Income Tax Appellate Tribunal - Chandigarh
Sh. Chetan Jain, Ludhiana vs Dcit, Ludhiana on 4 July, 2018
IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH 'A', CHANDIGARH BEFORE SHRI SANJAY GARG, JUDICIAL MEMBER AND MS. ANNAPURNA GUPTA, ACCOUNTANT MEMBER ITA No.256/Chd/2017 (Assessment Year : 2010-11) Sh.Chetan Jain, Vs. The D.C.I.T., B-121, Pushap Vihar, Central Circle-III, Canal Road, Ludhiana.
Ludhiana.
PAN: AAYPJ0618H
(Appellant) (Respondent)
Appellant by : None
Respondent by : Smt.Chanderkanta, Addl. CI T
Date of hearing : 24.04.2018
Date of Pronouncement : 04.07.2018
O RDE R
PER ANNA PURNA GUPTA, A. M. :
Th i s a p p e a l h a s b e e n p r e f er r e d by t h e a s s es s e e ag a i n st t h e o r d e r o f l e a rn e d C o m mi s s i o ne r o f I nc o m e Ta x ( A p p e a l s) -
5 , L u d h i a n a ( h e re i n a f t e r r e fe r r e d t o a s C I T( A p p e al s ) ) d a t ed 2 5 . 1 1 . 2 0 16 r e l a ti n g t o a s s e s s m ent y e a r 2 0 1 0 - 1 1 ,ch a l l e n g i ng t h e c o n f i r m at i on o f levy of penalty u/s 271(1)© of the I n co m e Ta x A c t ,19 6 1 .
2. Th e f a c t s o f t h e c a s e a r e t h a t r e t u r n f o r t h e i m pu g n e d year was filed by the assessee on 11.12.2010 declaring i n c o m e o f R s . 1 1 ,7 5 , 9 5 9 / - . Th e r e a f t e r s e a r c h u / s 1 3 2 o f t h e A c t w a s c o n d u ct e d a t t h e r e s i d e n c e o f t h e a ss e s s e e on 1 4 . 3 . 2 0 1 2, d u r i ng t h e c o u r s e o f w h i c h i n c o m e o f R s . 4 1 l a c s w a s s u r r e nd e r e d. I n r e s p on s e to n o t i c e i s s u e d u / s 1 5 3 A, return was f i l ed by the a s s e ss e e ,declaring income of R s . 5 2 , 7 5 ,9 5 9 / - w h i c h i n c l ud e d t h e s u r r e n de r e d i n c o m e o f 2 R s . 4 1 l a c s. S u bs e q u e n t l y d u r i ng a s s e s s m en t pr o c e e d i n gs t h e A O n o t ed t ha t d u r i n g th e y ea r u n d e r c on s i de r a t i o n t he assessee h ad p u r c h a s e d t w o pl o t s m e as u r i n g 2 7 0 s q . yd .
e a c h s i t u a te d a t M o j a B a r e w a l Aw a r i a , A s h ap u r i , L u d h i a n a.
Th e source of investment i n th e s e p r o pe r t i e s R s . 4 1 l a cs w a s s t a t e d b y t he a s s e s s e e a s b ei n g o u t o f th e su r r e n d e r ed i n c o m e of R s . 41 l a c s . Th e A ss e ss i n g O f fi c e r n o t ed t h a t t h e s u r r e n d e r w a s m a d e a f t e r d e t e ct i o n o f c o nc e a l me n t b y t he D e p a r t m e nt b y w a y o f s e a r c h u / s 1 3 2 o f t he A c t a nd t h e r e f o r e i ni t i a te d p e n a l t y p r o ce e d i n g s o n t h e s a m e u / s 271(1)(c) of t he Act. D u ri n g penalty pr o c ee d i n g s the a s s e s s e e c o n t end e d t h at t h e s u rr e n d e r h a d be e n s u o mo t o d i s c l o s e d b y th e a s s e s s e e i n h i s r e t u r n o f i n c o me a n d h a d n o t b e e n a d d e d b y t h e A s s e s s i n g O f f i c er a n d f u r th e r t h a t n o i n f i r m i t y h a d b ee n f o u n d i n t h e e x p l a n a t i o n o f th e a s s e s se e o r t h e d o c u me n ts s u b m i t t e d i n su p p o r t o f h i s c on t e n t i o n . I t w a s t h e r e fo r e c on t e n d e d t h at n o p e n a l t y u / s 271 ( 1 ) © w a s l e v i a b l e i n t h e pr e s e n t c a s e . Th e A s s e s si n g Of f i ce r r e j ec t e d the c o n t en t i o n of the as s e s s e e and l e vi e d p en a l t y u /s 2 7 1 ( 1 ) © o f t he Ac t , s t a ti n g th a t t h e s u r re n d e r wa s c o v e re d o n l y i n t h e y e ar o f s e a r c h o r t he p r e c e d i n g ye a r o f w h i c h r e t u r n w a s d u e b u t n o t f i l e d b y t h e a s s es s e e, a n d t h e i m p u g n e d ye a r be i n g n e i t he r , t h e a s s e s s e e wa s no t e n t i t l ed t o c l a i m i m mu n i t y o f th e s u rr e n de r g r a n te d b y v i r t u e o f t he p r o v i s i o ns o f s e ct i o n 1 3 2 ( 4) r . w . s. 2 7 1 A A A ( 4 ) ( b ) of t h e A c t.
Th e A s s e s s i n g O ff i c e r a l s o h el d t ha t t h e a s s e s se e h a v i n g n o t d i s c l o s e d t h e s ur r e n d e r e d i n c o me i n t h e o r i g i n a l r e t u r n o f i n c o m e f i l e d, t h e d i s c l o s u r e i n th e r e t u r n f i l e d su b s e q u e n t 3 t o s e a r c h w a s on l y a f t e r d e t e ct i o n o f c o n c e a l m en t a n d t h e a s s e s s e e s c o nt en t i o n t h a t n o p e n a l t y w a s l e vi a b l e s i n ce r e t u r n e d i n co m e h a d b e e n a c c ep t e d , w a s n o t ac c e p t a b l e.
Th e A O a c c o r di ng l y i m p os e d pe na l t y u / s 2 7 1 ( 1) ( c) o f t he A c t a m o u n t i n g t o R s. 1 1 , 6 8 , 0 20 / - , b ei n g 1 0 0 % o f t h e t a x s o ug h t t o b e e v ad e d o n th e i n c o m e c o n c ea l e d .
