LATE SMT. SUDHA PATNI, Jaipur V. ACIT, Jaipur

ITA 963/JPR/2015

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 5201 (ITAT-JAIPUR)
• Duration Of Justice: 7 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-08-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: Not Allotted
• Assessment Year: 2012-2013
• Appeal Filed On: 11-12-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAGHUVIR SINGH DAGUR CIT DHK
• Keywords: Gift
• Section: 143(3); 131; 27; 132

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 DQY HKKJR] U;KF;D LNL; ,OA JH FOE FLAG ;KNO] YS [KK LNL; DS LE{K BEFORE: SHRI KUL BHARAT, JM & SHRI VIKRAM SINGH YAD AV, AM VK;DJ VIHY LA-@ ITA NO. 963/JP/2015 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2012-13. LATE SMT. SUDHA PATNI, (THROUGH LEGAL HEIR SH. MAHENDRA KR. PATNI, 248, MUSAFRON KA CHOWK, HALDIYON KA RASTA, JOHARI BAZAR, JAIPUR. CUKE VS. THE ASSISTANT COMMISSIONER OF INCOME-TAX, CENTRAL CIRCLE-2, JAIPUR. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN NO. AWFPP 1174 R VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY : SHRI VIJAY GOYAL (CA) JKTLO DH VKSJ LS@ REVENUE BY : SHRI RAGHUVIR SINGH DAGUR (ADDL.CIT) LQUOKBZ DH RKJH[K@ DATE OF HEARING : 22.07.2016. ?KKS'K .KK DH RKJH[K@ DATE OF PRONOUNCEMENT : 09/08/2016. VKNS'K@ ORDER PER SHRI KUL BHARAT, JM. THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST TH E ORDER OF LD. CIT (A)-4, JAIPUR DATED 27.10.2015 PERTAINING TO ASSESSMENT YE AR 2012-13. THE GROUND RAISED BY THE ASSESSEE IS AS UNDER : 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE A ND IN LAW THE LD. CIT (A) ERRED IN CONFIRMING THE IMPOSITION OF PENAL TY OF RS. 27,19,188/- UNDER SECTION 271AAA OF INCOME TAX ACT, 1961. 2. THE ASSESSEE PRAYS FOR LEAVE TO ADD, TO AMEND, TO D ELETE, OR MODIFY THE ALL OR ANY GROUNDS OF APPEAL ON OR BEFORE THE H EARING OF APPEAL. 2. BRIEFLY STATED THE FACTS ARE THAT A SEARCH AND S EIZURE ACTION UNDER SECTION 132 OF THE I.T. ACT, 1961 (HEREINAFTER REFERRED TO AS T HE ACT) WAS CONDUCTED ON 29.06.2011 ON GANPATI LOCKERS PVT. LTD. SITUATED AT GANPATI PLAZA, M.I. ROAD, JAIPUR. 2 ITA NO. 963/JP/2015 LATE SMT. SUDHA PATNI DURING THE COURSE OF SEARCH ACTION, VALUABLES BEING GOLD BULLION, LOOSE DIAMONDS, JEWELLERY ETC. WHICH WAS VALUED AT RS. 2,84,19,380/ - AND CASH AMOUNTING TO RS. 46,22,500/- AGGREGATING TO RS. 3,30,41,880/- WERE S EIZED FROM THE LOCKER NO. 378 AND THE CONTENTS THEREOF WERE FOUND TO BE BELONGING TO SMT. SUDHA PATNI, THE ASSESSEE ON THE BASIS OF THE STATEMENT RECORDED U/S 131 BY THE DDIT (UNIT-III), JAIPUR ON 03.08.2011. THE ASSESSEE FURTHER CLAIMED IN THE SAID STATEMENT THAT ALL VALUABLES AND CASH AS DESCRIBED ABOVE WHICH WERE FO UND AND SEIZED FROM