PREETI JAGDISH AGRAWAL, NAGPUR V. ASSISTNAT COMMISSIONE OF INCOME TAX, CENTAL CIRCLE 1(2), NAGPUR

ITA 71/NAG/2021

AI Insights

The case involves twin appeals by Shri Jagdish S. Agrawal and Smt. Preeti Jagdish Agrawal against the penalties imposed for undisclosed income under section 271AAB of the Income Tax Act, 1961, for the assessment year 2016-2017. The penalties were based on undisclosed income of Rs. 20,50,000 each, which the assessees admitted following a search and seizure operation on August 5, 2015. The main legal contention raised by the assessees was the alleged invalidity of the show cause notices issued by the Assessing Officer. However, the Tribunal upheld the penalties, citing the clear admissions of undisclosed income and the relevant provisions of the Income Tax Act.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 136599 (ITAT-NAGPUR)
• Duration Of Justice: 2 year(s) 2 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-10-2023
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 31-12-0000
• Assessment Year: 2016-2017
• Appeal Filed On: 22-08-2021
• Other Referred Cases: Cognizance for Extension of Limitation, In re 438 ITR 296 (SC), Cognizance for Extension of Limitation, In re 432 ITR 206 (SC), Cognizance for Extension of Limitation, In re 421 ITR 314
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: RASHMI MATHUR

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL NAGPUR BENCH : NAGPUR [THROUGH VIRTUAL HEARING AT INCOME TAX APPELLATE TRIBUNAL : PUNE BENCHES : PUNE] BEFORE SHRI SATBEER SINGH GODARA, JUDICIAL MEMBER AND DR. DIPAK RIPOTE, ACCOUNTANT MEMBER I.T.A.No.69/NAG./2021 Assessment Year – 2016-2017 Shri Jagdish S. Agrawal, 23, Behind Sudhanshu Hall, Abhang Survie Layout, Bhagyashree Housing Society, Ayodhya Nagar, Nagpur - 440 024 Maharashtra. PAN AEWPA3791G vs. The ACIT, Central Circle – 1(2), 2 nd Floor, Aayakar Bhavan, Civil Lines, Nagpur – 440 001 Maharashtra. (Appellant) (Respondent) I.T.A.No.71/NAG./2021 Assessment Year – 2016-2017 Smt. Preeti Jagdish Agrawal, 23, Behind Sudhanshu Hall, Abhang Survie Layout, Bhagyashree Housing Society, Ayodhya Nagar, Nagpur - 440 024 Maharashtra. PAN AFVPA1153J vs. The ACIT, Central Circle – 1(2), 2 nd Floor, Aayakar Bhavan, Civil Lines, Nagpur – 440 001 Maharashtra. (Appellant) (Respondent) For Assessees : -None- For Revenue : Smt. Rashmi Mathur, Sr. DR Date of Hearing : 25.10.2023 Date of Pronouncement : 31.10.2023 ORDER PER SATBEER SINGH GODARA, J.M. : These twin assessees’ as many appeals, for assessment year 2016-17, arise against the CIT(A)-3, Nagpur’s separate orders in case No.CIT(A)-3/10063/2018-19 and No.CIT(A)-3/10068/2018- 2 ITA.Nos.69 & 71/Nag./2021 19, both dated 12.11.2020, involving proceedings u/s.271AAB of the Income Tax Act, 1961 (in short “the Act”); respectively. Cases called twice. None appears at assessees’ behest. The very position has been continuing since all earlier hearings as well. We thus proceed ex-parte against both these assessees. 2. It emerges at the outset that these twin assessees’ as many appeals suffer from 223 days delay each since preferred against the CIT(A)'s order dated 12.11.2020 and instituted on 23.08.2021. The same admittedly fall within Coviid-2019 pandemic outbreak period between 15.03.2020 to 28.02.2022 as per hon’ble apex court’s directions in Cognizance for Extension of Limitation, In re 438 ITR 296 (SC) read with judgment in Cognizance for Extension of Limitation, In re 432 ITR 206 (SC) dated 08-03-2021 and 421 ITR 314, excluding the covid-19 pandemic outbreak period from for all intents and purposes under the limitation law. We thus condone the impugned delay of 223 days in both these appeals in very terms. 3. We now advert to both these assessees’ identical sole substantive grievance that the learned lower authorities have erred in law and on facts in levying the impugned sec.271AAB penalties of Rs.2,05,000/- each i.e., @ 10% of the undisclosed income of Rs.20,50,000/- in their cases, respectively. The department taken us to the CIT(A)'s detailed discussion affirming Assessing Officer’s action in this respect as under : 3 ITA.Nos.69 & 71/Nag./2021 4 ITA.Nos.69 & 71/Nag./2021 5 ITA.Nos.69 & 71/Nag./2021 6 ITA.Nos.69 & 71/Nag./2021 7 ITA.Nos.69 & 71/Nag./2021 8 ITA.Nos.69 & 71/Nag./2021 9 ITA.Nos.69 & 71/Nag./2021 10 ITA.Nos.69 & 71/Nag./2021 11 ITA.Nos.69 & 71/Nag./2021 12 ITA.Nos.69 & 71/Nag./2021 4. Suffice to say, it has come on record that this is indeed an instance of both these assessees’ having derived their undisclosed income in above terms u/sec.271AAB Explanation-(c) (i)(A) of the Act representing their tuition fee in various educational institutions. And also that the department had come across the corresponding seized material during the course of search herein dated 05.08.2015 which made these assessees’ to admit additional income of Rs.41 lakhs ÷ 2 coming to Rs.20.50 lakhs each (supra) which stood declared in their respective returns. The assessees’ sole substantive grievance appears to be that the Assessing Officer’s corresponding show cause notices dated 29.12.2017 (supra) had not been validly issued. We find no merit in the assessees’ stand once it has come on record that the impugned penalty has been levied @ 10% since falling in the first and foremost limb u/sec.271AAB(1)(a)(i) to (iii) of the Act in the specified circumstances. Their identical contention therefore, that the Assessing Officer ought to have specified corresponding limb(s) to this effect fails to cut any ice before us. Faced with the situation 13 ITA.Nos.69 & 71/Nag./2021 and primarily for the reason that these assessees’ have been found to have derived their undisclosed income as per the seized incriminating material followed by their search admission(s), we find no reason to interfere with the learned lower authorities action invoking sec.271AAB penalties in their respective cases. These assessees’ fail in their respective grounds therefore. Ordered accordingly. 5. These twin assessees’ as many appeals are dismissed in above terms. A copy of this common order be placed in the respective case files. Order pronounced in the open Court on 31.10.2023. Sd/- Sd/- [DR. DIPAK P. RIPOTE] [SATBEER SINGH GODARA] ACCOUNTANT MEMBER JUDICIAL MEMBER Pune, Dated October, 2023 VBP/- Copy to 1. The applicant 2. The respondent 3. The CIT(A)-3, 119, Aayakar Bhavan, Telangkhedi Road, Civil Lines, Nagpur – 440 001. 4. The CIT (Central), Nagpur. 5. D.R. ITAT, Nagpur Bench, Nagpur. 6. Guard File. //By Order// //True Copy // Assistant Registrar, ITAT, Pune Benches, Pune.