3. Th e matter was carried in appeal b e f o re the L d . CI T( A ) , w h e r e t h e a s s e s s e e re i t e r a t e d t he c o n t e n t i o n s made before the AO and further contended that since no i n c r i m i n at i n g ma t e r i a l w a s f o und d u r i n g s e a r c h n o p e n a l t y c o u l d b e i mp o se d e v e n b y i n vo k i n g E x p l a n a ti o n 5 A t o s e c t i o n 2 7 1 ( 1 ) ( c) of t h e A c t . Th e L d . CI T( A ) re j e c t e d th e c o n t e n t i on s o f th e a s s e s s ee h o l d i n g t h a t th e p ro v i s i o n s of E x p l a n a t i o n - 5 A to s e c t i o n 27 1 ( 1 ) ( c ) o f t h e I nc o m e Ta x A c t , 1 9 6 1 ( i n s h o r t 'th e A c t ' ) w e r e a ttr a c t e d i n t h e p re s e n t c a s e since th e i n co me d e c l a re d i n t h e r e t u r n f i l e d i n re s p o n s e t o n o t i c e u / s 1 5 3A , h a d n o t b e e n d e c l a r e d i n t h e o r i g i n al r e t u r n o f i n c o me f i l e d an d t h e a d d i t i o n al i n c ome d e c l a r ed after s e a rc h r ep r e s e n t e d c o n ce a l e d i n c om e an d hence t a n t a m o u nt e d to i n c r i m i n a ti n g material for attracting E x p l a n a t i o n 5 A to s e c t i o n 2 7 1 ( 1) ( c ) o f t he A c t .
4. A g g r i e v e d b y the s a m e t h e a ss es s e e h a s c o m e u p i n a p p e a l b ef o r e us r a i s i n g t h e f ol l o w i n g e f fe c t i v e g ro u n d :
"1. That the learned CIT (A) has erred in confirming the penalty u/s 271(1)(c) of the Income Tax Act,1961 imposed by the Assessing Officer against the facts and circumstances of the case."
5. N o n e a p p e a re d on b e h a l f o f t he as s e s s e e o n t he da t e o f h e a r i n g i . e . 2 4.4 . 2 0 1 8 . F u r t h er i t w a s n o t i c ed t h a t o n 4 e a r l i e r o c c a si o ns a l s o i . e . 2 2 . 11 . 2 0 1 7 an d 1 9.2 . 2 0 1 8 t h e c a s e h a d b e e n ad j o u r n e d o n t h e r e q u e s t o f t h e a s s e s s e e 's c o u n s e l t h r o u gh a d j o u r nm e n t a pp l i c a t i o ns f i l e d . F u r t h e r , i t w a s p o i n t e d o u t t o u s t h a t t h e i ss u e i n t h e p r e s en t c a s e w a s i d e n t i c a l wi t h t ha t i n t h e c a s e o f M u n i s h J a i n V s. D C I T i n I TA N o s .2 5 4 & 25 5 / C h d / 2 01 7 t he o r d e r i n w hi c h c a s e ha d been p r o n o u n ced by the I TA T Chandigarh Bench on 1 9 . 3 . 2 0 1 8. C opy o f t h e o r d e r w a s p l a ce d b e for e u s . On p e r u s i n g t h e r e co r d s o f th e p r o ce e d i n g s be f o r e us , i t w as noticed t h at t he Ld. counsel for assessee on s e v e r al o c c a s i o n s h a d so u g h t a d j o u r nme n t s t a t i n g t h a t t h e f a c t s a n d c i r c u m s t an ce s o f t h e p r e s e n t c a s e a r e i d e n t i ca l t o t h a t i n t h e c a s e of M u n i s h J a i n V s. D CI T i n I TA N o s . 2 5 4 & 2 5 5 / C h d / 20 1 7 . Th e L d . c o u n s el f o r a s s es s e e v i d e i t s l et t e r s d a t e d 1 9. 9 . 2 0 1 7, 2 2 . 1 1 . 20 1 7 a nd 1 9 . 2 . 2 01 8 h a d s t a t e d so .
I n a l l t h e a b o v e l e t t e r s th e L d . co u n s e l f o r a s s e ss e e p l e a d ed t h a t t h e a fo r e s a i d c a s e h a d be e n h e a r d a n d si n c e t h e f a c t s w e r e i d e n t i ca l t o t h a t i n t h e p r e se n t c a s e t h e h e ar i n g i n t h e p r e s e n t c a s e w as s o u g h t t o b e a d j o u r n e d t i l l t h e o r d e r i n the case of Mu n i s h J ai n Vs. D CI T in I TA Nos.254 & 2 5 5 / C h d / 20 1 7 w a s p r o n o un c e d . S i n c e a d m i t t e d l y , t h e f a c ts o f t h e p r e s e n t ca s e w e r e i d e n t i ca l t o t h a t i n t h e c a s e o f M u n i s h J ai n V s. D CI T i n I TA N o s . 2 5 4 & 2 5 5 /C h d / 2 0 1 7 , a n d t h e or d e r i n t h e s a i d c a s e ha d b e e n pr o n o u nc e d b y t he Tr i b u n a l , t h e r ea s o n f o r w hi c h ad j o u r n m e nt w a s s o u g h t by the a s s es s e e on earlier o cc a si o n s no l o n g er r e m a i n ed relevant a nd f ur t h e r no r e a son was given f or seeking a d j o u r n m en t o n t h e p r e s e n t d a te o f h e a r i n g . Th e m a t t e r w as 5 t h e r e f o r e pr o c e ed e d t o b e h e a rd w i t h since it appears t h a t t h e a s s e s see i s n o t s e r i o us i n p u r s u i ng t h e ap p e a l .
6. O n p e r u sa l o f th e r e c o rd o f h ea r i n g b ef o r e u s i t w a s f o u n d t ha t t h e a s s e s s e e h a d sou g h t t o a d m i t a d d i t i o n al g r o u n d b ef o r e us v i d e i t s a pp l i c a t i o n da t e d 22 .5 . 2 0 1 7 a s under:
Dated: 19.05.2017 The Honorable Members, Income Tax Appellate Tribunal, Chandigarh.
Sub: Application for filing of Additional Grounds of Appeal In the case of Chetan Jain, B-121, Pushap Vihar, Canal Road, Ludhiana. PAN:
AAYPJ0618H, A.Y.2010-11. ITA No.256/CHANDI-2017.
Respected Sir/Madam, Respectfully submitted that the hearing of the above stated cases is fixed for 22.05.2017. The appellant hereby seeks Your Honor's permission to raise additional grounds of appeal as under:
1. On the facts and the circumstances of the case & in law, the penalty proceedings initiated vide notice u/s 274 read with section 271 of the I.T.Act,1961., dated 29.11.2013 are invalid and bad in law.
2. On the facts and are the circumstances of the case and in law, the penalty order dated 30.05.2014 passed u/s 271(l)(c) is invalid and bad in law.
The appellant hereby very humbly prays Your Honor to admit the additional grounds raised in the interest of justice, as these grounds being purely legal grounds were inadvertently omitted to be taken earlier and would go to the very root of the matter and would not involve further investigations in to the facts. The appellant shall be highly thankful for Your Honors kindness.
