Krishan Chandra Bajaj, Kolkata V. ACIT, Circle - 50(1), Kolkata , Kolkata

ITA 201/KOL/2018

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 4822 (ITAT-KOLKATA)
• Duration Of Justice: 1 year(s) 3 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-05-2019
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2014-2015
• Appeal Filed On: 08-02-2018
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: AGAINST DATED PASSED
• Keywords: Search and seizure; Document seized; Opportunity of being heard; Principle of natural justice; Initiation of penalty proceedings; Competent authority; Assessment record; Documents seized; Set aside
• Section: 271(1)(c); 143(3); 153A; 132; 139

Judgement Text

PAGE | 1 IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA BENCH A, KOLKATA BEFORE SH. P.M.JAGTAP, VICE PRESIDENT & SH.S.S.VISWANETHRA RAVI, JUDICIAL MEMBER ITA NO.201/KOL/2018 (ASSESSMENT YEAR-2014-15) ORDER PER S.S. VISWANETHRA RAVI, JUDICIAL MEMBER THIS APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER DATED 05.12.2017 PASSED BY CIT(A)-15, KOLKATA FOR AY 2014-15. 2. THE ONLY ISSUE IS TO BE DECIDED AS TO WHETHER THE CIT(A) IS JUSTIFIED IN CONFIRMING THE PENALTY IMPOSED BY THE AO U/S 271AAB OF THE INCOME TAX ACT, 1961 (IN SHORT ACT) IN THE FACTS AND CIRCUMSTANCES OF THE CASE. 3. BRIEF FACTS RELATING TO THE ISSUE RAISED ABOVE ARE THAT THE ASSESSEE IS AN INDIVIDUAL AND DERIVES INCOME FROM COMMISSION ON BROKERAGE. A SEARCH AND SEIZURE OPERATION U/S 132(1) OF THE ACT WAS CONDUCTED ON 24.04.2014. IN THE SAID OPERATION, CASH OF RS.66,18,900/- WAS FOUND IN THE OFFICE PREMISES, THE ENTIRE CASH WAS SEIZED. THEREAFTER, NOTICE U/S 153A OF THE ACT WAS ISSUED AND IN RESPONSE TO WHICH THE ASSESSEE FILED RETURN OF INCOME DECLARING TOTAL INCOME OF RS.64,20,050/-. ACCORDING TO AO, THE ASSESSEE OWNED UP ENTIRE CASH SEIZED AS HIS UNDISCLOSED AND ADMITTED THAT IT WAS OUT OF HIS INCOME AND OFFERED TO KRISHAN CHANDRA BAJAJ, 190, BLOCK-B, LAKE TOWN, KOLKATA-700089. PAN- AFUPB1761Q VS ACIT, CIRCLE-50(1), BLOCK-DS(2) & 3, UTTARAPAN, MANIKTALLA CIVIC CENTRE, KOLKATA-700054. (APPELLANT) (RESPONDENT) APPELLANT BY SH. MANISH TIWARI, FCA RESPONDENT BY SH. A.K.NAYAK, CIT DR DATE OF HEARING 12.03.2019 DATE OF PRONOUNCEMENT 31.05.2019 ITA NO.201/KOL/2018 (ASSESSMENT YEAR-2014-15) PAGE | 2 TAX. THE AO CONSIDERING THE SAME ASSESSED THE INCOME AT RS.65,19,550/- VIDE ORDER DATED 26.12.2016 BY RECORDING THAT PENALTY PROCEEDINGS U/S 271AAB OF THE ACT IS BEING INITIATED SEPARATELY. ACCORDINGLY, NOTICE ISSUED AND INITIATED PENALTY PROCEEDINGS AS ABOVE. DURING THE COURSE OF PENALTY PROCEEDINGS, THE ASSESSEE FILED WRITTEN SUBMISSION DATED 24.04.2017 WHICH IS REPRODUCED HEREIN BELOW- IN HIS SUBMISSION DATED 24.04.2017, IT WAS STATED THAT .YOUR HONOUR HAS ISSUED NOTICE FOR PENALTY U/S.AAB FOR A.Y. 2014-15. IN THIS REGARD I WOULD LIKE TO SAY THAT ONLY CASH WAS SEIZED AND NO INCRIMINATING DOCUMENTS WERE SEIZED FROM THE POSSESSION OF THE ASSESSEE DURING THE COURSE OF SEIZURE ON 24.04.2014. THE CASH SEIZED WAS OUT OF INCOME FOR FY: 2013-14 THAT WAS SHOWN IN INCOME TAX RETURN FOR AY: 2014-15. THERE WAS NO UNDISCLOSED INCOME ON THE PART OF THE ASSESSEE. FURTHER A SUM OF RS.99,503/- WAS DISALLOWED AS INTEREST PAID TO BUN. IN THIS REGARD IT IS SAID THAT THE GENUINENESS AND CORRECTNESS OF THE EXPENSE CLAIMED BY THE ASSESSEE WAS NOT QUESTIONED BY THE AO BUT ONLY NEXUS OF THE EXPENSE IN RELATION TO INCOME EARNED WAS DOUBTED. THE ASSESSEE FOR WANT OF PEACE OF MIND HAVE NOT APPEALED TO THE ADDITION BUT HE WILL REQUEST YOUR HONOUR TO DROP THE PENALTY PROCEEDINGS AS THE ADDITION IS DUE TO DISALLOWANCE OF EXPENSES AND NOT BECAUSE OF CONCEALMENT OF INCOME 4. AO DID NOT ACCEPT THE SUBMISSIONS AS MADE ABOVE BY THE ASSESSEE AND PROCEEDED TO IMPOSE PENALTY @ 10% OF RS.6,61,890/- U/S 271AAB OF THE ACT BY GIVING REASONS AS UNDER:- FURTHER, AFTER PERUSAL OF THE RECORD, FACTS OF CRUCIAL IMPORTANCE ARE AS UNDER:- 1. THE CASH WAS SEIZED AT THE PREMISES OF SHRI KRISHAN CHANDRA BAJAJ AT 2, M.D. ROAD, 1ST FLOOR, ROOM NO.4, KOLKATA-700007. 2. THE STATEMENT WAS RECORDED DURING SEARCH ACTION OF ASSESSEE DATED 15/5/2014 IN WHICH HE ADMITTED THAT 16.95 LAKHS BELONG TO HIM AND RS. 8 LAKHS TO M/S. DISHA PLASTICS AND RS. 30 LAKHS BELONGS TO M/S SHYAM STEEL INDUSTRIES LIMITED (IN HIS ANSWER TO Q.NO.10.) 3. FURTHER, VIDE HIS LETTER DATED 2.6.2016, THE ASSESSEE ACCEPTED THAT ENTIRE SEIZED CASH DURING SEARCH ACTION BELONGS TO HIM IN CONTRAVENTION TO HIS STATEMENT. 