Sudha Gupta, New Delhi V. DCIT, New Delhi

ITA 5445/DEL/2012

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 81626 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 9 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-08-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: G
• Next Hearing Date: 12-06-2014
• Assessment Year: 2008-2009
• Appeal Filed On: 26-10-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: G S SEMA
• Keywords: Income from undisclosed sources; Search and seizure; Bonafide mistake
• Section: 153A; 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH G: NEW DELHI BEFORE SHRI R.S. SYAL, ACCOUNTANT MEMBER AND SHRI C.M. GARG, JUDICIAL MEMBER ITA NO. 5445/DEL/2012 ASSESSMENT YEAR: 2008-09 SUDHA GUPTA, A-172, MEERA BAGH, NEW DELHI. AAGPG8225R VS. DCIT, CENTRAL (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI CHANDRA SHEKHAR, CA RESPONDENT BY : SHRI G.S. SEMA, SR. DR O R D E R PER C.M. GARG, J.M. THIS APPEAL HAS BEEN PREFERRED BY THE ASSESSEE AGAI NST THE ORDER OF THE CIT(APPEALS)-XXXI, NEW DELHI, DATED 28/08/2012 IN APPEAL NO. 78/2010-11 FOR A.Y. 2008-09 BY WHICH PENALTY ORDER OF THE AO PASSED U/S 271AAA OF THE INCOME TAX ACT,1961 (FOR SHORT THE AC T) DATED 28/06/2010 HAS BEEN UPHELD. 2. THE GROUNDS RAISED BY THE ASSESSEE READ AS UNDER : 1. THAT ON THE FACTS AND THE CIRCUMSTANCES OF THE CASE, THE JUDGMENT OF THE HONBLE ALLAHABAD HIGH CO URT IN THE CASE OF CIT VS. RADHA KISHAN GOEL 278 ITR 45 4 STILL HOLDS GOOD AND APPLICABLE TO THE APPELLANTS CASE. HENCE THE PENALTY LEVIED IS UNJUSTIFIED. ITA NO. 5445/D/2012 2 2. THAT ON THE FACTS AND THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE PENALTY SHALL NOT BE LEVIED ORDINAR ILY WHERE THE ASSESSEE IS NOT AT FAULT OR GUILTY OF MIS CONDUCT. THE LD. CIT(A) ERRED BY LEVYING PENALTY ON THE APPE LLANT WITHOUT ANY FINDING/PROVING ANYTHING WRONG ON RECOR D IN RELATION TO THE ADDITIONAL INCOME. HENCE, THE PENA LTY LEVIED IS UNCALLED AND WITHOUT ANY BASIS. 3. THAT ON THE FACTS AND THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD.CIT(A) FAILED TO CONSIDER AND DE LIVER ON GROUND NO. 3 WHICH IS AS FOLLOWS: A) THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE APPELLANT HAS TO SPECIFY AND SUBSTANTIATES THE MANNER OF DERIVING THE UNDISCLOSED INCOME ONLY AT THE TIME OF STATEMENT RECORDED U/S 132(4) AND NOT OTHERWISE AS MENTIONED BY THE AO IN HIS ORDER; B) THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE ENTIRE RECORDING OF OATH STATEMENT DID NOT PROVIDE ANY OPPORTUNITY TO THE APPELLANT TO SPECIFIES AND SUBSTANTIATE THE MANNER IN WHICH SUCH INCOME WAS DERIVED; C) THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE, IT