RAJENDRA SINGH BHAMBOO, JHUNJHUNU V. DCIT, Jaipur

ITA 137/JPR/2016

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 2059 (ITAT-JAIPUR)
• Duration Of Justice: 1 year(s) 4 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-06-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: Not Allotted
• Assessment Year: 2012-2013
• Appeal Filed On: 12-02-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: B K GUPTA CIT DR DHK
• Assessee Lawyers: K L MOOLCHANDAN I
• Keywords: Income from undisclosed sources; Search and seizure; Opportunity of being heard
• Section: 143(3); 5(2); 153A; 132; 10; 139

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES, JAIPUR JH HKKXPAN] YS[KK LNL; ,OA JH DQY HKKJR ] U;KF;D LNL; DS LE{K BEFORE: SHRI BHAGCHAND, AM & SHRI KUL BHARAT, JM VK;DJ VIHY LA-@ ITA NO. 137/JP/2016 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2012-13 RAJENDRA SINGH BHAMBOO, D-30, INDRA NAGAR, JHUNJHUNU. CUKE VS. A.C.I.T., CENTRAL CIRCLE-2, JAIPUR. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO.: AAMPB 4899 A VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT VK;DJ VIHY LA-@ ITA NO. 160/JP/2016 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2012-13 D.C.I.T., CENTRAL CIRCLE-2, JAIPUR. CUKE VS. RAJENDRA SINGH BHAMBOO, D-30, INDRA NAGAR, JHUNJHUNU. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO.: AAMPB 4899 A VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT VK;DJ VIHY LA-@ ITA NO. 135/JP/2016 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2012-13 RAJENDRA SINGH DANGI, JATAWAS BAGAR, JHUNJHUNU. CUKE VS. A.C.I.T., CENTRAL CIRCLE-2, JAIPUR. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO.: AAWPD 4615 N VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY : SHRI K.L. MOOLCHANDANI (CA) JKTLO DH VKSJ LS@ REVENUE BY : SHRI B.K. GUPTA (CIT DR) LQUOKBZ DH RKJH[K@ DATE OF HEARING : 26/05/2017 MN?KKS'K.KK DH RKJH[K @ DATE OF PRONOUNCEMENT : 14/06/2017 ITA 137, 160 & 135/JP/2016_ RAJENDRA SINGH BHAMBOO VS ACIT 2 VKNS'K@ ORDER PER: KUL BHARAT, J.M. ITA NO. 137/JP/2016 AND 160/JP/2016 ARE THE APPEAL S FILED BY THE ASSESSEE AND REVENUE AND ITA NO. 135/JP/2016 FILED BY THE ASSESSEE ARISE AGAINST THE SEPARATE ORDERS DATED 23/12/2015 PASSED BY THE LD. CIT(A)-4, JAIPUR PERTAINING TO THE ASSESSMENT YEAR 2 012-13. THE GROUNDS TAKEN BY THE ASSESSEE AS WELL AS THE REVENUE ARE AS UNDER:- GROUND OF ASSESSEES APPEAL ITA NO. 137/JP/2016 1 ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E, THE AUTHORITIES BELOW HAVE FACTUALLY AND LEGALLY ERRED I N IMPOSING AND CONFIRMING PENALTY OF RS. 24,41,026/- U/S 271AAA OF THE ACT WITHOUT APPRECIATING THE FACTS OF THE CASE IN RIGHT PERSPECTIVE. THE PENALTY SO IMPOSED AND CONFIRMED DESERVES TO BE DELETED. GROUND OF REVENUES APPEAL ITA NO. 160/JP/2016 1 WHETHER ON THE FACTS AND THE CIRCUMSTANCES OF TH E CASE THE CIT(A) WAS RIGHT IN DELETING THE PENALTY OF RS. 51,66,579/- LEVIED U/S 271AAA OF THE IT ACT, WITHOUT APPRECIATING THE FACT THAT IN THIS CASE THE ASSESSEE HAS FAILED TO SPECIFY THE MANNER IN WHICH T HE UNDISCLOSED INCOME WAS DERIVED AS PER SUB CLAUSE (I) OF SECTION 271AAA(2) OF THE IT ACT, 1961. (2) WHETHER ON THE FACTS AND THE CIRCUMSTANCES OF T HE CASE THE CIT(A) WAS RIGHT IN DELETING THE PENALTY OF RS. 51,66,579/- LEVIED U/S 271AAA OF THE IT ACT, WITHOUT APPRECIATING THE FACT