The Dy. CIT, Central Circle-1, Baroda V. Shri Himanshu B. Joshi, Baroda

ITA 1089/AHD/2016

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 6056 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 9 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-02-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: Not Allotted
• Assessment Year: 2012-2013
• Appeal Filed On: 29-04-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: V K SINGH
• Assessee Lawyers: NIRAV SHAHAR
• Keywords: Income from undisclosed sources; Document seized; Documents seized
• Section: 143(3); 153A; 131

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD D BENCH AHMEDABAD BEFORE, SHRI S. S. GODARA, JUDICIAL MEMBER AND SHRI AMARJIT SINGH, ACCOUNTANT MEMBER ITA NO. 1089/AHD/2016 (AS SESSMENT YEAR: 2012-13) DEPUTY COMMISSIONER OF INCOME-TAX, CENTRAL CIRCLE-1, AAYAKAR BHAVAN, RACE COURSE CIRCLE, BARODA APPELLANT VS. SHRI HIMANSHU B. JOSHI PROP. PRASANNA ASSOCIATES, 2 ND FLOOR, PRASANNA HOUSE, ASSOCIATED SOCIETY, NR. AKOTA STADIUM , AKOTA, BARODA- 390020 RESPONDENT PAN: ABQPJ7682J /BY REVENUE : SHRI V. K. SINGH, SR. D.R. /BY ASSESSEE : SHRI NIRAV SHAH, A.R. & ITA NO. 1090/AHD/2016 (AS SESSMENT YEAR: 2012-13) DEPUTY COMMISSIONER OF INCOME-TAX, CENTRAL CIRCLE-1, AAYAKAR BHAVAN, RACE COURSE CIRCLE, BARODA APPELLANT VS. SHRI CHANDRAJIT NATWARLAL SHAH 23/A, PANCHAM BUNGLOWS, NEAR VASNA JAKAT NAKA, VASNA ROAD, BARODA- 390015 RESPONDENT PAN: AGAPS7370R ITA NOS. 1089 TO 1093, 1098 & 1099/AHD/16 SHRI HIMANSHU B. JOSHI & 5 ORS. ] - 2 - /BY REVENUE : SHRI V. K. SINGH, SR. D.R. /BY ASSESSEE : SHRI S. N. SOPARKAR & SHRI P ARIN SHAH, A.RS. & ITA NO. 1091/AHD/2016 (AS SESSMENT YEAR: 2012-13) DEPUTY COMMISSIONER OF INCOME-TAX, CENTRAL CIRCLE-1, AAYAKAR BHAVAN, RACE COURSE CIRCLE, BARODA APPELLANT VS. M/S. SHREE B. R. PATEL CORPORATION, 3, DARSHAN PARK SOCIETY, KARELIBAUG, BAROD, BARODA- 390018 RESPONDENT PAN: ABQFS4232B /BY REVENUE : SHRI V. K. SINGH, SR. D.R. /BY ASSESSEE : WRITTEN SUBMISSION & ITA NO. 1092/AHD/2016 (AS SESSMENT YEAR: 2012-13) DEPUTY COMMISSIONER OF INCOME-TAX, CENTRAL CIRCLE-1, AAYAKAR BHAVAN, RACE COURSE CIRCLE, BARODA APPELLANT VS. SHRI RAJENDRA N. SHAH 4B, PANCHRATNA BUILDING, JETALPUR ROAD, ALKAPURI, BARODA- 390007 RESPOND ENT PAN: AGAPS7368B ITA NOS. 1089 TO 1093, 1098 & 1099/AHD/16 SHRI HIMANSHU B. JOSHI & 5 ORS. ] - 3 - /BY REVENUE : SHRI V. K. SINGH, SR. D.R. /BY ASSESSEE : NONE & ITA NO. 1093/AHD/2016 (AS SESSMENT YEAR: 2012-13) DEPUTY COMMISSIONER OF INCOME-TAX, CENTRAL CIRCLE-1, AAYAKAR BHAVAN, RACE COURSE CIRCLE, BARODA APPELLANT VS. M/S. AMIN ASSOCIATES, 4 TH FLOOR, KOTHARI CHAMBERS, NEAR GOVT. PRESS, KOTHI ROAD, BARODA- 390001 RESPON DENT PAN: AAOFA5006E /BY REVENUE : SHRI V. K. SINGH, SR. D.R. /BY ASSESSEE : SHRI S. N. SOPARKAR & SHRI P ARIN SHAH, A.RS. & ITA NOS. 1098 & 1099/AHD/2016 (ASSESS MENT YEARS: 2011-12 & 2012-13) DEPUTY COMMISSIONER OF INCOME-TAX, CENTRAL CIRCLE-1, AAYAKAR BHAVAN, RACE COURSE CIRCLE, BARODA APPELLANT VS. M/S SUN INCORPORATE, 3 RD & 4 TH FLOOR, KOTHARI CHAMBERS, NEAR GOVT. PRESS, KOTHI ROAD, BARODA- 390001 RESPONDENT PAN: ABOFS6911N ITA NOS. 1089 TO 1093, 1098 & 1099/AHD/16 SHRI HIMANSHU B. JOSHI & 5 ORS. ] - 4 - /BY REVENUE : SHRI V. K. SINGH, SR. D.R. /BY ASSESSEE : SHRI S. N. SOPARKAR & SHRI P ARIN SHAH, A.RS. /DATE