JUGAL KISHORE MAHESHWARI, Jaipur V. ACIT, Jaipur

ITA 844/JPR/2016

• Counselvise Citation: [2018] 121 COUNSELVISE.COM (IT) 6108 (ITAT-JAIPUR)
• Duration Of Justice: 1 year(s) 8 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-06-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2012-2013
• Appeal Filed On: 26-09-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: POONAM RAI DCIT DHK
• Assessee Lawyers: S R SHARMA
• Keywords: Search and seizure
• Section: 143(3); 153A; 131; 27; 132; 11

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHE S, JAIPUR JH FOT; IKY JKWO] U;KF;D LNL; ,OA JH FOE FLAG ;K NO ] YS[KK LNL; DS LE{K BEFORE: SHRI VIJAY PAL RAO, JM AND SHRI VIKRAM SING H YADAV, AM VK;DJ VIHY LA-@ ITA NO. 843 & 844/JP/2016 FU/KZKJ.K O'K Z@ ASSESSMENT YEARS : 2011-12 & 2012-13. SHRI JUGAL KISHORE MAHESHWARI, B-79, RAJENDRA MARG, BAPU NAGAR, JAIPUR. CUKE VS. THE ACIT CENTRAL CIRCLE-3, JAIPUR. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO. ABAPK 0309 H VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY : SHRI S.R. SHARMA (CA) JKTLO DH VKSJ LS@ REVENUE BY : SMT. POONAM RAI (DCIT) LQUOKBZ DH RKJH[K@ DATE OF HEARING : 06.06.2018. ?KKS'K .KK DH RKJH[K@ DATE OF PRONOUNCEMENT : 08/06/2018. VKNS'K@ ORDER PER VIJAY PAL RAO, JM : THESE TWO APPEALS BY THE ASSESSEE ARE DIRECTED AGAI NST TWO SEPARATE ORDERS OF LD. CIT (A)-4, JAIPUR BOTH DATED 25.07.2016 ARIS ING FROM THE PENALTY ORDER PASSED UNDER SECTION 271AAA OF THE I.T. ACT FOR THE ASSESS MENT YEARS 2011-12 AND 2012-13 RESPECTIVELY. THE ASSESSEE HAS RAISED COMMON GROUND S IN THESE APPEALS EXCEPT THE QUANTUM OF APPEAL. THE GROUNDS FOR THE ASSESSMENT YEAR 2011-12 ARE AS UNDER :- 1. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE LD. CIT (A) IS WRONG, UNJUST AND HAS ERRED IN LAW IN CONFIRMING PENALTY OF RS. 46120/- IMPOSED BY THE LD. ASSESSING OFFICER U/S 27 1AAA OF THE INCOME TAX ACT, 1961. 2. THAT THE APPELLANT CRAVES THE PERMISSION TO ADD OR AMEND TO ANY GROUND OF APPEAL OR TO WITHDRAW ANY OF THEM. 2 ITA NOS. 843 & 844/JP/2016 SHRI JUGAL KISHORE MAHESHWARI, JAIPUR. THE ASSESSEE HAS ALSO RAISED ADDITIONAL GROUND FOR BOTH THE ASSESSMENT YEARS. THE ADDITIONAL GROUND RAISED BY THE ASSESSEE IS ALSO CO MMON AND READ AS UNDER :- 1(A) THAT ON THE FACTS AND IN THE CIRCUMSTANCES O F THE CASE PENALTY OF RS. 46120/- IMPOSED U/S 271AAA OF THE I.T. ACT, 1961 BY THE LD. ASSESSING OFFICER AND CONFIRMED BY THE LD. CIT (A)- 4, JAIPUR IS WRONG, UNWARRANTED AND BAD IN LAW IN AS MUCH AS PROVISIONS OF SEC. 271AAA ARE NOT AT ALL ATTRACTED IN THE CASE OF THE APPELLA NT AS NO SEARCH U/S 132 OF THE I.T. ACT 1961 WAS CONDUCTED. 