SMT. LATA AGARWAL, BHILWARA V. DEPUTY COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE, KOTA

ITA 1051/JPR/2019

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 5875 (ITAT-JAIPUR)
• Duration Of Justice: 5 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-02-2020
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2015-2016
• Appeal Filed On: 26-08-2019
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: RUNI PAUL
• Keywords: Unexplained investment; Search and seizure; Initiation of penalty proceedings
• Section: 132

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCH B , JAIPUR JH FOT; IKY JKO] U;KF;D LNL; ,OA JH FOE FLAG ;KNO] YS[KK LNL; DS LE{K BEFORE : SHRI VIJAY PAL RAO, JM & SHRI VIKRAM SINGH YADAV, AM VK;DJ VIHY LA-@ ITA NO. 1051/JP/2019 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2015-16 SMT. LATA AGARWAL SEVA SADAN ROAD BHILWARA CUKE VS. THE DCIT CENTRAL CIRCLE KOTA LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO .: AAOPA 3155 G VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY : WRITTEN SUBMISSION JKTLO DH VKSJ LS@ REVENUE BY : SMT. RUNI PAUL, JCIT-DR LQUOKBZ DH RKJH[K@ DATE OF HEARING : 04/02/2020 ?KKS'K .KK DH RKJH[K@ DATE OF PRONOUNCEMENT : 05 /02/2020 VKNS'K@ ORDER PER VIJAY PAL RAO, JM THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST T HE ORDER OF LD. CIT(A) -2, UDAIPUR DATED 28-06-2019 ARISING FROM THE PENALTY ORDER PASSED U/S 271AAB OF THE ACT FOR THE ASSESSMENT YEA R 2015-16. 2.1 NONE APPEARED ON BEHALF OF THE ASSESSEE DESPITE THE NOTICE SENT THROUGH RPAD. HOWEVER, THE ASSESSEE FILED THE WRITT EN SUBMISSION INSTEAD OF ARGUING THE MATTER ORALLY. ACCORDINGLY, WE PROPOSE TO DECIDE ITA NO.1051/JP/2019 SMT. LATA AGARWAL VS DCIT, CENTRAL CIRCLE, KOTA 2 THIS APPEAL EX-PARTE BY CONSIDERING THE WRITTEN SUB MISSION FILED BY THE ASSESSEE AND ARGUMENTS OF THE LD. DR 3.1 THE ASSESSEE HAS RAISED THE FOLLOWING GROUN DS. 1. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE , THE LD. CIT(A) ERRED IN UPHOLDING THE VALIDITY OF ORDER PAS SED BY THE AO. 2. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE , THE LD. CIT(A) ERRED IN SUSTAINING THE PENALTY OF RS. 29,12 9/- U/S 271AAB OF THE ACT. 3. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE , THE LD. CIT(A) ERRED IN RECORDING VARIOUS OBSERVATIONS IN T HE APPELLATE ORDER WHICH ARE CONTRARY TO THE PROVISIONS OF LAW AND ALSO AGAI NST THE LAW DECIDED BY THE HON'BLE COURTS.. 4. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE , THE LD. CIT(A) ERRED IN NOT CONSIDERING THE EXPLANATION AND JUDICIAL DECISIONS REFERRED BY THE APPELLANT. 4.1 THE GROUND NO. 1 OF THE ASSESSEE IS REGARDING T HE VALIDITY OF INITIATION OF PENALTY PROCEEDINGS U/S 271AAB OF THE ACT FOR WANT OF SPECIFYING THE CHARGE IN THE SHOW CAUSE NOTICE. 