SHRI SHRI BASANT KUMAR JAIN, RAIPUR (CG) V. THE DY. COMMISSIONER OF INCOME TAX, RAIPUR (CG)

ITA 191/BIL/2016

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 4383 (ITAT-RAIPUR)
• Duration Of Justice: 5 year(s) 2 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-10-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2012-2013
• Appeal Filed On: 15-07-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R K BARAL
• Assessee Lawyers: R B DOSHI
• Keywords: Income from undisclosed sources; Benefit of exemption; Set aside

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL RAIPUR BENCH, RAIPUR BEFORE SHRI PRADIP KUMAR KEDIA, ACCOUNTANT MEMBER & SHRI PAWAN SINGH, JUDICIAL MEMBER ./ I.T.A. NO. 191/RPR/2016) ( ASSESSMENT YEAR : 2012-13) BASANT KUMAR JAIN PRO. M/S. RISHABH BUILDERS, D-14, SHAILENDRA NAGAR, RAIPUR (C.G.) 492001 / VS. DEPUTY COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-I, RAIPUR, CENTRAL REVENUE BUILDING, CIVIL LINES, RAIPUR (C.G.) 492001 ./ ./PAN/GIR NO. : ACIPJ1068K ( APPELLANT ) .. ( / RESPONDENT ) / APPELLANT BY : SHRI R. B. DOSHI, C.A. / RESPONDENT BY : SHRI R. K. BARAL, DR DATE OF HEARING 12/08/2021 / DATE OF PRONOUNCEMENT 04/10/2021 / O R D E R PER PRADIP KUMAR KEDIA - AM: THE CAPTIONED APPEAL HAS BEEN FILED AT THE INSTANCE OF THE ASSESSEE AGAINST THE ORDER OF THE COMMISSIONER OF I NCOME TAX (APPEALS)-I, RAIPUR (CIT(A) IN SHORT) DATED 05.02 .2016 ARISING IN THE PENALTY ORDER DATED 26.09.2014 PASSED BY THE AS SESSING OFFICER (AO) UNDER S. 271AAA OF THE INCOME TAX ACT, 1961 (T HE ACT) CONCERNING AY 2012-13 WHEREIN RS.20,74,830/- WAS C ONFIRMED BY THE CIT(A). ITA NO. 191/RPR/2016 (BASANT KUMAR JAIN VS. DCIT) A.Y. 2012-13 - 2 - 2. BRIEFLY STATED, THE ASSESSEE IS AN INDIVIDUAL EN GAGED IN THE BUSINESS OF LAND DEVELOPERS AND CONTRACTORS. A SEA RCH WAS CONDUCTED ON 21.03.2012 AT THE PREMISES OF THE ASSE SSEE. DURING THE COURSE OF SEARCH, THE ASSESSEE ADMITTED AN UNAC COUNTED INCOME OF RS.2 CRORES OR THEREABOUT. THE INCOME RETURNED INCLUDING THE UNACCOUNTED INCOME FILED UNDER S.153A OF THE ACT WA S ASSESSED AT THE SAME FIGURE. THE PENALTY UNDER S.271AAA OF THE ACT AMOUNTING TO RS.20,74,830/- (BEING 10% OF UNDISCLOSED INCOME) WAS IMPOSED BY THE AO FOR AY 2012-13 IN QUESTION ON THE GROUND THAT CONDITIONS SPECIFIED IN SECTION 271AAA OF THE ACT FOR EXONERAT ION FROM PENALTY HAS NOT BEEN SATISFIED BY THE ASSESSEE. 3. THE ASSESSEE PREFERRED APPEAL AGAINST THE IMPOSI TION OF PENALTY, BUT, HOWEVER, COULD NOT FIND ANY RELIEF. THE ACTION OF THE AO WAS CONFIRMED BY THE CIT(A) AS UNDER: 2.3 FROM THE ABOVE FACTS, I FIND THAT THE APPEL LANT WILL NOT GET A BENEFIT OF SUB CLAUSE -2 TO SEC. 271 AAA SINCE AS P ER CLAUSE (II) OF SUB-SECTION (2) THE APPELLANT IS REQUIRED TO SUB STANTIATE THE MANNER IN WHICH UNDISCLOSED INCOME WAS DERIVED. APP ELLANT HAS NEVER EXPLAINED IT. IT TAKES THE PLEA THAT NEITHER AT THE STAGE OF RECORDING OF STATEMENT OF THE ASSESSEE NOR AT THE S TAGE OF ASSESSMENT PROCEEDINGS, THE ASSESSEE WAS ASKED EITH ER BY AUTHORIZED OFFICER OR BY ASSESSING OFFICER TO SUBST ANTIATE THE MANNER IN WHICH UNACCOUNTED INCOME WAS DERIVED. THI S PLEA CANNOT BE ACCEPTED BECAUSE THE CASE OF