ANUJ MATHUR, Jaipur V. DEPUTY COMMISSIONER OF INCOME TAX, Jaipur

ITA 971/JPR/2017

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 3610 (ITAT-JAIPUR)
• Duration Of Justice: 1 year(s) 4 month(s) 18 day(s)
• Appeal Type: Income Tax (International Taxation) Appeal
• Pronouncement Date: 29-04-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2015-2016
• Appeal Filed On: 11-12-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SEEMA MEENA
• Keywords: Business income; Search and seizure; Salary income; Document seized; Opportunity of being heard; Principle of natural justice; Transactions in derivatives; Source of fund; Question of law; Reasonable cause; Non compliance; Documents seized; Set aside; CHAPTER IV
• Section: 6; 132; 271(1)(c); 44AD; 139; 143(3); 153A; 292BB; 274; 44BB; 139(1); 246A; 13; 158BFA; 22; 20

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; ,O A JH HKKXPUN ] YS[KK LNL; DS LE{K BEFORE: SHRI VIJAY PAL RAO, JM & SHRI BHAGCHAND, A M VK;DJ VIHY LA- @ ITA NO. 971/JP/2017 FU/KZKJ.K O'K Z @ ASSESSMENT YEARS : 2015-16. SHRI ANUJ MATHUR, A-8, SHYAM NAGAR, AJMER ROAD, JAIPUR. CUKE VS. THE DY. COMMISSIONER OF INCOME-TAX, CENTRAL CIRCLE-4, JAIPUR. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO. AEZPM 2576 G VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY : SHRI S.L. PODDAR AND MS. ISHA KANUNGO (ADVOCATES) JKTLO DH VKSJ LS@ REVENUE BY : SMT. SEEMA MEENA (JCIT) LQUOKBZ DH RKJH[K@ DATE OF HEARING : 24.04.2018. ?KKS'K .KK DH RKJH[K @ DATE OF PRONOUNCEMENT : 13/06/2018. VKNS'K@ ORDER PER VIJAY PAL RAO, J.M. THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST TH E ORDER DATED 17.11.2017 OF LD. CIT (A)-4, JAIPUR ARISING FROM PENALTY ORDER PA SSED UNDER SECTION 271AAB OF THE IT ACT FOR THE ASSESSMENT YEAR 2015-16. THE ASSESS EE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL :- 1. UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE THE LEARNED CIT (A) HAS ERRED IN PASSED THE ORDER U/S 271AAB OF THE INCOME TAX ACT, 1961 WHICH IS VOID AB-INITIO DESERVES TO BE QU ASHED. 2. UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE TH E LEARNED CIT (A) HAS ERRED IN CONFIRMING THE ACTION OF THE LEARN ED ASSESSING 2 ITA NO. 971/JP/2017 SHRI ANUJ MATHUR, JAIPUR. OFFICER IN IMPOSING THE PENALTY OF RS. 70,10,000/- U/S 271AAB OF THE INCOME TAX ACT, 1961. 3. THE ASSESSEE CRAVES YOUR INDULGENCE TO ADD, AMEN D OR ALTER ALL OR ANY GROUNDS OF APPEAL BEFORE OR AT THE TIME OF H EARING. 2. THE ASSESSEE IS AN INDIVIDUAL AND DERIVES INCOME DURING THE YEAR UNDER CONSIDERATION FROM SALARY, HOUSE PROPERTY AND OTHER SOURCES. A SEARCH UNDER SECTION 132 WAS CONDUCTED IN THE CASE OF THE ASSESS EE ON 30 TH OCTOBER, 2014 WHEREIN THE ASSESSEE HAS DISCLOSED AND SURRENDERED AN INCOME OF RS. 7,01,00,000/-. IN THE RETURN OF INCOME FILED BY THE ASSESSEE ON 30 TH SEPTEMBER, 2015 TOTAL INCOME OF RS. 7,88,48,920/- WAS DECLARED INCLUDING THE SUR RENDERED INCOME. THE AO ACCEPTED THE RETURNED INCOME WHILE FRAMING THE ASSE SSMENT UNDER SECTION 143(3) READ WITH SECTION 153B(1) OF THE IT ACT. SUBSEQUENT LY, THE AO IMPOSED THE PENALTY OF RS. 70,10,000/- UNDER SECTION 271AAB OF THE ACT WITH REFERENCE TO THE SURRENDERED INCOME OF RS. 7,01,00,000/-. AGGRIEVED BY THE ORDER OF THE A.O., THE ASSESSEE PREFERRED APPEAL BEFORE THE LD. CIT (A), W HO HAS CONFIRMED THE PENALTY WITHOUT CONSIDERING THE SUBMISSION OF THE ASSESSEE. NOW THE ASSESSEE IS IN APPEAL BEFORE US. 3. AT THE OUTSET, WE NOTE THAT THE PENALTY IN THIS CASE HAS BEEN LEVIED AS PER THE OUTCOME OF THE SEARCH DATED 30 TH OCTOBER, 2014 AS IN THE CASE OF SHRI RAVI MATHUR I N ITA NO. 969/JP/2017. THE LD. A/R OF THE ASSESSEE A S WELL AS THE LD. D/R HAS ADVANCED THE ARGUMENT AS MADE IN THE CASE OF SHRI R AVI MATHUR. THE ARGUMENTS OF THE PARTIES AND OUR FINDINGS IN THE CASE OF RAVI MA THUR VIDE ORDER OF EVEN DATE IN ITA NO. 969/JP/2017 ARE AS UNDER :- 3 ITA NO. 971/JP/2017 SHRI ANUJ MATHUR, JAIPUR. 3. BEFORE US, THE LD. A/R OF THE ASSESSEE HAS SUBM ITTED THAT THE AO ISSUED SHOW CAUSE NOTICE ON 28 TH DECEMBER, 2016 ALONG WITH COMPLETION OF ASSESSMENT AND THEREAFTER A SHOW CAUS E NOTICE DATED 3 RD MARCH, 2017 WAS ISSUED FOR IMPOSING PENALTY UNDER S ECTION 271AAB. BOTH THE NOTICES WERE ISSUED IN A ROUTINE MANNER WI THOUT MENTIONING UNDER WHICH CLAUSE OF SECTION 271AAB OF THE ACT THE ASSESSEE IS LIABLE FOR PENALTY. THE LD. A/R HAS SUBMITTED THAT SECTIO N 271AAB(1) HAS THREE CLAUSES (A) TO (C) AND EACH CLAUSE OF SUB-SEC TION (1) TO SEC. 271AAB PROVIDES THE CIRCUMSTANCES AND VIOLATION ATT RACTING THE PENALTY @ 10% OR 20% OR 30% OF UNDISCLOSED INCOME OF SPECIF IED PREVIOUS YEAR. THE LD. A/R HAS POINTED OUT THAT EVEN IN THE ASSESSMENT ORDER THE AO HAS NOT SPECIFIED UNDER WHICH CLAUSE THE PEN ALTY IS LIABLE TO BE IMPOSED BUT THE AO HAS MENTIONED THE PENALTY PROCEE DINGS UNDER SECTION 271AAB OF THE IT ACT ARE BEING INITIATED. T HUS THERE IS NO APPLICATION OF MIND AT THE TIME OF ISSUING THE SHOW CAUSE NOTICE AS THE SHOW CAUSE NOTICE ISSUED BY THE AO DO NOT SPECIFY T HE UNDISCLOSED INCOME ON WHICH THE ASSESSEE IS REQUIRED TO SHOW CA USE. EVEN THE AO HAS NOT GIVEN ANY GROUND FOR LEVY OF PENALTY FOR WH ICH THE ASSESSEE COULD PUT HIS DEFENCE. THUS THE LD. A/R HAS CONTEND ED THAT IN THE ABSENCE OF SPECIFIC CHARGE AGAINST THE ASSESSEE, HE WAS NOT IN A POSITION TO COUNTER THE SHOW CAUSE NOTICE ISSUED BY THE AO AS WELL AS HIS COGENT REPLY TO THE SHOW CAUSE NOTICE. THOUGH THE AO WHILE PASSING THE IMPUGNED ORDER HAS IMPOSED THE PENALTY AS PER CLAUSE (A) OF SECTION 271AAB(1) OF THE ACT, HOWEVER, NO SUCH G ROUND WAS SPECIFIED IN THE SHOW CAUSE NOTICE ISSUED UNDER SEC TION 271AAB READ WITH SECTION 274 OF THE ACT. THEREFORE, THE SHOW C AUSE NOTICE WAS UNLAWFUL IN VIEW OF THE DECISION OF HONBLE KARNATA KA HIGH COURT IN THE CASE OF CIT VS. MANJUNATHA COTTON & GINNING FACTORY (SUPRA). THE LD. A/R HAS ALSO RELIED ON THE DECISION OF CHENNAI BENC H OF THE TRIBUNAL 4 ITA NO. 971/JP/2017 SHRI ANUJ MATHUR, JAIPUR. DATED 5 TH APRIL, 2018 IN THE CASE OF DCIT VS. SHRI R. ELANGO VAN IN ITA NO. 1199/CHNY/2017 AND SUBMITTED THAT THE TRIBUNAL IN THE SAID CASE WHILE CONSIDERING THE VALIDITY OF SHOW CAUSE NOTICE AND INITIATION OF PROCEEDINGS UNDER SECTION 271AAB AND FOLLOWING THE DECISION OF HONBLE KARNATAKA HIGH COURT IN THE CASE OF CIT VS. MANJUNATHA COTTON & GINNING FACTORY (SUPRA) AS WELL AS THE DECISION O F HONBLE SUPREME COURT DISMISSING THE SLP FILED BY THE REVENUE IN TH E CASE OF CIT VS. SSAS EMERALD MEADOWS, 242 TAXMAN 150 (SC) HELD THA T THE NOTICE ISSUED UNDER SECTION 274 READ WITH SECTION 271AAB O F THE ACT NOT SPECIFYING THE GROUND AND CLAUSES FOR LEVY OF PENAL TY WAS NOT VALID AND CONSEQUENTLY THE PENALTY ORDER WAS SET ASIDE. THE LD. A/R HAS ALSO RELIED ON THE DECISION OF HONBLE JURISDICTIONAL HI GH COURT IN THE CASE OF SHEVETA CONSTRUCTION CO. PVT. LTD. IN DBIT APPEAL N O. 534/2008 DATED 06.12.2016. THUS THE LD. A/R HAS SUBMITTED THAT TH E ORDER OF IMPOSING PENALTY UNDER SECTION 271AAB IS UNLAWFUL AND NOT SU STAINABLE IN LAW. THE SECOND LEG OF CONTENTION OF LD. A/R IS THAT WIT HOUT GIVING THE FINDING THAT THE INCOME IN QUESTION IS AN UNDISCLOS ED INCOME AS PER SEC. 271AAB AND PARTICULARLY THE EXPLANATION UNDER SECTION 271AAB DEFINING THE TERM UNDISCLOSED INCOME THE ORDER PA SSED BY THE AO IS A NON-SPEAKING ILLEGAL ORDER. HE HAS FURTHER SUBMITT ED THAT NO UNDISCLOSED INCOME WAS FOUND DURING THE COURSE OF S EARCH UNDER SECTION 132 THOUGH A POCKET DIARY WAS FOUND AND SEI ZED DURING THE SEARCH WHICH CONTAINS THE ADVANCES GIVEN BY THE ASS ESSEE FOR PURCHASE OF LAND. HOWEVER, THE SAID ENTRY IN THE