Sri Mahabir Prasad Jalan, Kolkata V. A.C.I.T.,Central Circle-1(1), Kolkata

ITA 241/KOL/2020

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 3838 (ITAT-KOLKATA)
• Duration Of Justice: 8 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-11-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 03-11-2020
• Assessment Year: 2013-2014
• Appeal Filed On: 25-02-2020
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DHRUBAJYOTI ROY JCIT LD
• Assessee Lawyers: S M SURANA LD
• Keywords: Document seized; Principle of natural justice; Documents seized; Set aside
• Section: 201; 13; 22

Judgement Text

1 ITA NO . 241/KOL/2020 AY 2013 - 14 SRI MAHABIR PRASAD JALAN IN THE INCOME TAX APPELLATE TRIBUNAL , A BENCH, KOLKATA [ BEFORE SHRI J.SUDHAKAR REDDY, AM AND SHRI PARTHA SARATHI CHOUDHURY , JM ] I.T.A. NO. 241 /KOL/20 20 ASSESSMENT YEAR: 20 1 3 - 14 SRI MAHABIR PRASAD JALAN PAN: ACFPJ2428J VS. A CIT, C.C - 1( 1 ), KOLKATA APP ELLANT RESPONDENT DATE OF HEARING (VIRTUAL) 03 - 11 - 2020 DATE OF PRONOUNCEMENT 05 - 11 - 2020 FOR THE APPELLANT SHRI S.M SURANA, ADVOCATE, LD.AR FOR THE RESPONDENT SHRI DHRUBAJYOTI ROY, J CIT, LD. SR. DR ORDER PER SHRI PARTHA SARATHI CHOUDHURY, JM TH IS APPEAL PREFERRED BY THE ASSESSEE EMANATES FROM THE ORDER OF LD. CIT(A) , 2 0, KOLKATA DATED 22 - 09 - 2015 FOR THE ASSESSMENT YEAR 20 1 3 - 14 AS PER THE FOLLOWING GROUND OF APPEAL: - 1. FOR THAT THE LD. CIT(A) ERRED IN CONFIRMING THE PENALTY IMPO SED BY THE AO U/S. 271AAB WHICH IS NOT IN ACCORDANCE WITH LAW. 2 . BRIEF FACTS ARE THAT A SEARCH WAS CONDUCTED AT T HE OFFICE PREMISES OF RAMKRISHNA FORGING LTD 72, SHAKESPEARE SARANI, KOLKATA - 17 ON 13 - 12 - 2012. THERE WAS ALSO A SEARCH WARRANT IN THE N AME OF THE ASSESSEE ON 13 - 12 - 2012 AT THE RESIDENTIAL PREMISES AT 18/2 ALIPORE ROAD, KOLKATA. IN THE COURSE OF SEARCH AT THE RESIDENCE NO INCRIMINATING DOCUMENT S WERE FOUND. IN THE OFFICE OF RAM KRISHNA FORGING ALSO NO INCRIMINATING DOCUMENT S WERE FOUND ON 13 - 12 - 2012. HOWEVER, ONLY SRI NARESH JALAN ONE OF THE DIRECTORS STATEMENT S RECORDED U/S. 132(4) OF THE ACT, WHO MADE AN ADHOC DISCLOSURE OF RS. 15 CRORES ON 13 - 12 - 2012 FOR BUSINESS CONCERNS AND FAMILY MEMBERS. THE DEPARTMENT ALSO PUT A PO ON ONE OF 2 ITA NO . 241/KOL/2020 AY 2013 - 14 SRI MAHABIR PRASAD JALAN THE W ARDROBES ON THAT DAY OF SEARCH IN THE OFFICE OF RAMKRISHNA FORGIN G P.LTD. THEREAFTER THE PO WAS OPENED ON 8 - 2 - 2013 WHEN SOME DOCUMENTS WERE SEIZED AND BUNCHED IN RKFL - 9, ALL OF WHICH WERE REGULAR BUSINESS DOCUMENTS DULY ACCOUNTED FOR IN THE BOOKS OF RAMKR ISHNA FORGING EXCEPT 7 SHEET OF DOCUMENTS WHICH WERE PAGE 7 TO 13 OF THE SAID RKFL - 9 (P.B PAGES 31 - 37) WRITTEN IN THE SAME HANDWRITING AND BY SAME PEN BY THE ACCOUNTANT AND ALL WRITTEN ON ONE DAY GIVING FIGURES OF DIFFERENT DATES. ON EACH OF THE SHEET ONE NAME WAS WRITTEN AS