PRASHANT G. SHARMA, MUMBAI v. DCIT (OSD-II) CEN RG-7, MUMBAI

ITA 5596/MUM/2009 | 2003-2004
Pronouncement Date: 15-07-2011 | Result: Dismissed

Appeal Details

RSA Number 559619914 RSA 2009
Assessee PAN AAZPS9066P
Bench Mumbai
Appeal Number ITA 5596/MUM/2009
Duration Of Justice 1 year(s) 9 month(s) 1 day(s)
Appellant PRASHANT G. SHARMA, MUMBAI
Respondent DCIT (OSD-II) CEN RG-7, MUMBAI
Appeal Type Income Tax Appeal
Pronouncement Date 15-07-2011
Appeal Filed By Assessee
Order Result Dismissed
Bench Allotted C
Tribunal Order Date 15-07-2011
Date Of Final Hearing 27-06-2011
Next Hearing Date 27-06-2011
Assessment Year 2003-2004
Appeal Filed On 14-10-2009
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL 'C' BENCH MUMBAI BEFORE SHRI R.V. EASWAR PRESIDENT AND SHRI B. RAMAKOTAIAH ACCOUNTANT MEMBER ITA NOS. 5596 & 5597/MUM/2009 (ASSESSMENT YEARS: 2003-04 & 2005-06) SHRI PRASHANT G. SHARMA DCI T(OSD-II) CENTRAL RANG E-7 C-104 PRASHANT APARTMENTS OLD CGO BUILDING OPP. IIT MAIN GATE POWAI VS. M.K. ROAD MUMBAI 400020 MUMBAI 400076 PAN - AAZPS 9066 P APPELLANT RESPONDENT APPELLANT BY: SHRI MANISH SANGHAVI RESPONDENT BY: SHRI JITENDRA YADAV O R D E R PER B. RAMAKOTAIAH A.M. THESE APPEALS ARE FILED BY THE ASSESSEE AGAINST THE ORDERS OF THE CIT(A) 40 MUMBAI DATED 14.09.2009 CONFIRMING THE PENALTIE S UNDER SECTION 271(1)(C) LEVIED BY THE A.O. FOR THE RESPECTIVE ASS ESSMENT YEARS. SINCE THE ISSUE IS COMMON FOR BOTH YEARS THESE APPEALS ARE D ISPOSED OFF BY THIS CONSOLIDATED ORDER. 2. A SEARCH AND SEIZURE ACTION UNDER SECTION 132 WAS C ARRIED OUT ON ASSESSEES RESIDENCE AS PART OF SEARCH AND SEIZURE ACTION ON GHP/DAVE GROUP OF CASES ON 18.01.2007. ASSESSMENT PROCEEDING S UNDER SECTION 143(3) R.W.S. 153A WERE SUBSEQUENTLY COMPLETED ON 3 1.12.2008 DETERMINING THE TOTAL INCOME AT ` 34 41 447/- FOR A.Y. 2003-04 AND ` 19 79 568/- FOR A.Y. 2005-06. IN THE COURSE OF THE ASSESSMENT PROCEEDING S A REVISED COMPUTATION WAS FILED BY THE ASSESSEE OFFERING INCO MES OF ` 18 05 000/- AND ` 11 50 000/- FOR THE RESPECTIVE ASSESSMENT YEARS. W HILE FILING THE REVISED RETURN ASSESSEE REFERRED TO THE DISCLOSURE OF ` 50 00 000/- FOR A.Y. 2007-08 MADE IN THE STATEMENT RECORDED UNDER SECTION 132(4) ON 15.03.2007 AS ADDITIONAL INCOME IN THE HANDS OF THE GROUP CONCERN S AND INDIVIDUALS. THE A.O. OBSERVED THAT IT CANNOT BE CONSIDERED AS INCOM E DECLARED UNDER SECTION 132(4) AS