THAT IN THIS CASE THE ITA 137, 160 & 135/JP/2016_ RAJENDRA SINGH BHAMBOO VS ACIT 3 ASSESSEE HAS FAILED TO SUBSTANTIATE THE MANNER IN WHICH THE UNDISCLOSED INCOME WAS DERIVED AS PER SUB CLAUSE (II) OF SECTION 271AAA(2) OF THE IT ACT, 1961 . GROUND OF ASSESSEES APPEAL ITA NO. 133/JP/2016 1 ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E, THE AUTHORITIES BELOW HAVE FACTUALLY AND LEGALLY ERRED I N IMPOSING AND CONFIRMING PENALTY OF RS. 24,14,987/- U/S 271AAA OF THE ACT WITHOUT APPRECIATING THE FACTS OF THE CASE IN RIGHT PERSPECTIVE. THE PENALTY SO IMPOSED AND CONFIRMED DESERVES TO BE DELETED. 2. ALL THE THREE APPEALS ARE BEING HEARD TOGETHER A ND FOR THE SAKE OF CONVENIENCE AND BREVITY, A COMMON ORDER IS BEING PA SSED. 3. FIRSTLY WE TAKE ASSESSEES APPEAL BEING ITA NO. 1 37/JP/2016. BRIEFLY STATED FACTS OF THE CASE ARE THAT A SEARCH AND SEIZURE OPERATION WAS CARRIED OUT AT THE RESIDENTIAL AND BUS INESS PREMISES OF BHAMBOO GROUP ON 15/03/2012. DURING SEARCH, INCRIMI NATING DOCUMENTS WERE FOUND, WHICH WAS INVENTORISED AND SEIZED AS PER THE PANCHNAMA. A NOTICE U/S 153A OF THE INCOME TAX ACT, 1961 (HEREINA FTER REFERRED AS THE ACT) WAS ISSUED. IN PURSUANCE TO THAT, THE ASSESSEE FILED RETURN OF INCOME ON 26/09/2012 DECLARING INCOME OF RS. 3,10,6 8,140/- INCLUDING UNDISCLOSED INCOME OF RS. 2,41,29,870/-, WHICH WAS SU RRENDERED AS UNDISCLOSED INCOME OF THE ASSESSEE ON ACCOUNT OF VA RIOUS DISCREPANCIES ITA 137, 160 & 135/JP/2016_ RAJENDRA SINGH BHAMBOO VS ACIT 4 FOUND DURING THE SEARCH. SUBSEQUENTLY, THE ASSESSME NT U/S 143(3) READ WITH SECTION 153B(1)(B) WAS COMPLETED ON 31/03/2014 A T TOTAL INCOME OF RS. 3,13,48,532/- AFTER MAKING AN ADDITION OF RS. 2 ,80,392/- ON ACCOUNT OF ADDITION MADE U/S 69A OF THE ACT FOR UNEXPLAINED JEWELLERY AND ALSO PENALTY WAS INITIATED U/S 271AAA OF THE ACT IN RESPE CT OF UNACCOUNTED INCOME OF RS. 2,44,10,262/-. A PENALTY ORDER WAS PAS SED ON 26/09/2014 LEVYING THE PENALTY @ 10% OF THE UNDISCLOSED INCOME. 4. BEING AGGRIEVED BY THE ORDER OF THE ASSESSING OF FICER, THE ASSESSEE CARRIED THE MATTER BEFORE THE LD. CIT(A), W HO AFTER CONSIDERING THE SUBMISSIONS, DISMISSED THE APPEAL OF THE ASSESS EE. 5. NOW THE ASSESSEE IS IN APPEAL BEFORE US CHALLENGI NG THE CORRECTNESS OF THE ORDER OF THE LD. CIT(A). THE ONLY EFFECTIVE GROUND OF THE ASSESSEES APPEAL IS AGAINST CONFIRMING THE PEN ALTY U/S 271AAA OF THE ACT. THE LD AR OF THE ASSESSEE HAS REITERATED TH E SUBMISSIONS AS MADE IN THE WRITTEN SUBMISSIONS. HE FURTHER SUBMITTE D THAT THE AUTHORITIES BELOW WERE NOT JUSTIFIED IN LEVYING THE P ENALTY AND CONFIRMING THE SAME U/S 271AAA OF THE ACT. HE FURTHER SUBMITTE D THAT THE ASSESSEE HAD DULY INCLUDED THE INCOME SURRENDERED DURING THE COURSE OF SEARCH. HE SUBMITTED THAT INITIATION OF PENALTY BY THE ASSE SSING OFFICER IS ITA 137, 160 & 135/JP/2016_ RAJENDRA SINGH BHAMBOO VS ACIT 5 CONTRARY TO THE SPIRIT OF THE PROVISIONS OF SECTION 271AAA OF THE ACT. HE ALSO SUBMITTED THAT IN THE STATEMENT RECORDED DURIN G THE COURSE OF SEARCH, THE ASSESSEE HAD DULY REPLIED. HE DREW OUR A TTENTION TOWARDS PAGE NO. 12 OF THE PAPER BOOK IN SUPPORT OF THE CON TENTION THAT THE ASSESSEE HAD SURRENDERED INCOME FOR TAXATION IN REP LY TO QUESTION NO. 16. HE SUBMITTED THAT THIS IS NOT A FIT CASE WHERE T HE LD. CIT(A) OUGHT TO HAVE CONFIRMED THE PENALTY. 