Sh. Pawan Sahni, Solan V. DCIT, CC-II, Chandigarh

ITA 1373/CHANDI/2017

• Counselvise Citation: [2018] 119 COUNSELVISE.COM (IT) 0741 (ITAT-CHANDIGARH)
• Duration Of Justice: 1 year(s) 2 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-11-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2010-2011
• Appeal Filed On: 18-09-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ANITA SINHA
• Assessee Lawyers: SUMIT GOYAL
• Keywords: Business income; Tax effect
• Section: 132; 153A

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL, CHANDIGARH BENCH B , CHANDIGARH , !'# , #$ % & ' ( , )*' BEFORE: SMT.DIVA SINGH, JM & SMT.ANNAPURNA GUPTA, A M ./ ITA NO.1372/CHD/2017 / ASSESSMENT YEAR : 2010-11 SHRI MANOJ SAHNI, SAHNIS ASHIANA, CIRCULAR ROAD, SOLAN (H.P.) THE D.C.I.T., CENTRAL CIRCLE-II , CHANDIGARH. ./PAN NO: AFNPS5722P /APPELLANT /RESPONDENT ./ ITA NO.1373/CHD/2017 / ASSESSMENT YEAR : 2010-11 SHRI PAWAN SAHNI, SAHNIS ASHIANA, CIRCULAR ROAD, SOLAN (H.P.) THE D.C.I.T., CENTRAL CIRCLE-II , CHANDIGARH. ./PAN NO: AERPS9602P /APPELLANT /RESPONDENT ./ ITA NO.194/CHD/2014 / ASSESSMENT YEAR : 2007-08 THE D.C.I.T., CENTRAL CIRCLE-II , CHANDIGARH. SHRI MANOJ SAHNI, SAHNIS ASHIANA, CIRCULAR ROAD, SOLAN (H.P.) ./PAN NO: AFNPS5722P /APPELLANT /RESPONDENT ./ ITA NO.37/CHD/2017 / ASSESSMENT YEAR : 2010-11 THE A.C.I.T., CENTRAL CIRCLE-II , CHANDIGARH. M/S DEV BHOOMI APARTMENTS(AOP), KALKA SHIMLA ROAD, DEONGHAT, SOLAN. ./PAN NO:AAAAD5685P /APPELLANT /RESPONDENT ./ ITA NO.201/CHD/2014 / ASSESSMENT YEAR : 2010-11 2 THE D.C.I.T., CENTRAL CIRCLE-II , CHANDIGARH. M/S DEV BHOOMI APARTMENTS(AOP), KALKA SHIMLA ROAD, DEONGHAT, SOLAN. ./PAN NO:AAAAD5685P /APPELLANT /RESPONDENT & ./ ITA NO.143/CHD/2015 / ASSESSMENT YEAR : 2010-11 THE A.C.I.T., CENTRAL CIRCLE-II , CHANDIGARH. M/S DEV BHOOMI GREEN VALLEY, KALKA SHIMLA ROAD, DEONGHAT, SOLAN. ./PAN NO:AAAAD5140P /APPELLANT /RESPONDENT /ASSESSEE BY : S/SHRI RAJ KUMAR & SUMIT GOYAL, CAS ! / REVENUE BY : SMT.ANITA SINHA, CIT DR '# $ /DATE OF HEARING : 04.09.2018 %&'(# /DATE OF PRONOUNCEMENT: 30.11.2018 )+ /ORDER PER BENCH : ALL THE ABOVE APPEALS RELATE TO DIFFERENT ASSESSEE S BELONGING TO THE SAME GROUP, I.E. SAHNI GROUP, WHER E SEARCH ACTION WAS CARRIED OUT U/S 132(1) OF THE INCOME TA X ACT, 1961 (IN SHORT REFERRED TO AS ACT).WHILE THE APPE ALS IN ITA NO.1372 & 1373/CHD/2017 ARE ASSESSEES APPEAL AGAIN ST SEPARATE ORDERS OF THE COMMISSIONER OF INCOME TAX (APPEALS)-3, GURGAON DATED 15.6.2017, CONFIRMING PE NALTY LEVIED U/S 271AAA OF THE ACT, THE REST ARE APPEALS FILED BY THE REVENUE AGAINST ORDERS PASSED BY THE CIT(A) SIN CE THE APPEALS ARISE FROM THE COMMON ACTION OF SEARCH CARR IED OUT ON A GROUP TO WHICH ALL THE ABOVE ASSESSEES RELATE, THEY WERE TAKEN UP TOGETHER FOR HEARING. 3 3. AT THE OUTSET, IT WAS POINTED OUT THAT THE TAX E FFECT INVOLVED IN ALL THE APPEALS FILED BY THE REVEN UE I.E. IN ITA NO.194/CHD/2014, ITA NO.37/CHD/2017, ITA NO. 143/CHD/2015 AND ITA NO.201/CHD/2014 IS LESS THAN R S. 20 LACS. THE LD. DR HAS ALSO FAIRLY ADMITTED THAT C BDT CIRCULAR NO. 3/2018 IS APPLICABLE TO THIS APPEAL, H ENCE, THIS APPEAL OF THE REVENUE IS LIABLE TO BE DISMISSED. 