IT WAS DISCLOSED IN THE REVISED COMPUTATI ON AND NOT IN THE REVISED ITA NOS. 5596 & 5597/MUM/2009 SHRI PRASHANT G. SHARMA 2 RETURN. SO HE INITIATED PENALTY PROCEEDINGS UNDER S ECTION 271(1)(C). BEFORE THE A.O. ASSESSEE SUBMITTED THAT THE NON-DISCLOSURE WAS AN UNINTENTIONAL MISTAKE WHICH WAS CORRECTED BY FILING A REVISED STA TEMENT OF INCOME. RELYING OF THE DECISION OF THE HON'BLE MADRAS HIGH COURT IN THE CASE OF A.V. THOMAS AND CO. VS. CIT 59 ITR 499 IT WAS ALSO SUBMITTED TH AT PENALTY IS NOT JUSTIFIED FOR COMMISSION OF A BONAFIDE MISTAKE. A.O. DID NOT ACCEPT THE EXPLANATION OF THE ASSESSEE. HE WAS OF THE OPINION THAT THE A.O. H AS NO POWER TO ENTERTAIN THE CLAIM MADE BY THE ASSESSEE OTHERWISE THAN BY WA Y OF A REVISED RETURN. RELYING ON THE DECISION OF THE HON'BLE SUPREME COUR T IN THE CASE OF GOETZE (INDIA) LTD. VS. CIT 284 ITR 323 HE REJECTED THE CL AIM OF THE ASSESSEE. A.O. WAS OF THE VIEW THAT THE INCOME WAS DISCLOSED ONLY AS A CONSEQUENCE OF THE SEARCH AND SEIZURE ACTION AND RELYING ON THE DECISI ONS OF THE HON'BLE RAJASTHAN HIGH COURT IN THE CASE OF CIT VS. DR. R.C . GUPTA & CO. 122 ITR 567 AND HON'BLE CALCUTTA HIGH COURT IN THE CASE OF CIT VS. P.B. SHAH 113 ITR 587 HE LEVIED PENALTY UNDER SECTION 271(1)(C). THE MATTER WAS TAKEN TO THE CIT(A) IN APPEAL. BEFORE THE CIT(A) IT WAS SUBM ITTED THAT MERELY BECAUSE CERTAIN INCOME WHICH REMAINED TO BE SHOWN IN THE RE TURN OF INCOME DUE TO BONAFIDE MISTAKE CORRECTED SUBSEQUENTLY WOULD NOT J USTIFY IMPOSITION OF PENALTY. FURTHER IT WAS SUBMITTED THAT THE A.O. HAS NOT RECORDED ANY SATISFACTION REGARDING CONCEALMENT OR INCOME OF FUR NISHING OF INACCURATE PARTICULARS IN THE ASSESSMENT ORDER THEREFORE THE PENALTY MAY BE CANCELLED. THE LEARNED CIT(A) CONFIRMED THE PENALTY BY HOLDING THAT THE DISCLOSURE OF INCOMES CANNOT FORM PART OF THE DISCLOSURE MADE IN THE STA TEMENT UNDER SECTION 132(4). ASSESSEE IS AGGRIEVED AND IN APPEAL BEFORE US. 3. THE LEARNED COUNSEL SUBMITTED THAT ASSESSEE HAS FIL ED RETURN OF INCOME CONSEQUENT TO THE NOTICE GIVEN UNDER SECTION 153A AND SUBSEQUENTLY REALISED THAT CERTAIN INCOMES HAVE BEEN OMITTED TO BE DISCLOSED THEREFORE FIELD REVISED COMPUTATION AS THERE WAS NO PROVISION TO FILE REVISED RETURN. HE THEN REFERRED TO THE ORDER OF THE A.O. IN WHICH ONL Y THE AMOUNT ADMITTED WAS BROUGHT TO TAX WITHOUT ANY ENQUIRY BY THE A.O. OR QUESTIONING. IT WAS HIS SUBMISSION