THIS LOCKER BELONGED TO HER. ACCORDINGLY, THE ASSESSEE SURRENDE RED A SUM OF RS. 3,30,41,880/- AS HER UNDISCLOSED INCOME FOR THE A.Y. 2012-13. THE REAFTER, THE ASSESSMENT UNDER SECTION 143(3) OF THE I.T. ACT, 1961 WAS FRAMED VID E ORDER DATED 10.03.2014. WHILE FRAMING THE ASSESSMENT, THE AO INITIATED PENALTY PR OCEEDINGS UNDER SECTION 271AAA ON THE GROUND THAT UNDISCLOSED INCOME OF RS. 2,71,9 1,880/- WERE FOUND DURING THE COURSE OF SEARCH U/S 132 OF THE ACT. ACCORDINGLY, P ENALTY U/S 271AAA OF THE ACT IS INITIATED ON SUCH AMOUNT OF RS. 2,71,91,880/- BY WA Y OF ISSUE OF NOTICE U/S 274 READ WITH SECTION 271AAA OF THE ACT. THE ASSESSEE AGGRIE VED BY THIS ORDER, PREFERRED AN APPEAL BEFORE LD. CIT (A), WHO AFTER CONSIDERING TH E SUBMISSIONS DISMISSED THE APPEAL OF THE ASSESSEE. 3. NOW THE ASSESSEE IS IN APPEAL BEFORE US. 4. THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT BOTH THE AUTHORITIES BELOW HAVE FAILED TO APPRECIATE THE FACTS AND WRONGLY APP LIED THE PROVISIONS. THE LD. COUNSEL SUBMITTED THAT THE SEIZED JEWELLERY, ORNAME NTS AND STONES OF RS. 2,25,69,380/- AND CASH OF RS. 46,22,500/-. WERE NO T ACQUIRED BY THE ASSESSEE OUT OF HER UNDISCLOSED INCOME BUT THE SAME WERE RECEIVE D TO ASSESSEE AT THE TIME OF HER MARRIAGE FROM HER PARENTS AND IN LAWS AND IN GIFT F ROM TIME TO TIME FROM NEPHEWS OF 3 ITA NO. 963/JP/2015 LATE SMT. SUDHA PATNI ASSESSEE SHRI AMIT PATNI AND SHRI ABHISHEK PATNI (S ON OF BROTHER IN LAW OF ASSESSEE) WHO ARE RESIDING IN USA. FURTHER THE SEIZED CASH WA S LYING OUT OF SALES PROCEEDS OF 20 GOLD BISCUITS WHICH WERE SOLD IN APRIL-2011. THE SE BISCUITS WERE ALSO RECEIVED TO ASSESSEE IN GIFT. THESE ARE THE FACTS, WHICH THE AS SESSEE STATED ON OATH IN HER STATEMENT RECORDED ON 03.08.2011. HE DREW OUR ATTEN TION TO THE ANSWER TO QUESTION NO 11 AND 13 OF STATEMENT RECORDED BY SEARCH PARTY . HE, HOWEVER, SUBMITTED THAT THE ASSESSEE WAS NOT HAVING ANY PROOF OF RECEIVING THE JEWELLERY AND OTHER VALUABLES IN GIFT OR SELLING OF THE GOLD BISCUITS. THEREFORE, IN ORDER TO BUY PEACE AND AVOID LITIGATION SHE SURRENDERED THE ENTIRE JEWELLE RY, VALUABLES AND CASH FOUND AT THE TIME OF SEARCH AS HER INCOME FOR AY 2012-13. THE SU RRENDER WAS MADE IN THE STATEMENT RECORDED BY DDIT. FURTHER THE ASSESSEE DI SCLOSED THIS INCOME IN INCOME TAX RETURN FILED FOR AY 2012-13 AND PAID THE DUE TA XES THEREON. 4.1. THE LD. COUNSEL SUBMITTED THAT THE ASSESSMENT OF ASSESSEE FOR AY 2012-13 WAS COMPLETED BY LD AO VIDE HIS ORDER DATED 10.03.2 014 AND THE RETURNED INCOME OF THE ASSESSEE WAS ACCEPTED. 