVEY UNDER SECTION 133A OF THE INCOME-TAX ACT 1961 AND DURING THE SURVEY FOUND THAT THERE WAS A ITA NO.2914 2915 AND 2916/AHD/2008 SHRI ARVIND D. PATEL VS ACIT CENTRAL CIRCLE-1 BA RODA 15 DISCREPANCY IN STOCK TO THE TUNE OF RS.18 28 706 WHICH WAS BROUGHT TO THE NOTICE OF THE ASSESSEE AND THE ASSESSEE FILED A REVISED RETURN DISCLOSING ADDITIONAL INCOME OF RS.18 28 706. THE ASSESSING OFFICER IMPOSED PENALTY UNDER SECTION 271 (1) ( C ) AND THIS WAS UPHELD BY THE TRIBUNAL. ON APPEAL TO THE HIGH COURT: HELD DISMISSING THE APPEAL THAT THE QUESTION WHETHER THERE IS CONCEALMENT OF INCOME OR NOT HAS TO BE DECIDED WITH REFERENCE TO THE FACTS OF A GIVEN CASE AND THE FACT FINDING AUTHORITIES UNDER THE ACT HAVING COME TO THE CONCLUSION THAT IN THE FACTS OF THE CASE THE ASSESSEE HAD CONCEALED THE INCOME INITIALLY WITH A VIEW TO AVOID PAYMENT OF TAX THE IMPOSITION OF PENALTY WAS VALID. 7.1 HONBLE BOMBAY HIGH COURT IN THE CASE OF VADILA L ICHHACHAND VS CIT 32 ITR 569 HELD AS UNDER: ON SEPTEMBER 28 1953 THE ASSESSEE FILED HIS RETURN FOR AN ASSESSMENT YEAR SHOWING A TOTAL INCOME OF RS.7 038. ON OCTOBER 19 THE INCOME-TAX OFFICER ON EXAMINATION OF THE BOOKS OF THE ASSESSEE DISCOVERED THAT THE ASSESSEE HAD NOT DISCLOSED AN INCOME OF RS.17 548. THE ASSESSEE FILED ON THE SAME DAY A REVISED RETURN DATED OCTOBER 18 DECLARING HIS TOTAL INCOME TO BE RES. 24 528 WHICH INCLUDED THE SUM OF RS.17 548. THE INCOME-TAX AUTHORITIES CAME TO THE CONCLUSION THAT INCOME HAD BEEN DELIBERATELY CONCEALED BY THE ASSESSEE IN HIS RETURN DATED SEPTEMBER 28 AND IMPOSED A PENALTY ON HIM. ON APPEAL THE APPELLATE TRIBUNAL HELD THAT THE PENALTY SHOULD BE CALCULATED ON THE BASIS OF THE REVISED RETURN AND THE PENALTY8 WAS THEREFORE NIL. ON A REFERENCE: ITA NO.2914 2915 AND 2916/AHD/2008 SHRI ARVIND D. PATEL VS ACIT CENTRAL CIRCLE-1 BA RODA 16 HELD (I) THAT T HE RETURN THAT HAD TO BE TAKEN INTO ACCOUNT UNDER SECTION 28(1) (C ) OF THE INDIAN INCOME-TAX ACT 1922 WAS THE RETURN WHICH IF ACCEPTED WOULD HAVE AVOIDED TAX AND WHICH WAS NOT ACCEPTED; THEREFORE THE PENALTY HAD TO BE CALCULATED ON THE BASIS OF THE ORIGINAL RETURN AND THE TRIBUNAL ERRED IN HOLDING THAT THE REVISED RETURN OF OCTOBER 18 HAD TO BE TAKEN INTO ACCOUNT AND THAT THE ASSESSEE WAS NOT LIABLE TO A PENALTY. 