4.2 THE ASSESSEE HAS CONTENDED IN THE WRITTEN SUBMI SSION THAT THE ORDER PASSED U/S 271AAB OF THE ACT IS BAD IN LAW AS THERE IS NO SPECIFIC CHARGE IN THE NOTICE ISSUED U/S 271AAB OF THE ACT WHETHER PENALTY PROCEEDING HAS BEEN INITIATED U/S 271AAB(1)(A) OR 271AAB(1) (B) OR 271AAB(1)(C). IN THE ABSENCE OF SPECIFIC CHARG E IN THE SHOW CAUSE NOTICE ISSUED ON 21-11-2017, THE CONSEQU ENTIAL PENALTY ORDER ITA NO.1051/JP/2019 SMT. LATA AGARWAL VS DCIT, CENTRAL CIRCLE, KOTA 3 PASSED BY THE AO IS NOT SUSTAINABLE IN LAW. IN SUPP ORT OF HER CONTENTION, THE ASSESSEE RELIED ON DECISION OF HON'BLE KARNATAK A HIGH COURT IN THE CASE OF CIT VS MANJUNATH COTTON & GINNING FACTORY, 359 ITR 565 (KAR) AS WELL AS DECISION OF THIS TRIBUNAL IN THE CASE OF ANUJ MATHUR VS DCIT (ITA NO. 971/JP/2017). 4.3 ON THE OTHER HAND, THE LD. DR HAS SUBMITTED THA T DURING SEARCH AND SEIZURE ACTION CARRIED OUT ON 02-07-2015 AT VARIOUS PREMISES OF M/S. KOTA DAL MILL GROUP, THE ASSESSEE IN HER STATEMENT RECOR DED U/S 132 (4) OF THE ACT DISCLOSED AND SURRENDERED UNDISCLOSED INCOME ON ACCOUNT OF UNEXPLAINED CASH OF RS. 60,311/- AND UNEXPLAINED IN VESTMENT IN GOLD JEWELLERY OF RS. 2,31,880/- FOUND DURING SEARCH. TH E ASSESSEE ALSO OFFERED THE SAID SURRENDER IN THE RETURN OF INCOME FILED U/ S 139 OF THE ACT. THE AO HAS NOT MADE ANY ADDITION WHILE PASSING THE ASSE SSMENT ORDER ON THIS ACCOUNT. SINCE THE ASSESSEE HAS DISCLOSED THE UNDIS CLOSED INCOME OF RS. 2,92,191/-, THEREFORE, THE PENALTY U/S 271AAB WAS I NITIATED AND FINALLY LEVIED BY THE AO. THE LD. DR HAS SUBMITTED THAT IN SHOW CAUSE NOTICE THE AO MADE SPECIFIC CHARGE U/S 271AAB OF THE ACT FOR LEVYING THE PENALTY AGAINST UNDISCLOSED INCOME. THUS THE LD. DR RELIED ON THE ORDERS OF THE LOWER AUTHORITIES. ITA NO.1051/JP/2019 SMT. LATA AGARWAL VS DCIT, CENTRAL CIRCLE, KOTA 4 4.4 WE HAVE HEARD THE LD. DR, WRITTEN SUBMISSIONS O F THE ASSESSEE AS WELL AS THE RELEVANT MATERIALS AVAILABLE ON RECORD. DURING THE COURSE OF SEARCH AND SEIZURE ACTION CARRIED OUT U/S 132(1) OF THE ACT ON 2-07-2015, THE ASSESSEE IN HER STATEMENT RECORDED U/S 132(4) O F THE ACT DISCLOSED THE UNEXPLAINED CASH OF RS. 60,311/- AND UNEXPLAINED IN VESTMENT IN GOLD JEWELLERY OF RS. 2,31,880/- TOTALING TO RS. 2,92,19 1/-. IT IS PERTINENT TO NOTE THAT INCOME DISCLOSED AND SURRENDERED BY THE A SSESSEE IS BASED ON THE PHYSICAL ASSETS BEING CASH AS WELL AS GOLD JEWE LLERY FOUND DURING THE COURSE OF SEARCH AND SEIZURE ACTION. IN THE SHOW CA USE NOTICE, THE AO HAS CLEARLY MENTIONED THAT AS PER SECTION 271AAB OF THE ACT YOU ARE LIABLE FOR PENALTY ON ASSESSED UNDISCLOSED INCOME. SINCE THE ASSESSEE HAS OFFERED THIS INCOME OF RS. 2,92,191/- IN THE RETURN OF INCOME AND NO ADDITION IS MADE BY THE AO ON THIS ACCOUNT, THEREF ORE, THE AO