4. DURING THE SEARCH PROCEEDING, THE ASSESSEE HAD ADMITTED IN HIS STATEMENT THAT HE DOES NOT MAINTAIN BOOKS OF ACCOUNT AND THEREFORE, SEIZED CASH IS NOT ACCOUNTED. 5. FURTHER, THE INCOME FROM BROKERAGE RANGES FROM RS. 5 TO 8 LAKHS IN EARLIER ASSESSMENT YEARS AND HAD NEVER TOUCH TO SUBSTANTIAL AMOUNT OF CASH SEIZED AS FOUND DURING SEARCH PROCEEDING. IT WAS ONLY AFTER SEARCH THAT ASSESSEE ADMITTED THE CASH SEIZED AS HIS INCOME. 6. ON ALL ABOVE FACTS, I AM SATISFIED THAT THE INCOME RETURNED OF RS.66,18,900 IS OUT OF UNDISCLOSED INCOME. ITA NO.201/KOL/2018 (ASSESSMENT YEAR-2014-15) PAGE | 3 7. FURTHER, CONTENTION OF ASSESSEE THAT SEARCH WAS CONDUCTED ON 24.4.2014 AND THERE WAS LIME TO FILE RETURN CANNOT BE ACCEPTED AS YEAR ENDED ON 31.3.2014 AND NO BOOKS OF ACCOUNT OR INCOME STATEMENT COULD BE PRODUCE DURING THE SEARCH PROCEEDING BY THE ASSESSEE TO SUBSTANTIATE CASH SEIZED. 8. CASH SEIZED WAS NOT SUBSTANTIATED WITH DOCUMENTARY EVIDENCE HENCE IT IS UNDISCLOSED AND THEREFORE, CONTENTION OF ASSESSEE THAT NO INCRIMINATING DOCUMENTS WERE FOUND DOES NOT HOLD GOOD, SECTION 271AAB OF THE ACT IS REPRODUCED FOR READY REFERENCE WHICH STATES (1) THE ASSESSING OFFICER MAY, NOTWITHSTANDING ANYTHING CONTAINED IN ANY OTHER PROVISIONS OF THIS ACT, DIRECT THAT, IN A CASE WHERE SEARCH HAS BEEN INITIATED UNDER SECTION 132 ON OR AFTER THE 1 ST DAY OF JULY 2012, THE ASSESSEE SHALL PAY BY WAY OF PENALTY, IN ADDITION TO TAX, IF ANY, PAYABLE BY HIM, - (A) A SUM COMPUTED AT THE RATE OF TEN PERCENT OF THE UNDISCLOSED INCOME OF THE SPECIFIED PREVIOUS YEAR, IF SUCH ASSESSEE (I) IN THE COURSE OF THE SEARCH, IN A STATEMENT UNDER SUB-SECTION (4) OF SECTION 132, ADMITS THE UNDISCLOSED INCOME AND SPECIFIES THE MANNER IN WHICH SUCH INCOME HAS BEEN DERIVED; (II) SUBSTANTIATES THE MANNER IN WHICH THE UNDISCLOSED INCOME WAS DERIVED; AND (III) ON OR BEFORE THE SPECIFIED DATE (A) PAYS THE TAX, TOGETHER WITH INTEREST, IF ANY, IN RESPECT OF THE UNDISCLOSED INCOME; AND (B) FURNISHES THE RETURN OF INCOME FOR THE SPECIFIED PREVIOUS YEAR DECLARING SUCH UNDISCLOSED INCOME THEREIN: IN CASE OF ASSESSEE, THE ABOVE CONDITIONS SPECIFIED IN SECTION 271AAB OF THE ACT ARE SATISFIED ON THE FACTS ENLISTED ABOVE. THEREFORE, I AM FIRMLY OF THE OPINION AND BELIEF THAT THIS IS A FIT CASE FOR IMPOSITION OF PENALTY U/S 271AAB OF THE I.T.ACT, 1961. THE QUANTUM OF PENALTY LEVIABLE IN THE CASE IS CALCULATED AS UNDER:- RS. (I) TOTAL UNDISCLOSED INCOME 66,18,900/- (II) A SUM COMPUTED AT THE RATE OF TEN PERCENT OF THE UNDISCLOSED INCOME OF F.Y. 2013-14 6,61,890/- PENALTY OF RS.6,61,890/- BEING A SUM COMPUTED AT THE RATE OF TEN PERCENT OF THE UNDISCLOSED INCOME OF F.Y. 2013-14 IS IMPOSED ON THE ASSESSEE U/S 271AAB OF THE I.T.ACT, 1961. PENALTY ORDER IS PASSED AFTER APPROVAL OF ADDL. COMMISSIONER OF INCOME TAX, RANGE-50, KOLKATA. 5. AGGRIEVED BY THE ORDER OF IMPOSITION OF PENALTY, THE ASSESSEE CARRIED THE MATTER TO THE CIT(A). WE FIND THAT THE ASSESSEE REITERATED THE SAME ITA NO.201/KOL/2018 (ASSESSMENT YEAR-2014-15) PAGE | 4 SUBMISSIONS AS MADE BEFORE THE AO IN THE FIRST APPELLATE PROCEEDINGS. ACCORDING TO CIT(A), THERE WAS NO FRESH SUBMISSIONS AS MADE AVAILABLE IN THE FIRST APPELLATE PROCEEDINGS. THE CIT(A) CONSIDERING THE FACTS AND CIRCUMSTANCES OF THE CASE TOGETHER WITH THE PENALTY ORDER AND SUBMISSIONS OF THE ASSESSEE CONFIRMED THE PENALTY IMPOSED BY THE AO AS UNDER:- (I) A SEARCH AND SEIZURE OPERATION U/S 132(1) WAS CONDUCTED ON 24.04.2014, IN THE OFFICE PREMISES AT 2, M D ROAD, 1 ST FLOOR, ROOM NO. 4, KOLKATA-7. DURING THE COURSE OF SEARCH OPERATION, CASH' AMOUNTING TO RS.66,18,900/- WAS FOUND IN THE OFFICE PREMISES AND THE ENTIRE AMOUNT WAS SEIZED. (II) THE AIR OF THE APPELLANT HAS ADMITTED THAT DURING SEARCH PROCEEDINGS IN HIS STATEMENT U/S 132(4) OF THE ACT THAT HE DOES NOT MAINTAIN BOOKS OF ACCOUNT. (III) THE CONTENTION OF THE APPELLANT THAT SEARCH WAS CONDUCTED ON 24.04.2014 AND DUE DATE FOR FILING OF RETURN HAD NOT EXPIRED COULD NOT BE ACCEPTED, BECAUSE IF IT WAS NOT FOR THE SEARCH, HE WOULD NOT HAVE DISCLOSED THE ENTIRE SEIZED CASH OF RS.66,18,900/-. MOREOVER, DURING THE PREVIOUS ASSESSMENT YEARS, THE TOTAL INCOME OF THE APPELLANT IN HIS RETURN HAD NEVER EXCEEDED RS.I0 LAKHS. (IV) THE APPELLANT DURING ASSESSMENT PROCEEDINGS U/S 153A READ WITH SECTION 143(3), COULD NOT PRODUCE BOOKS OF ACCOUNT OR DOCUMENTARY EVIDENCE, TO SUBSTANTIATE CASH SEIZED. THE A.O. HAD THEREFORE, RIGHTLY IMPOSED PENALTY U/S 271AAB @ 10% ON CASH SEIZED OF RS.66,18,900/-. AFTER A CAREFUL CONSIDERATION OF THE SUBMISSION OF THE APPELLANT AND PERUSAL OF THE RELEVANT ASSESSMENT RECORDS. PENALTY U/S 271AAB @ 10% ON CASH SEIZED OF RS.66,18,900/- IS SUSTAINED. HENCE, THIS GROUND OF APPEAL IS DISMISSED AND THE ASSESSING OFFICER IS DIRECTED ACCORDINGLY. 