7.2 THE HONBLE ALLAHABAD HIGH COURT IN THE CASE OF BILAND RAM HARGAN DASS VS CIT 171ITR 390 HELD AS UNDER: DURING THE ASSESSMENT YEAR 1978-79 THE ASSESSEE FILED A RETURN ON JULY 28 1978 SHOWING AN INCOME OF RS. 66 787. A REVISED RETURN WAS FILED BY THE ASSESSEE ON SEPTEMBER 28 1979 SHOWING AN INCOME OF RS. 2 18 810 THEREBY INCLUDING AN EXTRA INCOME OF RS. 1 52 02782 WHICH WAS SURRENDERED BY THE ASSESSEE IN CONSEQUENCE OF A SEARCH CONDUCTED IN THE BUSINESS PREMISES OF THE ON OCTOBER 25 1978 I.E. AFTER THE FILING OF THE ORIGINAL RETURN. THE TOTAL INCOME OF THE ASSESSEE WAS ULTIMATELY DETERMINED AT RS. 2 59 315 BY THE TRIBUNAL. THE INCOME TAX OFFICER INITIATED PENALTY PROCEEDINGS UNDER SECTION 271(1)(C) OF THE INCOME-TAX ACT 1961 FOR CONCEALMENT OF INCOME AND LEVIED A PENALTY OF RS. 1 04 000 ON THE GROUND THAT IT WAS ONLY AFTER THE SEARCH WAS CONDUCTED AND THE INCOME-TAX OFFICER FOUND THAT THE ASSESSEE HAD CONSIDERABLE BUSINESS OUTSIDE HIS BOOKS AND CALLED UPON THE ASSESSEE TO EXPLAIN THE NATURE OF ENTRIES IN THE SEIZED PAPERS THAT THE ASSESSEE WAS FORCED TO FILE A REVISED RETURN. THE INCOME-TAX OFFICER AND THE TRIBUNAL FOUND THAT THE REVISED RETURN WAS FILED ON ACCOUNT OF ANY ITA NO.2914 2915 AND 2916/AHD/2008 SHRI ARVIND D. PATEL VS ACIT CENTRAL CIRCLE-1 BA RODA 17 BONA FIDE INADVERTENCE OR OMISSION IN THE ORIGINAL RETURN. THE TRIBUNAL ALSO FOUND THAT THE SURRENDER OF INCOME WAS NOT VOLUNTARY BUT WAS AS A RESULT OF DETECTION MADE BY THE INCOME-TAX OFFICE THAT THE REVISED RETURN WAS FILED BY THE ASSESSEE TO ESCAPE PENALTY BY MAKING AVERMENTS IN THE COVERING LETTER DATED SEPTEMBER 28 1979 IN ITS OWN FAVOUR TO THE EFFECT HAT IT WAS WITH A VIEW TO PURCHASE PEACE WITH THE DEPARTMENT AND TO CLOSE LITIGATION THAT THE SURRENDER WAS NOT MADE ON THE CONDITION THAT NO PENALTY WOULD BE LEVIED THAT THEREFORE THE SUM OF RS.1 52 027 REPRESENTED THE CONCEALED INCOME OF THE ASSESSEE AND HENCE THE LEVY OF PENALTY UNDER CLAUSE (B) OF EXPLANATION TO SECTION 271 (1) ( C ) WAS VALID. THE TRIBUNAL THEREFORE DISMISSED T4HE APPEAL FILED BY THE ASSESSEE. ON A REFERENCE APPLICATION FILED BY THE ASSESSEE UNDER SECTION 256 (2) THE ASSESSEE CONTENDED THAT THE QUESTION INVOLVED WAS THE CONSTRUCTION OF THE LETTER DATED 28 1979 WHICH WAS FILED BY THE ASSESSEE ALONG WITH THE RETURN AND AS SUCH A QUESTION OF LAW AROSE FOR REFERENCE: HELD AFFIRMING THE FINDINGS OF THE TRIBUNAL THAT THE LEVY OF PENALTY WAS VALID AND NO QUESTION OF LAW AROSE OUT OF THE ORDER OF THE TRIBUNAL. 