Mr. Dilip Yeshwant Oak, Pune v. Asstt.CIT, Cir.5, Pune, Pune

ITA 998/PUN/2007 | 2002-2003
Pronouncement Date: 16-03-2011 | Result: Allowed

Appeal Details

RSA Number 99824514 RSA 2007
Assessee PAN HJULY2004A
Bench Pune
Appeal Number ITA 998/PUN/2007
Duration Of Justice 3 year(s) 7 month(s) 23 day(s)
Appellant Mr. Dilip Yeshwant Oak, Pune
Respondent Asstt.CIT, Cir.5, Pune, Pune
Appeal Type Income Tax Appeal
Pronouncement Date 16-03-2011
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted B
Tribunal Order Date 16-03-2011
Assessment Year 2002-2003
Appeal Filed On 24-07-2007
Judgment Text
THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B PUNE BEFORE SHRI I.C. SUDHIR JUDICIAL MEMBER AND SHRI D. KARUNAKARA RAO ACCOUNTANT MEMBER. I.T.A. NOS. 998 & 999/PN/2007. ASSESSMENT YEARS : 2002-03 & 2003-04. MR. DILIP YESHWANT OAK ASSTT. COMMISSIONER OF MALATI MADHAV VS. INCOME-TAX CIRCLE-5 819 BHANDARKAR INSTITUTE ROAD PUNE. PUNE-411 004. APPELLANT. RESPONDENT APPELLANT BY : SHRI S.U. PATHAK. RESPONDENT BY : SHRI HEMANT KUMAR LEWA. O R D E R PER D KARUNAKARA RAO A M THESE ARE THE TWO APPEALS FILED BY THE ASSESSEE AG AINST THE DIFFERENT ORDERS OF THE CIT(APPEALS) COMMONLY DATED 30 TH APRIL 2007 IN CONNECTION WITH LEVY OF PENALTIES U/S 271(1)(C) OF THE INCOME-TAX A CT 1961 LEVIED FOR AY 2002-03 & 2003-04. THE GROUNDS IN BOTH THE APPEALS ARE IDEN TICAL BUT FOR THE AMOUNTS OF PENALTIES LEVIED. FOR THE SAKE OF CONVENIENCE BOTH THESE TWO APPEALS ARE CLUBBED AND THEY ARE BEING DISPOSED IN THIS COMPOSI TE ORDER AND FOR THE SAKE OF COMPLETENESS THE GROUNDS FOR THE ASSESSMENT YEAR 2 002-03 ARE REPRODUCED AS UNDER : 1. ON THE FACTS OF THE CASE AND IN LAW THE LEARNED CO MMISSIONER OF INCOME- TAX (APPEALS) ERRED IN CONFIRMING THE LEVY OF PENALTY U/S 271(1)(C) OF THE INCOME-TAX ACT 1961 OF RS.4 80 000/- ON APPEL LANT. 2. THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) ER RED IN NOT APPRECIATING THAT THE LEARNED ASSESSING OFFICER HAD NOT RECORDED THE REQUISITE SATISFACTION REGARDING CONCEALMENT OF PARTICULARS OF INCOME OR FURNISHING INACCURATE PARTICULARS AS REQUIRED AS PER THE PROVISIONS OF SECTION 271(1)(C) AND THEREFORE THE LEVY OF PENALTY IS NOT JUSTIFIED. 3. WITHOUT PREJUDICE TO ABOVE GROUNDS OF APPEAL THE LD CIT(A) ERRED IN NOT APPRECIATING THAT THE APPELLANT HAD VOLUNTARILY AND SUO MOTO DECLARED ADDITIONAL INCOME OF RS.50 LACS FOR ASSESSMENT YEARS 2002- ITA NOS. 998&999/PN/2007 MR. DILIP YESHWANT OAK ASSTT. YEARS: 2002-03 & 2003-04 . 2 03 2003-04 AND 2004-05 ON THE DATE OF SURVEY I.E. 13.02.2004 ITSELF AND FURNISHED YEAR-WISE BIFURCATION THEREOF ON 16.02.20 04 WITHOUT ANY KNOWLEDGE OF THE DEPARTMENT HAVING CONDUCTED BANK ENQUIRIES . 4. WITHOUT PREJUDICE TO ABOVE GROUNDS OF APPEAL THE LD CIT(A) OUGHT TO HAVE RESTRICTED THE LEVY OF PENALTY ONLY TO THE EXT ENT OF 100% OF THE TAX SOUGHT TO BE EVADED I.E. RS.3 92 348/-. 2. THE SUMMARY OF THE ABOVE GROUNDS IS THAT THE PRESENT APPEAL IS FILED AGAINST THE DECISION OF THE CIT(A) IN CONFIRMING TH E PENALTY U/S 271(1)(C) OF THE ACT FOR BOTH THE AYS. ASSESSEE IS AGGRIEVED AGAINST SUCH LEVY AS THE CIT(A) FAILED TO SEE THE FACT THAT THE AO FAILED TO RECORD THE RE QUISITE SATISFACTION AND WHEN THERE IS SUE MOTTO DISCLOSURE OF INCOME VOLUNTARILY WITHOUT BEING PRIVY TO THE DISCOVERIES OF THE ENQUIRIES WITH THE BANK BY THE D EPARTMENT. WITHOUT PREJUDICE THE ASSESSEE PRAYS FOR RESTRICTING THE SUM OF PENAL TY TO 100% OF THE TAX ONLY. 3. BRIEFLY STATED RELEVANT FACTS OF THE CASE ARE T HAT THE ASSESSEE IS ENGAGED IN CONDUCTING COACHING CLASS FOR GRE AND OTHER EXAMIN ATION UNDER THE NAME AND STYLE OF M/S DILIP OAKS ACADEMY. THE ASSESSEE FILE D ORIGINAL RETURN ON 19-9-2002 DECLARING THE TOTAL INCOME OF RS.84 61 890/-. AN AC TION U/S 133A OF THE INCOME- TAX ACT 1061 WAS UNDERTAKEN BY THE AO IN THE PREMI SES OF THE ASSESSEE ON 13- 2-2004. DURING THE SURVEY ACTION CERTAIN DISCREPAN CIES WERE FOUND. TO COVER UP THE SAME THE ASSESSEE OFFERED AN ADDITIONAL INCOME OF RS. 7 LACS FOR ASSESSMENT YEAR 2002-03 IN STATEMENT RECORDED UNDER OATH AT TH E TIME OF SURVEY ON 16-02- 004. THE RETURN WAS SUBSEQUENTLY REVISED TO RS.97 44 150/- ON 9-3-2004. WHILE FILING THIS RETURN THE ASSESSEE OFFERED THE SAID A DDITIONAL INCOME OF RS.12 82 258/- AND THE SAME AS UNDER: I) INCOME UNDER THE BUSINESS AND PROFESSION RS. 12 80 000/- II) INCOME UNDER THE HEAD OTHER SOURCES RS. 2 258/- ---------- ------ TOTAL RS.12 82 258/- ---------- ------ THE ABOVE ADDITIONAL INCOME WAS STATED TO BE INVEST ED IN FIXED DEPOSITS WITH VARIOUS BANKS. ASSESSEE FILED THE REVISED RETURN OF INCOME INCORPORATING THE SAID INCOME. DURING THE COURSE OF ASSESSMENT PROCEEDINGS ASSESSEE PROVIDED REQUISITE BREAK UP OF FDS FOR RS.12 70 000/-. FINAL LY THE ASSESSMENT WAS COMPLETED AND THE AO ACCEPTED THE INCOME RETURNED I N THE REVISED RETURN AND ITA NOS. 998&999/PN/2007 MR. DILIP YESHWANT OAK ASSTT. YEARS: 2002-03 & 2003-04 . 