DCIT, CC-2(2), KOLKATA, AAYAKAR BHAWAN POORVA V. NARENDRA GOPAL SINGHAL, BURDWAN

ITA 1706/KOL/2024

AI Insights

The case involves an appeal by the revenue against the order of the CIT(A) which had deleted a penalty imposed on Narendra Gopal Singhal for the assessment year 2019-20. The penalty was initially levied by the Assessing Officer following a search operation related to other individuals, where significant undisclosed cash was found. Although Singhal admitted to the ownership of the undisclosed cash, the CIT(A) ruled that section 271AAB could not be applied as no direct search had been conducted on Singhal himself. The tribunal agreed with the CIT(A)'s decision, referencing a similar case (Jorbagh Tea Co. vs. ACIT) and emphasizing that the specific conditions for applying section 271AAB were not met in this case.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 772202 (ITAT-KOLKATA)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-08-2025
• Appeal Filed By: Department
• Order Result: Dismissed
• Assessment Year: 2019-2020
• Other Referred Cases: Jorbagh Tea Co. vs. ACIT in ITA No.778/Kol/2022
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: MANGTHILEN HAOKIP
• Keywords: Search and seizure
• Section: 131

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL “C” BENCH, KOLKATA BEFORE SHRI GEORGE MATHAN, JUDICIAL MEMBER AND SHRI SANJAY AWASTHI, ACCOUNTANT MEMBER ITA No.1706/Kol/2024 Assessment Year: 2019-20 DCIT, CC-2(2), Kolkata Vs Narendra Gopal Singhal, Burdwan HANUMAN CHARAI, G.T. ROAD, BARAKAR, BURDWAN, W.B – 713324. (PAN: AJBPS9321E) (Appellant) (Respondent) Present for: Appellant by : None Respondent by : Shri Mangthilen Haokip, Sr. DR Date of Hearing : 27.08.2025 Date of Pronouncement : 28.08.2025 ORDER Per Bench : This is an appeal filed by the revenue against the order of the Commissioner of Income Tax (Appeals)-27, Kolakta [hereinafter referred to as the ‘CIT(A)’] in appeal no.CIT(A), Kolkata-21/10856/2018-19 dated 27.02.2024 for assessment year 2019-20. 2. None represented on behalf of the assessee and Shri Mangthilen Haokip, Sr. DR represented on behalf of the revenue. 3. It is noticed that notices through RPAD had also been issued to the assessee at multiple occasions and the assessee has chosen not to appear. Consequently, the appeal of the revenue is disposed off ex parte the assessee. Printed from counselvise.com ITA No.1706/Kol/2024 Narendra Gopal Singhal, Burdwan 2 4. It was submitted by the ld. Sr. DR that there was search operation in the case of Shri Kishan Kumar Kalyani and Shri Kalu Magha Ram on 04.04.2019 where an amount of Rs.2,51,50,000/- was seized from Shri Kishan Kumar Kalyani. Shri Kishan Kumar Kalyani in a statement had disclosed that the assessee had given him Rs.1,99,00,000/-. The assessee’s statement was also recorded u/s 131 on 03.06.2019 and the assessee had admitted the said amount of Rs.1,99,00,000/- as belonging to the assessee. Another search operation had been conducted on 27.05.2019 in the case of one Shri Bivas Kedia in so far as he was detained by Railway Police Authority on 27.05.2019 at Asansol as he was carrying cash amounting to Rs.1,00,00,000/- without any documentary evidence. In the statement recorded from Shri Bivash Kedia, he has mentioned that the money belonged to M/s Pratik Steel Casting Pvt. Ltd. The said Rs.1,00,00,000/- was also held to be belonged to the assessee and the assessee had also owned up the said amount. The assessee had filed his return of income for assessment year 2019-20 declaring an income of Rs.2.90 crores and for the assessment year 2020-21 an amount of Rs.15 lakh. It was submitted that the Assessing Officer has consequently initiated penalty proceedings u/s 271AAB and levied penalty of Rs.1,74,00,000/-. It was submitted that the ld. CIT(A) had deleted the penalty by holding that the provisions of section 271AAB of the Act could not be applied in the case of the assessee in so far as no search had been conducted upon the assessee. The ld. CIT(A) had relied upon the decision of the Coordinate Bench of this Tribunal in the case of Jorbagh Tea Co. vs. ACIT in ITA No.778/Kol/2022 dated 18.05.2023. It was submitted that as the cash which had been found and which has been accepted by the assessee would not have been disclosed in the returns filed, the penalty as levied is liable to be upheld. It was submitted that the order of the ld. CIT(A) is liable to be reversed. Printed from counselvise.com ITA No.1706/Kol/2024 Narendra Gopal Singhal, Burdwan 3 5. We have considered the submission and also perused the orders of the authorities below. The facts in the present case clearly show that search and seizure operation has not been conducted on the assessee. The statement u/s 131 of the Act has been recorded from the assessee. The assessee has declared total income of Rs.3.05 crores and out of the said Rs.3.05 crores, Rs.2.90 crores has been disclosed in the assessment year 2019-20, which is the impugned assessment year. The assessee has explained that the income was earned through speculation business and that the amount has been accounted in the assessee’s books of account. The penalty order also specifically mentioned that the explanation of the assessee along with related documents were verified as necessary and kept on record. No addition has been made by the Assessing Officer in the assessment order of the assessee. The Assessing Officer in para 5.2 of his order mentions that the assessee has admitted undisclosed income during the search. However, there is no recording of when this search has taken place on the assessee and there is no reference to any search having been conducted on the assessee. The Assessing Officer further holds that the assessee has substantiated the manner in which such undisclosed income was earned but he has not paid due tax on such undisclosed income for the specified period before the specified date. In these circumstances, the Assessing Officer has levied the penalty. A perusal of the order of the ld. CIT(A) clearly shows that even the ld. CIT(A) accepts the fact that no search has happened in the case of the assessee. The revenue has not been able to be dislodge this finding of fact that there was no such search conducted on the assessee. A perusal of the provision of section 271AAB shows that the word used in the said section “in a case where search has been initiated u/s 132”. The said term is used in 271AAB(1) and 271AAB(1A) also. Admittedly, the heading of the said section also mentions “penalty where search has been initiated”. Now, admittedly in the case of the assessee, there is no search. The search is in the case of Shri Kishan Kumar Kalyani and Shri Printed from counselvise.com ITA No.1706/Kol/2024 Narendra Gopal Singhal, Burdwan 4 Bivas Kedia. As no search has been done in the case of the assessee, we are of the view that the decision of the Coordinate Bench of this Tribunal in the case of Jorbagh Tea Co. vs. ACIT referred supra is squarely applicable to the case of the present appeal. This being so, as the revenue has not been able to dislodge any of the findings of fact as arrived by the ld. CIT(A) for the purpose of deleting the penalty levied u/s 271AAB by the Assessing Officer, we find no reason to interfere with the order of the ld. CIT(A). In the circumstances, the order of the ld. CIT(A) stands upheld. 6. In the result, the appeal of the revenue is dismissed. Kolkata, the 28th August, 2025. Sd/- Sd/- [Sanjay Awasthi] [George Mathan] लेखा सदèय/Accountant Member ÛयाǓयक सदèय/Judicial Member Dated: 28.08.2025. RS Copy of the order forwarded to: 1. Appellant - 2. Respondent – 3. CIT(A)- 4. CIT- , 5. CIT(DR), //True copy// By order Assistant Registrar, Kolkata Benches Printed from counselvise.com "