SHRI SHRI PRITESH KUMAR JAIN, RAIPUR (CG) V. THE DY. COMMISSIONER OF INCOME TAX,CENTRAL CIRCLE-1, RAIPUR (CG)

ITA 317/BIL/2016

• Counselvise Citation: [2022] 105 COUNSELVISE.COM (IT) 5648 (ITAT-RAIPUR)
• Duration Of Justice: 5 year(s) 5 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-03-2022
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2012-2013
• Appeal Filed On: 12-10-2016
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Search and seizure
• Section: 139; 274

Judgement Text

आयकर अपीलȣय अͬधकरण Ûयायपीठ रायप ु र मɅ। IN THE INCOME TAX APPELLATE TRIBUNAL, RAIPUR BENCH, RAIPUR (Through Virtual Court) BEFORE SHRI RAVISH SOOD, JUDICIAL MEMBER AND SHRI JAMLAPPA D BATTULL, ACCOUNTANT MEMBER आयकर अपील सं. / ITA No. 317/RPR/2016 Ǔनधा[रण वष[ / Assessment Year : 2012-13 Pritesh Kumar Jain C/o. M/s. Rishabh Builders, D-14, Shailendra Nagar, Raipur (C.G)-492 001 PAN : ACIPJ9611L .......अपीलाथȸ / Appellant बनाम / V/s. The Deputy Commissioner of Income Tax, Central Circle-1, Raipur. ......Ĥ×यथȸ / Respondent Assessee by :Shri R.B. Doshi, AR Revenue by :Shri P.K. Mishra, DR स ु नवाई कȧ तारȣख / Date of Hearing : 09.02.2022 घोषणा कȧ तारȣख / Date of Pronouncement : 30.03.2022 2 Pritesh Kumar Jain Vs. DCIT ITA No. 317/RPR/2016 आदेश / ORDER PER RAVISH SOOD, JM: The present appeal filed by the assessee is directed against the order passed by the CIT (Appeals)-1, Raipur, dated 07.07.2016, which in turn arises from the order passed by the A.O under Sec.271AAA of the Income-tax Act, 1961 (in short ‘the Act’) dated 26.09.2014 for assessment year 2012-13. Before us the assessee has assailed the impugned order on the following grounds of appeal : “1. On the facts and in the circumstances of the case, Commissioner of Income-tax (Appeals) erred in confirming action of Assessing Officer in levying penalty u/s.271AAA of Rs.1,00,000/-. 2. The appellant reserves the right to add, amend or alter any ground or grounds of appeal at the time of hearing.” 2. Controversy involved in the present appeal hinges around the sustainability of penalty imposed by the Assessing Officer u/s 271AAA of the Act, which thereafter had been upheld by the CIT(Appeals). 3. Succinctly stated, search and seizure proceedings were conducted on Sharma Group and others on 21.03.2012 and the 3 Pritesh Kumar Jain Vs. DCIT ITA No. 317/RPR/2016 assessee being a member of the said group was also covered. On 22.03.2012 the statement of the assessee was recorded u/s 132(4) of the Act, wherein he on behalf of himself and his group came forth with a disclosure of Rs.2 crore. However, as against the aforesaid disclosure of Rs. 2 crore (supra) disclosure of undisclosed income of only Rs.1.64 crore was made by the assessee and his group members, as under: Name Undisclosed Income offered (Rs.) Head Basant Kumar Jain 1,54,00,000/- Stock and work in progress Pritesh Kumar Jain 10,00,000/- Cash Total 1,64,00,000/- On being queried as regards the deficit disclosure of Rs. 36 lac, an additional income of Rs. 36 lacs was offered by Shri Basant Kumar Jain, i.e. uncle of the assessee. Backed by the aforesaid facts, the disclosure of Rs. 2 crore (supra) that was made by the assessee in his statement recorded u/s 132(4), dated 22.03.2012 was comprised of as under: 4 Pritesh Kumar Jain Vs. DCIT ITA No. 317/RPR/2016 Name Disclosure Basant Kumar Jain 1,90,00,000/- Pritesh Kumar Jain 10,00,000/- 4. Observing that the assessee had failed to come forth with any explanation as regards his share of unexplained cash of Rs. 10 lacs that was found and seized during the course of search proceedings, the Assessing Officer held the same as the unexplained money of the assessee u/s.69A of the Act. The Assessing Officer in the body of the assessment order also initiated penalty proceedings u/s 271AAA of the Act. After culmination of the assessment proceedings, the Assessing Officer called upon the assessee to explain as to why penalty u/s 271AAA of the Act may not be imposed on him as regards the unexplained money of Rs. 10 lacs that was disclosed by him in his statement recorded u/s.132(4) of the Act. However, the assessee failed to come forth with any explanation. As the assesee had failed to cumulatively satisfy the conditions contemplated in section 271AAA of the Act, i.e, failed to specify and substantiate the manner in which the undisclosed income of Rs. 10 lac was derived by him, therefore, the 5 Pritesh Kumar Jain Vs. DCIT ITA No. 317/RPR/2016 A.O imposed upon him a penalty of Rs.1,00,000/- u/s 271AAA of the Act. 5. Aggrieved the assessee carried the matter in appeal before the CIT(Appeals) but without any success. 