3 THE SAID ASSESSMENT BECAME FINAL. THERE IS NO LITIG ATION ON THE MERITS OF THE ASSESSMENT. THERE WAS ADDITIONAL INCOME FOR OTHER A Y IE 2003-04 AND FIGURES ARE DIFFERENT. OTHERWISE THE FACTS ARE IDENTICAL. 4. DURING THE COURSE OF SCRUTINY ASSESSMENT PENALT Y PROCEEDINGS U/S 271(1)(C) OF THE I.T. ACT WERE INITIATED FOR CONCEA LING THE PARTICULARS OF THE INCOME AND FURNISHING INACCURATE PARTICULARS THEREO F. AO IS OF THE VIEW THAT THE DISCREPANCIES NOTICED DURING THE COURSE OF SURVEY U /S 133A AND CONSEQUENT DISCLOSURE OF ADDITIONAL INCOME OF RS.7 LAKHS FOR T HE ASSESSMENT YEAR IN QUESTION AND SUBSEQUENT REVISION OF RETURN ON 9-3-2004 OFFER ING ADDITIONAL INCOME OF RS.12 8 258/- ATTRACTS PENALTIES. NOTICE U/S 274 R .W.S. 271(1)(C) WAS ISSUED AND SERVED ON THE ASSESSEE ON 23-7-2004 TO APPEAR BEFOR E THE AO ON 10-8-2004 AND TO SUBMIT HIS SAY IN THIS REGARD. IN RESPONSE T O THE SAID NOTICE THE ASSESSEE VIDE HIS WRITTEN SUBMISSION DATED 10-8-2004 STATED AS UNDER : A) NO DISCREPANCIES WERE FOUND BY THE SURVEY PARTY PERTAINING TO ASSESSMENT YEAR 2002-03 NOR ARE ANY DISCREPANCIES F OUND DURING THE COURSE OF ASSESSMENT PROCEEDINGS. B) I HAVE DISCLOSED CORRECTLY RS.12 82 260/- AS AN ADD ITIONAL INCOME FOR ABOVE YEAR VOLUNTARILY AND SUO MOTU TO AVOID LITIGATION AND BUY PEACE THEREBY PROVING MY CREDENTIALS AND INTENT ION TO DISCLOSE THE FULL AND CORRECT INCOME. I HAVE PAID ADDITIONAL TAX AND INTEREST AGGREGATING TO RS.5 45 349/- BEING TAX OF RS.3 92 3 68/- AND PENAL INTEREST OF RS.1 52 981/-. C) YOUR HONOUR HAS VIDE ORDER U/S 143(3) DATED 12 TH JULY 2004 ACCEPTED THE TOTAL INCOME AS PER MY REVISED RETURN OF INCOME AND ASSESSED THE TOTAL INCOME AT RS.97 44 150/- I.E. SA ME AS DECLARED BY ME IN MY REVISED RETURN OF INCOME. D) THE DECLARATION FOR ASSESSMENT YEAR 2002-03 WAS ON THE ORAL UNDERSTANDING THAT NO PENALTY WILL BE INITIATED AND / OR LEVIED FOR ASSESSMENT YEAR 2002-03. E) I HAVE FULLY CO-OPERATED WITH THE DEPARTMENT IN COM PLETING THE ASSESSMENT FOR ASSESSMENT YEAR 2002-3. F) I AM A REGULAR TAX PAYER FOR LAST 20 YEARS OR SO. NO MAJOR ADDITION/DISALLOWANCE WERE MADE IN MY CASE IN SCRUTINY ASSESSMENT AND OTHER PROCEEDINGS FOR ANY EARLIER AS SESSMENT YEARS OR THE YEAR UNDER CONSIDERATION. THUS THE NON-DISCOVERY OF INCRIMINATING DISCOVERIE S IN THE SURVEY ACTION VOLUNTARY AND SUE MOTTO DISCLOSURE OF RS 50 LAKHS VALID REVISING OF THE RETURNS ITA NOS. 998&999/PN/2007 MR. DILIP YESHWANT OAK ASSTT. YEARS: 2002-03 & 2003-04 . 4 INCORPORATING THE SAID UNDISCLOSED INCOME/FDS ORAL PROMISES OF THE AO FOR NON LEVY OF PENALTIES ETC ARE THE DEFENSE FOR THE ASSES SEE. TO SUPPORT HIS EXPLANATION FOR NON LEVY OF PENALTY U/S 271(1)(C) OF THE ACT T HE ASSESSEE CITED VARIOUS CASE LAWS AND DECISION POINTING OUT THE SIMILARITY IN HI S CASE TO THOSE MENTIONED IN REPLY. AS PER THE ASSESSEE THE DECLARATION OF ADDI TIONAL INCOME MADE BY HIM IN THE REVISED RETURNS WAS VOLUNTARILY AND IT IS TO BU Y PEACE AND CONSEQUENTLY REQUESTED THE AO TO DROP THE PENALTY PROCEEDINGS. 5. DURING THE COURSE OF PENALTY PROCEEDINGS BEFORE THE AO FURTHER IT WAS SUBMITTED THAT NO DISCREPANCIES WERE FOUND BY THE S URVEY PARTY AND THAT THE APPELLANT CORRECTLY DISCLOSED RS.12 82 260/- AS ADD ITIONAL INCOME OF THE ASSESSEE FOR THE AY 2002-03. THE TOTAL REVISED INCOME WAS AC CEPTED WITHOUT ANY FURTHER ADDITIONS AND THEREFORE THERE SHOULD NOT BE ANY C ASE FOR INITIATING/LEVY OF PENALTY PROCEEDINGS. IT WAS FURTHER STATED THAT THE ASSESSEE WAS A REGULAR TAX PAYER AND HE FULLY CO-OPERATED WITH THE DEPARTMENT ALL THE TWENTY YEARS. FURTHER HE REFERRED TO THE FACT THAT THE DECLARATI ON WAS MADE ON THE ORAL UNDERSTANDING THAT NO PENALTY WOULD BE INITIATED FO R THE AY UNDER CONSIDERATION. 