Thanking you, Yours Sincerely Sd/-
(Chetan Jain) Appellant 6 Dated: 22.05.2017 The Honorable Members, Income Tax Appellate Tribunal, Chandigarh.
Sub: Request for admission of additional grounds under rule 11 of ITAT, Rules,1963 in the case of Chetan Jain, B-121, Pushap Vihar, Canal Road, Ludhiana. PAN:
AAYPJ0618H, A.Y.2010-11 ITA No.256/CHANDI-2017. -reg- fixed for hearing on 22.05.2017.
Respected Sir/Madam, In reference to the above, kindly find enclosed request letter in triplicate received from appellant addressed to the Hon'ble ITAT praying for admission of additional grounds in the above case under Rule 11 of ITAT Rules, 1963.
Keeping in view the decision of the Hon'ble Apex Court in the case of NTPC Ltd. vs CIT (229 ITR 383)(SC) copy enclosed, Hon'ble Bench is humbly requested that the additional grounds of appeal as raised by the appellant may kindly be admitted as these grounds are crucial in passing a judicial matter and in the interest of Justice.
Thanking you, Yours sincerely, (CA Rajeev K. Gupta) (Counsel) I t w a s a l s o s t at ed i n t h e s a i d a pp l i c a t i o n t h a t b ei n g a l e g a l g r ou n d t h e s a m e b e ad m i t te d f o r a d ju d i c a ti o n i n v i e w o f t h e d e c i s i o n o f t h e H o n ' b l e A p e x C o u r t i n th e c a s e o f N TP C L i m i t e d V s. CI T, 2 9 9 I TR 38 3 .
7. Th e L d . D R d i d no t o b j e c t t o t he sa m e .
8. S i n c e t h e g r o u nd r a i s e d b y t h e a s s e s s e e i s a l e g al g r o u n d ch a l l e ngi n g t h e v a l i d i t y o f t he o r de r pa s s e d u /s 271(1)(c) of the Act, we hereby admit the same in view of t h e d e c i s i on o f t h e H o n ' b l e Su pr e m e C o u r t i n th e c a s e o f N TP C L i m i t e d ( su p r a ) .
9. F u r t h e r i t w a s po i n t e d ou t , a s s ta t e d e a rl i e r , t h at t h e facts of th e p re s e n t c a se and the issue i n vo l v e d w e re 7 i d e n t i c a l t o t h a t i n t h e c a s e o f Mu n i s h J a i n ( s u p ra ) a n d t h e d e c i s i o n r en d e r ed t h e r e i n b y t he I TA T, d i s m i s s i n g a l l t he g r o u n d s r a i se d by t h e a s s e s s e e , th e r e b y u p h o l d i ng t h e l e v y o f p e n a l t y , t h er e fo r e s q u a re l y a ppl i e d i n t h e p r es en t c a s e .
10. W e h a v e h e a r d th e L d . D R a n d al s o g o n e t h r o u gh t h e o r d e r s o f th e a u th o r i t i e s be l o w an d t h e o r d er o f th e I TA T i n t h e c a s e o f M u n i s h J a i n ( s u p r a ) .O n g o i n g t h r o u gh t h e o r d e r o f t h e I . T. A . T. i n t h e c a s e o f M u ni s h J a i n ( s u pr a ) , W e find t h a t t h e f a ct s o f t h e p r e s e n t c a s e a n d t h e i s s u e i nv o l v e d a r e i d e n t i c a l t o t h at i n t h e c a se o f Mu n i s h J a i n ( s u p ra ) , w h e r ei n s e a r c h w a s c on du c t e d o n t h e s am e d a t e a s t h e as s e s s e e i . e.
1 4 . 3 . 2 0 1 2, d u ri n g w h i c h t h e as s e s s e e s u r r e nde r e d R s .2 8 l a c s , d i s c l o s e d th e s a m e i n t h e r e t u r n o f i n c om e f i l e d i n response to not i c e i ss u e d u /s 153A of th e Act an d t h e r e a f t er , o n i n v e s t m e n t i n l an d b e i n g d e te c te d b y t h e A s s e s s i n g O f fi c er , a t t ri b u t e d t h e s o u rc e o f t h e sa m e t o t h e s u r r e n d e re d i n com e . Th e A s s e s s i n g O f f i ce r i n t h e s a i d c as e a l s o h ad l e vi e d pe n a l t y o n t he s u rr e n d e r e d i n c o me , w h i c h i n t u r n w a s u p h e l d b y t h e C I T( A ) h o l d i n g t h a t pe n a l t y w as l e v i a b l e a s p e r th e p r o vi s i o n s o f E x p l a n at i o n 5 A t o s ec t i o n 2 7 1 ( 1 ) ( c ) , a s i n th e c a s e o f th e as s e s s e e . I n th a t c a s e a l so, we find th e assessee had raised a dd i t i o na l ground c h a l l e n g i n g t h e v a l i d i t y o f t h e pe n a l t y l ev i e d u/s 2 7 1 ( 1 ) ( c ) of the Act. Th e s a i d a d d i ti o n a l g r o u n d w a s d i sm i s s e d b y t h e I . T. A . T. T h e I . T. A . T. t h e r e a f t e r a l so d e a l t w i t h t he merits of the case and held that th e p r ov i s i o n s of E x p l a n a t i o n 5 A t o s e c t i o n 2 7 1( 1) ( c ) w e re a p p l i c ab l e i n th e 8 p r e s e n t c a s e s i nc e s e a r c h w a s i ni t i a t e d a f t er 1 s t J u n e 2 0 0 7 , a s p r e s c ri b e d f or t h e a p p l i c a b i l i t y o f t h e Ex p l a na t i o n , a n d t h e a s s es s e e hav i n g n o t d i s cl o se d t h e su r r e n der e d i n c om e i n t h e o r i g i na l re t u r n o f i n c om e f i l e d , t h e a ss e s se e f u l fi l l ed the c o n d i ti o n p r e s c r i b ed fo r a p p l i c ab i l i t y of the Explanation, t he r e b y d e em i n g the a s s es s ee to have concealed the p a r t i c u l ar s of his i n c om e or f u r n i s h ed i n a c c u r a te p a r t i cu l a r s o f hi s i n c om e f o r l e v y i n g p en a l t y . Th e I TA T a l s o r e j e c te d t h e c o n te n t i on o f t h e a s se s se e t h a t no i n c r i m i n at i n g ma t e r i a l w a s f o u nd d u r i n g s e ar c h s o a s t o a t t r a c t E x pl a n a t i o n 5 A t o s e c t i on 2 7 1 ( 1 ) © , h o l d i ng t h a t t h e s u r r e n d e r m a d e b y t h e a ss e s s e e w a s s u o mo t o a nd r e m a i n ed u n r e t r a c te d t h r ou g h o u t a n d t h e s a m e w a s a t t ri bu t e d d u r i n g a s s e s s m e nt p r oc e e d i n g s as so u r c e of i n v est m e n t in p r o p e r t i es , w h i ch t a n t a m o u n te d t o the a s s e s s ee himself c o m i n g c l e a n b ef o r e t h e R e v e n u e a b o u t t h e f a c t o f e a r n i ng s u c h i n c om e a nd i n v e s t i n g i t i n a s s e t s , w h i c h i n t u r n m et t h e r e qu i r e m e nt o f E xp l a n a ti o n 5 A o f t h e a s s es s e e b ei n g f o u n d d u r i n g s ea r c h t o b e th e o w n e r o f a s se t s ac q u i r e d o ut o f e a r l i e r u nd i s cl o s e d i nc o m e . Th e r e l e va n t fi n d i n g s o f t h e I TA T a r e a s u n der :