WAS NOT UNDER ANY OBLIGATION TO EXPLAIN AND MAKE THE ASSESS EE KNOWN ABOUT THE NATURE OF CHARGE OF DEFAULT COMMITTED BY THE ASSESS EE. ONCE THE ASSESSEE HERSELF HAS DISCLOSED THE UNDISCLOSED INCOME BASED ON THE ASSETS BEING UNEXPLAINED CASH AND UNEXPLAINED INVESTMENT IN THE GOLD JEWELLERY FOUND DURING THE COURSE OF SEARCH THEN IT WAS VERY WELL I N THE KNOWLEDGE OF THE ASSESSEE ABOUT UNDISCLOSED INCOME AND DEFAULT COMMI TTED BY THE ITA NO.1051/JP/2019 SMT. LATA AGARWAL VS DCIT, CENTRAL CIRCLE, KOTA 5 ASSESSEE. ACCORDINGLY, WE DO NOT FIND ANY MERIT OR SUBSTANCE IN THE GROUND NO. 1 OF THE ASSESSEE'S APPEAL CHALLENGING T HE VALIDITY OF INITIATION OF PENALTY PROCEEDINGS AND CONSEQUENTIAL ORDER PASSED U/S 271AAB OF THE ACT. THUS GROUND NO. 1 OF THE ASSESSE E IS DISMISSED. 5.1 GROUND NOS. 2 TO 4 OF THE ASSESSEE ARE REGARDIN G MERITS OF LEVY OF PENALTY U/S 271AAB OF THE ACT. 5.2 THE AO WHILE PASSING THE PENALTY ORDER U/S 271A AB OF THE ACT HAS LEVIED THE PENALTY @ 10% AMOUNTING TO RS. 29,21 9/-. THE ASSESSEE HAS SUBMITTED IN THE WRITTEN SUBMISSION THAT DISCLO SURE MADE BY THE ASSESSEE WAS DULY DECLARED IN THE RETURN OF INCOME WHICH WAS ACCEPTED BY THE AO AND AS SUCH THE LEVY OF PENALTY U/S 271AA B IS NOT JUSTIFIED. FURTHER, IT IS CONTENDED THAT THE INCOME DISCLOSED BY HER DOES NOT FALL IN THE DEFINITION OF UNDISCLOSED INCOME PROVIDED IN EX PLANATION TO SECTION 271AAB OF THE ACT. THE ASSESSEE HAS RELIED ON THE D ECISIONS OF THIS TRIBUNAL IN THE CASE OF RAJENDRA KUMAR GUPTA VS DCI T (ITA NO.359/JP/2017) AND IN THE CASE PADAM CHAND PUNGLIY A VS ACIT (ITA NO. 112/JP/2018 DATED 5-04-2019). 5.3 ON THE OTHER HAND, THE LD. DR HAS SUBMITTED THA T DISCLOSURE AND SURRENDER WAS MADE BY THE ASSESSEE IN RESPECT OF UN DISCLOSED CASH AND ITA NO.1051/JP/2019 SMT. LATA AGARWAL VS DCIT, CENTRAL CIRCLE, KOTA 6 JEWELLERY FOUND DURING THE COURSE OF SEARCH AND SEI ZURE ACTION. THEREFORE, THIS DISCLOSURE IS NOT BASED ON ANY ENTRY IN THE BO OKS OF ACCOUNT OR SEIZED MATERIAL BUT IT IS BASED ON THE DETECTION OF THE AS SETS BEING CASH AND JEWELLERY. THEREFORE, THE SAID DISCLOSURE AND SURRE NDER MADE BY THE ASSESSEE WOULD FALL IN THE DEFINITION OF UNDISCLOSE D INCOME PROVIDED IN EXPLANATION TO SECTION 271AAB OF THE ACT. THE LD. D R RELIED ON THE ORDERS OF THE LOWER AUTHORITIES. 5.4 WE HAVE HEARD THE ARGUMENTS THE LD. DR, WRITTEN SUBMISSIONS OF THE ASSESSEE AS WELL AS THE RELEVANT MATERIALS AVAI LABLE ON RECORD. THERE IS NO DISPUTE THAT DURING THE COURSE OF SEARCH AND SEI ZURE ACTION, THE ASSESSEE COULD NOT EXPLAIN THE CASH OF RS. 60,311/- AND JEWELLERY OF RS. 2,31,880/- FOUND DURING SEARCH. THE ASSESSEE IN THE STATEMENT RECORDED U/S 132(4) OF THE ACT HAS DISCLOSED THE SAID AMOUNT AS UNDISCLOSED INCOME AND ALSO DECLARED THE SAME IN THE RETURN OF INCOME