POCKET DIARY GIVING ADVANCES FOR PURCHASE OF LAND ITSELF IS NOT AN UNDI SCLOSED INCOME. THE REVENUE AUTHORITIES HAVE EXERTED UNDUE PRESSURE AND OBTAINED THE SURRENDER OF INCOME FROM THE ASSESSEE. HE HAS REFE RRED TO THE BOARDS CIRCULAR DATED 10 TH MARCH, 2003 AND SUBMITTED THAT THE BOARD HAS EXPRESSED ITS CONCERN ABOUT THE PRACTICE OF CONFESS ION OF ADDITIONAL INCOME DURING THE COURSE OF SEARCH AND SEIZURE PROC EEDINGS AND, THEREFORE, CLARIFIED THAT THE CONFESSION DURING THE COURSE OF SEARCH AND 5 ITA NO. 971/JP/2017 SHRI ANUJ MATHUR, JAIPUR. SURVEY OPERATION DO NOT SERVE ANY USEFUL PURPOSE. THERE SHOULD BE FOCUS AND CONCENTRATION ON COLLECTION OF EVIDENCE O F INCOME WHICH LEADS TO INFORMATION ON WHAT HAS NOT BEEN DISCLOSED OR IS NOT LIKELY TO BE DISCLOSED BEFORE THE INCOME TAX DEPARTMENT. THE BOARD HAS AGAIN ISSUED A CIRCULAR DATED 18 TH DECEMBER, 2014 AND ADVISED THE TAXING AUTHORITIES TO AVOID OBTAINING ADMISSION OF UNDISCL OSED INCOME UNDER COERCION/UNDUE INFLUENCE. THE LD. A/R HAS THUS CON TENDED THAT EXCEPT THE STATEMENT UNDER SECTION 132(4) THERE IS NO UNDI SCLOSED INCOME IN THE CASE OF THE ASSESSEE. THE ASSESSEE WAS FORCED TO ADMIT AND SURRENDER THE INCOME IN THE STATEMENT RECORDED UNDE R SECTION 132(4). THE PROVISIONS OF SECTION 271AAB CLEARLY REQUIRES T HAT SUCH UNDISCLOSED INCOME TO BE SUBSTANTIATED AND, THEREFORE, THE ASSE SSEE IS REQUIRED TO SPECIFY THE MANNER IN WHICH SUCH INCOME HAS BEEN DE RIVED AND FURTHER SUBSTANTIATE THE SAME FURNISHING MATERIAL AVAILABLE WITH HIM. IN THE ABSENCE OF ANY RECORD OR MATERIAL TO SHOW ANY UNDIS CLOSED SOURCE OF INCOME, THE ENTIRE DISCLOSURE ON PAPERS IS TO AVOID UNDUE HARASSMENT AND UNWANTED LITIGATION. THE LD. A/R HAS THEN CONT ENDED THAT THE AO WHILE PASSING THE ORDER UNDER SECTION 271AAB HAS TO EXAMINE THE CASE IN TERMS OF THE PROVISIONS OF SAID SECTION AND, THE REFORE, THE LEVY OF PENALTY UNDER SECTION 271AAB IS NOT AUTOMATIC BUT D ISCRETIONARY. ONLY WHEN THE AO IS SATISFIED THAT THE CONDITIONS AS PRE SCRIBED UNDER SECTION 271AAB ARE SATISFIED AS CONTAINED IN VARIOU S CLAUSES OF SUB- SECTION (1), THE PENALTY CAN BE LEVIED ACCORDINGLY. IN THE ABSENCE OF SUCH FINDING OF THE AO AS TO HOW THE CASE OF THE AS SESSEE FALLS UNDER THE PURVIEW OF SECTION 271AAB, THE IMPUGNED ORDER P ASSED BY THE AO IS CONTRARY TO THE PROVISIONS OF THE ACT AND, THERE FORE, LIABLE TO BE QUASHED. IN THE INSTANT CASE NO QUERY WAS RAISED B Y THE AUTHORIZED OFFICER DURING THE COURSE OF RECORDING OF STATEMENT OF ASSESSEE U/S 132(4) ABOUT MANNER IN WHICH UNDISCLOSED INCOME HAS BEEN DERIVED AND ABOUT ITS SUBSTANTIATION. IN THE ABSENCE OF QU ERY RAISED BY AUTHORIZED OFFICER, THE AO WAS NOT JUSTIFIED IN IMP OSING PENALTY U/S 6 ITA NO. 971/JP/2017 SHRI ANUJ MATHUR, JAIPUR. 271AAB SPECIALLY WHEN OFFERED UNDISCLOSED INCOME HA D BEEN ACCEPTED AND DUE TAX HAD BEEN PAID BY ASSESSEE. THE LD. A/R SUBMITTED THAT IN SECTION 271AAB THE WORD MAY IS USED INSTEAD OF S HALL SO IT IS NOT MANDATORY BUT IT IS DISCRETIONARY. SECONDLY, THE IN TENTION OF THE LEGISLATURE IS CLEAR BY MAKING THE ORDER PASSED U/S 271AAB AS APPEALABLE ORDER BY AMENDING SUB CLAUSE (B) OF CLAU SE (HB) OF SECTION 246A W.E.F. 01.07.2012 THAT IT IS DISCRETIONARY AND NOT MANDATORY TO GIVE RELIEF TO THE ASSESSEE WHERE THE AUTHORITIES H AVE NOT USED THEIR DISCRETION TO PROVIDE RELIEF TO THE ASSESSEE. IT I S SETTLED POSITION OF LAW THAT PENALTIES ARE NOT COMPULSORY, NOT MANDATORY BU T ARE ALWAYS DISCRETIONARY CONSIDERING THE OVERALL FACTS AND CIR CUMSTANCES OF THE CASE. IN IMPOSITION OF PENALTY MENS-REA ALSO PLAYS A VITAL ROLE BEFORE IMPOSING THE PENALTY, IT IS ALWAYS COMPULSORY TO P ROVE THE MENS-REA OF THE ASSESSEE AS MALAFIDE FOR CONCEALMENT OF INCO ME OR FOR AVOIDANCE OF ANY PROVISION OF LAW IN FORCE INTENTIO NALLY. IN THE CASE OF THE ASSESSEE, THE AO HAS NOT MENTIONED ANYTHING IN THE ASSESSMENT ORDER PASSED BY HIM ON 28.12.2016 U/S 143(3)/153B(1 )(B) OF THE ACT. FROM THE ASSESSMENT ORDER IT IS CLEAR THAT THE ASSE SSEE HAS MAINTAINED A SEPARATE DIARY FOR THE INCOME SURRENDERED DURING THE COURSE OF SEARCH. THE DIARY WAS ALSO MAINTAINING AS BOOKS OF ACCOUNTS (PLACED ON PAPER BOOK PAGE NO. 1 TO 5). IN THIS DIARY ALL THE ENTRIES ARE FOR THE CURRENT FINANCIAL YEAR I.E. FROM 01.04.2014 TO DATE OF SEARCH I.E. 31.10.2014. ALL THE TRANSACTIONS ARE RECORDED. NOT HING ADVERSE WAS FOUND WHICH SUGGEST THAT THE ASSESSEES INTENTION W AS NOT TO DISCLOSE THE INCOME RECORDED IN THE SEIZED DOCUMENTS. THE S ETTLED POSITION OF LAW IS THAT THE POWER TO LEVY PENALTY INHERENTLY HA S POWER NOT TO LEVY PENALTY. THUS, THE LD. CIT (A) CONFIRMED THE PENAL TY UNDER A WRONG NOTION. THE PROVISIONS OF SECTION 271AAB ITSELF SPE AK THAT THESE ARE NOT MANDATORY. HE HAS REFERRED TO SECTION 271AAB AND S UBMITTED THAT THE TERM THE AO MAY USED IN THE SECTION DOES NOT MAK E THE LEVY OF PENALTY AS MANDATORY. THE SECTION STARTS THAT THE A SSESSING OFFICER 7 ITA NO. 971/JP/2017 SHRI ANUJ MATHUR, JAIPUR. MAY DIRECT. THUS IT IS NOT SHALL WHICH WOULD HA VE MADE THE LEVY OF PENALTY MANDATORY. THUS THE LD. CIT (A) WAS WRONG I N OBSERVING THAT LEVY OF PENALTY U/S 271AAB WAS MANDATORY. SECONDL Y THE PROVISIONS OF SECTION 271AAB(3) LAY DOWN THAT PENALTY SHALL BE LEVIED UNDER THE SECTION WITH REFERENCE TO SECTION 274. IN OTHER WO RDS THE PROVISIONS OF SECTION SHALL APPLY IN LEVYING PENALTY UNDER THIS S ECTION. SECTION 274 SPEAKS THAT NO ORDER IMPOSING PENALTY UNDER THIS CHAPTER SHALL BE MADE UNLESS THE ASSESSEE HAS BEEN HEARD OR HAS BEEN GIVEN A REASONABLE OPPORTUNITY OF BEING HEARD. THUS HEARI NG HAS TO BE GIVEN TO THE ASSESSEE BEFORE LEVY OF PENALTY. THIS ITSELF SHOWS THAT PENALTY IS LEVIABLE ONLY AFTER HEARING THE ASSESSEE AND IN CAS E ASSESSEE IS ABLE TO MAKE OUT A CASE BY SHOWING SOME REASONABLE CAUSE OR OTHERWISE THEN PENALTY SHALL NOT BE LEVIABLE. PENALTY IS NOT LEVYA BLE AUTOMATIC. THE LD. A/R PLACED RELIANCE ON THE FOLLOWING CASE LAWS :- PRINCIPAL COMMISSIONER OF INCOME TAX VS. SHRI SAN DEEP CHANDAK (ALLAHABAD HIGH COURT) ITA NO. 122 OF 2017 DATED 27.11.2017. DCIT VS. MADAN LAL BESWAL (ITAT KOLKATA) IN ITA NO. 1475/KOL2015 DATED 14.3 .2018. ACIT VS. M/S. MARVEL ASSOCIATES (ITAT VIZAG) IN ITA NO. 147/VIZAG/2017 DTED 16.03 .2018. DCIT VS. SHRI R. ELANGOVAN (ITAT CHENNAI) IN ITA NO. 1199/CHNY/2017 DATED 05 .04.2018. ACIT VS. MOTHUKURI SOMABRAHMAM (ITAT VIZAG) IN ITA NO. 126/VIZAG/2017 DATED 16.0 3.2018. THE LD. A/R SUBMITTED THAT IN VIEW OF THE AFORESAI D DISCUSSION AND VARIOUS CASE LAWS CITED ABOVE THE PENALTY IN THIS C ASE WOULD NOT BE LEVIED BECAUSE OF THE FOLLOWING FACTS :- (I) THERE IS NO VALID GROUND GIVEN IN THE ASSESSMENT OR DER FOR INITIATING PENALTY PROCEEDINGS. 8 ITA NO. 971/JP/2017 SHRI ANUJ MATHUR, JAIPUR. (II) THE INITIATION OF PENALTY IS STATUTORILY DEFECTIVE. (III) THE ASSESSEE FILED THE RETURN IN GOOD FAITH AND SUR RENDERED INCOME TO PURCHASE PEACE OF MIND AND AVOID LITIGATI ON. (IV) ASSESSMENT HAS BEEN COMPLETED ACCEPTING THE INCOME DECLARED BY THE ASSESSEE. (V) IF AT ALL THERE IS ANY DEFAULT IT IS TECHNICAL. THE RE IS VIRTUALLY NO CONCEALMENT OF INCOME. NO PARTICULARS OF INCOME HAV E BEEN FILED INACCURATELY. 