JUDGMENT - V.C. DAGA, J.:---These three appeals have been filed against the common order dated 22-2-2000 passed by the Income Tax Appellate Tribunal, C-Bench, Mumbai ("Tribunal" for short). The Tribunal, while confirming the said order, also upheld levy of penalty under section 271(1)(c) of the Income Tax Act, 1961 ("the Act" for short).

FACTUAL MATRIX

2. The factual matrix lies in narrow compass and it is this;

The appellants are the partnership firms engaged in the business of manufacturing garments and operate as semi wholesalers. The appellant is a part of group concern belonging to one Shah family. Returns for the assessment years 1986-87 and 1988-89 were filed by the assessee. In pursuance thereof assessments were finalised.

3. There was a search and seizure operation under section 132 of the Act, carried out in the shop premises of all the appellants after the returns were filed by them. One of such seizure operations was carried out at the residence of partners of the group concern viz. Shri Madhukar R. Shah, Shri Ramesh R. Shah and Shri Kantilal R. Shah. Simultaneously, there was a survey action under section 133-A of the Act at the factory premises of these group concerns. In the course of search and seizure operations, certain documents, papers and records including certain diaries were seized.

Subsequently, the seized material was scrutinised and as a result of the scrutiny, the following unaccounted income has been worked out :-

(i) Pack of loans worked

out on the basis of

seized material. .. Rs. 40,89,484

(ii) Unexplained Jewellery.. Rs. 2,91,524

(iii) Unexplained cash. Rs. 39,127

(iv) On money paid in respect

of the following properties:-

(a) Office Nos. 14, 15, 16

Malad Shopping Centre

Malad, Bombay Rs. 2,51,000

(b) Office No. 607,

Paramsramuria Chambers,

Anand Road, Malad, Bombay. Rs. 1,15,000

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Rs. 3,66,000

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Estimated at 80% Rs. 2,36,000

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Rs. 46,56,135

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The assessee group admitted the above unaccounted income and offered to disclose the additional income in the hands of various firms in various years, broadly on the basis of entries recorded in diaries, when their statements were recorded under section 132(4) of the Act. The total disclosure made at the time of search was to the tune of Rs. 47,62,860/-. The papers and documents found during search were attached. The same were scrutinised by the Income Tax Department. Based on such scrutiny, the department arrived at Rs. 46,56,135/- as undisclosed income of the said firm.

4. On the basis of the disclosures, all the group concerns including the appellants herein chose to file revised returns on 19-2-1991. These returns and additional income disclosed therein were accepted by the assessing officer while passing assessment order under section 143(3) of the Act during the assessment proceedings of the respective concerns for the respective years. In the assessment orders, the assessing officer ordered initiation of penalty proceedings under section 271(1)(c) of the Act.

5. On the day of the assessment orders, the notices under section 274 read with section 271 proposing levy of penalty under section 271(1)(c) of the Act were issued as the assessing officer was of the opinion that penalty under section 271(1)(c) of the Act has to be levied since the returns for the other years including the assessment years in question, were filed beyond the time limit prescribed for filing return under section 139(1) of the Act, and that the appellants were not entitled to claim benefit of Explanation 5 to section 271(1)(c) of the Act.

6. Aggrieved by the aforesaid orders, the appellants preferred an appeal before the first Appellate Authority i.e. the Commissioner of Income Tax (Appeals), who confirmed the levy of penalty vide order dated 26-6-1995 for the respective assessment years.

7. The aforesaid orders were unsuccessfully challenged before

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