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TMI Blog2015 (11) TMI 1440X X X X Extracts X X X X X X X X Extracts X X X X ..... hat: "The Ld. CIT(A) has erred both on facts and in law in confirming the levy of penalty of Rs. 2,27,491/- u/s 158BFA(2) of the I. T. Act, 1961." 2. Briefly stated, the facts of this case are that the assessee, Director in various companies running in the name and style of M/s. Shri Gopal Vanaspati Ltd., M/s. Shyam Sunder Vanaspati Ltd. and M/s. Sagar International (P) Ltd. was searched u/s 132 of the Act on 13th Feb., 2003. Incriminating material in the shape of electricity bills, purchase bills, telephone bills etc. duly described at para 3 of the penalty order were found and seized. No block return was filed by the assessee in response to the statutory notice. On the basis of seized documents undisclosed income to the tune of Rs. 3, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and to initiate penalty proceedings u/s 158 BFA(2) of the Act income of each of the Previous year needs to be computed separately but the A.O. has computed the undisclosed income in lump-sum without identifying the income of the relevant Assessment Year; that all the additions have been made by the A.O. on the basis of income voluntarily surrendered by the assessee which is not permissible under law and prayed for deleting the penalty. 5. On the other hand, Ld. D.R. repelled the submissions made by the Ld. A.R. by contending inter alia that the assesses has never challenged the findings returned by Ld. CIT(A) nor he has accepted the income and seized material by filing return; that when assessee has voluntarily accepted the undisclosed inc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... during search operations conducted on 13.02.2003 and the A.O. has taken about two years to scrutinize the same for issuance of notice u/s 158BC but provided just 15 days time to the assessee to file the return which he has not filed. The intention of legislature as enshrined in Section 158BC(2) of the Act is to provide the sufficient time with variation of 15 days to 45 days to the assessee to file the return depending upon the circumstances of the case particularly when the A.O. has taken about 2 years to complete the assessment and expected the assessee to file return within 15 days. Not only this, copies of seized record by the A.O. have been supplied to the assessee on 06.10.2005 i.e. after 8 months after the expiry of period of filing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... independent investigation to prove the concealment of income. Moreover, most of the seized documents are house hold items like Air-conditioner, Microwave Oven, clothes, phone sets, purchase of used car etc and none of the items is more than the value of Rs. 1,00,000/-. In the face of the fact that undisclosed income was assessed to Rs. 3,61,097/-, such items appear to have lost sight of assessee to bring the same to tax as the same have been purchased within a period of about eight years as the last payment of Rs. 70,000/- as per seized documents was paid in cash in August, 1995. 13. Ld. Counsel for the assessee by relying upon the judgement cited as Chain Sukh Rathi Vs CIT 270 ITR 0368 contended that tax exemption limit has to be kept in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stance for the transactions of the whole year. The Tribunal also found that even the estimate of 1% net profit was mere guesswork. On the basis of these facts it is apparent that the undisclosed income has been computed merely on the basis of the surrender made by the assessee in the course of the block assessment proceedings. De-hors the surrender, there is no evidence which could have been said to have been found as a result of the search and, therefore, the computation of undisclosed income by the Assessing Officer in the block assessment proceedings cannot be construed as a determination of undisclosed income contemplated under Section 158 BC (c) or 158 BB. Thus, even de hors the question of applicability of the decision in Sir Shadilal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cause there is no determination of undisclosed income by the assessee under clause (c) of Section 158BC which is the requirement for imposition of penalty. 17. Even a bare perusal of seized material referred to in para 3 of the penalty order, shows that no additional investment by the assessee in acquisition of property has been made suggesting the undisclosed income nor any further investigation has been made by the A.O. regarding concealed income. In other words, there is no independent material on the file except voluntary acceptance of the assessee as to the undisclosed income sufficient to proceed with the penalty proceedings. From the undisputed facts and circumstances of the case, it is proved that when the assessee has voluntarily ..... X X X X Extracts X X X X X X X X Extracts X X X X
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