THAT ON THE BASIS OF THE DOCUMENT IM POUNDED UNDER SECTION 133A CAN IT BE CONSIDERED WHETHER ASSESSEE HAS CONC EALED PARTICULARS OF INCOME AS THE DOCUMENT RELIED UPON BY THE REVENUE G OT IMPOUNDED UNDER ITA NOS. 5596 & 5597/MUM/2009 SHRI PRASHANT G. SHARMA 3 SECTION 133A AND NOT SEIZED MATERIAL. IT WAS FURTHE R SUBMITTED THAT ASSESSEE HAS DISCLOSED THE AMOUNT RECEIVED TOWARDS UNEXPLAIN ED CASH RECEIVED ON SALE OF PROPERTY IN A.Y. 2003-04 AND ALSO OFFERED T HE INVESTMENT IN PURCHASE OF PROPERTY IN A.Y. 2005-06 WITHOUT CLAIMING ANY SE T OFF OF CASH AVAILABILITY. IT WAS HIS SUBMISSION THAT ASSESSEE ACTED BONAFIDEL Y WITHOUT CLAIMING THE BENEFIT OF TELESCOPING OF AMOUNTS RECEIVED EARLIER. IT WAS FURTHER SUBMITTED THAT BEFORE THE A.O. ISSUED ANY NOTICE ASSESSEE HIM SELF FILED THE REVISED COMPUTATION AND PENALTY NEED NOT BE LEVIED ON THIS VOLUNTARY COMPLIANCE BY THE ASSESSEE. THE LD. COUNSEL ALSO RELIED ON EXPLAN ATION 5 TO SECTION 271(1)(C) AND LEGAL PRINCIPLES. 4. THE LEARNED D.R. IN REPLY HOWEVER SUBMITTED THAT THE ASSESSEE HAS FILED RETURN SUBSEQUENT TO THE SEARCH WHICH OCCURRE D ON 18.01.2007 AND THE IMPOUNDED DOCUMENTS WERE PART OF THE MATERIAL SEIZE D AT THE TIME OF SEARCH ITSELF. HE THEN REFERRED TO THE ADMISSION OF ` 50 00 000/- FOR THE LATER YEAR AND SUBMITTED THAT ASSESSEE HAS NEITHER MENTIONED R ECEIPT OF ON-MONEY IN SALE OF PROPERTY NOR INVESTMENT IN PURCHASES OF PRO PERTY OUTSIDE THE BOOKS OF ACCOUNT. THEREFORE THE CONTENTION OF THE ASSESSE E THAT EXPLANATION 5 IS APPLICABLE IS NOT CORRECT. IT IS FURTHER SUBMITTED THAT SINCE ASSESSEE HAS NOT OFFERED ANY INCOME THE SAME IS TO BE CONSIDERED FOR LEVY OF PENALTY. HE RELIED ON THE DECISION OF THE HON'BLE KERALA HIGH COURT IN THE CASE OF P.C. JOSEPH& BROTHERS VS. CIT 240 ITR 818 AND THE HON'BLE BOMBAY HIGH COURT IN THE CASE OF SHERATON APPARELS VS. ACIT 256 ITR 20 AND T HE CASE OF INDUS ENGINEERING CO. VS. ACIT 323 ITR 302 (BOM). THE LEA RNED D.R. ALSO RELIED ON THE DECISION OF THE THIRD MEMBER IN THE CASE OF ACI T VS. KIRIT DAHYABHAI PATEL 121 ITD 159. THE LEARNED D.R. ALSO SUBMITTED THAT THE A.O. WAS GENEROUS ENOUGH NOT TO INITIATE PENALTY PROCEEDINGS ON THE ENTIRE INCOME ADMITTED IN THE RETURN FILED IN RESPONSE TO SECTION 153A BUT ONLY TO THE EXTENT OF ADDITIONAL INCOME WHICH WAS NOT ADMITTED EVEN WHEN FILING THE RETURN IN RESPONSE TO NOTICE UNDER SECTION 153A CON SEQUENT TO THE SEARCH. HE SUPPORTED THE ORDERS OF THE A.O. AND THE CIT(A). 