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TMI Blog2016 (5) TMI 1094X X X X Extracts X X X X X X X X Extracts X X X X ..... ataria. 4. Brief facts of the case are that a search and seizure operation was conducted on 27.12.2006 at the business as well as residential premises of Shri Mahendra B. Kataria group at Silvassa. Survey under section 133A was also undertaken at various places. During the course of search, statement of Shri Mahendra B. Kataria was recorded under section 132(4) of the Income Tax Act. He admitted total unaccounted income of Rs. 1,37,00,000/- vide answer to question nos.23 and 25 of the statement. A disclosure of Rs. 12.00 lakhs was made by Shri Mahendra B. Katariya in his individual capacity, which has been offered in the return in response to notice under section 153 A of the Act. 5. The Id.AO has passed an assessment order on 30.12.008. Me determined the taxable income of the assessee at Rs. 12,46,551/- which was declared income of the assessee. 6. In the case of Sarika Jewellers, a survey under section 133A of the Act was carried out at the business premises of the firm on 27.12.2006. During the course of survey action, value of stock and gold and silver items was worked out and inventoried as per Annexure -C/F. Shri Sajjanraj Pokhraj Shah, one of the partners of the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iderations of the above facts and circumstances, we find that the Tribunal has extensively made reference to the decision of the Hon'ble Gujarat High Court in the case of Kirit Dahyabhai Patel (supra) while deciding the appeal of Maleka Haji Amin Gadawala (supra). The discussion made by the Tribunal in this regard is worth to note. It reads as under: "8. We have heard the rival contentions, pursued the material on record and duly considered facts of the case, in the light of the applicable legal position. 9. As learned Counsel for the assessee rightly points out, the issue is now covered, in favour of the assesses, by Hon'ble jurisdictional High Court's judgement in the case of Kirit Dahyabhai Patel vs. ACIT (ITA Nos.1181, 1182 & 1185 of 2010; judgement dated 03.12.2014), wherein reversing the very Third Member decision of this Tribunal which was relied upon by the CIT(A), Their Lord ships have observed as follows: "8. We have heard learned advocates for the parties and perused the material on record. Before dealing with the contentions, it would be relevant to reproduce Explanation 5 to Section 271 (1) (c) of the Income Tax Act, which reads as under: "Explanatio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessee admitted the receipt of undisclosed income for those years and also specified the manner in which such income had been derived and thereafter pays the tax on that undisclosed income with interest, then such undisclosed income would get immunised from the levy of penalty. 10. Looking to the facts and circumstances of the case, it would be relevant to refer the decision relied upon by learned senior advocate for the appellant in the case of Gebilal Kanbhaialal (HUF)(supra), wherein the Apex Court in paragraph No.6 has observed as under: "6. Explanation 5 is a deeming provision. It provides that where, in the course of search under Section 132, the assessee is found to be the owner of unaccounted assets and the assessee claims that such assets have been acquired by him by utilizing, wholly or partly, his income for any previous Year which has ended before the date of search or which is to end on or after the date of search, then, in such a situation, notwithstanding that such income is declared by him in any return of income furnished on or after the date of search, he shall be deemed to have concealed the particulars of his income for the purpose of imposition of penalt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee should pay tax on income disclosed in the statement under Section 132(4)." 11. Even, the High Court of Chattisgarh in the case of Abdul Rashid(supra) has held that in order to get the benefit of immunity under clause(2) of explanation 5 to Section 271(1)(c) of the Income Tax Act, it is not necessary to file the return before the due date provided that the assessee had made a statement, during the search and explained the manner in which the surrendered amount was derived, and paid tax as well as interest on the surrendered amount. 12. At this stage, it is required to be noted that the Apex Court in the case of Commissioner of Income Tax, West BanagalI Vs. Vegetable Products Ltd. (supra), has held that if the Court finds that the language of a taxing provision is ambiguous or capable of more meaning than one, then the Court has to adopt the interpretation which favours the assessee, more particularly so where the provision relates to the imposition of a penalty. 13. Considering the facts and circumstances of the case and also considering the decisions relied upon by learned senior advocate for the appellant, we are of the considered opinion that the view taken by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e in question was covered by the declaration made in the statement recorded under section 132(4) and the tax thereon was duly paid by the assessee, the provisions of Explanation 5 to section 271(1)(c) of the Act will come into play on the facts of this case. Accordingly, as the assessee rightly contends, penalty under section 271(1)(c) cannot be sustained in law. In any event, as held by the Hon'ble jurisdictional High Court above, the penalty under section 271(1)(c) of the Act can only be imposed in respect of an income over and above the income disclosed in the return filed under section 153A, and since the income in question was included in the return filed by the assessee under section 153A, the impugned penalty is unsustainable. For this reason also, the impugned penalties of Rs. 79,070/- for A.Y. 2003-04, Rs. 82,070/- for A.Y. 2004-05 and Rs. 65,025/- for the A.Y. 2005-06 are, therefore, deleted. The assessee gets the relief accordingly. 10. As observed earlier, the Id.counsel for the assessee has demonstrated that the additional income declared in response to the notice received under section 153(A) and 153(c) of the Act are based on the declaration made in the statement u ..... X X X X Extracts X X X X X X X X Extracts X X X X
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