6. HOWEVER THE ASSESSING OFFICER DID NOT ACCEPT TH E SUBMISSIONS OF THE ASSESSEE THAT NO DISCREPANCY WAS FOUND AS DURING TH E COURSE OF SURVEY. ACCORDING TO THE ASSESSING OFFICER ENQUIRIES WERE CONDUCTED WITH THE BANKS TO VERIFY WHETHER THE ASSESSEE AND HIS FAMILY MEMBERS HAD ANY UNACCOUNTED FIXED DEPOSITS. AS A RESULT OF SAID ENQUIRIES IT WAS FOU ND THAT THERE WERE FDS WHICH WERE NOT FURNISHED BY THE ASSESSEE IN THE RETURN O F INCOME FOR A.YS. 2002-03 AND 2003-04. THE ASSESSING OFFICER ALSO NOTED THAT THESE FDS EXCEEDED THE AMOUNT OF ADDITIONAL INCOME DISCLOSED BY THE APPELL ANT VIDE HIS STATEMENT UNDER OATH AND IT WAS BECAUSE OF THIS REASON THAT ASSESSE E AT THE TIME OF FILING OF REVISED RETURN DECLARED RS.12 82 056/- AS ADDITIONA L INCOME INSTEAD OF RS.7 00 000/- ORIGINALLY DECLARED DURING THE SURVEY ACTION U/S 133A OF THE ACT. AT THE END OF THE PENALTY PROCEEDINGS AO CONSIDERED T HE FACTS OF THE CASE AS WELL AS THE LEGAL PROPOSITIONS AND REJECTED THE ABOVE EX PLANATION OF THE ASSESSEE. ITA NOS. 998&999/PN/2007 MR. DILIP YESHWANT OAK ASSTT. YEARS: 2002-03 & 2003-04 . 5 FINALLY AO HELD THAT THE ASSESSEE CONCEALED THE PA RTICULARS OF INCOME AND FAILED TO OFFER SATISFACTORY EXPLANATION TO THE AO. RESULT ANTLY HE PROCEEDED TO LEVY PENALTY OF RS.4 LAKHS FOR THE ASSESSMENT YEAR 2002- 03. HOWEVER AS SEEN FROM PARA 4 OF THE PENALTY ORDER THE AO GAVE A FINDING THAT THE ASSESSEE COOPERATED WITH THE DEPARTMENT IN FILING THE REVISED RETURN OF INCOME AND PAID TAXES AS AGREED DURING THE SURVEY OPERATION. AGGRIEVED WITH THE ABOVE LEVY OF PENALTY THE ASSESSEE FILED AN APPEAL BEFORE THE CIT(APPEALS ). FIRST APPELLATE PROCEEDINGS: 7. DURING THE APPELLATE PROCEEDINGS BEFORE THE CIT( A) THE ASSESSEE SUBMITTED THAT DECLARATION OF RS.50 LAKHS FOR ALL T HE THREE ASSESSMENT YEARS FILING OF THE REVISED RETURN OF INCOME U/S 139(5) O F THE ACT VALIDLY OFFERING HIGHER TOTAL INCOME THAN THAT OF THE DECLARED RS.50 LAKHS CONSTITUTE A VOLUNTARY ACT OF FURNISHING OF INCOME AND THE SAID HIGHER INCOME REL ATES TO THE FIXED DEPOSITS WITH CERTAIN BANKS HELD IN THE NAMES OF THE MEMBERS OF THE FAMILY. FURTHER IT WAS STATED THAT ALL THESE FDS WERE MADE OUT OF HIS INCOME EITHER IN HIS NAME JOINTLY WITH HIS WIFE OR IN HIS WIFES NAME JOINTLY WITH HIS NAME OR IN THE NAME OF HIS MINOR DAUGHTER. FURTHER IT WAS STATED THAT ALL THESE FDS WERE KEPT ON CUMULATIVE BASIS. SINCE ASSESSEE WAS FOLLOWING CASH METHOD OF ACCOUNTING FOR INCOME FROM BUSINESS AND PROFESSION AS WELL AS FOR INCOME FROM OTHER SOURCES THE INTEREST ON THESE FIXED DEPOSITS WOULD BE INCLU DED IN THE YEAR OF MATURITY OF EACH FIXED DEPOSIT. THE SUBMISSIONS MADE BEFORE THE ASSESSING OFFICER WERE REITERATED BEFORE THE CIT(A). FURTHER IT WAS STATE D THAT THE ASSESSEE DISCLOSED AN ADDITIONAL INCOME OF RS.50 LAKHS FOR THE YEAR 20 02-03 TO 2004-05 BEFORE ANY DETECTION BY THE DEPARTMENT AND WHERE THERE WAS NO DISCOVERY OF ANY INCRIMINATING MATERIAL. THE BANK ENQUIRIES WERE UND ERTAKEN BY THE SURVEY PARTY BEHIND THE BACK OF THE ASSESSEE AND THE SURVEY PART Y DID NOT ASK ANY QUESTION REGARDING ANY UNDISCLOSED FDRS WITH THE BANKS IN TH E STATEMENT RECORDED. THE ADDITIONAL INCOME OF RS.50 LAKHS DISCLOSED WAS SIGN IFICANTLY HIGHER THAN THE AMOUNT OF FDRS HINTED BY THE SURVEY PARTY ON THE BA SIS OF BANK ENQUIRIES. FINALLY THE ASSESSEE RELIED UPON VARIOUS CASE LAWS REFERRED BEFORE THE ASSESSING ITA NOS. 998&999/PN/2007 MR. DILIP YESHWANT OAK ASSTT. YEARS: 2002-03 & 2003-04 . 6 OFFICER AND FURTHER RELIED UPON A NUMBER OF ADDITIO AN CASE LAWS TO SUBMIT THAT WHERE THE REVISED RETURN WAS ACCEPTED BY THE DEPARTMENT PENALTY U/S 271(1)(C) WAS NOT LEVIABLE. IT WAS FURTHER ARGUED T HAT THE REQUISITE SATISFACTION REGARDING CONCEALMENT WAS NOT RECORDED BY THE ASSE SSING OFFICER AS THE PROPOSITION THAT THE ADDITIONAL INCOME ASSES SED WAS DUE TO THE BANK ENQUIRIES MADE BY THE SURVEY PARTY AND NOT ON ACCOU NT OF DISCLOSURE MADE BY THE APPELLANT IN HIS STATEMENT WAS NOT APPARENT FRO M THE ASSESSMENT ORDER. THE DECISION OF THE DELHI HIGH COURT IN THE CASE OF CIT V. RAM COMMERCIAL ENTERPRISES LTD. 246 ITR 568 WAS RELIED UPON. IT WAS FURTHER STATED THAT THE DECLARATION WAS MADE ON THE ORAL UNDERSTANDING THAT NO PENALTY WOULD BE INITIATED OR LEVIED AND THE APPELLANT HAD COOPERATE D IN THE ASSESSMENT PROCEEDINGS AND ALSO THAT NO MAJOR ADDITION/DISALLO WANCES HAD BEEN MADE IN APPELLANTS CASE IN SCRUTINY ASSESSMENTS FOR THE EA RLIER YEARS. 