INCOME FROM COMMODITY PROFIT. THE TOTAL OF THE COMMODITY PROFIT AS PER 5 SHEET WAS ROUND FIGURE OF RS. 15 CRORES. THE ASSESSEES NAME WAS ALSO WRITTEN ON ONE SUCH DOCUMENT BEING PAGE NO. 13(P.B PAGE - 31). THE SAID SRI NARESH JALAN ON 8.2.2017 FILED A LETTER WHEREIN HE SUBMITTED THE BIFURCATION OF THE SUM OF RS. 15 CORES FOR WHICH HE MADE THE STATEMENT ON 13 - 12 - 2012 IN FIVE NAMES, WHICH TALLIED WITH THE FIGURES STATED IN FIVE SHEETS SEIZED ON 8.2.2012. HOWEVER, IN THE DISCLOSURE PETITIO N MADE ON 13 - 12 - 2012 OR IN THE LETTER DATED 8.2.2017 FILED BY SRI NARESH JALAN, HE DID NOT DISCUSS THE DOCUMENTS SEIZED ON 8.2.2017. IT WAS CONTENDED BY THE ASSESSEE THAT HE DULY DECLARED THE COMMODITY PROFIT IN THE RETURN OF INCOME AS IS APPARENT FROM P ARA 3 AND 5 OF THE ASSESSMENT ORDER ITSELF AS WELL AS IN THE COMPUTATION OF INCOME. FURTHER IT WAS ARGUED THAT THERE WAS NO REFERENCE TO ANY DISCLOSURE IN THE COMPUTATION OF INCOME FILED BY THE ASSESSEE. THE AO HAS ALSO ACCEPTED THE SAME AS PER RETURN WHILE COMPLETING THE ASSESSMENT . THERE IS NO WHISPER ANYWHERE OF ANY SEIZED DOCUMENT OR DISCUSSION NOR ANY REFERENCE TO ANY STATEMENT OF THE ASSESSEE U/S. 132(4) OR ANY INCRIMINATING PAPERS OR EVEN THE STATEMENT MADE BY SHRI NARESH J ANAL BIFURCATING THE SUM OF RS. 15 CRS IN FIVE NAMES. THE AO IN THE ASSESSMENT OR D ER OR IN THE ORDER SHEET HAS NOT TREATED THE SEIZED DOCUMENTS AS INCRIMINATING PAPERS NOR THERE IS ANY FINDING OR EVEN WHISPER THAT INCOME FROM COMMODITY PROFIT RECORDED IN OTHER DOCUMENTS WOULD NOT HAVE BEEN DISCLOSED IF THERE WAS NO SEARCH. HOWEVER, THE AO HAS ACCEPTED THE RETURN FILED BUT HAS IMPOSED PENALTY U/S. 271AAB OF THE ACT. THE ASSESSEE HAS CHALLENGED THE SAME BEFORE US. 3. AT THE TIME OF HEARING BEFORE US THE LD.AR OF THE ASSESSEE HA S VEHEMENTLY ARGUED TH A T THE NOTICE ISSUED U/S. 271AAB OF THE ACT IS VAGUE AND THERE WAS NO SPECIFIC CHARGE 3 ITA NO . 241/KOL/2020 AY 2013 - 14 SRI MAHABIR PRASAD JALAN MENTIONED THEREIN. COPY OF THE SAID NOTICE IS ALSO ANNEXED AT PAGE - 1 OF THE P.B FILED BEFORE US. THE LD. AR FURTHER SUBMITS THAT EVEN IN THE ORDER - SHEET THERE IS NO WHISPER OF CHARGE FOR INITIATION OF PENALTY U/S. 271AAB OF THE ACT . IN SUPPORT OF HIS ARGUMENTS/CONTENTIONS THE LD. AR PLACED HIS STRONG RELIANCE ON THE FOLLOWING JUDICIAL PRONOUNCEMENTS : - IN THE CASE OF PADAMCHAND PUGALIA , JAIPUR ITAT IN ITA NO. 112/JP/2018 IN THE CASE OF ASHOK BHATIA, INDORE BENCH ITAT IN ITA NO. 869/IND/ DECIDED ON 5.2.2020 IN THE CASE OF RAVI MATHUR, JAIPUR ITAT IN ITA NO. 969/JP/2017 DATED 13 - 6 - 2018 IN THE CASE OF SHRI R. ELANGOVAN, ITAT CHENNAI, ITA NO. 1199/CHNY /2017, DATED 5.4.2018 PER CONTRA, LD. SR.DR HAS STRONGLY RELIED ON THE ORDERS OF THE SUB - ORDINATE AUTHORITIES. 