" 1 3 . W e h av e h e ar d th e r i v al c o n te n tio n s . T h e g e n e s is o f th e ar g u me n ts o f th e L d . c o u n s e l f or as s e s s e e o r ig i n ate s f r o m th e o r d e r of th e H o n ' b l e K ar n at ak a H i g h C o u r t i n th e c as e of M an ju n ath a C o tto n & G in n i n g F ac to r y ( s u p r a) wh ic h wa s f ol l o we d b y th e H o n ' b l e K ar n at ak a H ig h C o u r t ag ai n in S S A ' s E me r al d M e ad o ws ( s u p r a) wh e r e i n S L P f il e d b ef or e th e H o n ' b l e Sup r e me C o u r t wa s d is mi s s e d an d th e s aid ju d g me n t was al s o r e l i e d u p o n b y th e T r i b u n al i n a n u mb e r of d e c is io n s r e n d e r e d an d c i t e d b y th e L d . c o u n s e l f o r as s e s s e e b e f or e u s . It i s , th e r e f o r e, p e r ti n e n t to u n d e r s tan d 9 th e r e as o n in g l ai d d o wn b y th e H o n ' b l e K ar n a t ak a H ig h C o u r t i n M an ju n a th a C o tto n & G in n i n g F ac to r y ( s u p r a) wh i l e h o l d in g th a t th e n o ti c e u / s 2 7 4 mu s t s p e c if i c al l y s p e l l o u t th e c h ar g e f ix e d o n th e as s e s s e e f o r th e p u r p o s e o f l e v y o f p e n al ty wh e th e r c o n c e al me n t o r f ur n is h i n g o f in ac c u r ate p ar ti c u l ar s o f in c o me b y s tr i k i n g o u t th e ir r e l e v an t c l au s e in th e n o t ic e . P ar a 5 9 o f th e o r d e r d e al s wi th th e s a me a n d is b e i n g r e p r o d u c e d h e re u n d er f or r ef er e n c e :
"NOTICE UNDER SECTION 274
59. As the provision stands, the penalty proceedings can be initiated on various ground set out therein. If the order passed by the Authority categorically records a finding regarding the existence of any said grounds mentioned therein and then penalty proceedings is initiated, in the notice to be issued under Section 274, they could conveniently refer to the said order which contains the satisfaction of the authority which has passed the order. However, if the existence of the conditions could not be discerned from the said order and if it is a case of relying on deeming provision contained in Explanation-1 or in Explanation-1(B), then though penalty proceedings are in the nature of civil liability, in fact, it is penal in nature. In either event, the person who is accused of the conditions mentioned in Section 271 should be made known about the grounds on which they intend imposing penalty on him as the Section 274 makes it clear that assessee has a right to contest such proceedings and should have full opportunity to meet the case of the Department and show that the conditions stipulated in Section 271(1)(c) do not exist as such he is not liable to pay penalty. The practice of the Department sending a printed form where all the ground mentioned in Section 271 are mentioned would not satisfy requirement of law when the consequences of the assessee not rebutting the initial presumption is serious in nature and he had to pay penalty from 100% to 300% of the tax liability. As the said provisions have to be held to be strictly construed, notice issued under Section 274 should satisfy the grounds which he has to meet specifically. Otherwise, principles of natural justice is offended if the show cause notice is vague. On the basis of such proceedings, no penalty could be imposed on the assessee.
60. Clause (c) deals with two specific offences, that is to say, concealing particulars of income or furnishing inaccurate particulars of income. No doubt, the facts of some cases may attract both the offences and in some cases there may be overlapping of the two offences but in such cases the initiation of the penalty proceedings also must be for both the offences. But drawing up penalty proceedings for one offence and finding the assessee guilty of another offence or finding him guilty for either the one or the other cannot be sustained in law. It is needless to point out satisfaction of the existence of 10 the grounds mentioned in Section 271(1)(c) when it is a sine qua non for initiation or proceedings, the penalty proceedings should be confined only to those grounds and the said grounds have to be specifically stated so that the assessee would have the opportunity to meet those grounds. After, he places his version and tries to substantiate his claim, if at all, penalty is to be imposed, it should be imposed only on the grounds on which he is called upon to answer. It is not open to the authority, at the time of imposing penalty to impose penalty on the grounds other than what assessee was called upon to meet. Otherwise though the initiation of penalty proceedings may be valid and legal, the final order imposing penalty would offend principles of natural justice and cannot be sustained. Thus once the proceedings are initiated on one ground, the penalty should also be imposed on the same ground. Where the basis of the initiation of penalty proceedings is not identical with the ground on which the penalty was imposed, the imposition of penalty is not valid. The validity of the order of penalty must be determined with reference to the information, facts and materials in the hands of the authority imposing the penalty at the time the order was passed and further discovery of facts subsequent to the imposition of penalty cannot validate the order of penalty which, when passed, was not sustainable.
61. The Assessing Officer is empowered under the Act to initiate penalty proceedings once he is satisfied in the course of any proceedings that there is concealment of income or furnishing of inaccurate particulars of total income under clause (c). Concealment, furnishing inaccurate particulars of income are different. Thus the Assessing Officer while issuing notice has to come to the conclusion that whether is it a case of concealment of income or is it a case of furnishing of inaccurate particulars. The Apex Court in the case of Ashok Pai reported in 292 ITR 11 at page 19 has held that concealment of income and furnishing inaccurate particulars of income carry different connotations. The Gujrat High Court in the case of MANU ENGINEERING reported in 122 ITR 306 and the Delhi High Court in the case of VIRGO MARKETING reported in 171 Taxmn 156, has held that levy of penalty has to be clear as to the limb for which it is levied and the position being unclear penalty is not sustainable. Therefore, when the Assessing Officer proposes to invoke the first limb being concealment, then the notice has to be appropriately marked. Similar is the case for furnishing inaccurate particulars of income. The standard proforma without striking of the relevant clauses will lead to an inference as to non-application of mind."