8. ON CONSIDERING THE ABOVE SUBMISSIONS THE CIT(A) HELD THAT COOPERATION OF THE ASSESSEE MAY BE A CASE FOR WAIVER OF PENALTY U/S 273A BUT NOT FOR THE PROCEEDINGS U/S 271(1)(C) OF THE ACT. THE CIT(A) DI D NOT APPRECIATE THE EXISTENCE OF ORAL UNDERSTANDING FOR NOT LEVYING TH E PENALTIES. ON THE ASSESSEES CONTENTION RELATING TO FILING OF REVISED RETURN VOL UNTARILY THE CIT(A) IS OF THE OPINION THAT THE ADDITIONAL INCOME BROUGHT TO TAX R ELATES TO THE EVENT OF SURVEY. THEREFORE THE VOLUNTARY ACTION OF THE ASSESSEE IS NOT ABSOLUTE. THE CIT(A) IS OF THE OPINION THAT DISCOVERY OF ADDITIONAL EVIDENCE A ND OTHER FIXED DEPOSITS RELATES TO THE ENQUIRIES CONDUCTED BY THE DEPARTMENT AT THE BACK OF THE ASSESSEE. REGARDING THE BONAFIDE APPROACH OF THE ASSESSEE IN FILING THE REVISED RETURN THE CIT(A) IS OF THE OPINION THAT THE ASSESSEE MIS-USED THE PROVISIONS OF SECTION 139(5) OF THE ACT FOR ENHANCING HIS CONCEALED INCOM E DELIBERATELY AND HE DID NOT SEE THE ASSESSEES SUE MOTTO ATTEMPT TO COME CLEAN VOLUNTARILY. ACCORDINGLY HE REJECTED THE INADVERTENCE-BASED SUBMISSIONS OF THE ASSESSEE AND CONFIRMED THE PENALTY LEVIED BY THE AO. ITA NOS. 998&999/PN/2007 MR. DILIP YESHWANT OAK ASSTT. YEARS: 2002-03 & 2003-04 . 7 2 ND APPELLATE PROCEEDINGS: 9. DURING THE PROCEEDINGS BEFORE US SHRI S.U. PATH AK LEARNED COUNSEL FOR THE ASSESSEE READ OUT THE RELEVANT PORTIONS OF THE ORDERS OF THE REVENUE AND ARGUED FOR THE PROPOSITION THAT THE ASSESSEES CASE IS NOT A FIT CASE FOR LEVY OF PENALTY. THE SUBMISSIONS BRIEFLY ARE AS FOLLOWS IE (I) THE ASSESSEE IS REGULAR IN FILING THE RETURN OF INCOME FOR THE LAST TWO DECADE S AND ENGAGED IN THE ENRICHMENT OR EMPOWERMENT OF THE YOUTH OF INDIA; (I I) THE SURVEY OPERATION U/S 133A HARDLY RESULTED IN DISCOVERY OF ANY INCRIMINAT ING EVIDENCES TO SUPPORT THE DISCLOSURE OF ADDITIONAL INCOME OF RS.50 LAKHS OR A NY OTHER UNDISCLOSED FDS; (III) THE ASSESSEE OFFERED THE SAID ADDITIONAL INCOME COV ERING THREE ASSESSMENT YEARS WHICH CONSTITUTES A VOLUNTARY AND BONA FIDE ACT; (IV) IN COMPLIANCE OF THE ABOVE DISCLOSURE THE ASSESSEE FILED THE REVISED RETURNS OF INCOME NOT ONLY INCLUDING THE ABOVE SAID ADDITIONAL INCOME BUT ALSO ENHANCING TH E SAID INCOME SUE MOTTO AND VOLUNTARILY TO THE EXTENT OF LEFT OVER FIXED DEPOSI TS LYING WITH THE BANKS IN NAMES OF THE SELF AND MEMBERS OF THE FAMILY WITHOUT GOING INTO THE OWNERSHIP OF THE FDS AND THE PERIOD IT RELATE TO. THIS IS A VOLUNTAR Y AND BONA FIDE OFFER AND IT IS FULL AND TRUE DISCLOSURE; (V) THE REVISED RETURN OF INCOME IS A VALID ONE. THE AO DID NOT FIND A MISTAKE EITHER ON LEGAL FRONT AS WEL L AS ON MERITS IN SUCH REVISED RETURN; (VI) THE CIT(APPEALS) ERRONEOUSLY HELD AND TRIED TO FIND MISTAKES IN THE ASSESSEES OFFER OF ADDITIONAL INCOME WHICH IS DECL ARED UNDER BONAFIDE BELIEF WHICH CONSTITUTES A REASONABLE CAUSE FOR NON LEVY O F PENALTIES U/S 271(1)(C); (VII) TAKING US THROUGH VARIOUS DOCUMENTS FILED BEFORE US BY WAY OF A PAPER BOOK THE SRI PATHAK LEARNED COUNSEL FOR THE ASSESSEE DEMONS TRATED THAT THE IMPUGNED ADDITIONAL INCOME/ FIXED DEPOSITS IN FACT DOES NOT BELONG TO THE YEARS UNDER CONSIDERATION. THE IMPUGNED FDS HAVE REAL GENESIS I N THE YEAR 1999. THEREFORE THE AO WRONGLY TAXED IN THE YEARS UNDER CONSIDERATI ON MERELY BECAUSE IT IS OFFERED BY ME. THERE IS NO ENQUIRY INTO BY THE AO O N THE ISSUES OF ACTUAL OWNERSHIP AND ACTUAL AYS THEY RELATE TO. FURTHER HE MENTIONED THAT PENALTY U/S 272(1)(C) OF THE ACT SHOULD BE LEVIED IN THE ASSESS MENT YEARS UNDER CONSIDERATION IN RESPECT OF THE INCOME/FDS WHICH I N FACT PERTAINS TO EARLIER AYS; (VIII) THE COUNSEL ALSO MENTIONED THAT SOME OF THE FDS ARE HELD IN THE NAMES OF ITA NOS. 998&999/PN/2007 MR. DILIP YESHWANT OAK ASSTT. YEARS: 2002-03 & 2003-04 . 8 THE MEMBERS OF THE FAMILY SUCH AS WIFE AND THE CH ILD. IN SUCH CIRCUMSTANCES WITHOUT GOING INTO THE FACTS OF OWNERSHIP OF THE IN COME/FDS THE PENALTY CANNOT BE LEVIED ON SUCH INCOME RELATABLE TO THE DISPUTED INCOME. BY REFERRING TO THE COPIES OF THE RECEIPTS FROM THE BANK WHICH FDS WER E MADE SRI PATHAK DEMONSTRATED THAT THE FDS STAND IN THE NAMES OF MRS . KISHORI DILIP OAK AND SARIKA DILIP OAK THE MEMBERS OF THE FAMILY. PAGES 33 TO 56 OF THE PAPER BOOK ARE RELEVANT IN THIS REGARD; (IX) THE COUNSEL ARGUE D STATING THAT THE WHATEVER THE ENQUIRIES MADE BY THE DEPARTMENT AND THEIR TACTICS MIGHT HAVE RESULTED IN ENSURING THE DISCLOSURE OF ADDITIONAL INCOME BUT TH E FACT IS THAT THERE IS NO IOTA OF MATERIAL FORGET ABOUT THE INCRIMINATING MATERIA L AS SEEN FROM THE ORDERS TO SUBSTANTIATE THE PENALTY. FURTHER HE MENTIONED THA T THE PENALTY PROCEEDINGS ARE ENTIRELY DIFFERENT AND DISTINCT FROM THAT OF THE AS SESSMENT/QUANTUM PROCEEDINGS; (X) FURTHER MR. PATHAK LEARNED COUNSEL FOR THE AS SESSEE RELIED ON THE DECISIONS OF BOMBAY HIGH COURT IN THE CASE OF JAINARAYAN BABU LAL VS. CIT 170 ITR 399 (BOM) AND CIT VS. BHIMJI BHANJEE & CO 146 ITR 145 ( BOM) TO SUBSTANTIATE HIS ARGUMENTS. 