N.SANTHANAM, CHENNAI V. ACIT CENTRAL CIRCLE-1(2), CHENNAI

ITA 328/CHNY/2020

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 2589 (ITAT-CHENNAI)
• Duration Of Justice: 1 year(s) 8 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-10-2021
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 26-10-2021
• Assessment Year: 2014-2015
• Appeal Filed On: 11-02-2020
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: R ANITA
• Keywords: Business income; Income from undisclosed sources; Principle of natural justice; Initiation of penalty proceedings; Reasonable cause; Revised return; Set aside
• Section: 273B; 153A; 201; 274; 143(2); 139(1); 13; 132; 139

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL , B B ENCH, CHENNAI . , ! . , ! ' BEFORE SHRI DUVVURU RL REDDY, JUDICIAL MEMBER AND SHRI G. MANJUNATHA, ACCOUNTANT MEMBER ./ I.T.A.NO.328/CHNY/2020 ( / ASSESSMENT YEAR: 2014-15) MR. N.SANTHANAM OLD NO.14, NEW NO.12, SEETHAMMAL COLONY EXTENSION, 1 ST CROSS STREET, TEYNAMPET, CHENNAI - 600 018. VS THE ASSISTANT COMMISSIONER INCOME TAX, CENTRAL CIRCLE-1(2) CHENNAI-600 034. PAN: AXUPS 6533R ( /APPELLANT) ( /RESPONDENT) / APPELLANT BY : NONE /RESPONDENT BY : MS.R.ANITA, ADDL.CIT /DATE OF HEARING : 26.10.2021 /DATE OF PRONOUNCEMENT : 26.10.2021 / O R D E R PER G.MANJUNATHA, AM: THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGA INST THE ORDER OF THE LEARNED CIT(A)-18, CHENNAI DATED 23.12 .2019 AND PERTAINS TO ASSESSMENT YEAR 2014-15. 2. THE ASSESSEE HAS RAISED FOLLOWING GROUNDS OF APP EAL:- 1.THE ORDER DATED 23.12.2019 PASSED BY THE LEARNED COMMISSIONER OF INCOME-TAX, (APPEALS-)-18, CHENNAI, IS ERRONEOUS, OPPOSED TO LAW AND FACTS OF THE CASE. 2. THE LEARNED COMMISSIONER OF INCOME-TAX, (APPEALS )-18, ERRED IN DISMISSING THE APPEAL WITHOUT APPRECIATING THE FACT THE APPELLANT HAD FILED AN APPLICATION SEEKING ADJO URNMENT OF THE HEARING POSTED ON 23.12.2019. 3. THE LEARNED COMMISSIONER OF INCOME-TAX, (APPEALS )-18, ERRED IN NOT AFFORDING A FINAL OPPORTUNITY TO THE A PPELLANT OF BEING HEARD BEFORE THE APPEAL WAS ADJUDICATED IN TH E 2 ITA NO. 328/CHNY/2020 INTEREST OF NATURAL JUSTICE AND DECIDING THAT THE A PPEAL WAS NOT PROSECUTED BY THE APPELLANT. 4. THE LEARNED COMMISSIONER OF INCOME-TAX, (APPEALS )-18, ERRED IN NOT APPRECIATING THE FACT THAT THE APPELLA NT HAD VOLUNTARILY ADMITTED THE ADDITIONAL INCOME IN THE R ETURN OF INCOME FILED EVEN WHEN NO INCRIMINATING MATERIALS W ERE FOUND OR SEIZED BY THE DEPARTMENT. 5. THE LEARNED COMMISSIONER OF INCOME-TAX, (APPEALS )-18, ERRED IN NOT APPRECIATING THE FACT THAT THE APPELLA NT HAD NOT SPECIFIED THE MANNER IN WHICH SUCH INCOME WAS EARNE D. 6. THE LEARNED COMMISSIONER OF INCOME-TAX, (APPEALS )-18, ERRED IN NOT APPRECIATING THE FACT THAT THE ADDITIO NAL INCOME ADMITTED BY THE APPELLANT DOES NOT FALL UNDER THE I NCOME AS DEFINED IN THE EXPLANATION (C) TO SECTION 271AAB OF THE ACT. 7. THE LEARNED COMMISSIONER OF INCOME-TAX, (APPEALS )-18, ERRED IN NOT APPRECIATING THE FACT THAT THE NOTICE ISSUED BY THE ASSESSING OFFICER DID NOT SPECIFY WHETHER PENAL TY HAD BEEN INITIATED U/S 271AAB(1)(A) OR 271AAB(1)(B) OR 