OF HEARING : 15.02.2018 /DATE OF PRONOUNCEMENT : 21.02.2018 ORDER PER BENCH REVENUE HAS FILED INSTANT BATCH OF SEVEN APPEALS PE RTAINING TO SIX DIFFERENT ASSESSEES FOR ASSESSMENT YEAR 2012-13 IN ALL APPEAL S EXCEPT IN CASE M/S. SUN INCORPORATES ASSESSMENT YEAR 2011-12 & 2012-13; AG AINST THE CIT(A)-12, AHMEDABAD SEPARATE ORDERS DATED 2.12.2015 (IN ITA N OS. 1089, 1090, 1091, 1092, 1098 & 1099/AHD/2016) AND 02.12.2006 (IN ITA NO. 10 93/AHD/2016), IN CASE NOS. CIT(A)-12/368B/CC-1/BARODA/14-15, CIT(A)-12/374B/CC -1/BARODA/14-15, CIT(A)-12/369B/CC-1/BARODA/14-15, CIT(A)-12/379B/CC -1/BARODA/14-15, CIT(A)-12/362B, 363B/CC-1/BARODA/14-15 & CIT(A)-12 /376B/CC-1/BARODA/14- 15, DELETING PENALTIES OF RS.41,06,568/-, RS.16,10, 000/-, RS.25,00,000/-, RS.33,00,000/-, RS.20,00,000/-, RS.20,00,000/- & RS .40,00,000/-; RESPECTIVELY, IN PROCEEDINGS U/S. 271AAA OF THE INCOME TAX ACT, 1961 ; IN SHORT THE ACT. HEARD BOTH THE PARTIES. CASE FILES PERUSED. 2. WE NOTICE AT THE OUTSET THAT THE INSTANT BATCH O F SEVEN APPEALS HAD EMANATED FROM A SEARCH ACTION DATED 09.08.2011 CONDUCTED IN CASE OF SUNCITY/ANIL BHOLABHAI GROUP OF CASES. ONE SHRI RAJENDRA SHAH ACTED AS GR OUPS AUTHORIZED PERSON DURING THE COURSE OF SEARCH TO ADMIT UNDISCLOSED INCOME OF RS.35CRORES. S/SHRI AKSHAY KOTHARI, SHRI CHANDRAJIT SHAH AND SHRI MAHESH KOTHA RI ALSO SIGNED THE SAID STATEMENT. THIS FOLLOWED RELEVANT LETTERS ISSUED T O THE DDIT-2, BARODA ON BEHALF OF THE SAID GROUP GIVING DETAILS OF THE RELEVANT UNDIS CLOSED INCOME IN CORRESPONDING ITA NOS. 1089 TO 1093, 1098 & 1099/AHD/16 SHRI HIMANSHU B. JOSHI & 5 ORS. ] - 5 - CASES. THE SEARCH STATEMENT IN QUESTION ALSO STAND S EXTRACTED IN CIT(A)S ALL ORDERS UNDER CHALLENGE BEFORE US. THESE ASSESSEES THEREAF TER FILED THEIR RETURNS. THE SAME STOOD ACCEPTED IN CORRESPONDING ASSESSMENTS. THE A SSESSING OFFICER THEREAFTER INITIATED THE IMPUGNED PENALTY PROCEEDINGS U/S.271A AA OF THE ACT. HE THEN PASSED THE CORRESPONDING PENALTY ORDER AS WELL ALLEGING TH EREIN THAT THESE ASSESSEES HAD FAILED TO SPECIFY THE MANNER OF HAVING DERIVED THE ABOVE UNDISCLOSED INCOME FOLLOWED BY SUBSTANTIATION THEREOF SO AS TO BE ELIG IBLE FOR IMMUNITY U/S.271AAA OF THE ACT. WE ARE NOT ADVERTING TO FACTS OF EACH AND EVERY CASE SINCE ALL PARTIES AGREE DURING THE COURSE OF HEARING THAT THERE IS NO DISTI NCTION IN ANY OF THESE CASES IN RELEVANT FACTS AND CIRCUMSTANCES. 3. THE CIT(A) REVERSES ASSESSING OFFICERS ACTION I MPOSING THE IMPUGNED PENALTIES AS UNDER: 5. WHILE DECIDING THE APPEALS AS ABOVE, ON FACTS O F THE APPEALS AND THE ISSUES INVOLVED THEREIN, WHICH ARE IDENTICAL TO THO SE UNDER CONSIDERATION IN PRESENT APPEALS, I HAVE GIVEN THE GROUNDS OF DECISI ON AND FINDINGS WHICH CAN BE SUMMARIZED AS UNDER: 1) DISCLOSURE BY KEY-PERSON OF THE GROUP FOR AND ON BEHALF OF THE APPELLANT IS SUFFICIENT COMPLIANCE TO IMMUNITY CONDITION OF 271A AA(2)(I): THE DISCLOSURE MADE BY KEY PERSON OF THE GROUP FOR THE WHOLE GROUP, FOLLOWED UP BY APPROPRIATE COMMUNICATION TO THE INVESTIGATIN G OFFICER OR ACQUIESCENCE BY THE INVESTIGATING OFFICER FOLLOWED BY FILING OF RETURN U/S 153A/153C/139 BY RESPECTIVE CONSTITUENTS, TOTALLING , IN ALL, TO THE GROUP DISCLOSURE BY THE KEY PERSON IS HELD BY ME TO BE SU FFICIENT COMPLIANCE TO THE IMMUNITY CONDITION OF 271AAA(2)(I) BOTH BY KEY PERS ON