IS THE DUTY OF THE OATH ADMINISTRATOR TO PUT QUESTIONS IN APPROPRIATE FORM, INFORM THE UTILITY AND USEFULNESS OF THE STATEMENT RECORDED AND DISCLOSURE OF FACTS VIS--VIS TO THE INCOME TAX ACT , 1961. D) THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE APPELLANT HAS DEEMED TO FULFILL ALL THE 4 ITA NO. 5445/D/2012 3 NECESSARY CONDITIONS ON WHICH PENALTY CANNOT BE LEVIED. HENCE, ACTION OF THE AO IS NOT JUSTIFIED. 4. THAT ON THE FACTS AND THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) AND THE LD. AO ERRED BY CONSID ERING THAT THE APPELLANT FAILS TO FULFILL THE CONDITIONS OF SECTION271AAA OF THE INCOME TAX ACT, 1961. WHEREAS THE APPELLANT HAS TRULY DISCLOSED ALL THE FACTS IN THE COURSE OF SEARCH U/S 132(4) WHATEVER BEING ASKED BY THE OATH ADMINISTRATOR. HENCE, PENALTY LEVIED IS AGAIN ST THE PROVISIONS OF THE LAW AND LIABLE TO BE DELETED. 3. BRIEFLY STATED THE FACT GIVING RISE TO THIS APPE AL ARE THAT A SEARCH AND SEIZURE OPERATION WAS CONDUCTED ON 28/09/2007 AND A SSESSMENT PROCEEDINGS WERE COMPLETED U/S 153A OF THE ACT ON31 /12/2009 AT A TOTAL INCOME OF RS. 51,72,230/-. DURING THE COURSE OF SE ARCH AND SEIZURE OPERATION THE ASSESSEE SURRENDERED INCOME OF RS. 24 ,14,144/- ON ACCOUNT OF JEWELLERY AS ARE INCOME FROM UNDISCLOSED SOURCES . THE AO NOTED THAT AS THE ASSESSEE DID NOT SPECIFY THE MANNER IN WHICH UNDISCLOSED INCOME WAS DERIVED AND ALSO DID NOT SUBSTANTIATE THE SAME, THEREFORE, PENALTY PROCEEDINGS U/S 271AAA OF THE ACT WERE INITIATED IS SUING NOTICE AGAINST THE ASSESSEE DATED 31/12/2009. IN RESPONSE TO THE NOTI CE THE ASSESSEE FILED A REPLY STATING FOLLOWING SUBMISSIONS: 1. ASSESSEE HAS ADMITTED THE ADDITIONAL INCOME OF RS . 20 LACS; 2. THE OFFICER WHO WAS TAKING THE OATH DID NOT ASK THE MANNER IN WHICH SUCH INCOME WAS DERIVED; ITA NO. 5445/D/2012 4 3. THE OFFICER DID NOT PUT THE QUESTION OR EXPLAIN TO THE ASSESSEE THAT IF YOU SUBSTANTIATE THE MANNER IN WHI CH YOU HAVE DERIVED THE INCOME YOU WILL NOT BE LIABLE TO PAY FURTHER PENALTY U/S 271AAA; 4. THE ASSESSEE WAS DENIED AN OPPORTUNITY TO EXPLAIN T HE MANNER IN WHICH SUCH INCOME WAS DERIVED; 5. AT THE TIME OF OATH NO PROFESSIONAL PERSON WAS PRESENT ON BEHALF OF THE ASSESSE AND IT BECOMES TH E DUTY OF THE OATH ADMINISTRATOR TO EXPLAIN THE PROVI SION OF THE LAW OR THE CONSEQUENCES OF NON DECLARATION O F CERTAIN INFORMATION; 6. FRAMING OF THE QUESTIONS WERE NOT IN THE SCOPE OF T HE ASSESSEE; 7. ASSESSEE HAS ANSWERED ONLY TO THOSE QUESTIONS WHICH WERE BEING PUT IN FRONT OF HER; 8. THE ASSESSEE IS LAYMAN WHEREAS OATH ADMINISTRATOR IS REPRESENTING INCOME TAX AUTHORITY AND SHOULD BE VERY