6. HEARD BOTH PARTIES AND PERUSED MATERIAL AVAILABLE ON RECORD. THERE IS NO DISPUTE IN RESPECT OF THE DATE OF SEARCH AND SEIZURE OPERATION ON 24.04.2014. THEREFORE, THE APPLICABILITY OF SECTION 271AAB OF THE ACT IS JUSTIFIED. THERE IS NO DISPUTE IN OWNING THE CASH SEIZED DURING THE COURSE OF SEARCH AND SEIZURE OPERATION AS UNDISCLOSED INCOME OF THE ASSESSEE WHICH IS OUT OF HIS PROFESSIONAL INCOME. THERE IS NO DISPUTE THAT THE ASSESSEE OFFERING THE SAME FOR TAXATION. THERE IS NO DISPUTE IN RESPECT OF PAYMENT OF TAX TOGETHER WITH INTEREST IN RESPECT OF UNDISCLOSED INCOME. THERE IS NO DISPUTE IN RESPECT OF FILING OF RETURN OF INCOME TO THE SPECIFIED PREVIOUS YEAR DECLARING SUCH ITA NO.201/KOL/2018 (ASSESSMENT YEAR-2014-15) PAGE | 5 UNDISCLOSED INCOME. THEREFORE, IN OUR OPINION THE FACTS AND CIRCUMSTANCES IN THE PRESENT CASE FULFILS THE CONDITIONS AS CONTEMPLATED CLAUSE (A) IN SUB-SECTION (1) OF SECTION 271AAB OF THE ACT TO IMPOSE PENALTY. THEREFORE, WE FIND NO INFIRMITY IN THE ORDER OF CIT(A) AND CONFIRMING THE PENALTY IMPOSED BY THE AO U/S 271AAB(I)(A) OF THE ACT. 7. FURTHER THIS TRIBUNAL ON SIMILAR AND IDENTICAL FACTS DECIDED THE ISSUE IN THE CASE OF GANPATI INDUSTRIAL PVT.LTD. & JEKAY INTERNATIONAL PVT.LTD. VS DCIT IN ITA NO.1927 & 1928/KOL/2016 VIDE ORDER DATED 15.02.2019 AND FOR BETTER UNDERSTANDING THE RELEVANT PORTION IS REPRODUCED HEREIN BELOW:- ITA NO.1927/KOL/2016 (AY:2013-14) 4. THE LD. COUNSEL FOR THE ASSESSEE, SHRI. M.SATNALIWALA SUBMITTED THAT NOTICE OF PENALTY WAS ISSUED BY THE AO U/S 271AAA OF THE ACT WHILE THE PENALTY WAS FINALLY IMPOSED U/S 271AAB OF THE ACT. HE CONTENDED THAT THE PENALTY NOTICE ISSUED BY THE AO, THEREFORE, WAS DEFECTIVE AND THE PENALTY IMPOSED IN PURSUANCE OF SUCH DEFECTIVE NOTICE IS NOT SUSTAINABLE. HE ALSO CONTENDED THAT THE SPECIFIC LIMB OF SECTION 271AAB OF THE ACT, WAS NOT MENTIONED BY THE AO AS APPLICABLE TO THE FACTS OF THE ASSESSEES CASE AND IN VIEW OF THE SAME, PENALTY IMPOSED U/S 271AAB OF THE ACT IS LIABLE TO BE CANCELLED. HE, SUBMITTED THAT COMMODITY PROFIT WAS EARNED BY THE ASSESSEE AND SINCE IT WAS DULY DISCLOSED IN THE RETURN OF INCOME IT WAS NOT A CASE OF UNDISCLOSED INCOME ATTRACTING THE PENAL PROVISION OF SECTION 271AAB OF THE ACT. 5. THE LD.CIT DR, SHRI. ANAND KUMAR KEDIA ON THE OTHER HAND SUBMITTED THAT EVEN THOUGH AT THE TOP OF THE PENALTY NOTICE, A REFERENCE WAS MADE TO SECTION 271AAA OF THE ACT INADVERTENTLY AND IN THE MAIN BODY OF THE PENALTY NOTICE THERE WAS A CLEAR MENTION OF SECTION 271AAB. IN SUPPORT OF THE CONTENTION, THE LD.DR, SHRI KEDIA PLACED RELIANCE IN THE CASE OF GALAXY NIRMAN PRIVATE LIMITED AND SUBMITTED THAT THE AO SHOW CAUSED THE ASSESSEE IN CLEAR WHY AN ORDER IMPOSING A PENALTY ON YOU SHOULD NOT BE MADE U/S 271AAB IN THE SECOND PARA OF NOTICE AND ASSESSEE ALSO DULY RESPONDED TO SAID CHARGE. HE ARGUED THAT IT IS A WELL SETTLED PRINCIPLE OF LAW THAT MENTIONING OF WRONG PROVISION OR NON-MENTIONING OF A PROVISION DOES NOT INVALIDATE OF AN ORDER IF THE COURT AND/OR STATUTORY AUTHORITY HAD THE REQUISITE JURISDICTION THEREOF. FURTHER, HE SUBMITTED THAT THE AO HAS REQUISITE JURISDICTION TO IMPOSE PENALTY UNDER SECTION 271AAB OF THE ACT. 6. FURTHER, HE REPLACED RELIANCE IN THE CASE OF RAM SUNDAR RAM REPORTED IN [2007] 9 SCALE 197 AND SUBMITTED THAT IT IS WELL SETTLED THAT IF AN AUTHORITY HAS POWER UNDER THE LAW MERELY BECAUSE WHILE EXERCISING THAT POWER, THE SOURCE OF POWERS IS NOT SPECIFICALLY REFER TO OR A REFERENCE IS MADE TO A WRONG PROVISION OF LAW THAT BY ITSELF DOES NOT VITIATE THE EXERCISE OF POWER SO LONG AS THE POWER DOES EXIST. THE LD. DR ARGUED THAT QUOTING OF WRONG PROVISION BY THE COMPETENT AUTHORITY DOES NOT TAKE AWAY THE JURISDICTION OF THE AUTHORITY AND ON THE SOLE GROUND, ORDER OF PENALTY CANNOT BE VITIATED. 