4. IT MAY BE NOTED THAT CBDT VIDE CIRCULAR NO. 3/20 18 DATED 11.07.2018 HAS REVISED THE MONETARY LIMIT UPT O RS.20 LACS FOR FILING APPEALS BY THE DEPARTMENT BEFORE TH E TRIBUNAL AND FURTHER VIDE PARA 13 OF THE SAID CIRCULAR IT HA S BEEN CLARIFIED THAT SAID CIRCULAR IS APPLICABLE RETROSPE CTIVELY TO THE PENDING APPEALS ALSO. THE HONBLE PUNJAB & HARY ANA HIGH COURT IN THE CASE OF PRINCIPAL CIT OF INCOME TAX VS. SURINDER KUMAR SINGHAL ITA NO 406-2016 (O&M) VIDE ORDER DATED 30.1.2017 WHILE FURTHER RELYING UPON THE DECI SION OF THE HON'BLE SUPREME COURT IN THE CASE OF CIT VS. DHANALEKSHMI BANK LTD. (2015) 373 ITR 526 (SC), HA S DISMISSED THE APPEAL OF THE REVENUE WITHOUT GOING I NTO THE MERITS DUE TO LOW TAX EFFECT LEAVING THE QUESTION O F LAW OPEN. IN VIEW OF THE CBDT CIRCULAR NO. 03/2018 (SUPRA) AN D IN THE LIGHT OF THE ABOVE REFERRED TO DECISION OF THE HON' BLE JURISDICTIONAL PUNJAB & HARYANA HIGH COURT (SUPRA) , THE PRESENT APPEAL OF THE REVENUE IS DISMISSED DUE TO L OW TAX EFFECT. 5. IT IS, HOWEVER, CLARIFIED THAT THE DISMISSAL OF THE ABOVE APPEAL SHALL NOT BE TAKEN TO BE AFFIRMATION OF THE ORDER OF 4 THE CIT(A) ON MERITS. THE LEGAL ISSUE RAISED BY THE REVENUE IS BEING LEFT OPEN TO BE ADJUDICATED IN AN APPROPRI ATE CASE. 6. THE DEPARTMENTAL APPEALS IN ITA NO.194/CHD/2014, ITA NO NO.37/CHD/2017, ITA NO.143/CHD/2015 AND IN I TA NO.201/CHD/2014 ARE, THEREFORE, DISMISSED. 7. WE SHALL NOW BE TAKING UP THE ASSESSEES APPEAL IN ITA NOS.1372 & 1373/CHD/2017. IT WAS COMMON GROUND BETWEEN BOTH THE PARTIES THAT THE PENALTY WAS LEVIE D U/S 271AAA OF THE ACT ON IDENTICAL SET OF FACTS I.E. OF CASH SURRENDERED. SINCE THE FACTS AND ISSUE INVOLVED IN BOTH THE APPEALS ARE COMMON, THEY ARE BEING DECIDED TOGETHER . FOR CONVENIENCE, WE SHALL BE DEALING WITH THE FACTS IN THE CASE OF SHRI PAWAN SAHNI IN ITA NO.1373/CHD/2017 AND THE DECISION RENDERED THEREIN WILL APPLY MUTATIS MUTAND IS IN THE CASE OF SHRI MANOJ SAHNI IN ITA NO.1372/CHD/201 7. ITA NO.1373/CHD/2017: 8. AS STATED ABOVE, THE ASSESSEE HAS CHALLENGED THE ACTION OF THE LD.CIT(A) IN UPHOLDING THE LEVY OF PE NALTY U/S 271AAA ON CASH SURRENDERED DURING SEARCH OPERATION CARRIED OUT ON THE ASSESSEE. 9. BRIEF FACTS RELEVANT TO THE CASE ARE THAT SEARCH OPERATIONS U/S 132(1) OF THE ACT WERE CARRIED OUT A T THE RESIDENTIAL AND BUSINESS PREMISES OF SAHNI GROUP OF CASES INCLUDING THE ASSESSEES ON 11.9.2009, DURING THE CO URSE OF WHICH CASH OF RS.32,65,270/- WAS FOUND FROM THE RESIDENTIAL PREMISES OF THE ASSESSEE OUT OF WHICH R S.30, 5 00,000/- WAS SEIZED FROM THE GROUP.. THE ASSESSEE W HEN ASKED TO EXPLAIN THE SOURCE OF THE CASH FOUND, IN H IS STATEMENT RECORDED U/S 132(4) OF THE ACT STATED THA T THE CASH AMOUNTING TO RS.9,65,270/- WAS THE CASH IN HAN D OF ALL PERSONS AND CONCERNS OF THE GROUP, DETAIL