WELL AWARE OF PROVISIONS OF LAW. IT IS MY HUMBLE SUBMISSION THAT THE ASSESSEE WAS DENIED AN OPPORTUNITY TO COME CLEAN AND TO SPECIFY THE MANNER IN WHICH SUCH INCOME WAS DERIVED. THE QUESTIONS OF THE OATH ADMINISTRATOR WAS NOT IN APPROPRIATE FORM AND NOBODY COULD DERIVED THE MEANI NG OF SOURCE OF ACQUISITION OF JEWELLERY IN PARALLEL TO THE WORDS SPECIFY THE MANNER IN WHICH YOU HAVE DERIVED THE INCOME. THE WORDS HAVE DIFFERENT MEANING IN DIFFERENT CONTEXT. IN ANY CASE ACQUISITION OF JEWELLERY CANNOT BE EQUATED W ITH MANNER OF DERIVING OF THE INCOME. THE TRUE DISCLO SURE ITA NO. 5445/D/2012 5 OF THE ADDITIONAL INCOME BY THE ASSESSEE IS BEING D EFEATED DUE TO WRONG QUESTIONS OR NON PUTTING OF QUESTIONS BY THE OATH ADMINISTRATOR. IT SEEMS THAT HE HIMSELF WAS N OT AWARE OF THE SECTION 271AAA AS THE PROVISIONS WERE NEWLY INTRODUCED IN THE INCOME TAX ACT WITH EFFECT FROM 1 ST JUNE, 2007. WHEN THE ASSESSEE WAS READY TO DISCLOSE AND PAY TAXES ON THE ENTIRE AMOUNT OF UNDECLARED INCOME AND STATED THAT I SHALL NOT BE TROUBLED OR PENALIZED F OR THE SURRENDERED INCOME THEN QUESTION OF SPECIFYING THE MANNER IN WHICH SUCH INCOME WAS DERIVED DOES NOT AR ISE AT ALL. IF AT ALL, ASSESSEE WAS EXPLAINED THE BENE FIT OF MANNER OF DERIVING OF SUCH INCOME OR PUT QUESTION A T THE TIME OF OATH THEN ASSESSEE WOULD HAVE CERTAINLY DIS CLOSED AND SUBSTANTIATE THE SAME. WHEN ASSESSEE HAD PAID THE ADVANCE CHEQUES OF TAXES THEN THERE IS NOT QUESTION OF HIDING THE INFORMATION WHICH IS IN THE INTEREST OF THE ASSESSEE. IT IS AGAIN REITERATED THAT THERE IS NO ERROR OR OMISSION ON PART OF THE ASSESSEE. ASSESSEE HAS FAI THFULLY AND TRULY DISCLOSED THE FACTS ASKED FOR. IF APPROP RIATE QUESTION WAS PUT FORWARD BEFORE THE ASSESSEE THEN T HERE WAS NO QUESTION OF HIDING THE INFORMATION. IN VIEW OF THE ABOVE, IT IS HUMBLY PRAYED THAT KINDLY DROP THE PENALTY PROCEEDINGS AND OBLIGE AS I T SEEMS TO BE UNINTENTIONAL MISTAKE OF THE SEARCH PAR TY AS WELL AS ASSESSEE. 4. THE AO HOLD THAT THE ASSESSEE FAILED TO SPECIFY THE MANNER IN WHICH UNDISCLOSED INCOME HAD BEEN DERIVED AND AT THE TIME OF SEARCH AND ITA NO. 5445/D/2012 6 SEIZURE OPERATION THE ASSESSEE HAS SURRENDERED INCO ME OF RS. 24,14,144/- OUT OF WHICH JEWELLERY WORTH 4,14,144/- WAS CLAIMED BY THE ASSESSEE AS ISTRIDHAN AND, THEREFORE, THE AO LEVIED PENALTY OF RS. 2 LAKH WHICH IS EQUAL TO 10% OF UNDISCLOSED INCOME I.E. RS. 20 LAKHS. 