7.3 THE HONBLE KERALA HIGH COURT IN THE CASE OF P. C. JOSEPH & BROTHERS VS CIT 158 CTR 104 HELD AS UNDER: CONCLUSION SIMPLY BECAUSE ASSESSEE AGREED TO ADDITION OF CONCEALED INCOME AFTER DETECTION THEREOF BY SPREADING THE AMOUNT OVER FOUR YEARS AND FILED RETURNS IN RESPONSE TO NOTICE UNDER S. 148 OFFERING ADDITIONAL INCOME IT CANNOT ESCAPE PENALTY UNDER S. 271(1) ( C ). ITA NO.2914 2915 AND 2916/AHD/2008 SHRI ARVIND D. PATEL VS ACIT CENTRAL CIRCLE-1 BA RODA 18 7.4 THE HONBLE BOMBAY HIGH COURT IN THE CASE OF KRISHNA KUMARI CHAMANLAL AND ANOTHER VS CIT AND ANOTHER 217 ITR 645 HELD AS UNDER: THE INCOME-TAX OFFICER IMPOSED PENALTY UNDER SECTION 271 (1) ( C ) OF THE INCOME-TAX ACT 1961 FOR THE ASSESSMENT YEARS 1960-61 TO 1964-65. ON A WRIT PETITION: HELD DISMISSING THE WRIT PETITION AGAINST THE IMPOSITION OF PENALTY UNDER SECTION 271 (1) ( C ) THAT THE AUTHORITIES BELOW HAD RECORDED A FINDING OF FAC T TO THE EFFECT THAT IN 1965 SEARCH AND SEIZURE OPERATIONS HAD TAKEN PLACE WHICH DETECTED BOGUS HUNDI NOTES AND THAT THE ASSESSEE HAD AGREED TO SURRENDER RS.2 15 500 RS.23 74 100 AND RS.28 46 200 IN RESPECT OF THE ASSESSMENT YEARS 1960-61 1963-64 AND 1964-65 RESPECTIVELY. THE ASSESSEE DID NOT AVAIL OF THE OPPORTUNITY GIVEN TO SHOW THAT THE AMOUNTS IN QUESTION WERE NOT CONCEALED INCOME. DESPITE SEVERAL OPPORTUNITIES THE ASSESSEE DID NOT REMAIN PRESENT. SECONDLY NO APPEAL WAS PREFERRED. THIRDLY THE RECORD SHOWED THAT THE ASSESSEE AGREED TO SURRENDER THE AMOUNTS ONLY AFTER SEIZURE OPERATIONS TOOK PLACE IN 1965. I N THE CIRCUMSTANCE THE LEVY OF PENALTY WAS VALID. (S EE P. 464A B E F). 8. CONSIDERING THE FACTS OF THE CASE IN THE LIGHT O F THE ABOVE DECISIONS IT IS CLEAR THAT THE ASSESSEE HAS CONCEALED THE PARTICULARS OF INCOME AND HAS DELIBER ATELY FILED INACCURATE PARTICULARS OF INCOME. ADMITTEDLY SEARCH WAS CONDUCTED ON 21/22/07-2004 AND CASH BELONGING T O THE ASSESSEE WAS FOUND WHICH WAS ALSO ADMITTED LATE R ON BY THE ASSESSEE. THE FILING OF RETURN FOR THE ASSES SMENT YEAR 2005-06 WAS NOT DUE ON THE DATE OF SEARCH AND THE ASSESSEE HAD AMPLE TIME TO FILE THE RETURN FOR ASSE SSMENT YEAR UNDER APPEAL WHICH THE ASSESSEE ULTIMATELY FIL ED HIS REGULAR RETURN OF INCOME ON 14-10-2005. THE ASSESSE E TILL THAT TIME NEVER ACCEPTED THAT THE CASH IN QUESTION WAS ITA NO.2914 2915 AND 2916/AHD/2008 SHRI ARVIND D. PATEL VS ACIT CENTRAL CIRCLE-1 BA RODA 19 THE UNACCOUNTED MONEY OF THE ASSESSEE. THE CASH SO FOUND WAS ALSO NOT DECLARED AS UNDISCLOSED INCOME I N THE ORIGINAL RETURN OF INCOME. LATER ON THE ASSESSEE A DMITTED THAT