AS ALSO THE CONSTITUENTS, PARTICULARLY WHEN THE INCOMES RETURNE D IN RESPECTIVE HANDS IS ACCEPTED BY THE AO EXCLUSIVELY ON THE BASIS OF THE 'DISCLOSURE' IN RESPECTIVE HANDS WITHOUT ANY ADVERSE FINDING. THE OPERATIVE PO RTION OF MY ORDER IN THE CASE OF UMESH C PATEL (CIT(A)-12/370B,371B/CC-2 BAR ODA/2013-14 DATED 28/10/2015) IS REPRODUCED AS UNDER: 4.1 AFTER CAREFULLY GOING THROUGH THE MATERIAL AVAI LABLE AND THE CASE LAW OR FACTS RELIED UPON BOTH BY THE AO AND THE AR, I A M PERSUADED BY THE CONTENTIONS RAISED ON BEHALF OF THE APPELLANT THAT SUFFICIENT AND SUBSTANTIAL COMPLIANCE TO ELIGIBILITY CONDITIONS FOR IMMUNITY P RESCRIBED U/S 271AAA(2)(I) HAS BEEN MADE BY THE APPELLANT. DOUBTL ESSLY, THE AO TILL FINALIZATION OF ASSESSMENTS FOR RELEVANT YEARS IN- THE CASES OF BOTH APPELLANT AND RAJESH SHAH HAS PROCEEDED AND ACTED I N CONFORMITY WITH THE RESPECTIVE 'DISCLOSURES' MADE BY BOTH APPELLANT AND RAJESH SHAH, TAXING ONLY THE 'ADMITTED AMOUNTS' IN THEIR RESPECTIVE HAN DS AND NO MORE AS PER TABLE ON PAGE 2 OF THE ASSESSMENT ORDER. THE AO, IN MY CONSIDERED ITA NOS. 1089 TO 1093, 1098 & 1099/AHD/16 SHRI HIMANSHU B. JOSHI & 5 ORS. ] - 6 - OPINION, CAN'T TURN AROUND AND DEVIATE, AS RIGHTLY SUBMITTED BY THE ARS, FROM A MUTUALLY ACCEPTED POSITION OF ADMISSION AND TAXATION. THE FACT THAT SHRI RAJESH SHAH HAS NOT BEEN TAXED, AND APPELLANT HAS BEEN TAXED, ON THE AMOUNT OWNED UP BY APPELLANT IS IN COMPLETE CONTRAS T TO THE STAND TAKEN BY THE AO DURING PENALTY PROCEEDINGS TO THE EFFECT THAT THE APPELLANT HAS 'NOT ADMITTED THE AMOUNT U/S 132(4)', THE LD. AR IS RIGHT THAT THE STAND TAKEN BY THE AO DURING PENALTY PROCEEDINGS IS TOO M ECHANICAL AND NARROW AND IS ALSO IN COMPLETE CONTRAST TO AO'S OWN ACTION DURING ASSESSMENT. THE AR IS ALSO RIGHT THAT DURING THE COURSE OF SEAR CH, THE APPELLANT HIMSELF ALSO HAS SIGNED THE STATEMENT U/S 132(4) AND ADMITT ED UNACCOUNTED RECEIPTS ON THE BASIS OF SEIZED DOCUMENTS CONFRONTE D TO RAJESH SHAH WHO MADE THE GROUP ADMISSION. I ALSO AGREE WITH THE SUB MISSION MADE BY THE AR THAT AS HELD IN BALAJI FORMALIN (SUPRA), THE ADM ISSION U/S 132(4) BY THE KEY PERSON IN THE HANDS OF VARIOUS ENTITIES IS TO B E DEEMED TO BE ADMISSION BY VARIOUS CONSTITUENTS OF THE GROUP, PARTICULARLY IF THE AO HAS ALSO MADE ASSESSMENTS OF VARIOUS CONSTITUENTS ON THE BASIS OF , AND LIMITED TO, THE RETURNS FILED BY CONSTITUENTS DISCLOSING SUCH 'DECL ARED' INCOME. I ALSO AGREE WITH THE SUBMISSION OF THE LD. AR THAT AFTER ADMISSION U/S 132(4), AND IN CONTINUATION THEREOF, THE ALLOCATION/ALLOTME NT IN VARIOUS HANDS FOR VARIOUS YEARS, MADE UNDER S. 131 OR THROUGH A SEPAR ATE LETTER ADDRESSED TO INVESTIGATING OFFICER BY THE KEY PERSON IS A MERE C ONTINUATION OF EARLIER ADMISSION U/S 132(4). EXACTLY THIS BEING THE FACT I N APPELLANT'S CASE, I HAVE NO HESITATION IN AGREEING WITH THE ARS THAT THE AO HAS NOT ONLY ERRED BUT CONTRASTED HIMSELF IN HOLDING THAT THE ADMISSION HA S NOT BEEN MADE BY THE APPELLANT U/S 132(4). THE AO HAS ALSO ERRED IN BEIN G TOO RIGID AND MECHANICAL IN MISREADING THE REQUIREMENTS OF 271AAA (2)(I) AND HOLDING AGAINST THE APPELLANT FOR A MERE VENIAL OR TECHNICA L BREACH THEREOF WITH FINDING THAT THE APPELLANT HIMSELF HAS NOT MADE THE DISCLOSURE U/S 132(4). THE CONCLUSION ARRIVED AT AS ABOVE IS NOT ONLY IN C ONFORMITY WITH BALAJI