7. FURTHER, HE ARGUED THAT THE ASSESSEE HAVING RESPONDED THROUGH ITS AUTHORISED REPRESENTATIVE AND HAVING PARTICIPATED IN THE PROCEEDINGS CANNOT BE ALLOWED TO TURN AROUND AND RAISED OBJECTION BEFORE THE TRIBUNAL SEEKING INVALIDATION OF THE PROCEEDINGS INITIATED BY THE AUTHORITY ALLEGING ISSUANCE NOTICE U/S271AAA. IF SUCH DEFECT IS NOT ALLOWED TO BE CURED, OR TREATED AS INVALID SO AS TO DECLARE THE NOTICE INVALID DESPITE THE FACT THE ASSESSEE HAD TAKEN THE NOTICE AS VALID AND RESPONDED TO IT IN LETTER AND SPIRIT AND PARTICIPATED IN THE PROCEEDINGS THE VERY PURPOSE AND OBJECTIVE OF THE PROVISIONS CONTAINED IN SECTION 292B OF THE ACT WOULD STAND FRUSTRATED AND DEFEATED. THE INTENT OF THE LEGISLATURE IS CLEAR FROM THE LANGUAGE IMPLIED IN THIS PROVISION ON THE ALLEGED DEFECTIVE NOTICE ORDER CANNOT BE DECLARED INVALID BY REASON OF ANY MISTAKE, DEFECT OR OMISSION, IF THE NOTICE IN SUBSTANCE AND IN EFFECT IS IN CONFORMITY WITH OR ACCORDING TO THE INTENT TO THE PURPOSE OF THE PROVISION. 8. FURTHER, HE REPLACED RELIANCE ON SEVERAL CASE LAWS REGARDING QUESTIONING AS TO WHETHER SATISFACTION MUST BE RECORDED IN THE ASSESSMENT ORDER. THE LD. DR SUBMITS THAT THE NOTICE INITIATING PENALTY CANNOT BE DECLARED BAD IN LAW BECAUSE IT STATES THE PENALTY PROCEEDINGS ARE INITIATED, IF ITA NO.201/KOL/2018 (ASSESSMENT YEAR-2014-15) PAGE | 6 OTHERWISE IT IS TO BE SEEN FROM THE RECORD WHETHER THE AO HAS ARRIVED AT PRIMA FACIE SATISFACTION FOR INITIATION OF PENALTY PROCEEDINGS. THE AO DISCUSSED THE FACTS AND CIRCUMSTANCES OF THE CASE LEADING TO INITIATION OF PENALTY PROCEEDINGS UNDER SECTION 271AAB IN HIS ORDER I.E CASH & OTHER VALUABLES, JEWELLERY, SILVER UTENSILS AND ARTICLES, BANK ACCOUNTS AND SEIZED DOCUMENTS. THE AO CLEARLY STATED THAT THE ASSESSEE ADMITTED RS. 5 CRORE AS UNDISCLOSED INCOME DERIVED FROM THE ACTIVITY UNDER COMMODITY PROFIT WHICH WAS DISCLOSED UNDER SECTION 132(4) OF THE ACT AND PRAYED TO CONFIRM THE ORDER OF CIT (A). 9. REGARDING THE CONTENTION OF FAILURE OF THE AO TO POINT OUT SPECIFICALLY A PARTICULAR LIMB OF SECTION 271AAB OF THE ACT, THE LD. DR SUBMITTED THAT SECTION 271AAB HAS NO SUCH LIMBS AND WHAT ARE GIVEN THEREIN ARE THE DIFFERENT SITUATIONS INVOLVING DIFFERENT RATES OF PENALTY. HE CONTENDED THAT SINCE THE CASE OF THE ASSESSEE WAS COVERED BY ONE SITUATION ATTRACTING PENALTY UNDER SECTION 271AAB @ 10% OF THE UNDISCLOSED INCOME, PENALTY @ 10% WAS RIGHTLY IMPOSED UNDER SECTION 271AAB. HE CONTENDED THAT THE COMMODITY PROFIT WAS NOT REFLECTED IN THE BOOKS OF ACCOUNTS OF THE ASSESSEE AND SINCE IT WAS REFLECTED IN THE DOCUMENTS SEIZED DURING THE COURSE OF SEARCH AND IT WAS A CLEAR CASE OF UNDISCLOSED INCOME ATTRACTING PENAL PROVISION OF SECTION 271AAB OF THE ACT. 10. HEARD BOTH PARTIES AND PERUSED THE MATERIAL AVAILABLE ON RECORD. IT IS NOTED FROM THE RECORD THAT THERE WAS A SEARCH CONDUCTED IN JALLAN GROUP OF CASES ON 06/07.09.2012 AND SUBSEQUENT DATES. THE SAID GROUP INVOLVED IN THE BUSINESS OF MANUFACTURING OF RAIL TRACK PRODUCTS INCLUDING JOINTS, FIST PLATES, BASE PLATES, POINTS AND CROSSING, STEEL SLEEPERS, BRIDGE CHANNEL SLEEPERS, VARIOUS TYPES OF BOLTS AND NUTS. DURING THE COURSE OF SEARCH ON 06.09.2012, A PANCHNAMA WAS DRAWN IN THE NAME OF M/S. GANPATI INDUSTRIAL PRIVATE LIMITED WHICH IS ASSESSEE BEFORE US. 11. THE RETURN OF INCOME WAS FILED ON 26.09.2013 DISCLOSING A TOTAL INCOME OF RS.7,94,66,300/-. THE ASSESSEE THROUGH ITS REPRESENTATIVE APPEARED AND PRODUCED THE DETAILS REQUISITIONED BY THE AO. THE AO DETERMINED THE TOTAL INCOME OF THE ASSESSEE ON RS.7,94,66,290/- WHICH IS INCLUSIVE OF UNDISCLOSED INCOME OF RS.5 CRORES AS ADMITTED BY THE ASSESSEE VIDE ITS ORDER DATED 17.04.2015 UNDER SECTION 143(3) OF THE ACT. 12. HAVING SATISFIED THAT IT IS A FIT CASE FOR IMPOSITION OF PENALTY UNDER SECTION 271AAB OF THE ACT, THE AO INITIATED PROCEEDINGS UNDER SECTION 271AAB OF THE ACT BY ISSUING A NOTICE DATED 17.04.2014. THE AO IMPOSED PENALTY OF RS.50,00,000/- UNDER SECTION 271AAB OF THE ACT. THE RELEVANT PORTION OF WHICH IS REPRODUCED HERE IN BELOW:- BUT IN THE INSTANT CASE THE SEARCH WAS CONDUCTED ON 06.09.2012 WHICH IS AFTER JULY,2012. THEREFORE PROVISION OF SEC.271AAB OF THE IT. ACT, 1961 INSTEAD OF PROVISION OF SEC.271AAA OF THE IT ACT,1961 IS APPLICABLE WHERE A MINIMUM SUM COMPUTED AT THE RATE OF TEN PERCENT OF UNDISCLOSED INCOME OF THE SPECIFIED PREVIOUS YEAR TO BE IMPOSED AS PENALTY IRRESPECTIVE OF FULFILLING THE CONDITIONS LAID DOWN IN SEC.271AAB(1)(A) OF THE IT. ACT,1961. THEREFORE, ASSESSEE'S SUBMISSION FOR DROPPING THE PENALTY U/S 271AAB FOR FULFILLING THE THREE CONDITIONS IS NOT APPLICABLE TO THE PRESENT CASE. HOWEVER, IN THE CASE OF THE ASSESSEE THE CONDITIONS LAID DOWN IN SEC.27L AAB(L)(A) ARE FULFILLED AS DISCUSSED UNDER:- 1) SEARCH CONDUCTED: 06.09.2012. 