4.1 THE AGGRIEVED ASSESSEE PREFERRED APPEAL BEFORE LD. CIT(A) WHICH WAS ALSO DISMISSED BY THE IMPUGNED ORDER. THE RELE VANT DETERMINATION AND CONCLUSION OF CIT(A) READ AS UNDER: THE INSTANT APPEAL HAS BEEN FILED AGAINST THE ORD ER OF IMPOSITION OF PENALTY U/S 271AAA. I HAVE PERUSED T HE PENALTY ORDER AND RIVAL SUBMISSIONS MADE IN THIS REGARD. THE AO HAS IMPOSED THE PENALTY ON THE UNDISCLOSED INCOME SURRENDERED BY THE APPELLANT AT THE TIME OF SEARCH. THE AO HAS STATED THAT THE APPELLA NT HAD FAILED TO SPECIFY THE MANNER IN WHICH UNDISCLOS ED INCOME HAD BEEN DERIVED AND AS SUCH IS LIABLE TO PA Y PENALTY AS PER PROVISIONS OF SECTION 271AAA OF THE I.T. ACT. THE APPELLANT HAS STATED THAT THE ORDER IS BA D IN LAW AND CONTRARY TO THE PRINCIPLE OF NATURAL JUSTIC E BECAUSE THE INCOME WHICH RELATES TO FY 2007-08 CANN OT BE TERMED AS UNDISCLOSED INCOME ON THE DATE OF SEAR CH I.E. 29.08.2007. IT IS FURTHER CONTESTED THAT NO P ROPER OPPORTUNITY WAS PROVIDED TO THE APPELLANT TO SPECIF Y AND SUBSTANTIATE THE MANNER IN WHICH INCOME WAS DERIVED. ON PERUSAL OF PENALTY ORDER IT IS OBSERVE D THAT DURING THE COURSE OF SEARCH AND SEIZURE OPERATION T HE STATEMENT OF THE APPELLANT WAS RECORDED ON OATH AND SHE WAS ASKED TO EXPLAIN THE SOURCE OF JEWELLERY VI DE ITA NO. 5445/D/2012 7 QUES. NO. 14 & 15. WHILE ANSWERING THESE QUESTIONS THE APPELLANT HAD STATED THAT OUT OF RS. 24,14,144/ - JEWELLERY WORTH RS. 4,14,144/- IS MY ISTRI DHAN AND BALANCE JEWELLERY OF RS. 20 LAC WAS PURCHASED BY ME . HOWEVER, ON BEING ASKED VIDE QUES. NO. 15 SHE STATE D THAT I CANNOT EXPLAIN THE SOURCE OF ACQUISITION OF THE JEWELLERY STATED TO HAVE BEEN PURCHASED BY ME AND SAME MAY BE PLACED TREATED AS ADDITIONAL INCOME FOR THE YEAR. A PLAIN READING OF SEC. 271AAA HOLDS THE ASSESSEE LIABLE FOR PENALTY UNLESS THE ASSESSEE FULFILLS THE FOLLOWING CONDITIONS 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. THE ARGUMENT OF THE AR THAT INCOME RELATED TO FY 2007-08 CANNOT BE TERMED AS UNDISCLOSED INCOME ON T HE DATE OF SEARCH I.E. 29.08.2007 IS DEVOID OF MERIT I N THE LIGHT OF ABOVE PROVISION THAT DISCLOSURE IS NOT ENO UGH BUT THE APPELLANT HAS TO SPECIFY THE MANNER IN WHIC H INCOME HAS BEEN EARNED AND ALSO SUBSTANTIATE THE MANNER IN WHICH UNDISCLOSED INCOME WAS DERIVED. THESE TWO ELEMENTS WERE NEITHER STATED BEFORE THE A O NOR AT THE APPELLANT STAGE. ITA NO. 5445/D/2012 8 IN VIEW OF THE ABOVE, I FIND THAT THE APPELLANT HAD FAILED TO COMPLY WITH THE PROVISIONS OF THE SECTION 271AAA TO GET IMMUNITY AGAINST PENALTY AND, THEREFORE, THE GR OUND OF APPEAL IS REJECTED. 5. WE HAVE HEARD THE ARGUMENT OF BOTH THE SIDES ON ALL THE GROUNDS RAISED BY THE ASSESSEE IN THIS APPEAL AND CAREFULLY PERUSED THE RELEVANT MATERIAL PLACED ON RECORD, INTER-ALIA, CITATIONS AN D DECISIONS RELIED BY APPELLANT ASSESSEE AS WELL AS BY THE REVENUE AUTH ORITIES BELOW. 