THE AMOUNT OF RS.20 00 000/- IS ITS UNDISCLOSE D INCOME. THEREFORE ON THE DATE OF FILING OF RETURN THE ASSESSEE WAS AWARE THAT THE AMOUNT IN QUESTION WAS UNDISCLOSED INCOME OF THE ASSESSEE AND IF THE ASSES SEE WANTED TO INCLUDE THE UNDISCLOSED INCOME OF RS.20 00 000/- VOLUNTARILY IN THE ORIGINAL RETURN O F INCOME IT COULD HAVE DONE SO ON THE DATE OF FILING OF THE ORIGINAL RETURN OF INCOME ON 14-10-2005 BUT THE ASSESSEE DI D NOT DO SO AND IN HIS REPLY BEFORE THE ADIT (INVESTIGATI ON) IT MADE A CLAIM ON 18-08-2004 THAT THE ASSESSEE WOULD BE ABLE TO EXPLAIN THE SOURCE OF THE CASH FOUND IN THE SEARCH BY PRODUCING DOCUMENTARY EVIDENCES. BUT NO EVIDENC E WAS PRODUCED AT ANY SAGE BEFORE ANY OF THE INCOME T AX AUTHORITIES. THE ASSESSEE CLAIMED THAT SINCE THE R ETURN WAS FILED U/S 153C OF THE IT ACT WHICH IS THE ONLY MODE FOR SURRENDERING THE AMOUNT THERE IS NO CONCEALMENT OF INCOME. WE DO NOT AGREE WITH THE CONTENTION OF THE ASSESSEE BECAUSE PROCEEDINGS U/S 153 C OF THE IT AC T WOULD BE DEPENDING UPON THE PROCEEDINGS TAKEN AGAIN ST THE PERSON SEARCHED AND THE PROCEEDINGS TAKEN AGAIN ST THEM U/S 153A OF THE IT ACT. AS NOTED ABOVE THE ASSESSEE WAS HAVING AMPLE OPPORTUNITY TO DISCLOSE T HE UNACCOUNTED CASH OF RS.20 00 000/- ON THE DATE OF F ILING OF THE ORIGINAL RETURN THEREFORE THERE WAS NO REA SON FOR THE ASSESSEE TO HAVE WAITED FOR ISSUE OF NOTICE U/S 153C OF THE IT ACT. THE ASSESSEE ALSO CLAIMED THAT AMOUN T OF RS.20 00 000/- WAS DISCLOSED IN THE RETURN OF INCOM E IN ORDER TO BUY PEACE OF MIND AND TO AVOID LITIGATIONS BUT NO SUCH EXPLANATION WAS FILED BY THE ASSESSEE AFTER TH E SEARCH OR ON THE DATE OF FILING OF THE ORIGINAL RET URN OF INCOME. EVEN SUCH A PLEA OF THE ASSESSEE WAS NEVER ACCEPTED BY THE REVENUE AUTHORITIES. THE PENALTY PROCEEDINGS WERE INITIATED FOR CONCEALMENT OF INCOM E BECAUSE IT WAS ONLY AFTER THE SEARCH WAS CONDUCTED THE ASSESSEE WAS FOUND IN POSSESSION OF UNACCOUNTED CAS H OUT SIDE THE BOOKS OF ACCOUNTS AND WHEN THE ASSESSE E WAS CALLED UPON TO EXPLAIN THE UNACCOUNTED CASH TH E ITA NO.2914 2915 AND 2916/AHD/2008 SHRI ARVIND D. PATEL VS ACIT CENTRAL CIRCLE-1 BA RODA 20 ASSESSEE WAS FORCED TO DECLARE UNACCOUNTED CASH IN THE RETURN OF INCOME FILED U/S 153C OF THE IT ACT. WE THEREFORE FIND THAT THE AMOUNT DECLARED IN THE RET URN U/S 153C OF THE IT ACT WAS NOT DISCLOSED VOLUNTARILY OR ON ACCOUNT OF ANY BONA FIDE. THE SURRENDER OF INCOME I N THE SUBSEQUENT RETURN WAS THEREFORE