2) IN COURSE OF SEARCH DISCLOSURE OF RS. 5,00,00,000/- WAS MADE. 3) DATE OF FILING OF RETURN U/S 139 INCLUDING DISCLOSED INCOME PAYING ENTIRE TAX LIABILITY ON 26.09.2013. THE ABOVE PROVES THAT IT IS A FIT CASE FOR LEVYING PENALTY U/S 271 AAB OF THE IT. ACT, 1961 FOR UNDISCLOSED INCOME OF THE ASSESSEE. AS A RESULT, THEREFORE, A PENALTY OF RS. 50,00,000/- (BEING 10% OF THE DISCLOSED INCOME OF RS 5,00,00,000/-) IS BEING LEVIED UPON THE ASSESSEE. 13. IT IS NOTED FROM THE ABOVE THAT THE AO HELD THE ASSESSEE TO LIABLE TO PAY PENALTY UNDER SECTION 271AAB OF THE ACT BY HOLDING THAT A SEARCH WAS CONDUCTED ON 06.09.2012 AND A DISCLOSURE OF RS.5 CRORES WAS MADE AND PAID TAX LIABILITY INCLUDING ON THE UNDISCLOSED INCOME AS ADMITTED BY ITA NO.201/KOL/2018 (ASSESSMENT YEAR-2014-15) PAGE | 7 THE ASSESSEE DURING SEARCH PROCEEDINGS. IT IS PERTINENT TO NOTE THAT A TOTAL ASSESSED INCOME OF THE ASSESSEE AS DETERMINED BY THE AO IN THE ASSESSMENT PROCEEDINGS IS CONSISTS OF THE UNDISCLOSED INCOME AS MENTIONED ABOVE. 14. AGGRIEVED BY THE ORDER OF AO IN IMPOSING PENALTY, THE ASSESSEE CHALLENGED THE SAME BEFORE THE CIT(A). THE SPECIFIC CONTENTION WAS MADE BEFORE THE CIT(A) THAT PENALTY UNDER SECTION 271AAB IS NOT MANDATORY FOR THE REASONS AS THERE WAS NO CONCEALMENT OF INCOME, RETURN WAS FILED WITHIN DUE DATE, MANNER OF EARNING INCOME WAS ALSO SPECIFIED AND TAX AND INTEREST ON THE SAID INCOME WAS ALSO DULY PAID. THE CIT(A) CONSIDERING THE SUBMISSIONS OF THE ASSESSEE AND RECORD CONTAINING THE PENALTY ORDER, ASSESSMENT ORDER CONFIRMED THE ORDER OF AO IN IMPOSING THE PENALTY UNDER SECTION 271AAB OF THE ACT. THE RELEVANT PORTION OF WHICH IS REPRODUCED HEREIN BELOW:- THE RELEVANT PENALTY ORDER, ASSESSMENT ORDER AND THE SUBMISSION OF THE APPELLANT ARE REFERRED AND PERUSED. IT IS APPARENT FROM THE FACTS AND CIRCUMSTANCES OF THE CASE, AS MENTIONED IN THE RELEVANT PENALTY ORDER, THAT THE ASSESSING OFFICER WAS JUSTIFIED IN THE LEVYING OF PENALTY U/S. 271AAB OF THE ACT. PENALTY @10% OF THE DISCLOSED INCOME I.E. RS.50,00,000/- HAS BEEN CORRECTLY LEVIED U/S. 271AAB OF THE ACT, BY THE ASSESSING OFFICER. APPEAL ON THIS GROUND IS DISMISSED. 15. IN ANSWER TO THE SUBMISSIONS MADE BY LD. COUNSEL FOR THE ASSESSEE THAT THE PENALTY NOTICE IS DEFECTIVE AND PENALTY IMPOSED THEREON IS NOT MAINTAINABLE THAT ON PERUSAL OF THE PENALTY NOTICE WHICH IS AT PAGE NO.20 OF PAPER BOOK, IT IS TRUE THE AO ISSUED NOTICE U/S 274 R.W.S. 271AAA OF THE ACT. BUT, HOWEVER, IN THE BODY OF THE SAID NOTICE THE AO CLEARLY MENTIONED HIS INTENTION WHY AN ORDER IMPOSING PENALTY ON YOU SHOULD NOT BE MADE U/S 271AAB OF THE ACT. FURTHER, IT IS NEEDLESS TO SAY IN RESPONSE TO THE SAID NOTICE, THE ASSESSEE PARTICIPATED IN THE PENALTY PROCEEDINGS AND IT IS EVIDENT FROM THE PENALTY ORDER THAT THE ASSESSEE SPECIFICALLY CONTENDED THAT THE PROCEEDINGS U/S 271AAB ARE NOT APPLICABLE FOR THE SEARCH CONDUCTED U/S 132 OF THE ACT. THE LD.DR AS NARRATED ABOVE THE SUBMISSIONS AND CASE LAWS SUPPORTING THAT EVEN THOUGH QUOTING OF WRONG PROVISION BY THE COMPETENT AUTHORITY DOES NOT TAKE AWAY JURISDICTION OF THE AUTHORITY AND SUCH ORDERS CANNOT BE VITIATED ON SUCH SOLE GROUND. IN OUR OPINION, THE SUBMISSIONS AS MADE BY THE LD.AR IN THIS REGARD ARE NOT TENABLE AND THEY ARE LIABLE TO BE REJECTED. 16. FURTHER, WE MAY PLACE ON RECORD THE PRINCIPLE LAID DOWN BY THE HONBLE HIGH COURT OF ALLAHABAD IN THE CASE OF SANDIP CHANDAK WHERE, WE FIND THE SAME CONTENTION RAISED AS THE PENALTY INITIATED AND IMPOSED U/S 271AAB IS NOT MAINTAINABLE AS AUTHORITY ISSUED NOTICE U/S 274 R.W.S. 271 OF THE ACT. THE HONBLE HIGH COURT OF ALLAHABAD WAS PLEASED TO OBSERVE THAT THOUGH NOTICE WAS ISSUED U/S 274 R.W.S 271 OF THE ACT, THE AO CLEARLY INDICATED THAT THE PROCEEDINGS U/S 271AAB OF THE ACT INITIATED AND SHOW CAUSED THE ASSESSEE TO REPLY IN WRITING ON OR BEFORE SPECIFIED DATE AND IS SUFFICIENT TO INITIATE AND COMPLETE THE PENALTY PROCEEDINGS. 