2. WE HAVE HEARD THE LD. A/R AS WELL AS THE LD. D/R ON THE ADMISSION OF ADDITIONAL GROUND AND CONSIDERED THE RELEVANT MATER IAL ON RECORD. AS IT IS CLEAR FROM THE ADDITIONAL GROUND THAT THE ASSESSEE HAS RAISED A LEGAL ISSUE REGARDING VALIDITY OF THE PENALTY ORDER PASSED UNDER SECTION 271AAA OF TH E ACT ON THE GROUND THAT THERE WAS NO SEARCH CONDUCTED UNDER SECTION 132 OF THE AC T IN THE CASE OF THE ASSESSEE. SINCE THE ADDITIONAL GROUND RAISED BY THE ASSESSEE IS PURELY LEGAL IN NATURE AND FOR ITS ADJUDICATION NO FRESH MATERIAL OR FACTS ARE REQ UIRED BUT THE FACTS WHICH ARE UNDISPUTED AND ALREADY ON RECORD CAN BE CONSIDERED FOR ADJUDICATION OF THE ADDITIONAL GROUND RAISED BY THE ASSESSEE FOR BOTH T HE YEARS, HENCE IN VIEW OF THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE O F NTPC VS. CIT, 229 ITR 383 (SC) THE ADDITIONAL GROUND RAISED BY THE ASSESSEE I S ADMITTED FOR ADJUDICATION ON MERITS. 3. THERE WAS A SEARCH AND SEIZURE UNDER SECTION 132 OF THE IT ACT ON 29.06.2011 AT THE PREMISES OF M/S. BIRANI SAFE DEPO SIT VAULTS PVT. LTD. IT WAS FOUND FROM THE RECORD OF M/S. BIRANI SAFE DEPOSIT VAULTS PVT. LTD. THAT THE LOCKER NO. 1084 WAS IN THE NAME OF SHRI KAILASH GUPTA. HOWEVER, SU BSEQUENTLY VIDE LETTER DATED 5 TH 3 ITA NOS. 843 & 844/JP/2016 SHRI JUGAL KISHORE MAHESHWARI, JAIPUR. JULY, 2011 THE ASSESSEE CLAIMED THAT THE LOCKER NO. 1084 BELONGS TO HIM WHICH IS APPEARING IN THE NAME OF HIS EMPLOYEE SHRI KAILASH GUPTA. STATEMENT OF THE ASSESSEE WAS RECORDED UNDER SECTION 131 OF THE ACT ON 21 ST JULY, 2011 WHEREIN THE ASSESSEE ADMITTED THE FACT THAT SAID LOCKER NO. 108 4 BELONGS TO HIM. THE AO INITIALLY ISSUED A NOTICE UNDER SECTION 153A OF THE ACT. HOW EVER, SUBSEQUENTLY THE AO DROPPED THE PROCEEDINGS INITIATED UNDER SECTION 153 A AND PROCEEDED TO FRAME THE ASSESSMENT UNDER SECTION 153C OF THE ACT. THE AO H AS COMPLETED THE ASSESSMENT UNDER SECTION 153C READ WITH SECTION 143(3) OF THE ACT ON 24 TH MARCH, 2014 ON THE UNDISCLOSED INCOME ADMITTED AND DECLARED IN THE RET URN OF INCOME OF RS. 28,70,284/- FOR THESE TWO ASSESSMENT YEARS. FOR THE YEAR UNDER CONSIDERATION THE ASSESSEE HAS DECLARED AND OFFERED