6. ON THE CONTRARY, THE LD CIT DR HAS VEHEMENTLY SU PPORTED THE ORDERS OF THE AUTHORITIES BELOW AND SUBMITTED THAT T HE PROVISIONS ARE CLEAR WHERE THE ASSESSEE SURRENDERS INCOME HE HAS TO SUBSTANTIATE IN THE MANNER SUCH INCOME WAS EARNED IN THE ABSENCE OF SUCH SUBSTANTIATION. THE AUTHORITIES WOULD BE WITHIN THEIR POWER TO IMPOSE PENALTY. 7. WE HAVE HEARD THE RIVAL CONTENTIONS OF BOTH THE PARTIES, PERUSED THE MATERIAL AVAILABLE ON THE RECORD AND GONE THROU GH THE ORDERS OF THE AUTHORITIES BELOW. THERE IS NO DISPUTE WITH REGARD TO THE FACT THAT THE ASSESSEE HAD SURRENDERED A SUM OF RS. 2,44,10,262/- AS UNDISCLOSED INCOME DURING THE COURSE OF SEARCH. IT IS ALSO NOT IN DISPUTE THAT THIS INCOME WAS DULY INCLUDED INTO THE RETURN FILED IN PU RSUANCE TO THE NOTICE ISSUED U/S 153A OF THE ACT. NOW UNDER THESE FACTS, W E NEED TO ITA 137, 160 & 135/JP/2016_ RAJENDRA SINGH BHAMBOO VS ACIT 6 ADJUDICATE WHETHER THE AUTHORITIES BELOW WERE JUSTIFIE D IN IMPOSING THE PENALTY UNDER THE FACTS OF THE PRESENT CASE. FOR TH E SAKE OF CLARITY, THE RELEVANT PROVISIONS OF SECTION 271AAA OF THE ACT IS REPRODUCED HEREINBELOW: (1) THE ASSESSING OFFICER MAY, NOTWITHSTANDING ANYT HING CONTAINED IN ANY OTHER PROVISIONS OF THIS ACT, DIRECT THAT, IN A CAS E WHERE SEARCH HAS BEEN INITIATED UNDER SECTION 132 ON OR AFTER THE 1ST DAY OF JUNE, 2007 BUT BEFORE THE 1ST DAY OF JULY, 2012, THE ASSESSEE SHALL PAY B Y WAY OF PENALTY, IN ADDITION TO TAX, IF ANY, PAYABLE BY HIM, A SUM COMP UTED AT THE RATE OF TEN PER CENT. OF THE UNDISCLOSED INCOME OF THE SPECIFIE D PREVIOUS YEAR. (2) NOTHING CONTAINED IN SUB-SECTION (1) SHALL APPL Y IF THE ASSESSEE,? (I) IN THE COURSE OF THE SEARCH, IN A STATEMENT UND ER SUB-SECTION (4) OF SECTION 132, ADMITS THE UNDISCLOSED INCOME AND SPEC IFIES THE MANNER IN WHICH SUCH INCOME HAS BEEN DERIVED ; (II) SUBSTANTIATES THE MANNER IN WHICH THE UNDISCLO SED INCOME WAS DERIVED ; AND (III) PAYS THE TAX, TOGETHER WITH INTEREST, IF ANY, IN RESPECT OF THE UNDISCLOSED INCOME. (3) NO PENALTY UNDER THE PROVISIONS OF CLAUSE (C) O F SUB-SECTION (1) OF SECTION 271 SHALL BE IMPOSED UPON THE ASSESSEE IN R ESPECT OF THE UNDISCLOSED INCOME REFERRED TO IN SUB-SECTION (1). (4) THE PROVISIONS OF SECTIONS 274 AND 275 SHALL, S O FAR AS MAY BE, APPLY IN RELATION TO THE PENALTY REFERRED TO IN THIS SECTION . EXPLANATION FOR THE PURPOSES OF THIS SECTION,- (A) UNDISCLOSED INCOME MEANS (I) ANY INCOME OF THE SPECIFIED PREVIOUS YEAR REPRE SENTED, EITHER WHOLLY OR PARTLY, BY ANY MONEY, BULLION, JEWELLERY OR OTHER V ALUABLE ARTICLE OR THING OR ANY ENTRY IN THE BOOKS OF ACCOUNT OR OTHER DOCUMENT S OR TRANSACTIONS FOUND IN THE COURSE OF A SEARCH UNDER SECTION 132, WHICH HAS? (A) NOT BEEN RECORDED ON OR BEFORE THE DATE OF SEAR CH IN THE BOOKS OF ACCOUNT OR OTHER DOCUMENTS MAINTAINED IN THE NORMAL COURSE RELATING TO SUCH PREVIOUS YEAR ; OR ITA 137, 160 & 135/JP/2016_ RAJENDRA SINGH BHAMBOO VS ACIT 7 (B) OTHERWISE NOT BEEN DISCLOSED TO THE PRINCIPAL C HIEF COMMISSIONER OR CHIEF COMMISSIONER OR PRINCIPAL COMMISSIONER OR COM MISSIONER BEFORE THE DATE OF THE SEARCH ; OR (II) ANY INCOME OF THE SPECIFIED PREVIOUS YEAR REPR ESENTED, EITHER WHOLLY OR PARTLY, BY ANY ENTRY IN RESPECT OF AN EXPENSE RECOR DED IN THE BOOKS OF ACCOUNT OR OTHER DOCUMENTS MAINTAINED IN THE NORMAL COURSE RELATING TO THE SPECIFIED PREVIOUS YEAR WHICH IS FOUND TO BE FA