17. FURTHER IN RESPECT OF THE ARGUMENTS AS ADVANCED BY THE LD.AR THAT NO PENALTY SHOULD BE LEVIED WHEN THE ASSESSEE DULY DISCLOSED THE MANNER OF EARNING THE SAID UNDISCLOSED INCOME UNDER THE HEAD COMMODITY PROFIT IN THE RETURN OF INCOME. IT IS TO BE NOTED ON PERUSAL OF THE PROVISION U/S 271AAB OF THE ACT THE PREDOMINANT CONDITION TO ATTRACT PENALTY PROVISIONS U/S 271AAB OF THE ACT, ADMISSION OF UNDISCLOSED INCOME, SPECIFYING AND SUBSTANTIATING THE MANNER IN WHICH SUCH INCOME HAS BEEN DERIVED, PAID THE TAX TOGETHER WITH INTEREST AND FURNISHES RETURN OF INCOME DECLARING SUCH UNDISCLOSED INCOME. THEREFORE, IT IS CLEAR WHEN THE ASSESSEE ADMITS THE UNDISCLOSED INCOME, SPECIFIES AND SUBSTANTIATE THE SAME, PAYS THE TAX TOGETHER WITH INTEREST AND FURNISHES RETURN OF INCOME, THE PENALTY PROVISIONS U/S 271AAB OF THE ACT WOULD ATTRACT. THEREFORE, THE CONTENTIONS RAISED BY THE LD.AR ARE NOT TENABLE AND ARE REJECTED. 18. AS DISCUSSED ABOVE, THE AO LEVIED PENALTY @ 10% UNDER SUB-SECTION (1)(A) OF SECTION 271AAB OF THE ACT ON UNDISCLOSED INCOME OFFERED BY THE ASSESSEE AND FOR READY-REFERENCE THE PROVISION OF SECTION 271AAB OF THE ACT IS REPRODUCED HEREUNDER:- PENALTY WHERE SEARCH HAS BEEN INITIATED. 271AAB. (1) THE ASSESSING OFFICER MAY, NOTWITHSTANDING ANYTHING CONTAINED IN ANY OTHER PROVISIONS OF THIS ACT, DIRECT THAT, IN A CASE WHERE SEARCH HAS BEEN INITIATED UNDER SECTION 132 ON OR AFTER THE 1 ST DAY OF JULY, 2012, THE ASSESSEE SHALL PAY BY WAY OF PENALTY, IN ADDITION TO TAX, IF ANY, PAYABLE BY HIM, - (A) A SUM COMPUTED AT THE RATE OF TEN PER CENT OF THE UNDISCLOSED INCOME OF THE SPECIFIED PREVIOUS YEAR, IF SUCH ASSESSEE - ITA NO.201/KOL/2018 (ASSESSMENT YEAR-2014-15) PAGE | 8 (I) IN THE COURSE OF THE SEARCH, IN A STATEMENT UNDER SUB- SECTION (4) OF SECTION 132, ADMITS THE UNDISCLOSED INCOME AND SPECIFIES THE MANNER IN WHICH SUCH INCOME HAS BEEN DERIVED; (II) SUBSTANTIATES THE MANNER IN WHICH THE UNDISCLOSED INCOME WAS DERIVED; AND (III) ON OR BEFORE THE SPECIFIED DATE - (A) PAYS THE TAX TOGETHER WITH INTEREST, IF ANY, IN RESPECT OF THE UNDISCLOSED INCOME; AND (B) FURNISHES THE RETURN OF INCOME FOR THE SPECIFIED PREVIOUS YEAR DECLARING SUCH UNDISCLOSED INCOME THEREIN; (B) A SUM COMPUTED AT THE RATE OF TWENTY PERCENT OF THE UNDISCLOSED INCOME OF THE SPECIFIED PREVIOUS YEAR, IF SUCH ASSESSEE - (I) IN THE COURSE OF SEARCH, IN A STATEMENT UNDER SUB-SECTION (4) OF SECTION 132, DOES NOT ADMIT THE UNDISCLOSED INCOME; AND (II) ON OR BEFORE THE SPECIFIED DATE - (A) DECLARES SUCH INCOME IN THE RETURN OF INCOME FURNISHED FOR THE SPECIFIED PREVIOUS YEAR; AND (B) PAYS THE TAX, TOGETHER WITH INTEREST, IF ANY, IN RESPECT OF THE UNDISCLOSED INCOME; (C) A SUM WHICH SHALL NOT BE LESS THAN THIRTY PERCENT BUT WHICH SHALL NOT EXCEED NINETY PER CENT OF THE UNDISCLOSED INCOME OF THE SPECIFIED PREVIOUS YEAR, IF IT IS NOT COVERED BY THE PROVISIONS OF CLAUSES (A) AND (B). (2) NO PENALTY UNDER THE PROVISIONS OF CLAUSE (C) OF SUB-SECTION (1) OF SECTION 271 SHALL BE IMPOSED UPON THE ASSESSEE IN RESPECT OF THE UNDISCLOSED INCOME REFERRED TO IN SUB-SECTION (1). (3) THE PROVISIONS OF SECTIONS 274 AND 275 SHALL, AS FAR AS MAY BE, APPLY IN RELATION TO THE PENALTY REFERRED TO IN THIS SECTION. 19. ON READING OF THE ABOVE PROVISION U/S 271AAB, EXPLAINS THAT IN A SEARCH CASE THE AO MAY DIRECT THE ASSESSEE TO PAY PENALTY AS COMPUTED AT THE RATES SPECIFIED IN THE CLAUSES (A), (B) & (C) OF SUB SECTION (1) OF 271AAB OF THE ACT AND THE ASSESSEE SHALL PAY PENALTY IN ADDITION TO THE TAX ON UNDISCLOSED INCOME DISCLOSED BY THE ASSESSEE MADE AT THE STAGE OF MAKING STATEMENT U/S 132(4) OF THE ACT OR DURING THE ASSESSMENT PROCEEDINGS. IN THE PRESENT CASE AS DISCUSSED ABOVE THAT THE ASSESSEE ACCEPTED DISCLOSURE OF RS.5,00,00,000/- AS ITS UNDISCLOSED INCOME FROM UNDISCLOSED SOURCE. IT IS ALSO NOTED THAT THE SAME HAS BEEN COMPUTED AS DISCLOSURE U/S 134(2) IN THE COMPUTATION OF TOTAL INCOME IN THE ASSESSMENT ORDER. THERE IS NO DISPUTE REGARDING THE PAYMENT OF TAX TOGETHER WITH INTEREST IN RESPECT OF SUCH UNDISCLOSED INCOME AND THE SPECIFIED DATE OF FILING RETURN OF INCOME. SO, THEREFORE, IT IS CLEAR FROM THE RECORD THAT THE ASSESSEE ADMITTED UNDISCLOSED INCOME AND THE STATEMENT WAS RECORDED U/S 132(4) OF THE ACT TO THAT EFFECT. THE ASSESSEE ALSO EXPLAINED THE MANNER OF SUCH EARNING I.E. OUT OF COMMODITY PROFIT AT PAGE NO.18 OF AOS ORDER. IN OUR OPINION, THE ASSESSEE IS LIABLE TO PAY PENALTY AS THE FACTS AND CIRCUMSTANCES OF THE PRESENT CASE FULFILLED THE CONDITIONS THAT REQUIRED TO ATTRACT PENALTY @ 10% IN TERMS OF CLAUSE (A) OF SUB-SECTION (1) OF SECTION 271AAB OF THE ACT I.E: UNDER SUB-CLAUSE (I) OF CLAUSE (A) OF SECTION 271AAB(1) FOR THE REASON THAT THERE WAS A SEARCH, STATEMENT WAS MADE U/S 