271AAB(1)(C) AND HENCE THE PENALTY IMPOSED IS ILLEG AL AND BAD IN LAW. 8. THE LEARNED COMMISSIONER OF INCOME-TAX, (APPEALS )-18, ERRED IN DISMISSING THE APPEAL WITHOUT CONSIDERING THE ISSUES RAISED BY THE APPELLANT IN THE GROUNDS OF AP PEAL AND MERITS OF THE CASE. 9. FOR THESE AND OTHER GROUNDS WHICH THE APPELLANT MAY BE PERMITTED TO SUBMIT AT THE TIME OF HEARING, IT IS P RAYED, THE HONBLE INCOME-TAX APPELLATE TRIBUNAL MAY BE PLEASE D TO SET ASIDE THE ORDER OF THE LEARNED COMMISSIONER OF INCOME-TAX(APPEALS)-18 AND RENDER JUSTICE TO THE APPELLANT. 3. BRIEF FACTS OF THE CASE ARE THAT A SEARCH & SEIZ URE OPERATION U/S.132 OF THE INCOME TAX ACT, 1961 WAS CONDUCTED AT THE RESIDENTIAL PREMISES OF THE ASSESSEE ON 31.1 0.2013. DURING THE COURSE OF SEARCH OPERATION, THE ASSESSEE IN HIS 3 ITA NO. 328/CHNY/2020 SWORN DEPOSITION RECORDED U/S.132(4) OF THE ACT ON 28.12.2013 HAD OFFERED UNDISCLOSED INCOME OF RS.1.00 CRORE FOR ASSESSMENT YEAR 2014-15. CONSEQUENT TO SEARCH, THE ASSESSEE HAS FILED HIS RETURN OF INCOME FOR ASSESSMENT YEAR 2014-15 ON 29.11.2014 ADMITTING TOTAL INCOME OF RS.2,42,16,440 /-. IN THE SAID RETURN, THE ASSESSEE DID NOT OFFER UNDISCLOSE D INCOME AS ADMITTED IN SWORN STATEMENT RECORDED DURING COURSE OF SEARCH. THE CASE HAS BEEN TAKEN UP FOR SCRUTINY AND NOTICE U/S.143(2) HAS BEEN ISSUED CALLING UPON VARIOUS DETAILS. THE A SSESSEE HAS FILED REVISED RETURN AFTER INITIATION OF SCRUTINY P ROCEEDINGS ON 23.03.2016 ADMITTING TOTAL INCOME AT RS.3,42,16,44 0/-, INCLUDING ADDITIONAL INCOME OF RS.1.00 CRORE WHICH WAS OFFERED TO TAX AT THE TIME OF SEARCH. THE ASSESSMENT HAS BE EN COMPLETED U/S.143(3) R.W.S 153B(1)(B) OF THE ACT O N 28.03.2016 AND ACCEPTED RETURNED INCOME. 4. SUBSEQUENTLY, PENALTY PROCEEDINGS U/S.271AAB OF THE ACT WAS INITIATED AND ACCORDINGLY, NOTICE U/S.274 R .W.S 271AAB DATED 28.03.2016 WAS ISSUED AND SERVED ON THE ASSES SEE. IN RESPONSE, THE ASSESSEE HAS FILED HIS WRITTEN SUBMIS SIONS AND CHALLENGED INITIATION OF PENALTY PROCEEDINGS ON THE GROUND THAT 4 ITA NO. 328/CHNY/2020 ADMISSION OF UNDISCLOSED INCOME WITHOUT ANY REFEREN CE TO INCRIMINATING MATERIAL DOES NOT WARRANT LEVY OF PEN ALTY U/S.271AAB OF THE ACT. THE ASSESSING OFFICER WAS NO T CONVINCED WITH THE EXPLANATION FURNISHED BY THE ASS ESSEE AND ACCORDING TO HIM, PENALTY U/S.271AAB IS MANDATORY, WHEN THE ASSESSEE HAS ADMITTED ADDITIONAL INCOME DURING THE COURSE OF SEARCH IN THE STATEMENT RECORDED U/S.132(4) OF THE ACT AND THUS, OPINED THAT IT IS A FIT CASE FOR LEVY OF PENALTY AN D HENCE, LEVIED PENALTY OF RS.30 LAKHS BEING 30% OF UNDISCLOSED INC OME OF RS.1.00 CRORE OFFERED TO TAX. 5. BEING AGGRIEVED BY ASSESSMENT ORDER, THE ASSESSE E PREFERRED AN APPEAL BEFORE LEARNED CIT(A). BEFORE T HE LEARNED CIT(A), THE ASSESSEE NEITHER APPEARED NOR FILED ANY WRITTEN SUBMISSIONS TO JUSTIFY HIS CASE. THEREFORE, THE LEA RNED CIT(A) DECIDED ISSUE AND CONFIRMED PENALTY LEVIED BY THE A SSESSING OFFICER U/S.271AAB OF THE ACT BY FOLLOWING CERTAIN JUDICIAL PRECEDENTS, INCLUDING DECISION OF THE HONBLE DELHI HIGH COURT IN THE CASE OF PCIT VS SMT. RITU SINGHAL (2018) 92 TAXMANN.COM 224 (DEL). THE