LSE AND WOULD NOT HAVE BEEN FOUND TO BE SO HAD THE SEARCH NOT BEEN CONDUCT ED ; (B) SPECIFIED PREVIOUS YEAR MEANS THE PREVIOUS YE AR (I) WHICH HAS ENDED BEFORE THE DATE OF SEARCH, BUT THE DATE OF FILING THE RETURN OF INCOME UNDER SUB-SECTION (1) OF SECTION 1 39 FOR SUCH YEAR HAS NOT EXPIRED BEFORE THE DATE OF SEARCH AND THE ASSESSEE HAS NOT FURNISHED THE RETURN OF INCOME FOR THE PREVIOUS YEAR BEFORE THE S AID DATE ; OR (II) IN WHICH SEARCH WAS CONDUCTED. FROM THE READING OF THE ABOVE PROVISION, IT IS CLEA R THAT AS PER SUB- SECTION (1) OF SECTION 271AAA OF THE ACT, THE ASSES SING OFFICER MAY DIRECT THAT IN A CASE WHERE THE SEARCH HAS BEEN INIT IATED U/S 132 ON OR AFTER FIRST DAY OF JUNE, 2007, THE ASSESSEE SHALL P AY BY WAY OF PENALTY IN ADDITION TO TAX IF ANY PAYABLE BY HIM A SUM COMPUTE D AT THE RATE OF TEN PER CENT OF THE UNDISCLOSED INCOME OF THE SPECIFIED PREVIOUS YEAR. AS PER SUB-SECTION (2) OF SECTION 271AAA OF THE ACT NOTHIN G CONTAINED IN SUB- SECTION (1) SHALL APPLY IF THE ASSESSEE (I) IN THE COURSE OF THE SEARCH, IN A STATEMENT UND ER SUB-SECTION (4) OF SECTION 132, ADMITS THE UNDISCLOSED INCOME A ND SPECIFIES THE MANNER IN WHICH SUCH INCOME HAS BEEN DERIVED ; ITA 137, 160 & 135/JP/2016_ RAJENDRA SINGH BHAMBOO VS ACIT 8 (II) SUBSTANTIATES THE MANNER IN WHICH THE UNDISCLOS ED INCOME WAS DERIVED ; AND (III) PAYS THE TAX, TOGETHER WITH INTEREST, IF ANY, IN RESPECT OF THE UNDISCLOSED INCOME. NOW COMING TO THE FACTS OF THE PRESENT CASE, THE ASS ESSEE IN HIS STATEMENT U/S 132 OF THE ACT ADMITTED UNDISCLOSED I NCOME AND SPECIFIED THE MANNER IN WHICH SUCH INCOME WAS DERIVED, WHICH IS EVIDENT FROM THE REPLY TO QUESTION NO. 16 RECORDED DURING THE COURSE OF SEARCH. THE REVENUE HAS NOT DISPUTED THE FACT THAT THE ASSESSEE HAD PAID TAX TOGETHER WITH THE INTEREST IF ANY IN RESPECT OF THE UNDISCLOSED INCOME, THEREFORE, OUT OF THE THREE CONDITIONS FOR IMMUNITY AGAINST THE PENALTY UNDER SUB-SECTION (I) OF SECTION 271AAA OF THE ACT ARE DULY SPECIFIED IN THE PRESENT CASE. THE BASIS OF IMPOSING PENALTY, CO NFIRMING THE SAME BY THE REVENUE IS THAT THE ASSESSEE HAS NOT SUBSTANTIA TED THE MANNER IN WHICH THE UNDISCLOSED INCOME WAS DERIVED. WE FIND THA T IN THE CASE OF DCIT VS. RAJENDRA SINGH BHAMBOO IN ITA NO. 160/JP/20 16, THE LD. CIT(A) HAS DELETED THE PENALTY BY OBSERVING AS UNDER :- DURING THE PENALTY PROCEEDING, AO ISSUED A NOTICE U/S 271 AAA TO THE APPELLANT COMPANY BY ALLEGING THAT ASSESSEE HAS FAI LED TO SPECIFY AND SUBSTANTIATE THE MANNER IN WHICH THE UNDISCLOSED IN COME OF RS. 51,66,579/- HAS BEEN DERIVED. IN RESPONSE TO THE NOTICE THE ASS ESSEE STATED THAT ITA 137, 160 & 135/JP/2016_ RAJENDRA SINGH BHAMBOO VS ACIT 9 PROVISIONS CONTAINED IN SECTION 271 AAA OF THE ACT ARE INAPPLICABLE TO THE FACTS OF THE APPELLANT COMPANY AND COMPLETE TAXES H AD BEEN PAID BY THE APPELLANT COMPANY. HOWEVER, AO WAS NOT CONVINCED WI TH ASSESSEES CONTENTION AND LEVIED PENALTY. NOW IT NEEDS TO BE E XAMINED AS TO WHETHER THE ASSESSEE HAS BEEN ABLE TO FULFILL THE REQUIREME NT OF SECTION 271 AAA FOR CLAIMING EXEMPTION FROM LEVY OF THE PENALTY THERE U NDER. HAVING GONE THROUGH THE PROVISIONS LAID DOWN U/S 271 AAA OF THE ACT, I FIND THAT IN RESPECT OF UNACCOUNTED INCOME IN THE CASES WHERE SEARCH IS INITIATED AFTER 1.6.2007 AND BEFORE 1.7.2012, THE ASSESSEE IS TO PAY A PENAL TY @ 10% OF