6. THE LD. AR SUBMITTED THAT THE LD. CIT(A) FAILED TO CONSIDER THAT THE JUDGMENT OF HONBLE ALLAHABAD HIGH COURT IN THE CAS E OF CIT VS. RADHA KISHAN GOEL, 278 ITR 454 STILL HOLDS GOOD AND APPLI CABLE TO THE ASSESSEES CASE, HENCE, THE CIT(A) WAS NOT JUSTIFIED IN CONFIR MING THE PENALTY. THE AR FURTHER CONTENDED THAT THE CIT(A) ALSO ERRED IN CON FIRMING THE PENALTY IGNORING THE FACT THAT THE PENALTY SHALL NOT BE LEV IED ORDINARILY WHERE THE ASSESSEE IS NOT AT FAULT OR GUILTY OF MISCONDUCT. THE LD. AR FURTHER POINTED OUT THAT THE ASSESSEE HAS TO SPECIFY AND SUBSTANTIA TE THE MANNER OF DERIVING THE UNDISCLOSED INCOME ONLY AT THE TIME OF STATEMENT RECORDED U/S 132(4) OF THE ACT AND NOT OTHERWISE AS MENTIONED BY THE AO. THE AO VEHEMENTLY CONTENDED THAT THE ENTIRE RECORDING OF O ATH STATEMENT DID NOT PROVIDE ANY OPPORTUNITY TO THE ASSESSEE TO SPECIFY AND SUBSTANTIATE THE MANNER IN WHICH SUCH INCOME WAS DERIVED, THEREFORE, IT IS THE DUTY OF OATH ADMINISTRATOR TO PUT QUESTION IN APPROPRIATE FORM, AND TO INFORM THE UTILITY AND PURPOSE OF THE STATEMENT RECORDED U/S 132(4) OF THE ACT AND DISCLOSURE ITA NO. 5445/D/2012 9 OF FACTS AS PER PROVISIONS OF THE ACT. THE AO ALSO CONTENDED THAT THE ASSESSEE HAS DEEMED TO BE FULFILLED ALL THE FOUR NE CESSARY CONDITIONS AS STIPULATED IN SECTION 271AAA OF THE ACT OF WHICH PE NALTY CANNOT BE LEVIED HENCE THE ACTION OF THE AO WAS NOT JUSTIFIED WHICH WAS UPHELD BY CIT(A) WITHOUT ANY COGENT AND SOLID BASIS. 6.1 THE AR ALSO CONTENDED THAT THE CIT(A) AND THE A O ERRED BY CONSIDERING THAT THE ASSESSEE FAILS TO FULFILL THE CONDITIONS OF SECTION 271AAA OF THE ACT WHEREAS THE APPELLANT HAS TRULY D ISCLOSED ALL THE FACTS IN COURSE OF SEARCH AND SEIZURE OPERATION AND AT THE T IME OF STATEMENT RECORDED U/S 132(4) OF THE ACT WHATEVER BE ASKED BY THE OATH COMMISSIONER WHO RECORDED STATEMENT OF THE ASSESSEE . THE AO FINALLY PRAYED THAT THE ORDERS OF THE AUTHORITIES BELOW MAY KINDLY BE SET ASIDE AND PENALTY LEVIED AGAINST THE PROVISIONS OF THE ACT IS LIABLE TO BE DELETED. 7. LD. DR SUPPORTED THE PENALTY ORDER AS WELL AS TH E IMPUGNED ORDER AND SUBMITTED THAT DURING THE COURSE OF SEARCH AND SEIZURE OPERATION THE STATEMENT OF SMT. SUDHA GUPTA, THE ASSESSEE WAS REC ORDED ON OATH IN WHICH SHE WAS ASKED TO EXPLAIN THE SOURCE OF JEWELL ERY, VIDE QUESTION NO. 14 & 15 OF HER STATEMENT BUT REPLYING TO QUESTION N O. 15 THE ASSESSEE TOLD THAT SHE CANNOT EXPLAIN THE SOURCE OF ACQUISITION O F JEWELLERY STATED TO HAVE BEEN PURCHASED BY HER, THEREFORE, THE AO WAS JUSTIF IED IN LEVYING PENALTY ON FAILURE OF THE ASSESSEE FULFILLING THE REQUIRED CONDITIONS AS STIPULATED U/S ITA NO. 5445/D/2012 10 271AAA OF THE ACT. THE DR SUPPORTED THE ORDERS OF THE AUTHORITIES BELOW AND SUBMITTED THAT THE APPEAL OF THE ASSESSEE IS DE VOID OF MERITS. 