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TMI Blog2011 (1) TMI 156X X X X Extracts X X X X X X X X Extracts X X X X ..... essing Officer also. So far as the explanation of the difference of Rs. 1,56,665 is concerned, the same is not accepted by the Assessing Officer that the figure of Rs. 7,61,500 is only estimation. On the perusal of the assessment order as well as the appellate order, we find that without examining the father of the assessee the Assessing Officer has straight way made the addition. Before rejecting the explanation of the assessee’s, the Assessing Officer should have at least recorded the statement of his father - Penalty deleted. - 842/MUM./2010 - - - Dated:- 5-1-2011 - R.S. SYAL, ACCOUNTANT MEMBER J. AND R.S. PADVEKAR, JUDICIAL MEMBER J. Vijay Mehta for the Appellant. Sumeet Kumar for the Respondent. ORDER Per R.S. Padvekar, Judicial Member In this appeal the assessee has challenged the impugned order of the Ld. CIT(A)-34 Mumbai, dated 24-11-2009 relevant to the assessment year 2000-01 and this appeal is arising out of the penalty order passed under section 271(1)( c ) of the I.T. Act, 1961 dated 24-3-2008. 2. The facts relevant to the issue before us are as under. The assessee is an individual who is engaged in the business of trading in textile in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f income or has filed the inaccurate particulars of income. It is argued that so far as Rs. 6,20,000 which is an income offered by the assessee in respect of the cash deposits found in the bank a/cs, no addition is made by the Assessing Officer and hence, by virtue of provision of sub-section (IB) to section 271, no penalty is attracted. The Ld. Counsel heavily relied on the decision of the full Bench of the High Court of Delhi in the case of CIT v. Rampur Engineering Co. Ltd. 309 ITR 143 and he pleaded that as the Assessing Officer has not recorded a specific satisfaction, hence no penalty can be levied. Alternatively, he pleaded that by virtue of Explanation 5 to section 271(1)( c ), as the assessee has offered said amount as undisclosed income and also paid taxes, hence, he has entitled for the immunity from the penalty. We have also heard the Ld. D.R. 5. So far as the facts of this case are concerned, same are not in dispute. The assessee offered the cash deposits made in the bank a/c of SBBJ, Malad and Punjab National Bank, Malad as his undisclosed income. The assessee has also paid tax on the same. On the perusal of the assessment order, it is seen that, to the exte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... issue whether it is mandatory on the part of the Assessing Officer to record the satisfaction during the course of the assessment proceedings? . In the case of Rampur Engineering Co. Ltd. ( supra ), the Hon ble High Court held that in period before insertion of sub-section (IB) to section 271 w.e.f. 1-4-1989, if the satisfaction is not recorded with clear finding in the assessment proceedings then initiation of the penalty proceedings under section 271(1)( c ) would be without jurisdiction. 8. In the case of Rampur Engineering Co. Ltd. ( supra ) the Hon ble High Court has not considered explanation 5 to section 271(1)( c ), which reads as under:- Explanation 5. Where in the course of a search initiated under section 132 before the 1st day of June, 2007, the assessee is found to be the owner of 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, ( a ) for any previous year which has ended before the date of the search, but the return of income for such year has not been ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rwise it is presumed that to that extent the assessee deemed to have concealed the particulars of his income or furnished inaccurate particulars of his income. So far as the decision of Rampur Engineering Co. Ltd. ( supra ) is concerned, this is a case where the normal assessment is made. In the case where assessment is made in consequence of the search and if the assessee himself admits and offers an undisclosed income to tax then that is covered by Explanation 5 to section 271(1)( c ) of the Act and in our opinion, no further satisfaction is required to be recorded by the Assessing Officer. We, therefore, hold the assessee has himself admitted the undisclosed income to the extent of Rs. 6,20,000 in respect of the cash deposits in his two bank a/cs and offered the same and also paid the tax on it, then Explanation 5 to section 271(1)( c ) is applicable and to that extent the assessee has deemed to have concealed the particulars of his income or has filed the inaccurate particulars of income. We, therefore, reject the argument of the Ld. Counsel on the issue that no specific recording of the satisfaction . 10. So far as immunity from the penalty is concerned, admittedly, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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