UNACCOUNTED INCOME BUT SUB SECTION (2) OF SECTION 271 AAA ALSO PROVIDES EXEMPTION FROM THIS PENALTY PROVISIONS IN A SITUATION IN WHICH (I) DURING THE COURSE OF SEARCH IN A STATEMENT UNDER SECTION 132(41 THE ASSESSEE ADMIT S THE UNDISCLOSED INCOME AND SPECIFIES THE MANNER IN WHICH SUCH INCOM E HAS BEEN DERIVED (II) SUBSTANTIATES THE MANNER IN WHICH THE UNDISCLOSED I NCOME WAS DERIVED AND (III) PAYS THE TAX TOGETHER WITH THE INTEREST, IF A NY, IN RESPECT OF THE UNDISCLOSED INCOME. THE AO IN THE IMPUGNED PENALTY ORDER HAS HELD THAT THE ASSESSEE HAS NOT FULFILLED CONDITIONS AS LAID DOWN IN CLAUSE (III) TO SUB SECTION (2) OF SECTION 271 AAA OF THE ACT. ON PERUSAL OF SWORN STATEMENT RECORDED ON OATH U/S 132(4) OF THE ASSESSEE, IT IS SEEN THAT THOUGH NO SPECIFIC QUESTION HAS BEEN RAISED TO THE ASSESSEE ABOUT SPECIFICATION OF THE MANNER IN WHICH SUCH INCOME HAS BEEN DERIVED AND SUBSTANTIATION OF THE MANNER IN WHICH THE UNDISCLOSED INCOME WAS DERIVED, BUT THE ASSESSEE IN ANSWER TO QUESTION NO. 16, HAS SPECIFIED THE MANNER THAT THE UNDISCLOSED I NCOME WAS FROM THE BUSINESS OPERATIONS. IT IS ALSO AN ADMITTED FACT TH AT THE UNDISCLOSED INCOME OF RS. 51,66,579/- HAS BEEN ACCEPTED BY THE AO IN THE ASSESSMENT COMPL ETED U/S 143(3) R.W.S. 153A OF THE ACT. HERE I WOULD LIK E TO QUOTE THE DECISION OF HONBLE ITAT BENCH NEW DELHI IN CASE OF 2009 M/S. S PAZE TOWER PVT. LTD REPORTED IN IT A NO. 2296/DEL/2012 ASSESSMENT YEAR: 2008-09, WHICH IS QUITE IDENTICAL TO THE FACTS OF THE APPELLANT ASSESSEE AS UNDER:- WE HAVE GONE THROUGH CERTAIN FOLLOWING DECISIONS O N AN IDENTICAL ISSUE WHILE DECIDING THE QUESTION IN THE CASE OF NEERAJ SINGHAL VS. ACIT, ITA NO. 337/D/2013 (ASSTT. 2010-11) ORDER DATED 24.6.2013. THESE DECISIONS ARE OF HON'BLE ALLAHABAD HIGH COURT IN THE CASE OF CIT VS. RADHA KISHAN GOEL (2005) 278ITR 454 (ALL) AND HON'BLE GUJARAT HIGH COURT IN THE CASE OF CIT VS. MAHENDRA C. SHAH (2008) 298 ITR 305 (GUJ.). THE HON'BLE ALLAHABAD HI GH COURT IN THE CASE OF CIT VS. RADHA KISHAN GOEL (SUPRA) HAS BEEN PLEASED TO ITA 137, 160 & 135/JP/2016_ RAJENDRA SINGH BHAMBOO VS ACIT 10 HOLD THAT U/S 132(4) UNLESS THE AUTHORIZED OFFICER PUTS A 14 SPECIFIC QUESTION WITH REGARD TO THE MANNER IN WHICH INCOME HAS BEEN DERIVED, IT IS NOT EXPECTED FROM THE PERSON TO MAKE A STATEMENT IN THI S REGARD AND IN CASE IN THE STATEMENT THE MANNER IN WHICH INCOME HAS BEEN D ERIVED HAS NOT BEEN STATED BUT HAS BEEN STATED SUBSEQUENTLY, THAT AMOUN TS TO THE COMPLIANCE WITH EXPLANATION 5(2) TO SECTION 271(1)(C) OF THE A CT. IT HAS BEEN FURTHER HELD BY THE HON'BLE HIGH COURT THAT IN CASE THERE IS NOT HING TO THE CONTRARY IN THE STATEMENT RECORDED UNDER SECTION 132(4) OF THE ACT, IN THE ABSENCE OF ANY SPECIFIC STATEMENT ABOUT THE MANNER IN WHICH SUCH I NCOME HAS BEEN DERIVED, IT CAN BE INFERRED THAT SUCH UNDISCLOSED INCOME WAS DERIVED FROM THE BUSINESS WHICH HE WAS CARRYING ON AND NOT FROM OTHER SOURCES . THE OBJECT OF THE PROVISION IS ACHIEVED BY MAKING THE STATEMENT ADMIT TING THE NON-DISCLOSURE OF MONEY, BULLION, JEWELLERY, ETC. IT WAS HELD THAT MUCH IMPORTANCE SHOULD NOT BE ATTACHED TO THE STATEMENT ABOUT THE MANNER IN WH ICH SUCH INCOME HAS BEEN DERIVED. IT CAN BE INFERRED ON THE FACTS AND C IRCUMSTANCES OF THE CASE, IN THE ABSENCE OF ANYTHING TO THE CONTRARY. THEREFORE, MERE NON-STATEMENT OF THE MANNER IN WHICH