10. PER CONTRA LD AR FOR THE REVENUE RELIED ON BOTH THE ORDERS OF THE REVENUE. THE CASE OF THE REVENUE IS THAT THE IMPUGN ED ADDITIONAL INCOME/FDS WAS BROUGHT TO TAX BY THE DIRECT EFFORTS OF THE REV ENUE BY WAY OF CONDUCTING SURVEY ACTION AND THE SUBSEQUENT ENQUIRIES WITH THE BANK. HE DISMISSED THE ARGUMENTS OF THE ASSESSEE WHICH REVOLVE AROUND THE SUE MOTTO AND VOLUNTARY DECLARATION OF ADDITIONAL INCOME. IN RESPONSE TO TH E QUERIES FROM THE BENCH ON IF THE IMPUGNED ADDITIONAL INCOME IS EARNED BY THE ASS ESSEE ONLY AND NOT BY ASSESSEES SPOUSE AND THE DAUGHTER (FDS STAND IN TH EIR NAMES) AND IF THE SAID INCOME IS FULLY TAXABLE IN THE AYS UNDER CONSIDERAT ION THE REVENUES AR HAS NOTHING CONCRETE TO ANSWER. HIS ONLY DEFENSE IN THI S REGARD IS THAT THESE ARGUMENTS OF THE COUNSEL CAME UP FOR THE FIRST TIME BEFORE THE TRIBUNAL. IN FACT THE REVENUE PRAYED FOR SETTING ASIDE THE ISSUES TO THE FILES OF THE REVENUE. ITA NOS. 998&999/PN/2007 MR. DILIP YESHWANT OAK ASSTT. YEARS: 2002-03 & 2003-04 . 9 11. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE ORDERS OF THE REVENUE. WE HAVE ALSO GONE THROUGH THE PAPER BOOK FILED BEFO RE US INCLUDING THE FIXED DEPOSIT ANALYSIS RELATED DOCUMENTS WHICH WERE ALSO AVAILABLE TO THE REVENUE AUTHORITIES. UNDISPUTED FACTS INCLUDE THE FOLLOWING (I) THERE IS SURVEY AC TION ON THE ASSESSEE; (II) THE SAID ACTION RESULTED IN ENFORCIN G THE ASSESSEE TO DISCLOSE THE ADDITIONAL INCOME OF RS 50 LAKHS OR MORE FOR THREE AYS; (III) ASSESSEE FILED THE RETURNS/REVISED RETURNS VALIDLY COMPLYING WITH THE ADMISSION MADE DURING THE SURVEY ACTION; (IV) ASSESSEE PAID RELATABLE TAXES O N THE IMPUGNED ADDITIONAL INCOME AS PER THE PROVISIONS OF THE ACT; (V) THERE WAS AN ORAL REQUEST OF THE ASSESSEE TO THE AO FOR NON LEVY OF PENALTIES U/S 27 1(1)(C) OF THE ACT IN RESPECT THE SAID ADDITIONAL INCOME; (VI) THE REVISED INCOME OFFERED BY THE ASSESSEE IN THE RETURNS/REVISED RETURNS IS MUCH HIGHER THAN RS 50 L AKHS SPREAD OVER THREE AYS; (VII) THE FDS IN QUESTION ARE NOT HELD IN THE NAME OF THE ASSESSEE AND IN FACT THEY STAND IN THE NAMES OF HIS WIFE AND HIS DAUGHTE R; (VIII) THE SOURCE INCOME FOR MAKING OF THE IMPUGNED FDS DO NOT PERTAIN TO THE AY S UNDER CONSIDERATION AND IN FACT THE SAID INCOME RELATES TO THE EARLIER AYS IE 1999-2000; (IX) AO DID NOT ESTABLISH THAT THE SOURCE INCOME OF THE FDS OR OTHE R INCOME AND ITS OWNERSHIP VEST WITH THE ASSESSEE AND NOT WITH WIFE OR DAUGHTE R OF THE ASSESSEE BEFORE DECIDING TO LEVY THE PENALTY U/S 271(1)(C) OF THE A CT. 12. FURTHER FROM THE REVENUE SIDE WE HAVE EXAMINE D THE INFORMATION AVAILABLE IN THEIR POSSESSION TO SUBSTANTIATE THE L EVY OF IMPUGNED PENALTY. ON PERUSAL OF THE BOTH THE ORDERS OF THE REVENUE WE D O FIND NOTICE ANYTHING INCRIMINATING MATERIAL GATHERED EITHER DURING THE S URVEY ACTION OR DURING THE POST SURVEY ENQUIRIES WITH THE BANK HAS BEEN SPECIFICALL Y MENTIONED. HOWEVER THEY CONTAIN MERE OBLIQUE REFERENCE TO THE BANK ENQUIRIE S AND SCANTY MATERIAL AGAINST THE ASSESSEE WHICH IS QUANTITATIVELY DISPR OPORTIONATE TO THE EXTENT OF DISCLOSURE OFFERED BY THE ASSESSEE. IN ANY CASE NE ITHER THE AO HAS DESCRIBED THE SAID MATERIAL NOR THE CIT(A) HIGHLIGHTED THE INCRIM INATING NATURE OF THE SAME IN THEIR RESPECTIVE ORDERS WHILE LEVYING/CONFIRMING TH E PENALTY. THESE ORDERS ARE ITA NOS. 998&999/PN/2007 MR. DILIP YESHWANT OAK ASSTT. YEARS: 2002-03 & 2003-04 . 10 SILENT ON THE SAID MATERIAL AS TO HOW THE INCOME IN QUESTION IS A CONCEALED FOR THE AYS UNDER CONSIDERATION AND NOTHING IS MADE OUT ABOUT THE INCRIMINATING NATURE OF THE SAME. EVEN BEFORE US NONE OF THESE SAI D DOCUMENTS HOWEVER SCANTY THEY MAY BE WERE PRODUCED TO DEMONSTRATE TH AT THE IMPUGNED ADDITIONAL INCOME WAS DECLARED BY THE ASSESSEE ONLY DUE TO SAI D INCRIMINATING MATERIAL DISCOVERED DURING THE SURVEY OPERATION OR POST SURV EY OPERATION. WHILE THIS IS THE POSITION FROM THE REVENUES SIDE WE FIND THAT THE ASSESSEE HAS NOT ONLY OFFERED THE ADDITIONAL INCOME BUT ALSO FILED THE REVISED RE TURN BY ENHANCING THE INCOME. THOUGH THE CIT (A) REFERRED TO CERTAIN ENQUIRIES W ITH THE BANKS AS A REASON FOR SUCH AN ENHANCEMENT NOTHING IS BROUGHT TO OUR NOTI CE TO SUPPORT THE ALLEGATIONS OF THE REVENUE. INN THE LIGHT OF THE ABOVE FACTUAL MATRIX OF THIS CASE WE FIND IT IS NECESSARY TO EXPLORE THE SCOPE OF THE RELEVANT P ENALTY PROVISIONS AND THE SAME IS AS UNDER. 