132(4), ADMITTED THE UNDISCLOSED INCOME AND SPECIFIED THE MANNER OF SUCH INCOME HAS BEEN DERIVED. UNDER SUB-CLAUSE (II) , THE ASSESSEE SUBSTANTIATED THE MANNER OF DERIVING SUCH INCOME IN COMMODITY PROFIT. UNDER SUB-CLAUSE (III) (A) , THE ASSESSEE PAID THE TAX TOGETHER WITH INTEREST REGARDING THE UNDISCLOSED INCOME, AND UNDER (B) FURNISHED THE RETURN OF INCOME DECLARING THE SUCH UNDISCLOSED INCOME. ITA NO.201/KOL/2018 (ASSESSMENT YEAR-2014-15) PAGE | 9 20. IN THE CASE OF SANDIP CHANDAK SUPRA, THE HONBLE HIGH COURT OF ALLAHABAD HELD A PROCEDURE IS PROVIDED U/S 271AAB OF THE ACT WHERE THE ASSESSEE IN THE COURSE OF SEARCH IN A STATEMENT (UNDER SUB-SECTION 4 OF SECTION 132) ADMITS THE UNDISCLOSED INCOME AND SPECIFIES MANNER IN WHICH SUCH INCOME HAS BEEN DERIVED, THEN THE PROVISIONS OF SECTION 271AAB AUTOMATICALLY ATTRACTS. THE RELEVANT PORTION IS REPRODUCED HEREUNDER FOR READY-REFERENCE:- IN THE PRESENT CASE, THE REGULAR ASSESSMENT PROCEEDINGS ARE BEING CARRIED OUT UNDER SECTION 143(3) , WHICH IS A PROCEEDING OF ASSESSMENT AS SO STIPULATED UNDER SECTION 143 AND SUB SECTION (3) OF SECTION 143 PROVIDES THE PROCEDURE TO BE ADOPTED BY THE ASSESSING AUTHORITY DURING THE COURSE OF THE ASSESSMENT PROCEEDINGS. PROVIDES THE PROCEDURE FOR PENALTY WHERE THE SEARCH HAS BEEN INITIATE SECTION 271AAB ED. IN THE PRESENT CASE, ADMITTEDLY A SEARCH AND SEIZURE OPERATION IS CARRIED OUT IN WHICH THE ASSESSEES HAVE SURRENDERED THE AMOUNT OF RS.4 CRORES EACH (RS.4 LAKH EACH BY ALL THE THREE ASSESSEES) AND THEREFORE, IN VIEW OF THE PROVISIONS OF SECTION 271AAB THE ASSESSEES ARE REQUIRED TO PAY, BY WAY OF, PENALTY IN ADDITION TO TAX, IF ANY, A SUM COMPUTED @ 10% OF UNDISCLOSED INCOME OF THE SPECIFIED PERIOD OR PREVIOUS YEARS. IN THE CASE WHERE THE ASSESSEE IN THE COURSE OF SEARCH IN A STATEMENT (UNDER SECTION 4 OF SECTION 132) ADMITS THE UNDISCLOSED INCOME AND SPECIFIED MANNER IN WHICH SUCH INCOME HAS BEEN DERIVED, THAN THE PROVISIONS OF SECTION 271AAB AUTOMATICALLY ATTRACTS AND THE PROCEEDINGS ARE TO BE CARRIED OUT/COMPLETED. WE HAVE NOTICED THAT THE PENALTY NOTICE HAS BEEN ISSUED UNDER SECTION 274 READ WITH SECTION 271 . SECTION 274 PROVIDES THAT NO ORDER IMPOSING A PENALTY SHALL BE MADE UNLESS THE ASSESSEE HAS BEEN HEARD OR HAS BEEN GIVEN A REASONABLE OPPORTUNITY OF BEING HEARD. IN THE INSTANT CASE THE PENALTY NOTICE ISSUED CLEARLY INDICATES THAT THE OPPORTUNITY OF BEING HEARD IS PROVIDED TO THE ASSESSEE AND THEREFORE, THE PENALTY NOTICES HAS BEEN ISSUED UNDER SECTION 274 READ WITH SECTION 271 CALLING UPON THE ASSESSEE TO SHOW CAUSE IN WRITING OR IN PERSON WHICH FULFILL THE REQUIREMENT OF SECTION 274 OF THE ACT. IN THE PRESENT CASE, THE PROVISIONS OF SECTION 271AAB ARE FULLY APPLICABLE AS OF THE CONDITIONS SO STIPULATED OR ATTRACTS AS A SEARCH HAS BEEN INITIATED UNDER SECTION 132 AND DURING THE COURSE OF SEARCH THE STATEMENT OF THE ASSESSEE HAS BEEN RECORDED UNDER SUB SECTION (4) OF SECTION 132 , IN WHICH THE ASSESSEES ADMIT UNDISCLOSED INCOME AND SPECIFIES THE MANNER IN WHICH SUCH INCOME HAS BEEN DERIVED. WE HAVE GONE THROUGH THE CONTENTS OF THE PENALTY NOTICE AND WE FIND THAT IN THE PENALTY NOTICE, WHICH HAS BEEN ISSUED UNDER SECTION 274 READ WITH SECTION 271 , THE ASSESSING AUTHORITY HAS CLEARLY INDICATED THAT THE PROCEEDINGS UNDER SECTION 271AAB BEING INITIATED AND THE REPLY TO THE SHOW CAUSE NOTICE IN WRITING ON OR BEFORE THE DATE SO AS INDICATED WILL BE CONSIDERED BEFORE ANY SUCH ORDER IS MADE UNDER SECTION 271 AAB. WE FIND THE SUBSTANCE IN THE SUBMISSION OF THE LEARNED COUNSEL FOR THE DEPARTMENT AND WE NOTICED THAT THE ORDERS PASSED BY THE CIT (APPEALS), AFFIRMING THE ORDERS OF THE PENALTY, ARE FULLY JUSTIFIED WHERE THE CIT (APPEALS) HAS RECORDED A CATEGORICAL FINDING WITH REGARD TO THE STATEMENT OF SRI KAMAL KISHORE CHANDAK DURING THE SEARCH AND THE ISSUANCE OF THE PENALTY NOTICES UNDER SECTION 271AAB , WHICH IS RELEVANT. WE HAVE NOTICED THAT THIS FACT HAS NOT BEEN CONSIDERED BY THE TRIBUNAL. IN THIS REGARD, WE MAY REPRODUCE THE RELEVANT FINDING OF CIT (APPEALS) HEREINBELOW : 'FROM THE ABOVE PROVISIONS, IT MAY BE SEEN THAT THE AO MAY IMPOSE THE PENALTY UNDER THIS SECTION IF FOLLOWING INGREDIENTS ARE FULFILLED. 1. SEARCH ACTION U/S 132 OF THE INCOME TAX ACT , 1961 SHOULD BE INITIATED U/ S 132 ON OR AFTER 01.06.2012. ITA NO.201/KOL/2018 (ASSESSMENT YEAR-2014-15) PAGE | 10 2. THE ASSESSEE HAS MADE DISCLOSURE OF UNDISCLOSED INCOME DURING THE COURSE OF SEARCH ACTION, HAS PAID THE TAX TOGETHER WITH INTEREST AND HAS FILED RETURN OF INCOME. 