FILED U/S 139 OF THE ACT. ONCE THE DISCLOSURE AND SURRENDER MADE BY THE ASSESSEE IS REPRESENTING THE PHYSICAL ASSETS FOUND DURING THE C OURSE OF SEARCH AND SEIZURE ACTION THEN THE SAID AMOUNT OF RS. 2,92,191 /- WOULD FALL IN THE DEFINITION OF UNDISCLOSED INCOME AS PER EXPLANATION TO SECTION 271AAB OF THE ACT. THE DISCLOSURE AND SURRENDER REPRESENTS THE UNDERLYING ASSETS ITA NO.1051/JP/2019 SMT. LATA AGARWAL VS DCIT, CENTRAL CIRCLE, KOTA 7 BEING UNEXPLAINED CASH AS WELL AS JEWELLERY. ACCORD INGLY, THE SAME WILL FALL IN THE DEFINITION OF UNDISCLOSED INCOME PROVID ED IN CLAUSE (C) OF EXPLANATION TO SECTION 271AAB OF THE ACT. THE LD. C IT(A) HAS CONSIDERED THIS ISSUE IN PARAS 5.1 AND 5.2 AS UNDE R:- 5.1 THE PENALTY HAS BEEN LEVIED IN RESPECT OF UNE XPLAINED CASH OF RS. 60,311/- AND JEWELLERY VALUED AT RS. 2, 31,880/- FOUND DURING SEARCH. THEREFORE, THE INCOME OF RS. 2 ,92,191/- FALLS WITHIN THE DEFINITION OF UNDISCLOSED INCOME AS GIVEN IN CLAUSE OF EXPLANATION TO SECTION 271AAB. 5.2 THE ARGUMENT OF THE ASSESSEE THAT PENALTY U/S 2 71AAB IS NOT MANDATORY IS FOUND TO BE SUPPORTED BY THE JU DICIAL AUTHORITIES AND IS THEREFORE, ACCEPTABLE IN PRINCIP LE, BUT THE SAID FINDINGS DOES NOT APPLY IN THE FACTS OF THE IN STANT CASE, BECAUSE, AS DISCUSSED IN THE PRECEDING PARA, IN THE INSTANT CASE, INCOME OF RS. 2,92,191/-, IN RESPECT OF WHICH PENALTY U/S 271AAB HAS BEEN LEVIED, FALLS WITHIN THE DEFINI TION OF UNDISCLOSED INCOME AS GIVEN IN CLAUSE OF EXPL ANATION TO SECTION 271AAB. THEREFORE, PENALTY OF RS. 29,21 9/- LEVIED BY THE AO UNDER CLAUSE (A) OF SECTION 271AAB , AT 10% OF THE UNDISCLOSED INCOME, IS HEREBY CONFIRMED. THE DECISIONS RELIED ON BY THE ASSESSEE ARE NOT APP LICABLE IN THE PRESENT CASE WHEN DISCLOSURE IS BASED ON THE DETECTION OF U NEXPLAINED CASH AND JEWELLERY. ACCORDINGLY, WE DO NOT FIND ANY ERROR OR ILLEGALITY IN THE ORDER OF THE LD. CIT(A) QUA THIS ISSUE. THUS GROUND NOS. 2 TO 4 OF THE ASSESSEE ARE DISMISSED. ITA NO.1051/JP/2019 SMT. LATA AGARWAL VS DCIT, CENTRAL CIRCLE, KOTA 8 6.0 IN THE RESULT, THE APPEAL OF THE ASSESSEE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 05/02/ 2020. SD/- SD/- FOE FLAG ;KNO FOT; IKY JKO (VIKRAM SINGH YADAV) (VIJAY PAL RAO) YS[KK LNL;@ ACCOUNTANT MEMBER U;KF;D LNL;@ JUDICIAL MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 05/02/ 2020 *MISHRA VKNS'K DH IZFRFYFI VXZSFKR@ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ@ THE APPELLANT- SMT. LATA AGARWAL, BHILWARA 2. IZR;FKHZ@ THE RESPONDENT- THE DCIT,CENTRAL CIRCLE, KOTA 3. VK;DJ VK;QDRVIHY ) @ CIT(A), 4. VK;DJ VK;QDR@ CIT, 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ@ DR, ITAT, JAIPUR 6. XKMZ QKBZY@ GUARD FILE (ITA NO1051/JP/2019) VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASSISTANT. REGISTRAR