13. SCOPE OF THE PENALTY PROVISION: SECTION 271(1)(C) OF THE ACT IS THE RELEVANT PROVISIONS AND MAIN SECTION WHICH IS RELE VANT FOR THE PRESENT APPEAL READ AS FOLLOWS. 271(1) IF THE ASSESSING OFFICER OR THE COMMISSIONER (APPE ALS) OR THE COMMISSIONER IN THE COURSE OF ANY PROCEEDINGS UNDER THIS ACT IS SATISFIED THAT ANY PERSON (A) & (B) (C) HAS CONCEALED THE PARTICULARS OF HIS INCOME OR FURNISHED INACCURATE PARTICULARS OF SUCH INCOME (D).. HE MAY DIRECT THAT SUCH PERSON SHALL PAY BY WAY OF PENALTY -- .. . THE ABOVE PROVISIONS WERE EXPLAINED BY THE APEX CO URT IN THE CASE OF CIT V. RELIANCE PETRO-PRODUCTS PVT. LTD. 322 ITR 158 (SC) AND RELE VANT HELD PORTION OF THE SAID JUDGMENT IS AS FOLLOWS: A GLANCE AT THE PROVISIONS OF SECTION 271(1)(C) O F THE INCOME-TAX ACT 1961 SUGGESTS THAT IN ORDER TO BE COVERED BY IT THERE H AS TO BE CONCEALMENT OF THE PARTICULARS OF THE INCOME OF THE ASSESSEE. SECONDLY THE ASSES SEE MUST HAVE FURNISHED INACCURATE PARTICULARS OF HIS INCOME. THE MEANING OF THE WORD PARTICULARS USED IN SECTION 271(1)(C) WOULD EMBRACE THE DETAILS OF THE CLAIM MA DE. WHERE NO INFORMATION GIVEN IN THE RETURN IS FOUND TO BE INCORRECT OR INACCURATE THE ASSESSEE CANNOT BE HELD GUILTY OF FURNISHING INACCURATE PARTICULARS. IN ORDER TO EXPO SE THE ASSESSEE TO PENALTY UNLESS THE ITA NOS. 998&999/PN/2007 MR. DILIP YESHWANT OAK ASSTT. YEARS: 2002-03 & 2003-04 . 11 CASE IS STRICTLY COVERED BY THE PROVISION THE PENALTY PROVISION CANNOT BE INVOKED. .. THERE CAN BE NO DISPUTE THAT EVERYTHING WOULD DEPEND UPON THE RETURN FILED BY THE ASSESSEE BECAUSE THAT IS THE ONLY DOCUMENT WHERE THE ASSESSE E CAN FURNISH THE PARTICULARS OF HIS INCOME . WHEN SUCH PARTICULARS ARE FOUND TO BE INACCURATE T HE LIABILITY WOULD ARISE. TO ATTRACT PENALTY THE DETAILS SUPPLIED IN THE RE TURN MUST NOT BE ACCURATE NOT EXACT OR CORRECT NOT ACCORDING TO THE TRUTH OR ERRONEOUS. WHERE THERE IS NO FINDING THAT ANY DETAILS SUPPLIE D BY THE ASSESSEE IN ITS RETURN ARE FOUND TO BE INCORRECT OR ERRONEOUS OR FALSE THE RE IS NO QUESTION OF INVITING THE PENALTY UNDER SECTION 271(1)(C). A MERE MAKING OF A CLAIM WHICH IS NOT SUSTAINABLE IN LAW BY ITSELF WILL NOT AMOUNT TO FURNISHING INACCURATE PA RTICULARS REGARDING THE INCOME OF THE ASSESSEE. SUCH A CLAIM MADE IN THE RETURN CANNOT AM OUNT TO FURNISHING INACCURATE PARTICULARS. THUS THE RETURN OF INCOME OR VALID REVISED RETURN IS THE BASIS OR THE STARTING POINT FOR ARRIVING AT THE ACCURACY OR INACCURACY OF THE PARTICULARS/CLAIMS BECAUSE THAT IS THE ONLY DOCUMENT WHERE THE ASSESSEE CAN FU RNISH THE PARTICULARS OF HIS INCOME.. TO ATTRACT PENALTY THE DETAILS SUPPLIED IN THE RET URN MUST NOT BE ACCURATE NOT EXACT OR CORRECT NOT ACCORDING TO THE TRUTH OR ERRONEOUS. IN THE LIGHT OF THE SAID SETTLED POSITION WE HAVE EXAMINE D THE FACTS OF THE INSTANT CASE WHERE THE ASSESSEE FURNISHED THE VALID REVISED RETU RN WHICH WAS ACCEPTED BY THE AO WITHOUT POINTING OUT A SINGLE INACCURACY AND WITHOUT MAKING ANY FURTHER ADDITIONS IN THE ASSESSMENT. IN SUCH CIRCUMSTANCES WE FIND THAT IT IS NOT A FIT CASE FOR LEVY PENALTY. 14. ORDER OF THE CIT(A) REFERS TO MISUSE BY THE ASS ESSEE OF THE PROVISION OF SECTION 139(5) OF THE ACT AND ACCORDING TO HIM FUR NISHING ADDITIONAL INCOME IN THE REVISED RETURN AS DONE IN THIS CASE BY THE ASSE SSEE DOES NOT CONSTITUTE EITHER A CASE OF OMISSION OR A CASE OF WRONG STATEMENT THEREIN. WE DO NOT SUBSCRIBE THIS PROPOSITION OF THE CIT(A). IN THIS R EGARD WE HAVE PERUSED THE PROVISIONS OF SECTION 139(5) WHICH READ AS FOLLOWS. 139.. . (5) IF ANY PERSON HAVING FURNISHED A RETURN UNDER SUBSECTION (1) OR IN PURSUANCE OF A NOTICE ISSUED UUNDER SUBSECTION (1) OF SECTION 142 DISCOVERS ANY OMISSION OR ANY WRONG STATEMENT THEREIN HE MAY FURNISH A REVISED RETURN. FROM THE ABOVE IT IS EVIDENT THAT BOTH THE EXPRESS IONS OMISSION OR WRONG STATEMENT THEREIN ARE QUALIFIED BY THE WORD ANY AND MEAN THAT EVERY ITA NOS. 998&999/PN/2007 MR. DILIP YESHWANT OAK ASSTT. YEARS: 2002-03 & 2003-04 . 12 OMISSION OR WRONG STATEMENT AND THERE FOR THE SCOPE OF THESE EXPRESSIONS ARE NOT SO NARROW AS ATTEMPTED TO BE MADE OUT BY THE CI T(A) IN HIS ORDER. THUS THE FINDING OF THE CIT(A) IN THIS REGARD ARE DISMISSED. 