RELEVANT FINDINGS OF THE LEARNED CIT(A) ARE AS UNDER:- 5 ITA NO. 328/CHNY/2020 4.1 I HAVE GONE THROUGH THE PENALTY ORDER, GROUNDS OF APPEAL FILED BY THE APPELLANT IN THIS REGARD. HOWEVER, DUR ING THE APPELLATE PROCEEDINGS IT IS OBSERVED THAT ONE HAS B EEN ATTENDING THE APPELLATE PROCEEDINGS . THE FOLLOWING CHART IN TABULAR FORM SHOWS THE NUMBER OF OPPORTUNITIES GIVE N TO THE APPELLANT TO EXPLAIN HIS POSITION IN THIS REGARD. HOWEVER, IT IS SEEN THAT ENOUGH OPPORTUNITY HAS BEE N GIVEN TO THE APPELLANT AND SINCE NO FURTHER INFORMATION IS C OMING FORTH EXCEPT SEEKING ADJOURNMENT, THEREFORE THE MATTER IS DECIDED AS PER MERITS AND ON THE BASIS OF MATERIALS AVAILABLE ON RECORD. 5. DURING THE COURSE OF PENALTY PROCEEDINGS BEFORE THE AO, THE APPELLANT MADE A PLEA NOT TO LEVY PENALTY ON THE GR OUND THAT THEY HAD COOPERATED WITH THE DEPARTMENT IN ALL THE PROCEEDINGS; AND THAT NO ADDITION WAS MADE TO THE INCOME RETURNE D AND THERE WAS NO ELEMENT OF CONCEALMENT. 5.1 THE AO REJECTED THE PLEA OF THE ASSESSEE STATIN G THAT THOUGH THE INCOME WAS ADMITTED DURING THE COURSE OF SEARCH, THE ASSESSEE FAILED TO ADMIT IT IN THE ORIGINAL RET URN FILED AND ONLY AFTER SCRUTINY PROCEEDINGS WERE INITIATED, A R EVISED RETURN WAS FILED AND ADMITTING THE ADDITIONAL INCOME. THE AO FURTHER OBSERVED THAT PENAL LIABILITY U/S. 271AAB ARISES ON THE UNACCOUNTED INCOME ADMITTED DURING THE COURSE OF SE ARCH OPERATION AND THE SCOPE OF THE SAID INCOME IS NOT L IMITED TO THE ADDITIONS MADE IN SCRUTINY ASSESSMENT. THE UNACCOUN TED INCOME AS ADMITTED BY THE ASSESSEE WAS BASED ON THE MATERIAL FOUND DURING THE COURSE OF SEARCH AND ALSO GOLD AND JEWELLERY AND CASH FOUND. FURTHER THE AO HAS BROUGHT IN THE R ELEVANT EXTRACTS OF THE SWORN STATEMENTS RECORDED AND THE A NSWERS GIVEN BY THE ASSESSEE IN PARA 3 OF HIS PENALTY ORDE R WHEREIN IT 6 ITA NO. 328/CHNY/2020 WAS ADMITTED BY THE ASSESSEE THE UNACCOUNTED INCOME OF RS. 1 CRORE FOR THIS ASSESSMENT YEAR. 5.2 THUS THE AO LEVIED PENALTY U/S. 27IAAB OF RS. 3 0 LAKHS OBSERVING THAT UNDISCLOSED INCOME HAS BEEN ADMITTED BY THE ASSESSEE DURING THE COURSE OF SEARCH AND IN A STATE MENT U/S. 132(4) OF THE ACT BUT THE ASSESSEE FAILED TO ADMIT THE INCOME IN THE RETURN FILED ORIGINALLY BUT ADMITTED THE INCOME BY FILING A REVISED RETURN ON 23.3.2016 ONLY AFTER INITIATION O F PROCEEDINGS U/S. 143(2). 6. I HAVE GONE THROUGH THE FACTS OF THE CASE AND MA TERIALS AVAILABLE ON RECORD. THE AO HAS LEVIED PENALTY U/S. 271AAB ON THE ADMISSION OF ADDITIONAL INCOME OF RS. 1 CRORE F OR THE AY UNDER CONSIDERATION. THE ADDITION RELATING TO UNACC OUNTED CASH REMUNERATION IN HIS PROFESSION AS A FILM ARTISTE HA S BEEN MADE ON THE SWORN STATEMENT DEPOSED BY THE APPELLANT DUR ING THE COURSE OF SEARCH PROCEEDINGS. THE APPELLANT HAD FUR THER DEPOSED THAT THE INVESTMENTS IN EXPENSES MADE OUT T HE BOOKS OF ACCOUNT BY THE APPELLANT NEEDED TO BE TELESCOPED AGAINST THE ADMISSION OF UNDISCLOSED INCOME OF RS. 2.5 OR F OR THE FYS. 2011-12, 2012-13 AND 2013-14.