ORDER

1. This batch of fourteen appeals are having identical issues as well as common facts and these appeals are arising out of the penalty levied by the AO and sustained by the learned CIT(A) under s. 271(l)(c) of the Act.

2. In all these appeals, the grounds taken by the assessees are common, save the amount of the penalties which read as under :

"1. The learned CIT(A) erred in confirming the penalty levied by the AO amounting to Rs. 69,000 under s. 271(l)(c) for asst. yr. 2000-01.

2. The learned CIT(A), Pune further erred in not appreciating the submissions given by the appellant that the there is no concealment of income for the purpose of s. 271(l)(c) of the IT Act, 1961 since there is no difference in the assessed income and returned income filed in response to notice under s. 153A.

3. The learned CIT(A) erred in not appreciating the contention of the appellant that no penalty is leviable in respect of income declared in the return of income filed in response to notice under s. 153A of the Act, 1961.

4. The learned CIT(A) erred in confirming the penalty by holding that the appellant is not eligible for immunity as provided in Expln. 5 to s. 271(l)(c) of the Act."

3. The facts which reveal from the record are as under. All these assessees were subjected to the search and seizure action under s. 132(1) of the Act on 26th Oct., 2005. These assessees are engaged in the business of jewellery and related activities. The AO issued notices to the assessees under s. 153A and in response to the notices issued by the AO, all these assessees filed the returns of income on 29th Nov., 2007. The position of the returns filed by the assessees prior to the date of search, income declared in the original returns, income declared in the returns filed in response to notices under s. 153A, income assessed by the AO and penalty levied by the AO under s. 271(l)(c) can be summarized as under :

In sum and substance, the income declared by the assessee in the returns filed in response to the notices under s. 153A was accepted in all these cases and no further addition was made. From the summary of the income declared by the assessee given above, it is seen that in respect of some of the assessment years, these assessees have not filed the returns under ss. 139(1) and 139(4) but for the first time filed the returns of income under s. 153A of the Act. In some of the cases, in some of the assessment years, these assessees offered additional income while filing the returns of income in response to the notices issued under s. 153A of the Act, but, the fact remains that in respect of all these assessees for all the assessment years under appeal, the income declared by these assessees in the returns filed in response to the notices under s. 153A was accepted. The AO initiated the penalty proceedings against these assessees for all the assessment years before us under s. 271(l)(c) of the Act, but the AO confined the penalty to the additional income offered by these assessees in the returns of income filed in response to the notices under s. 153A. Moreover, in some of the assessment years, the returns of income were filed for the first time only after the search and seizure action in response to notices under s. 153A. The AO, therefore, proceeded to levy the penalty for concealment of the particulars of income or for furnishing the inaccurate particulars of income in respect of the additional income offered by these assessees in the returns filed in response to notices under s. 153A and also in those cases where for the first time in respective assessment years, the returns of income were filed only after issuance of the notices under s. 153A. The details of the penalty levied by the AO are given hereinabove. All these assessees challenged the penalty order before the learned CIT(A) but without any success, as the learned CIT(A) confirmed the penalty orders and dismissed all the appeals. Now, the assessees are in appeal before us.

4. We have heard the rival submissions of the parties and perused the record. The learned counsel, at the first instance, submitted that no addition is made by the AO to the income offered or declared in the returns of income filed in response to the notices issued under s. 153A of the Act. He submitted that entire income offered by these assessees were merely on the basis of some entries in the documents and there is no income detected based on any money, bullion, jewellery or any valuable asset. He submits that at the first instance, the assessee is entitled for the immunity as per the Expln. 5 to the s. 271(l)(c) of the Act as the income admitted during search operation was offered by all these assessees and also paid the tax. Second limb of his argument is that even Expln. 5A, newly added to s. 271(l)(c) is not applicable to these assessees as admittedly, the assessment years involved in all these appeals are prior to the asst. yr. 2007-08. He submits that the assessee's case is squarely covered in the case of Chandan K. Shewani v. Dy. CIT [ITA Nos. 235 and 236/Pn/2010, order-dt 29th Aug., 2012]. He pleaded for deleting the addition.