THE UNDISCLOSED INCOME OF RS. 4,61,174/- AND ACCORDINGLY THE AO HAS ACCEPTED THE RETURNED INCOME OF RS. 6,44,010 /-. THE AO, THEREAFTER, INITIATED THE PROCEEDINGS UNDER SECTION 271AAA OF T HE ACT AND LEVIED THE PENALTY IN RESPECT OF THE UNDISCLOSED INCOME SURRENDERED BY TH E ASSESSEE. THE ASSESSEE CHALLENGED THE ACTION OF THE AO BEFORE THE LD. CIT (A) BUT COULD NOT SUCCEED. 4. WE HAVE HEARD THE LD. A/R AS WELL AS THE LD. D/R AND CONSIDERED THE RELEVANT MATERIAL ON RECORD. THE LD. A/R OF THE ASSESSEE HA S RELIED UPON VARIOUS DECISIONS OF THIS TRIBUNAL ON THE POINT THAT WHEN THERE WAS NO S EARCH UNDER SECTION 132 IN THE CASE OF THE ASSESSEE THEN THE PENALTY CANNOT BE LEV IED UNDER SECTION 271AAA OF THE ACT. 4.1. ON THE OTHER HAND, THE LD. D/R HAS SUBMITTED T HAT IT IS A CASE OF DETECTION OF BENAMI LOCKER MAINTAINED BY THE ASSESSEE DURING THE COURSE OF SEARCH AND SEIZURE ACTION. WHEN THE LOCKER WAS SUBJECT MATTER OF SEAR CH, THEN EVEN IF THE AUTHORIZATION 4 ITA NOS. 843 & 844/JP/2016 SHRI JUGAL KISHORE MAHESHWARI, JAIPUR. WARRANT WAS NOT IN THE NAME OF THE ASSESSEE, THE SE ARCH WAS CARRIED OUT ON THE LOCKER OF THE ASSESSEE. THUS THE LD. D/R HAS SUBMIT TED THAT THE AO WAS JUSTIFIED IN IMPOSING THE PENALTY UNDER SECTION 271AAA OF THE AC T. 5. HAVING CONSIDERED THE RIVAL SUBMISSIONS AS WELL AS THE MATERIAL ON RECORD, AT THE OUTSET WE NOTE THAT THIS ISSUE HAS BEEN CONSIDE RED BY THE COORDINATE BENCH OF THE TRIBUNAL IN THE CASE OF DCIT VS. SHRI ASHISH KU MAR GATTANI IN ITA NO. 1021/JP/2015 VIDE ORDER DATED 28 TH APRIL, 2017 AS WELL AS IN THE CASE OF P.C. JAIN & SONS HUF IN ITA NOS. 927 & 928/JP/2017 VIDE ORDER D ATED 3 RD MAY, 2018. BOTH WERE RELIED UPON BY THE LD. A/R OF THE ASSESSEE. I N THE LATEST DECISION IN THE CASE OF PC JAIN & SONS HUF VS. ACIT (SUPRA), THE TRIBUNAL H AS CONSIDERED AN IDENTICAL ISSUE IN PARA 5 AS UNDER :- 5. HAVING CONSIDERED THE RIVAL SUBMISSIONS AS WELL AS THE RELEVANT MATERIAL ON RECORD, WE NOTE THAT THERE WAS NO SEARC H AND SEIZURE ACTION IN THE CASE OF THE ASSESSEE BUT THE SEARCH W AS CARRIED OUT IN THE CASE OF GANPATI LOCKERS PVT. LTD. ON 29 TH JUNE, 2011. SUBSEQUENT TO THE SEARCH, THE STATEMENT OF THE ASSESSEE WAS RECOR DED UNDER SECTION 131 ON 11 TH JULY, 2011 WHEREIN THE ASSESSEE HAS DISCLOSED AN I NCOME OF RS. 89,600/-. THEREFORE, THERE IS NO DISPUTE TH AT THE ASSESSEE DISCLOSED THE INCOME IN THE STATEMENT