4.2. THE LD. COUNSEL FURTHER SUBMITTED THAT THE PEN ALTY U/S 271AAA WAS IMPOSED BY TREATING THE INCOME OF RS. 2,71,91,880/- DECLARE D BY THE ASSESSEE IN RETURN AS UNDISCLOSED INCOME OF THE ASSESSEE WITHIN THE DEFIN ITION OF SECTION 271AAA OF INCOME TAX ACT. IN THIS REGARD, THE HUMBLE ASSESSEE SUBMITS THAT SHE HAS SATISFIED ALL THE CONDITIONS MENTIONED IN SUB-SECTION 2 OF SE CTION 271AAA AND THEREFORE, THE LOWER AUTHORITIES HAVE NOT JUSTIFIED IN LEVY OF PE NALTY U/S 271AAA. IN THIS REGARD, THE ASSESSEE SUBMITS THAT THE FOLLOWING FACTS ARE NOT I N DISPUTE: - 4 ITA NO. 963/JP/2015 LATE SMT. SUDHA PATNI (I) IN THE STATEMENT RECORDED BY DDI WING THE ASS ESSEE ADMITTED THE UNDISCLOSED INCOME. (II) THE MANNER IN WHICH THE UNDISCLOSED INCOME D ERIVED WAS ALSO EXPLAINED. THE ASSESSEE HAS SPELLED OUT IN DETAIL T HE NATURE OF THE TRANSACTION. IN ANSWER TO QUESTION NO 11, 13, 16 AND 17 SHE SAID THAT THE VALUABLES WERE RECEIVED TO ASSESSEE AT THE TIME OF HER MARRIAGE FROM HER PARENTS AND IN LAWS AND IN GIFT FROM TIME TO TIME FROM NEPHEWS OF ASSESSEE SHRI AMIT PATNI AND SHRI ABHISH EK PATNI (SON OF BROTHER IN LAW OF ASSESSEE) WHO ARE RESIDING IN USA . FURTHER THE SEIZED CASH WAS LYING OUT OF SALES PROCEEDS OF 20 GOLD BIS CUITS WHICH WERE SOLD IN APRIL-2011. THESE BISCUITS WERE ALSO RECEIV ED TO ASSESSEE IN GIFT. HOWEVER THE ASSESSEE WAS NOT HAVING ANY PROOF OF RE CEIVING THE JEWELLERY AND OTHER VALUABLES IN GIFT OR SELLING OF THE GOLD BISCUITS THEREFORE IN ORDER TO BUY PEACE AND AVOID LITIGATIO N SHE SURRENDERED THE ENTIRE JEWELLERY, VALUABLES AND CASH FOUND AT T HE TIME OF SEARCH AS HER INCOME FOR AY 2012-13. THE SURRENDER WAS MADE I N THE STATEMENT RECORDED BY DDIT. SECTION 271AAA HAS BEEN INSERTED BY FINANCE BILL 20 07 AND IS APPLICABLE IN A CASE WHERE SEARCH HAS BEEN INITIATE D ON OR AFTER 1.6.2007 BUT BEFORE 1.7.2012. EXPL 5 TO SECTION 271 (1)(C) WAS ALSO AMENDED BY THE FINANCE BILL 2007 AND STOOD APPLICAB LE ON SEARCH INITIATED BEFORE 1.6.2007. IN MEMORANDUM EXPLAINING THE PROVISIONS, IT IS MADE CLEAR THAT BY IN INTRODUCTION OF SECTION 27 1AAA, EXPL 5 IS NOT RELEVANT. BOTH SECTIONS GRANTED IMMUNITY FROM CONCE ALMENT PROCEEDINGS IN CASE CERTAIN CONDITIONS ARE SATISFIE D. CONDITIONS ARE ALSO SIMILAR IF CONDITIONS ARE NOT SATISFIED THEN PENALT Y U/S 271AAA IS 10% OF UNDISCLOSED INCOME WHILE PENALTY U/S 271(1)(C) I S TO BE QUANTIFIED 5 ITA NO. 963/JP/2015 LATE SMT. SUDHA PATNI AS PER 271(1)(III) IN CASE CONDITIONS ARE NOT SATIS FIED. HENCE CASE LAWS DECIDED IN RESPECT OF EXPL 5 TO 271 (1)(C) ARE RELE VANT FOR SUBSECTION 2 OF SECTION 271AAA. WHILE RECORDING STATEMENT U/S 13 2(4), IT IS THE DUTY OF THE AUTHORIZED OFFICER TO APPRISE THE ASSESSEE A BOUT PROVISIONS OF LAW AND IF NO QUESTION ASKED ABOUT THE MANNER IN WH ICH INCOME HAS BEEN DERIVED, THEN ON THIS GROUND, IMMUNITY CANNOT BE DENIED. IN THIS REGARD, THE LEARNED COUNSEL PLACED RELIANCE ON THE