NOT VOLUNTARY ACT BUT WAS AS A RESULT OF DETECTION MADE BY THE INCOME TAX AUTHORITIES UPON WHICH THE ASSESSEE DISCLOSED THE UNACCOUNTED CASH IN THE RETURN OF INCOME U/S 153 C OF THE IT ACT IN ORDER TO ESCAPE THE PENALTY PROCEEDINGS. HAD THE REVENUE AUTHORITIES NOT CONDUCTED THE SEARCH ON THE VEHICLE IN QUESTION THE UNACCOUNTED CASH WOULD NOT HAVE BEEN SURFACED IN ANY MANNER. IT IS ONLY BECAUSE OF THE FACT THAT SEARCH WAS CONDUCTED AND UNACCOUNTED CASH BELONGING TO THE ASSESSEE WAS FOUND DURING THE COUR SE OF SEARCH THE ASSESSEE LATER ON MADE A SURRENDER OF C ASH OF RS.20 00 000/- WHICH CANNOT BE SAID TO BE BONA F IDE ACTION ON THE PART OF THE ASSESSEE BECAUSE THE ASSE SSEE DESPITE HAVING AMPLE OPPORTUNITY FROM THE DATE OF S EARCH IN JULY 2004 TILL THE DATE OF FILING OF THE ORIGIN AL RETURN ON 14-10-2005 HAD BEEN CLAIMING IT TO BE ACCOUNTED CAS H FOR WHICH NO EVIDENCE WAS FILED AT ANY STAGE. FOR WHAT PURPOSE THE ASSESSEE WAS WAITING FOR MAKING A SURRE NDER ON 03-01-2007 IS NOT CLEAR. THE ABOVE FACTS THEREF ORE WOULD SHOW THAT THE LEARNED CIT(A) WAS NOT JUSTIFIE D IN DELETING THE PENALTY. THE LEARNED CIT(A) RELIED UPO N THE DECISION OF THE HONBLE M. P. HIGH COURT IN THE CAS E OF SURESH CHANDRA MITTAL (SUPRA) IN WHICH IT WAS HELD THAT ONCE REVISED RETURN WAS REGULARIZED BY THE REVENUE AND NO OBJECTION IS TAKEN AND THAT THE EXPLANATION OF T HE ASSESSEE WAS THAT IN ORDER TO BUY PEACE WITH THE DEPARTMENT AND TO AVOID LITIGATION SURRENDER WAS MA DE. THE TRIBUNAL ACCEPTED THE PLEA OF THE ASSESSEE AND ACCORDINGLY THE DEPARTMENTAL APPEAL WAS DISMISSED. THE HONBLE SUPREME COURT CONFIRMED THE VIEW OF THE HON BLE M. P. HIGH COURT IN THE CASE OF CIT VS SURESH CHAND RA MITTAL 251 ITR 09 AS RELIED UPON BY THE LEARNED CIT (A) AND HELD AS UNDER: ORDER ITA NO.2914 2915 AND 2916/AHD/2008 SHRI ARVIND D. PATEL VS ACIT CENTRAL CIRCLE-1 BA RODA 21 WE HAVE READ THE ORDER OF THE HIGH COURT (SEE [2000] 241 ITR 124] AND THE STATEMENT OF CASE. GIVEN THE FACTS AND CIRCUMSTANCES WE DO NOT THINK THAT ANY INTERFERENCE WITH THE ORDER OF THE HIGH COURT IS CALLED FOR. THE CIVIL APPEALS ARE DISMISSED. NO ORDER AS TO COSTS. 