FORMALIN (SUPRA), BUT IS ALSO FORTIFIED BY THE SC D ECISION IN HINDUSTAN STEEL LTD (1972) 83 ITR 26 WITH FOLLOWING OBSERVATI ONS: .........PENALTY WILL NOT ALSO BE IMPOSED MERELY BE CAUSE IT IS LAWFUL TO DO SO. WHETHER PENALTY SHOULD BE IMPOSED FOR FAI LURE TO PERFORM A STATUTORY OBLIGATION IS A MATTER OF DISCRETION OF THE AUTHORITY TO BE EXERCISED JUDICIALLY AND ON A CONSIDERATION OF ALL THE RELEVANT CIRCUMSTANCES. EVEN IF A MINIMUM PENALTY IS PRESCRI BED, THE AUTHORITY COMPETENT TO IMPOSE THE PENALTY WILL BE J USTIFIED IN REFUSING TO IMPOSE PENALTY, WHEN THERE IS A TECHNIC AL OR VENIAL BREACH OF THE PROVISIONS OF THE ACT OR WHERE THE BR EACH FLOWS FROM A BONA FIDE BELIEF THAT THE OFFENDER IS NOT LIABLE TO ACT IN THE MANNER PRESCRIBED BY THE STATUTE...... 4.2 IN THE FACTS AND CIRCUMSTANCES AS DISCUSSED AB OVE, THUS, THE APPELLANT IS DEEMED TO HAVE MADE ADMISSION U/S 132(4) OF AMOUNTS AS TABULATED IN PARA 2. LA OF THE PENALTY ORDER AND PA RA 5 OF THE ASSESSMENT ORDER FOR THE YEARS UNDER REFERENCE. IT IS THEREFORE HELD THAT APPELLANT HAS FULFILLED THE IMMUNITY CONDITION OF S. 27LAAA(2)(I) . 2) MANNER AND SUBSTANTIATION OF EARNING OF UNACCOUNTED INCOME: IMMUNITY CONDITION 271AAA(I) AND (II) : IT HAS BEEN OBSERVED AND HELD BY ME THAT THE TERMS 'STATING THE MANNER AND SUBSTANTIATING THE SA ME' HAS NOT BEEN DEFINED IN S. 271AAA AND THEREFORE THE SAME IS TO B E UNDERSTOOD ONLY IN THE SENSE EXPLAINED IN MAHENDRA C SHAH AND SIDHNATHGOEL ,(SUPRA) AS FURTHER FOLLOWED AND EXPLAINED IN GEETA PRINTS (SUPRA) BY A HMEDABAD TRIBUNAL, AND ITA NOS. 1089 TO 1093, 1098 & 1099/AHD/16 SHRI HIMANSHU B. JOSHI & 5 ORS. ] - 7 - THUS, IT HAS BEEN HELD BY ME THAT THE ASSESSEE CANN OT BE EXPECTED TO PROVIDE GRAPHIC DETAILS, A RUPEE-TO-RUPEE ACCOUNT AND EXACT AND IMMEDIATE SOURCE OF UNACCOUNTED INCOME/CASH IN VIEW OF SOCIAL CONDIT IONS AND OVER ALL ENVIRONMENT OF RECORDING OF STATEMENT U/S 132(4). I T IS ALSO PRIMARILY FOR THE AUTHORIZED OFFICER AND THEREAFTER THE INVESTIGA TING OFFICER TO SOLICIT FURTHER INFORMATION AND EXPLANATION FROM THE ASSESSEE OR KEY PERSON WHILE RECORDING THE STATEMENT U/S 132(4), WHEN THE DISCLO SURE IS CLEARLY BASED ON SEIZED DOCUMENTS, THE BROAD SOURCE HAS BEEN INDICAT ED BY THE ASSESSEE OR KEY PERSON, THE APPELLANT HAS 'MADE A CLEAN BREAST OF HIS ADMITTED UNACCOUNTED INCOME' WHILE FILING THE RETURN U/S 153 A/139, AND ASSESSMENT IS ALSO FRAMED ON THE BASIS OF DISCLOSURE MADE IN T HE STATEMENT U/S 132(4) AND THE RETURN, WITHOUT ANY ALTERATION TO RETURNED INCOME OR ANY ADVERSE FINDING, THE BROAD INDICATION OF MANNER OF EARNING ON THE BASIS OF THE SEIZED DOCUMENTS FORMING THE BASIS OF DISCLOSURE U/S 132(4 ), AS ACQUIESCED IN BY THE AUTHORIZED OFFICER, INVESTIGATING OFFICER AND T HE ASSESSING OFFICER, WOULD IPSO FACTO AND PRIMA FACIE BE A SUFFICIENT CO MPLIANCE TO THE IMMUNITY CONDITION AS CONTAINED IN S. 271AAA(2)(II). THE REL EVANT PORTION FROM THE ORDER OF UMESH C PATEL (SUPRA) IS REPRODUCED AS UND ER: 5. WITH REGARD TO THE SECOND OBJECTION OF THE AO RE GARDING IMMUNITY CONDITION OF STATING THE MANNER OF EARNING UNACCOUNTED INCOME DISCLOSED U/S 132(4), AND SUBSTANTIATION THEREOF, A S CONTAINED IN SECTION 271AAA(2)(II) OF THE ACT......... ................. . RELIANCE IS PLACED ON: (I) DECISION OF HON'BLE GUJARAT HIGH COURT IN CASE OF COMMISSIONER