5. We have also heard the learned Departmental Representative, who supported the orders of the authorities below. On the perusal of the assessment orders in all these appeals, it is admitted fact that there is no addition over and above the income declared by these assessees in the returns of income filed in response to notices under s. 153A of the Act. it is also admitted fact that no declaration is based on any money, jewellery, bullion or any other valuable articles detected or seized in the course of the search operation. At the first instance, the learned counsel pleaded that these assessees are entitled for the immunity in view of Expln. 5 to s. 271(l)(c) of the Act because the income admitted during the course of the search has been declared in the return of income as well as the tax on the admitted income has also been paid. The scope of Expln. 5 has been considered by the Tribunal, Ahmedabad Bench in the case of Asstt. CIT v. Kirit Dahyabhai Patel [2009] 121 ITD 159 with specific reference whether the immunity is available for all the assessment years or only for the assessment year in which the date of filing of the return has expired at the time of search or for the assessment year in respect of which the previous year was yet to end on the date of search. In this case, search was conducted on 26th Oct., 2005, hence, at the most, the benefit of the immunity can be given for the asst. yr. 2006-07.

6. We find that the assessee's case is otherwise squarely covered vide the decision of Tribunal, Pune in the case of Chandan K. Shewani (supra). In the said case, The additional income was declared during the course of search to cover up the expenditure as well as deposit in bank accounts. The Tribunal considered the Explns. 3, 5 and 5A to s. 271(l)(c) of the Act and held as under :

"8. While deciding assessee's appeal for asst. yrs. 1999-2000 and 2001-02, the penalty levied on the income offered towards the personal expenditure of the assessee and his divorcee sister has been deleted. Even though the Parliament has inserted Expln. 5A to s. 271(l)(c), said Explanation is applicable in respect of the search initiated under s. 132 on or after 1st June, 2007. Explanation 5A is introduced to patch out the lacunae in the existing provisions more particularly to overcome the judicial interpretation of Expln. 5. If the search is initiated under s. 132 on or after 1st June, 2007 then there is a legal presumption that any income based on any entry in the books of account or other documents or transactions, which is claimed as income by the assessee, the same would be treated as deemed concealment of the particulars of income or furnishing inaccurate particulars of income. So far as the present assessee is concerned, the date of search is 15th June, 2004 and hence, Expln. 5A to s. 271(l)(c) is not applicable. It is well-settled rule of interpretation of the penalty provisions that the same should be strictly interpreted and there is no scope for any presumption for levy of the penalty unless statute specifically provides same.

9. So far as the Expln. 3 to s. 271(l)(c) is concerned, which reads as under :

'Explanation 3.—Where any person fails, without reasonable cause, to furnish within the period specified in sub-s. (1) of s. 153 a return of his income which he is required to furnish under s. 139 in respect of any assessment year commencing on or after the 1st day of April, 1989, and until the expiry of the period aforesaid, no notice has been issued to him under cl. (i) of sub-s. (1) of s. 142 or s. 148 and the AO or the CIT(A) is satisfied that in respect of such assessment year such person has taxable income, then, such person shall, for the purposes of cl. (c) of this sub-section, be deemed to have concealed the particulars of his income in respect of such assessment year, notwithstanding that such person furnishes a return of his income at any time after the expiry of the period aforesaid in pursuance of a notice under s. 148.'

The said Explanation presumes that there is a concealment of particulars of income or filing of the inaccurate particulars of income in the situation where the assessee did not file return of income under s. 139 or within the time limit prescribed under s. 153(1) of the Act but files the return of income in response to notice under s. 148. The said Explanation is also silent in the situation if the assessee has not filed the return of income for any particular assessment year but filed the return of income for the first time in response to notice under s. 153A, then what would be the legal presumption ? In our opinion, Expln. 3 has no application, when the return is filed in response to notice under s. 153A. We, therefore, hold that as per the facts of this case and law applicable, there is no justification to levy the penalty for the asst. yr. 2002-03 in the income declared by the assessee in the return of income in response to notice under s. 153A even for the said income is based on some entries found in the diaries or other documents or even bank account during the course of search. We, accordingly delete the penalty sustained by the learned CIT(A)."

7. In all the appeals before us, Expln. 3 cannot be applied, as held in the case of Chandan K. Shewani (supra). So far as Expln. 5A is concerned, it is brought on the statute book w.e.f. 1st June, 2007 i.e. from the asst. yr. 2007-08. So far as the assessments in all these cases are concerned, no addition is made by the AO over and above the income declared in the returns of income filed in response to notice under s. 153A as the expression "tax sought to be evaded" appearing in cl. (c) to s. 271(1) is to be understood as a difference between the income declared by the assessee in the return of income and the income finally assessed. After introduction of s. 153A w.e.f. 1st June, 2003, there is no specific penalty provision to deal with the assessments framed in consequence of search and seizure action under s. 132 of the Act. In the present case, as the returned income and income assessed are the same, otherwise also, no penalty can be levied. We, therefore, hold that in all the appeals before us, the AO was not justified in levying the penalty under s. 271(l)(c) of the Act. We accordingly, delete the penalties levied by the AO in all the appeals for the abovementioned reasons.

8. In the result, all the appeals are allowed.

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