9. CONSIDERING THE FACTS OF THE CASE IN THE LIGHT O F THE ABOVE DISCUSSIONS IT IS CLEAR THAT THE FACTS IN THE CASE OF SURESH CHANDRA MITTAL (SUPRA) ARE CLEARLY DISTINGUI SHABLE AND WOULD NOT SUPPORT THE CASE OF THE ASSESSEE. WE ACCORDINGLY SET ASIDE THE ORDER OF THE LEARNED CIT (A) IN CANCELING PENALTY U/S 271 (1) ( C ) OF THE IT ACT AND RESTORE THE ORDER OF PENALTY PASSED BY THE AO. 8. THE HONBLE GUJARAT HIGH COURT IN THE CASE OF LM P PRECISION ENGG. CO. LTD. VS DCIT 300 ITR 93 HELD THAT REVISED RETURN AFTER SURVEY OPERATION SHOWED CONCEALMENT OF INCOME IMP OSITION OF PENALTY VALID. IT WAS ALSO HELD IN THIS CASE THAT IF THE OMISSION IS INTENTIONAL THE REVISED RETURN CANNOT ABSOLVE AN A SSESSEE FROM PENALTY. 9. CONSIDERING THE FACTS OF THE CASE IN THE LIGHT O F THE ABOVE DECISIONS IT IS CLEAR THAT THE ASSESSEE HAS CONCEA LED THE PARTICULARS OF INCOME AND HAS DELIBERATELY FILED INACCURATE PAR TICULARS OF INCOME. ADMITTEDLY SEARCH WAS CONDUCTED ON 04-03-2005 AFTE R CLOSE OF THE RELEVANT FINANCIAL YEAR UNDER APPEALS. THE ASSESSEE IN RESPONSE TO THE NOTICE U/S 153A OF THE IT ACT DECLARED ADDITION AL INCOME WHICH ADMITTEDLY WAS NOT DISCLOSED IN THE ORIGINAL RETURN OF INCOME. THE ASSESSEE LATER ON IN RESPONSE TO NOTICE U/S 153A OF THE IT ACT DECLARED UNDISCLOSED INCOME WHICH WAS NEVER DISCLOS ED IN THE ITA NO.2914 2915 AND 2916/AHD/2008 SHRI ARVIND D. PATEL VS ACIT CENTRAL CIRCLE-1 BA RODA 22 ORIGINAL RETURN OF INCOME. IT WOULD SHOW THAT THE A SSESSEE WAS AWARE OF THE FACT THAT HE HAS GENERATED UNDISCLOSED INCOM E AND IF THE ASSESSEE WANTED TO DISCLOSE SUCH ADDITIONAL INCOME HE COULD HAVE REVISED THE ORIGINAL RETURN OF INCOME WITHIN THE TI ME PRESCRIBED UNDER THE LAW. BUT THE ASSESSEE DID NOT DO SO AND ONLY WH EN SEARCH WAS CONDUCTED AGAINST HIM THE ASSESSEE CAME FORWARD TO DISCLOSE ADDITIONAL UNDISCLOSED INCOME. PENALTY PROCEEDINGS WERE INITIATED FOR CONCEALMENT OF INCOME BECAUSE IT WAS ONLY AFTER THE SEARCH WAS CONDUCTED THE ASSESSEE WAS FOUND IN POSSESSION OF UNACCOUNTED INCOME AND WHEN THE ASSESSEE WAS CALLED UPON TO FIL E THE RETURN OF INCOME U/S 153A OF THE IT ACT THE ASSESSEE WAS FOR CED TO DECLARE UNDISCLOSED INCOME WHICH WAS NEVER DISCLOSED IN THE ORIGINAL RETURN OF INCOME. WE THEREFORE FIND THAT THE AMOUNT DECL ARED IN THE RETURN OF INCOME U/S 153A OF THE IT ACT WAS NOT DISCLOSED VOLUNTARILY OR ON ACCOUNT OF ANY BONA FIDE. THE SURRENDER OF INCOME I N THE SUBSEQUENT RETURN WAS NOT THEREFORE VOLUNTARY ACT BUT IS A R ESULT OF DETECTION MADE BY THE INCOME TAX AUTHORITIES UPON WHICH THE A SSESSEE DISCLOSED UNDISCLOSED INCOME IN THE RETURN OF INCOM E U/S 153A OF THE IT ACT IN ORDER TO ESCAPE THE PENALTY PROCEEDINGS. HAD THE REVENUE AUTHORITIES NOT CONDUCTED THE SEARCH ON THE