TMI Blog2014 (12) TMI 513X X X X Extracts X X X X X X X X Extracts X X X X ..... y on presumption that the assessee might have been in possession of cash throughout the period covered by search assessments – thus, the order for levying penalty is set aside – Decided in favour of assessee. - ITA Nos.5193, 5194 & 5195/Del/2011 - - - Dated:- 14-3-2014 - SHRI A.D. JAIN AND SHRI SHAMIM YAHYA, JJ. For The Appellant : Shri Vinod Kumar Bindal, CA For The Respondent : Shri Ramesh Chandra, CIT,DR ORDER PER BENCH: These are Assessee s appeals for Assessment Years 2001-02 2003- 04 against the orders dated 20.09.2011, passed by the Ld. CIT(A)-I, New Delhi raising the following similar grounds:- 1. The ld. Appellate Authority erred in law and on facts in confirming the penalty of ₹ 57,52,554/- (for Assessment Year 2001- 02, ₹ 23,82,950/- for Assessment Year 2003-04 ₹ 38,16,840 for Assessment Year 2004-05) levied u/s 271 (1)(c) on additional income offered in the return of income filed by the appellant in response to the notice u/s 153A of the Act, while ignoring that such penalty cannot be imposed on the basis of entries in the books of account or documents/loose papers seized in a search carried between 1/6/03 to 31/5/07 ne ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the return of income for the relevant Assessment Year filed u/s 139 (1) originally. (c) That CBDT vide its circular dated 30.09.1969 explained the word voluntary by stating that if there is seizure of incriminating material in the course of a search the penalties and prosecutions are imminent and the disclosure is a sequel to such a search, it would not be possible to treat the disclosure as a voluntary one. (d) That the Board s Instruction No.1142 dated 25.01.1978 while confirming the same position stated that a disclosure following a search in which unaccounted cash or incriminating documents were discovered cannot be termed as voluntary. (e) That in the following judicial authorities the above view gets ratified that income declared after search cannot be called voluntary so as to avoid the penal consequences: i. ACIT vs. Smt. Rasila S. Mehta , (2002) 82 ITD 27 (Mum) ii. Shantilal M. Lalwani vs. ACIT , (2002) 82 ITD 59 (Pune) iii. Hukum Singh vs. CIT , (1980) 124 ITR 228 (All) iv. Indian Cloth Depot vs. CIT , (1988) 173 ITR 330 (Ker.) (f) That there is no provision in the Income-tax Act, 1961 rendering the return of income filed u/s 139 (1) as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ncealment of income and furnishing inaccurate particulars thereof, on the basis of his submission that he had furnished new returns and the old assessments stood cancelled and because filing of due returns is mandatory, the income shown in such returns filed u/s 153A could not be regarded as an admission on behalf of the assessee; that in the return filed u/s 153A, the income shown was as a result of search, which the assessee showed on the basis of the documents found during the search; that therefore, the disclosure could not be regarded as a voluntary or suo motu disclosure; that the concealed income was detected by the department as a consequence of the search; that the assessee had filed the return u/s 153A of the Act only after the department has discovered the concealed income after the search; and that therefore, the penalty as imposed by the Assessing Officer were being upheld. 5. Before us, the Ld. Counsel for the assessee has contended that in the case of the assessee himself, for Assessment Year 2006-07 and 2006-07, under exactly similar circumstances, vide order dated 24.01.2013, passed in ITA Nos.5658 and 5659/Del/2012, the Tribunal, following the Tribunal Order da ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2.11.2006, as in the said two cases. Certain documents were found and were seized. In the return of income filed u/s 153A of the Act, additional income from trading and commission was disclosed. Concealment penalty was levied on this additional income. In Prem Arora (supra) and Kiran Grover (supra) also, the facts were entirely similar. In Prem Arora (supra), the penalty was deleted by the Tribunal holding as follows:- 29. We also find that the Finance Act, 2007 has inserted words search initiated under sec. 132 before the first day of June, 2007 in Explanation 5 of sec. 271(1) of the Act. Further Explanation 5A was inserted in the Statute by the Finance Act, 2007 in respect of a search initiated under section 132 on or after the 1st day of June, 2007. Thus Explanation 5 will not be applicable in respect of a search initiated on or after 1.6.2007. Further the words search initiated under sec. 132 before the first day of June, 2007 have been inserted by the Finance Act, 2007 w.e.f. 1.6.2007. In our considered opinion the amended provisions of Explanation 5 will be applicable only for assessment year 2008-09 if any money, bullion, jewellery or other valuable article or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or other valuable article or thing is found in the possession or under control of the assessee. In the case of the assessee the search was conducted on 22.11.2006 and cash of ₹ 1,11,45,350/- was found from the possession of the assessee. The assessee had undisclosed commission income as well as purchases and sales as seen from the statement of affairs made by the assessee based on seized material. The assessee had drawn cash flow statement for the entire period of six years in order to determine undisclosed income based on seized material for each of six assessment years. Explanation 5 to section 271(1) of the Act cannot be invoked in assessment year 2004-05 merely on presumption that the assessee might have been in possession of cash throughout the period covered by search assessments. The income offered to tax u/s 153A for assessment year 2004-05 is based on entries recorded in the seized material. Unlike provisions of Explanation 5A, the provisions of Explanation 5 cannot be invoked in assessment year 2004-05 in respect of entries recorded in seized material. Thus invoking of Explanation 5 in assessment year 2004-05 is based on presumptions, surmises and conjectures. It i ..... 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