15. THERE ARE DIFFERENT PENALTY PROVISIONS FOR DIFF ERENT DEFAULTS UNDER THE INCOME TAX ACT 1961 AND PENALTY UNDER THE PROVISION S OF SECTION 271(1)(C) IS ONE THEM. FOR THE LEVY OF THE PENALTY UNDER SECTIO N 271(1)(C) IT IS ESTABLISHED LEGAL PROPOSITION THERE HAS TO BE POSITIVE MATERIAL TO INDICATE THAT THE ASSESSEE HAS CONCEALED INCOME OR HAD FURNISHED INAC CURATE PARTICULARS OF INCOME. TO ELABORATE THE AO MUST HAVE GATHERED SUC H MATERIAL WHICH IS UNDISPUTEDLY RELIABLE AND INCREDIBLE TO ESTABLISH T HE CONCEALED INCOME OF THE ASSESSEE. PENALTY FOR CONCEALMENT COULD NOT BE LEVI ED MERELY WHEN THE ASSESSEE OFFERS SOME INCOME NOT BACKED BY THE MATERIAL AS TH E ASSESSEE CAN OFFER SUCH INCOME FOR VARIOUS REASONS. IT IS FOR THE AO TO CRY STALLIZE THE OWNERSHIP OF SUCH INCOME AND YEAR IT RELATES TO. FURTHER THERE HAS T O BE SOME MATERIAL TO COMPARE AND TO PROVE THAT WHAT IS STATED BY THE ASSESSEE IS FALSE OR INACCURATE. ASSESSMENT PROCEEDINGS ARE DISTINCT AND DIFFERENT F ROM THAT OF THE PENALTY PROCEEDINGS. SUSTAINING OF THE ADDITIONS IN QUANTUM APPEAL OR ASSESSEE DECISION TO NOT TO FILE FURTHER APPEAL FOR SOME REASONS DOE S NOT AUTOMATICALLY INVITE THE LEVYING THE PENALTY. PENALTY CANNOT BE SUSTAINED IN SUCH CASES WHERE THERE IS SOME POSSIBILITY FOR THE ACCEPTANCE OF THE ASSESSEE S EXPLANATION. IT IS SO HELD IN THE CASE OF STAR INTERNATIONAL P LTD 23 SOT 88 (LUC K). FURTHER WHEN TWO VIEWS ARE POSSIBLE REAL OWNERSHIP OF THE FDS/INCOME AND CORRECT AYS AS IN THIS CASE A BONA FIDE BELIEF FOR CLAIM OR ALLOWANCE CANNOT BE S UBJECTED TO CONCEALMENT MERELY BECAUSE SUCH BELIEF IS ERRONEOUS UNDER THE L AW AS HELD IN THE CASE OF SHETTY GD 112 ITD 103 (PUNE). IN THE LIGHT OF THE ABOVE WE ARE OF THE OPINION THAT IT IS NOT A FIT CASE FOR LEVY OF PENALTY. 16. APPLICATION OF THE ABOVE SCOPE OF THE PROVISION S TO THE FACTS OF THE INSTANT CASE: IN THE INSTANT CASE NO INACCURACY IN MATTERS OF FU RNISHING OF THE PARTICULARS OF INCOME IN THE REVISED RETURN/RET URN HAS BEEN NOTICED BY THE ITA NOS. 998&999/PN/2007 MR. DILIP YESHWANT OAK ASSTT. YEARS: 2002-03 & 2003-04 . 13 REVENUE. THUS SO FAR AS THE REVISED RETURN OF INCO ME IS CONCERNED IT IS A VALID AND FREE OF ANY INACCURACY IN MATTERS OF FURNISHING OF PARTICULARS OF INCOME. THEREFORE THE CONDITIONS SPECIFIED IN THE MAIN PAR TS OF THE SECTION 271(1)(C) ARE NOT VIOLATED BY THE ASSESSEE. REGARDING REVENUES ALLEGATION THAT THE IMPUGNED A DDITIONAL INCOME IS THE OUTCOME OF THE SURVEY ACTION WE FIND THE IMPUGNED INCOME IN FACT DOES NOT PERTAIN TO THE AYS UNDER CONSIDERATION FULLY AS THE IMPUGNED FDS ARE ORIGINALLY MADE WITH THE INCOME EARNED BY THE ASSESSEE IN THE EARLIER AYS AND THE INCOME EARNED BY THE ASSESSEE IN THE AYS UNDER CONSIDERATI ON RELATES TO THE INTEREST SEGMENTS ON THE FDS ON ACCRUAL BASIS. BUT THE ASSES SEE HAS FOLLOWED THE CASH SYSTEM. THUS THE MAJOR PORTION OF THE DISCLOSED IN COME DOES NOT RELATE TO THE AYS UNDER CONSIDERATION. REGARDING THE INCOME EARNE D BY THE ASSESSEE DURING THE YEAR UNDER CONSIDERATION THE ASSESSEE CANNOT B E FOUND FAULT WITH IN THIS REGARD TOO AS THE ASSESSEE FOLLOWS CASH SYSTEM OF A CCOUNTING. THUS WE FIND THERE EXISTS A COUPLE OF DISPUTES ABOUT THE IMPUGNE D ADDITIONAL INCOME OFFERED BY THE ASSESSEE. THE DISPUTES RELATES (I) OWNERSHIP AND (II) THE CORRECT AYS FOR INCIDENCE OF TAX ON THE IMPUGNED ADDITIONAL INCOME/ FDS. OWNERSHIP IS IN DISPUTE AS THE IMPUGNED FDS WERE NOT MADE IN THE NA ME OF THE ASSESSEE AND THEY STAND IN THE NAMES OF HIS WIFE AND DAUGHTER. W HO IS THE REAL OWNER OF THESE FDS IE ADDITIONAL INCOME? REGARDING THE INCIDENCE O F TAX WE FIND THERE IS CLARITY ON THE ACTUAL YEAR OF EARNING OF THE IMPUGNED FDS/I NCOME. ON THE FACE OF IT WE FIND THAT THE SOME OF THE FDS WERE MADE IN THE YEAR 1999 OUT OF THE INCOME EARNED IN THOSE YEARS. OF COURSE THE ASSESSEE OFFE RED TO INCOME TO TAX IN THE AYS UNDER CONSIDERATION AND AO DID NOT TAKE IT TO T HE ACCURATE AY FOR THE REASONS BETTER KNOW TO HIM. THUS ADDITIONAL INCOME IN QUESTION IS NOT FREE FROM DISPUTE SO FAR AS ITS OWNERSHIP AND YEAR INCIDENCE OF TAX IS CONCERNED. THERE IS NO FINDING OF FACT AT THE LEVEL OF THE INCOME TAX A UTHORITIES ON THE ISSUE OF CLEAR OWNERSHIP OF INCOME AND THE RELEVANT ASSESSMENT YEA R. THE WHOLESALE AND ADHOC APPROACH OF THE AO IS EVIDENT IN TAXING THE I MPUGNED ADDITIONAL INCOME. IN OUR CONSIDERED OPINION SUCH AN APPROACH CANNOT BE THE BASIS FOR LEVY OF PENALTY U/S 271(1)(C) OF THE ACT. ITA NOS. 998&999/PN/2007 MR. DILIP YESHWANT OAK ASSTT. YEARS: 2002-03 & 2003-04 . 