(NEEDLESS TO SAY THAT THE APPELLANT HAD ADMITTED RS. 1 CR FOR THE FY 2013-14 RELEVANT TO AY 2014-15 BEING THE SUBJECT MATTER OF APPEAL). IT HAS BEEN BROUGHT ON RECORD BY THE AO THAT THE APPELLANT HAD PLEADED THAT THE INVESTMENTS IN GOLD AND DIAMOND JEWELLERY WORTH RS. 58.8 LAKHS AND LOAN LENT BY HIS FATHER IN CASH TO SHRI L AKSHMANAN, SHRI PARANTHAMAN AND SHRI VISWANATHAN DURING THE FY 2013- 14 BESIDES THE CASH EXPENDITURE INCURRED OUTSIDE TH E BOOKS OF ACCOUNT WERE FROM OUT OF THE UNDISCLOSED INCOME ADM ITTED. 7. AT THIS STAGE IT IS APPOSITE TO REFER TO THE PRO VISIONS OF SEC.271AAB AS IT STOOD AT THE RELEVANT POINT IN TIM E. PENALTY WHERE SEARCH HAS BEEN INITIATED. 27IAAB. (1) THE ASSESSING OFFICER MAY, NOTWITHSTAND ING ANYTHING CONTAINED IN ANY OTHER PROVISIONS OF THIS ACT, DIRECT THAT, IN A CASE WHERE SEARCH HAS BEEN INITIATED UND ER SECTION 132 ON OR AFTER THE 1ST DAY OF JULY, THE AS SESSEE 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 T HE UNDISCLOSED INCOME OF THE SPECIFIED PREVIOUS YEAR, IF SUCH ASSESSEE. 7 ITA NO. 328/CHNY/2020 (I) IN THE COURSE OF THE SEARCH, IN A STATEMENT UND ER SUB-SECTION (4) OF SECTION 132 ADMITS THE UNDISCLOSED INCOME AN D SPECIFICS THE MANNER IN WHICH SUCH INCOME HAS BEEN DERIVED; (II) SUBSTANTIATES THE MANNER IN WHICH THE UNDISCLO SED INCOME WAS DERIVED; AND (III) ON OR BEFORE THE SPECIFIED DATE (A) PAYS THE TAX, TOGETHER WITH INTEREST, IF ANY, I N RESPECT OF THE UNDISCLOSED INCOME; AND (B) FURNISHES THE RETURN OF INCOME FOR THE SPECIFIE D PREVIOUS YEAR DECLARING SUCH UNDISCLOSED INCOME THEREIN; (B) A SUM COMPUTED AT THE RATE OF TWENTY PER CENT O F THE UNDISCLOSED INCOME OF THE SPECIFIED PREVIOUS YEAR, IF SUCH ASSESSEE- (I) IN THE COURSE OF THE SEARCH, IN A STATEMENT UND ER 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 FU RNISHED FOR THE SPECIFIED PREVIOUS YEAR; AND (B) PAYS THE TAX, TOGETHER WITH INTEREST, IF ANY, I N RESPECT OF THE UNDISCLOSED INCOME; (C) A SUM [WHICH SHALL NOT BE LESS THAN THIRTY PER CENT BUT WHICH SHALL NOT EXCEED NINETY PER CENT] OF THE UNDISCLOSE D INCOME OF THE SPECIFIED PREVIOUS YEAR, IF IT IS NOT COVERED B Y THE PROVISIONS OF CLAUSES (A) AND (H). (2) NO PENALTY UNDER THE PROVISIONS OF SECTION 270A OR] CLAUSE (C) OF SUB-SECTION (1) OF SECTION SHALL BE IMPOSED UPO N THE ASSESSEE IN RESPECT OF THE UNDISCLOSED INCOME REFER RED TO IN SUBSECTION (1) 4[OR SUB-SECTION (IA)]. (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. EXPLANATION.FOR THE PURPOSES OF THIS SECTION, (A) SPECIFIED DATE MEANS THE DUE DATE OF FURNISHI NG OF RETURN OF INCOME UNDER SUB-SECTION (1) OF SECTION 139 OR THE DATE ON WHICH THE PERIOD SPECIFIED IN THE NOTICE ISSUED UNDER SEC TION 153A FOR FURNISHING OF RETURN OF INCOME EXPIRES, AS THE CASE MAY BE; 8 ITA NO. 328/CHNY/2020 (B) SPECIFIED PREVIOUS YEAR MEANS THE PREVIOUS YE AR (I) WHICH HAS ENDED BEFORE THE DATE OF SEARCH, BUT THE DATE OF FURNISHING THE RETURN OF INCOME UNDER SUB-SECTION ( 1) OF SECTION 139 FOR SUCH YEAR HAS NOT EXPIRED BEFORE THE DATE O F SEARCH AND THE ASSESSEE HAS NOT FURNISHED THE RETURN OF INCOME FOR THE PREVIOUS YEAR BEFORE THE DATE OF SEARCH; OR (II) IN WHICH SEARCH WAS CONDUCTED; (C) UNDISCLOSED INCOME MEANS (I) ANY INCOME OF THE SPECIFIED PREVIOUS YEAR REPRE