1 4 . A s is e v id e n t f r om th e ab o v e th at th e H o n ' b l e H ig h C o u r t h as v e r y l u c id l y e x p l ain e d th a t th e p u r p o s e of is s u i n g n o ti c e is to mak e th e ac c u s e d p e r s o n a war e o f th e c h ar g e ag a i n s t h i m f o r wh ic h h e is b e i n g p e n al i z e d i. e . f o r c o n ce al in g p ar t ic u l ar s of in c o me an d / o r f ur ni s h in g i n ac c u r a te 11 p ar ti c u l ar s o f in c o me s o th a t h e c an ad e q u ate l y d e f en d h i ms e l f . T h e H on ' b l e H i g h C o u r t f u r th e r c l ar if ie d th a t th e s a me may b e c l e ar f r o m th e o r d e r o f th e au th o r i t i e s i ts e l f p as s e d in p r o c e e d in g s d u r in g th e c o u r s e o f wh i c h h e wa s s at is f ie d o f th e e x is te n c e o f th e i mp u g n e d c o n d i t io n , wh i c h i s a s tatu to r y r e q u i r e me n t for in i ti a t i n g p e n al ty p r o c e e d in g s u / s 2 7 1 ( 1 ) ( c ) of th e A c t. In s u c h c as e s th e H o n ' b l e H ig h C o u r t h e l d , wh e r e g r o u n d f or in i t i a t i n g p e n al ty i s c l e ar l y c o mi n g o u t f r o m th e o r d e r , r ef er e n c e to th e o r d e r in t h e n o ti c e u / s 2 7 4 o f th e A c t wo u l d b e s uf f ic ie n t to mak e th e p e r s o n c h ar g e d wi th th e s a me , a war e o f th e c h ar g e . A s p e r th e H o n ' b l e H ig h C o u r t, r e f e re n c e to th e o r d e r i n th e n o t ic e wh i c h c o n ta in s c l e ar s at i s f ac ti o n o f th e au th o r i ty o f th e e x is te n c e o f an y o f th e g r o u n d s wo u l d b e s uf f ic ie n t c o mp l i an c e o f th e af or e s ai d c o n d i t io n . T h e H o n ' b l e H ig h C o u r t f ur th e r h e l d th at in s i tu a t i o n wh e r e th e o r d e r of th e au th o r i ty i s n o t c l e ar v i s - a- v is g r o u n d f or wh i c h i t is i n i t i a te d , as in c as e s wh e r e th e r e i s d e e me d c o n c e al me n t as p e r E x p l an a t io n - 1 to s e c ti o n 271(1)(c) of th e Act an d d e e me d s ati s f ac ti o n o f th e au th o r i ty o f c on c e al me n t as p e r s e c ti o n 2 7 1 ( 1 ) ( b ) o f th e A c t, th e n , th e H o n ' b l e H ig h C o u r t h as h e l d , th a t th e n o ti c e s h o u l d c l e ar l y r ef l e c t th e e x ac t g r o u n d f o r wh i c h p e n al ty i s l e v ie d . T h e H o n' b l e H ig h C o u r t h as i n v e r y c l e ar wo r d s e x p l ai n e d th a t th e p r o c e e d in g s b e in g p e n al i n n atu r e th e as s e s s e e s ho u l d be mad e a war e o f th e g r o u n d s o n wh i c h p e n al ty i s b e in g l e v ie d s o th at h e c an ad e q u ate l y d e f e n d h i ms e l f . T he c r u x of th e ju d g me n t th e r ef o r e is th at th e n o ti c e u / s 2 7 4 s h o u l d c l e ar l y b r in g o u t th e c h ar g e ag a i n s t th e p e r s o n wh o i s b e in g p e n al i z e d e i th e r b y r e f er r in g to th e as s e s s me n t o r d e r wh e r e th e A O h as c l e ar l y r e c o r d e d h is s at i s f ac ti o n o f th e e xi s te n c e o f g r o u n d wa r r an t i n g l e v y o f p e n al ty o r wh e r e th e s a me i s ab s e n t , b y wa y o f s tr i k in g o f f th e ir r e l e v an t g r o u n d wh ic h f i n d s me n t io n i n th e s tan d ar d p e rf o r ma u s e d b y th e R e v e n u e wh il e is s u in g n o t ic e u / s 2 7 4 of th e A c t. A t th is ju n c tu r e , i t i s r e l e v an t to p o in t o u t th a t th e p e n al ty u / s 2 7 1 ( 1 ) ( c ) of th e A c t i s l e v ie d f o r c o n c e al in g an d / o r f or f ur n is h in g i n ac c u r a te p ar ti c u l ar s o f in c o me . T h e H o n ' bl e H ig h Court h as c l ar if ie d th a t th e r e may be c ir c u ms t an c e s wh e th e r th e c h ar g e s ar e o v e r l ap p i n g an d b o th th e c o n d i ti o n s e x is t. T he f ac ts , th e r e f o re, s h o u l d c l e ar l y p o in t o u t th e e x is te n c e o n e i th e r o r b o th th e g r o u n d s as is ap p l ic ab l e i n e ac h c as e s .
1 1 . H av in g s a i d s o we s h al l p r o c e e d to ap p l y th e af or e s ai d r a ti o t o th e f ac ts o f th e p r e s e n t c as e . T h e n o tic e is s u e d to th e as s e s s e e u / s 2 7 4 of th e A c t s ta te s th a t d u r in g th e c o u r s e o f pr o c e e d in g s 12 f or th e i mp u g n e d ye ar i t ap p e ar e d th a t th e as s e s s e e h ad c o n c e al e d p ar t i c u l ar s o f h is in c o me an d ( e mp h as is s u p p l ie d by us) f ur n is h e d i n ac c u r a te p ar t i c u l ar s o f in c o me . T h e r e l e v an t n o tic e p r o d u c e d b e f or e u s is as u n d e r :
NOTICE UNDER SECTION 274 READ WITH SECTION 271 OF THE INCOME TAX ACT, 1961.
PAN: ABNPJ4747M Office of the Dy. Commissioner of Income Tax, Central Circle-Ill, Dandi Swami Chowk, Civil Lines, Ludhiana.
Dated, Ludhiana the 29/11/2013.
To Sh. Munish Jain, B-
121,PushapVihar, Canal Road, Ludhiana.
Whereas in the course of proceedings before me for the assessment year 2010-11 it appears to me that you:-
have without reasonable cause failed to furnish me return of income which you were required to furnish by a notice given under section of the Income Tax Act, 1961, dated____________________ .
have without reasonable cause failed to comply with the notice u/s --------
--------------- issued on ---------------------- fixing the case for hearing on which was served on have concealed the particulars of your income and for furnishing inaccurate particulars of such income.