3.1. ON THE OTHER HAND, THE LD. D/R HAS SUBMITTED T HAT THE ASSESSEE WAS VERY WELL AWARE ABOUT THE DEFAULT AND THE NATUR E OF INCOME HE HAS DISCLOSED AND SURRENDERED DURING THE STATEMENT RECO RDED UNDER SECTION 132(4) OF THE IT ACT. THE SURRENDER IN QUESTION WAS MADE BECAUSE THE ASSESSEE WAS UNABLE TO EXPLAIN THE SOURCE OF THE IN VESTMENT IN QUESTION. IT IS CLEAR CASE OF UNDISCLOSED INCOME DETECTED DURING TH E COURSE OF SEARCH AND SEIZURE ACTION AND, THEREFORE, THE SURRENDER MADE B Y THE ASSESSEE ITSELF IS SELF-EXPLANATORY TO THE NATURE OF INCOME SURRENDERE D BY THE ASSESSEE. THE LD. D/R HAS CONTENDED THAT THE ASSESSEE HAS PARTICI PATED IN THE PENALTY PROCEEDINGS AND HAS NOT RAISED ANY OBJECTION OR HAS DEMANDED BEFORE THE AO ABOUT HIS UNAWARENESS OF THE NATURE OF DEFAULT ATTR ACTING THE LEVY OF PENALTY UNDER SECTION 271AAB. IT IS NOT THE CASE OF THE ASS ESSEE THAT THE DISCLOSURE WAS TAKEN UNDER COERCION AND FURTHER THE ASSESSEE H AS OFFERED THE SAID AMOUNT TO TAX IN THE RETURN OF INCOME WHICH RULES O UT THE SCOPE OF ANY PRESSURE OR COERCION BY THE SEARCH TEAM FOR TAKING DISCLOSURE FROM THE ASSESSEE. THUS THE OBJECTION RAISED BY THE ASSESSE E THAT THE AO HAS NOT SPECIFIED THE CLAUSE UNDER SECTION 271AAB(1) OF THE ACT HAS NO MERIT WHEN THE ASSESSEE HIMSELF HAS EXPLAINED THE NATURE OF IN COME DISCLOSED AND SURRENDERED AND ALSO PAID THE TAX ON THE SAME. THE LD. D/R HAS SUBMITTED THAT AS PER THE EXPLANATORY NOTE OF FINANCE BILL, 2 012, THE PROVISIONS OF SECTION 271AAB ARE MANDATORY IN NATURE AND AO HAS N O DISCRETION BUT THE ASSESSEE SHALL PAY THE PENALTY IN ADDITION TO THE T AX ON THE UNDISCLOSED 9 ITA NO. 971/JP/2017 SHRI ANUJ MATHUR, JAIPUR. INCOME SURRENDERED UNDER SECTION 132(4) OF THE ACT. SHE HAS RELIED UPON THE ORDERS OF THE AUTHORITIES BELOW. 3.2. THE LD. D/R HAS ALSO RELIED UPON THE DECISION OF HONBLE ALLAHABAD HIGH COURT IN CASE OF PRINCIPAL CIT VS. S ANDEEP CHANDAK AND OTHERS DATED 27 TH NOVEMBER, 2017 IN I.T. APPEAL NO. 122, 128 AND 129 OF 2017 AND SUBMITTED THAT EVEN OTHERWISE IF THE SHOW CAUSE NOTICE DOES NOT MENTION THE SECTION CORRECTLY IT WILL NOT BE INVALI D AS THE AO WILL GET THE BENEFIT OF SECTION 292BB OF THE ACT. THE LD. D/R H AS ALSO RELIED UPON THE DECISION OF KOLKATA BENCH OF THE TRIBUNAL IN THE CA SE OF DCIT VS. AMIT AGARWAL, 88 TAXMANN.COM 288. 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AS WELL AS RELEVANT MATERIAL ON RECORD. A SEARCH WAS CONDUCTED UNDER SECTION 13 2 OF THE IT ACT ON 30 TH OCTOBER, 2014 AT THE PREMISES OF THE ASSESSEE. THE ASSESSEE IN HIS STATEMENT RECORDED UNDER SECTION 132(4) HAS DISCLOS ED AN INCOME OF RS. 10,02,00,000/- IN PURSUANT TO THE ENTRIES OF ADVANC ES GIVEN FOR PURCHASE OF LAND RECORDED IN THE POCKET DIARY WHICH WAS FOUND A ND SEIZED DURING THE COURSE OF SEARCH AND SEIZURE ACTION. THIS IS YEAR O F SEARCH AND THE FINANCIAL YEAR WOULD END ON 31 ST MARCH, 2015. HOWEVER, THE ASSESSEE DISCLOSED THIS AMOUNT OF RS. 10,02,00,000/- BASED ON THE ENTRIES I N THE DIARY REGARDING INVESTMENT IN REAL ESTATE. THE DUE DATE OF FILING O F RETURN OF INCOME UNDER SECTION 139(1) WAS 30 TH SEPTEMBER, 2015. IT IS UNDISPUTED FACT THAT THE ASSESSEE IS AN INDIVIDUAL AND WAS NOT MAINTAINING R EGULAR BOOKS OF ACCOUNT. THEREFORE, THE TRANSACTIONS RECORDED IN THE POCKET DIARY FOUND DURING THE COURSE OF SEARCH ITSELF WOULD NOT LEAD TO THE PRESU MPTION THAT THE ASSESSEE WOULD NOT HAVE OFFERED THIS INCOME TO TAX IF THE SE ARCH IS NOT CONDUCTED ON 30 TH OCTOBER, 2014. FURTHER, THE ENTRIES IN THE DIARY ITSELF DO NO NOT REPRESENT THE INCOME OF THE ASSESSEE DURING THE YEAR UNDER CO NSIDERATION THOUGH THE ASSESSEE WAS REQUIRED TO EXPLAIN THE SOURCE OF INVE STMENT IN QUESTION AND THAT SOURCE WOULD BE THE INCOME OF THE ASSESSEE. I T IS MOST LIKELY THAT THE INVESTMENT IN QUESTION WAS MADE FROM THE UNACCOUNTE D INCOME OF PRECEDING 10 ITA NO. 971/JP/2017 SHRI ANUJ MATHUR, JAIPUR. YEARS. HENCE THE INVESTMENT IN THE REAL ESTATE ITSE LF WOULD NOT REVEAL THE NATURE OF INCOME AND THE SOURCE OF INCOME OF THE YE AR UNDER CONSIDERATION. IT IS A PRE-CONDITION FOR INVOKING THE PROVISIONS O F SECTION 271AAB THAT THE ASSESSEE ADMITTED THE UNDISCLOSED INCOME IN THE STA TEMENT UNDER SECTION 132(4). THE DEFINITION OF UNDISCLOSED INCOME IS PROVIDED IN SECTION 271AAB ITSELF AND, THEREFORE, THE AO IN THE PROCEEDINGS UN DER SECTION 271AAB HAS TO EXAMINE ALL THE FACTS OF THE CASE AND THEN ARRIVE T O THE CONCLUSION THAT THE INCOME DISCLOSED BY THE ASSESSEE FALLS IN THE DEFIN ITION OF UNDISCLOSED INCOME AS STIPULATED IN THE EXPLANATION TO SAID SECTION. THE FIRST QUESTION ARISES IS WHETHER THE LEVY OF PENALTY UNDER SECTION 271AAB IS MANDATORY AND CONSEQUENTIAL TO THE DISCLOSURE OF INCOME BY THE AS SESSEE UNDER SECTION 132(4) OR THE AO HAS TO TAKE A DECISION WHETHER THE GIVEN CASE HAS SATISFIED THE REQUIREMENTS FOR LEVY OF PENALTY UNDER SECTION 271AAB OF THE ACT. IN ORDER TO CONSIDER THIS ISSUE, THE PROVISIONS OF SEC TION 271AAB ARE TO BE ANALYZED. FOR READY REFERENCE, WE QUOTE SECTION 2 71AAB AS UNDER :- 271AAB. (1) THE ASSESSING OFFICER MAY, NOTWITHSTANDING ANY THING CONTAINED IN ANY OTHER PROVISIONS OF THIS ACT, DIRECT THAT, IN A CASE WHERE SEARCH HAS BEEN INITIATED UNDER SECTION 132 ON OR AFTER THE 1ST DAY OF JULY, 2012 49 [BUT BEFORE THE DATE ON WHICH THE TAXATION LAWS (SECOND AMENDMENT) BILL, 2016 RECEIVES THE ASSENT OF THE PRESIDENT 50 ], THE ASSESSEE SHALL PAY BY WAY OF PENALTY, IN ADD ITION TO TAX, IF ANY, PAYABLE BY HIM, (A) A SUM COMPUTED AT THE RATE OF TEN PER CENT OF THE UNDISCLOSED INCOME OF THE SPECIFIED PREVIOUS YEAR, IF SUCH ASSESSEE (I) IN THE COURSE OF THE SEARCH, IN A STATEMENT UNDER S UB-SECTION (4) OF SECTION 132 , ADMITS THE UNDISCLOSED INCOME AND SPECIFIES THE MAN NER IN WHICH SUCH INCOME HAS BEEN DERIVED; (II) SUBSTANTIATES THE MANNER IN WHICH THE UNDISCLOSED I NCOME WAS DERIVED; AND (III) ON OR BEFORE THE SPECIFIED DATE (A) PAYS THE TAX, TOGETHER WITH INTEREST, IF ANY, IN RESPECT OF THE UNDISCLOSED INCOME; AND (B) FURNISHES THE RETURN OF INCOME FOR THE SPECIFIED PR EVIOUS YEAR DECLARING SUCH UNDISCLOSED INCOME THEREIN; (B) A SUM COMPUTED AT THE RATE OF TWENTY PER CENT OF TH E UNDISCLOSED INCOME OF THE SPECIFIED PREVIOUS YEAR, IF SUCH ASSESSEE (I) IN THE COURSE OF THE SEARCH, IN A STATEMENT UNDER S UB-SECTION (4) OF SECTION 132 , DOES NOT ADMIT THE UNDISCLOSED INCOME; AND 11 ITA NO. 971/JP/2017 SHRI ANUJ MATHUR, JAIPUR. (II) ON OR BEFORE THE SPECIFIED DATE (A) DECLARES SUCH INCOME IN THE RETURN OF INCOME FURNIS HED FOR THE SPECIFIED PREVIOUS YEAR; AND (B) PAYS THE TAX, TOGETHER WITH INTEREST, IF ANY, IN RE SPECT OF THE UNDISCLOSED INCOME; (C) A SUM 51 [COMPUTED AT THE RATE OF SIXTY PER CENT] OF THE UND ISCLOSED INCOME OF THE SPECIFIED PREVIOUS YEAR, IF IT IS NOT COVERED BY TH E PROVISIONS OF CLAUSES (A) AND (B). 52 [(1A) THE ASSESSING OFFICER MAY, NOTWITHSTANDING AN YTHING CONTAINED IN ANY OTHER PROVISIONS OF THIS ACT, DIRECT THAT, IN A CASE WHER E SEARCH HAS BEEN INITIATED UNDER SECTION 132 ON OR AFTER THE DATE ON WHICH THE TAXATION LAWS (S ECOND AMENDMENT) BILL, 2016 RECEIVES THE ASSENT OF THE PRESIDENT, THE ASSESSEE SHALL PAY BY WAY OF PENALTY, IN ADDITION TO TAX, IF ANY, PAYABLE BY HIM, (A) A SUM COMPUTED AT THE RATE OF THIRT Y PER CENT OF THE UNDISCLOSED INCOME OF THE SPECIFIED PREVIOUS YEAR, 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 AND SPECIFIES THE M ANNER IN WHICH SUCH INCOME HAS BEEN DERIVED; (II) SUBSTANTIATES THE MANNER IN WHICH THE UNDISCLOSED I NCOME WAS DERIVED; AND (III) ON OR BEFORE THE SPECIFIED DATE (A) PAYS THE TAX, TOGETHER WITH INTEREST, IF ANY, IN RE SPECT OF THE UNDISCLOSED INCOME; AND (B) FURNISHES THE RETURN OF INCOME FOR THE SPECIFIED PR EVIOUS YEAR DECLARING SUCH UNDISCLOSED INCOME THEREIN; (B) A SUM COMPUTED AT THE RATE OF SIXTY PER CENT OF THE UNDISCLOSED INCOME OF THE SPECIFIED PREVIOUS YEAR, IF IT IS NOT COVERED UNDER THE PROVI SIONS OF CLAUSE ( A).] (2) NO PENALTY UNDER THE PROVISIONS OF 53 [ SECTION 270A OR] CLAUSE (C) OF SUB-SECTION (1) OF SECTION 271 SHALL BE IMPOSED UPON THE ASSESSEE IN RESPECT