Rajiv Chinubhai Parikh, Kolhapur V. Deputy Commissioner of Income-Tax, Central Circle, Kolhapur

ITA 149/PUN/2022

AI Insights

The case involves Shri Rajiv Chinubhai Parikh, who appealed against the order of the CIT(A), Pune-11, which affirmed the Assessing Officer's imposition of a penalty under Section 271AAA of the Income Tax Act, 1961. The penalty was imposed following a search operation that allegedly uncovered undisclosed income related to renovation and decoration expenditures. The primary contention was the discrepancy between the amount admitted by the assessee during the search (Rs. 61 lakhs) and the amount recorded in the books (Rs. 44,86,500). The Tribunal, after considering the arguments and the relevant legal provisions, decided in favor of the assessee, highlighting the lack of substantial evidence to support the penalty.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 137339 (ITAT-PUNE)
• Duration Of Justice: 10 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-01-2023
• Appeal Filed By: Assessee
• Order Result: AllowedAllowed
• Bench Allotted: B
• Next Hearing Date: 22-12-2022
• Assessment Year: 2011-2012
• Appeal Filed On: 03-03-2022
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH “B” : PUNE BEFORE SHRI SATBEER SINGH GODARA, JUDICIAL MEMBER AND DR. DIPAK P. RIPOTE, ACCOUNTANT MEMBER ITA.No.149/PUN./2022 Assessment Year 2011-12 Shri Rajiv Chinubhai Parikh, 1114 E-Ward, Royal Courts O-2, Kolhapur – 416 001. PAN ADDPP4359B vs. Dy. CIT, Central Circle, 1 st Floor, Shriram Heights, 1 st lane Shahupuri, Kolhapur – 416 001. (Appellant) (Respondent) For Assessee : -None- For Revenue : Shri M.G. Jasnani Date of Hearing : 23.12.2022 Date of Pronouncement : 05.01.2023 ORDER PER SATBEER SINGH GODARA, J.M. This assessee’s appeal for assessment year 2011-12, arises against the CIT(A), Pune-11, Pune’s order dated 08.12.2021, passed in DIN & Order No.ITBA/APL/S/250/ 2021-22/1037613843(1), involving proceedings under Section 271AAA of the Income Tax Act, 1961 (in short “the Act”). 2. Case called twice. None appears at the assessee’s behest. He is accordingly proceeded ex-parte. 3. Mr. Jasnani at the outset invited our attention to the CIT(A)'s detailed discussion affirming Assessing Officer’s action imposing sec.271AAA penalty of Rs.1,81,817/- @ 10% 2 ITA.No.149/PUN./2022 Shri Rajiv Chinubhai Parikh, Kolhapur. of the alleged undisclosed income detected during the course of search reading as under : 3 ITA.No.149/PUN./2022 Shri Rajiv Chinubhai Parikh, Kolhapur. 4 ITA.No.149/PUN./2022 Shri Rajiv Chinubhai Parikh, Kolhapur. 4. Suffice to say, it has come on record that both the learned lower authorities have levied the impugned penalty in assessee’s case thereby concluding that he could not satisfy the manner in which the undisclosed income had been derived in the relevant previous year. Mr. Jasnani also took a lot of pains to refer to the assessee’s search statement to question no.15 wherein he could not explain the discrepancy of the expenditure. 5. We have given our thoughtful consideration to the assessee’s pleadings and Revenue’s vehement arguments. We see no reason to express our agreement with the impugned 5 ITA.No.149/PUN./2022 Shri Rajiv Chinubhai Parikh, Kolhapur. penalty. This is for the precise reason that the same is only based on the assessee’s alleged admission in search regarding renovation/decoration expenditure of Rs.61 lakhs whereas the actual figure thereof as per the books of accounts found/seized during the course of search only indicated the actual figure of Rs.44,86,500/-. We are, therefore, of the view that such a mere statement itself hardly carries any significance as per the CBDT’s twin circulars issued on 10.03.2003 as reiterated on 18.12.2014 nor the same satisfies the mandatory condition u/s.271AAA Explanation (a) of the Act. Faced with the situation, we hold that the impugned penalty exceeding the actual amount in the books found in the course of search and carrying presumption of correctness u/sec.292C of the Act, would hardly form any basis to attract the impugned penalty per se. The penalty of Rs.1,81,817/- is directed to be deleted therefore. 6. This assessee’s appeal is allowed in above terms. Order pronounced in the open Court on 05.01.2023. Sd/- Sd/- [DR. DIPAK P. RIPOTE] [SATBEER SINGH GODARA] ACCOUNTANT MEMBER JUDICIAL MEMBER Pune, Dated 05 th January, 2023 VBP/- 6 ITA.No.149/PUN./2022 Shri Rajiv Chinubhai Parikh, Kolhapur. Copy to 1. The appellant 2. The respondent 3. The Ld. CIT(A) concerned. 4. The CIT concerned 5. D.R. ITAT, Pune “B” Bench, Pune 6. Guard File. //By Order// Assistant Registrar, ITAT, Pune Benches Pune.