OF INCOME-TAX V. MAHENDRA C. SHAH[2008] 172 TAXMAN 58 (GUJ.) ..............THE REASON WAS NOT FAR TO SEEK. IN TH E FIRST INSTANCE, THE STATEMENT WAS BEING RECORDED IN THE QUESTION AND ANSWER FORM AND THERE WOULD BE NO OCCASION FOR AN ASSESSEE TO STATE AND MAKE AVERMENTS IN THE EXACT FORMAT STIPULATED BY THE PROVISIONS, CONSIDERING THE SETTING IN WHICH SUCH S TATEMENT WAS BEING RECORDED. SECONDLY, CONSIDERING THE SOCIAL ENVIRONMENT, IT IS NOT POSSIBLE TO EXPECT FROM AN ASSESSEE, WHETHER LITERATE OR ILLITERATE, TO BE SPECIFIC AND TO THE POINT REGARDING THE CONDITIONS STIPULATED BY THE EXCEPTIO N NO. 2 WHILE MAKING STATEMENT UNDER SECTION 132(4). THE VIEW TAKEN BY T HE TRIBUNAL TO THE EFFECT THAT EVEN IF THE STATEMENT DOES NOT SPECIFY THE MANNER I N WHICH THE INCOME IS DERIVED, IF THE INCOME IS DECLARED AND TAX THEREON IS PAID, THERE WOULD BE SUBSTANTIAL COMPLIANCE NOT WARRANTING ANY FURTHER D ENIAL OF THE BENEFIT UNDER THE EXCEPTION NO. 2 IN THE EXPLANATION 5 WAS COMMEN DABLE. [PARA 15] HENCE, THE TRIBUNAL WAS JUSTIFIED IN COMING TO THE CONCLUSION THAT INSOFAR AS THE VALUE OF DIAMONDS WAS CONCERNED, THE ASSESSEE HAVIN G MADE A DECLARATION UNDER SECTION 132(4) AND HAVING PAID TAXES THEREON, HAD F ULFILLED ALL THE CONDITIONS FOR AVAILING OF THE BENEFIT OF IMMUNITY FROM LEVY OF PE NALTY AS PROVIDED UNDER THE EXPLANATION 5 TO SECTION 271(L)(C). (II) DECISION OF HON'BLE AHMEDABAD TRIBUNAL IN CASE OF SULOCHANADEVI A. AGARWAL, DATED 17 JULY, 2012 VIDE ITA NO: 1052/AHD/2012 '......WE HAVE HEARD THE SUBMISSIONS OF THE REVENUE AND CAREFULLY PERUSED THE MATERIALS ON RECORD. THE LEARNED CIT(A) HAD DELETED THE PENALTY DUE TO THE FOLLOWING REASONS: 1) THE ASSESSEE HAD VOLUNTARILY DISCLOSED THE SUM O F RS.50,00,000/- DURING THE SEARCH PROCEEDINGS WITH REQUEST THAT NO PENALTY SHO ULD BE LEVIED IN RESPECT OF SUCH DISCLOSURE. ITA NOS. 1089 TO 1093, 1098 & 1099/AHD/16 SHRI HIMANSHU B. JOSHI & 5 ORS. ] - 8 - (2) DURING THE POST SEARCH PROCEEDINGS NO SPECIFIC QUESTION AS REGARDS MANNER OF EARNING OF UNDISCLOSED INCOME OR SUBSTANTIATION THE REOF WAS PUT FORTH BY THE REVENUE. (3) THE ASSESSEE HAD ALSO PAID DUE TAX FOR THE UNDI SCLOSED INCOME OF RS.50,00,000/- DECLARED VOLUNTARILY. (4) IN THE DECISION RENDERED BY THE JURISDICTIONAL HIGH COURT OF GUJARAT IN THE CASE OF CIT VSMAHENDRA C. SHAH (2008) 299 ITR 305 (GUJ) IT W AS HELD THAT WHEN UNDISCLOSED INCOME ADMITTED BY THE ASSESSEE HAS BEE N OFFERED FOR TAX IN THE RETURN OF INCOME AND THE TAX THEREOF DULY PAID, PENALTY CA NNOT BE LEVIED, SPECIFICALLY, IN THE ABSENCE OF ANY QUESTION IN THIS RESPECT BY THE AO. AT THIS JUNCTURE, WE MUST ADMIT THAT THE REASONS PO INTED OUT BY THE LEARNED CIT(A) ARE JUSTIFIABLE FOR DELETING THE PENALTY LEVIED BY THE LEARNED AO U/S 271 AAA OF THE ACT. THEREFORE, WE DO NOT FIND ANY HESITATION TO CONFIRM THE ORDER OF THE LEARNED CIT(A) 8. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISM ISSED. (IV) GEETA PRINTS PVT LTD. ITA NO.2093/2011 (A HD) (APPROVED BY HC IN TA NO 565/2015 DTD 14/9/2015) '7. WE HAVE HEARD THE LD. DR AND PERUSED THE MATERI AL AVAILABLE ON RECORD. WE FIND THAT CIT(A) WHILE DELETING THE PENALTY HAS NOTED THAT THE CONDITIONS PROVIDED U/S. 2YIAAA(2) ARE REQUIRED TO BE FULFILLE D SO AS TO GRANT IMMUNITY TO THE ASSSESSEE FROM PENALTY. HE HAS FURTHER NOTED THAT A LL THE THREE CONDITIONS HAVE BEEN FULFILLED BY THE ASSESSEE AND FURTHER RELYING ON THE DECISION OF HON'BLE GUJARAT HIGH COURT IN THE CASE OF CIT VS. MAHENDRA C SHAH (2000) 299 ITR 305 (GUJARAT) AND CIT VS. RADHA KRISHNA GOEL (2005) 278 ITR 454 HAD HELD THAT ASSESSEE HAD MADE DISCLOSURE OF UNACCOUNTED INCOME WHILE RECORDING STATEMENTS U/S. 132(4) OF THE ACT AND HAD ALSO PAID THE TAX WI TH INTEREST. HE HAS FURTHER GIVEN A FINDING THAT THE AO IN THE ASSESSMENT ORDER PASSE D U/S. 143(3) OF THE ACT HAD ACCEPTED THE DISCLOSED INCOME DECLARED BY THE ASSES SEE AND NO ADDITION ON ACCOUNT OF UNDISCLOSED INCOME HAS BEEN MADE BY THE AO, HE HAS FURTHER GIVEN A FINDING THAT AO WAS SATISFIED ABOUT THE DISCLOSED I NCOME OFFERED IN THE RETURN OF INCOME AND THE MANNER IN WHICH THE INCOME WAS DERIV ED. WE THUS FIND THAT LD. CIT(A) BY A DETAILED AND REASONED ORDER DELETED THE PENALTY. BEFORE US, REVENUE HAS NOT BROUGHT ANY MATERIAL ON RECORD TO CONTROVER T THE FINDINGS OF THE CIT(A) OR HOW THE RATIO OF DECISIONS RELIED BY ID. CIT(A) NOT APPLICABLE TO THE PRESENT FACTS. IN VIEW OF THE AFORESAID FACTS, WE FIND NO REASON T O INTERFERE WITH THE ORDER OF LD. CIT(A) AND THUS THIS GROUND OF REVENUE IS DISMISSED . . 5.2 WHEN SEEN IN THE LIGHT OF MAHENDRA C SHAH (SUPR A), I FIND FORCE IN THE CONTENTION OF THE ARS THAT SUBSEQUENT TO ADMISSION U/S 132(4), CLEARLY INDICATING THE BROAD MANNER OF EARNING TO BE 'BEING FROM LAND TRANSACTIONS, CAPITAL GAINS AND MISCELLANEOUS' FOLLOWED BY OFFERING IN THE RETU RN, AND UNCONDITIONAL AND UNALTERED BRINGING OF THE SAME TO TAX BY THE AO, SU BSTANTIALLY TANTAMOUNT TO STATING THE MANNER AND SUBSTANTIATING THE SAME, AND THAT THE AO CANNOT HOLD OTHERWISE DURING PENALTY PROCEEDINGS WITHOUT BRINGI NG IN POSITIVE EVIDENCE TO ESTABLISH THE ABSENCE OF SUBSTANTIATION OR THE FALS ITY IN CLAIM OF THE APPELLANT OR WITHOUT REFERRING TO SEIZED DOCUMENTS. AS SUCH, IN LIGHT OF VARIOUS AUTHORITIES CITED BY THE AR AND ALSO OTHERWISE PERUSED BY ME, I AM OF THE CONSIDERED OPINION THAT THE FACT THAT THE AUTHORIZED OFFICER DURING SEARCH, AND INVESTIGATING OFFICER THEREAFTER, HAS ACQUIESCED IN THE REPLY GIVEN BY TH E APPELLANT, WITHOUT ANY FURTHER PROBE AT THAT TIME, CLEARLY BRINGS OUT THAT. COMPLI ANCE SATISFACTORY TO THE INVESTIGATING OFFICER HAS BEEN MADE BY THE APPELLAN T. THEREAFTER, ONCE THE APPELLANT HAS FILED THE RETURN HONORING HIS COMMITM ENT FULLY, WHICH HAS ALSO BEEN ACCEPTED DURING ASSESSMENT WITHOUT ANY MODIFICATION TO RETURNED INCOME, THE LD. ITA NOS. 1089 TO 1093, 1098 & 1099/AHD/16 SHRI HIMANSHU B. JOSHI & 5 ORS. ] - 9 - AO'S INSISTENCE FOR 'STATING THE MANNER AND SUBSTAN TIATING THE SAME' IS SIMPLY SUPERFLUOUS AND UNCALLED FOR IN THE FACE OF CLEAR-C UT DISCLOSURE OF MANNER OF EARNING OF 'UNACCOUNTED INCOME' BY THE APPELLANT, A ND ALSO IN LIGHT OF MAHENDRA C. SHAH (SUPRA). SUCH INSISTENCE OF THE AO AND 'NON -COMPLIANCE THERETO' BY THE APPELLANT PLEADING 'SUFFICIENT COMPLIANCE', HAS OBV IOUSLY NOT IMPACTED THE QUANTIFICATION OF INCOME AND ASSESSMENT THEREOF. 