OF WH ICH WAS ALSO FILED. THE BALANCE UNEXPLAINED CASH OF RS.23,0 0,000/- (32,65,270 - 9,65,270) WAS SURRENDERED BY THE ASSES SEE AS UNDER: SHRI PAWAN SAHNI (ASSESSEE) RS.15,00,000/- SHRI GIRISH SAHNI RS. 2,50,000/- SHRI MANOJ SAHNI RS. 5,50,000/- 10. THE OFFER OF THE ADDITIONAL INCOME WAS MADE IN THE RETURN FILED U/S 153A OF THE ACT WHICH WAS ACCEPTED ALSO BY THE REVENUE. HOWEVER,, PENALTY PROCEEDINGS WERE INI TIATED U/S 271AAA OF THE ACT STATING THAT SINCE THE ASSESS EE COULD NOT SPECIFY THE MANNER OF EARNING THE UNDISCLOSED C ASH SURRENDERED BY HIM DURING SEARCH. THEREAFTER THE OR DER WAS PASSED LEVYING PENALTY @ 10% OF THE CASH SURRENDERE D AS PER THE PROVISIONS OF SECTION 271AAA OF THE ACT FOR THE SAID REASON. THE LD.CIT(A) UPHELD THE ORDER OF THE A.O. THE RELEVANT FINDINGS OF THE LD.CIT(A) UPHOLDING THE LE VY OF PENALTY AT PARAS 3.4 TO 3.6 OF THE ORDER IS AS UNDE R: 3.4 DURING THE SEARCH PROCEEDINGS, THE APPELLANT HA D VOLUNTARILY SURRENDERED RS.23,00,000/- AS ADDITIONAL INCOME, WHICH WAS INCLUDED IN THE TOTAL SURRENDER OF RS.3,00,00,000/- MADE BY THE GROUP. 3.5 FURTHER, THE APPELLANT HAD OFFERED ADDITIONAL IN COME OF RS.15,00,000/- MADE IN THE RETURN U/S 153A. THE AO HAS IMPOSED PENALTY OF RS.1,50,000/- U/S 271AAA OF THE ACT ON THE GROUND THAT THE APPELLANT HAD FAILED TO SPECIFY THE MANNER OF EARNING THE UNDISCLOSED INCOME. 6 3.6 IT IS APPARENT FROM THE CASE, THAT THE APPELLANT HAD NOT DISCLOSED INCOME OF RS.15,00,000/- WHICH RELATES TO THE 'SPECIFIED PREVIOUS YEAR' IN THE COURSE OF CERTIFIE D TRUE COPY THE SEARCH IN A STATEMENT U/S 132(4) OF THE AC T HAD NOT ADMITTED THIS UNDISCLOSED INCOME NOR SPECIFIED THE MANNER IN WHICH SUCH INCOME HAS BEEN DERIVED AS MANDATED IN SEC 271AAA(2)(I) OF THE ACT TO GET IMMUNITY FROM PENALTY U/S 271AAA. IN VIEW OF THE ABOVE DISCUSSION, PENALTY U/S 271AM OF THE ACT AMOUNTING RS.1,50,000/- IS SUSTAINED. 11. AGGRIEVED BY THE SAME, THE ASSESSEE HAS COME U P IN APPEAL BEFORE US. DURING THE COURSE OF HEARING BEF ORE US THE LD. COUNSEL FOR ASSESSEE MADE HIS SUBMISSIONS D ATED 4.9.2018 IN WRITING AND RELYING UPON THE SAME ARGUE D BEFORE US THAT THE ORDER OF THE CIT(A) CONFIRMING L EVY OF PENALTY WAS BAD ON VARIOUS COUNTS AS UNDER: 1) SINCE THE ASSESSEE HAD COMPLIED WITH ALL THE CONDITIONS SPECIFIED U/S 271AAA SUB-SECTION (2) FOR GRANT OF IMMUNITY FROM LEVY OF PENALTY UNDER THE SECTION BY MAKING THE SURRENDER DURING THE SEARCH SPECIFYING THE AMENDMENT OF EARNING THE SAID CASH A S BEING ON ACCOUNT OF ADVANCES RECEIVED AGAINST SALE OF CERTAIN PROPERTIES WHICH DID NOT MATURE, WHICH WAS DECLARED IN THE RETURN OF INCOME FILED POST SEARCH, TAXES AND INTEREST PAID THEREON AND WHICH SURRENDER WAS ACCEPTED BY THE A.O. ALSO. OUR ATTENTION WAS DRAWN TO THE SURRENDER LETTER SPECIFYING THE MANNE R OF EARNING THE INCOME PLACED AT PAPER BOOK PAGE NO.23 AS UNDER: THAT OUR OF TOTAL CASH OF RS.30 LACS SEIZED DURING THE SEARCH/SURVEY, RS.23 LACS WAS ON ACCOUNT OF ADVANCE RECEIVED AGAINST CERTAIN PROPERTIES AND THE SAME NOT GETTING MATURED AND HENCE BEING 7 SURRENDERED IN THE ABSENCE OF PROPER DETAILS. BALANCE CASH OF RS.7 LACS IS DULY ACCOUNTED FOR IN THE BOOKS OF ACCOUNT AND HENCE THE SAME IS NOT BEING SURRENDERED. 