Shri Rajiv Agrawal , Jamshedpur V. DCIT CENTRAL CIRCLE-2 , RANCHI

ITA 195/RAN/2017

• Counselvise Citation: [2018] 119 COUNSELVISE.COM (IT) 0609 (ITAT-RANCHI)
• Duration Of Justice: 1 year(s) 3 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-11-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2013-2014
• Appeal Filed On: 17-08-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: A K MOHANTY
• Keywords: Search and seizure
• Section: 132

Judgement Text

P A G E 1 | 5 IN THE INCOME TAX APPELLATE TRIBUNAL, RANCHI SMC BENCH, RANCHI BEFORE SHRI N.S SAINI, ACCOUNTANT MEMBER ITA NO. 195 / RAN /201 7 ASSESSMENT YEAR : 2013 - 14 SHRI RAJIV AGARWAL, ARUNODAYA, SUNDERNAGAR, JAMSHEDPUR VS. DCIT, CENTRAL CIRCLE - 2, RANCHI PAN/GIR NO. (APPELLANT ) .. ( RESPONDENT ) ASSESSEE BY : SHRI DEVESH PODDAR, ADV REVENUE BY : SHRI A.K.MOHANTY, JCIT DATE OF HEARING : 29 / 11 / 2018 DATE OF PRONOUNCEMENT : 30 / 11 / 2018 O R D E R THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF THE CIT(A), RANCHI, D ATED 31.7.2017 FOR THE ASSESSMENT YEAR 2013 - 14. 2. THE SOLE ISSUE INVOLVED IN THIS APPEA L IS THAT THE CI( A) ERRED IN CONFIRMING THE LEVY OF PENALTY U/S.271AAB OF THE ACT OF 4,73,000 / - . 3, THE FACTS OF THE CASE ARE THAT THE ASSESSING OFFICER OBSERVED THAT DURING THE SEARCH OPERATION CARRIED OUT UNDER SECTION 132 OF THE ACT AT THE PREMISES OF MICA MODI GROUP ON 21.12.2012, THE ASSESSEE ADMITTED UNDISCLOSED INCOME OF 31,75,000/ - AND IN ITA NO.195/RAN/2017 ASSESSMENT YEAR : 2013 - 14 P A G E 2 | 5 THE YEAR UNDER CONSIDERATION DECLARED INCOME OF 23,65,000/ - WHICH WAS ACCEPTED IN THE ASSESSMENT. THEREAFTER, THE ASSESSING OFFICER LEVIED PENALTY U/S. 271AAB FOR 7,90,500/ - BEING 30% OF THE UNDISCLOSED INCOME OF 23,65,000/ - . 4. ON APPEAL, THE CIT(A) REDUC ED THE SAME TO 20% OF THE UNDISCLOSED INCOME. 5. STILL AGGRIEVED, THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL. 6. BEFORE ME, LD AUTHORISED REPRESENTATIVE RELIED ON THE DECISION OF KOLKATA BENCH OF THE TRIBUNAL IN THE CASE OF ACIT VS. SRI KANWAR SAIN GUP TA IN ITA NO.538/KOL/2017 FOR ASSESSMENT YEA R 2013 - 14 ORDER DATED 29.6.2018 , WHEREIN, THE TRIBUNAL DELETED PENALTY. IT WAS SUBMITTED THAT THE FACTS OF THE ASSESSEES CASE ARE IDENTICAL TO THE CASE OF SRI KANWAR SAIN GUPTA (SUPRA). THEREFORE, FOLLOWING TH E SAME, PENALTY LEVIED BY THE ASSESSING OFFICER U/S.271AAB SHOULD BE DELETED. 7. ON THE OTHER HAND, LD DEPARTMENTAL REPRESENTATIVE COULD NOT CONTROVERT THE SUBMISSION OF LD AUTHORISED REPRESENTATIVE OF THE ASSESSEE. 