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TMI Blog2015 (2) TMI 112X X X X Extracts X X X X X X X X Extracts X X X X ..... come Tax(Appeals)-IV, Ahmedabad ('CIT(A)' in short) all identically dated 01/04/2011, pertaining to Assessment Years (AYs) 2000-01 to 2005-06. Since the facts and the issues involved in all these appeals are identical, therefore all the appeals were taken up together and are being disposed of by this consolidated order for the sake of convenience. 2. First, we take up the Revenue's appeal in IT(ss)A No.15/RJT/2011 for AY 2000-01 as a lead case. The Revenue has raised the following common grounds (except quantum) of appeal (extracted from IT(ss)A No.15/Rjt/2011):- 1. The learned CIT(A) erred in law and on facts in deleting penalty of ₹ 12,76,429/- (Rs.13,69,715/- for AY 20001-02, ₹ 16,07,025/- for AY 2002-03, ₹ 27,37,111/- for AY 2003-04, ₹ 46,07,024/- for AY 2004-05 ₹ 35,14,624/- for AY 2005-06) levied by the Assessing Officer by holding that penalty cannot be levied in respect of the additions made on estimate basis by applying the gross profit rate. 2. In doing so, the ld.CIT(A) failed to appreciate that where there is a justification for the admission of income, as in the instant case, the burden is on the assessee to prove th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... penalty was leviable on a sum of ₹ 53,04,000/- (Rs.30,06,000 + ₹ 22,98,000). He issued showcause notice to the appellant. The addition of ₹ 22,98,000/- was reduced to ₹ 3,09,400/- at appellate stage. Therefore, fresh opportunity of being heard to the assessee was given vide show cause notice dated 24.08.2009. The appellant's reply to such show-cause notice was not found satisfactory by Assessing Officer and, therefore, he imposed penalty of ₹ 12,76,429/- upon the assessee u/s.271(1)(c) of the Act on the additional income of ₹ 30,06,000/- so disclosed in the 153A return as also on the addition made on account of profit on suppressed sales on estimated basis and reduced to ₹ 3,09,400/- at appellate stage. 2.1. The ld.CIT(A), after considering the submissions and following the decision of the Coordinate Bench (ITAT Rajkot) rendered in the case of DCIT vs. M/s. Balaji Multiflex P. Ltd. in IT(ss)A Nos.64 65/RJT/09 for AYs 2004-05 2005-06) dated 10/08/2010, allowed the appeal of the assessee by deleting the penalty. 3. The ld.CIT-DR submitted that the ld.CIT(A) was not justified in deleting the addition and supported the order of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... idhar reported at (2012) 205 taxman 212 (Kar.). 3.2. The ld.counsel for the assessee pointed out that the ld.CIT(A) has followed the decision of the Coordinate Bench rendered in the case of DCIT vs. M/s. Balaji Multiflex Pvt. Ltd. in IT(ss)A Nos.64 65/RJT/09 (supra), wherein on identical facts, the order of the ld.CIT(A) deleting the penalty was upheld by the Tribunal. He further submitted that the Revenue preferred an appeal before the Jurisdictional High Court against the order of the ITAT and the Hon'ble Jurisdictional High Court in Tax Appeal Nos.83 84 of 2011 (in the case of CIT vs. M/s. Balaji Multiflex Pvt. Ltd.) vide order dated 19/10/2011 has affirmed the view taken by the Tribunal and dismissed the appeal(s). He has also submitted that the AO has followed the decision of the Hon'ble ITAT Ahmedabad Bench rendered in the case of ACIT vs. Shri Kirit Dahyabhai Patel (in ITA Nos.2344, 2345, 2346, 2348 and 2389/Ahd/2007). The said decision of the Hon'ble ITAT has been reversed by the Hon'ble Gujarat High Court in a recent judgement in Tax Appeal Nos.1181, 1182 and 1185 of 2010, dated 03/12/2014 and decided the issue in favour of the assessee. 4. We hav ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Act, immunity from penal proceedings is required to be granted on facts of the respondent's case. Hon'ble High Court of Madras has in the case of CIT Vs. S.D.V. Chandru 266 ITR 175 (Mad) wherein it held that Para (2) in Explanation 5 does not make any distinction between the previous year which has ended before the date of search and the previous year which is to end on or after the date of search and therefore when the assessee filed his returns for earlier years admitting a larger income and also paid tax together with interest after his statement was recorded under s. 132(4), he was entitled to immunity under Explanation 5 to s. 271(1)(c) and penalty was not leviable . Explanation 5 to section 271(1)(c) specifically provides for immunity from penalty in case of admission of concealed income recorded during search. It is in this context of plain language of the law, the concurrent finding of the first appellate authority and the Tribunal was upheld in CIT Vs Chhabra Emporium 264 ITR 249 (Delhi). Penalty was found to be not leviable in Gebilal Kanaiyalal (HUF) Vs ACIT) 270 ITR 523 (Raj). Reliance is also placed on the following decisions: a. Hon'ble ITAT, Rajkot B ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Hissaria Brothers vs. DCIT 31 DTR (Jd) 223. I. Hon'ble ITAT, Allahabad 'A' Bench, Allahabad in the case of Shyam Biri Works (P) Ltd. vs. Asst.CIT 70 TTJ (All) 880 and m. Hon'ble High Court of Karnataka in the case of CIT vs. Mukta Sridhar (2012) 205 taxman 212 (Kar) [copy attached at Page 10 to 11] 8.0 Without prejudice to the above it is to submit that the immunity granted under explanation 5 to section 271(1)(c) of the Act is applicable to all the year covered under provisions of section 153A of the Act in the cases where search was conduced prior to 01.04.2007. The legislature has with specific purposes inserted provisions of section 271AAA w.e.f. 01.04.2007 and explanation 5A to section 271(1)(c) of the Act for levy of penalty w.e.f. 01.04.2007 and 01.06.2007 respectively. Therefore, also immunity is available from the penalty action. 9.0 The respondent disclosed additional income only on the basis of understanding that no penal action shall be initiated. This fact was specifically mentioned in the letter of disclosure also. Under the circumstances levy of penalty is totally unjustified and uncalled for. Hon'ble ITAT, AHMEDABAD 'C' BENCH ..... 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