2) THAT THE A.O. WAS FACTUALLY WRONG IN MENTIONING THAT THE ASSESSEE HAD NOT SPECIFIED THE MANNER IN WHICH THIS INCOME WAS EARNED WHICH IS EVIDENT FROM THE SURRENDER LETTER AS POINTED OUT ABOVE AND WHICH STOOD ACCEPTED BY THE DEPARTMENT ALSO. 3. THAT THE CIT(A) WAS FACTUALLY INCORRECT IN STATI NG THAT THE SURRENDER OF CASH WAS NOT DISCLOSED IN THE COURSE OF SEARCH WHEN THE FACT WAS THAT IT WAS SURRENDERED ONLY DURING SEARCH AND HAD ALSO WRONGLY HELD THAT THE MANNER OF EARNING HAD NOT BEEN SPECIF IED BY THE ASSESSEE. 4) THAT ON IDENTICAL SET OF FACTS ON THE BASIS OF S AME SURRENDER LETTER, THE ASSESSEES BROTHER, SHRI GIRI SH SAHNI HAD SURRENDERED RS.2,50,000/- EXPLAINING THE SAME SOURCE AND SAME MANNER AND SIMILAR PENALTY HAD BEEN LEVIED ON HIM ALSO WHICH WAS SUBSEQUENTLY DELETED IN APPEAL BY THE CIT(A) ON THE BASIS OF EXA CTLY SAME EXPLANATION OF SAME SOURCE, MANNER AND SPECIFICATION. OUR ATTENTION WAS DRAWN TO THE ORDE R OF THE CIT(A) IN THE CASE OF SHRI GIRISH SAHNI PLACED AT PAPER BOOK PAGE NO.39 DATED 9.6.2017 DELETING THE PENALTY LEVIED ON CASH SURRENDERED OF RS.2,50,000/- AT PARAS 3.4 TO 3.6 AS UNDER: 3.4 DURING THE SEARCH PROCEEDINGS, THE APPELLANT HA D VOLUNTARILY SURRENDERED RS.2,50,000/- AS ADDITIONAL 8 INCOME, WHICH WAS INCLUDED IN THE TOTAL SURRENDER OF RS.3,00,00,000/- MADE BY THE GROUP. 3.5 FURTHER, THE APPELLANT HAD OFFERED ADDITIONAL IN COME OF RS.2,50,000/- MADE IN THE RETURN U/S 153A. THE AO HA S IMPOSED PENALTY OF RS.25,000/- U/S 271AAA OF THE AC T ON THE GROUND THAT THE APPELLANT HAD FAILED TO SPECI FY THE MANNER OF EARNING THE UNDISCLOSED INCOME. 3.6 IT HAS BEEN SUBMITTED BY THE APPELLANT THAT IT IS A SETTLED LAW THAT WHERE SURRENDER AMOUNT STANDS OFFERED IN THE RETURN AND TAXES AND INTEREST STAND PAID, THEN NO PENALTY SHOULD BE LEVIED FOR TECHNICA L REASONS. IT HAS FURTHER BEEN SUBMITTED THAT IF THE ASSESSEE ANSWERS THE QUESTIONS RAISED BY THE SEARCH PARTY REGARDING SURRENDER AMOUNT, IT SHOULD BE DEEMED THAT HE HAS COMPLETED ALL HIS OBLIGATIONS RELATING TO SURRENDER AMOUNT AND IF THERE IS ANY DEFICIENCY, INCLUDING WHICH MAY BE SPECIFICALLY FOR N OT ADDRESSING THE SPECIFIC ISSUE BY THE SEARCH PARTY, T HE ASSESSEE CANNOT BE FAULTED. RELIANCE PLACED ON FOLLOWING JUDICIAL PRONOUNCEMENTS. A) CIT VS. SUDHIR JAIN 41 TAXRNANN.COM 234 (DELHI HC) B) SUNIL KUMAR BANSAL VS. DCIT 70 SOT 137 (CHD TRIB) C) ACIT VS. MUNISH KR, GOYAL 152 ITD 458 (CHD TRIB) I AGREE WITH THE APPELLANT'S CONTENTION IN VIEW OF THE JUDICIAL PRONOUNCEMENTS RELIED UPON WHICH ARE APPLICA BLE TO THE CASE OF THE APPELLANT AND HENCE PENALTY ON RS. 2,50.000 AMOUNTING RS. 25,000 IS ALSO DELETED. IN VIEW OF THE SAME, PENALTY OF RS. 69,557 IMPOSED BY THE AO IS DELETED. AS A RESULT, APPEAL OF THE APPELLANT IS ALLOWED. 