TMI Blog2016 (4) TMI 206X X X X Extracts X X X X X X X X Extracts X X X X ..... penalties imposed in pursuance of such initiation are not sustainable. It is also observed that the income surrendered during the course of search was declared by the assessee in the returns of income filed for three years under consideration, i.e. A.Y. 2004-05, 2005-06 & 2006-07 in response to the notices issued by the Assessing Officer under section 153A and the income so declared was accepted by the assessee without making any further addition. Thus penalty cancelled - Decided in favour of assessee - ITA Nos. 1843, 1844, 1845 & 1846/KOL/2009 - - - Dated:- 24-2-2016 - P. M. Jagtap, AM And S. S. Viswanethra Ravi, JM For the Appellant : Shri A K Tibrewal, FCA and Shri Amit Agarwal, Adv For the Respondent : Shri David Z Chawngthu, ACIT, Sr. DR ORDER Per Shri P M Jagtap These four appeals filed by the assessee are directed against the common order of the ld. Commissioner of Income Tax (Appeals), Central-III, Kolkata dated 28.08.2009, whereby he confirmed the penalties of ₹ 5,16,000/-, ₹ 23,54,000/-, ₹ 42,21,500/- and ₹ 25,800/- imposed by the Assessing Officer under section 271(1)(c) of the Act for assessment years 2004-2005, 2005- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... inly was that the additional income had been offered voluntarily and the same having been accepted in the assessments, there was no case of any concealment of particulars of income or furnishing of inaccurate particulars of income warranting levy of penalty under section 271(1)(c). This explanation of the assessee was not found acceptable by the Assessing Officer. According to him, the additional income was disclosed by the assessee only as a result of search and so the disclosure made by the assessee could not be considered as voluntary. He, therefore, proceeded to impose penalties of ₹ 5,16,000/-, 23,54,000/-, ₹ 42,21,500/- and ₹ 25,800/- for A.Y. 2004-05, 2005-06, 2006-07 2007-08 respectively being 100% of the tax sought to be evaded by the assesese in respect of additional income offered as a result of search. 4. The penalties imposed by the Assessing Officer under sect ion 271(1)(c) for all the four years under consideration were challenged by the assessee in the appeals filed before the ld. CIT(Appeals). During the course of appellate proceedings before the ld. CIT (Appeals), the assessee mainly claimed the immunity available under Clause 2 of Explanati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ther addition, there was no case of any concealment of particulars of his income by the assesee or furnishing of inaccurate particulars of such income warranting levy of penalty as held by the Hon'ble Gujarat High Court in the case of Kirit Dayabhai Patel vs. - ACIT (Income Tax Appeal Nos. 1181, 1182 1185 of 2010 dated 03.12.2014). He contended that the conditions stipulated in Clause 2 of Explanation 5 to section 271(1)(c) were also duly satisfied by the assessee and the immunity available therein was wrongly denied by the ld. CIT(Appeals) to the assessee on the basis of all irrelevant grounds, which are not germane to the issue. 6. The ld. D.R., on the other hand, strongly relied on the orders of the authorities below in support of the Revenue's case that the case of the assesese is a f it case to impose penalties under section 271(1)(c). He contended that the additional income was surrendered and offered by the assesese to tax in the returns of income filed in response to notice under section 153A only as a result of adverse findings of the search and seizure action and the same, therefore, cannot be considered as voluntary disclosure made by the assessee to exoner ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... deserve the imposition of penalty should be discernible from the order passed during the course of the proceedings. At the stage of initiation of penalty proceeding, the order passed by the AO need not reflect satisfaction vis-a-vis each and every item of addition or disallowance, if overall sense gathered from the order is that a further prognosis is called for. The decision of the Hon'ble Supreme Court in the case of MAK Data (P) Ltd. (supra) has to be understood in the context of the facts of the said case. The relevant portion of the judgment in the aforesaid case, reads thus: 9. We are of the view that the surrender of income in this case is not voluntary in the sense that the offer of surrender was made in view of detection made by the AO in the search conducted in the sister concern of the assessee. In that situation, it cannot be said that the surrender of income was voluntary. AO during the course of assessment proceedings has noticed that certain documents comprising of share application forms, bank statements, memorandum of association of companies, affidavits, copies of Income Tax Returns and assessment orders and blank share transfer 8 deeds duly signed, hav ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e initiated u/s.271(1)(c) of the Act. In the present case, we have read the order of assessment as a whole and are satisfied that satisfaction for initiation of penalty proceedings is not discernible from the order of assessment. We therefore concur with the argument of the learned counsel for the assessee that initiation of penalty proceedings was not proper in the present case and on that ground the imposition of penalty u/s.271(1)(c) of the Act is unsustainable . 8. Keeping in view the decision of the Tribunal in the case of Suvaprasanna Bhattacharya (supra), the ld. D.R. was required by us to point out any observation or finding recorded by the Assessing Officer in the assessment orders for all the four years under consideration, from which the satisfaction as required to be arrived at by him to initiate penalty proceedings under section 271(1)(c) is discernable. However, he has not been able to pinpoint any such observation or finding recorded by the Assessing Officer in this context. A perusal of the assessment order also shows that there is no such observation or finding given by the ld. CIT(Appeals) from which the satisfaction as required to be arrived at by the Assessi ..... 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