3. THE ASSESSEE SUBSTANTIATES THE MANNER IN WHICH HE HAS EARNED THE UNDISCLOSED INCOME. FROM THE ANALYSIS OF THE ABOVE PROVISIONS OF ACT , IT IS CLEAR THAT ACTION OF IMPOSITION OF PENALTY U/S 271AAB(A) IS INDEPENDENT OF THE ENQUIRIES MADE AND SUBSEQUENT ADDITIONS MADE DURING COURSE OF ASSESSMENT PROCEEDINGS. IN OTHER WORDS, THIS PENALTY IS NOT BASED UPON THE FACTS GATHERED DURING COURSE OF ASSESSMENT PROCEEDING. IT IS DUR TO THIS REASON, IN MY OPINION, SATISFACTION OF THE AO IS NOT REQUIRED TO BE RECORDED BY AO DURING ASSESSMENT PROCEEDINGS OR AT THE TIME OF COMPLETION OF THE PROCEEDINGS. THUS, INITIATION OF THE PENALTY AFTER THE COMPLETION OF ASSESSMENT PROCEEDING IS NOT VITIATED BY LAW. THE LD. A.RS HAVE ALSO CHALLENGED THAT THE CAPTION OF THE NOTICE MENTIONED ONLY SECTION 271 AND NOT 271AAB. IN THIS RESPECT, THE COPY OF NOTICE HAS BEEN PRODUCED BY THE LD. A.R. BEFORE ME. IT IS SEEN THAT THE LD. A.R. IS CORRECT IN OBSERVING THAT THE SECTION OF PENALTY HAS NOT BEEN CORRECTLY MENTIONED BY THE AO IN THE CAPTION. HOWEVER, THE AO WILL GET THE BENEFIT OF SECTION 292BB OF THE INCOME TAX ACT, 1961 BECAUSE FIRSTLY, THE ASSESSEE HAS RAISED NO OBJECTION BEFORE THE AO IN THIS REGARD. SECONDLY, LAST LINE OF THE NOTICE CLEARLY MENTIONS SECTION 271AAB . THIRDLY, THE ASSESSEE HAS GIVEN REPLY TO SAID NOTICE WHICH SHOWS THAT THE ASSESSEE FULLY COMPREHENDED THE IMPLICATION OF THE NOTICE THAT IT IS FOR SECTION 271AAB . THE ASSESSEE HAS ALSO CHALLENGED THAT THE PRINCIPLES OF NATURAL JUSTICE HAS NOT FOLLOWED BY THE AO. THE DETAILED SUBMISSIONS OF A.R. IN THIS REGARD HAS ALREADY BEEN REPRODUCED ABOVE. THE A.R. DID NOT PRODUCE ANY EVIDENCE TO SHOW THAT HE WAS NOT GIVEN PROPER OPPORTUNITY OF HEARING. IT IS CLEAR FROM THE PENALTY ORDER THAT THE AO HAS GIVEN PENALTY NOTICE AND WHICH WAS ALSO REPLIED BY THE ASSESSEE. THEREFORE, IN MY OPINION, PRINCIPLE OF NATURAL JUSTICE HAS NOT BEEN VIOLATED. THUS IN VIEW OF ABOVE DISCUSSION PENALTY IMPOSED BY AO U/S 271AAB OF THE ACT IS CONFIRMED.' SINCE ADMITTEDLY, NO PROCEEDING UNDER SECTION 271(1)(C) ARE INITIATED BY THE ASSESSING AUTHORITY DURING THE COURSE OF THE ASSESSMENT PROCEEDING UNDER SECTION 143(3) , THE IMPUGNED PENALTY PROCEEDINGS UNDER SECTION 271AAB ARE FULLY JUSTIFIED AND ARE INITIATED IN ACCORDANCE WITH LAW. WE FIND THAT THE ORDER OF THE ITAT CANNOT SUSTAIN, THEREFORE, THE SAME IS SET ASIDE AND THE PENALTY ORDERS UNDER SECTION 271AAB PASSED BY THE ASSESSING AUTHORITY, CONFIRMED BY THE CIT (APPEALS), ARE AFFIRMED AND ARE RESTORED. 21. THE HONBLE SUPREME COURT HAS UPHELD THE ABOVE JUDGEMENT AND IS REPORTED AS SANDEEP CHANDAK VS PR.CIT [2018] 93 TAXMANN.COM 406 (SC) DATED 23.04.2018. ON PERUSAL OF THE AFORE- MENTIONED DECISION, THE HONBLE HIGH COURT OF ALLAHABAD WAS PLEASED TO HOLD THAT THE PROVISIONS OF SECTION 271AAB AUTOMATICALLY ATTRACTS AND THE PROCEEDINGS ARE TO BE CARRIED OUT/COMPLETED WHERE A SEARCH AND SEIZURE OPERATION IS CARRIED OUT IN WHICH THE ASSESSEES HAVE SURRENDERED THE AMOUNT U/S 132(4) STATEMENT OF UNDISCLOSED INCOME, SPECIFY THE MANNER IN WHICH THIS INCOME WAS DERIVED, FILED RETURN OF INCOME, ADMIT THE SAME AND HAD PAID TAXES AND INTEREST ON THE SAME. 22. AS DISCUSSED ABOVE IN THE AFORE-MENTIONED PARA NO- 19 AND FINDING OF HONBLE COURT OF ALLAHABAD IN THE CASE OF SANDEEP CHANDAK SUPRA, WE FIND NO INFIRMITY IN THE ORDER OF CIT(A) AND IT IS JUSTIFIED. THUS, GROUND NO-1 RAISED BY THE ASSESSEE IS DISMISSED. GROUND NO-2 IS GENERAL REQUIRES NO ADJUDICATION AND IT IS DISMISSED. 23. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS DISMISSED. ITA NO.201/KOL/2018 (ASSESSMENT YEAR-2014-15) PAGE | 11 8. IN THE LIGHT OF THE AFORE-MENTIONED DECISIONS AND DISCUSSION MADE HEREIN ABOVE AT PARA 6, WE FIND NO INFIRMITY IN THE ORDER OF CIT(A) AND IT IS JUSTIFIED. THUS, GROUNDS RAISED BY THE ASSESSEE ARE DISMISSED. 9. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 31.05.2019. SD/- SD/- (P.M.JAGTAP) (S.S.VISWANETHRA RAVI) VICE PRESIDENT JUDICIAL MEMBER DATE:- 31.05.2019 *AMIT KUMAR* COPY FORWARDED TO: 1. APPELLANT- KRISHAN CHANDRA BAJAJ, 190, BLOCK-B, LAKE TOWN, KOLKATA- 700089. 2. RESPONDENT- ACIT, CIRCLE-50(1), BLOCK-DS(2) & 3, UTTARAPAN, MANIKTALLA CIVIC CENTRE, KOLKATA-700054. 3. CIT-KOLKATA 4. CIT(APPEALS)-KOLKATA 5. DR: ITAT -KOLKATA BENCHES BY ORDER AR/H.O.O ITAT, KOLKATA