5. WE HAVE CONSIDERED THE ISSUE. AS SEEN FROM THE FACT S ON RECORD THERE WAS A SEARCH AND SEIZURE OPERATION CARRIED OUT ON G HP/DAVE GROUP OF CASES ON 18.01.2007 AND THE ASSESSEES RESIDENCE AT C-104 PRASHANT APARTMENTS ITA NOS. 5596 & 5597/MUM/2009 SHRI PRASHANT G. SHARMA 4 MUMBAI WAS ALSO SEARCHED. NOTICE UNDER SECTION 153A WAS ISSUED ON 07.12.2007 AND ASSESSEE FILED RETURNS OF INCOME DEC LARING AN INCOME OF ` 16 36 446/- AND 8 29 568/- RESPECTIVELY. DURING THE COURSE OF ASSESSMENT PROCEEDINGS ASSESSEE FILED REVISED COMPUTATION ON 2 0.11.2008 ADMITTING ADDITIONAL AMOUNT OF ` 18 05 500/- FOR A.Y. 2003-04 AND ` 11 50 500/- FOR A.Y. 2005-06 STATED TO BE ON-MONEY RECEIVED AND PAI D ON PURCHASE AND SALE OF PROPERTY IN RESPECTIVE YEARS. THERE WAS A STATEM ENT RECORDED FROM THE ASSESSEE UNDER SECTION 132(4) ON 15.03.2007 IN WHI CH VIDE QUESTION NO. 4 ASSESSEE WAS CONFRONTED WITH VARIOUS DOCUMENTS SEIZ ED AND IMPOUNDED FROM ASSESSEES PREMISES IN MUMBAI AND JAIPUR. XERO X COPIES OF THE SAID DOCUMENTS WERE STATED TO HAVE BEEN PROVIDED TO THE ASSESSEE BY THE TIME THE STATEMENT WAS TAKEN ON 15.03.2007. THE QUESTION AND ANSWER GIVEN IN THE STATEMENT WAS AS UNDER: - Q.NO. 4: DURING THE COURSE OF SEARCH VARIOUS DOCUM ENTS HAVE BEEN SEIZED AND IMPOUNDED FROM YOUR PREMISES AT MUMBAI A ND JAIPUR. THE XEROX COPY OF ABOVE SAID DOCUMENTS HAVE ALREADY BEEN PROVIDED TO YOU. PLEASE EXPLAIN WHETHER THE AM OUNTS MENTIONED IN THESE LOOSE PAPERS ARE PROPERLY ACCOUN TED IN YOUR BOOKS OF ACCOUNTS OR NOT? ANS: MOST OF THE NOTINGS ARE RECORDED IN THE BOOKS OF ACCOUNTS BUT SOME NOTINGS ARE NOT RECORDED IN THE BOOKS OF ACCOU NTS. I THEREFORE DECLARE A SUM OF RS . 50 00 000/- AS ADDITIONAL INCOME FOR THE GROUP CONCERNS ASSOCIATED FAMILY ME MBERS ETC. THE YEAR-WISE AND ASSESSEE-WISE BY BIFURCATIO N OF THE SAME WILL BE SUBMITTED TO YOU WITHIN A WEEK TIME. T HIS ADDITIONAL INCOME OF RS.50 00 000/- BEING OFFERED B Y ME AS UNDISCLOSED INCOME FOR CURRENT YEAR HAS BEEN EARNED BY ME IN THE REGULAR COURSE OF BUSINESS OF OUR ASSOCIATES CONCERNS GROUP CONCERNS AND FAMILY MEMBERS. THE ABOVE INDICATES THAT THE SEIZED DOCUMENTS AS WE LL IMPOUNDED DOCUMENTS WERE PROVIDED TO THE ASSESSEE IMMEDIATELY AFTER THE SEARCH EVEN BEFORE NOTICE UNDER SECTION 153A WAS ISSUED. AS STA TED EARLIER THE NOTICE WAS ISSUED ON 