RECORDED UNDE R SECTION 131 AND NOT IN THE STATEMENT RECORDED UNDER SECTION 132(4) OF THE ACT. HENCE THE PROVISIONS OF SECTION 271AAA CANNOT BE RESORTED TO LEVY THE PENALTY WHEN THERE WAS NO SEARCH AND SEIZURE ACTION RESULTING IN DISCLOSURE OF INCOME BY THE ASSESSEE IN THE STATEME NT RECORDED UNDER SECTION 132(4) OF THE ACT. THE ASSESSEE HAS RELIED UPON A SERIES OF DECISIONS ON THIS POINT INCLUDING THE DECISION OF H ONBLE GUJARAT HIGH COURT IN THE CASE OF PCIT VS. MUKESH BHAI RAMAN LAL PRAJAPATI IN TAX 5 ITA NOS. 843 & 844/JP/2016 SHRI JUGAL KISHORE MAHESHWARI, JAIPUR. APPEAL NO. 434 OF 2017 DATED 24 TH JULY, 2017. THE HONBLE HIGH COURT HAS HELD IN PARA 13 & 14 AS UNDER :- 13. SUB SECTION (2) OF SECTION 271AAA THUS WHILE RETAINING THE OTHER REQUIREMENTS OF AVOIDING PENALTY AS PROVI DED IN CLAUSE (II) OF EXPLANATION 5 HAS NOW INTRODUCED AN ADDITIO NAL REQUIREMENT OF THE ASSESSEE HAVING TO SUBSTANTIATE THE MANNER IN WHICH, THE UNDISCLOSED INCOME WAS DERIVED. IT IS THIS REQUIREMENT WHICH THE COUNSEL FOR THE REVENUE WOULD PLACE GREAT EMPHASIS ON. ACCORDING TO HER, ONUS IS NOW EN TIRELY SHIFTED ON THE ASSESSEE NOT ONLY TO MAKE A DISCLOSU RE OF THE UNDISCLOSED INCOME BUT ALSO TO SPECIFY THE MANNER, IN WHICH, THE INCOME HAS BEEN DERIVED AND TO SUBSTANTIATE THE SAME. IT WAS THEREFORE, CONTENDED THAT THE EARLIER DECISIONS OF THIS COURT IN CASE OF COMMISSIONER OF INCOME TAX VS. MAHENDRA C. SHAH AND THE DECISION OF ALLAHABAD HIGH COURT IN CASE OF COMMISSIONER OF INCOME TAX VS. RADHA KISHAN GOEL RE NDERED IN BACKDROP OF DIFFERENT STATUTORY PROVISIONS WOULD NO T AUTOMATICALLY APPLY. 14. WE DO NOT REJECT THIS CONTENTION TOTALLY. HOWEV ER, INSOFAR AS THE FACTS OF THE PRESENT CASE ARE CONCERNED, THE FIELD WOULD STILL BE HELD BY THE DECISION OF THIS COURT IN CASE OF COMMISSIONER OF INCOME TAX VS. MAHENDRA C. SHAH (SU PRA). SUB SECTION (2) OF SECTION 271 AAA IMPOSES AN ADDIT IONAL CONDITION OF THE ASSESSEE HAVING TO SUBSTANTIATE TH E MANNER IN WHICH, THE UNDISCLOSED INCOME WAS DERIVED. THIS REQ UIREMENT, HOWEVER, MUST BE SEEN AS CONSEQUENTIAL TO OR COROLL ARY TO THE BASE REQUIREMENT OF SPECIFYING THE MANNER, IN WHICH , THE UNDISCLOSED INCOME WAS DERIVED. IT IS ONLY WHEN SUC H DECLARATION IS MADE, THE QUESTION OF SUBSTANTIATING SUCH DISCLOSURE OR CLAIM WOULD ARISE. IF, AS IN THE PRES ENT CASE, THE REVENUE FAILED TO QUESTION THE ASSESSEE WHILE RECOR DING HIS