2. You are hereby requested to appear before me at 11.30AM on 26.12.2013 and show cause why an order imposing a penalty on you should not be made under section 274 read with section 271 of the Income Tax Act, 1961. If you do not wish to avail yourself of this opportunity of being heard in person or through authorized representative you may show cause in writing on or before the said date which will be considered before any such order is made under section 271(1 )(c) of the I.T.Act,1961.
(SUKHJIT SINGH) Dy. Commissioner of Income Tax, Central Circle-Ill, Ludhiana.
T h e c h ar g e ag ai n s t th e as s e s s e e is th e r e f o r e o n b o th C o u r ts wh i c h as p o in te d o u t ab o v e b y u s h as b e e n h e l d to b e p l au s ib l e as th e s a me c an b e o v e r l ap p in g i n c e r tai n c ir c u ms tan c e s .
1 5 . T h er e is , th e r e f or e , n o inf ir mi ty i n th e n o tic e an d th e g r o u n d f o r wh i c h p e n al ty was i n i t i a te d o n th e as s e s s e e h as b e e n c l e ar l y a n d u n a mb i g u o u s l y b r o u g h t o u t in th e s aid n o ti c e . T h e as s e s s e e h as 13 al s o , we f in d , r e s p o n d e d to th e n o tic e an d was g iv e n f ul l o p p o rtu n i ty to d e f e n d h i ms e l f ag ai n s t th e s ai d c h ar g e s wh i c h was d u l y av a i l e d o f al s o b y th e as s e s s e e . N e c e ss ar y an d r e q u is i te r e p l y d e f en d in g h i ms e l f f r o m th e c h ar g e s was f il e d b e f or e th e A s s e s s in g O f f ic er . It i s n o t th e c as e o f th e as s e s s e e th a t d u e o p p o r tu n i ty was n o t g i v e n to th e as s e s s e e . U n d e r th e af o re s ai d c ir c u ms tan c e s we f in d th a t th e r e is n o v io l a ti o n o f th e p r in c i p l e s o f n atu r al ju s t ic e in th e p r e s e n t c as e wh e n th e as s e s s e e h av in g b e e n a war e o f th e s p e c if ic c h ar g e f or wh i c h p e n al t y was i n i ti a te d an d al s o h av i n g b e e n g iv e n d u e o p p o r tu n i ty to d e f e n d h i ms e l f f r o m th e s ai d c h ar g e . W e , th e r e f o r e , can n o t ag r e e wi th th e c o n te n t i o n o f th e L d . c o u n s el f or as s e s s e e th a t th e n o ti c e i s s u e d to i t u / s 2 7 4 o f th e A c t s uf f ere d f ro m inf ir mi ty . M o r e o v e r , we f in d th at th e d e c is i o n s r e l ie d u p o n b y th e L d . c o u n s el f o r as s e s s e e ar e o f n o as s is t an c e s i n c e th e y ar e al l d is ti n g u is h ab l e o n f ac ts as in a l l th e s ai d c as e s th e g r o u n d o n ac c o u n t o f wh ic h p e n al ty was i n i t i a te d was n o t c l e ar wi th th e n o tic e b e in g i n a s tan d ar d f o r ma t me n ti o n i n g b o th th e c h ar g e s al te r n a ti v e l y wi th o u t s tr ik i n g o f th e in c o r r e c t c h ar g e wh i c h is d if f e r en t f ro m th e f ac ts o f th e p r e s e n t c as e . In v ie w o f th e ab o v e , we d i s mi s s th e ad d i t i o n al g r o u n d o f ap p e al r ais e d b y t h e as s e s s e e .
1 6 . N o w c o mi n g to th e g r o u n d r ai s e d c h al l e n g in g th e l e v y o f p e nal ty as p e r E x p l an at i o n 5 A to s e c ti o n 2 7 1 ( 1 ) © o f th e A c t, b e f or e u s th e L d . c o u n s e l f o r as s e s s e e r e l ie d u p o n th e s u b mi s s io n s mad e b e f o r e th e L d . C IT ( A pp e al s ) r e p r o d u c e d in th e o r d e r of th e L d . C IT ( A p p e al s ) at p ar a- 2 an d wh i c h b r ie f l y s ta te d ar e as u n d e r :
1. S in c e no in c r i mi n a t in g mat e r i al was d is c o v e r e d an d n o v al u ab l e ar t i c l e was f o un d by th e R e v e n u e du r in g s e ar c h , n o p e n al ty wa s l e v i ab l e as p e r E x p l an a t i o n - 5 A to s e c ti o n 2 7 1 ( 1 ) ( c ) o f th e A c t.
2) W h e n r e tu r n o f in c o me f il e d u / s 1 5 3 A is ac c e p te d b y th e A s s e s s in g O f f ic e r, th e r e wi l l b e n o c o n c e al me n t o f i n c o me an d c o n s e q u e n tl y p e n al ty u / s 2 7 1 ( 1) ( c ) of th e A c t c an n o t b e i mp o s e d .
1 7 . T h e L d . c o u n se l f o r as s e s s e e al s o r e l ie d u p o n th e d e c is io n o f v ar io u s T r ib u n al s in th i s c o n te x t wh i c h we r e r e f e r r e d b ef o re th e L d . C IT ( A pp e al s ) al s o .
1 8 . T h e Ld . D R , o n th e o th e r h an d , s u p p o r te d th e o r d e r of th e L d . CIT ( A p p e al s ) .