07.12.2007 AND THE RETURNS WERE FILED ON 31.03.2008 I.E. ALMOST A YEAR LATER TO THE SAID STATEMENT UNDER SEC TION 132(4) WAS RECORDED. ASSESSEE ADMITTED THE ADDITIONAL INCOME OF ` 50 00 000/-. THE INCOME WHICH WERE OFFERED IN A.Y. 2003-04 AT ` 18 50 000/- AND THE INCOME OFFERED IN AY 2005-06 AT ` 11 50 000/- WERE IN ADDITION TO THE ABOVE ADMITTED INCOME UNDER SECTION 132(4) WHICH WAS OFFERED IN AY 2007-08. AS SEEN FROM ITA NOS. 5596 & 5597/MUM/2009 SHRI PRASHANT G. SHARMA 5 THE ASSESSMENT ORDER OF A.Y. 2005-06 ASSESSEE ADMIT TED AN AMOUNT OF ` 5 00 000/- ON ACCOUNT OF UNEXPLAINED INVESTMENT AT THE TIME OF FILING OF THE RETURN ITSELF. THE A.O. VIDE PARA 2 OF THE ASSESSME NT ORDER STATED THAT THE AMOUNT OF ` 5 00 000/- WAS UNDISCLOSED INCOME ON ACCOUNT OF UNE XPLAINED INVESTMENT IN THE RESIDENTIAL HOUSE AND SINCE THIS AMOUNT WAS NOT REFLECTED IN THE ORIGINAL RETURN OF INCOME (FILED EARLIER TO SEARCH) PENALTY UNDER S ECTION 271(1)(C) WAS INITIATED SEPARATELY. AFTER THIS ASSE SSEE ADMITTED FURTHER AMOUNT OF ` 11 50 000/- TOWARDS CASH PAYMENT ON THE BASIS OF AG REEMENT SIGNED FOR GHP CORPORATION ON 18.09.2004 FOR DEVELO PMENT OF LAND AT JAIPUR. AN AMOUNT OF ` 39.50 LAKHS WAS PAID BY WAY OF CHEQUE AND AN AMOUNT OF ` 11 50 000/- WAS PAID IN CASH ON 15.09.2004. THE SAI D PAYMENT OF CASH WAS UNACCOUNTED AND THIS AMOUNT WAS OFFERED BY WAY OF REVISED COMPUTATION IN A.Y. 2005-06. THE A.O. INITIATED PEN ALTY PROCEEDINGS UNDER SECTION 271(1)(C) ON THIS AMOUNT AS WELL. HOWEVER WHILE FINALISING THE PENALTY PROCEEDINGS THE A.O. CONSIDERED ONLY ` 11 50 000/- AND LEVIED PENALTY TAKING THAT AMOUNT ONLY FOR CONSIDERATION. BE THAT AS IT MAY THE ISSUE IN THE PRESENT APPEALS IS WHETHER PENALTY UND ER SECTION 271(1)(C) IS WARRANTED ON THE AMOUNT ADMITTED BY ASSESSEE BY REV ISED COMPUTATION. 6. IT WAS THE CONTENTION OF THE ASSESSEE THAT THEY HAV E FILED VOLUNTARILY REVISED COMPUTATION AND HAS NOT TAKEN ANY BENEFIT O F TELESCOPING ON THESE AMOUNTS AND THIS WAS PART OF ADMISSION OF INCOME AT THE TIME OF SEARCH UNDER SECTION 132(4). IT IS ALSO EXPLAINED THAT IT WAS A BONAFIDE MISTAKE IN NOT ADMITTING THE INCOME WHICH THE ASSESSEE HAS FIL ED VOLUNTARILY BY WAY OF REVISED COMPUTATION AS THERE IS NO PROVISION FOR F ILING REVISED RETURN IN 154A PROCEEDINGS. 