OF T HE UNDISCLOSED INCOME REFERRED TO IN SUB-SECTION (1) 52 [OR SUB-SECTION (1A)]. (3) THE PROVISIONS OF SECTIONS 274 AND 275 SHALL, AS FAR AS MAY BE, APPLY IN RELATION TO THE PENALTY REFERRED TO IN THIS SECTION. EXPLANATION.FOR THE PURPOSES OF THIS SECTION, (A) 'SPECIFIED DATE' MEANS THE DUE DATE OF FURNISHING O F RETURN OF INCOME UNDER SUB- SECTION (1) OF SECTION 139 OR THE DATE ON WHICH THE PERIOD SPECIFIED IN THE NO TICE ISSUED UNDER SECTION 153A FOR FURNISHING OF RETURN OF INCOME EXPIRES, AS THE CASE MAY BE; (B) 'SPECIFIED PREVIOUS YEAR' MEANS THE PREVIOUS YEAR (I) WHICH HAS ENDED BEFORE THE DATE OF SEARCH, BUT THE DATE OF FURNISHING THE RETURN OF INCOME UNDER SUB-SECTION (1) OF SECTION 139 FOR SUCH YEAR HAS NOT EXPIRED BEFORE THE DATE OF SEARCH AND THE ASSESSEE HAS NOT FURNISHED THE RETURN OF INCOME FOR THE PREVIOUS YEAR BEFORE THE D ATE OF SEARCH; OR (II) IN WHICH SEARCH WAS CONDUCTED; (C) 'UNDISCLOSED INCOME' MEANS 12 ITA NO. 971/JP/2017 SHRI ANUJ MATHUR, JAIPUR. (I) ANY INCOME OF THE SPECIFIED PREVIOUS YEAR REPRESENT ED, EITHER WHOLLY OR PARTLY, BY ANY MONEY, BULLION, JEWELLERY OR OTHER V ALUABLE ARTICLE OR THING OR ANY ENTRY IN THE BOOKS OF ACCOUNT OR OTHER DOCUMENT S OR TRANSACTIONS FOUND IN THE COURSE OF A SEARCH UNDER SECTION 132 , WHICH HAS (A) NOT BEEN RECORDED ON OR BEFORE THE DATE OF SEARCH IN THE BOO KS OF ACCOUNT OR OTHER DOCUMENTS MAINTAINED IN THE NORMAL COURSE RELATING TO SUCH PREVIOUS YEAR; OR (B) OTHERWISE NOT BEEN DISCLOSED TO THE 54 [PRINCIPAL CHIEF COMMISSIONER OR] CHIEF COMMISSIONER OR 54 [PRINCIPAL COMMISSIONER OR] COMMISSIONER BEFORE THE DATE OF SE ARCH; OR (II) ANY INCOME OF THE SPECIFIED PREVIOUS YEAR REPRESENT ED, EITHER WHOLLY OR PARTLY, BY ANY ENTRY IN RESPE CT OF AN EXPENSE RECORDED IN THE BOOKS OF ACCOUNT OR OTHER DOCUMENTS MAINTAINED IN THE NORMAL COURSE RELATING TO THE SPECIFIED PREVIOUS YEAR WHICH IS FOUND TO BE FALSE AND WOULD NOT HAVE BEEN FOUND TO BE SO HAD THE SEARCH NOT BEEN CONDUCTED.] THE SECTION BEGINS WITH THE STIPULATION THAT THE AO MAY DIRECT THE ASSESSEE SHALL PAY BY WAY OF PENALTY IF THE CONDITIONS AS PR ESCRIBED UNDER CLAUSES (A) TO (C) ARE SATISFIED. AS PER SUB-SECTION (3) OF SE CTION 271AAB THE PROVISIONS OF SECTION 274 AND 275 AS FAR AS MAY BE APPLIED IN RELATION TO THE PENALTY REFERRED IN THIS SECTION WHICH MEANS THAT BEFORE IM POSING THE PENALTY UNDER SEC. 271AAB, THE AO HAS TO ISSUE A SHOW CAUSE NOTIC E AND GIVE A PROPER OPPORTUNITY OF HEARING TO THE ASSESSEE. THUS THE LE VY OF PENALTY U/S. 271AAB IS NOT AUTOMATIC BUT THE A.O. HAS TO TAKE A DECISIO N TO IMPOSE THE PENALTY AFTER GIVING A PROPER OPPORTUNITY OF HEARING TO THE ASSESSEE. IT IS STATUTORY REQUIREMENT THAT THE EXPLANATION OF THE ASSESSEE FO R NOT FULFILLING THE CONDITIONS AS PRESCRIBED U/S 271AAB OF THE ACT IS R EQUIRED TO BE CONSIDERED BY THE AO AND PARTICULARLY WHETHER THE EXPLANATION FURNISHED BY THE ASSESSEE IS BONAFIDE AND NON-COMPLIANCE OF THE SAME IS DUE T O THE REASON BEYOND THE CONTROL OF THE ASSESSEE. THEREFORE, THE PENALTY U/S 271AAB IS NOT A CONSEQUENTIAL ACT BUT THE AO HAS TO FIRST INITIATE PROCEEDINGS BY ISSUING A SHOW CAUSE NOTICE AND AFTER CONSIDERING THE EXPLANA TION AND REPLY OF THE ASSESSEE HAS TO TAKE A DECISION. THIS REQUIREMENT OF GIVING AN OPPORTUNITY OF HEARING ITSELF MAKES IT CLEAR THAT THE PENALTY U/S 271AAB IS NOT MANDATORY BUT THE AO HAS TO TAKE A DECISION BASED ON THE FACTS AN D CIRCUMSTANCES OF THE CASE OTHERWISE THERE IS NO REQUIREMENT OF ISSUING A NY NOTICE FOR INITIATION OF 13 ITA NO. 971/JP/2017 SHRI ANUJ MATHUR, JAIPUR. PROCEEDINGS BUT THE LEVY OF PENALTY WOULD BE CONSEQ UENTIAL AND ONLY COMPUTATION OF THE QUANTUM WAS TO BE DONE BY THE AO AS IN THE CASE OF LEVY OF INTEREST AND FEE U/S 234A TO E. EVEN THE QUANTU M OF PENALTY LEVIABLE U/S 271AAB IS ALSO SUBJECT TO THE CONDITION PRESCRIBED UNDER CLAUSES (A) TO (C) OF SUB-SECTION (1) AND THE AO HAS TO AGAIN GIVE A FIND ING FOR LEVY OF PENALTY @ 10% OR 20% OR 30% OF THE UNDISCLOSED INCOME. THUS THE AO IS BOUND TO TAKE A DECISION AS TO WHAT DEFAULT IS COMMITTED BY THE ASSESSEE AND WHICH PARTICULAR CLAUSE OF SECTION 271AAB(1) IS ATTRACTED ON SUCH DEFAULT. FURTHER, MERE DISCLOSURE OF INCOME UNDER SECTION 132(4) WOUL D NOT IPSO FACTO PAR TAKE THE CHARACTER OF UNDISCLOSED INCOME BUT THE FACTS O F EACH CASE ARE REQUIRED TO BE ANALYZED IN OBJECTIVE MANNER SO AS TO ATTRACT TH E PROVISIONS OF SECTION 271AAB OF THE ACT. SINCE IT IS NOT AUTOMATIC BUT T HE AO HAS TO GIVE A FINDING THAT THE CASE OF THE ASSESSEE FALLS IN THE AMBIT OF UNDISCLOSED INCOME AS DEFINED IN EXPLANATION TO THE SAID SECTION. THEREF ORE, THE PROVISIONS OF SECTION 271AAB STIPULATE THAT THE AO MAY COME TO TH E CONCLUSION THAT THE ASSESSEE SHALL PAY THE PENALTY. THE ONLY MANDATORY ASPECT IN THE PROVISION IS THE QUANTUM OF PENALTY AS SPECIFIED UNDER CLAUSES ( A) TO (C) OF SEC. 271AAB(1) OF THE ACT AS 10% TO 30% OR MORE AS AGAIN ST THE DISCRETION GIVEN TO THE AO AS PER THE PROVISIONS OF SECTION 271(1)(C ) OF THE ACT WHERE THE AO HAS THE DISCRETION TO LEVY THE PENALTY FROM 100% TO 300% OF THE TAX SOUGHT TO BE EVADED. THUS THE AO IS DUTY BOUND TO COME TO THE CONCLUSION THAT THE CASE OF THE ASSESSEE IS FIT FOR LEVY OF PENALTY UND ER SECTION 271AAB AND THEN ONLY THE QUANTUM OF PENALTY BEING 10% OR 20% OR 30% HAS TO BE DETERMINED SUBJECT TO THE EXPLANATION OF THE ASSESSEE FOR THE DEFAULTS. 5. BEFORE WE PROCEED FURTHER, THE DECISIONS RELIED UPON BY THE LD. D/R ARE TO BE CONSIDERED. IN THE CASE OF PRINCIPAL CIT VS. SANDEEP CHANDAK & OTHERS (SUPRA) THE ISSUE BEFORE THE HONBLE HIGH COURT WAS THE DEFECT IN THE NOTICE ISSUED UNDER SECTION 271AAB ON ACCOUNT OF MENTIONIN G WRONG PROVISION OF THE ACT BEING 271(1)(C) OF THE ACT. THE HONBLE HIGH C OURT AFTER CONSIDERING THE FACT THAT THE SHOW CAUSE NOTICE ISSUED BY THE AO TH OUGH MENTIONS SECTION 14 ITA NO. 971/JP/2017 SHRI ANUJ MATHUR, JAIPUR. 271(1) IN THE CAPTION OF THE SAID NOTICE, HOWEVER, THE BODY OF THE SHOW CAUSE NOTICE CLEARLY MENTIONS SECTION 271AAB, WHICH WAS F ULLY COMPREHENDED BY THE ASSESSEE AS REVEALS IN THE REPLY FILED BY THE ASSES SEE AGAINST THE SAID SHOW CAUSE NOTICE. HENCE THE HONBLE HIGH COURT HAS HEL D AS UNDER :- THE LD. A.RS HAVE ALSO CHALLENGED THAT THE CAPTIO N OF THE NOTICE MENTIONED ONLY SECTION 271 AND NOT 271AAB. I N THIS RESPECT, THE COPY OF NOTICE HAS BEEN PRODUCED BY THE LD. A.R . BEFORE ME. IT IS SEEN THAT THE LD. A.R IS CORRECT IN OBSERVING THAT THE SECTION OF PENALTY HAS NOT BEEN CORRECTLY MENTIONED BY THE AO IN THE C APTION. HOWEVER, THE AO WILL GET THE BENEFIT OF SECTION 292BB OF THE INCOME TAX ACT, 1961 BECAUSE FIRSTLY, THE ASSESSEE HAS RAISED NO OB JECTION BEFORE THE AO IN THIS REGARD. SECONDLY, LAST LINE OF THE NOTIC E CLEARLY MENTIONS SECTION 271AAB. THIRDLY, THE ASSESSEE HAS GIVEN REP LY TO SAID NOTICE WHICH SHOWS THAT THE ASSESSEE FULLY COMPREHENDED TH E IMPLICATION OF THE NOTICE THAT IT IS FOR SECTION 271AAB. THE ASSESSEE HAS ALSO CHALLENGED THAT THE PRINCIPLE S OF NATURAL JUSTICE HAS NOT FOLLOWED BY THE AO. THE DETAILED SUBMISSION S OF A.R IN THIS REGARD HAS ALREADY BEEN REPRODUCED ABOVE. THE A.R DID NOT PRODUCE ANY EVIDENCE TO SHOW THAT HE WAS NOT GIVEN PROPER O PPORTUNITY OF HEARING. IT IS CLEAR FROM THE PENALTY ORDER THAT TH E AO HAS GIVEN PENALTY NOTICE AND WHICH WAS ALSO REPLIED BY THE AS SESSEE. THEREFORE, IN MY OPINION, PRINCIPLE OF NATURAL JUSTICE HAS NOT BEEN VIOLATED. THUS IN VIEW OF ABOVE DISCUSSION PENALTY IMPOSED BY AO U /S 271AAB OF THE ACT IS CONFIRMED. THUS IT WAS FOUND BY THE HONBLE HIGH COURT THAT TH E MISTAKE IN MENTIONING THE SECTION IN THE SHOW CAUSE NOTICE IS COVERED UND ER SECTION 292BB AND THE AO WILL GET THE BENEFIT OF THE SAME. THE SAID DECIS ION WILL NOT HELP THE CASE OF THE REVENUE SO FAR AS THE ISSUE INVOLVES THE MERITS OF LEVY OF PENALTY UNDER SECTION 271AAB. AS REGARDS THE DECISION OF KOLKATA BENCHES OF THE TRIBUNAL 15 ITA NO. 971/JP/2017 SHRI ANUJ MATHUR, JAIPUR. IN THE CASE OF DCIT VS. AMIT AGARWAL (SUPRA), WE FI ND THAT THE SAID DECISION WAS SUBSEQUENTLY RECALLED BY THE TRIBUNAL AND A FRE SH ORDER DATED 14 TH MARCH, 2018 WAS PASSED BY THE TRIBUNAL IN FAVOUR OF THE AS SESSEE. THEREFORE, THE DECISION RELIED UPON BY THE LD. D/R IS NO MORE IN E XISTENCE. 