SENTED, EITHER WHOLLY OR PARTLY, BY ANY MONEYS 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 SEAR CH IN THE BOOKS OF ACCOUNT OR OTHER DOCUMENTS MAINTAINED IN T HE NORMAL COURSE RELATING TO SUCH PREVIOUS YEAR; OR (B) OTHERWISE NOT BEEN DISCLOSED TO THE24PRINCIPAL CHIEF COMMISSIONER OR J CHIEF COMMISSIONER OR 24[PRINCIPA L COMMISSIONER OR COMMISSIONER BEFORE THE DATE OF SEA RCH; OR (II) ANY INCOME OF THE SPECIFIED PREVIOUS YEAR REPR ESENTED, EITHER WHOLLY OR PARTLY, BY ANY ENTRY IN RESPECT OF AN EXP ENSE RECORDED IN THE BOOKS OF ACCOUNT OR OTHER DOCUMENTS MAINTAIN ED IN THE NORMAL COURSE RELATING TO THE SPECIFIED PREVIOUS YE AR WHICH IS FOUND TO BE FALSE AND WOULD NOT HAVE BEEN FOUND TO BE SO HAD THE SEARCH NOT BEEN CONDUCTED. 8. SECTION 271AAB PROVIDES THE PROCEDURE FOR PENALT Y WHERE THE SEARCH HAS BEEN INITIATED. ON ANALYSIS OF THE SAID SECTION, AS PER THE LAW AS IT STOOD AT THE RELEVANT POINT IN TIME, IT BECOMES THAT THE AO MAY, IN RESPECT OF SPECIFIED YEARS, IN RELAT ION TO UNDISCLOSED INCOME, LEVY PENALTY OF (A)L0% IF THE T AXPAYER ADMITS THE UNDISCLOSED INCOME U/S 132(4); SUBSTANTIATES TH E MANNER OF EARNING SUCH UNDISCLOSED INCOME AND FILES RETURN OF INCOME WITHIN THE DUE DATE AND PAYS TAX;(B) 20% IF THE TAX PAYER DOES NOT ADMIT UNDISCLOSED INCOME U/S 132(4) ; DISCLOSES SUC H UNDISCLOSED INCOME AND FILES RETURN OF INCOME WITHI N THE DUE DATE AND PAYS TAX AFTER SUBSTANTIATING THE MANNER I N WHICH SUCH INCOME WAS DERIVED; AND (C) 30%, IF THE TAXPAYER DO ES NOT FALL UNDER EITHER OF THE CONDITION PRESCRIBED IN (A)OR ( B) SUPRA. 9. IT IS AN UNDISPUTED FACT THAT THE APPELLANT DURI NG THE COURSE OF SEARCH ACTION IN TERMS OF S.132(L) OF THE ACT, ON B EING CONFRONTED 9 ITA NO. 328/CHNY/2020 ADMITTED THAT HE HAD EARNED UNDISCLOSED INCOME OF R S. 2.5 CRORE FOR THE AYS. 2012-13 TO 2014-15 AS MENTIONED IN PAR A 6 SUPRA AND HAD OFFERED THE SAME AS UNDISCLOSED INCOME IN T HE SWORN STATEMENT RECORDED U/S 132(4) OF THE ACT. HOWEVER, THE APPELLANT FAILED TO ADMIT THE INCOME OF RS. 1 CRORE (THAT WAS ADMITTED BY THE APPELLANT DURING THE COURSE OF SEARCH FOR THE A Y UNDER CONSIDERATION) IN THE RETURN FILED FOR THE A.Y. 201 4-15 AND HAD ADMITTED ONLY AFTER INITIATION OF PROCEEDINGS U/S. 143(2) BY FILING A REVISED RETURN ON 23.3.2016. 10. AS PER THE SECTION, THE IMPUGNED AY IS A SPECIF IED YEAR IN TERMS OF EXPLANATION (B).THE APPELLANT DID NOT OFFE R HIS RETURN OF INCOME ADMITTING THE UNDISCLOSED INCOME DEPOSED BY HIM DURING SEARCH PROCEEDINGS. THE NATURE OF UNDISCLOSED INCOM E ADMITTED REPRESENTED UNACCOUNTED CASH REMUNERATION IN HIS PR OFESSION AS FILM ARTISTE WHICH INCOME HAD BEEN UTILIZED FOR UNA CCOUNTED INVESTMENT AND OUTGOINGS THAT WERE NOT RECORDED IN THE BOOKS OF ACCOUNT. THE ADMISSION AS MENTIONED ABOVE WAS MADE BY THE APPELLANT ONLY BY FILING THE REVISED RETURN MUCH BE YOND THE DUE DATE AS SPECIFIED IN EXPLANATION (A) OF THE SECTION , THE SPECIFIED DATE AS PER THE AFOREMENTIONED EXPLANATION MEANS TH E DUE DATE OF FURNISHING OF THE APPELLANTS RETURN OF INCOME U /S 139(1) OF THE ACT OR THE DATE ON WHICH THE PERIOD SPECIFIED IN TH E NOTICE ISSUED