7. WE ARE NOT CONVINCED WITH THE REASONS ADDUCED BY TH E ASSESSEE. FIRST OF ALL ASSESSEE HAS FILED ORIGINAL RETURNS OF INCOM E AND THERE WERE UNEXPLAINED INCOMES AND TRANSACTIONS WHICH WERE UNE ARTHED IN THE COURSE OF SEARCH AT MUMBAI AND JAIPUR. EVENTHOUGH THE SEAR CH WAS CONDUCTED ON 18.01.2007 THE STATEMENT FROM THE ASSESSEE UNDER SE CTION 132(4) WAS TAKEN AS LATE AS 15.03.2007. THE QUESTION AND ANSWER EXTR ACTED ABOVE ALSO INDICATES THAT THE SEIZED DOCUMENTS AND IMPOUNDED D OCUMENTS WERE FURNISHED TO THE ASSESSEE BEFORE THE STATEMENT WAS RECORDED. ASSESSEE ITA NOS. 5596 & 5597/MUM/2009 SHRI PRASHANT G. SHARMA 6 ADMITTED THE AMOUNT OF ` 50 00 000/- IN A.Y. 2007-08 CONSEQUENT TO THE SEARCH WHEREAS THE INCOMES ADMITTED IN THESE TWO A SSESSMENT YEARS WERE NOT PART OF THE ORIGINAL ` 50 00 000/- DISCLOSED UNDER SECTION 132(4). THEREFORE ASSESSEES EXPLANATION THAT THEY HAVE VO LUNTARILY FILED REVISED COMPUTATION CANNOT BE ACCEPTED ON THE FACT THAT ASS ESSEE NEITHER ADMITTED THESE INCOMES DURING THE COURSE OF SEARCH PROCEEDIN GS NOR EVEN AT THE TIME OF FILING RETURNS IN THESE YEARS IN RESPONSE TO NOT ICES UNDER SECTION 153A. ASSESSEE FILED THE SO CALLED REVISED COMPUTATION ON 20.11.2008 MAY BE AFTER THE ENQUIRY BY THE A.O. WITH REFERENCE TO THE SEIZE D/IMPOUNDED DOCUMENTS. THIS DOES NOT ABSOLVE THE ASSESSEE OF THE FAILURE T O FURNISH CORRECT INCOMES AT THE TIME OF FILING ORIGINAL RETURN IN THE RESPEC TIVE ASSESSMENT YEARS. IT IS AN ESTABLISHED LAW THAT THE ONUS ATTACHED TO THE A SSESSEE WITH REFERENCE TO ORIGINAL RETURN CANNOT BE AVOIDED BY FILING REVISED RETURN AFTER DETECTION BY THE REVENUE. THIS ISSUE WAS ELABORATELY DISCUSSED W ITH REFERENCE TO THE PROCEEDINGS UNDER SECTION 153A IN THE CASE OF ACIT VS. KIRIT DAHYABHAI PATEL 121 ITD 159 (AHD) (TM) WHEREIN ASSESSEE FILED REVISED RETURNS AFTER SEIZURE OF DOCUMENTS DURING THE COURSE OF SEARCH AN D SINCE THE RETURNS WERE FILED UNDER SECTION 153A THESE WERE ACCEPTED BUT PE NALTY PROCEEDINGS U/S 271(1)( C) WERE INITIATED. THE CONTENTION THAT PENA LTY PROCEEDINGS CANNOT BE INITIATED AS INCOMES WERE FILED VOLUNTARILY WAS NOT ACCEPTED. IT WAS HELD THAT IMMUNITY UNDER EXPLANATION 5 TO SECTION 271(1)(C) W AS NOT AVAILABLE TO ASSESSEE WHEN RETURNS WERE FILED CONSEQUENT TO SEAR CH AND SEIZURE PROCEEDINGS. IT WAS HELD AS UNDER: - SINCE A VIEW HAD ALREADY BEEN TAKEN AS TO THE AVAI LABILITY OF THE IMMUNITY UNDER THE EXPLANATION 5(2) TO SECTION 271( 1)(C) BY AN ORDER OF THE AHMEDABAD BENCH THAT TOO IN THE CASE