8. ON A CAREFUL CONSIDERATION OF ABOVE SUBMISSIONS AND CONTENTIONS OF BOTH THE PARTIES, WE ARE OF THE VIEW THAT ADMITTEDL Y, THE ASSESSEE SURRENDERED RS. 20 LAKH DURING SEARCH AND SEIZURE O PERATION CONDUCTED ON 28/09/2007 AND THE DEPARTMENT TREATED THE SAME AS I NCOME FROM UNDISCLOSED SOURCES. 9. NOW AS PER PROVISIONS OF SECTION 271AAA OF THE A CT THE ASSESSEE IS LIABLE FOR PENALTY UNLESS THE ASSESSEE FULFILLS THE FOLLOWING CONDITIONS: 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. 10. LD. AR HAS ALSO RELIED ON THE DECISION OF ITAT MUMBAI IN THE CASE OF GULABRAI V GANDHI VS. ACIT, REPORTED AS 84 ITD 370 (ITAT MUMBAI), WHEREIN IT WAS HELD THAT WHEN THE STATEMENT U/S 132 (4) WAS RECORDED IN QUESTION AND ANSWER FORM, THE BENEFIT OF IMMUNITY F ROM PENALTY CANNOT BE DENIED TO THE ASSESSEE ON THE GROUND OF NOT SPECIFY ING THE MANNER IN WHICH INCOME WAS DERIVED BY HER. THE AR FURTHER CO NTENDED THAT IN SIMILAR CIRCUMSTANCES THE ITAT, DELHI IN THE CASE OF MRS. R AJ RANI GUPTA IN ITA ITA NO. 5445/D/2012 11 NO. 3371/DEL/2011 DATED 30/03/2012, WHEREIN PENALTY IMPOSED U/S 271AAA OF THE ACT WAS DELETED. THE AR ALSO POINTED OUT THE DECISION OF ITAT DELHI IN ASSESSEES OWN CASE IN ITA NO. 3372/D EL/2011 DATED 12/10/2012, WHEREIN THE PENALTY HAS BEEN DELETED BY FOLLOWING DECISION OF HONBLE GUJARAT HIGH COURT IN THE CASE OF CIT VS. M AHENDRA C SHAH, 299 ITR 305 (GUJ.), WHEREIN IT WAS HELD THAT IF THE STA TEMENT OF THE ASSESSEE RECORDED U/S 132(4) OF THE ACT DOES NOT SPECIFY THE MANNER IN WHICH THE INCOME IS DERIVED, IF THE INCOME IS DECLARED AND TA X THEREON HAS BEEN PAID, THERE WOULD BE SUBSTANTIAL COMPLIANCE NOT WARRANTIN G ANY FURTHER DENIAL OF THE BENEFIT UNDER EXCEPTION NO. 2 IN EXPLANATION 5 ATTACHED TO SECTION 271(1) OF THE ACT. 12. IN VIEW OF THE ABOVE, WE COME TO A CONCLUSION T HAT THE STATEMENT BEING RECORDED U/S 132(4) OF THE ACT IN THE QUESTIO N AND ANSWER FORM AND THERE WOULD BE NO OCCASION OF THE ASSESSEE TO STATE AND MAKE AVERMENT IN THE EXACT FORMAT STIPULATED BY THE PROVISIONS OF TH E ACT CONSIDERING THE SETTING IN WHICH SUCH STATEMENT IS BEING RECORDED. IN THE PRESENT CASE, THE STATEMENT OF THE ASSESSEE WAS RECORDED IN QUESTION AND ANSWER FORM AND DURING THE STATEMENT RECORDED U/S 132(4) OF THE ACT ON OATH SHE WAS ASKED TO EXPLAIN THE SOURCE OF JEWELLERY VIDE QUESTION NO . 