5) THAT IN THE CASE OF M/S DEV BHOOMI APARTMENTS (AOP) (GROUP CONCERN) SURRENDER OF RS.25,00,000/- F OR WORK IN PROGRESS MADE VIDE THE SAME SURRENDER LETTE R ON WHICH PENALTY U/S 271AAA HAD BEEN LEVIED WAS ASO DELETED BY THE CIT(A) VIDE HIS ORDER DATED 9.6.2017 . OUR ATTENTION WAS DRAWN TO THE FINDINGS OF THE CIT( A) IN THE SAID CASE AT PARA 4.3(B) AS UNDER: 9 4.3 (B) WITH REGARD TO PENALTY ON RS. 25,00,000/- SURRENDERED U/S 132(4) AS WIP, IT HAS BEEN STATED BY T HE APPELLANT THAT IT IS A CASE WHERE THE ASSESSEE SURREND ERED THE AMOUNT, INCLUDED THE SAME IN THE RETURN, ALSO EXPLAINE D THE MANNER OF DERIVING SUCH UNDISCLOSED INCOME AND ALSO PAID TAXES THEREON. THUS, THE APPELLANT SATISFIED ALL THE C ONDITIONS OF SEC 271AAA(2) OF THE ACT AND HENCE PENALTY SHOULD NOT BE LEVIED. IT HAS FURTHER BEEN SUBMITTED THAT DURING SEAR CH AS WELL AS DURING POST SEARCH PERIOD, WHATEVER AND WHENE VER ANY QUESTIONS WERE ASKED INCLUDING IN STATEMENT U/S 132(4) OF THE ACT, THE APPELLANT ALWAYS REPLIED FULLY AND COMP LETELY & RELIED ON JUDICIAL PRONOUNCEMENTS INCLUDING CIT. VS. SUD HIR JAIN 41 TAXRNANN. COM 234 (DELHI HC) AND SUDHIR KUM AR BANSAL VS. DCIT 70 SOT 137 (CHD. TRIBUNAL) I AGREE WITH THE CONTENTIONS OF THE APPELLANT THERE I S NO REASON TO LEVY PENALTY ON THIS SURRENDERED AMOUNT I N VIEW OF THE PROVISIONS OF THE ACT AND THE JUDICIAL PRONOUNC EMENTS ON THIS ISSUE. IN VIEW OF THE SAME, PENALTY ON SURRENDERED VALUE AMOUNTING TO RS. 25,00,OOO/- IS A LSO DELETED. 6) WITHOUT PREJUDICE TO THE ABOVE CONTENTION WHERE SURRENDERED AMOUNT STOOD OFFERED IN THE RETURN, TAX ES AND INTEREST STOOD PAID AND THE MANNER OF EARNING STOOD EXPLAINED, NO PENALTY WAS LEVIABLE U/S 271AAA OF THE ACT. RELIANCE WAS PLACED ON VARIOUS DECISIONS O F THE HON'BLE HIGH COURT AND THE TRIBUNAL IN THIS REGARD. THE SUBMISSIONS FILED BY THE ASSESSEE ARE BEING PRODUCED HEREUNDER: PENALTY U/S 271AAA RS.1,50,000/- @10% ON CASH SURR ENDERED RS. 1,50,000/- ONE - SEARCH ON THE GROUP U/S.132 ON L 1.09.09 (A.Y. 20 10-1 1) - CASH OF RS. 30,00,000/- WAS SEIZED FROM THE GROU P - OUT OF THIS CASH OF RS.23,00,000/- WAS SURRENDERE D U/S.132 (4) AS UNDER:- PAWAN SAHNI (ASSESSEE) RS. 15,00,000/- GIRISH SAHNI RS.2,50,000/- MANOJ SAHNI RS. 5,50,000/- - THE ASSESSEE ALSO EXPLAINED THE SOURCE AS 'BUSINE SS INCOME' AND ALSO THE MANNER AS 'ON ACCOUNT OF ADVANCE RECEIVED AGAIN ST CERTAIN PROPERTIES AND THE SAME NOT GETTING MATURED AND HEN CE BEING SURRENDERED IN THE ABSENCE OF PROPER DETAILS' 10 - THUS, THE SURRENDER WAS MADE DURING SEARCH, THE M ANNER WAS ALSO SUO MOTO FURNISHED AND IT WAS SUBSTANTIATED ALSO AND THE A.O. DULY ACCEPTED THE SAME AS AND IN THE MANNER AS SURRENDERE D BY THE ASSESSEE - THUS HE SUBSTANTIATED THE MANNER OF EARNING THE SAID INCOME ALSO - RS.15,00,000/- WERE DECLARED IN THE RETURN FILED POST SEARCH AND THE SURRENDER WAS ALSO ACCEPTED - THE ASSESSEE ALSO PAID TAXES AND INTEREST THEREON AS PER LAW - HENCE, ALL CONDITIONS VIDE SEC.271AAA (2) STOOD S ATISFIED FOR NOT LEVYING PENALTY U/S. 271AAA. TWO - THE A.O. HAS BEEN FACTUALLY WRONG IN MENTIONING THAT THE ASSESSEE HAD NOT SPECIFIED THE MANNER IN WHICH THIS INCOME WAS EARNE D - THE MANNER WAS DULY SPECIFIED IN THE SURRENDERED LETTER AS DETAILED ABOVE - THE SURRENDER STANDS ACCEPTED THREE - CIT (A) WRONGLY HELD THAT RS. 15,00,000/- WAS NOT D ISCLOSED IN THE COURSE OF SEARCH WHILE IT WAS SURRENDERED ONLY DURING SEAR CH - CIT (A) ALSO WRONGLY HELD THAT MANNER HAS NOT BEEN SPECIFIED WHILE IT WAS DULY SPECIFIED AS GIVEN IN PG.23 OF THE PAPER BOOK FOUR - EXACTLY ON SIMILAR FACTS, ON THE BASIS OF SAME SURR ENDER LETTERS, SH. GIRISH SAHNI (BROTHER) ALSO SURRENDERED CASH OF RS. , 2.5 LACS EXPLAINING THE SAME SOURCE AND SAME MANNER AND SIMILAR PENALTY HAS BEEN LEVIED ON HIM ALSO - HOWEVER, SAME CIT (A), VIDE SAME DATED ORDER I.E. 1 5.06.17. DELETED THE PENALTY OF RS, 25, 000/- ON SURRENDER OF RS.2,5 0,000/- ON THE BASIS OF EXACTLY SAME/COMMON EXPLANATION OF SOURCE, MANNER A ND ITS SUBSTANTIATION FIVE - M/S DEV BHOOMI APPTT. AOP (GROUP CONCERNED) ALSO S URRENDERED RS.25,00,000/- FOR WIP VIDE SAME SURRENDER LETTER - SAME LD. CIT (A) VIDE ORDER DTD.09.06.17 DELETED TH E PENALTY ON SAID AMT. - SIX - WITHOUT PREJUDICE - WHERE SURRENDER AMT. STANDS OFFERED IN THE RETURN, T AXES AND INTEREST STANDS PAID AND THE MANNER STANDS EXPLAINED, NO PEN ALTY U/S.271AAA CAN BE LEVIED CASE LAWS CIT VS. SUDHIR JAIN 41 TAXMANN.COM 234 (DELHI HC) SECTION 271AAA, READ WITH SECTION 69, OF THE INCOME-TAX ACT , 1961 - PENALTY - WHERE SEARCH HAS BEEN INITIATED [CONDITIONS PRECEDE NT] - A CERTAIN SUM WAS SURRENDERED AS UNDISCLOSED INCOME BY AN AOP AT T IME OF SEARCH 11 - TAXES AND APPLICABLE INTEREST WERE PAID ON UNDISC LOSED INCOME AND MANNER OF EARNING WAS RECORDED IN STATEMENT OF ONE OF MEMBERS OF AOP THAT INCOME WAS DERIVED FROM TRADING TRANSACTIONS NOT RECORDED IN BOOKS - WHETHER PENALTY UNDER SECTION 2 71AAA COULD NOT BE IMPOSED - HELD, YES [PARA 7] [IN FAVOUR OF ASSES SEE] SUNIL KUMAR BANSAL VS..DCIT 70_SQT 137 (CHD. TRIE) IT : WHERE NO QUESTION WAS ASKED DURING STATEMENT RECORDED UNDER SECTION 132(4), IN RESPECT OF MANNER OF EARNING INC OME SURRENDERED, ASSESSEE COULD NOT BE EXPECTED TO SUBS TANTIATE SAME LATER ON; PENALTY COULD NOT BE LEVIED UNDER SECTION 271AAA. 1`432ACIT VS. MUNISH KUMAR GOYAL 152 ITD 453 (CHD. TRIE) SECTION 271 AAA OF THE INCOME-TAX ACT, 1961 - PENAL TY - WHERE SEARCH HAS BEEN INITIATED (APPLICABILITY OF) - ASSE SSMENT YEAR 2010- 11 - WHERE ASSESSEE HAVING SURRENDERED CERTAIN INCO ME IN COURSE OF SEARCH, FILED RETURN WHEREIN SAID AMOUNT WAS DULY D ISCLOSED AND TAXES WERE PAID ACCORDINGLY, THERE WAS SUFFICIENT C OMPLIANCE OF PROVISIONS OF SECTION 271 AAA (2) AND, THUS, IMPUGN ED PENALTY ORDER DESERVED TO BE SET ASIDE - HELD, YES [PARA 10] [IN FAVOUR OF ASSESSEE] NEERAT SINGAL VS. ACIT 161 TTJ (DEL.) (TRIE.) 483 PENALTY U/S. 271 AAA - CONDITIONS PRECEDENT - SURRE NDER OF INCOME VIS- A-VIS MATTER OF EARNING - IN THE ABSENCE OF QUERY R AISED BY THE AO DURING THE COURSE OF RECORDING OF STATEMENT U/S. 132 (4) ABOUT THE MANNER IN WHICH THE UNDISCLOSED INCOME HAS BEEN DERIV ED ABOUT ITS SUBSTANTIATION, THE AO WAS NOT JUSTIFIED IN IMPOSIN G PENALTY U/S. 271 AAA SPECIALLY WHEN THE OFFERED UNDISCLOSED INCOME H AS BEEN ACCEPTED AND DUE TAX THEREON HAS BEEN PAID BY THE A SSESSEE. PRAMOD KR. JAIN VS. DCIT (2012) 77 DTR (CTK.) (TRIE .) 