6. THE QUESTION WHETHER LEVY OF PENALTY UNDER SECTI ON 271AAB BY THE AO IS MANDATORY OR DISCRETIONARY HAS BEEN CONSIDERED B Y THE VISAKHAPATNAM BENCH OF THIS TRIBUNAL IN CASE OF ACIT VS. M/S. MAR VEL ASSOCIATES (SUPRA) IN PARA 5 TO 7 AS UNDER :- 5. WE HAVE HEARD BOTH THE PARTIES, PERUSED THE MATE RIALS AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. D URING THE APPEAL HEARING, THE LD. A.R. VEHEMENTLY ARGUED THAT THE A.O. HAS LEVIED THE PENALTY UNDER THE IMPRESSION THAT THE LEVY OF PENALTY IN THE CASE OF ADMISSION O F INCOME U/S 132(4) IS MANDATORY. THE LD. A.R. FURTHER STATED THAT PENALTY U/S 271AAB OF THE ACT IS NOT MANDATORY BUT DISCRETIONARY. THE PROVISIONS OF SECTION 271AAB OF THE ACT IS PARIMATERIA WITH THAT OF SECTION 158BFA OF THE ACT RELATING TO BLOCK ASSESSM ENT AND ACCORDINGLY ARGUED THAT THE LEVY OF PENALTY UNDER SECTION 271AAB IS NOT MAN DATORY BUT DISCRETIONARY. WHEN THERE IS REASONABLE CAUSE, THE PENALTY IS NOT EXIGI BLE. THE LD. A.R. TAKEN US TO THE SECTION 271AAB OF THE ACT AND ALSO SECTION 158BFA(2 ) OF THE ACT AND ARGUED THAT THE WORDS USED IN SECTION 271AAB OF THE ACT AND THE WOR DS USED IN SECTION 158BFA(2) OF THE ACT ARE IDENTICAL. HENCE, ARGUED THAT THE PENAL TY SECTION 271AAB OF THE ACT PENALTY IS NOT AUTOMATIC AND IT IS ON THE MERITS OF EACH CASE. FOR READY REFERENCE, WE REPRODUCE HEREUNDER SECTION 158BFA (2) OF THE ACT A ND SECTION 271AAB OF THE ACT WHICH READS AS UNDER; 271AAB [PENALTY WHERE SEARCH HAS BEEN INITIATED]: (1) THE ASSESSING OFFICER MAY, NOTWITHSTANDING ANYTHING CONTAINED IN ANY OTHER PROVISIONS OF THIS ACT, DIRECT THAT, IN A CASE WHERE SEARCH HA S BEEN INITIATED UNDER SECTION 132 ON OR AFTER THE 1 ST DAY OF JULY, 2012, THE ASSESSEE SHAL L PAY BY WAY OF PENALTY, IN ADDITION TO TAX, IF ANY, PAYABLE BY HIM (A) A SUM COMPUTED AT THE RATE OF TEN PER CENT OF T HE UNDISCLOSED INCOME OF THE SPECIFIED PREVIOUS YEAR, IF SUCH ASSESSEE 16 ITA NO. 971/JP/2017 SHRI ANUJ MATHUR, JAIPUR. (I) IN THE COURSE OF SEARCH, IN A STATEMENT UNDER SUB-S ECTION (4) OF SECTION 132, ADMITS THE UNDISCLOSED INCOME AND SPEC IFIES THE MANNER IN WHICH SUCH INCOME HAS BEEN DERIVED. (II) SUBSTANTIATES THE MANNER IN WHICH THE UNDISCLOSED I NCOME WAS DERIVED; AND (III) ON OR BEFORE THE SPECIFIED DATE (A) PAYS THE TAX, TOGETHER WITH INTEREST, IF ANY, IN RE SPECT OF THE UNDISCLOSED INCOME; AND (B) FURNISHES THE RETURN OF INCOME FOR THE SPECIFIED PR EVIOUS YEAR DECLARING SUCH UNDISCLOSED INCOME THEREIN; (B) A SUM COMPUTED AT THE RATE OF TWENTY PER CENT O F THE UNDISCLOSED INCOME OF THE SPECIFIED PREVIOUS YEAR, IF SUCH ASSESSEE (I) IN THE COURSE OF THE SEARCH, IN A STATEMENT UNDER S UB-SECTION (4_) OF SECTION 132, DOES NOT ADMIT THE UNDISCLOSED INCOME; AND (II) ON OR BEFORE THE SPECIFIED DATE (A) DECLARES SUCH INCOME IN THE RETURN OF INCOME FURNIS HED FOR THE SPECIFIED PREVIOUS YEAR; AND (B) PAYS THE TAX, TOGETHER WITH INTEREST, IF ANY, I N RESPECT OF THE UNDISCLOSED INCOME; (C) A SUM WHICH SHALL NOT BE LESS THAN THIRTY PER C ENT BUT WHICH SHALL NOT EXCEED NINETY PER CENT OF THE UNDISCLOSED INCOME OF THE SPECIFIED PRE VIOUS YEAR, IF IT IS NOT COVERED BY THE PROVISIONS OF CLAUSES (A) AND (B). (2) NO PENALTY UNDER THE PROVISIONS OF CLAUSE (C) O F SUB-SECTION (1) OF SECTION 271 SHALL BE IMPOSED UPON THE ASSESSEE IN RESPECT OF THE UNDISCL OSED INCOME REFERRED TO IN SUB-SECTION (1). SECTION 158BFA(2): (2) THE ASSESSING OFFICER OR THE COMMISSIONER (APP EALS) IN THE COURSE OF ANY PROCEEDINGS UNDER THIS CHAPTER, MAY DIRECT THAT A P ERSON SHALL PAY BY WAY OF PENALTY A SUM WHICH SHALL NOT BE LESS THAN THE AMOUNT OF TA X LEVIABLE BUT WHICH SHALL NOT EXCEED THREE TIMES THE AMOUNT OF TAX SO LEVIABLE IN RESPECT OF THE UNDISCLOSED INCOME DETERMINED BY THE ASSESSING OFFICER UNDER CLAUSE (C ) OF SECTION 158BC: PROVIDED THAT NO ORDER IMPOSING PENALTY SHALL BE MADE IN RE SPECT OF A PERSON IF (I) SUCH PERSON HAS FURNISHED A RETURN UNDER CLAUSE (A) OF SECTION 158BC; 17 ITA NO. 971/JP/2017 SHRI ANUJ MATHUR, JAIPUR. (II) THE TAX PAYABLE ON THE BASIS OF SUCH RETURN HAS BEE N PAID OR, IF THE ASSETS SEIZED CONSIST OF MONEY, THE ASSESSEE OFFERS THE MO NEY SO SEIZED TO BE ADJUSTED AGAINST THE TAX PAYABLE. (III) EVIDENCE OF TAX PAID IS FURNISHED ALONG WITH THE RE TURN; AND (IV) AN APPEAL IS NOT FILED AGAINST THE ASSESSMENT OF TH AT PART OF INCOME WHICH IS SHOWN IN THE RETURN: PROVIDED FURTHER THAT THE PROVISIONS OF THE PRECEDING PROVI SO SHALL NOT APPLY WHERE THE UNDISCLOSED INCOME DETERMINED BY THE ASSESSING OFFICER IS IN EXCESS OF THE INCOME SHOWN IN THE RETURN AND IN SUCH CASES THE PE NALTY SHALL BE IMPOSED ON THAT PORTION OF UNDISCLOSED INCOME DETERMINED WHICH IS I N EXCESS OF THE AMOUNT OF UNDISCLOSED INCOME SHOWN IN THE RETURN. 6. CAREFUL READING OF SECTION 271AAB OF THE ACT, TH E WORDS USED ARE AO MAY DIRECT AND THE ASSESSEE SHALL PAY BY WAY OF PENALTY. SIM ILAR WORDS ARE USED SECTION 158BFA(2) OF THE ACT. THE WORD MAY DIRECT INDICATES THE DISCRETION TO THE AO. FURTHER, SUB SECTION (3) OF SECTION 271AAB OF THE A CT, FORTIFIES THIS VIEW. SUB SECTION (3) OF SECTION 271AAB: THE PROVISIONS OF SECTION 274 AND 275 SHALL, AS FAR AS MAY BE, APPLY IN RELATION TO THE PENALTY REFERRED TO IN THIS SECTION. 7. THE LEGISLATURE HAS INCLUDED THE PROVISIONS OF S ECTION 274 AND SECTION 275 OF THE ACT IN 271AAB OF THE ACT WITH CLEAR INTENTION TO CO NSIDER THE IMPOSITION OF PENALTY JUDICIALLY. SECTION 274 DEALS WITH THE PROCEDURE FO R LEVY OF PENALTY, WHEREIN, IT DIRECTS THAT NO ORDER IMPOSING PENALTY SHALL BE MADE UNLESS THE ASSESSEE HAS BEEN HEARD OR HAS BEEN GIVEN A REASONABLE OPPORTUNITY OF BEING HE ARD. THEREFORE, FROM PLAIN READING OF SECTION 271AAB OF THE ACT, IT IS EVIDENT THAT THE PENALTY CANNOT BE IMPOSED UNLESS THE ASSESSEE IS GIVEN A REASONABLE O PPORTUNITY AND ASSESSEE IS BEING HEARD. ONCE THE OPPORTUNITY IS GIVEN TO THE ASSESSE E, THE PENALTY CANNOT BE MANDATORY AND IT IS ON THE BASIS OF THE FACTS AND M ERITS PLACED BEFORE THE A.O. ONCE THE A.O. IS BOUND BY THE ACT TO HEAR THE ASSESSEE A ND TO GIVE REASONABLE OPPORTUNITY TO EXPLAIN HIS CASE, THERE IS NO MANDATORY REQUIREM ENT OF IMPOSING PENALTY, BECAUSE THE OPPORTUNITY OF BEING HEARD AND REASONABLE OPPOR TUNITY IS NOT A MERE FORMALITY BUT IT IS TO ADHERE TO THE PRINCIPLES OF NATURAL JU STICE. HONBLE A.P. HIGH COURT IN THE CASE OF RADHAKRISHNA VIHAR IN ITTA NO.740/2011 WHIL E DEALING WITH THE PENALTY U/S 158BFA HELD THAT WE ARE OF THE OPINION THAT WHILE THE WORDS SHALL BE LIABLE UNDER SUB SECTION (1) OF SECTION 158BFA OF THE ACT THAT A RE ENTITLED TO BE MANDATORY, THE 18 ITA NO. 971/JP/2017 SHRI ANUJ MATHUR, JAIPUR. WORDS MAY DIRECT IN SUB SECTION 2 THERE OF INTENDED TO DIRECTORY. IN OTHER WORDS, WHILE PAYMENT OF INTEREST IS MANDATORY LEVY OF PENA LTY IS DISCRETIONARY. IT IS TRITE POSITION OF LAW THAT DISCRETION IS VESTED AND AUTHO RITY HAS TO BE EXERCISED IN A REASONABLE AND RATIONAL MANNER DEPENDING UPON THE F ACTS AND CIRCUMSTANCES OF THE EACH CASE. PLAIN READING OF SECTION 271AAB AND 274 OF THE ACT INDICATES THAT THE IMPOSITION OF PENALTY U/S 271AAB OF THE ACT IS NOT MANDATORY BUT DIRECTORY. ACCORDINGLY WE HOLD THAT THE PENALTY U/S 271AAB IS NOT MANDATORY BUT TO BE IMPOSED ON MERITS OF THE EACH CASE. THUS THE TRIBUNAL HAS HELD THAT THE LEVY OF PENALTY UNDER SECTION 271AAB IS NOT MANDATORY BUT THE AO HAS THE DISCRETION TO TAKE A DECISION AND SHALL BE BASED ON JUDICIOUS DECISION OF THE AO. HENCE WE FOR TIFY OUR VIEW BY THE ABOVE DECISIONS OF TRIBUNAL IN CASE OF ACIT VS. MARVEL AS SOCIATES. 