14 & 15 FOR SAKE OF CLARITY IN OUR FINDINGS THE RELEVANT QUESTION ANSWE R ARE BEING REPRODUCED BELOW: ITA NO. 5445/D/2012 12 Q.NO.14 JEWELLERY WORTH RS. 24,14,144/- HAS BEEN FOUND FROM YOUR PREMISES. PLEASE EXPLAIN THE SOURC E OF ACQUISITION OF THE JEWELLERY? ANS. JEWELLERY WORTH RS. 4,14,144/- IS MY ISTRIDHAN WHICH I GOT AT THE TIME OF MARRIAGE AND O THER OCCASIONS. THE BALANCE JEWELLERY OF RS. 20 LACS WA S PURCHASED BY ME. Q. NO. 15 PLEASE EXPLAIN THE SOURCE OF ACQUISITION OF JEWELLERY STATED TO HAVE BEEN PURCHASED BY YOU. ANS. I CANNOT EXPLAIN THE SOURCE OF ACQUISITION OF THE JEWELLERY STATED TO HAVE BEEN PURCHASED BY ME. THE SAME MAY PLEASE BE TREATED AS MY ADDITIONAL INCOME FOR THE YEAR, WHICH HAS BEEN SPENT ON THE PURCHASE OF T HE JEWELLERY AND THE REFERENCE. 13. IN WRITTEN SUBMISSIONS FILED BY THE ASSESSEE AT PAGE 9 FOLLOWING EXPLANATION HAVE BEEN OFFERED FOR OUR CONSIDERATION : IT IS MY HUMBLE SUBMISSION THAT THE ASSESSEE WAS DENIED AN OPPORTUNITY TO COME CLEAN AND TO SPECIFY THE MANNER IN WHICH SUCH INCOME WAS DERIVED. THE QUESTIONS OF THE OATH ADMINISTRATOR WAS NOT IN APPROPRIATE FORM AND NOBODY COULD DERIVE THE MEANIN G OF SOURCE OF ACQUSITION OF JEWELLERY IN PARALLEL TO THE WORDS SPECIFY THE MANNER IN WHICH YOU HAVE DERIVED THE INCOME. THE WORDS HAVE DIFFERENT MEANING IN DIFFERENT CONTEXT. IN ANY CASE ACQUISITION OF JEWELLERY CANNOT BE EQUATED W ITH MANNER OF DERIVING OF THE INCOME . THE TRUE DISCLOSURE OF THE ADDITIONAL INCOME BY THE ASSESSEE IS BEING D EFEATED DUE TO WRONG QUESTIONS OR NON PUTTING OF QUESTIONS BY THE ITA NO. 5445/D/2012 13 OATH ADMINISTRATOR. IT SEEMS THAT HE HIMSELF WAS N OT AWARE OF THE SECTION 271AAA AS THE PROVISIONS WERE NEWLY INTRODUCED IN THE INCOME TAX ACT WITH EFFECT FROM 1 ST JUNE, 2007. WHEN THE ASSESSEE WAS READY TO DISCLOSE AND PAY TAX ES ON THE ENTIRE AMOUNT OF UNDECLARED INCOME AND STATE D THAT I SHALL NOT BE TROUBLED OR PENALIZED FOR THE SURRENDERED INCOME THEN QUESTION OF NOT SPECIFYING THE MANNER IN WHICH SUCH INCOME WAS DERIVED ARISE AT AL L, ASSESEE WAS EXPLAINED THE BENEFIT OF MANNER OF DERI VING OF SUCH INCOME OR PUT QUESTION AT THE TIME OF OATH THEN ASSESSEE WOULD HAVE CERTAINLY DISCLOSED AND SUBSTAN TIATE THE SAME. WHEN ASSESSEE HAD PAID THE ADVANCE CHEQU ES OF TAXES THEN THERE IS NO QUESTION OF HIDING THE INFORMATION WHICH IS IN THE INTEREST OF THE ASSESSE E. IT IS AGAIN REITERATED THAT THERE IS NO ERROR OR OM ISSIONON PART OF THE ASSESSEE. ASSESSEE HAS FAITHFULLY AND TRULY DISCLOSED THE FACTS ASKED FOR. IF APPROPRIATE QUES TION WAS PUT FORWARD BEFORE THE ASSESSEE THEN THERE WAS NO QUESTION OF HIDING THE INFORMATION. IN VIEW OF THE ABOVE, IT IS HUMBLY PRAYED THAT KIND LY DROP THE PENALTY PROCEEDING AND OBLIGE AS IT SEEMS TO BE UNINTENTIONAL MISTAKE OF THE SEARCH PARTY AS WELL A S ASSESSEE. 