THE APPELLAN T HAS BEEN REPRESENTED BY LD CAS WHO ARE WELL AWARE OF THE POS ITION OF LAW AND THAT CERTAIN CONDITIONS ARE REQUIRED TO BE SATI SFIED IN ORDER THAT PROVISIONS OF SEC. 271 AAA DON'T COME INTO PLA Y AGAINST THE ASSESSEE. IN THE STATEMENT U/S 132(4) THE PERSON SE ARCHED UPON IS ALWAYS ASKED TO EXPLAIN THE BOOKS OF ACCOUNTS AND A SSETS FOUND FROM THE PREMISES AND ITS INCUMBENT UPON THE ASSESS EE TO EXPLAIN THE SOURCE OF THESE ASSETS. HAVING FAILED TO DO SO EITHER DURING THE SEARCH OPERATION, OR BEFORE THE AO, EVEN BEFORE THE APPELLATE PROCEEDINGS THE APPELLANT IS NOT UTILIZED THE OPPOR TUNITY PROVIDED BY THE ACT. THEREFORE, THE AO HAS RIGHTLY IMPOSED THE PENALTY AND THE SAME IS HEREBY SUSTAINED. 4. FURTHER AGGRIEVED, THE ASSESSEE PREFERRED APPEAL BEFORE THE TRIBUNAL. ITA NO. 191/RPR/2016 (BASANT KUMAR JAIN VS. DCIT) A.Y. 2012-13 - 3 - 5. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED, AT THE OUTSET, THAT THERE WAS NO OCCASION FOR THE ASSESSEE TO MEET THE REQUIREMENT OF SECTION 271AAA(2) OF THE ACT. IN ELABORATION, T HE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT NO SPECIFIC QUESTION WAS PUT BY THE AUTHORIZED OFFICER FOR PROVIDING THE MANNER IN WHICH SUCH UNDISCLOSED INCOME HAS BEEN DERIVED. THE QUESTION OF SUBSTANTIATION ALSO DID NOT ARISE IN VIEW OF ABSENC E OF ENQUIRY IN THIS REGARD. FOR THIS POSITION, THE LEARNED COUNSE L ADVERTED TO PAGE NO. 9 TO PAGE NO.14 OF THE PAPER BOOK SHOWING STATE MENT FOR SURRENDER ON BEHALF OF THE ASSESSEE. HE POINTED OU T THAT AUTHORIZED OFFICER NEITHER ASKED ANY QUESTION TO SPECIFY THE M ANNER NOR TOWARDS SUBSTANTIATION OF THE UNDISCLOSED INCOME SO OFFERED . IN THE CIRCUMSTANCES, THE BURDEN WAS NEVER SHIFTED UPON TH E ASSESSEE. THE LEARNED COUNSEL FURTHER SUBMITTED THAT EVEN IN THE COURSE OF THE ASSESSMENT PROCEEDINGS, THE AO NEVER REQUIRED THE A SSESSEE TO COMPLY WITH THE CONDITIONS OF SECTION 271AAA(2) OF THE ACT AND TO PROVIDE THE MANNER FOR DERIVING UNDISCLOSED INCOME AND TO SUBSTANTIATE IT. SIMILAR IS THE POSITION IN THE CO URSE OF THE PENALTY PROCEEDINGS AS WELL. NO QUESTION WAS POSED TO THE ASSESSEE EVEN IN THE COURSE OF THE PENALTY PROCEEDINGS. HE THUS SUB MITTED THAT THE SO CALLED UNDISCLOSED INCOME AS PER THE STATEMENT UNDE R S.132(4) OF THE ACT INCLUDED IN THE RETURN OF INCOME AND TAXES DUE THEREON HAVING BEEN PAID, THERE WAS NO WARRANT FOR THE AO TO INVOK E THE PROVISIONS OF SECTION 271AAA OF THE ACT AND IMPOSE PENALTY @10 % ON UNDISCLOSED INCOME. A REFERENCE WAS MADE TO THE DE CISIONS LIKE CIT VS. MAHENDRA C. SHAH (2008) 299 ITR 305 (GUJ.), PR.CIT VS. MUKESHBHAI RAMANLAL PRAJAPATI (2017) 398 ITR 170 (G UJ.), NEERAJ SINGAL VS. ACIT (2014) 146 ITD 152 (DEL.), ACIT VS. SHREENARAYAN SITARAM MUNDRA (2017) 166 ITD 0047 AND MANY MORE. HE THUS SUBMITTED THAT THE CIT(A) HAS MIS-DIRECTED HIMSELF IN LAW IN CONFIRMING THE ACTION OF THE AO. THE LEARNED COUNS EL ACCORDINGLY URGED THAT THE RELIEF ENTITLED UNDER S.271AAA OF TH E ACT TOWARDS ITA NO. 191/RPR/2016 (BASANT KUMAR JAIN VS. DCIT) A.Y. 2012-13 - 4 - UNDISCLOSED INCOME MUST BE PROVIDED TO THE ASSESSEE AS THE FAILURE, IF ANY IS ATTRIBUTABLE TO THE REVENUE AND NOT UPON THE ASSESSEE. 