7. AS REGARDS THE VALIDITY OF NOTICE UNDER SECTION 274 FOR WANT OF SPECIFYING THE GROUND AND DEFAULT, WE FIND THAT WHE N THE BASIC CONDITION OF THE UNDISCLOSED INCOME NOT RECORDED IN THE BOOKS OF ACCOUNTS DOES NOT EXISTS, THEN THE SAME HAS TO BE SPECIFIED BY THE AO IN THE SHOW CAUSE NOTICE AND FURTHER THE AO IS REQUIRED TO GIVE A FINDING WHILE IMPOSING THE PENALTY UNDER SECTION 271AAB. EVEN IF THE AO IS SATISFIED AND CO ME TO THE CONCLUSION THAT THE ASSESSEE HAS NOT RECORDED THE UNDISCLOSED INCO ME IN THE BOOKS OF ACCOUNTS OR IN THE OTHER DOCUMENTS / RECORD MAINT AINED IN NORMAL COURSE RELATING TO SPECIFIED PREVIOUS YEAR, THE SHOW CAUSE NOTICE SHALL ALSO SPECIFY THE DEFAULT COMMITTED BY THE ASSESSEE TO ATTRACT THE PENALTY @ 10% OR 20% OR 30% OF THE UNDISCLOSED INCOME. THER E IS NO DISPUTE THAT THE AO HAS NOT SPECIFIED THE DEFAULT AND CHARGE AGA INST THE ASSESSEE WHICH NECESSITATED THE LEVY OF PENALTY UNDER SECTION 271A AB OF THE ACT. CONSEQUENTLY, THE ASSESSEE WAS NOT GIVEN AN OPPORTU NITY TO EXPLAIN HIS CASE FOR SPECIFIC DEFAULT ATTRACTING THE LEVY OF PENALTY IN TERMS OF CLAUSES (A) TO (C) OF SECTION 271AAB(1) OF THE ACT. THE CHANNAI BENCH OF THE TRIBUNAL IN THE CASE OF DCIT VS. SHRI R. ELANGOVAN (SUPRA) AT PAGES 7 TO 10 HAS HELD AS UNDER :- 19 ITA NO. 971/JP/2017 SHRI ANUJ MATHUR, JAIPUR. IT IS CLEAR FROM THE SUB SECTION (3) OF SECTION 271 AAB THAT SECTIONS 274 AND SECTION 275 OF THE ACT SHALL, SO FAR AS MAY BE, APP LY. SUB SECTION (1) OF SECTION 274 OF THE ACT MANDATES THAT ORDER IMPOSING PENALTY HAS TO BE IMPOSED ONLY AFTER HEARING THE ASSESSEE OR GIVING A ASSESSEE OPPORTUNITY OF HE ARING. OPPORTUNITY THAT IS TO BE GIVEN TO THE ASSESSEE SHOULD BE A MEANINGFUL ONE AN D NOT A FARCE. NOTICE ISSUED TO THE ASSESSEE REPRODUCED (SUPRA), DOES NOT SHOW WHET HER PENALTY PROCEEDINGS WERE INITIATED FOR CONCEALMENT OF INCOME OR FOR FURNISHI NG INACCURATE PARTICULARS OF INCOME OR FOR HAVING UNDISCLOSED INCOME WITHIN THE MEANING OF SECTION 271AAB OF THE ACT. NOTICE IN OUR OPINION WAS VAGUE. HONBLE K ARNATAKA HIGH COURT IN THE CASE OF SSAS EMERALD MEADOWS (SUPRA) RELYING IN ITS OWN JUDGMENT IN THE CASE OF MANJUNATHA COTTON AND GINNING FACTORY (SUPRA) HAD H ELD AS UNDER:- 2. THIS APPEAL HAS BEEN FILED RAISING THE FOLLOWI NG SUBSTANTIAL QUESTIONS OF LAW: (1) WHETHER, OMISSION IF ASSESSING OFFICER TO EXPLICITL Y MENTION THAT PENALTY PROCEEDINGS ARE BEING INITIATED FOR FURNISH ING OF INACCURATE PARTICULARS OR THAT FOR CONCEALMENT OF I NCOME MAKES THE PENALTY ORDER LIABLE FOR CANCELLATION EVEN WHEN IT HAS BEEN PROVED BEYOND REASONABLE DOUBT THAT THE ASSESSEE HA D CONCEALED INCOME IN THE FACTS AND CIRCUMSTANCES OF THE CASE? (2) WHETHER, ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE TRIBUNAL WAS JUSTIFIED IN LAW IN HOLDING THAT THE P ENALTY NOTICE UNDER SECTION 274 R.W.S. 271(1)(C) IS BAD IN LAW AN D INVALID DESPITE THE AMENDMENT OF SECTION 271(1B) WITH RETRO SPECTIVE EFFECT AND BY VIRTUE OF THE AMENDMENT, THE ASSESSIN G OFFICER HAS INITIATED THE PENALTY BY PROPERLY RECORDING THE SAT ISFACTION FOR THE SAME? (3) WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE TRIBUNAL WAS JUSTIFIED IN DECIDING THE APPEALS AGAI NST THE REVENUE ON THE BASIS OF NOTICE ISSUED UNDER SECTION 274 WIT HOUT TAKING INTO CONSIDERATION THE ASSESSMENT ORDER WHEN THE ASSESSI NG OFFICER HAS SPECIFIED THAT THE ASSESSEE HAS CONCEALED PARTICULA RS OF INCOME? 3. THE TRIBUNAL HAS ALLOWED THE APPEAL FILED BY THE ASSESSEE HOLDING THE NOTICE ISSUED BY THE ASSESSING OFFICER UNDER SECTION 274 R EAD WITH SECTION 271(1)(C) OF THE INCOME TAX ACT, 1961 (FOR SHORT THE ACT) TO BE BA D IN LAW AS IT DID NOT SPECIFY WHICH LIMB OF SECTION 271(1)(C) OF THE ACT, THE PENALTY P ROCEEDINGS HAD BEEN INITIATED I.E., WHETHER FOR CONCEALMENT OF PARTICULARS OF INCOME OR FURNISHING OF INACCURATE 20 ITA NO. 971/JP/2017 SHRI ANUJ MATHUR, JAIPUR. PARTICULARS OF INCOME. THE TRIBUNAL, WHILE ALLOWING THE APPEAL OF THE ASSESSEE, HAS RELIED ON THE DECISION OF THE DIVISION BENCH OF THI S COURT RENDERED IN THE CASE OF CIT VS. MANJUNATHA COTTON AND GINNING FACTORY (2013) 35 9 ITR 565. 4. IN OUR VIEW, SINCE THE MATTER IS COVERED BY JUDG MENT OF THE DIVISION BENCH OF THIS COURT, WE ARE OF THE OPINION, NO SUBSTANTIAL QUESTI ON OF LAW ARISES IN THIS APPEAL FOR DETERMINATION BY THIS COURT. THE APPEAL IS ACCORDIN GLY DISMISSED. IN THE EARLIER CASE OF MANJUNATHA COTTON AND GINNIN G FACTORY (SUPRA) THEIR LORDSHIP HAD OBSERVED AS UNDER:- NOTICE UNDER SECTION 274 OF THE ACT SHOULD SPECIF ICALLY STATE THE GROUNDS MENTIONED IN SECTION 271(1)(C), I.E., WHETHER IT IS FOR CONCEALMENT OF INCOME OR FOR FURNISHING OF INCORRECT PARTICULARS OF INCOM E. SENDING PRINTED FORM WHERE ALL THE GROUNDS MENTIONED IN SECTION 271 ARE MENTIONED WOULD NOT SATISFY THE REQUIREMENT OF LAW ; THE ASSESSEE SHOULD KNOW THE GROUNDS WHICH HE HAS T O MEET SPECIFICALLY. OTHERWISE, THE PRINCIPLES OF NATURAL JUSTICE ARE OF FENDED. ON THE BASIS OF SUCH PROCEEDINGS, NO PENALTY COULD BE IMPOSED ON TH E ASSESSEE ; ) TAKING UP OF PENALTY PROCEEDINGS ON ONE LIMB AND FINDING THE ASSESSEE GUILTY OF ANOTHER LIMB IS BAD IN LAW ; PENALTY PROCEEDINGS AR E DISTINCT FROM THE ASSESSMENT PROCEEDINGS : THOUGH PROCEEDINGS FOR IMP OSITION OF PENALTY EMANATE FROM PROCEEDINGS OF ASSESSMENT, THEY ARE IN DEPENDENT AND A SEPARATE ASPECT OF THE PROCEEDINGS ; THE FINDINGS RECORDED IN THE ASSESSMENT PROCEEDINGS IN SO FAR AS CONCEALMENT OF INCOME AND FURNISHING OF INCORREC T PARTICULARS WOULD NOT OPERATE AS RES JUDICATA IN THE PENALTY PROCEEDINGS. IT IS OPEN TO THE ASSESSEE TO CONTEST THE PROCEEDINGS ON THE MERITS. HOWEVER, THE VALIDITY OF THE ASSESSMENT OR REASSESSMENT IN PURSUANCE OF WHICH PE NALTY IS LEVIED, CANNOT BE THE SUBJECT MATTER OF PENALTY PROCEEDINGS. THE A SSESSMENT OR REASSESSMENT CANNOT BE DECLARED INVALID IN THE PENA LTY PROCEEDINGS. VIEW TAKEN BY THE HONBLE KARNATAKA HIGH COURT IN T HE ABOVE JUDGMENT WAS INDIRECTLY AFFIRMED BY THE HONBLE APEX COURT, WHEN IT DISMISSED AN SLP FILED BY THE REVENUE AGAINST THE JUDGMENT IN THE CASE OF SSAS E MERALD MEADOWS (SUPRA), SPECIFICALLY OBSERVING THAT THERE WAS NO MERITS IN THE PETITION FILED BY THE REVENUE. CONSIDERING THE ABOVE CITED JUDGMENTS, WE HOLD THAT THE NOTICE ISSUED U/S.274 R.W.S. 271AAB OF THE ACT, REPRODUCED BY US AT PARA 5 ABOVE WAS NOT VALID. EX-CONSEQUENTI, THE PENALTY ORDER IS SET ASIDE. 6. SINCE WE HAVE SET ASIDE THE PENALTY ORDER FOR TH E IMPUGNED ASSESSMENT YEAR, THE APPEAL FILED BY THE REVENUE HAS BECOME INFRUCTUOUS. 21 ITA NO. 971/JP/2017 SHRI ANUJ MATHUR, JAIPUR. IN VIEW OF THE DECISION OF THE CHENNAI BENCH (SUPRA ), THE SHOW CAUSE NOTICE ISSUED BY THE AO IN THE CASE OF THE ASSESSEE IS NOT SUSTAINABLE. 