14 17. WE HAVE ALSO PERUSED THE DECISIONS CITED BEFORE US AND THE ONES MENTIONED IN PAGES 8 TO 11 OF THE PAPER BOOK. FROM THE PERUSAL OF THE BOMBAY HIGH COURT DECISION IN THE CASE OF JAINARAYAN BABUL AL VS. CIT 170 ITR 399 (BOM) IT IS NOTICED THAT THE PENALTY U/S 271(1)(C) IS NOT ATTRACTED IN RESPECT OF THE INCOME WHICH IS ASSESSED IN THE WRONG ASSESSMENT YE AR AS IN ASSESSEES CASE. IN THAT CASE THE IMPUGNED INCOME IS TAXABLE IN THE AY IS 1949-50. RELEVANT PORTIONS FROM THE SAID JUDGMENT READ AS FOLLOWS: NO PENALTY COULD BE IMPOSED FOR THE NON DISCLOSURE OF THAT INCOME IN ASSESSMENT FOR THE ASSESSMENT YEAR 1950-51 IN THE PROCESS THE HONBLE HIGH COURT RELIED ON TH E APEX COURTS JUDGMENT IN THE CASE OF BALADIN RAM (71 ITR 427) WHERE THE APEX COU RT RULED THAT - THE ONLY WAY IN WHICH THE INCOME FROM UNDISCLOSED SOURCE COULD BE ASSESSED WAS TO MAKE THE ASSESSMENT ON THE BASIS OF .. THE PREVIOUS YEAR FOR SUCH INCOME THEREFORE IT IS A DECIDED ISSUE AT THE LEVEL OF TH E JURISDICTIONAL HIGH COURT WHICH IS BINDING ON US THAT NO PENALTY U/S 271(1)(C) OF THE ACT IS LEVIABLE IN RESPECT OF THE CONCEALMENT INCOME WHICH WAS ASSESSED IN THE W RONG AY AND IN THE WRONG PERSON FOR ANY REASONS. FURTHER NO PENALTIES ARE L EVIABLE WHEN THE ASSESSEE HAS NOWHERE ADMITTED THAT IT HAD CONCEALED ITS INCOME A S HELD BY THE JURISDICTIONAL HIGH COURT OF BOMBAY IN THE CASE OF CIT VS. BHIMJI BHANJEE & CO. 146 ITR 145 (BOM). 18. TO SUM UP THE REVENUE HAS FAILED TO CRYSTALISE THAT THE IMPUGNED ADDITIONAL INCOME/FDS WHICH IS SUBJECT MATTER OF T HE PENALTY IS ACTUALLY EARNED BY THE ASSESSEE AND IT IS VALIDLY AND UNDEBATABLY T AXABLE IN THE HANDS OF THE ASSESSEE WHICH IS RELEVANT FACTOR IN THESE PENALTY PROCEEDINGS. WE SHOULD NOT BE CONFUSED WITH THE FACT THAT THE ASSESSEE SUE MOT TO OFFERED OF THE SAID INCOME IN HIS HANDS FOR SOME OTHER REASONS AND THIS FACT IS ENTIRELY DIFFERENT AND NOT RELEVANT IN SUCH MATTERS OF PENALTY PROCEEDINGS. FU RTHER TAXING OF THE SAID INCOME IN THE WRONG ASSESSMENT YEARS IS ANOTHER FAC TOR WHICH GOES AGAINST THE ITA NOS. 998&999/PN/2007 MR. DILIP YESHWANT OAK ASSTT. YEARS: 2002-03 & 2003-04 . 15 REVENUE LEGALLY. THUS THERE IS EXITS DEBATE ON THE SE ACCOUNTS. IT IS A TRITE LAW THAT THE PENALTY PROVISIONS ARE NOT ATTRACTED WHICH THE ADDITIONAL INCOME WHICH IS SUBJECT MATTER OF THE PENALTY IS NOT FREE FROM THE DISPUTE OR DEBATE. AS SUCH THERE IS NO INACCURACY ON PART OF THE ASSESSEE IN F URNISHING OF THE PARTICULARS OF INCOME IN THE RETURN FINALLY ACCEPTED BY THE REVENU E AS DISCUSSED IN THE PRECEDING PARAGRAPHS OF THIS ORDER. FURTHER THERE IS NO DIRECT EVIDENCE OR MATERIAL GATHERED BY THE REVENUE OR GATHERED AND US ED IN THE PENALTY PROCEEDINGS AS EVIDENT FROM THE IMPUGNED ORDERS EXC EPT MAKING UNSPECIFIC MYSTERIOUS AND OBLIQUE REFERENCES WHICH HAS NO CON SEQUENCES IN PENALTY PROCEEDINGS. FURTHER IT IS EVIDENT FROM THE IMPUGN ED ORDERS THAT THE ASSESSEE HAS ALL ALONG COOPERATED WITH EVERY PROCEEDING UNDE RTAKEN BY THE REVENUE AGAINST THE ASSESSEE AND IT WAS SO STATED BY THE RE VENUE IN THEIR ORDERS. 19. THEREFORE IN THE FACTUAL AND THE LEGAL MATRIX DETAILED ABOVE WE ARE OF THE OPINION THAT THE PENALTY LEVIED BY THE AO AND C ONFIRMED BY THE CIT(APPEALS) HAVE TO BE DELETED AS IT IS NOT A FIT CASE FOR LEVY OF PENALTY. ACCORDINGLY THE GROUNDS RAISED BY THE ASSESSEE ARE ALLOWED . ITA NO. 999/PN/2007 (A.Y.: 2003-04) 20. WE FIND THAT THE GROUNDS RAISED BY THE ASSESSEE ARE IDENTICAL IN THIS ASSESSMENT YEAR ALSO BARRING THE FACT THAT THE AMOU NT OF PENALTY LEVIED IS RS.4.8 LAKHS. DURING THE PROCEEDINGS BEFORE US BOTH THE PARTIES HAVE MENTIONED THAT CONSIDERING THE COMMONALITY OF THE FACTS THE ARGUM ENTS OF THE PARTIES MADE IN CONNECTION WITH THE APPEAL ITA NO. 998/PN/2007 OF T HE ASSESSEE ARE EQUALLY APPLICABLE TO THE PRESENT APPEAL UNDER CONSIDERATIO N AND THEY ALSO MENTIONED THAT THE DECISION OF THE TRIBUNAL GIVEN FOR THE ASS ESSMENT YEAR 2002-03 VIDE ITA NO. 998/PN/2007 IS APPLICABLE TO THIS APPEAL TOO. S O CONSIDERING THE ABOVE WE ARE OF THE OPINION THAT THE PENALTY SUSTAINED BY TH E CIT(APPEALS) HAS TO BE DELETED. ACCORDINGLY THE GROUNDS RAISED IN THIS APP EAL ARE ALLOWED . ITA NOS. 998&999/PN/2007 MR. DILIP YESHWANT OAK ASSTT. YEARS: 2002-03 & 2003-04 . 16 21. IN THE RESULT BOTH THE APPEALS OF THE ASSESSEE ARE ALLOWED . ORDER PRONOUNCED IN THE OPEN COURT ON 16 TH DAY OF MARCH 2011. SD/- SD/- (I.C. SUDHIR) ( D.KARUNAKARA RAO) JUDICIAL MEMBER ACCOUNTANT MEMBER PUNE DATED : 16 TH MARCH 2011 WAKODE COPY OF THE ORDER IS FORWARDED TO : 1. ASSESSEE. 2. ACIT CIRCLE-5 PUNE. 3. CIT(A)-II PUNE. 4. CIT-III PUNE. 5. D.R. ITAT-B BENCH PUNE. BY ORDER ASSISTANT REGISTRAR I.T.A.T PUNE