6. The assessee being aggrieved with the order of the CIT(Appeals) has carried the matter in appeal before us. The Ld. Authorized Representative ( for short ‘AR’) took us through the facts of the case. At the very outset of the hearing of the appeal, it was submitted by the Ld. AR that on the basis of the statement of the assessee recorded u/s.132(4) of the Act, dated 22.03.2012 a similar penalty u/s 271AAA was imposed in the hands of Shri Basant Kumar Jain (uncle of the assessee), which thereafter had been vacated by the Tribunal vide its order passed in ITA No. 191/RPR/2016, dated 04.10.2021 (copy placed on record). Backed by his aforesaid contentions, it was submitted by the Ld. AR that the issue in hand was squarely covered by the aforesaid order of the Tribunal. Alternatively, it was submitted by the ld. A.R that as the assessee was never called upon to specify or 6 Pritesh Kumar Jain Vs. DCIT ITA No. 317/RPR/2016 substantiate the manner in which the undisclosed income was derived by him, thus, he could not be held at fault in not furnishing the details as regards the same. 7. Per contra, the Ld. Departmental Representative (for short ‘DR’) relied on the orders of the lower authorities. It was submitted by the Ld. DR that as the assessee had failed to both specify and substantiate the manner in which the undisclosed income of Rs.10 lacs (supra) was derived by him, therefore, having failed to cumulatively satisfy the conditions contemplated u/s 271AAA (2) of the Act, he had rightly been saddled with the penalty in question. 8. We have heard the ld. authorized representatives for both the parties, perused the orders of the lower authorities and the material available on record, as well as considered the judicial pronouncements that have been pressed into service by the Ld. AR to drive home his aforesaid contentions. Before proceeding any further, we deem it fit to cull out the provisions of section 271AA of the Act, as under : “271AAA. (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 1st day of June, 2007 but before the 1st day of July, 2012, the assessee 7 Pritesh Kumar Jain Vs. DCIT ITA No. 317/RPR/2016 shall pay by way of penalty, in addition to tax, if any, payable by him, a sum computed at the rate of ten per cent of the undisclosed income of the specified previous year. (2) Nothing contained in sub-section (1) shall apply if the 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) pays the tax, together with interest, if any, in respect of the undisclosed income. (3) 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). (4) The provisions of sections 274 and 275 shall, so far as may be, apply in relation to the penalty referred to in this section. Explanation.—For the purposes of this section,— (a) "undisclosed income" means— (i) any income of the specified previous year represented, either wholly or partly, by any money, bullion, jewellery or other valuable article or thing or any entry in the books of account or other documents or transactions found in the course of a search under section 132, which has— (A) not been recorded on or before the date of search in the books of account or other documents maintained in the normal course relating to such previous year; or (B) otherwise not been disclosed to the Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner before the date of search; or (ii) any income of the specified previous year represented, either wholly or partly, by any entry in respect of an expense recorded in the books of account or other documents maintained in the normal course relating to the specified previous year which is found to be false and would not have been found to be so had the search not been conducted; (b) "specified previous year" means the previous year— (i) which has ended before the date of search, but the date of filing the return of income under sub-section (1) of section 139 for such year has not expired before the date of search and the assessee has not furnished the return of income for the previous year before the said date; or (ii) in which search was conducted.” Admittedly, it is a matter of fact borne from the record that the statement of the assessee before us, i.e, Shri Pritesh Kumar Jain that 8 Pritesh Kumar Jain Vs. DCIT ITA No. 317/RPR/2016 was recorded u/s 132(4) of the Act, dated 22.03.2012 had both in his own case as well as in the case of Shri Basant Kumar Jain (supra) formed the very basis for levy of penalty u/s.271AAA of the Act. On a perusal the order passed by the Tribunal in the case of Shri Basant Kumar Jain in ITA No.191/RPR /2016 dated 04.10.2021, we find that the aspect that had weighed for quashing the penalty levied u/s 271AAA, was that the assessee before them, i.e, Shri. Basant was never called upon to specify and substantiate the manner in which