JUDGEMENT OF HONBLE GUJRAT HIGH COURT IN THE CASE OF CIT V MAHE NDER C. SHAH 172 TAXMAN 58. THE LD. COUNSEL FURTHER PLACED RELIANCE ON FOLLOWIN G DECISIONS:- CIT VS RADHA KISHAN GOEL, 278 ITR 454 (ALL.) SPS STEEL & POWER LTD. VS. ACIT (2015) 44 CCH 0286 KOL. TRIB. SHRI VINOD CHANDER SINHA VS. ACIT ITA NO. 3699/DEL/2014 DATED 13 TH JUNE, 2016. ACIT, CIRCLE-1 (1) , VISAKHAPATNAM VERSUS M/S. SAI RAM BUILDERS AND VICA-VERSA I.T.A.NO.738/VIZAG/2013, C.O. NO.12/VIZA G/2014 DATED: - 18 MARCH 2016 (2016 (4) TMI 949) SUNIL KUMAR BANSL VS. DCIT (2015) 37 ITR (TRIB) 0576 (CHANDIGARH) 4.3. THE LD. COUNSEL SUBMITTED THAT ALL THE CONDITIONS O F SUB-SECTION (2) OF SECTION 271AAA HAVE BEEN SATISFIED BY THE ASSESSEE AND CONS EQUENTLY NO PENALTY U/S.271AAA(1) WOULD BE LEVIABLE. IN THE CASE OF THE ASSESSEE, THE ASSESSEE SURRENDERED THE INCOME IN HER STATEMENT RECORDED BY DDIT. SHE SPECIFIED THE 6 ITA NO. 963/JP/2015 LATE SMT. SUDHA PATNI SOURCE OF HAVING IN POSSESSION OF VALUABLE AND CASH WHICH WAS OUT OF GIFT RECEIVED TO THE ASSESSEE AND THE SURRENDER WAS MADE ONLY IN ORD ER TO BUY PEACE AND AVOID LITIGATION. THE ASSESSEE DECLARED THE INCOME IN HER INCOME TAX RETURN AND PAID THE DUE TAXES THEREON. THUS BY VIRTUE OF CLAUSE (2) OF SECTION 271AAA OF INCOME TAX ACT, 1961 NO PENALTY SHOULD BE IMPOSED ON ASSESSEE. 4.4. THE LD. COUNSEL SUBMITTED THAT WITHOUT PREJUDI CE TO ABOVE SINCE THE ASSESSEE HAS NOT ACTED DELIBERATELY IN DEFIANCE OF LAW OR WA S NOT GUILTY OF CONDUCT CONTUMACIOUS OR DISHONEST, OR HAS NOT ACTED IN CONS CIOUS DISREGARD OF ITS OBLIGATION, PENALTY CANNOT BE LEVIED. IN THIS REGARD YOUR KIND ATTENTION IS DRAWN TOWARDS THE SUPREME COURT DECISION IN THE CASE OF HINDUSTAN STE ELS LTD. VS. STATE OF ORISSA, 83 ITR 26 (SC). HONBLE APEX COURT HAS HELD THAT - AN ORDER IMPOSING PENALTY FOR FAILURE TO CARRY OUT A STATUTORY OBLIGATION IS THE RESULT OF A QUASI-CRIMINAL PROCEEDING AND PENALTY W ILL NOT ORDINARILY BE IMPOSED UNLESS THE PARTY OBLIGED, EITHER ACTED DELI BERATELY IN DEFIANCE OF LAW OR WAS GUILTY OF CONDUCT CONTUMACIOUS OR DISHONEST, OR ACTED IN CONSCIOUS DISREGARD OF ITS OBLIGATION. PENALTY WILL NOT ALSO BE IMPOSED MERELY BECAUSE IT IS LAWFUL TO DO SO. WHETHER PENALTY SHOULD BE IMPOS ED FOR FAILURE TO PERFORM A STATUTORY OBLIGATION IS A MATTER OF DISCRETION OF T HE AUTHORITY TO BE EXERCISED JUDICIALLY AND ON A CONSIDERATION OF ALL THE RELEVA NT CIRCUMSTANCES. EVEN IF A MINIMUM PENALTY IS PRESCRIBED, THE AUTHORITY COMPET ENT TO IMPOSE THE PENALTY WILL BE JUSTIFIED IN REFUSING TO IMPOSE PEN ALTY, WHEN THERE IS A TECHNICAL OR VENIAL BREACH OF THE PROVISIONS OF THE ACT OR WHERE THE BREACH FLOWS FROM A BONA FIDE BELIEF THAT THE OFFENDER IS NOT LIABLE TO ACT IN THE MANNER PRESCRIBED BY THE STATUTE. IN VIEW OF THE ABOVE SUBMISSION, THE LD. COUNSEL PR AYS TO CANCEL THE PENALTY OF RS. 27,19,188/- LEVIED BY LD AO U/S 271AAA OF INCOME TA X ACT, 1961. 