244 ASSESSEE HAVING SURRENDERED CERTAIN INCOME FOR THE RELEVANT ASSTT. YEARS IN THE STATEMENTS DURING THE COURSE OF SEARCH AND FILED RETURNS DECLARING THE SAME PURSUANT TO NOTICE U/S. 153 A WHICH HAS BEEN ACCEPTED BY THE AO, LEVY OF PENALTY U/S. 271 A AA WAS NOT JUSTIFIED ON THE GROUND THAT THE ASSESSEE HAS MADE DISCLOSURE BUT FAILED TO SPECIFY THE MANNER IN WHICH SUCH INCOME H AS BEEN DERIVED. ASHQK KR. SHARMA VS. DCIT (2012) 77 DTR (CTK.) (TRI E.) 241 ASSESSEE HAVING DISCLOSED CONCEALED INCOME WHILE GI VING STATEMENT U/S. 132 (4) DURING THE COURSE OF SEARCH AND PAID T AX THEREON AND SHOWED THE SAID UNDISCLOSED INCOME IN THE RETURN UN DER THE HEAD 'INCOME FROM BUSINESS' WHICH HAS BEEN ACCEPTED BY T HE DEPTT., PENALTY U/S. 271 AAA IS NOT LEVIABLE. 12. THE LD. COUNSEL FOR ASSESSEE, THEREFORE, CONTEN DED THAT THE ASSESSEE HAVING COMPLIED WITH ALL THE CONDITION S SPECIFIED FOR GRANT OF IMMUNITY U/S 271AAA SUB-SECT ION (2) OF THE ACT AND THE CIT(A) HAVING HIMSELF DELETED TH E PENALTY LEVIED IN IDENTICAL CIRCUMSTANCES IN THE CASE OF OT HER ASSESSEES OF THE SAME GROUP AND IN RELATION TO THE SAME 12 SURRENDER MADE, THERE WAS NO CASE OF LEVY OF PENALT Y U/S 271AAA OF THE ACT. 13. THE LD. DR, ON THE OTHER HAND, RELIED UPON THE ORDERS OF THE A.O. AND THE CIT(A) EMPHASIZING THAT THE ASS ESSEE HAD FAILED TO SPECIFY THE MANNER OF EARNING THE CAS H SURRENDERED. 14. WE HAVE HEARD RIVAL CONTENTIONS AND PERUSED THE ORDERS OF THE AUTHORITIES BELOW. WE ARE CONVINCED W ITH THE ARGUMENTS OF THE LD. COUNSEL FOR ASSESSEE THAT THE PRESENT IS NOT THE FIT CASE FOR LEVY OF PENALTY U/S 271AAA OF THE ACT. UNDISPUTEDLY THE PENALTY HAS BEEN LEVIED ON THE CAS H SURRENDERED BY THE ASSESSEE OF RS.15 LACS. ADMITTED LY THE ASSESSEE IN ITS SURRENDER LETTER AS REPRODUCED ABOV E, HAD EXPLAINED THE SOURCE OF EARNING THE SAID CASH AS BE ING ON ACCOUNT OF BUSINESS RECEIPT AGAINST CERTAIN PROPERT IES AND THE SAME NOT GETTING MATURED. THE AFORESAID SURREND ER UNDISPUTEDLY WAS ACCEPTED BY THE A.O. AND WAS REFLE CTED IN THE RETURN OF INCOME FILED BY THE ASSESSEE AND TAXE S PAID THEREON. THE REVENUE AUTHORITIES HAVE LEVIED PENALT Y FOR THE REASON THAT THE ASSESSEE FAILED TO SPECIFY THE MANN ER OF EARNING THE SURRENDERED INCOME/CASH. THIS FINDING A S IS EVIDENT FROM THE FACTS STATED ABOVE IS AN INCORRECT FINDING. SINCE THE SURRENDER LETTER DULY SPECIFIED THE MANNE R OF EARNING THE SURRENDERED CASH . ALSO AS RIGHTLY POIN TED OUT BY THE LD. COUNSEL FOR ASSESSEE THE OTHER CONDITION S SPECIFIED FOR GRANT OF IMMUNITY FROM THE