14. FROM CAREFUL PERUSAL OF DECISION OF ITAT E BE NCH, VIDE DATED 12.10.2012 IN ITA NO. 3372/D/2011 FOR A.Y. 2008-09 IN THE CASE OF MOTHERS PRIDE EDUCATION PERSONNA P. LTD. VS. DCIT. WE OBSE RVE THAT THE TRIBUNAL DELETED THE PENALTY IMPOSED U/S 271AAA OF THE ACT B Y ALLOWING APPEAL OF ITA NO. 5445/D/2012 14 THE ASSESSEE BY FOLLOWING DECISIONS OF THE HONBLE ALLAHABAD HIGH COURT IN THE CASE OF RADH KRISHAN GOEL (SUPRA) AND DECISION OF HONBLE GUJARAT HIGH COURT IN THE CASE OF CIT VS. MAHENDRA C. SAHA (SUPRA) AND ALSO FOLLOWING THE DECISION OF COORDINATE BENCH OF THE I TAT F BENCH, NEW DELHI VIDE DATED 30.03.2012 IN ITA NO. 3371/D/2011 FOR A.Y. 2008-09 IN THE CASE OF MRS. RAJRANI GUPTA VS. DCIT. IN THIS CASE OF MRS. RAJRANI GUPTA VS. DCIT (SUPRA) THE PENALTY IMPOSED U/S 271A AA HAS BEEN DELETED WITH FOLLOWING CONCLUSION AND FINDINGS: 10. FROM THE ABOVE STATEMENT IT APPEARS THAT WHATEVER QUESTION WAS PUT TO ASSESSEE, SHE REPLIED, SHE WAS NOT ASKED ABOUT THE MANNER IN WHICH SUCH INCOME WAS EARNED AND SHE WAS NEVER ASKED TO SUBSTANTIATE THE MANNER IN WHICH THE UNDISCLOSED INCOME WAS DERIVED. DURING ASSESSMENT PROCEEDINGS U/S 271AAA THE QUESTION ABOUT MANNER IN WHICH INCOME WAS DERIVED WERE ASKED TO ASSESSEE AND SHE HAD REPLIED TO THAT. FROM HERE IT IMPLIES THAT HAD THIS QUESTION BEEN POSED BEFORE HER DURING RECORDING OF STATEMENT U/S 132(4) SHE MIGHT HAVE REPLIED THAT. THE QUESTION OF PENALTY AS CONTAINED IN SECTION 271(1)(C) PRIOR TO 1.6.2007 HAS BEEN DECIDE D BY VARIOUS HIGH COURTS. BEFORE 1.6.2007, THE PENALTY PROVISIONS ON SEARCH AND SEIZURE WERE CONTAINED IN SECTION 271(1)(C) AND IMMUNITY WAS GRANTED TO THE ASSESSEE VIDE CLAUSE (2) OF EXPLANATION 5 APPENDED TO SECTION 271(1)(C). PROVISIONS OF CLAUSE (2) OF EXPLANATION 5 APPENDED ITA NO. 5445/D/2012 15 TO SECTION 271(1)(C) ARE SIMILAR TO IMMUNITY GRANTE D TO ASSESSEE UNDER CLAUSE (2) OF SECTION 271AAA. 15. IN VIEW OF FOREGOING DISCUSSIONS WE REACH TO A CONCLUSION THAT THE AO LEVIED PENALTY U/S 271AAA OF THE ACT ON WRONG AND U NJUSTIFIED GROUND WHICH WAS ALSO CONFIRMED BY CIT(A) WITHOUT ANY REAS ONABLE AND COGENT GROUND, HENCE, ORDERS OF THE AUTHORITIES BELOW ARE NOT SUSTAINABLE AND WE SET ASIDE THE SAME BY RESPECTFULLY FOLLOWING THE DE CISION OF THE COORDINATE BENCH OF THE TRIBUNAL IN THE CASE OF MRS. RAJ RANI GUPTA (SUPRA) AND AO IS DIRECTED TO DELETE THE PENALTY. 16. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWE D ON ALL GROUNDS. ORDER PRONOUNCED IN THE OPEN COURT ON 22.8.2014. SD/- SD/- (R.S. SYAL) ACCOUNTANT MEMBER (C.M. GARG) JUDICIAL MEMBER DATED: 22.8.2014 *KAVITA COPY TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT, NEW DELHI. TRUE COPY BY ORDER ASSISTANT REGISTRAR