SUCH INCOME WAS DERIVED WOULD N OT MAKE EXPLANATION 5(2) INAPPLICABLE HELD HON'BLE HIGH COURT. SIMILAR VIEW HAS BEEN EXPRESSED BY THE HON'BLE GUJARAT HIGH COURT IN THE CASE OF CIT V S. MAHENDRA C. SHAH (SUPRA) FOR A READY REFERENCE RELEVANT EXTRACT OF T HE SAID DECISION OF HON'BLE GUJARAT HIGH COURT IS REPRODUCED HEREUNDER:- ' IN SO FAR AS THE ALLEGED FAILURE ON THE PART OF THE ASSESSEE TO SPECIFY IN THE STATEMENT UNDER SECTION 132(4) OF THE ACT REGARDING THE MANNER IN WHICH SUCH INCOME HAS BEEN DERIVED, SUFFICE IT TO STATE T HAT WHEN THE STATEMENT IS BEING RECORDED BY THE AUTHORIZED OFFICER IT IS I NCUMBENT UPON THE AUTHORIZED OFFICER TO EXPLAIN THE PROVISIONS OF EXP LANATION 5 IN ITS ENTIRETY TO THE ASSESSEE CONCERNED AND THE AUTHORIZED OFFICE R CANNOT STOP SHORT AT A PARTICULAR STAGE SO AS TO PERMIT THE REVENUE TO T AKE ADVANTAGE OF SUCH A LAPSE IN THE STATEMENT THE REASON IS NOT FAR TO SEE K. IN THE FIRST INSTANCE, THE STATEMENT IS 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 CO NSIDERING THE SETTING IN WHICH SUCH STATEMENT IS BEING RECORDED, AS NOTED BY THE ALLAHABAD HIGH COURT IN THE CASE OF CIT V. RADHA KISHAN GOEL [2005] 278 ITR 454. SECONDLY, CONSIDERING THE SOCIAL ENVIRONMENT IT IS NOT POSSIBLE TO EXPECT FROM AN ASSESSEE, WHETHER LITERATE OR ILLITERATE, T O BE SPECIFIC AND TO THE POINT REGARDING THE CONDITIONS STIPULATED BY EXCEPT ION NO. 2 WHILE MAKING STATEMENT UNDER SECTION 132(4) OF THE ACT THE VIEW TAKEN BY THE TRIBUNAL AS WELL AS THE ALLAHABAD HIGH COURT TO THE EFFECT T HAT EVEN IF THE ITA 137, 160 & 135/JP/2016_ RAJENDRA SINGH BHAMBOO VS ACIT 11 STATEMENT DOES NOT SPECIFY THE MANNER IN WHICH THE INCOME IS DERIVED, IF THE INCOME IS DECLARED AND TAX THEREON PAID, THERE WOULD BE SUBSTANTIAL COMPLIANCE NOT WARRANTING ANY FURTHER DENIAL OF THE BENEFIT UNDER EXCEPTION NO. 2 IN EXPLANATION 5 IS COMMENDABLE.' THE CUTTACK BENCH OF THE TRIBUNAL IN THE CASE OF AS HOK SHARMA AND OTHERS VS. DCIT (ITA NO. 476 TO 480/CTK/2011 REFERRED IN THE C ASE OF NEERAJ SINGHAL VS. ACIT(SUPRA), HAS OBSERVED THAT PENALTY U/S 271AAA W AS LEVIED, THE ASSESSEE HAD DISCLOSED HUGE INCOME WHILE GIVING STATEMENT U/ S 132 OF THE ACT DURING THE COURSE OF SEARCH AND HAD PAID TAX THEREON AND T HE INCOME SHOWN FROM BUSINESS, DEPARTMENT HAD ACCEPTED THESE RETURNS AND ACCORDINGLY PASSED THE ASSESSMENT ORDER. IT WAS HELD THAT UNDISPUTEDLY THE ASSESSEE HAS SHOWN UNDISCLOSED INCOME UNDER THE HEAD 'INCOME FROM BUSI NESS' IN THE RETURNS FILED BY THEM AND THAT WAS ACCEPTED BY THE DEPARTME NT BY PASSING THE ASSESSMENT ACCORDINGLY, THE CASE OF THE ASSESSEE FA LLS EXACTLY WITHIN THE PURVIEW OF SUB SECTION 2 OF SECTION 271 AAA. THUS T HE IMPUGNED PENALTY LEVIED CONTRARY TO THE PROVISIONS CONTAINED IN SECT ION 271 AAA (2) IS NOT SUSTAINABLE. IT WAS DELETED ACCORDINGLY. IN THE CAS E OF SHRI PRAMOD KUMAR JAIN VS. JCIT (SUPRA) BEFORE THE CUTTACK BENCH OF THE TRIBUNAL, T HE ASSESSEE HAD DISCLOSED THE UNACCOUNTED INCOME BUT HAD FAILED TO SPECIFY THE MANNER IN WHICH SUCH INCOME HAS BEEN DERIVED. THE DEPARTMENT LEVIED PENALTY U/S 271AAA AND THE SAME WAS UPHELD BY THE FIRST APPELLA TE AUTHORITY. THE TRIBUNAL HAD HOWEVER DELETED THE PENALTY ON THE BAS IS THAT THERE IS NO PRESCRIBED METHOD TO INDICATE THE MANNER IN WHICH I NCOME WAS GENERATED WHEN THE DEFINITION OF 'UNDISCLOSED INCOME' HAS BEE N DEFINED IN THE ACT ITSELF WHEN NO INCOME OF THE SPECIFIED PREVIOUS YEAR REPRE SENTED 'EITHER WHOLLY OR PARTLY WHICH ONUS LAY UPON THE ASSESSEE STOOD DISCH ARGED. 