BELONG ING TO THE SAME GROUP AND AFTER REFERRING TO THE JUDGMENT OF THE MA DRAS HIGH COURT IN CIT VS. SDV CHANDRU [2004] 266 ITR 175 JUDICIAL DI SCIPLINE REQUIRES THAT THE THIRD MEMBER SHOULD NOT DEVIATE FROM THAT VIEW. ACCORDINGLY THE VIEW OF THE ACCOUNTANT MEMBER THAT THE IMMUNITY UNDER THE ABOVE EXPLANATION WAS NOT AVAILABLE TO TH E PRESENT ASSESSEE WAS TO BE UPHELD. THE STATEMENT OF OBJECTS AND REASON TO THE TAXATION LAWS (AMENDMENT AND MISCELLANEOUS PROVISIONS) BILL 1986 AND THE CIRCULAR NO. 469 DID NOT ADVANCE THE CASE OF THE AS SESSEES. THE STATEMENT OF OBJECTS AND REASONS SAID THAT THE AMEN DMENT WAS BEING MADE TO REMOVE AN ANOMALY IN THE EXISTING PROVISIO NS IN RESPECT OF ITA NOS. 5596 & 5597/MUM/2009 SHRI PRASHANT G. SHARMA 7 CASES WHERE PENALTY IS IMPOSABLE FOR CONCEALMENT OF INCOME EVEN IF THE TAXPAYER HAS NO INTENTION TO FABRICATE EVIDENCE OR TO CONCEAL HIS UNDISCLOSED INCOME AFTER SEARCH AND SEIZURES. THE CIRCULAR NO. 469 [162 ITR SC 21] EXPLAINING THE AMENDMENT SHOWS THAT THE BENEFIT OF IMMUNITY CONFERRED BY THE EXPLANATION 5(2) AS AMEN DED BY THE TAXATION LAWS (AMENDMENT AND MISCELLANEOUS PROVISIO NS) ACT 1986 WITH EFFECT FROM 10-9-1986 IS CONFINED TO THE RETU RN FOR THE YEAR IN RESPECT OF WHICH THE PREVIOUS YEAR IS YET TO END OR EVEN THOUGH HAS ENDED THE TIME FOR FILING THE RETURN UNDER SECTION 139(1) IS YET TO EXPIRE. IN THE INSTANT CASE THE SEARCH TOOK PLACE ON 4-9-2003. IN RESPECT OF THE ASSESSMENT YEAR 2003-04 FOR WHICH T HE PREVIOUS YEAR WOULD HAVE ENDED ON 31-3-2003 THE RETURN UNDER SEC TION 139(1) WOULD BE DUE LATEST BY 31-10-2003. IN RESPECT OF AL L THE EARLIER YEARS THE DUE DATES FOR FILING RETURNS UNDER SECTION 139( 1) WOULD HAVE ENDED MUCH EARLIER. RETURNS WERE FILED BY THE ASSES SEES AFTER THE SEARCH IN RESPONSE TO NOTICES ISSUED UNDER SECTION 153A. THE ADDITIONAL INCOME DECLARED IN THOSE RETURN DID NOT FALL UNDER THE CATEGORY OF THE RETURN MENTIONED IN THE EXPLANATION 5(2) TO SECTION 271(1)(C). THEREFORE THE ASSESSEES WERE NOT ENTITL ED TO THE IMMUNITY FROM PENALTY. ACCORDINGLY THE VIEW TAKEN BY THE ACCOUNTANT MEMBE R ON THIS ASPECT OF THE MATTER WAS TO BE AGREED WITH AND IT WAS TO B E HELD THAT THE IMMUNITY WAS NOT AVAILABLE TO THE ASSESSEE UNDER TH E EXPLANATION 5 TO SECTION 271(1)(C). 