U/S L53A OF THE ACT FOR FURNISHING OF RETURN OF INC OME ACT AS APPLICABLE. IN THE APPELLANTS CASE, THE FACTUM OF GENERATION OF UNACCOUNTED INCOME AND APPLICATION THEREOF FALL SQU ARELY WITHIN THE LIMB OF ENTRY IN THE BOOKS OF ACCOUNT OR OTHER RELEVANT DOCUMENTS / TRANSACTIONS RECOVERED DURING THE COURS E OF SEARCH AND THAT HAD NOT BEEN RECORDED ON OR BEFORE THE DAT E OF SEARCH IN THE BOOKS OF ACCOUNT OR OTHER DOCUMENTS THAT WER E MAINTAINED IN THE DAY TO DAY BUSINESS ACTIVITY OF THE APPELLAN T. THUS, THE UNDISCLOSED INCOME ADMITTED FALLS WITHIN THE AMBIT OF UNDISCLOSED INCOME DEFINED IN CLAUSE (C) OF EXPLANATION OF THE SECTION. IN VIEW OF THE FACT THAT THE APPELLANT HAD ADMITTED UN DISCLOSED INCOME IN THE COURSE OF SEARCH BUT HAD NOT FURNISHE D THE RETURN OF INCOME DECLARING SUCH UNDISCLOSED INCOME THEREI N BY PAYING TAX TOGETHER WITH INTEREST IN RESPECT OF THE UNDISC LOSED INCOME BEFORE THE DUE DATE, THE APPELLANTS CASE IS HIT BY SEC. 271AAB(L)(C). 11. ACCORDINGLY, AS PER THE PROVISIONS OF SECTION 27IAAB THE APPELLANT IS LIABLE TO PAY, BY WAY OF, PENALTY IN A DDITION TO TAX, IF ANY, A SUM COMPUTED @ 30% OF UNDISCLOSED INCOME OF THE SPECIFIED PERIOD OR PREVIOUS YEARS, FOR IN THIS CAS E THE APPELLANT IN THE COURSE OF SEARCH IN A STATEMENT U/S 132(4) H AD ADMITTED THE UNDISCLOSED INCOME AND SPECIFIED MANNER IN WHIC H SUCH INCOME HAS BEEN DERIVED AS MANIFESTED AS BUSINESS I NCOME BUT 10 ITA NO. 328/CHNY/2020 HAS NOT FILED RETURN OF INCOME WITHIN THE DUE DATE. THUS, THE APPELLANTS CASE IS SQUARELY COVERED BY CLAUSE(C) O F SECTION 271AAB(1) OF THE ACT AND THEREFORE THE PROVISIONS O F SECTION 271AAB GET AUTOMATICALLY ATTRACTED. 12. THE HONBLE HIGH COURT OF ALLAHABAD IN THE CASE OF PR. CIT VS SANDEEP CHANDAK (2018) 93 TAXMANN.EOM 405/ 405 ITR 648(ALLAHABAD) HAS HELD THAT THE IMPUGNED PENALTY P ROCEEDINGS UNDER SECTION 27IAAB ARE FULLY JUSTIFIED AND ARE IN ITIATED IN ACCORDANCE WITH LAW AND HAD HELD THAT THE ORDER OF THE ITAT CANT BE SUSTAINED AND THEREFORE THE SAME WAS SET ASIDE A ND THE PENALTY ORDERS UNDER S 271AAB OF THE ACT PASSED BY THE ASSESSING AUTHORITY, CONFIRMED BY THE CIT (APPEALS) , WERE AFFIRMED AND WERE RESTORED. THE HONBLE SUPREME COU RT HAS ENDORSED THIS DECISION BY DISMISSING THE SLP FILED BY THE ASSESSEE IN [20181 93 TAXMANN.COM 406(SC) BY WHICH IT HAS BECOME A SETTLED POSITION OF LAW THAT WHERE AN ASSE SSEE IN THE COURSE OF SEARCH ADMITS UNDISCLOSED INCOME AND MANN ER IN WHICH SUCH UNDISCLOSED INCOME HAS BEEN DERIVED, THE N THE PROVISIONS OF S 271 AAB OF THE ACT WOULD AUTOMATICA LLY GET ATTRACTED. 13. THE HONBLE HIGH COURT OF DELHI IN THE CASE OF PRINCIPAL COMMISSIONER OF INCOME-TAX VS SMT.RITU SINGAL [2018 ] 92 TAXMANN.COM 224(DELHI), THOUGH IN THE CONTEXT OF S. 27IAAA OF THE ACT, HELD THAT 14. IN CONSTRUING SECTION 271AAA ONE MUST NOT LOSE SIGHT OF ITS ESSENTIAL PURPOSE WHICH RESULTED IN ITS ENACTMENT. THERE IS A PENALTY AT THE RATE OF 10% OF THE UNDISCLOSED AMOUN T DECLARED, F THE CONDITIONS IN SECTION 27IAAA (2) ARE NOT MET WI TH. THIS IS QUITE DIFFERENT FROM THE PENAL PROVISION UNDER SECT ION 271(1) (C) OF THE ACT, WHICH DIRECTS THAT