ACIT, Central Circle-2(3), Kolkata, Kolkata V. Sri Kanwar Sain Gupta, Kolkata

ITA 538/KOL/2017

• Counselvise Citation: [2018] 121 COUNSELVISE.COM (IT) 6668 (ITAT-KOLKATA)
• Duration Of Justice: 1 year(s) 3 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-06-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2013-2014
• Appeal Filed On: 20-03-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MD USMAN
• Keywords: Search and seizure
• Section: 132

Judgement Text

ITA NO.538/KOL/2017 SRI KANWAR SAIN GUPTA A.Y.2013 -14 1 IN THE INCOME TAX APPELLATE TRIBUNAL, BENCH B KOL KATA [BEFORE HONBLE SHRI S.S.GODARA, JM & SHRI M.BALA GANESH, AM ] ITA NO.538/KOL/2017 ASSESSMENT YEAR : 2013-14 A.C.I.T., CIRCLE-2(3) -VERSUS- SRI KANWAR S AIN GUPTA KOLKATA KOLKATA (PAN: ADNPG 6276 G) (APPELLANT) (RESPONDENT) FOR THE APPELLANT: MD. USMAN, CIT(DR) FOR THE RESPONDENT: NONE DATE OF HEARING : 27.06..2018. DATE OF PRONOUNCEMENT : 29.06.2018. ORDER PER S.S.GODARA, JM: THIS REVENUES APPEAL FOR A.Y.2013-14 FALLS INTO QU ESTION THE CIT(A)-20, KOLKATAS ORDER DATED 02.01.2017 IN APPEAL NO.1343/ CIT(A)-20/CC-2(3)/15-16 REVERSING THE ASSESSING OFFICERS IMPOSING PENALTY OF RS.10,00,000/- IN HIS ORDER DATED 23.02.2016, INVOLVING PROCEEDINGS U/S 271AAB OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT ). CASE FILED PERUSED. NONE APPEARED AT ASSESSEES BE HEST. WE THEREFORE PROCEED EXPARTE AGAINST HIM. 2. LEARNED CIT (DR) VEHEMENTLY CONTENDS DURING THE COURSE OF HEARING THAT THE ASSESSING OFFICER HAD RIGHTLY PENALISED THE ASSESSE E U/S 271AAB OF THE ACT. THERE IS NO DISPUTE THAT THE DEPARTMENT HAD CARRIED OUT THE SEARCH IN QUESTION DATED 13.02.2013 AND ON SUBSEQUENT DATES IN M/S AGARWAL GROUP OF CAS ES. THE ASSESSE IS ONE OF THE CONNECTED PARTY TO THE SAID SEARCHED GROUP. HE MADE SECTION 132(4) DISCLOSURE OF RS.1,00,00,000/- UNDER THE HEAD OTHER BUSINESS IN COME. HE FILED HIS RETURN DATED 31.03.2014 DECLARING TOTAL INCOME OF RS.105,26,260/ - AS ACCEPTED IN REGULAR ASSESSMENT FRAMED ON 30.09.2015. ITA NO.538/KOL/2017 SRI KANWAR SAIN GUPTA A.Y.2013 -14 2 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 COND ITIONS 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 OPERATIO N U/S 132 IN THIS CASE NO EVIDENCES REGARDING CONCEALMENT/UNDISCLOSED INCOME IN THE FORM OF CASH SEIZURE/PAPERS/DOCUMENTS/STOCK ETC WERE FOUND AND S EIZED. NOTHING INCRIMINATING/NO EVIDENCES WERE FOUND REGARDING RS. 1 CRORE WHICH WAS OFFERED FOR TAXATION BY THE ASSESSEE SUO MOTO IN OR DER TO BUY PEACE OF MIND. I ALSO FIND THAT NEITHER THE OFFICERS IN THE INVESTIG ATION WING IN THE POST SEARCH INVESTIGATION NOR THE ASSESSING OFFICER DURING ASSE SSMENT PROCESS FOUND ANY DISCRIMINATING EVIDENCE OF UNDISCLOSED INCOME OTHER THAN THE STATEMENT OF THE ASSESSEE FOR MAKING THE ADDITION OF RS.1 CRORE. FURTHER I FIND THAT THE AO HAS LEVIED PENALTY U/S 2 71AAB (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 DECI DED BY THE HONBLE SUPREME COURT IN THE CASE OF SUDARSHAN SIIK & SARIE S (SUPRA), IT IS CLEAR THAT ONLY THE STATEMENT OF THE ASSESSEE WITHOUT ANY CORR OBORATING EVIDENCE CANNOT BE THE ONLY BASIS FOR LEVYING PENALTY. HERE IT IS A LSO CLEAR THAT FROM THE STATEMENT OF THE ASSESSEE ONE CANNOT POINT OUT WHIC H AMOUNT OF UNDISCLOSED INCOME PERTAINS TO WHICH SPECIFIED PREVIOUS YEAR. I N 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) O N 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 RA TIO THAT PENALTY CANNOT BE LEVIED ON THE AMOUNT OFFERED BY THE ASSESSEE IN ORDER TO BUY PEACE OF MIND [IN THE CASE OF SUDARSHAN SILK & SARIES (SUPRA)]. T HUS, 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 L, 2 AND 3 ARE ALLOWED. ITA NO.538/KOL/2017 SRI KANWAR SAIN GUPTA A.Y.2013 -14 3 4. 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 QUESTIO N. WE FIND NO SUBSTANCE IN REVENUES INSTANT ARGUMENTS. WE FIRST OF ALL MAKE I T 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 REP RESENTS ANY MONEY, BULLION, JEWELLERY OR VALUABLE ARTICLE OR ANY ENTRY IN THE B OOKS OR OTHER DOCUMENTS THEREIN. WE MAKE IT CLEAR THAT WE ARE DEALING WITH A PENALTY PR OVISION IN TAX STATUTE WHICH IS TO BE STRICTLY INTERPRETED. WE THEREFORE ARE OF THE OPINI ON THAT THE CIT(A) HAS RIGHTLY DELETED THE IMPUGNED PENALTY AS THE ASSESEES SEARCH STATEM ENT NOWHERE INDICATED THE CORRESPONDING UNDISCLOSED INCOME AS PER SPECIFIC RE QUIREMENT IN THE ACT. THE CIT(A)S FINDINGS UNDER CHALLENGE DELETING PENALTY IN QUESTION ARE ACCORDINGLY CONFIRMED. 6. THIS REVENUES APPEAL IS DISMISSED. O RDER PRONOUNCED IN THE COURT ON 29.06.2018. SD/- SD/- [M.. BALAGANESH ] [ S.S.GODARA ] ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 29.06.2018. [RG SR.PS] COPY OF THE ORDER FORWARDED TO: 1.SRI KANWAR SAIN GUPTA, 36H, TOLLYGUNJE CIRCULAR R OAD, KOLKATA-700053. 2. A.C.I.T., CENTRAL CIRCLE-2(3), KOLKATA. 3. C.I.T.(A)- 20, KOLKATA 4. C.I.T-CENTRAL-I, , KOLKATA 5. CIT(DR), KOLKATA BENCHES, KOLKATA. TRUE COPY BY ORDER, SENIOR PRIVATE SECRETARY HEAD OF OFFICE/D.D.O, ITAT KOLKATA BENCHES ITA NO.538/KOL/2017 SRI KANWAR SAIN GUPTA A.Y.2013 -14 4