8. NOT ONLY THAT THE HON'BLE BOMBAY HIGH COURT IN THE CASE OF INDUS ENGINEERING CO. VS. ACIT 323 ITR 302 HAS CONSIDERED THAT PENALTY IS LEVIABLE IN A CASE WHERE TRANSACTIONS WERE DISCLOSED IN THE COURSE OF SEARCH WHEN THESE WERE NOT DISCLOSED EITHER IN THE ORIGINAL RET URN OR REVISED RETURN AND UPHELD LEVY OF PENALTY CONSIDERING IT AS A CASE OF CONCEALMENT. SIMILAR VIEW WAS ALSO EXPRESSED BY THE HON'BLE BOMBAY HIGH COUR T IN THE CASE OF SHERATON APPARELS VS. ACIT 256 ITR 20 WHEREIN EXPLA NATION 5 TO 271(1)(C) WAS CONSIDERED AND HELD THAT THE SAID EXPLANATION C ANNOT OFFER IMMUNITY FROM PENALTY. 9. AS STATED ABOVE IN THE CASE OF THE ASSESSEE THE TRA NSACTIONS ARE OUTSIDE THE BOOKS OF ACCOUNT AND THE PAYMENTS RECEI VED AND PAID BY THE ASSESSEE WERE EVIDENCED BY THE IMPOUNDED DOCUMENTS. THOUGH THE COPIES WERE FURNISHED TO THE ASSESSEE WELL BEFORE TAKING S TATEMENT ON 15.03.2007 U/S 132(4) ASSESSEE FAILED TO OFFER THEM AT THAT T IME OR EVEN IN THE RETURNS FILED IN RESPONSE TO THE NOTICE UNDER SECTION 153A BUT ADMITTED ONLY IN THE COURSE OF ASSESSMENT PROCEEDINGS SUBSEQUENTLY. IN V IEW OF THIS WE ARE OF ITA NOS. 5596 & 5597/MUM/2009 SHRI PRASHANT G. SHARMA 8 THE OPINION THAT THERE IS FAILURE ON THE PART OF TH E ASSESSEE TO DISCLOSE CORRECT INCOMES AT THE TIME OF FILING NOT ONLY ORIG INAL RETURNS BUT ALSO AT THE TIME OF FILING RETURNS IN RESPONSE TO NOTICE UNDER SECTION 153A. AS NOTED EARLIER THE A.O. DID INDEED INITIATE PROCEEDINGS UN DER SECTION 271(1)(C) FOR AN AMOUNT OF ` 5 00 000/- DISCLOSED IN THE RETURN IN RESPONSE TO N OTICE UNDER SECTION 153A IN A.Y. 2005-06 BUT LEVIED PENALTY ONL Y ON THE ADDITIONAL INCOME OFFERED OF ` 11 50 000/-. SIMILARLY THE AMOUNT OFFERED IN AY 200 3-04 OF RS.18 05 000/- WAS ALSO NOT OFFERED EARLIER. SIN CE THESE AMOUNTS ARE OFFERED TO TAX FOR WHICH THE PARTICULARS WERE CONCE ALED BY THE ASSESSEE AND WERE FOUND CONSEQUENT TO SEARCH WE ARE OF THE OPIN ION THAT ON THE FACTS OF THE CASE PENALTY IS WARRANTED IN RESPECTIVE YEARS. THEREFORE THE ORDERS OF THE A.O. AND THE CIT(A) ARE CONFIRMED. 10. IN THE RESULT APPEALS OF THE ASSESSEE ARE DISMISSE D. ORDER PRONOUNCED IN THE OPEN COURT ON 15 TH JULY 2011. SD/- SD/- (R.V. EASWAR) (B. RAMAKOTAIAH) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI DATED: 15 TH JULY 2011 COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) 40 MUMBAI 4. THE CIT CENTRAL -II MUMBAI CITY 5. THE DR C BENCH ITAT MUMBAI BY ORDER //TRUE COPY// ASSISTANT REGISTRAR ITAT MUMBAI BENCHES MUMBAI N.P.