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TMI Blog2014 (12) TMI 513X X X X Extracts X X X X X X X X Extracts X X X X ..... us, the penalty so levied should be cancelled. 2. The Ld. Appellate Authority erred in law and on facts in confirming levy of penalty of Rs. 57,52,554/- (for Assessment Year 2001-02, Rs. 23,82,950/- for Assessment Year 2003-04 & Rs. 38,16,840 for Assessment Year 2004-05)u/s 271 (1)(c) on the additional income offered by the appellant, which was assessed in the hands of the appellant on protective basis. Thus, the penalty so levied should be cancelled." 2. The facts are that there was an income-tax search on the assessee at the residential premises of the assessee on 22.11.2006 when certain documents were found from his possession and seized. In response to the notice issued u/s 153A, on the basis of the documents found, the assessee filed his return of income for the Assessment Year 2001-02 declaring a total income of Rs. 1,66,31,414/- including additional income from trading and commission on spices of Rs. 1,63,89,047/- which was not disclosed in the original return filed u/s 139 of the Act. The assessment of the said income was finally completed u/s 153A on 31.12.2008 for the said assessment year accepting the total income of Rs. 1,66,31,414/- as declared by the assessee withou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n of income of the return u/s 153A as under:- "All statutory enclosures and original challans/TDS and other certificates in respect of this return of income are on the record of IT Department in the assessment folder of the original return of income filed as per the photocopy of the acknowledgement enclosed, which may be referred to for the purpose of return filed u/s 153A of the Act now, and to give credit for taxes paid and to allow deductions. In case of any further requirement the same may be called for from the assessee." (g) That the argument of the assessee that the introduction of the provisions like Explanation 5A to section 271 (1)(c) and 271AAA w.e.f. 1.6.2007 was to cure the defect in earlier provisions due to which concealment penalty imposed stood on a weak foundation, is not acceptable since the said amendments in the provisions governing search and seizure were made as part of changes being made from time to time to keep pace with the income-tax policy changes and they do not render the old provisions for levy of penalty toothless. 4. The Ld. CIT (A) dismissed the appeals of the assessee, holding, inter alia, that consequent to the decision of the Tribunal in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vs. DCIT' in ITA Nos.4413/Del/2011 to 4418/Del/2011, for Assessment Years 2001-02 to 2006-07, which cases were also covered by the same search as that conducted on the assessee on 22.11.2006, deleted the penalty. The ld. Counsel has contended that as such, following the said Tribunal order/s, the penalty in the present cases may also be ordered to be deleted. 6. The Ld. DR, on the other hand, has placed strong reliance on the impugned orders. 7. We have heard the parties and have perused the material on record. We find that indeed, the issue at hand is covered by the order dated 24.01.2003, passed in the case of the assessee himself for Assessment Years 2005-06 and 2006-07, following the co-ordinate Bench orders in the cases of 'Prem Arora vs. DCIT' (supra) and 'Kiran Grover vs. DCIT' (supra). In that order, we have held as follows:- "5. At the outset, the ld. counsel for the assessee has pointed out that the matter is covered in favour of the assessee by the Tribunal Order dated 09.03.2012 (copy at pages 1-43 of the case laws paper book filed by the assessee, 'CLPB' for short) in 'Prem Arora vs. DCIT' in ITA No.4702/Del/2010 for Assessment Year 2004-05 and by the Tribunal decis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d on or after 1.6.2007 as provided in Explanation 5A, the assessee will be liable for penalty/s 271(1)(c) both in respect of assets as well as any income based on any entry in any books of account or other documents or transactions. But no such provision relating to entries was in existence in Explanation 5 prior to insertion of Explanation 5A in section 271(1) of the Act. Hence the scheme of assessment till insertion of Explanation 5A and section 271AAA by the Finance Act, 2007 gave immunity to the assessees in respect of undisclosed income based on entries recorded in seized material. Explanation 5A substituted by the Finance Act, 2009 w..e.f. 1.6.2007 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 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 transacti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... riod of six assessment years has to be rejected. In view of above discussion we are of the considered opinion that even the amended provisions of Explanation 5 cannot be applied in assessment year 2004-05. Consequently penalty u/s 271(c) cannot be imposed by invoking Explanation 5 of the Act in assessment year 2004-05 in respect of cash found in previous year relevant to assessment year 2007-08. 32. Now coming to the decisions relied by Ld CIT (DR) in the case of Ajit B Zota (supra) and in Kirit Dahyabhai Patel (Ahd)(supra) we find that these decisions are distinguishable on facts and hence not applicable. 33. In view of above discussions it is held that penalty u/s section 271(1)(c) is not imposable on the facts and in the circumstances of case discussed in detail as above. Explanation 5 is not applicable for the reasons mentioned above in our decision. Therefore, ld. CIT(A) was not justified in confirming the penalty u/s 271(1)(c) of the Act. The assessing officer is, therefore, directed to delete the penalty." 9. This Order in 'Prem Arora' (supra) was followed in 'Kiran Grover' (supra). 10. It remains undisputed that the facts in the present appeals are the same as in 'Prem ..... 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