Ajay Kumar Mittal, J. - (1.) This order shall dispose of a bunch of three appeals bearing ITA Nos. 386 of 2004, 47 and 104 of 2005 as according to learned counsel for the parties, the identical questions of law and facts are involved therein. For brevity, the facts are being extracted from ITA No. 47 of 2005.
(2.) This appeal has been preferred by the assessee under Sec. 260A of the Income Tax Act, 1961 (in short "the Act") against the order dated 31.8.2004 (Annexure A -1) passed by the Income Tax Appellate Tribunal, Chandigarh Bench "A", Chandigarh (hereinafter referred to as "the Tribunal") in ITA No. 494/CHD/2001 for the assessment year 1994 -95. All the appeals were admitted by this Court vide order dated 9.5.2006 for consideration of the following substantial questions of law: - (i) Whether, the decision of ITAT and authorities below is perverse in view of the facts and circumstances of the case being that the seized assets were far more in value as compared to the tax liability due on returned income and the appellant had offered adjustment of those assets against his taxes due vide a note appended to return of income, thus the appellant cannot be penalized on the ground of non payment of taxes? (ii) Whether, the decision of ITAT and authorities below is perverse in holding that the return of income has not been furnished in time while in fact it has been furnished on 23.5.1994 for the A.Y. 1994 -95? (iii) Whether, on the facts and circumstances of the case the ITAT was justified in law that the return of income should have been filed by the appellant within time limit specified u/s. 139(1) in order to get the benefit of explanation 5 of Sec. 271(1)(c) of the Income Tax Act, 1961?
(3.) A few facts necessary for adjudication of the instant appeal as narrated therein may be noticed. A search and seizure operation was carried out on 30.8.1993 by the Income Tax Department at the residential as well as business premises of the family of the assessee and cash, jewellery, FDR/IVPs and promissory notes were seized. During the course of search, a disclosure of Rs. 3 lacs was made under Sec. 132(4) of the Act. The said amount was surrendered subject to no penalty under Sec. 271(1)(c) of the Act. A further disclosure of Rs. 6 lacs was made in the hands of Shri Dipti Lal, Shri Raj Kumar, Dipti Lal and Sons besides Rs. 3 lacs in the case of Shri Surinder Pal (the appellant herein) for the assessment year 1994 -95. The income tax return for the assessment year 1994 -95 was filed by the assessee on 23.5.1994 declaring the income at Rs. 4,70,000/ - inclusive of surrender under Sec. 132(4) of the Act. However, regarding the payment of taxes due thereon, a note was appended to the computation (Annexure P -3) to the effect that "to be adjusted against seized liquid assets and also out of liquidation of other assets with my assistance." The taxes on the returned income as per the assessee's own computation were: - The seizure of the assets was worth Rs. 26,01,584/ - as against the taxes due amounting to Rs. 9,69,841/ - on the basis of returns of income filed by all the family members. The assessment was finalized vide order dated 27.12.1996 at a total income of Rs. 11,13,739/ - by presuming the business of jewellery as a joint business of the father and two brothers. The said assessment order was set aside by the Commissioner of Income Tax (Appeals) [for brevity "the CIT(A)"] to be made de novo. Thereafter, the Assessing Officer vide order dated 31.1.2000 (Annexure A -2) framed the assessment accepting the returned/surrendered income at Rs. 4,70,000/ -. The Deputy Commissioner of Income Tax, Investigation Circle 2(1), vide order dated 27.7.2000 (Annexure A -4) levied penalty of Rs. 1,87,040/ - under Sec. 271(1)(c) of the Act for the assessment year 1994 -95 on the amount disclosed under Sec. 132(4) read with Explanation 5 to Sec. 271(1)(c) of the Act. Feeling aggrieved, the assessee filed an appeal before the CIT(A) who vide order dated 27.3.2001 (Annexure A -5) dismissed the appeal. Against the order, Annexure A -5, the assessee filed an appeal before the Tribunal. The Tribunal vide order dated 31.8.2004 (Annexure A -1) upheld the order of the CIT(A) and dismissed the appeal. Hence, the present appeals.;