TMI Blog2013 (12) TMI 1603X X X X Extracts X X X X X X X X Extracts X X X X ..... umstances it would be in fitness of things that the instant plea of the assessee, which was raised before the CIT(A) but not considered by him, be remanded back for consideration and adjudication as per law. The point raised by the learned Departmental Representative against the plea of the assessee on this aspect, in our view, touches upon the merits of the plea, with which we are not presently concerned with. Therefore, we uphold the plea of the assessee for remanding the matter back to the file of the CIT(A) to address the grounds raised by the assessee with regard to the quantification of 15 concealed income liable for penalty of section 271(1)(c) of the Act. - Appeals of the Revenue are allowed for statistical purposes. - ITA Nos. 1389/PN/2012 to ITA No. 1395/PN/2012 , ITA Nos. 1922/PN/2012 to 1938/PN/2012, ITA Nos. 1946/PN/2012 to 1953/PN/2012, ITA Nos. 1957 & 1958/PN/2012, - - - Dated:- 20-12-2013 - SHRI G.S. PANNU, ACCOUNTANT MEMBER AND SHRI R.S. PADVEKAR, JUDICIAL MEMBER Department by : Mr. A. K. Modi Mr. S. P. Walimbe Assessee by : Mr. Sunil Pathak ORDER PER G. S. PANNU, AM All the captioned appeals preferred by the Revenue relate to differe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ncome. Ostensibly, in the returns filed in pursuance to the notices issued u/s 153A(1)(a) of the Act, assessee disclosed income which was higher than the income that was disclosed in the returns filed u/s 139 of the Act, for the respective years. Consequently, the Assessing Officer has levied penalty u/s 271(1)(c) of the Act with respect to the additional income declared and assessed in the returns filed u/s 153A(1)(a) of the Act over and above the income declared earlier in the returns filed u/s 139 of the Act. The aforesaid penalties levied by the Assessing Officer are the subject-matter of dispute in the present appeals, because such levy has been set-aside by the CIT(A). 3. In the above background, the appeal in the case of M/s. Chhoriya Land Developers Associates vide ITA No.1934/PN/2012 pertaining to the assessment year 2004-05 is taken as the lead case to appreciate the relevant facts and circumstances leading up to the present dispute. As noted earlier, 6 the assessee M/s. Chhoriya Land Developers Associates is a partnership firm engaged in the business of land developers and for the assessment year 2004-05 it filed a return of income u/s 139 of the Act on 26.10.2004 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of a search initiated under section 132 on or after the 1st day of June, 2007, the assessee is found to be the owner of (i) any money, bullion, jewellery or other valuable article or thing (hereafter in this Explanation referred to as assets) and the assessee claims that such assets have been acquired by him by utilising (wholly or in part) his income for any previous year; or (ii) any income based on any entry in any books of account or other documents or transactions and he claims that such entry in the books of account or other documents or transactions represents his income (wholly or in part) for any previous year, which has ended before the date of search and, (a) where the return of income for such previous year has been furnished before the said date but such income has not been declared therein; or (b) the due date for filing the return of income for such previous year has expired but the assessee has not filed the return, then, notwithstanding that such income is declared by him in any return of income furnished on or after the date of search, he shall, for the purposes of imposition of a penalty under clause (c) of sub-section (1) of this section, be de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... materials, so as to establish the charge for which the penalty has been imposed. 8. The CIT(A) observed that since the additional income could not be linked with any specific seized material, namely, money, bullion, jewellery or other valuable article, therefore Explanation 5A to section 271(1)(c) of the Act was not attracted and hence, according to him, the declaration of impugned additional income could not be considered as concealment of income. To our mind, the conclusion of the CIT(A) is quite misplaced since he has referred to clause (i) of Explanation 5A only and has totally glossed-over the prescription of clause (ii) of Explanation 5A, which clearly covers the case of the assessee. In the present case, additional income declared by the assessee is based on incriminating documents in the shape of diaries and loose papers found during the course of search, which indicated receipt of unrecorded consideration for 9 sale of plots and also unrecorded expenditure on purchase/other expenses on acquisition/development of plots. Quite clearly, assessee has admitted additional income based on the incriminating documents and transactions found in the course of search, a situation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... w of the Hon ble Supreme Court decision, at the most it can be argued from the Department side that the assessee has concealed the income in the returns filed u/s 139 of the Act prior to the search. Accordingly, for the years for which the returns were filed prior to the search and before 01.06.2007 i.e. the date on which Explanation 5A has come into force, it is contended on behalf of the assessee that Explanation 5 was on the statute, and in view of the Explanation 5, no penalty is leviable if the additional income is accepted during the search by way of declaration and such income is based on the documents like diaries or loose papers. It is submitted that clause (ii) in Explanation 5A was not present in the erstwhile Explanation 5, and thus, assessee was not liable for penalty for concealment for the years which ended before 01.06.2007 and for which the returns were filed before that date. 10. In our considered opinion, the provisions of Explanation 5A to section 271(1)(c) of the Act do not leave any doubt towards understanding that the same are applicable in cases where a search has been initiated u/s 132 of the Act on or after the 1st day of June, 2007 . The phraseology o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is the law operating on the date on which the wrongful act is committed which determines the penalty. Accordingly, the Hon ble Supreme Court held that the concealment of the particulars of income was effected by the assessee while filing the return of total income on 24.04.1968 and thus, it was the amended clause (iii) brought on the statute by the Finance Act, 1968 w.e.f. 01.04.1968 which would govern the case. In our considered opinion, the aforesaid judgment of the Hon ble Supreme Court cannot be straightaway applied in the present case to say that the law as on the date of the filing of return u/s 139 of 12 the Act before the date of search is to be applied. The unambiguous phraseology of the Explanation 5A, which we have already elucidated earlier, clearly makes out that the legislative intent depicts that Explanation 5A is applicable where a search has been initiated u/s 132 of the Act on or after 01.06.2007 and it covers (a) any precious year which has ended before the date of search and where the return of income for such previous year has been furnished before the said date but such income has not been declared; and, (b) any previous year whose due date of filing of the r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , had the assessee not offered the same on his own and therefore, penalty could not be levied with respect to the declared additional incomes. Explaining the aforesaid position, the learned counsel pointed out, with reference to the written submissions made to the CIT(A), that the plea of the assessee was that the disclosure of additional income was based on various factors viz. that the assessee was not having all the relevant entries of amounts reflecting purchases and expenditure against sales; that the loans received and given back would not have been confirmed by the parties; that to cover the declaration made u/s 132(4) which were otherwise not been covered from the figures noted in the seized material up to the amount declared; that on assurance offered by search officers that, if declaration is made the assessee would be exempt from penalty u/s 271(1)(c) on account of Explanation 5; and, to buy mental peace and to avoid litigation. The learned counsel further pointed out that what the assessee offered as income for taxation was the entire sale proceeds found noted in the diaries which could not represent the true and correct income of such transactions; and, therefore in t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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