12. WHEN WE EXAMINE THE FACTS OF THE PRESENT CASE IN VI EW OF THE ABOVE DECISIONS, WE FIND THAT NO SPECIFIC QUESTION WAS RA ISED BY THE DEPARTMENT DURING THE COURSE OF RECORDING OF STATEMENT U/S 132 (4) OF THE ACT TO SPECIFY THE MANNER IN WHICH SUCH INCOME HAS BEEN DE RIVED AND TO SUBSTANTIATE IT, INSTEAD THE ASSESSEE IN REPLY TO Q UESTION NO. 18 HAS STATED THAT UNDISCLOSED INCOME WAS FROM THE BUSINESS. RESP ECTFULLY FOLLOWING THE ABOVE DECISION WE HOLD THAT IN ABSENCE OF SPECIFIC QUERY RAISED IN THIS REGARD, THE ASSESSEE WOULD NOT BE EXPECTED TO SPECI FY THE MANNER IN WHICH THE SAID UNDISCLOSED INCOME WAS DERIVED AND S UBSTANTIATE IT. STILL THE ASSESSEE HAS SPECIFY THE MANNER SUBSTANTIATION OF WHICH CANNOT BE ITA 137, 160 & 135/JP/2016_ RAJENDRA SINGH BHAMBOO VS ACIT 12 DISPUTED IN ABSENCE OF ANY ADVERSE FINDING ON THE M ANNER EXPLAINED BY THE ASSESSEE AND ACCEPTED AS SUCH IN THE ASSESSMENT FRAMED U/S 153A OF THE ACT. WE ARE THUS OF THE VIEW THAT THE AUTHORITY BELOW WERE NOT JUSTIFY IN IMPOSING AND SUSTAINING THE PENALTY OF RS. 80 LA CS U/S 271 AAA OF THE ACT KEEPING IN VIEW THE FACTS AND CIRCUMSTANCES OF THE PRESENT CASE AS DISCUSSED ABOVE. THE SAME IS DIRECTED TO BE DELETED . (STRESS BY UNDERLYING SUPPLIED BY ME) HONBLE ITAT NEW DELHI WHILE DECIDING THE CASE OF N EERAJ SINGHAL HAS ALSO REFERRED DECISIONS OF FOLLOWING CASES:- * ASHOK KUMAR SHARMA VS. DY. CIT (2013) 33 TAXMANN.COM (CUTTACK) * ASSTT. CIT VS. GEBILAL KANHAIALAL (HUF) (2012) 2 52 CTR (SC) 345: (2012) 76 DTR (SC) 345 * DY. CIT VS. INDERCHAND SURAJMAL BROS. (ITA NO. 139/ PUNE/2010) * MOTHERS PRIDE EDUCATION PERSONNA (P) LTD. VS. DY. C IT (ITA NO. 3372/DEL/2011, DT. 12 TH OCT. 2012) * PRAMOD KUMAR JAIN VS. DY. CIT (2012) 149 TTJ (CTK) (UO) 36 : (2012) 77 DTR (CTK) (TRIB) 244 * SMT. SULOCHANADEVI A. AGARWAL VS. ITO (ITA NO. 1052 /AHD/2012) IN CASE OF NEERAJ SINGHAL (SUPRA) HONBLE ITAT NEW DELHI HAS OBSERVED THAT IN ABSENCE OF QUERY RAISED BY AO DURING THE COURSE OF RECORDING OF STATEMENT U/S 132(4) ABOUT THE MANNER IN WHICH THE UNDISCLOSE D INCOME HAS BEEN DERIVED AND ABOUT IT SUBSTANTIATION, THE AO WAS NOT JUSTIFIED IN IMPOSING PENALTY U/S 271 AAA SPECIALLY WHEN THE OFFERED UNDI SCLOSED INCOME HAS BEEN ACCEPTED AND DUE TAX THEREON HAS BEEN PAID BY THE A SSESSEE. ON SIMILAR FACTS, VARIOUS COURTS HAVE DECIDED THE ISSUE ON THE SAME LINE, AND IN THIS REGARD, FURTHER RELIANCE CAN BE PLACED ON THE FOLLO WING DECISIONS (I) 299ITR 305 (GUJ) CIT VS. MAHENDRA C. SHAH (II) 270 ITR 523 (RAJ) GEBITLAL KANHAIALAL (HUF) V S. ACIT (III) 299 ITR 19 (RAJ.) CIT VS. KANHAIYALAL (IV) 286 ITR 626 (MAD) CIT VS. E. V. BALASHANMUGHA M (V) 264 ITR 249 (DEL) CIT VS. CHHABRA EMPORIUM (VI) 247 ITR 742 (KER) CIT VS. SANTHOSH FINANCIERS (VII) 278 ITR 454 (ALL) CIT VS. RADHA KISHAN GOEL HOWEVER, IN THIS CASE, ASSESSEE IN ANSWER TO QUESTI ON NO. 16 OF THE SWORN STATEMENT RECORDED ON OATH U/S 132(4) OF THE ACT HA S CLEARLY SPECIFIED THE ITA 137, 160 & 135/JP/2016_ RAJENDRA SINGH BHAMBOO VS ACIT 13 MANNER OF DERIVING UNDISCLOSED INCOME. THEREFORE, W HEN ASSESSEE HAS COMPLIED WITH SUB SECTION (2) OF SECTION 271 AAA OF THE ACT, AOS ACTION CANNOT BE JUSTIFIED AND SUSTAINED. IN