the undisclosed income had been derived by him. As such, a material fact that distinguishes the case of the assessee as against that of Shri Basant Kumar Jain (supra) is that while for the assessee in the course of his statement recorded u/s 132(4) of the Act, dated 22.03.2012 was categorically called upon to specify the manner in which the undisclosed income was derived by him, however, Shri. Basant Kumar Jain (supra) was never queried or quizzed as regards the same. In fact, as observed by us hereinabove, it was the assessee i.e. Shri Pritesh Kumar Jain who had came forth with a disclosure of Rs. 2 crore, i.e, both on his own account as well as in the hands of Shri 9 Pritesh Kumar Jain Vs. DCIT ITA No. 317/RPR/2016 Basant Kumar Jain (supra). Backed by the aforesaid facts, as observed by the Tribunal while disposing off the appeal in the case of Shri Basant Kumar Jain (supra), and rightly so, as the aforementioned person was never queried about the manner in which the purported undisclosed income had been derived by him, therefore, there could be no justification for levy of penalty u/s 271AAA as regards the undisclosed income that was offered for tax in his hands. Backed by our aforesaid observations, we are of the considered view that as the facts involved in the case of Shri. Basant Kumar Jain (supra) are distinguishable as against those in the case of the assessee before us, therefore, the order passed by the Tribunal in his case would in no way assist the case of the assessee before us. 9. Adverting to the facts involved in the case before us, we find that the assessee in his statement recorded u/s 132(4), dated 22.03.2012 was categorically queried and called upon to specify the manner in which undisclosed income was derived by him. However, the assessee instead of specifying and substantiating the manner in which undisclosed income was derived by him, had on the contrary, came 10 Pritesh Kumar Jain Vs. DCIT ITA No. 317/RPR/2016 forth evasive replies. For the sake of clarity the relevant extract of the statement of the assessee, i.e, Shri Pritesh Kumar Jain recorded u/s.132(4) of the Act, dated 22.03.2012 is culled out as under: 11 Pritesh Kumar Jain Vs. DCIT ITA No. 317/RPR/2016 12 Pritesh Kumar Jain Vs. DCIT ITA No. 317/RPR/2016 Backed by aforesaid facts, we are of a strong conviction that as the assessee had failed to cumulatively satisfy the conditions as contemplated u/s 271AAA(2) of the Act, therefore, the Assessing Officer had rightly saddled him with penalty under the said statutory provision. In so far the claim of the ld. A.R that as the assesee had duly paid the taxes and. interest corresponding the undisclosed income, therefore, no penalty u/s 271AAA was called for in his hands, we are afraid that the same being a part satisfaction of the conditions contemplated in section 271AAA(2) of the Act, thus, would not bring the case of the assessee within the realm of the exception carved out in the said statutory provision. We, thus, in te backdrop of our aforesaid deliberations finding no infirmity in the view taken by the CIT(Appeals) who had rightly sustained the penalty imposed by the 13 Pritesh Kumar Jain Vs. DCIT ITA No. 317/RPR/2016 Assessing Officer u/s.271AAA of the Act, uphold his order. The Ground of appeal No.1 raised by the assessee is dismissed in terms of our aforesaid observations. 10. Ground of appeal No. 2 being general in nature is dismissed as not pressed. 11. In the result, appeal of the assessee being devoid and bereft of any merits is dismissed in terms of our aforesaid observations. Order pronounced in open Court on 30 th day of March 2022. Sd/- Sd/- JAMLAPPA D BATTULL RAVISH SOOD (ACCOUNTANT MEMBER) (JUDICIAL MEMBER) रायप ु र/ RAIPUR ; Ǒदनांक / Dated : 30 th March, 2022 SB आदेश कȧ ĤǓतͧलͪप अĒेͪषत / Copy of the Order forwarded to : 1. अपीलाथȸ / The Appellant. 2. Ĥ×यथȸ / The Respondent. 3. The CIT(Appeals)-1, Raipur (C.G) 4. The Pr. CIT-1, Raipur (C.G) 5.ͪवभागीय ĤǓतǓनͬध, आयकर अपीलȣय अͬधकरण,रायप ु रबɅच, रायप ु र / DR, ITAT, Raipur Bench, Raipur. 6. गाड[ फ़ाइल / Guard File. आदेशान ु सार / BY ORDER, // True Copy // Ǔनजी सͬचव / Private Secretary आयकर अपीलȣय अͬधकरण, रायप ु र / ITAT, Raipur. 14 Pritesh Kumar Jain Vs. DCIT ITA No. 317/RPR/2016 Date 1 Draft dictated on 20.03.2022 Sr.PS/PS 2 Draft placed before author 21.03.2022 Sr.PS/PS 3 Draft proposed and placed before the second Member JM/AM 4 Draft discussed/approved by second Member AM/JM 5 Approved draft comes to the Sr. PS/PS Sr.PS/PS 6 Kept for pronouncement on Sr.PS/PS 7 Date of uploading of order Sr.PS/PS 8 File sent to Bench Clerk Sr.PS/PS 9 Date on which the file goes to the Head Clerk 10 Date on which file goes to the A.R 11 Date of dispatch of order