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TMI Blog2015 (3) TMI 1018X X X X Extracts X X X X X X X X Extracts X X X X ..... sections, i.e., s. 271(1)( c) and s. 271AAA, are not only worded differently, with thus different concomitant scopes, are rather mandated to operate exclusively (refer section 271AAA(3)). The foregoing, we believe, would bring forth the basis as well as the validity of our initial observation at para 4.1 of this order, i.e., of the ld. CIT(A) having grossly misapplied himself in the matter. We, therefore, accepting the Revenue’s Ground vacate the findings by the ld. CIT(A) as well as his consequent decision as recorded in the concluding sub-para of his order. As explained by the hon’ble courts as well as the official pronouncements explaining the provision, is of plugging the generation of undisclosed income and the consequent leakage of revenue for future, why could the same be not read so as to allow the assessee the latitude for providing the necessary details subsequently, i.e., where the disclosure u/s.132(4) is made under excruciating or difficult circumstances. The same of course would be under oath, making it a part of and refer to the earlier statement u/s. 132(4), complying thus substantially and effectively, with the substantive provision of law. Further, the further ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 10, determining the total income at ₹ 7,55,90,450/-, i.e., at an increase of ₹ 3,46,632/- over that returned, also initiating penalty proceedings u/s.271AAA vide notice u/s.274 of even date. The same was subsequently levied at ₹ 66,52,232/-, being 10% of the undisclosed income of ₹ 6,65,22,317/-, detailed as under, included in the assessed income of ₹ 755.90 lacs: a) Undisclosed interest income declared by the assessee Rs.99,13,210/- b) Undisclosed income relating to stock Rs.5,62,62,475/- c) Undisclosed income relating to stock discrepancy Rs.3,46,632/- In appeal, the ld. CIT(A) deleted the penalty on the basis of a finding as to substantial compliance (of the provision), not warranting any further denial of benefit of Explanation 5A to section 271(1)(c), which is worded similar to Explanation 5, after noting the decision in the case of CIT vs. Mahendra C. Shah [2008] 299 ITR 305 (Guj). Aggrieved, the Revenue is in appeal, raising the following two grounds, which we may number as 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eferred to in sub-section (1). (4) The provisions of sections 274 and 275 shall, so far as may be, apply in relation to the penalty referred to in this section. Explanation.-For the purposes of this section,- (a) undisclosed income means- (i) any income of the specified previous year represented, either wholly or partly, by any money, bullion, jewellery or other valuable article or thing or any entry in the books of account or other documents or transactions found in the course of a search under section 132, which has- (A) not been recorded on or before the date of search in the books of account or other documents maintained in the normal course relating to such previous year; or (B) otherwise not been disclosed to the Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner before the date of search; or (ii) any income of the specified previous year represented, either wholly or partly, by any entry in respect of an expense recorded in the books of account or other documents maintained in the normal course relating to the specified previous year which is found to be false and would not have been found to be so had the sear ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... us 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) Whether 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. 6.5.4 On perusal of the same it is to be seen that an explanation has been provided in the aforesaid provisions on fulfillment of which penalty is not to be levied. The same being: 1. A statement is made u/s. 132(4) admitting the undisclosed income, 2. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (at para 6.5.5), i.e., Mahendra C. Shah (supra), is only in the context of section 271(1)(c). The two sections, i.e., s. 271(1)( c) and s. 271AAA, are not only worded differently, with thus different concomitant scopes, are rather mandated to operate exclusively (refer section 271AAA(3)). The foregoing, we believe, would bring forth the basis as well as the validity of our initial observation at para 4.1 of this order, i.e., of the ld. CIT(A) having grossly misapplied himself in the matter. We, therefore, accepting the Revenue s Ground # 1, vacate the findings by the ld. CIT(A) as well as his consequent decision as recorded in the concluding sub-para (# 6.5.6) of his order. The same, however, would not by itself imply a positive satisfaction of the conditions of section 271AAA, only on the basis of which the penalty as levied could be sustained. The matter would therefore; the ld. CIT(A) having examined the levy on the basis and anvil of a different provision, require being restored back to him for a consideration afresh, i.e., the issue on merits, and toward which the Revenue has raised its Ground No. 2 before us. We, accordingly, restore the matter back to the file of the ld. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... condition of oath. Further, surprisingly again, we observe no finding by the ld. CIT(A) in respect of substantiation of the manner of deriving the undisclosed income, which stipulation, while missing in section 271(1)(c), stands incorporated in section 271AAA. The A.O. clearly records a finding, both in respect of the assessee having failed to specify the manner in which the undisclosed income is derived as well as of the assessee having failed to substantiate the same, and which in fact the ld. CIT(A) notes vide para 6.5.2 of his order. Clearly, these findings of fact would need to be addressed by the ld. CIT(A), either endorsing or reversing or otherwise modifying the same, i.e., based on his reappraisal of the materials found from the possession of, or otherwise furnished by, the assessee, or even the evidences led by it before him for the first time, of-course by and upon observing the due process of law (refer r. 46A). The onus to satisfy the conditions of the provision though, would only be on the assessee. In fact, all this would precisely be the purview of the first appellate authority in the set aside proceedings. Coming to the decision in the case of Mahendra C. Sha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ich alone could depose qua the manner in which its undisclosed income stood earned/ derived, being rather in its exclusive knowledge? All that the law postulates is a honest disclosure qua the said income. A finding as to the satisfaction or otherwise of the said condition, or for that matter its substantiation, i.e., of the manner in which the undisclosed income was derived, it needs to be appreciated, are pure findings of fact. The hon ble high courts can interfere with such a finding/s only where it is in its view either perverse or without evidence or based on irrelevant material, or which is partly relevant and partly irrelevant (refer, inter alia, CIT v. Daulat Ram Rawatmull [1973] 87 ITR 349 (SC)). Further, even where so, the province of the hon ble court is to restore the matter back to the tribunal, stating its reasons, as clarified by the hon ble court in Janatha Contract Co. v. CIT [1976] 105 ITR 627 (Ker), following the binding decisions by the apex court in CIT v. Greaves Cotton Co. Ltd. [1968] 68 ITR 200 (SC) and CIT v. Indian Mollasses Co. (P.) Ltd. [1970] 78 ITR 474 (SC). The authorities on the law in the matter could in fact be multiplied. Then, again, we wond ..... X X X X Extracts X X X X X X X X Extracts X X X X
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