8. EVEN OTHERWISE, WITHOUT RESTRICTING OURSELVES TO THE VALIDITY OF SHOW CAUSE NOTICE, WE NOTE THAT SECTION 271AAB OF THE AC T CONTEMPLATES IMPOSITION OF PENALTY PURSUANT TO THE DISCLOSURE OF UNDISCLOSE D INCOME IN THE STATEMENT RECORDED UNDER SECTION 132(4) AND, THEREFORE, THE L EVY OF PENALTY UNDER THIS SECTION DOES NOT DEPEND ON THE ADDITION MADE DURING THE ASSESSMENT PROCEEDINGS. HENCE THE PENALTY PROCEEDINGS UNDER SE CTION 271AAB ARE COMPLETELY INDEPENDENT OF THE ENQUIRY AND FINDING O F THE AO IN THE ASSESSMENT ORDER EXCEPT FOR THE LIMITATION PROVIDED AS PER SECTION 275 OF THE ACT. WE HAVE ALREADY HELD THAT THE PENALTY IS NOT AUTOMATIC BUT THE AO HAS TO TAKE A DECISION TO IMPOSE THE PENALTY AFTER GIVI NG AN OPPORTUNITY OF HEARING TO THE ASSESSEE IN TERMS OF SECTION 274 OF THE ACT. THUS THE AO IN THE PROCEEDINGS UNDER SECTION 271AAB OF THE ACT HAS TO FIRST DECIDE THAT THE CONDITIONS PRESCRIBED UNDER THE SAID SECTION ARE SA TISFIED FOR LEVY OF PENALTY AND THEN TO FURTHER TAKE A DECISION AFTER CONSIDERI NG THE EXPLANATION OF THE ASSESSEE FOR NON COMPLIANCE OF ANY OF THE CONDITION S UNDER CLAUSES (A) TO (C) OF SUB-SECTION (1) REGARDING THE QUANTUM OF PENALTY . THE PRIMARY CONDITION FOR LEVY OF PENALTY IS THE EXISTENCE OF UNDISCLOSED INCOME AS PER THE DISCLOSURE MADE BY THE ASSESSEE UNDER SECTION 132(4 ). THE TERM UNDISCLOSED INCOME HAS BEEN DEFINED IN EXPLANATIONS TO SECTION 271AAB. THEREFORE, AS PER THE DEFINITION PROVIDED IN THE EXPLANATION, THE UNDISCLOSED INCOME MAY HAVE VARIOUS FORMS AND THE SAME IS NOT RECORDED IN THE BOOKS OF ACCOUNTS OR OTHER DOCUMENTS MAINTAINED IN NORMAL COURSE RELATIN G TO THE SPECIFIED PREVIOUS YEAR. AS PER SUB-CLAUSE (I) OF CLAUSE (C) OF THE EXPLANATION , THE UNDISCLOSED INCOME MEANS ANY INCOME OF THE SPEC IFIED PREVIOUS YEAR REPRESENTED BY ANY MONEY, BULLION, JEWELLERY OR VAL UABLE ARTICLE OR THINGS OR ANY ENTRY IN BOOKS OF ACCOUNTS OR OTHER DOCUMENTS O R TRANSACTIONS FOUND IN THE COURSE OF SEARCH. THIS DEFINITION IS FURTHER S UBJECT TO TWO CONDITIONS THAT THE SAID INCOME HAS NOT BEEN RECORDED ON OR BEFORE THE DATE OF SEARCH IN THE 22 ITA NO. 971/JP/2017 SHRI ANUJ MATHUR, JAIPUR. BOOKS OF ACCOUNTS OR OTHER DOCUMENTS MAINTAINED IN THE NORMAL COURSE RELATING TO SUCH PREVIOUS YEAR OR OTHERWISE NOT BEI NG DISCLOSED TO THE PRINCIPAL CHIEF COMMISSIONER, PRINCIPAL COMMISSIONER OR COMMI SSIONER BEFORE THE DATE OF SEARCH. THE OTHER FORMS OF UNDISCLOSED INCOME A S DEFINED IN SUB CLAUSE (II) IS ANY ENTRY IN RESPECT OF EXPENSES RECORDED IN THE BOOKS OF ACCOUNTS OR OTHER DOCUMENTS MAINTAINED IN THE NORMAL COURSE. THEREFO RE, THE CLAUSE (II) CONTEMPLATES UNDISCLOSED INCOME IN THE FORM OF FALS E ENTRIES OF EXPENSES RECORDED IN THE BOOKS OF ACCOUNTS WHICH IS NOT RELE VANT FOR THE CASE IN HAND. SINCE IN THE CASE OF ASSESSEE THE TRANSACTIONS OF I NVESTMENT WERE FOUND IN THE DIARY, THEREFORE, WHETHER THESE ENTRIE S IN THE DIARY CONSTITUTE UNDISCLOSED INCOME AS PER CLAUSE (C)(I) OF EXPLANAT ION TO SECTION 271AAB OF THE ACT. THE ASSESSEE IS AN INDIVIDUAL AND FOR THE YEAR UNDER CONSIDERATION THE ASSESSEE HAS NOT REPORTED ANY BUSINESS INCOME N OR IT WAS ASSESSED BY THE AO. THEREFORE, IT IS CLEAR THAT THE ASSESSEE W AS NOT REQUIRED BY ANY MANDATE OF LAW TO MAINTAIN REGULAR BOOKS OF ACCOUNT S. IN THE COMPUTATION OF INCOME, THE ASSESSEE HAS SHOWN INCOME FROM SALARY, INCOME FROM HOUSE PROPERTY AND INCOME FROM OTHER SOURCES. THE RETURNE D INCOME WAS ACCEPTED BY THE AO WHILE FRAMING THE ASSESSMENT UNDER SECTIO N 143(3) AND HENCE ASSESSEES CASE DOES NOT FALL IN THE CATEGORY WHERE THE REGULAR BOOKS OF ACCOUNTS ARE MANDATORY. THE ENTRIES OF INVESTMENT IN REAL ESTATE WERE FOUND RECORDED IN THE DIARY AND IN THE ABSENCE OF ANY OTH ER DOCUMENT MAINTAINED IN THE NORMAL COURSE RELATING TO THE YEAR UNDER CONSID ERATION, THE ENTRIES IN THE DIARY ARE TO BE CONSIDERED AS RECORDED IN THE DOCUM ENTS MAINTAINED IN THE NORMAL COURSE. IT IS NOT THE CASE OF THE REVENUE T HAT THE ASSESSEE HAS RECORDED THE OTHER TRANSACTIONS IN THE OTHER DOCUME NTS MAINTAINED IN THE REGULAR COURSE RELATING TO THE YEAR UNDER CONSIDERA TION AND ONLY THESE ENTRIES ARE RECORDED IN THE DIARY. SINCE THE LEVY OF PENAL TY UNDER SECTION 271AAB IS NOT BASED ON THE ADDITION AND ENQUIRY CONDUCTED BY THE AO IN THE ASSESSMENT PROCEEDINGS, THEREFORE, IT IS INCUMBENT ON THE AO TO CONDUCT A PROPER EXAMINATION OF FACTS, CIRCUMSTANCES AND EXPL ANATION FURNISHED BY THE 23 ITA NO. 971/JP/2017 SHRI ANUJ MATHUR, JAIPUR. ASSESSEE BEFORE ARRIVING TO THE CONCLUSION THAT PEN ALTY UNDER SECTION 271AAB IS LEVIABLE AND FURTHER WHETHER IT IS 10% OR 20% OR 30% OF SUCH UNDISCLOSED INCOME. THEREFORE, THE AO IS UNDER STATUTORY OBLIG ATION TO EXAMINE ALL THE ISSUES DURING THE PROCEEDINGS UNDER SECTION 271AAB AFTER GIVING THE ASSESSEE AN OPPORTUNITY TO EXPLAIN THE CHARGES/GROUNDS ON WH ICH THE PENALTY IS PROPOSED TO BE LEVIED. HENCE IT IS A PRE-REQUISITE CONDITION THAT THE AO FIRST SPECIFY THE CHARGES AGAINST THE ASSESSEE AND TO MAK E KNOWN THE ASSESSEE OF HIS DEFAULT SO AS TO AFFORD AN OPPORTUNITY TO EXPLA IN THE DEFAULT/CHARGES SO BROUGHT AGAINST THE ASSESSEE. WITHOUT CONSIDERING THE EXPLANATION OF THE ASSESSEE ON THE SPECIFIC DEFAULT, THE ORDER PASSED BY THE AO UNDER SECTION 271AAB SUFFERS FROM SERIOUS ILLEGALITY AND THEREFOR E NOT SUSTAINABLE IN LAW. WHEN A STRINGENT ACTION IS PROVIDED IN THE STATUTE AGAINST THE DEFAULT COMMITTED BY THE ASSESSEE, THEN IT ALSO CAST AN EQU ALLY STRINGENT AND STRICT DUTY ON THE AUTHORITY RESPONSIBLE TO TAKE SUCH ACTI ON. THEREFORE, WHEN THE PROVISIONS FOR LEVY OF PENALTY UNDER SECTION 271AAB IS A SPECIFIC PROVISION TO DEAL WITH THE UNDISCLOSED INCOME AND IT PROVIDES A STRICT PENAL ACTION THEN THE CORRESPONDING DUTY OF THE TAX AUTHORITY IS ALSO EQU ALLY STRINGENT. THE AO CANNOT ESCAPE FROM FOLLOWING THE STRICT MANDATORY R EQUIREMENT OF LAW AND PARTICULARLY THE PRINCIPLE OF NATURAL JUSTICE. THE AO HAS NEITHER SPECIFIED THE GROUNDS AND CLAUSE OF SECTION 271AAB NOR HAS DEALT WITH THE SAME IN THE IMPUGNED ORDER PASSED UNDER SECTION 271AAB. THE AO HAS ALSO NOT GIVEN A FINDING THAT THE CASE OF THE ASSESSEE FALLS IN THE DEFINITION OF UNDISCLOSED INCOME PROVIDED UNDER CLAUSE (C)(I) OF EXPLANATION TO SECTION 271AAB. WHEN THE TRANSACTIONS OF INVESTMENT IN REAL ESTATE ARE R ECORDED IN THE DIARY BEING OTHER DOCUMENTS MAINTAINED BY THE ASSESSEE FOR THE SAID PURPOSE, THEN IN THE ABSENCE OF ANY REQUIREMENT OF MAINTAINING REGULAR B OOKS OF ACCOUNTS BY THE ASSESSEE, THE CASE OF THE ASSESSEE WOULD NOT FALL I N THE DEFINITION OF UNDISCLOSED INCOME AS PER CLAUSE (C) OF EXPLANATION TO SECTION 271AAB OF THE ACT. 24 ITA NO. 971/JP/2017 SHRI ANUJ MATHUR, JAIPUR. 9. THE KOLKATA BENCH OF THE TRIBUNAL IN THE CASE OF DCIT VS. MADAN LAL BESWAL (SUPRA) HAS CONSIDERED THIS ISSUE OF THE ALL EGED INCOME FOUND RECORDED IN THE OTHER DOCUMENTS WOULD FALL IN THE D EFINITION OF UNDISCLOSED INCOME IN PARA 3 AND 4 AS UNDER :- 3. WE HAVE HEARD RIVAL SUBMISSIONS AND GONE THROUG H THE FACTS AND CIRCUMSTANCES OF THE CASE. WE FIND THAT THE ISS UE INVOLVED HEREIN IS SQUARELY COVERED IN FAVOUR OF THE ASSESSE E IN THE CASE OF DCIT VS MANISH AGARWALA (ANOTHER MEMBER IN THE SAME NEZONE GROUP) IN ITA NO. 1479/KOL/2015 FOR AY 2013-14 DATE D 9.2.2018 BY THE ORDER OF THIS TRIBUNAL , WHEREIN IT WAS HELD AS UNDER:- 3. WE HAVE HEARD RIVAL SUBMISSIONS AND GONE THROUGH THE FACTS AND CIRCUMSTANCES OF THE CASE. WE NOTE THAT THE AO HAS LEVIED THE PENALTY U/S. 271AAB ON THE GROUND THAT THE INCOME FROM COMM ODITY PROFIT HAS BEEN FOUND DURING SEARCH U/S.132 OF THE ACT WHICH I S NOT REFLECTED IN THE REGULAR BOOKS OF ACCOUNT. THE AO HAS ACCEPTED T HAT DURING SEARCH THE ASSESSEE HAS ADMITTED U/S. 132(4) OF THE ACT TH E INCOME FROM SPECULATIVE TRADING. THE UNDISPUTED FACTS THE AO HA S GIVEN FINDING PERTAINING TO THIS CASE IS AS FOLLOWS: I) THE ASSESSEE HAS SUBSTANTIATED THE MANNER IN WHI CH THE INCOME WAS DERIVED. II) FURNISHED THE RETURN OF INCOME THEREIN AND III) PAID THE TAX ALONG WITH INTEREST. BASED ON THE SAID FINDING, ACCORDING TO AO, THE ASS ESSEE SATISFIES THE CONDITIONS ENUMERATED IN SEC. 271AAB(I)(A) OF THE A CT AND THEREAFTER LEVIED TEN PERCENT OF RS.3 CR., WHICH HAVE BEEN DEL ETED BY THE IMPUGNED ORDER OF LD. CIT(A). 