8. I FIND THAT THE TRIBUNAL IN THE CASE OF SRI KANWAR SAIN GUPTA (SUPRA) HELD AS UNDER: ITA NO.195/RAN/2017 ASSESSMENT YEAR : 2013 - 14 P A G E 3 | 5 3. WE NOW COME TO THE IMPUGNED PENALTY PROCEEDINGS. THE ASSESSING OFFICER LEVIED PENALTY IN QUESTION IN HIS ORDER DATED 23.02.2016 BY QUOTING SECTION 271AAB OF THE ACT ON THE GROUND THAT ALL THE RELEVANT CON DITIONS STIPULATED THEREIN STOOD DULY SATISFIED QUA THE ABOVE STATED UNDISCLOSED INCOME. THE CIT(A) REVERSES THE ASSESSING OFFICERS ACTION AS FOLLOWS : I FIND THAT DURING THE SEARCH AND SEIZURE OPERATION U/S 132 IN THIS CASE NO EVIDENCES REGARDING CONCEA LMENT/UNDISCLOSED INCOME IN THE FORM OF CASH SEIZURE/PAPERS/DOCUMENTS/STOCK ETC WERE FOUND AND SEIZED. NOTHING INCRIMINATING/NO EVIDENCES WERE FOUND REGARDING RS.1 CRORE WHICH WAS OFFERED FOR TAXATION BY THE ASSESSEE SUO MOTO IN ORDER TO BUY PEACE OF MIND. I ALSO FIND THAT NEITHER THE OFFICERS IN THE INVESTIGATION WING IN THE POST SEARCH INVESTIGATION NOR THE ASSESSING OFFICER DURING ASSESSMENT PROCESS FOUND ANY DISCRIMINATING EVIDENCE OF UNDISCLOSED INCOME OTHER THAN THE STATEMENT OF THE ASSESSEE FOR MAKIN G THE ADDITION OF RS.1 CRORE. FURTHER I FIND THAT THE AO HAS LEVIED PENALTY U/S 271AAB (1)(A). THIS SECTION READS LIKE SUM COMPUTED AT THE RATE OF TEN PER CENT OF THE UNDISCLOSED INCOME OF THE SPECIFIED PREVIOUS YEAR. THUS, IT IS CLEAR THAT IN ORDER TO LEVY PENALTY TWO THINGS ARE ESSENTIAL (1) UNDISCLOSED INCOME AND (2) SPECIFIED PREVIOUS YEAR. HERE IN THIS CASE RS.1 CRORE WAS OFFERED FOR TAXATION BY THE ASSESSEE SUO MOTO IN THE STATEMENT RECORDED AT THE TIME OF SEARCH. FROM THE RATIO DECIDED BY THE HONBLE SUPREME COURT IN THE CASE OF SUDARSHAN SIIK & SARIES (SUPRA), IT IS CLEAR THAT ONLY THE STATEMENT OF THE ASSESSEE WITHOUT ANY CORROBORATING EVIDENCE CANNOT BE THE ONLY BASIS FOR LEVYING PENALTY. HERE IT IS ALSO CLEAR THAT FROM THE STATEMENT OF THE ASSESSEE ONE CANNOT POINT OUT WHICH AMOUNT OF UNDISCLOSED INCOME PERTAINS TO WHICH SPECIFIED PREVIOUS YEAR. IN THIS SITUATION, WHERE NOTHING IS CLEAR FROM ASSESSEE'S STATEMENT RECORDED AT THE TIME OF SEARCH, THE ACTION OF THE AO TO LEVY PENALTY U/S 271AAB(1)(A) ON THE AMOUNT OFFERED BY THE ASSESSEE SUO MOTO TO BUY PEACE OF MIND, CANNOT BE JUSTIFIED. THE HON'BLE SUPREME COURT HAS ALSO CATEGORICALLY DECIDED THE RATIO THAT PENALTY CANNOT BE LEVIED ON THE AMOUNT OFFERED BY THE ASS ESSEE IN ORDER TO BUY PEACE OF MIND [IN THE CASE OF SUDARSHAN SILK & SARIES (SUPRA)]. THUS, RESPECTFULLY