STATEMENT UNDER SECTION 132(4) OF THE ACT AS REGARD S THE MANNER OF DERIVING SUCH INCOME, THE REVENUE CANNOT JUMP TO THE CONSEQUENTIAL OR LATER REQUIREMENT OF SUBSTANTI ATING THE MANNER OF DERIVING THE INCOME. IN THE CONTEXT OF TH E REQUIREMENT OF THE ASSESSEE SPECIFYING THE MANNER O F DERIVING THE INCOME THE DECISION OF THIS COURT IN CASE OF CO MMISSIONER OF INCOME TAX VS. MAHENDRA C. SHAH (SUPRA) WOULD HOLD THE FIELD EVEN IN THE CONTEXT OF SUB-SECTION (2) OF SECTION 2 71AAA OF THE ACT. IT IS ONLY WHEN THE OFFICER OF THE RAIDING PAR TY RECORDING THE STATEMENT OF THE ASSESSEE UNDER SECTION 132(4) OF T HE ACT ELICITS A RESPONSE FROM THE ASSESSEES THIS REQUIREMENT, TH E ASSESSEES RESPONSIBILITY TO SUBSTANTIATE THE MANNER OF DERIVI NG SUCH 6 ITA NOS. 843 & 844/JP/2016 SHRI JUGAL KISHORE MAHESHWARI, JAIPUR. INCOME WOULD COMMENCE. WHEN THE BASE REQUIREMENT I TSELF FAILS, THE QUESTION OF DENYING THE BENEFIT OF NO PE NALTY WOULD NOT ARISE. IN VIEW OF THE FACTS AND CIRCUMSTANCES OF THE CASE WHEN THE DISCLOSURE WAS NOT MADE DURING THE SEARCH AND SEIZURE ACTION A ND IN THE STATEMENT RECORDED UNDER SECTION 132(4) AND BY FOLL OWING THE DECISION OF HONBLE GUJARAT HIGH COURT IN THE CASE OF MUKESH BHAI RAMAN LAL PRAJAPATI (SUPRA), THE PROVISIONS OF SECTION 271AAA ARE NOT ATTRACTED FOR LEVY OF PENALTY IN RESPECT OF THE DISCLOSURE OF INCOME MADE BY THE ASSESSEE IN THE STATEMENT RECORDED UNDER SECTION 13 1 OF THE ACT. ACCORDINGLY, WE DELETE THE PENALTY LEVIED BY THE AO UNDER SECTION 271AAA FOR BOTH THE ASSESSMENT YEARS. IN THE CASE IN HAND, THERE IS NO DISPUTE THAT THE S EARCH WAS CARRIED OUT AT THE PREMISES OF M/S. BIRANI SAFE DEPOSIT VAULTS PVT. LT D. ON 29 TH JUNE, 2011. SINCE LOCKER NO. 1084 WAS FOUND DURING THE SEARCH WHICH W AS OWNED BY THE ASSESSEE AND SURRENDERED THE INCOME IN THE STATEMENT RECORDED UN DER SECTION 131 OF THE ACT, THE AO INITIATED THE PROCEEDINGS UNDER SECTION 153A. H OWEVER, THE AO DROPPED THE PROCEEDINGS AND COMPLETED THE ASSESSMENT UNDER SECT ION 153C. THE AO HAS EXPLAINED THE INITIATION OF PROCEEDINGS UNDER SECTI ON 153A AND SUBSEQUENTLY DROPPED THE SAME IN PARA 4 & 6 OF THE ASSESSMENT OR DER FOR THE ASSESSMENT YEAR 2011-12 AS UNDER :- 4. FURTHER NOTICE U/S 153A OF THE IT ACT, 1961 WA S ISSUED ON 25.09.2012 WHICH WAS DULY SERVED UPON THE ASSESSEE THROUGH SPEED POST AD. IN COMPLIANCE TO THE NOTICE ISSUED, THE ASSESSEE FILED HIS RETURN OF INCOME ON 07.11.2012 D ECLARING TOTAL INCOME OF RS. 6,44,010/-. 