LEVY OF PE NALTY U/S 271AAA STOOD FULFILLED BY THE ASSESSEE BY WAY OF MA KING THE 13 IMPUGNED SURRENDER IN THE STATEMENT MADE DURING THE COURSE OF SEARCH, RETURNING THE SAME AS INCOME AND PAYING TAXES THEREON. MOREOVER AS RIGHTLY POINTED OUT BY T HE LD. COUNSEL FOR ASSESSEE IN IDENTICAL SET FACTS AND CIRCUMSTANCES THE LD.CIT(A) HAD DELETED THE LEVY OF PENALTY IN THE CASE OF SHRI GIRISH SAHNI, THE BROTHER OF TH E ASSESSEE WHO HAD MADE SURRENDER OF RS.2,50,000/- CASH EXPLAI NING THE SOURCE TO BE THE SAME AS IN THE CASE OF THE ASS ESSEE AND ALL OTHER CONDITIONS ALSO BEING IDENTICAL TO THAT I N THE CASE OF THE ASSESSEE. SIMILARLY, IN THE CASE OF M/S DEV BHOOMI APARTMENTS(AOP) THE PENALTY LEVIED ON THE SURRENDER MADE ON ACCOUNT OF WIP WHICH WAS ALSO DULY EXPLAINED IN THE SURRENDER LETTER FILED AND INCLUDED IN THE RETURN O F INCOME AND TAXES PAID THEREON WERE ALSO DELETED BY THE CIT (A). THE FACTS AND CIRCUMSTANCES INVOLVED IN THESE CASES ARE IDENTICAL TO THAT IN THE CASE OF THE ASSESSEE. THE LD. DR HAS BEEN UNABLE TO POINT OUT ANY DIFFERENTIATING FACTS. THERE IS NO REASON WHY THE CIT(A) TOOK A TOTALLY DIVERGENT V IEW IN THE PRESENT CASE AND CONFIRMED THE LEVY OF PENALTY. IN VIEW OF THE ABOVE FACTS AND CIRCUMSTANCES OF THE CASE, WE HOLD THAT THE ASSESSEE HAVING DEMONSTRATED TO HAVE FULFILLED ALL THE CONDITIONS FOR GRANT OF IMMU NITY FROM LEVY OF PENALTY U/S 271AAA AS SPECIFIED IN SUB-SECT ION (2) OF THE SECTION INCLUDING SPECIFYING THE MANNER OF EARN ING THE SURRENDERED INCOME, AND HAVING DELETED PENALTY LEVI ED IN IDENTICAL SET OF FACTS IN CASE OF OTHER ASSESSEES O F THE SAME GROUP, THE CIT(A) WAS WRONG IN CONFIRMING THE LEVY OF 14 PENALTY IN THE PRESENT CASE. THE PENALTY SO LEVIED IS, THEREFORE, DIRECTED TO BE DELETED. THE APPEAL OF THE ASSESSEE IS, THEREFORE, ALLOWED. ITA NO.1372/CHD/2017: 15. THE ISSUE IN THIS CASE RELATES TO LEVY OF PENAL TY ON THE CASH SURRENDERED BY SHRI MANOJ SAHNI AMOUNTING TO RS.5,50,000/-. SINCE IT WAS COMMON GROUND THAT THE FACTS AND CIRCUMSTANCES LEADING TO THE LEVY OF PENALTY AN D CONFIRMATION OF THE SAME BY THE CIT(A) WERE IDENTIC AL TO THAT IN THE CASE OF SHRI PAWAN SAHNI DEALT WITH BY US ABOVE IN ITA NO.1373/CHD/2017, THE DECISION RENDERED THER EIN WILL SQUARELY APPLY TO THE PRESENT CASE ALSO, FOLLO WING WHICH WE DELETE THE LEVY OF PENALTY. THE APPEAL OF THE ASSESSEE IS ALLOWED. 16. IN EFFECT; 1) THE APPEAL OF THE ASSESSEE IN ITA NOS.1272/CHD/2017 & ITA NO.1273/CHD/2017 ARE ALLOWED. 2) THE APPEALS OF THE REVENUE IN ITA NO.194/CHD/2014, ITA NO.37/CHD/2017, ITA NO.143/CHD/2015 & ITA NO.201/CHD/2014 ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT. $ %' & ( (DIVA SINGH) (ANNAPURNA GUPTA) ,' / JUDICIAL MEMBER )*' / ACCOUNTANT MEMBER $ /DATED: 30 TH NOVEMBER, 2018 15 * * &) *+,+ / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. - $ / CIT 4. - $ ( )/ THE CIT(A) 5. +./ 0 , #0 , 123/4 / DR, ITAT, CHANDIGARH 6. /35' / GUARD FILE &) $ / BY ORDER, 6 ! / ASSISTANT REGISTRAR