FOLLOWING THE RATIO DECIDED BY THE HON'BLE SUPREME COURT, THE AO IS DIRECTED TO DELETE THE PENALTY U/S 271AAB(1)(A). ACCORDINGLY, ASSESSEE 'S APPEAL ON GROUNDS NO 1 , 2 AND 3 ARE ALLOWED. ITA NO.195/RAN/2017 ASSESSMENT YEAR : 2013 - 14 P A G E 4 | 5 LEARNED DEPARTMENTAL REPRESENTATIVE ARGUED THAT THE ASSESSING OFFICER HAD RIGHTLY IMPOSED THE IMPUGNED PENALTY IN ASSESSEES CASE @10% OF HIS UNDISCLOSED INCOME OF RS.1 CRORE COMING RS.10,00,000 IN QUESTION. WE FIND NO SUBSTANCE IN REVENUES INSTANT ARGUME NTS. WE FIRST OF ALL MAKE IT CLEAR THAT SECTION 271AAB OF THE ACT APPLIES IN RELATION TO THE IMPUGNED PENALTY @10% OF THE UNDISCLOSED INCOME AS STOOD DEFINED IN EXPLANATION (C) THERETO. THERE IS NO MATERIAL IN THE CASE FILE TO INDICATE THAT THE ASSESSEES UNDISCLOSED INCOME REPRESENTS ANY MONEY, BULLION, JEWELLERY OR VALUABLE ARTICLE OR ANY ENTRY IN THE BOOKS OR OTHER DOCUMENTS THEREIN. WE MAKE IT CLEAR THAT WE ARE DEALING WITH A PENALTY PROVISION IN TAX STATUTE WHICH IS TO BE STRICTLY INTERPRETED. WE THERE FORE ARE OF THE OPINION THAT THE CIT(A) HAS RIGHTLY DELETED THE IMPUGNED PENALTY AS THE ASSESEES SEARCH STATEMENT NOWHERE INDICATED THE CORRESPONDING UNDISCLOSED INCOME AS PER SPECIFIC REQUIREMENT IN THE ACT. THE CIT(A)S FINDINGS UNDER CHALLENGE DELETING PENALTY IN QUESTION ARE ACCORDINGLY CONFIRMED. 9. IN THE INSTANT CASE ALSO, IT IS NOT IN DISPUTE THAT THE ASSESSEE ADMITTED ADDITIONAL INCOME OF 23,65,000/ - SUOTOMO TO BUY PEACE OF MIND. FURTHER, NEITHER THE INVESTIGATION WING IN THE POST SEARCH NOR DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER FOUND ANY INCRIMINATING EVIDENCE OF UNDISCLOSED INCOME OTHERWISE THE SUBMISSION OF THE ASSESSEE FOR MAKING THE ADDITION OF 23,65,000/ - . THEREFORE, THE DECISION IN THE CASE OF SRI KANWAR SAIN GUPTA (SUPRA) SQUARELY APPLIES TO THE FACTS OF THE PRESENT CASE. HENCE, FOLLOWING THE SAME, I DELETE THE PENALTY OF 4,73,000 / - AND ALLOW GROUND OF APPEAL OF THE ASSESSEE. ITA NO.195/RAN/2017 ASSESSMENT YEAR : 2013 - 14 P A G E 5 | 5 10 . IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED ORDER PRONOUNCED ON 30 / 11 /2018. SD/ - ( N.S SAINI) A CCOUNTANT MEMBER RANCHI ; DATED 30 / 11 /2018 B.K.PARIDA, SPS COPY OF THE ORDER FORWARDED TO : BY ORDER SR. PVT.S ECRETARY, ITAT, RANCHI ON TOUR 1. THE APPELLANT : SHRI RAJIV AGARWAL, ARUNODAYA, SUNDERNAGAR, JAMSHEDPUR 2. THE RESPONDENT. DCIT, CENTRAL CIRCLE - 2, RANCHI 3. THE CIT(A) - RANCHI 4. PR.CIT - RANCHI 5. DR, ITAT, RANCHI 6. GUARD FILE. //TRUE COPY//