4.5 THE LD. D/R SUPPORTED THE ORDERS OF THE AUTHORI TIES BELOW. 7 ITA NO. 963/JP/2015 LATE SMT. SUDHA PATNI 4.6. WE HAVE HEARD RIVAL CONTENTIONS, PERUSED THE M ATERIAL AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELO W. THERE IS NO DISPUTE WITH REGARD TO THE FACT THAT THE ASSESSEE HAS OFFERED IN HIS RETURN OF INCOME THE UNDISCLOSED INCOME OF RS. 2,71,91,880/-. THE SAME A RE DULY RECORDED BY THE AO AT PARA 4 OF THE ASSESSMENT ORDER. NOWHERE IN THE ASSE SSMENT ORDER, THE AO RECORDED THAT THE ASSESSEE WAS ASKED TO SPECIFY OR SUBSTANTI ATE THE MANNER IN WHICH THE INCOME HAS BEEN DERIVED AND THE ASSESSEE HAS FAILED TO DO SO. THE AO HAS MERELY RECORDED THAT THE TOTAL INCOME DECLARED IN THE RETU RN OF INCOME FOR THE SPECIFIED YEAR INCLUDED THE UNDISCLOSED INCOME OF RS. 2,71,91,880/ - WHICH REPRESENTED THE UNEXPLAINED MONEY. IN ACCORDANCE WITH SUB SECTION (2) OF SECTION 271AAA OF THE ACT, THE PENALTY PROVISIONS UNDER SUB-SECTION (1) O F SECTION 271AAA WILL NOT APPLY IF THE ASSESSEE (I) IN THE COURSE OF THE SEARCH, IN A STATEMENT UNDER S UB-SECTION (4) OF SECTION 132, ADMITS THE UNDISCLOSED INCOME A ND SPECIFIES THE MANNER IN WHICH SUCH INCOME HAS BEEN DERIVED ; (II) SUBSTANTIATES THE MANNER IN WHICH THE UNDISCLOSED I NCOME WAS DERIVED; AND (III) PAYS THE TAX, TOGETHER WITH INTEREST, IF ANY, IN RE SPECT OF THE UNDISCLOSED INCOME. IN THIS REGARD, AR HAS SUBMITTED THAT THE ASSESSEE SATISFIES ALL THE ABOVE THREE CONDITIONS AS IS EVIDENT FROM FACTS OF THE CASE AND DOCUMENTS SUBMITTED. FURTHER, THE ASSESSEE, IN COURSE OF SEARCH IN THE SWORN STAT EMENT RECORDED UNDER SECTION 132(4) OF THE ACT, HAS ADMITTED THE UNDISCLOSED INC OME, AND CLEARLY STATED THE MANNER IN WHICH THE UNDISCLOSED INCOME (WITHIN THE MEANING OF EXPLANATION (A)(I) OF SECTION 271AAA) WAS DERIVED AND SUBSTANTIATED IN ST ATEMENT RECORDED IN COURSE OF 8 ITA NO. 963/JP/2015 LATE SMT. SUDHA PATNI SEARCH. SUBSEQUENTLY, THE ASSESSEE PAID TAX, TOGETH ER WITH INTEREST IN RESPECT OF THE UNDISCLOSED INCOME AND FILED RETURN OF INCOME, WHIC H STAND ACCEPTED IN ASSESSMENT U/S 143(3) OF THE ACT. ON PERUSAL OF THE ABOVE, IT IS SEEN THAT ASSESSEE HAS OFFERED FOR TAX HIS UNDISCLOSED INCOME (RS. 2,71,91,880/-) INCLUDING JEWELLERY AS UNDER :- JEWELLERY RS. 2,25,69,380/- CASH RS. 46,22,500/- ---------------------- RS. 2,71,91,880/- WE FIND THAT THE CASE OF THE ASSESSEE IS SQUARELY C OVERED BY THE DECISION OF THE COORDINATE BENCH OF THE JAIPUR TRIBUNAL RENDERED IN THE CASE OF DCIT VS. SHRI RAHUL MANGAL & OTHERS IN ITA NO. 1026/JP/2015 & ORS. WHER