VIEW OF FACTS AND CIRCUMSTANCES DISCUSSED ABOVE, PENALTY LEVIED OF RS.51,66,579/= I S HEREBY DELETED. ASSESSEES APPEAL IN GROUND NO. 1 IS ALLOWED. HOWEVER, IN THE PRESENT CASE, HE HAS SUSTAINED THE P ENALTY ON THE GROUND THAT THE ASSESSEE HAS FAILED TO SUBSTANTIATE THE MANNER IN WHICH THE UNDISCLOSED INCOME WAS DERIVED. THE FACTS ARE IDE NTICAL AND ARISE FROM THE SAME SEARCH, THEREFORE, THE FINDING OF THE LD. CIT(A) IS CONTRADICTORY. UNDER THESE FACTS AND CIRCUMSTANCES, WE RESTORE THIS APPEAL TO THE FILE OF THE LD. CIT(A) FOR DECISION AF RESH. 8. NOW WE TAKE ASSESSEES APPEAL IN ITA NO. 135/JP/20 16 . IN THIS CASE, THE FACTS AND IDENTICAL AS WERE IN IT A NO. 137/JP/2016 PERTAINING TO THE A.Y. 2012-13 EXCEPT T HE CHANGE OF FIGURES. THE PARTIES HAVE ADOPTED SAME ARGUMENT AS WERE IN ITA NO. 137/JP/2016. BY TAKING A CONSISTENT VIEW, WE ALSO RE STORE THIS ISSUE TO THE FILE OF THE LD. CIT(A) FOR DECIDING AFRESH. 9. NOW WE TAKE REVENUES APPEAL IN ITA NO. 160/JP/201 6 THE ONLY EFFECTIVE ISSUE IS AGAINST DELETING THE PE NALTY OF RS. 51,66,579/- BY THE LD. CIT(A). THE LD CIT DR HAS VEHE MENTLY SUPPORTED ITA 137, 160 & 135/JP/2016_ RAJENDRA SINGH BHAMBOO VS ACIT 14 THE ORDER OF THE ASSESSING OFFICER AND SUBMITTED TH AT THE LD. CIT(A) WAS NOT JUSTIFIED IN DELETING THE PENALTY. 10. ON THE CONTRARY, THE LD AR OF THE ASSESSEE HAS VEHEMENTLY SUPPORTED THE ORDER OF THE LD. CIT(A). 11. WE HAVE HEARD THE RIVAL CONTENTIONS OF BOTH THE PARTIES, PERUSED THE MATERIAL AVAILABLE ON THE RECORD AND ALSO GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. SINCE THE ASSESSEE HAD ALSO C HALLENGED THE ORDER OF THE LD. CIT(A) IN THE CASE OF RAJENDRA SINGH BHAM BOO VS. ACIT AND THE OTHER ASSESSEE RAJENDRA SINGH DANGI VS. ACIT IN ITA NO. 137/JP/2016 AND 135/JP/2016 RESPECTIVELY. IN BOTH T HE APPEALS, WE HAVE SET ASIDE THE ORDER OF THE LD. CIT(A) AND RESTORED THE APPEAL TO THE FILE OF LD. CIT(A) FOR DECISION AFRESH. THEREFORE, IN THIS C ASE ALSO, THE FACTS ARE IDENTICAL AS WERE MADE IN THOSE APPEALS, BY TAKING A CONSISTENT VIEW, WE DEEM IT APPROPRIATE THE ORDER OF THE LD. CIT(A) IS S ET ASIDE AND THE APPEAL OF THE REVENUE TO BE RESTORED TO THE FILE OF THE LD. CIT(A) FOR DECISION AFRESH. THE LD. CIT(A) WOULD GIVE FINDING AF TER CONSIDERING ALL THE FACTS AND MATERIAL AVAILABLE ON RECORD AND GIVI NG SUFFICIENT OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. ITA 137, 160 & 135/JP/2016_ RAJENDRA SINGH BHAMBOO VS ACIT 15 12. IN THE RESULT, BOTH THE APPEALS OF THE ASSESSEE AND THE APPEAL OF THE REVENUE ARE ALLOWED FOR STATISTICAL PURPOSES ONL Y. ORDER PRONOUNCED IN THE OPEN COURT ON 14/06/2017. SD/- SD/- HKKXPAN DQY HKKJR (BHAGCHAND) (KUL BHARAT) YS[KK LNL;@ ACCOUNTANT MEMBER U;KF;D LNL;@ JUDICIAL MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 14 TH JUNE, 2017 *RANJAN VKNS'K DH IZFRFYFI VXZSFKR @ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ @ THE APPELLANT- (I) SHRI RAJENDRA SINGH BHAMBOO, JHNUNJHNU. (II) SHRI RAJENDRA SINGH DANGI, JHNUNJHNU. 2. IZR;FKHZ @ THE RESPONDENT- THE ACIT/DCIT, CENTRAL CIRCLE-2, JAIP UR. 3. VK;DJ VK;QDR @ CIT 4. VK;DJ VK;QDRVIHY @ THE CIT(A) 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ @ DR, ITAT, JAIPUR 6. XKMZ QKBZY @ GUARD FILE (ITA NO. 137/JP/2016, 160/JP/2016 & 135/JP/2016) VKNS'KKUQLKJ @ BY ORDER, LGK;D IATHDKJ @ ASST. REGISTRAR