141 9 . W e h av e h e ar d th e r iv al c o n te n t io n s . T he r e l e v an t f in d in g o f th e L d . C IT ( Ap p e al s ) wh i l e u p h o l d in g th e l e v y o f p e n al ty af te r d e al in g wi th th e ab o v e c o n te n tio n s o f th e as s e s s e e b ef or e h i m i s as u n d e r :
"To decide the issue, it is relevant to note here that there was an amendment in section 271(1} by Finance Act 2007 and a new explanation 'Explanation 5A' was inserted w.e.f. 01.06.2007, which is applicable to cases where search u/s 132 was initiated on or after 1st day of June 2007. Further 'Explanation 5' has been made applicable to cases where search was initiated before 1st day of June 2007. In the present case under consideration search action u/s 132 was initiated on 30.06.2009, therefore, this case is covered by the provisions of 'Explanation 5A' which is reproduced as under:
"[Explanation 5A- Where, in the course 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 utilizing (wholly or in part) his income for any previous year; or
(ii) any income based on any entry in any books of account of 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 deemed to have concealed the particulars of his income or furnished inaccurate particulars of such income]"
A plain reading of the above explanation shows that if the income declared by the assessee after search, in response to notice u/s 153A, which was not declared by the assessee earlier for any previous year which has ended before the date of search, then the assessee shall be deemed to have concealed the particulars of his income or furnished inaccurate particulars of such income. The undisputed fact in 15 this case are that the income declared for the year under consideration in the return filed in response to notice u/s 153A (after the search) was more than the income declared in the return filed u/s 139 before the search i.e. the surrendered/extra income was not forming part of income in the return filed before the date f search). The case of the assessee is thus covered u/s 271(1)(c) by the deeming fiction created by 'Explanation 5A' which has been inserted by Finance Act, 2007 w.e.f. 01.06.2007. Further, the case laws quoted by the Ld. Counsel for assessee relates to cases where the search u/s 132 was conducted before 1st June 2007 and in those cases 'Explanation 5' was applicable and hence these are not applicable to the present case. This view find support from the judgment of the Hon'ble ITAT Chandigarh Bench in ITA No. 516/CHP/2012, Sh. Rajnish Vohra Vs. DCIT, CC-I, Chandigarh dated 31.10.2012. The relevant para of the judgment dated 31.10.2012 are reproduced below:
"29. In the present case, the normal return of income for the assessment year 2007-08 was f iled by the assessee, on 31.3,2007 i.e. the date of search itself. However, the assessee filed his return of income in response to notice dated 27.1.2009 issued u/s 153A of the Act, on 23.7.2009, declaring income of Rs.3,27,01,440/-, including th e a d d i t i o n al a mo u n t o f R s . 2 , 0 0 , 6 0 , 0 0 0 / - , d e c l ar e d b y th e as s e s s e e , i n th e statement recorded u/s 132(4) of the Act. The assessee f iled return of income, in response to the said notice u/s 153A of the Act, on 23.7.2009 and on the date of filing the return, the Explanation 5A inserted by the Finance (No.2)Act of 2009, with retrospective effect from 1.6.2007, was on the Statute. In the present case, return of income was filed in response to notice u/s 153A of the Act, which is covered by Explanation 5A to Section 271(1) (c) of the Act, inserted by Finance (No.2) Act of 2009. The facts of present case, are not similar to the facts, as obtaining, in the case law, relied upon by the assessee, as discussed above.
30. Further, the provisions of Section 153A are specifically are brought on the Statute book, for assessment, in case of search u/s 132(1) of requisition of books of account u/s 132A of the Act. The opening sentence of Section 153A of the Act, overrides the provisions of Section 139, 147, 148, 149, 151 and 153 of the Act. The assessee has declared undisclosed income, in the return filed- in response to notice u/s 153A of the Act and the CIT(Appeals), having regard to the facts of the case, invoked the currently applicable Explanation 5A Section 271(1) (c) of the Act and upheld the penalty, levied by the AO.
In such a fact-situation, the CIT(Appeals) has acted in accordance with the currently operative and relevant penal provisions, with reference to the return of income, filed in response to Section 153A of the Act.16
31. In view of the above legal and factual discussions, and having regard to the express statutory provisions of Section 271(1) (c) of the Act read with Explanation 5A there under, as inserted by the Finance. (No. 2) Act, 2009, with retrospective effect from 01.06.2007, we do not find any infirmity, in the findings of ld CIT(Appeals). Therefore, the findings of the CIT(Appeals) are upheld and, consequently, the grounds of appeal of the assesses are dismissed.
32. In the result appeal of the assessee is dismissed. "
In the present case the provisions of Explanation-5A to Section 271(l)(c) are attracted. During the appellate proceedings, the main argument of the AR was that no incriminating document was found and the income returned in response to notice u/s!53A has been accepted. However, perusal of the assessment order shows that the additional income has been declared by the assessee after the search. The extra income offered/assessed u/s 153A represent concealed income which was not declared in the return filed before the search and had there been no search this extra income would never have been brought to tax. Therefore, in view of the facts and circumstances of the case and in the light of the above judgment of the Hon'ble ITAT, Chandigarh Bench passed in ITANo.516/CHD/2012 dated 31.10.2012, the penalty imposed by the AO in this is found as per law in view of Explanation-5A to section 271(l)(c) and therefore upheld."
20. As is e v id e n t from th e ab o v e , th e L d . C IT ( A pp e al s ) h as h e l d th a t s i n c e s e ar c h i n th e p r e s e n t c as e wa s in i t i a te d o n o r af te r 1 s t d ay o f J u n e , 2 0 0 7, th e p r e s e n t c as e i s c o v e r e d b y th e p r o v is i o n s o f E x pl an at i o n - 5 A to s e c tio n 2 7 1 ( 1 ) ( c ) of th e A c t. A t th is ju n c tu r e i t i s r e l e v an t to r e p r o d u c e th e p r o v is i o n s o f E x p l an a t io n 5 A to s e c tio n 2 7 1 ( 1 ) © s in c e th e c h al l e n g e of th e as s e s s e e is to th e ap p l ic ab il i ty o f th e s aid E x p l an at i o n in th e f ac ts o f th e p r e s e n t c as e :
"[Explanation 5A- Where, in the course 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 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,--17
(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;
(b) the 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 deemed to have concealed the particulars of his income or furnished inaccurate particulars of such income.]"
21 . T h er e is n o d i s p u te v is - à- v is th e f in d in g o f th e C IT ( A ) th at s in c e s e ar c h in th e p r e s e n t c as e wa s i n i ti a te d af te r 1 s t d ay o f J u n e 2 0 07 E x p l an a t io n 5 A t o s e c ti o n 2 7 1 ( 1 ) ( c ) was ap p l ic ab l e .
L d . C o u n s el f o r th e as s e s s e e h as mad e n o ar g u me n ts c h al l e n g in g th is f in d in g of th e C IT ( A) .
2 2 . F u r th e r we f ind no inf ir mi ty in th e i n te r p r e ta t i o n o f th e L d . C IT ( A ) of E x p l an a t io n 5 A to s e c ti o n 271(1)(c) s in c e th e l an g u ag e of E x p l an a t io n 5 A is v e r y c l e ar an d u n a mb ig u o u s , th at th e as s e s s e e wil l b e d e e me d to h av e c o n c e al e d p ar t i c u l ar s o f h is in c o me v is a v i s i n c o me d e c l ar e d i n th e r e tu r n f il e d in r e s p o n s e to n o tic e u / s 1 5 3 A af te r s e ar c h , wh i c h was n o t d e c l ar e d in th e o r ig i n al r e tu r n o f in c o me f il e d . T h er ef o r e, we h o l d , th at th e L d . C IT ( A ) h as r ig h tl y d is mi s s e d th e c o n te n ti o n o f th e as s e s s e e th at wh e r e in c o me r e tu r n e d u / s 1 5 3 A is ac c e p te d n o p e n al ty i s l e v i ab l e . L d . C IT ( A ) h as , we f in d , d is ti n g u is h e d th e c as e l a ws r e l i e d u p o n b y th e as s e s s e e in s u p p o r t o f i ts af o r es ai d c o n te n ti o n , as n o t h av in g b e e n r e n d e re d in th e c o n te x t o f E x p l an a t io n 5 A to s e c ti o n 2 7 1 ( 1 ) ( c ) an d h e n c e n o t ap p l ic ab l e in th e f ac ts o f th e p r e s e n t c as e . L d C o u n s e l f o r th e a s s e s s e e was u n a b l e to c o n tr o v e r t th is . T h e r ef or e we f in d n o r e as o n to i n te r f er e i n th is f in d in g o f th e C IT ( A ) al s o .