IF INCOME IS CONCEAL ED OR INACCURATE RETURNS ARE FILED, WHICH ARE DISALLOWED BY THE AO, THE PENALTY SHALL BE - THREE TIMES THE AMOUNT OF TAX SOUGHT TO BE EVADED. IN THE CASE OF AMOUNTS DISCLOSED DURING THE COURSE OF SEARCH, THE PENALTY AMOUNT IS ONLY TEN PERCENT OF THE UNDISCLOS ED INCOME. PARLIAMENT HAS, THEREFORE, GIVEN A DIFFERENT TREATM ENT TO THE LATTER CATEGORY. AT THE SAME TIME, IF AN ASSESSEE WERE TO SUCCESSFULLY URGE THE ESCAPE ROUTE SO TO SAY OF SECTION 271AAA (2), ALL THREE CONDITIONS MENTIONED IN THE PROVISION (AS HEL D IN GEBILAL KANHAILAL IN RESPECT OF PAN MATERIAL PROVISIONS) HA VE TO NECESSARILY BE FULFILLED. 16. THAT THE INCOME WHICH WAS ULTIMATELY BROUGHT T O TAX PURSUANT TO THE DISCLOSURE MADE, WHICH WAS VOLUNTAR Y ON THE PART OF THE ASSESSEE IS STATING THE OBVIOUS. THE ASSESSE E MERELY 11 ITA NO. 328/CHNY/2020 STATED THAT THE SUMS ADVANCED WERE UNDISCLOSED INCO ME. HOWEVER, SHE DID NOT SPECIFY HOW SHE DERIVED THAT I NCOME AND WHAT HEAD IT FELL IN (RENT, CAPITAL GAIN, PROFESSIO NAL OR BUSINESS INCOME OUT OF MONEY LENDING, SOURCE OF THE MONEY ET C). UNLESS SUCH FACTS ARE MENTIONED WITH SOME SPECIFICITY, IT CANNOT BE SAID THAT THE ASSESSEE HAS FULFILLED THE REQUIREMENT THA T SHE, IN HER STATEMENT (UNDER SECTION 132 (4))- SUBSTANTIATES TH E MANNER IN WHICH THE UNDISCLOSED INCOME WAS DERIVED. SUCH BEIN G THE CASE, THIS COURT IS OF OPINION THAT THE LOWER APPELLATE A UTHORITIES MISDIRECTED THEMSELVES IN HOLDING THAT THE CONDITIO NS IN SECTION 271AAA (2) WERE SATISFIED BY THE ASSESSEE. 13.1 THOUGH THIS DECISION HAS BEEN RENDERED IN THE CONTEXT OF S.27IAAA [THAT IS APPLICABLE TO SEARCH CONDUCTED FR OM 1.6.2007 TO 30.6.2012], THE SCOPE AND TONE & TENOR ARE IN AC CORD WITH S271 AAB [ THAT IS APPLICABLE IN THE APPELLANT CASE ON HAND. 14. FURTHER, THE HONBLE ITAT ,KOLKATA BENCH D IN THE CASE OF DCIT, CENTRAL CIRCLE 2(2),KOLKATA VS ANIL AGARWAL [ 2017] 88 TAXRNANN.COM 288 (KOLKATA-TRIB) IN PARA 9 HAS HELD THAT WE HAVE HEARD THE LD. DR AND PERUSED THE MATERIALS AVAILABLE ON RECORD. IT IS NOT IN DISPUTE THAT THE ASSESSEES CASE FALLS WITHIN THE AMBIT OF 271AAB(1)(A) OF THE ACT AS ADMITTEDLY THE ASSESSEE HAD SATISFIED THE CUMULATIVE CONDITIONS PRESCRIBED THEREON. WE ARE NOT INCLINED TO ACCEPT ARGUMENTS OF THE ASSESSE E THAT HE IS NOT REQUIRED TO MAINTAIN BOOKS OF ACCOUNTS U/S 44AA OF THE ACT FOR HIS COMMODITIES TRANSACTIONS, IN VIEW OF THE FA CT THAT THE ASSESSEE HIMSELF HAD CONSIDERED HIS CASE TO BE ELIG IBLE FOR TAX AUDIT AND HAD ACCORDINGLY, FILED THE RETURN OF INCO ME U/S 139(1) OF THE ACT ON 30.09.2013 FOR THE ASSESSMENT YEAR 2013- 14. IT IS NOT IN DISPUTE THAT THE DUE DATE FOR FILING RETURN OF I NCOME FOR NON-TAX AUDIT ASSESSEES IS 31.07.2013 FOR THE ASSESSMENT YE AR 2013-14. IN THE INSTANT CASE, THE ASSESSEE HIMSELF HAD ACCEP TED THE FACT THAT HE IS ENGAGED IN COMMODITIES TRADING BUSINESS AND ACCORDINGLY, HE IS MANDATED TO MAINTAIN BOOKS OF AC COUNTS U/S 44AA OF THE ACT. IT IS NOT IN DISPUTE THAT AS ON DA TE OF SEARCH I.E. 01.08.2012, THE ASSESSEE HAD NOT ENTERED THE COMMOD ITIES TRANSACTION IN ITS BOOKS OF ACCOUNTS. HENCE, AS PER THE