4 . WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE RELEVANT RECORDS. AFTER HEARING THE RIVAL SUBMISSIONS AND ANALYZING THE FACTS AND CIRCUMSTANC ES OF THE CASE AND CONSIDERING THE JUDICIAL PRONOUNCEMENTS PLACED ON RECORD BEFORE US AND ANALYZING THE PROVISIONS OF SECTION 271AAB OF THE ACT , WE FIND THAT THEREIN THREE LIMBS OF THE SECTION ARE MENTIONED AS CLAUSES (A); (B); ( C ) , WHEREIN A SUM PAID @ 1 0%, 20 % AND 60% RESPECTIVELY OF THE UNDISCLOSED INCOME OF THE SPECIFIED PREVIOUS YEAR HAS TO BE DETERMINED FOR PURPOSES OF PENALTY . THUS, IT IS EVIDENT THAT NOTICE ISSUED UNDER THIS PROVISION HAS TO SPECIFY UNDER WHICH CLAUSE THE AO WANTS TO PROCEE D TO LEVY THE IMPUGNED PENALTY AND THERE HAS TO BE AN UNDISCLOSED INCOME OF THE SPECIFIED PREVIOUS YEAR. IN THIS CASE, WHEN WE PERUSE THE ASSESSMENT ORDER , WE FIND THAT THERE IS NOT EVEN A WHISPER OF SPECIFIED CLAUSE OF THE SECTION 271AAB OF THE ACT IN WHICH THE PENALTY PROCEEDING HAS BEEN INITIATED BY THE AO , ALTHOUGH THE AO HAS ACCEPTED THE RETURN OF INCOME FILED BY THE ASSESSEE . THE AO HAS ALSO NOT MENTIONED ANY UNDISCLOSED INCOME IN THE NAME OF THE ASSESSEE. IN THIS SCENARIO, FACTS APROPOS ARE COVE RED BY VARIOU S JUDIC I AL PRONOUNCEMENTS/DECISIONS FILED ON RECORD BEFORE US SPECIFYING THE FOLLOWING PRINCIPLES : - A. PENALTY INITIATED U/S. 271AAB OF THE ACT SHOULD MENTION THE SPECIFIC CLAUSE/CHARGE IN WHICH IT IS INITIATED SO THAT IN CONFORMITY WITH PRINCIPLE OF NATURAL JUSTICE THE ASSESSEE SHO ULD KNOW THE EXACT CHARGE FOR IMPOSITION OF PENALTY AND HE CAN BE READY FOR HIS DEFENCE. 4 ITA NO . 241/KOL/2020 AY 2013 - 14 SRI MAHABIR PRASAD JALAN B. THERE HAS TO BE AN UNDISCLOSED INCOME FOR THE PREVIOUS YEAR 5. TAKING THE TOTALITY OF FACTS AND CIRCUMSTANCES OF THE CASE, WE ARE OF THE CONSIDERED VIEW THAT WHEN THE NOTICE ISSUED U/S. 271AAB OF THE ACT DOES NOT CONTAIN ANY SPECIFIC CHARGE AGAINST THE ASSESSEE AS PER THE VARIOUS CLAUSES THEREIN , WHEN THE AO HAS ACCEPTED THE RETURN FILED BY THE ASSESSEE AND WHEN TH E AO HAS NOT FOUND ANY UNDISCLOSED INCOME IN THE HANDS OF THE ASSESSEE , I N SUCH SCENARIO, THE PENALTY U/S. 271AAB OF THE ACT CANNOT BE IMPOSED AND ACCORDINGLY, WE SET ASIDE THE IMPUGNED ORDER OF THE LD. CIT(A) AND DIRECT THE AO TO CANCEL THE IMPUGNED PENA L T Y FROM THE HANDS OF THE ASSESSEE. 6 . IN THE RESULT, THE APPEAL OF THE ASSESSEE (ITA NO. 241/KOL/2020 FOR THE AY 201 3 - 14 ) IS ALLOWE D . ORDER IS PRONOUNCED IN THE OPEN COURT ON 5 TH NOVEMBER , 2020 SD/ - SD/ - ( J.SUDHAKAR REDDY ) ( PARTHA SARATHI C HOUDHURY) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 5 TH NOVEMBER, 2020 ** PP (SR.P.S.) COPY OF THE ORDER FORWARDED TO: 1. RESPECTIVE APPELLANT /ASSESSEE : SRI MAHABIR PRASAD JALAN 4A HASTING PARK ROAD, HASTINGS, KOLKATA - 27. 2 RESPONDENT /DEPAR TMENT : A CIT, C.C 1(4), 110 SHANTIPALLY, AAYKAR BHAWAN POORVA, 3 RD FLOOR, KOLKATA 3. 4. 5. CIT(A), CIT - , DR, ITAT, KOLKATA / TRUE COPY, BY ORDER, ASSISTANT REGISTRAR