2 3 . A s f o r th e c o n te n ti o n o f th e as s e s s e e th at th e E x p l an a t io n - 5 A t o s e c ti o n 2 7 1 ( 1 ) ( c ) of th e A c t is a ttr ac te d o n l y wh e n s o me in c r i mi n ati n g ma te r i al i s f oun d d u r in g th e c o u r s e of s e ar c h in th e f or m o f mo n e y, b u l l io n , j e we l l e r y o r an y i n c o me b as e d o n an e n tr y in th e b o o k s of ac c o u n t an d s in c e n o s u ch i n c r i mi n at i n g ma te r i al was f ou n d d u r in g th e c o u r s e o f s e ar c h in th e p r e s e n t c as e , n o p e n al ty as p e r E x p l an a t io n - 5 A t o s e c ti o n 2 7 1 ( 1 ) ( c ) of th e A c t is l e v i ab l e , we f in d n o me r i t i n th e s a me . T h e f ac ts o n r e c o r d p o in t o th e r wi s e . U n d o u b te d l y i t was th e as s e s s e e wh o h ad s u r r e n d e r e d R s . 2 8 l ac s d u r in g s e ar c h . T h e su r r e n d e r was n e v e r r e tr ac te d b y 18 th e as s e s s e e . N o th in g to th is e f f ec t is r e c o r d e d in th e o r d e r s of th e au th o r i ti e s b e l o w n o r h as b e e n b r o u g h t to o u r n o tic e d u r in g th e c o u r s e of h e ar in g b e f or e us . T hus as p e r th e as s e s s e e s o wn ad mi s s i o n , h e h ad n o t d i s c l o s e d i n c o me to th e tu n e o f R s . 28 l ac s e ar n e d d u r in g th e ye ar . T h en s u b s e q u e n tl y d u r in g as s e s s me n t p r o c e e d in g s th e as s e s s e e c l ai ms / ad mi ts to h av e in v e s te d th i s i n c o me in t wo p r o p e r ti e s . W h at th i s tan ta mo u n ts to i s th a t th e s u r r e nd e r mad e b y th e as s e s s e e was o n ac c o u n t o f u n di s c l o s e d in c o me f o r th e ye ar , i n v e s te d i n as s e ts . A n d s i n c e th e as s e s s e e h ad s u o mo to mad e th e s u r r en d e r i t t an t mo u n te d to th e as s e s s e e h i ms e l f c o mi n g c l e an b e f ore th e R e v e n u e ab o u t th e f ac t of e ar n in g s u c h in c o me an d i n v e s ti n g i t i n a s s e ts . T h u s at t h e p o in t o f ti me wh e n th e s u r r e n d e r was mad e b y th e as s e s s e e d u r in g s e ar c h t h e R e v e n u e f o r al l p u r p o s e s h ad f oun d th e as s e s s e e to b e th e o wn e r o f as s e ts ac q u ir e d o u t o f e ar l ie r u n d is c l o s e d in c o me d u r in g s e ar c h . Af te r th e s u o mo to d i s c l o s u r e b y th e as s e s s e e n o r e q ui r e me n t r e ma i n e d f o r th e R e v e n u e to mak e an y f ur th e r d is c o v e r y at al l . T he r e q u ir e me n t o f E x p l an a t io n 5 A o f th e as s e s s e e b e in g f o u n d du r in g s e ar c h to b e th e o wn e r o f as s e ts ac q u i r e d o u t o f e ar l i e r u n d is c l o s e d in c o me i s th e r e f o r e me t. T h e c o n te n ti o n o f th e as s e s s e e th at n o in c r i mi n a ti n g ma te r i al was f o un d d u r in g s e ar c h , we h o l d , h as b e e n r ig h tl y d is mi s s e d b y th e C IT ( A ) .
2 4 . In v ie w o f th e ab o v e we u p h o l d th e o r d e r of th e C IT ( A ) A c t, c o nf ir min g th e l e v y o f p e n al ty o f R s . 7 , 6 6 , 32 0 / - u/s 2 7 1 ( 1 ) ( c ) of th e A c t. "
1 1 . I n t h e p r e se n t c a se , v i s a v i s t h e ad d i t i on a l g r ou nd r a i s e d b y t h e a ss e s s e e t h at t h e o r d e r p a s se d u /s 2 7 1 ( 1 ) © w a s i n v a l i d an d b a d i n l a w a s a l s o t h e p e n a l t y pr o c e e d i n gs i n i t i a t ed v i de n ot i c e u /s 2 74 r . w. s 2 7 1 ( 1 ) © o f th e A c t , s i n c e n o s u b m i s s i o n s w e r e m a de i n t h i s r e g a r d , o r al o r w r i t t e n, b y t h e a s s e s s ee n o r a n y c o p y o f t h e n o t i c e i s s ue d u /s 2 7 4 f i l e d b e f o r e u s p oi n t i n g o u t a n y i n fi rm i t y i n t h e s ame , t h e s a i d a d d i t i o n al g r o und s a r e d i s m i s s ed.19
12. As for the g r ou n d raised ch al l e n g i n g the l ev y of p e n a l t y o n m e ri ts , s i n c e a d m i t t ed l y t h e f a c t s i n th e p r e s en t c a s e a r e i d e n ti c al t o t h at i n t h e ca s e o f Mu n i s h J ai n ( s u p ra ) t h e d e c i s i o n r e nd e r e d b y t h e I TAT i n t h e s a i d c a se s q u a r el y a p p l i e s t o th e pr e s e n t c a s e f o l l o w i n g w h i c h we u p h o l d t he l e v y o f p e n al t y u / s 2 7 1 ( 1 ) © o f th e A c t o f Rs . 11, 6 8 , 0 2 0 / -.
Th e g r o u n d o f a p p e a l r a i s ed b y t h e a s s e s s ee i n t h i s r e g a r d i s a l s o t h e r e f or e d i s m i s s e d.
13. I n t h e r es u l t , t h e a p p e a l of t h e a ss e s s e e i s d i s m i s se d .
O r d e r p r on o u n c ed i n t h e O p e n Cou r t .
Sd/- Sd/-
(SANJAY GARG) (ANNAPURNA GUPTA)
JUDICIAL MEMBER ACCOUNTANT MEMBER
Dated : 4 t h July, 2018
*Rati*
Copy to:
1. The Appellant
2. The Respondent
3. The CIT(A)
4. The CIT
5. The DR
Assistant Registrar,
ITAT, Chandigarh