ASSESSE E THE UNACCOUNTED INCOME WOULD NOT HAVE BEEN DISCLOSED IN ANY MANNER. IT IS ONLY BECAUSE OF THE FACT THAT SEARCH WAS COND UCTED AND UNDISCLOSED INCOME WAS FOUND WITH THE ASSESSEE DURI NG THE COURSE OF SEARCH THE ASSESSEE DISCLOSED ADDITIONAL INCOME THEREFORE IT COULD NOT BE SAID TO BE BONA FIDE ACTION ON THE PAR T OF THE ASSESSEE. CONSIDERING THE FACTS OF THE CASE IT CAN SAFELY BE NOTED THAT OVERALL CONDUCT OF THE ASSESSEE DOES NOT INDICATE THAT THE RETURNS FILED LATER ITA NO.2914 2915 AND 2916/AHD/2008 SHRI ARVIND D. PATEL VS ACIT CENTRAL CIRCLE-1 BA RODA 23 ON U/S 153A OF THE IT ACT WAS VOLUNTARY AND IN GOOD FAITH TO DISCLOSE UNDISCLOSED INCOME AS AGAINST THE RETURN OF INCOME FILED ORIGINALLY. WE THEREFORE DO NOT FIND ANY MERIT IN ALL THE APP EALS OF THE ASSESSEE. IDENTICAL ISSUE HAS ALREADY BEEN CONSIDER ED BY ITAT AHMEDABAD BENCH IN THE CASE OF RASMIBEN N. SHAH (SU PRA) AND M/S. JAYANTILAL AMBALAL CHOKSHI (SUPRA) IN DETAIL A ND THE DECISIONS THEREIN SQUARELY APPLY IN THE CASE OF THE ASSESSEE. 10. THE LEARNED COUNSEL FOR THE ASSESSEE RELIED ON THE ORDER OF THE ITAT RAJKOT BENCH IN THE CASE OF M/S. BALAJI MULTIF LEX PVT. LTD. (SUPRA) WHICH WOULD NOT APPLY TO THE CASE OF THE PRESENT AS SESSEE IN VIEW OF THE FINDINGS GIVEN IN THE CASE OF SMT. RASMIBEN N. SHAH (SUPRA) IN WHICH THIRD MEMBER DECISION IN THE CASE OF KIRIT DA HYABHAI PATEL HAS BEEN CONSIDERED ALONG WITH OTHER DECISIONS OF T HE HONBLE HIGH COURT AND THE HONBLE SUPREME COURT. SIMILARLY THE DECISION OF VARIOUS HIGH COURTS CONSIDERED IN THE CASE OF M/S. JAYANTILAL AMBALAL CHOKSHI (SUPRA) WOULD SHOW THAT THE ORDER OF THE IT AT RAJKOT BENCH CANNOT BE GIVEN PREFERENCE. 11. CONSIDERING THE ABOVE DISCUSSIONS IN THE LIGHT OF THE DECISIONS OF THE ITAT AHMEDABAD BENCH AND THE DECISIONS OF TH E HONBLE GUJARAT HIGH COURT NOTED ABOVE WE DO NOT FIND ANY MERIT IN THE APPEALS OF THE ASSESSEE. THE SAME ARE ACCORDINGLY D ISMISSED. ITA NO.2914 2915 AND 2916/AHD/2008 SHRI ARVIND D. PATEL VS ACIT CENTRAL CIRCLE-1 BA RODA 24 12. IN THE RESULT ALL THE APPEALS OF THE ASSESSEE ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 28-01-2011 SD/- SD/- (D. C. AGRAWAL) ACCOUNTANT MEMBER (BHAVNESH SAINI) JUDICIAL MEMBER DATE : 28-01-2011 LAKSHMIKANT/- COPY OF THE ORDER FORWARDED TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT CONCERNED 4. THE CIT(A) CONCERNED 5. THE DR ITAT AHMEDABAD 6. GUARD FILE BY ORDER D Y. REGISTRAR ITAT AHMEDABAD