DEFINITION OF UNDISCLOSED INCOME GIVEN IN EXPLANATION C TO SEC TION 271AAB OF THE ACT, THE ADDITIONAL INCOME DISCLOSED BY THE ASSESSEE INDEED TAKES THE CHARACTER OF UNDISCLOSED INCOME. W E ALSO FIND THAT THE LEGISLATURE IN ITS WISDOM HAD CONSCIOUSLY OMITTED TO INCLUDE SECTION 271AAB OF THE ACT IN THE PROVISIONS OF SECTION 273B OF THE ACT. HENCE THERE IS NO REQUIREMENT TO L OOK INTO ANY REASONABLE CAUSE ADDUCED BY THE ASSESSEE WARRANTING GRANT OF 12 ITA NO. 328/CHNY/2020 ANY IMMUNITY FROM LEVYING OF PENALTY U/S 271AAB OF THE ACT. HENCE, EVEN ASSUMING THAT THE MISTAKE LIES ON THE P ART OF THE ACCOUNTANT BY NOT ENTERING THE ENTRIES IN THE BOOKS OF ACCOUNTS REGARDING THE COMMODITIES TRANSACTION, WHICH MIGHT TANTAMOUNT TO REASONABLE CAUSE, THE ASSESSEE WOULD STILL BE EX IGIBLE FOR LEVY OF PENALTY AS NO IMMUNITY COULD BE CLAIMED IN TERMS OF SECTION 273B OF THE ACT. W FIND THAT THE LD. CIT (A) HAD LO OKED INTO IRRELEVANT CIRCUMSTANCES FOR DELETING THE LEVY OF P ENALTY IN THE INSTANT CASE FORGETTING THE FACT THAT THE LEVY OF P ENALTY U/S 27IAAB OF THE ACT IS AUTOMATIC IN NATURE AS PER THE PLAIN READING OF THE PROVISIONS OF THE ACT. HENCE, WE HOLD THAT THE LD. AO HAD RIGHTLY LEVIED PENALTY AT 10% OF UNDISCLOSED INCOME AMOUNTI NG TO RS. 30 LAKHS IN THE INSTANT CASE. ACCORDINGLY, THE GROUNDS RAISED BY THE REVENUE ARE ALLOWED 15. IN VIEW OF THE FOREGOING DISCUSSIONS, I AM OF THE VIEW THAT THERE IS NO INFIRMITY IN THE DECISION OF THE AO IN LEVYING PENALTY OF RS.30,00,000/- U/S 271AAB FOR THIS Y. ACCORDINGLY, I HOLD THAT THE APPELLANTS GROUNDS ARE DISMISSED. 6. NONE APPEARED FOR THE ASSESSEE. WE HAVE HEARD LE ARNED DR, PERUSED MATERIALS AVAILABLE ON RECORD AND GONE THROUGH ORDERS OF THE AUTHORITIES BELOW. THE FACTS BORNE OU T FROM RECORDS CLEARLY INDICATE THAT THE ASSESSEE HAS UNDI SCLOSED INCOME, WHICH WAS OFFERED TO TAX IN THE SWORN STATE MENT RECORDED U/S.132(4) OF THE ACT. THE ASSESSEE HAD AL SO FILED REVISED RETURN AND DECLARED UNDISCLOSED INCOME OFF ERED TO TAX DURING COURSE OF SEARCH AND PAID TAXES. AS PER PROV ISIONS OF SECTION 271AAB, PENALTY IS MANDATORY, WHERE THE AS SESSEE HAS ADMITTED UNDISCLOSED INCOME DURING THE COURSE OF SEARCH IN THE STATEMENT RECORDED U/S.132(4) OF THE ACT AND SPECIFIES MANNER IN WHICH SUCH INCOME HAS BEEN DERIVED. IN TH IS CASE, 13 ITA NO. 328/CHNY/2020 THE ASSESSEE HAS ADMITTED UNDISCLOSED INCOME IN TH E STATEMENT RECORDED U/S.132(4) OF THE ACT AND SUBS TANTIATES THE MANNER IN WHICH UNDISCLOSED INCOME WAS DERIVED . THEREFORE, WE ARE OF THE CONSIDERED VIEW THAT REASO NS GIVEN BY THE ASSESSING OFFICER TO LEVY PENALTY OF 30% OF UND ISCLOSED INCOME IS IN ACCORDANCE WITH LAW AND THUS, WE ARE I NCLINED UPHOLD ORDER OF THE LEARNED CIT(A) AND DISMISS APPE AL FILED BY THE ASSESSEE. 7. IN THE RESULT, APPEAL FILED BY THE ASSESSEE IS D ISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 26 TH OCTOBER, 2021 SD/- SD/- ( . ) ( . ) (DUVVURU RL REDDY) (G.MANJUNATHA) # & / JUDICIAL MEMBER & / ACCOUNTANT MEMBER # /CHENNAI, ) /DATED 26 TH OCTOBER, 2021 DS +, -, /COPY TO: 1. APPELLANT 2. RESPONDENT 3. . () /CIT(A) 4. . /CIT 5. , 2 /DR 6. /GF .