5.3 THE FACT THAT THE LD. AO HIMSELF HAS TAXED THE AMOUNT OFFERED U/S 132(4) AND FURTHER IN THE RETURN U/S 153A, WITHOUT CONTRADICTI NG OR CONTESTING THE BASIS AND QUANTIFICATION OF SUCH 'UNDISCLOSED INCOME' TO DISP ROVE THE SAME WOULD ALSO, IT WAS VEHEMENTLY CONTENDED, GO TO ESTABLISH THAT THE MANNER AS STATED BY THE APPELLANT U/S 132(4) STANDS NOT ONLY SUBSTANTIATED AS REQUIRED U/S 271AAA(2)(II) BUT THE AO IS ALSO SATISFIED ABOUT SUCH SUBSTANTIAT ION RIGHT AT THE ASSESSMENT STAGE, AND THE AO IS NOT EXPECTED TO SUDDENLY HOLD OTHERWI SE DURING PENALTY PROCEEDINGS UNLESS HE BRINGS POSITIVE MATERIAL TO DISPROVE THE ALREADY ACCEPTED SUBSTANTIATION BY THE APPELLANT. I FIND CONSIDERABLE FORCE IN THE CONTENTIONS RAISED AS ABOVE AND HAVE NO HESITATION IN FULLY AGREEING WITH THE SAME. WHILE ON ONE HAND HC HAS, IN MAHENDRA C SHAH CLEARLY OPINED THAT CONSIDERING THE SOCIAL ENVIRONMENT, THE APPELLANT CANNOT BE EXPECTED TO GIVE GRAPHIC DETAIL S OF MANNER OF EARNING UNACCOUNTED INCOME, ON THE OTHER HAND, THE INSISTEN CE OF THE LD. AO FOR SUCH DETAILS OR SUBSTANTIATION HAS NO BEARING OR RELEVAN CE DURING THE ASSESSMENT WHEN DUE TAXES HAVE BEEN PAID BY THE APPELLANT. THE APPE LLANT ALREADY MADE 'A CLEAN BREAST OF HIS UNACCOUNTED INCOME', AS IN SIDHNATHGO EL,(SUPRA), AND THERE IS NO FURTHER MATERIAL BROUGHT BY THE LD. AO TO HOLD OTHE RWISE. THUS, I FIND THAT THE APPELLANT'S CASE IS SQUARELY COVERED BY THE RATIOS OF MAHENDRAC SHAH AND SIDHNATHGOEL (SUPRA), AND THUS IT IS TO BE HELD THA T THE APPELLANT HAS MADE EFFECTIVE AND SUFFICIENT COMPLIANCE TO IMMUNITY CON DITION OF S. 271AAA(2)(II) ALSO. I MAY ALSO ADD THAT THE LAW LAID DOWN IN MAHENDRA C SHAH AND SIDHNATHGOEL HAS BEEN FURTHER EXPLAINED AND APPLIED BY THE AHMEDABAD TRIBUNAL IN GEETA PRINTS PUT LTD AND SULOCHANA DEVI AGGANVAL IN THE CONTEXT OF IMMUNITY CONDITIONS CONTAINED IN S. 271AAA(2)(I) AND (IF) IN ITA NOS. 2 093/2011 AND 1052/2012 (SUPRA) HOLDING AS ABOVE, AND, FURTHER, GEETA PRINT S HAS ALSO BEEN FURTHER (APPROVED BY THE HC IN TAX APPEAL NO 565/2015 DATED 14/09/2015. (3) WHEN PENALTY IS ON INCOME RETURNED U/S 153A: IN ADDITION TO THE FULFILLMENT OF IMMUNITY CONDITIONS AS PRESCRIBED U/S 271AAA(2)(I) AND (II) AS ABOVE, FOLLOWING KIRIT DAHYABHAI (SUPRA] AS EXPLAINED AND APPLIED BY AHMEDABAD TRIBUNAL IN SANDEEP NAVNEETLAL (SUPRA), IT HAS BEEN FURTHER HEL D BY ME IN THE ABOVE REFERRED APPEALS THAT IN VIEW OF THE FACT THAT THE PENALTY U /:: 271AAA HAS BEEN LEVIED ON THE INCOME ALREADY DISCLOSED IN THE RETURN FILED BY THE APPELLANT U/S 153A, AND NOT ON THE INCOME ASSESSED 'OVER AND ABOVE THAT RETURNED U /S 1S3A OR 139', THE PENALTY IS NOT SUSTAINABLE. THE OPERATIVE PORTION FROM MY O RDER OF UMESH C PATEL (SUPRA) IS REPRODUCED AS UNDER: ................7. MOREOVER, I ALSO FIND THAT THE P ROPOSITION OF LAW LAID DOWN IN KIRIT DAHYABHAI (SUPRA) TO THE EFFECT THAT PENALTY, POST- SEARCH, CAN BE LEVIED OR SUSTAINED ONLY ON THE INCOME WHICH HAS BEEN ASSESSE D 'OVER AND ABOVE' THAT RETURNED BY THE ASSESSEE U/S 153A AFTER THE SEARCH, IN VIEW OF THE SPECIFIC PROVISIONS OF S. 153A, AND CANNOT BE LEVIED ON 'UND ISCLOSED INCOME' ALREADY RETURNED U/S 153A, HAS BEEN FOLLOWED BY ITAT AHMEDA BAD IN SANDIP NAVNITLAL (SUPRA) IN THE DIRECT CONTEXT OF PENALTIES BOTH U/S 271(L)(C) READ WITH EXPLANATION 5A AND ALSO U/S 271AAA, RESPECTFULLY FO LLOWING THE SAME, ALSO, IT ITA NOS. 1089 TO 1093, 1098 & 1099/AHD/16 SHRI HIMANSHU B. JOSHI & 5 ORS. ] - 10 - IS TO BE FURTHER HELD THAT THE LD. AO ERRED IN LEVY ING THE PENALTY U/S 271AAA ON THE 'UNDISCLOSED INCOME' ALREADY RETURNED IN THE IN COME FILED AFTER SEARCH, AND ON THIS COUNT ALSO THE LEVY OF PENALTY IS HELD NOT SUSTAINABLE. 