EIN ON SIMILAR FACTS THE CLAIM OF THE ASSESSEE WAS ALLOWED BY DELETING THE ADDITIO N MADE BY THE AO, THEREBY DISMISSED THE APPEALS OF THE OF THE REVENUE. WE ALS O FIND SUPPORT FROM THE DECISION OF THE COORDINATE BENCH RENDERED IN THE CASE OF ACI T (OSD) VS. M/S. KANAKIA SPACES PVT. LTD. ITA NO. 6763/MUM/2011 A.Y. 2007-08 , WHEREIN THE HONBLE TRIBUNAL HAS HELD AS UNDER :- 3.1. LD. CIT (A) AFTER CONSIDERING THE SUBMISSION DELETE D THE PENALTY BY STATING AS UNDER:- I HAVE CAREFULLY CONSIDERED THE SUBMISSIONS MADE B Y THE APPELLANT IN RESPECT OF THE PENALTY LEVIED BY THE L D. AO. IT IS SEEN THAT THE LD. AO HAS WRITTEN TWO SENTENCES AT PARA-8 TO CONCLUDE THAT THE APPELLANT HAS NOT BEEN ABLE TO SUBSTANTIAT E THE SOURCE OF ACQUISITION OF THE MOVABLE ASSETS. THE FACT OF T HE MATTER IS THAT THE REQUIREMENT ON THE PART OF AN ASSESSEE TO SUBSTANTIATE THE SOURCE OF INCOME CANNOT BE TAKEN TO MEAN THAT A LL EVIDENCES IN THE RESPECT HAS TO BE PRODUCED. THE VERY FACT TH AT THE DISCLOSURE IS MADE IN RESPECT OF UNDISCLOSED INCOME , ALL THAT CAN BE REQUIRED OF AN ASSESSEE IS THAT THE PROXIMATE NA TURE OF ACQUISITION CAN BE MENTIONED BY HIM. IT CANNOT BE T HE CASE THAT VERY MINUTE DETAIL THEREOF WOULD BE PRESERVE WITH E VIDENCE WHICH IS POSSIBLE ONLY FOR THE REGULAR INCOME BEING DISCLOSED BY 9 ITA NO. 963/JP/2015 LATE SMT. SUDHA PATNI HIM. THE REQUIREMENT AS PER SECTION (2) OF SECTION 271AAA IS ONLY THAT THE MANNER OF EARNING INCOME SHOULD BE SP ECIFIED SO THAT UNDUE ADVANTAGE OF TELESCOPING OR SOME OTHER I NCOME BEING BROUGHT WITHIN THE TOTAL AMBIT OF UNDISCLOSED INCOME SURRENDERED DOES NOT HAPPEN. FROM THE ORDER OF THE LD. A.O ALSO, IT IS APPARENT THAT THE PENALTY IS NOT LEVIED BY HIM ON ACCOUNT OF SOME CONVICTION BUT HAS BEEN JUST LEVIED TO COMPLETE THE PROCEEDINGS. IN FACT THERE ARE NO MATERIAL FACT S WARRANTING THE LEVY OF PENALTY AND, ACCORDINGLY, THE PENALTY O F RS.55,00,000/- LEVIED UNDER SECTION 271AAA IS DIREC TED TO BE DELETED. 4. AFTER CONSIDERING THE RIVAL SUBMISSIONS, WE DO N OT SEE ANY REASON TO INTERFERE WITH THE ORDER OF CIT(A). THE O RDER IS IN TUNE WITH THE PRINCIPLES LAID DOWN BY VARIOUS CO-ORDINATE BEN CHES AND HIGH COURTS PARTICULARLY WITH REFERENCE TO DISCLOSURE MA DE UNDER SECTION 132(4). IN THE CASE OF CIT VS. MAHENDRA C. SHAH (29 9 ITR 305) THE HONBLE GUJARAT HIGH COURT CONSIDERED SIMILAR STATE MENT UNDER SECTION 132(4) TO GRANT IMMUNITY UNDER SECTION 271(1)(C). T HE HONBLE HIGH COURT HELD AS UNDER:- WHEN THE STATEMENT IS BEING RECORDED BY THE AUTHOR IZED OFFICER IT IS INCUMBENT UPON THE AUTHORIZED OFFICER TO EXPL AIN THE PROVISIONS OF EXPLANATION 5 IN ENTIRETY TO THE ASSE SSEE CONCERNED AND THE AUTHORIZED OFFICER CANNOT STOP SH ORT AT A PARTICULAR STAGE