6. THE LEARNED DR FOR THE REVENUE, ON THE OTHER HAN D, SUBMITTED THAT THE CONDITIONS PRESCRIBED UNDER S.271AAA(2) OF THE ACT HAS NOT BEEN SATISFIED IN THE INSTANT CASE. THE ASSESSEE F AILED TO SATISFY THE PRE-REQUISITES LAID DOWN IN SECTION 271AAA(2)OF THE ACT AND THEREFORE THE ASSESSEE IS NOT ELIGIBLE TO CLAIM EXE MPTION FROM PENALTY UNDER THE AFORESAID PROVISION. 7. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSIO NS. AS PER SECTION 271AAA(2) OF THE ACT, ONE OF THE CONDITIONS FOR OBTAINING RELIEF FROM IMPOSITION OF PENALTY UNDER S.271AAA OF THE ACT IS THAT THE ASSESSEE IN THE STATEMENT RECORDED UNDER S.132( 4) OF THE ACT ADMITS THE UNDISCLOSED INCOME, PAYS THE TAXES THERE ON AND SPECIFIES THE MANNER IN WHICH SUCH INCOME HAS BEEN DERIVED. THE SUB-CLAUSE (2) CASTS ANOTHER OBLIGATION ON THE PART OF THE ASS ESSEE TO SUBSTANTIATE THE MANNER IN WHICH UNDISCLOSED INCOME WAS DERIVED. THE PRIMARY ONUS IS ON THE REVENUE TO RAISE APPROPR IATE QUESTIONS TOWARDS MANNER OF DERIVING UNDISCLOSED INCOME AND S UBSTANTIATION THEREOF. ON BEING PUT TO NOTICE, THE ONUS SHIFTS U PON THE ASSESSEE TO SATISFY SUCH REQUIREMENT CONTEMPLATED IN LAW FOR AV AILING THE BENEFIT OF EXEMPTION. 8. IN THE BACKGROUND FACTS NARRATED ON BEHALF OF TH E ASSESSEE, THE FACTUAL POSITION DISCERNABLE FROM THE RECORD, IT IS MANIFEST THAT THE ASSESSEE HAS NOT FAILED TO SPECIFY THE MANNER OF DE RIVING UNDISCLOSED INCOME PER SE IN THE ABSENCE OF ANY QUESTION DIRECTED TOWARDS THE ASSESSEE/DEPONENT OF THE STATEMENT IN T HIS REGARD. THE SUBSTANTIATION OF THE MANNER OF DERIVING UNDISCLOSE D INCOME NATURALLY HAS NOT BEEN CALLED INTO QUESTION BY THE REVENUE. WE FURTHER NOTE THAT THE ASSESSEE HAS REPLIED TO THE Q UERIES RAISED WHILE ITA NO. 191/RPR/2016 (BASANT KUMAR JAIN VS. DCIT) A.Y. 2012-13 - 5 - RECORDING THE STATEMENT AS CALLED FOR. THE REVENUE DOES NOT APPEAR TO HAVE QUIZZED THE ASSESSEE FOR SATISFYING THE MAN NER IN WHICH THE PURPORTED UNDISCLOSED INCOME HAS BEEN DERIVED. THE INCOME CONSIDERED AS UNDISCLOSED INCOME UNDER S. 132(4) OF THE ACT WAS DULY INCORPORATED IN THE RETURN FILED PURSUANT TO S EARCH. THEREFORE, THE REVENUE, IN OUR VIEW, NOW CANNOT PLEAD DEFICIEN CY ON THE PART OF THE ASSESSEE TO SPECIFY THE MANNER WHICH HAS NOT BEEN CALLED INTO QUESTION AT THE TIME OF SEARCH OR EVEN AT THE STAGE OF THE ASSESSMENT. THE AO OR CIT(A) HAS NOT POINTED OUT ANY QUERY WHIC H REMAINED UNREPLIED OR EVADED IN THE COURSE OF SEARCH OR POST SEARCH INVESTIGATION. THEREFORE, LOOKING FROM ANY ANGLE, IT IS DIFFICULT TO ENDORSE THE ACTION OF THE REVENUE. ACCORDINGLY, WE SET ASIDE THE ORDER OF THE CIT(A) AND DIRECT THE AO TO DELETE THE IMPUGNED PENALTY. 9. IN THE RESULT, THE CAPTIONED APPEAL OF THE ASSES SEE IS ALLOWED. SD/- SD/- (PAWAN SINGH) (PRADIP KUM AR KEDIA) JUDICIAL MEMBER ACCOUNTANT MEMBER TRUE COPY S. K. SINHA / COPY OF ORDER FORWARDED TO:- &. / REVENUE 2. / ASSESSEE (. )*+ , / CONCERNED CIT 4. ,- / CIT (A) /. 012 33*+4 *+4 / DR, ITAT, RAIPUR 5. 267 8 / GUARD FILE. BY ORDER 4 SR. PRIVATE SECRETARY ITAT 4 RAIPUR (ON TOUR) ORDER PRONOUNCED ON 04 / 1 0 /2021 BY PLACING THE RESULT ON THE NOTICE BOARD AS PER RULE 34(4 ) OF THE INCOME TAX (APPELLATE TRIBUNAL) RULE, 1963.