6. AS THERE IS NO DISPUTE WITH REGARD TO THE FACT T HAT IMMUNITY CONDITION OF 271AAA(2)(III) IS FULFILLED BY THE APPELLANT BY WAY OF PAYMENT OF TAXES WITH INTEREST IN THE APPEAL UNDER REFERENCE, IN VIEW OF THE DISCUSSION AS ABOVE, FOLLOWING MY OWN FINDINGS AND UNDERSTANDING OF THE PROVISIONS OF S. 271AAAJ AS EXPLAINED BY VARIOUS AUTHORITIES AS DISCUSSED AB OVE AND AS ALREADY APPLIED BY ME IN APPEALS DECIDED BY ME AS ABOVE, THE PENALT Y LEVIED BY THE AO IS TO BE HELD NOT SUSTAINABLE AND THEREFORE, THE PENALTY FOR THE YEAR IS CANCELLED. ACCORDINGLY, THE RELATED GROUNDS ARE ALLOWED. THE A PPELLANT WOULD GET RELIEF OF RS.41,06,568/-. 4. LEARNED DEPARTMENTAL REPRESENTATIVE VEHEMENTLY C ONTENDS THAT THE LOWER AUTHORITY HEREIN HAS COMMITTED BOTH ILLEGALITY AND IRREGULARITY IN DELETING THE IMPUGNED PENALTIES IMPOSED BY THE ASSESSING OFFICER BY INVOKING SECTION 271AAA OF THE ACT FOR THE REASON THAT ALL THESE ASSESSEES FAILED TO SPECIFY THE MANNER OF HAVING DERIVED THE UNDISCLOSED INCOME DURING SEARCH FOLLOWED BY SUBSTANTIATION THEREOF. WE RATHER FIND THAT THE REVENUES SOLE SU BSTANTIVE IDENTICAL GROUND IN ALL THESE APPEALS PLEADS THAT IT IS ONLY THE LATTER CON DITION OF SUBSTANTIATION OF THE MANNER OF DERIVING OF THE UNDISCLOSED INCOME THAT R EMAINED TO BE UNFULFILLED. WE NOTICE IN THIS BACKDROP THAT HONBLE JURISDICTIONAL HIGH COURTS RECENT JUDGMENT IN TAX APPEAL NO. 434 OF 2017 PR.CIT VS. MUKESHBHAI RA MANLAL PRAJAPATI HOLDS AFTER DISCUSSING A CATENA OF CASE LAWS THAT IT IS INCUMBE NT FOR AN AUTHORIZED OFFICER TO PUT THE SEARCHED ASSESSEE TO QUESTION ABOUT THE MANNER OF HAVING DERIVED THE RELEVANT UNDISCLOSED INCOME. THEIR LORDSHIPS ARE OF THE VIEW THAT THE BURDEN THEN SHIFTS ON THE CONCERNED DEPONENTS TO SUBSTANTIATE THE SAID MA NNER OF HAVING DERIVED THE UNDISCLOSED INCOME IN ISSUE. WE SOUGHT TO KNOW FRO M LEARNED DEPARTMENTAL REPRESENTATIVE AS TO WHETHER THE AUTHORIZED OFFICER HAD RAISED MANNER QUERY IN THE COURSE OF SEARCH STATEMENT OR NOT. HE FAILS TO PINPOINT ANY SUCH QUESTION RAISED IN SEARCH STATEMENT. LEARNED COUNSEL REFERS TO CIT (A)S ORDER(S) UNDER CHALLENGE PAGES 4 ONWARDS EXTRACTING THE RELEVANT SEARCH STAT EMENT(S) FOLLOWED BY NECESSARY CORRESPONDENCE WITH THE DDIT-1. MR. SOPARKARS CAS E IS THAT NO SUCH SPECIFIC QUERY ON THE RELEVANT MANNER ISSUE CAME TO BE RAI SED FROM THE AUTHORIZED OFFICER. WE THEREFORE QUOTE HONBLE JURISDICTIONAL HIGH COUR TS ABOVE REFERRED JUDGMENT TO ITA NOS. 1089 TO 1093, 1098 & 1099/AHD/16 SHRI HIMANSHU B. JOSHI & 5 ORS. ] - 11 - CONCLUDE THAT THE CIT(A) HAS RIGHTLY DELETED ALL TH E IMPUGNED PENALTIES AFTER HOLDING THAT ALL THESE ASSESSEES HAD DULY COMPLIED WITH THE RELEVANT IMMUNITY CONDITIONS U/S.271AAA OF THE ACT. THE REVENUES IDE NTICAL SOLE SUBSTANTIVE GRIEVANCE IN ALL THESE APPEALS IS THEREFORE REJECTE D. 5. THESE SEVEN REVENUES APPEALS ARE DISMISSED. [PRONOUNCED IN THE OPEN COURT ON THIS T HE 21 ST DAY OF FEBRUARY, 2018.] SD/- SD/- ( AMARJIT SINGH ) (S. S. GODARA) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD: DATED 21/02/2018 TRUE COPY S.K.SINHA / COPY OF ORDER FORWARDED TO:- / REVENUE 2 / ASSESSEE ! / CONCERNED CIT 4 !- / CIT (A) ( )*+ ,--. . /0 / DR, ITAT, AHMEDABAD 1 +23 45 / GUARD FILE. BY ORDER / . // . /0