SO AS TO PERMIT THE REVENUE TO TAK E ADVANTAGE OF SUCH A LAPSE IN THE STATEMENT. THE REASON IS NOT FAR TO SEEK. IN THE FIRST INSTANCE, THE STATEMENT IS BEING RECOR DED IN THE QUESTION AND ANSWER FORM AND THERE WOULD BE NO OCCA SION FOR AN ASSESSEE TO STATE AND MAKE AVERMENTS IN THE EXAC T FORMAT STIPULATED BY THE PROVISIONS CONSIDERING THE SETTIN G IN WHICH SUCH STATEMENT IS BEING RECORDED. SECONDLY, CONSIDE RING THE SOCIAL ENVIRONMENT IT IS NOT POSSIBLE TO EXPECT FRO M AN ASSESSEE, WHETHER LITERATE OR ILLITERATE, TO BE SPECIFIC AND TO THE POINT REGARDING THE CONDITIONS STIPULATED IN THE SECOND E XCEPTION WHILE MAKING STATEMENT UNDER SECTION 132(4). EVEN IF THE STATEMENT DOES NOT SPECIFY THE MANNER IN WHICH THE INCOME IS DERIVED, IF THE INCOME IS DECLARED AND TAX THEREON PAID, THERE WOULD BE SUBSTANTIAL COMPLIANCE NOT WARRANTING ANY FURTHER D ENIAL OF THE BENEFIT. 4.1 IN THIS CASE, THE ASSESSEE WAS ASKED TO EXPLAIN THE ENTRIES IN THE WORK-IN-PROGRESS SHEET AND ASSESSEE IN THE CO URSE OF STATEMENT OFFERED THE INCOME WITH A PLEA NOT TO INITIATE PENA LTY PROCEEDINGS. THE ASSESSEE WAS NOT ASKED ABOUT THE MANNER IN WHICH SU CH INCOME WAS EARNED AND ALSO TO SUBSTANTIATE THE MANNER IN WHICH UNDISCLOSED INCOME WAS DERIVED. THE PROVISION OF CLAUSE-2 OF EX PLANATION-V APPENDED TO SECTION 271(1)(C) ARE SIMILAR TO SECTIO N 271AAA(2). THE SCOPE AND MEANING HAS BEEN LUCIDLY EXPLAINED BY THE HONBLE 10 ITA NO. 963/JP/2015 LATE SMT. SUDHA PATNI ALLAHABAD HIGH COURT IN THE CASE OF CIT VS. RADHA K ISHAN GOEL (2005) 278 ITR 454 (ALL.), WHICH WAS FOLLOWED BY THE HONB LE GUJARAT HIGH COURT IN THE ABOVE REFERRED CASE. IN VIEW OF THE AB OVE PRINCIPLES LAID DOWN, WE ARE OF THE OPINION THAT IMMUNITY PROVIDED UNDER S/S. (2) OF SECTION 271AAA IS APPLICABLE AND ACCORDINGLY, THE O RDER OF CIT(A) DOES NOT REQUIRE ANY MODIFICATION. REVENUES GROUNDS ARE REJECTED. RESPECTFULLY FOLLOWING THE DECISION OF THE COORDINA TE BENCHES, WE SET ASIDE THE ORDERS OF THE AUTHORITIES BELOW. THE AO IS DIRECTED TO DELETE THE ADDITION. THE APPEAL OF THE ASSESSEE IS ALLOWED. 5. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED . ORDER PRONOUNCED IN THE OPEN COURT ON 09/08/2016. SD/- SD/- FOE FLAG ;KNO ( DQY HKKJR ) (VIKRAM SINGH YADAV) ( KUL BHARAT ) YS[KK LNL;@ ACCOUNTANT MEMBER U;KF;D LNL;@ JUDICIAL MEMBER JAIPUR DATED:- 09/08/2016. DAS/ VKNS'K DH IZFRFYFI VXZSF'KR@ COPY OF THE ORDER FORWARDED TO: 1. THE APPELLANT- LATE SMT. SUDHA PATNI, JAIPUR. 2. THE RESPONDENT- THE ACIT, CENTRAL CIRCLE-2, JAIP UR. 3. THE CIT(A). 4. THE CIT, 5. THE DR, ITAT, JAIPUR 6. GUARD FILE (ITA NO. 963/JP/2015) VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASSISTANT. REGISTRAR 11 ITA NO. 963/JP/2015 LATE SMT. SUDHA PATNI