7 ITA NOS. 843 & 844/JP/2016 SHRI JUGAL KISHORE MAHESHWARI, JAIPUR. 6. LATER ON, IT WAS OBSERVED THAT THE NAME OF THE A SSESSEE WAS NOT APPEARING ON THE WARRANT OF AUTHORIZATION ISSUE D U/S 132(1) OF THE IT ACT, 1961, THEREFORE, THE PROCEEDINGS INI TIATED U/S 153A OF THE IT ACT, 1961 WERE DROPPED. THEREAFTER, NOTICE U/S 153A R.W.S. 153C OF THE IT ACT, 1961 WAS ISSUED ON 07.03.2014. THE ASSESSEE VIDE LETTER DATED 07.03.2014 SUBMITTED THAT THE RETURN FILED IN COMPLIANCE TO NOTICE ISSUED U/S 153 A OF THE IT ACT, 1961 MAY BE TREATED AS HIS RETURN FILED IN COM PLIANCE TO NOTICE ISSUED U/S 153A R.W.S. 153C OF THE IT ACT, 1 961. IN THE RETURN OF INCOME FILED U/S 153A R.W.S. 153C OF THE IT ACT, 1961 FOR THE YEAR UNDER CONSIDERATION THE ASSESSEE HAS D ECLARED TOTAL INCOME OF RS. 6,44,010/-. SINCE BOTH THE ASSESSMENTS WERE FRAMED UNDER SECTIO N 153C, THEREFORE, IT IS EVIDENT FROM THE ASSESSMENT ORDER ITSELF THAT THE SEARCH WA S NOT CARRIED OUT IN THE CASE OF THE ASSESSEE AND, THEREFORE, IN VIEW OF THE DECISIO N OF THE COORDINATE BENCH OF THE TRIBUNAL IN THE CASE OF PC JAIN & SONS HUF (SUPRA) AS WELL AS THE DECISION OF THE HONBLE GUJARAT HIGH COURT IN THE CASE OF PRINCIPAL CIT VS. MUKESH BHAI RAMAN LAL PRAJAPATI (SUPRA), WE HOLD THAT THE PROVISIONS OF S ECTION 271AAA ARE NOT ATTRACTED FOR LEVY OF PENALTY IN RESPECT OF THE DISCLOSURE OF INC OME MADE BY THE ASSESSEE IN THE STATEMENT RECORDED UNDER SECTION 131 OF THE ACT. AC CORDINGLY, WE SET ASIDE THE PENALTY ORDER PASSED BY THE AO UNDER SECTION 271AAA FOR BOTH THE ASSESSMENT YEARS. 5. IN THE RESULT, APPEALS OF THE ASSESSEE ARE ALLOW ED. ORDER IS PRONOUNCED IN THE OPEN COURT ON 08/06/2 018. SD/- SD/- ( FOE FLAG ;KNO ) ( FOT; IKY JKWO (VIKRAM SINGH YADAV ) (VIJAY PAL RAO) YS[KK LNL;@ ACCOUNTANT MEMBER U;KF;D LNL;@ JUDICIAL MEMBER JAIPUR DATED:- 08/06/2018. DAS/ 8 ITA NOS. 843 & 844/JP/2016 SHRI JUGAL KISHORE MAHESHWARI, JAIPUR. VKNS'K DH IZFRFYFI VXZSF'KR@ COPY OF THE ORDER FORWARDED TO: 1. THE APPELLANT- SHRI JUGAL KISHORE MAHESHWARI, JA IPUR. 2. THE RESPONDENT THE ACIT, CENTRAL CIRCLE-3, JAIP UR. 3. THE CIT(A). 4. THE CIT, 5. THE DR, ITAT, JAIPUR 6. GUARD FILE (ITA NO. 843 & 844/JP/2016) VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASSISTANT. REGISTRAR 9 ITA NOS. 843 & 844/JP/2016 SHRI JUGAL KISHORE MAHESHWARI, JAIPUR.