TMI Blog2009 (1) TMI 240X X X X Extracts X X X X X X X X Extracts X X X X ..... by the assessees prior to the block period as revealed from the ledger and the material seized during the search could not be treated as undisclosed income of the first assessment year in the block period – revenue appeal dismissed against the order of ITAT setting aside the penalty. - 195 and 196 of 2008 - - - Dated:- 19-1-2009 - A. M. KAPADIA and SANGEET LODHA JJ. K. K. Bissa for the appellant. JUDGMENT The judgment of the court was delivered by SANGEET LODHA J.- These two appeals under the provisions of section 260A of the Income-tax Act, 1961 (in short "the Act of 1961" hereinafter) filed by the Revenue are directed against the order dated March 13, 2007, passed by the Income-tax Appellate Tribunal, Jodhpur Bench, Jod ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tyendra Kumar Dosi Rs. 6,56,235 and Virendra Kumar Dosi Rs. 6,41,839) which comes to 100 per cent. of the tax leviable on the difference of the assessed and the returned income. It is relevant to mention here that the appeals of the assessee in quantum proceedings were decided by the learned Income-tax Appellate Tribunal and the income of the assessees after the appellate orders stands quantified at Rs. 67,17,116. 3. The validity of penalty orders dated August 6, 2002, passed by the Assessing Officer as aforesaid was challenged by each of the assessees by way of separate appeals before the Commissioner of Income-tax (Appeals), Udaipur. After due consideration of overall facts of the case and the decisions cited on behalf of the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oner of Income-tax (Appeals), vide order dated October 18, 2005. 4. On further appeals, before the learned Income-tax Appellate Tribunal, it was contended on behalf of the Revenue that under section 158BFA(2) a penalty on account of difference in disclosed and assessed undisclosed income has to be imposed automatically as no reasonable cause is admissible thereunder. The learned Income-tax Appellate Tribunal after due consideration of the provisions of section 158BFA and the rival submissions of the parties so also the earlier decisions of the Income-tax Appellate Tribunal held that the provision of penalty as contained in section 158BFA(2) is not mandatory. That apart, the learned Income-tax Appellate Tribunal opined that in the instan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... roviding for penalty on account of difference in disclosed and assessed undisclosed income is mandatory or discretionary"? also arise for consideration of this court in these appeals. 7. It is contended by the learned counsel for the appellant that the learned Income-tax Appellate Tribunal has erred in holding that the disputed income in real sense does not relate to the block period as such. The learned counsel submitted that what relates to the earlier period is the opening capital which is on estimate basis and not the income on which penalty is levied. The learned counsel submitted that even if the addition is result of estimated addition, a penalty shall be imposed on that portion of the undisclosed income so determined which is in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... if the assets seized consist of money, the assessee offers the money so seized to be adjusted against the tax payable (iii) evidence of tax paid is furnished along with the return; and (iv) an appeal is not filed against the assessment of that part of income which is shown in the return: Provided further that the provisions of the preceding proviso shall not apply where the undisclosed income determined by the Assessing Officer is in excess of the incomes shown in the return and in such cases the penalty shall be imposed on that portion of undisclosed income determined which is in excess of the amount of undisclosed income shown in the return." 10. A bare perusal of section 158BFA(2) goes to show that by virtue of the said provis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d by the learned counsel on the strength of the provisions of sections 273B and 158BFA(3) is also devoid of any merit. Of course, as per the provision of section 273B no penalty shall be imposable on the person or the assessee, as the case may be, on their failure referred to in the said provisions if he proves that there was reasonable cause for the said failure. But then the said provision in no manner leads to the presumption that in respect of the cases other than covered by section 273B for any failure or violation imposition of the penalty is automatic. Each provision of penalty has to be construed independently keeping in view the language employed therein. 12. For the aforementioned reasons, we are of the considered opinion that ..... X X X X Extracts X X X X X X X X Extracts X X X X
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