4. THE LD. DR BROUGHT TO OUR NOTICE THAT IN THE VE RY SAME GROUP CASE OF MANOJ BESWAL & ORS. THE TRIBUNAL HAD CONFIRMED THE LEVY OF PENALTY AND CONTENDED BEFORE US THAT PENALT Y U/S. 271AAB OF THE ACT IS MANDATORY AND THEREFORE, ACCORDING TO LD. DR, THE LD. CIT(A) ERRED IN DELETING THE PENALTY BY STATING THA T THE ASSESSEE DID NOT HAD ANY MENS REA NOT TO DISCLOSE THE AMOUNT I N QUESTION. ACCORDING TO HIM, PENALTY HAS TO BE MANDATORILY LEV IED U/S. 271AAB OF THE ACT ON THE UNDISCLOSED INCOME FOUND DURING S EARCH. ON THE OTHER HAND, LD. AR SHRI MIRAZ D. SHAH, SUPPORTING T HE DECISION OF LD. CIT(A) MADE CONTENTIONS THOUGH TAKEN UP BEFORE THE LD. CIT(A) BUT HAS NOT BEEN ADJUDICATED ON THOSE AVERME NTS, WHICH THE LD. AR URGES BEFORE US TO CONSIDER WHILE ADJUDI CATING THE APPEAL OF THE REVENUE. THE LD. AR ALSO POINTED OUT THAT THE CONTENTIONS WHICH HE IS GOING TO RAISE HAS BEEN TAK EN UP BEFORE THE AO ALSO, HOWEVER, ACCORDING TO LD. COUNSEL, THO SE LEGAL ARGUMENTS WERE NOT CONSIDERED BY THE AO IN THE RIGH T PERSPECTIVE. 25 ITA NO. 971/JP/2017 SHRI ANUJ MATHUR, JAIPUR. THE FIRST CONTENTION OF THE LD. AR IS THAT SINCE SE C. 271AAB OF THE ACT IS A PENALTY SECTION IT SHOULD BE CONSTRUED STR ICTLY, WHICH WE AGREE BEING IT IS A TRITE LAW THAT PENALTY PROVISIO NS HAVE TO BE STRICTLY INTERPRETED. NEXT CONTENTION OF LD. AR IS THAT SEC. 271AAB OF THE ACT IS NOT MANDATORY BECAUSE PARLIAMENT IN I TS WISDOM HAS USED THE WORD MAY AND NOT SHALL. SO, ACCORDING TO HIM, IT IS THE DISCRETION BESTOWED UPON THE AO WHETHER TO INITIATE AND IMPOSE PENALTY U/S. 271AAB OF THE ACT. WE AGREE WITH THE S AID CONTENTION OF LD. AR BECAUSE WHEN A SIMILAR ISSUE WAS ADJUDICA TED BY ITAT LUCKNOW (THE AUTHOR OF THIS ORDER WAS A MEMBER OF T HE BENCH) IN SANDEEP CHANDAK & ORS. VS. CIT (2017) 55 ITR (TRIB) 209 AND 2017 (5) TMI 675- ITAT-LUCKNOW IN ITA NO. 416, 417 AND 418/LKW/2016 DATED 30.01.2017 WHILE ADJUDICATING A CASE WHERE PENALTY WAS LEVIED UNDER SECTION 271AAB OF THE ACT IT WAS HELD THAT THE PROVISIONS OF SEC. 271AAB OF THE ACT ARE NOT MA NDATORY, WHICH MEANS THAT PENALTY NEED NOT BE LEVIED IN EACH AND E VERY CASE WHEREVER THE ASSESSEE HAS MADE DEFAULT AS STATED IN CLAUSES (A), (B) AND (C) OF THE ACT. SUB-SECTION (1) OF SEC. 271 AAB OF THE ACT USES THE WORD MAY NOT SHALL. MAY CANNOT BE EQ UATED WITH SHALL ESPECIALLY IN PENALTY PROCEEDING. USING THE WORD MAY IN OUR OPINION, GIVES A DISCRETION TO THE AO TO LEVY T HE PENALTY OR NOT TO LEVY, EVEN IF THE ASSESSEE HAS MADE THE DEFAULT UNDER THE SAID PROVISION. THEREFORE, THE 2 ND GROUND OF REVENUE FAILS AND WE HOLD THAT PENALTY U/S. 271AAB OF THE ACT IS NOT MANDATOR Y AND IS DISCRETIONARY. BEFORE PROCEEDING FURTHER, WE NOTE T HAT THE EX PARTE ORDER PASSED BY THE COORDINATE BENCH RELIED UPON BY LD. DR, MANOJ BESWAL, SUPRA, HAVE BEEN RECALLED IN MA NOS. 218 TO 220/KOL/2017 DATED 12.01.2018 BY OBSERVING AS UNDER : BY VIRTUE OF THESE MISCELLANEOUS APPLICATIONS, THE ASSESSEE SEEKS TO RECALL THE ORDER PASSED BY THIS TRIBUNAL IN I.T. A. NOS. 1471, 1475&1476/KOL/2015 IN THE HANDS OF AMIT AGARWAL, MA DAN LAL BESWAL AND MANOJ BESWAL RESPECTIVELY FOR THE ASSESS MENT YEAR 2013-14 ON THE GROUND THAT NOTICE WAS NOT SERVED ON THE ASSESSEE FOR THE HEARING AND ON CERTAIN FACTUAL ERROR THAT H AD CREPT IN THE ORDER OF THE TRIBUNAL. THE FIRST PRELIMINARY OBJECT ION RAISED BY THE LD. AR WAS THAT THE NOTICE OF HEARING WAS NOT SERVE D ON THE ASSESSEE FOR THE HEARING SCHEDULED ON 06.11.2017 AN D HENCE, THE ASSESSEE COULD NOT BE PRESENT ON THE SAID DATE BY W AY OF PERSONAL APPEARANCE. THE SECOND OBJECTION RAISED BY THE LD. AR WAS THAT THE TRIBUNAL HAD STATED IN PARA 9 OF ITS ORDER THAT THE ASSESSEE HIMSELF HAD ACCEPTED THAT HE IS ENGAGED IN COMMODIT IES TRADING BUSINESS AND THEREFORE MANDATED TO MAINTAIN BOOKS O F ACCOUNTS IN TERMS OF SECTION 44AA OF THE ACT AND THEREBY INFERR ING THAT THE ASSESSEE HAD REPORTED THE PROFIT FROM COMMODITIES T RADING BUSINESS UNDER THE HEAD INCOME FROM BUSINESS OR PR OFESSION. BASED ON THIS CRUCIAL FINDING, THE TRIBUNAL HAD CON CLUDED THAT SINCE THE TRANSACTION OF COMMODITIES TRADING HAD NOT BEEN ENTERED BY THE ASSESSEE IN HIS BOOKS OF ACCOUNTS AS ON THE DATE OF SEARCH ON 01.08.2012 AND THEREBY IT TAKES THE CHARACTER OF UN DISCLOSED INCOME FOR WHICH PENALTY U/S 271AAB OF THE ACT IS E XIGIBLE. IN THIS 26 ITA NO. 971/JP/2017 SHRI ANUJ MATHUR, JAIPUR. REGARD, WE FIND THAT THE LD. AR DREW OUR ATTENTION TO THE COMPUTATION OF THE TOTAL INCOME WHEREIN THE ASSESSE E HAD OFFERED INCOME FROM COMMODITY TRADING ONLY UNDER THE HEAD I NCOME FROM OTHER SOURCES. WE ALSO FIND THAT THE LD. AO HAD ALS O SPECIFICALLY STATED IN THE BODY OF THE ASSESSMENT ORDER VIDE COL UMN NO. 10 THAT THE ASSESSEE IS HAVING ONLY SALARY INCOME AND INCOM E FROM OTHER SOURCES. WE FIND THAT DUE TO THE ABSENCE OF THE ASS ESSEE AT THE TIME OF HEARING THIS PARTICULAR FACT HAD ESCAPED TH E ATTENTION OF THE TRIBUNAL. ON PERUSAL OF THE FACT AVAILABLE ON RECOR D, WE FIND THAT THE FINDING RECORDED BY THIS TRIBUNAL IN PARA 9 OF ITS ORDER DATED 10.11.2017 THAT THE ASSESSEE IS MANDATED TO MAINTAI N BOOKS OF ACCOUNTS U/S 44AA OF THE ACT IS FACTUALLY INCORRECT AND DESERVES TO BE RECTIFIED. THIS MISTAKE OF PRIMARY FACT HAD LEAD TO A CONCLUSION OF UPHOLDING THE LEVY OF PENALTY U/S 271AAB OF THE ACT . HENCE, IN THESE FACTS AND CIRCUMSTANCES AND IN VIEW OF THE AF ORESAID MISTAKE OF PRIMARY FACT RIGHTLY POINTED OUT BY THE LD. AR , WE DEEM IT FIT TO RECALL THE ORDERS OF THIS TRIBUNAL DATED 10.11.2017 IN THE CASE OF AFORESAID ASSESSEES. IN THE AFORESAID SCENARIO, THE LEGAL POSITION IS TH AT AN ORDER WHICH HAS BEEN RECALLED FOR DE NOVO ADJUDICATION, IS NO O RDER IN THE EYES OF LAW AND SO IT CANNOT BE TREATED AS A PRECEDENT. HENCE, THE RELIANCE PLACED BY THE LD. DR IN RESPECT OF ASSESSE ES IN THE SAME GROUP CONCERN CASES AS DECIDED BY THE TRIBUNAL NO L ONGER SURVIVES AND CANNOT BE TREATED AS COVERED AGAINST THE ASSESS EE. 5. THE THIRD CONTENTION OF THE LD. AR IS THAT THE ASSESSEE IS AN INDIVIDUAL, WHO WAS DRAWING SALARY INCOME. SO, ACCO RDING TO HIM, HE NEED NOT MAINTAIN ANY BOOKS OF ACCOUNT AS PER TH E ACT. ACCORDING TO LD. AR, UNDISPUTEDLY THE ASSESSEE WAS ENGAGED FOR THE FIRST TIME THIS AY ONLY IN TRADING OF COMMODITI ES, THAT TOO WHICH WAS CONDUCTED IN A NON-SYSTEMATIC MANNER AND THE IN COME FROM IT WAS DULY OFFERED TO TAX BY THE ASSESSEE IN HIS RETURN OF INCOME UNDER THE HEAD INCOME FROM OTHER SOURCES, WHICH, ACCORDING TO LD. AR WAS ACCEPTED AS SUCH BY THE AO AND DREW OUR ATTENTION TO PAGE ONE OF ASSESSMENT ORDER, (NOT THE PENALTY ORDER) WHEREIN WE NOTE THAT THE AO HAS ACKNOWLEDGED THAT T HE ASSESSEE OWNED UP RS. 3 CR. AS HIS INCOME FROM COMMODITY PRO FIT AND IT HAS BEEN DISCLOSED IN HIS INCOME AND EXPENDITURE FOR AY 2013-14 UNDER THE HEAD INCOME OUT OF SPECULATIVE BUSINESS FROM SALE OF COMMODITIES, AND THEREAFTER THE AO CONFIRMED THE A SSESSEES CLAIM AND THEREAFTER TOTAL INCOME WAS ASSESSED BY T HE AO AS PER THE RETURN SUBMITTED BY THE ASSESSEE. IN THE LIGHT OF THE AFORESAID FACTS DISCERNED FROM ASSESSMENT ORDER, THE ASSESSEE S CASE IS THAT FOR THE FIRST TIME IN THIS AY HE WAS DOING UNSYSTEM ATIC SPECULATIVE ACTIVITY WHICH EARNED INCOME AND, IT WAS BROUGHT UN DER THE HEAD INCOME FROM OTHER SOURCES, AND SO, ACCORDINGLY, H E IS NOT REQUIRED TO MAINTAIN BOOKS OF ACCOUNT AS STIPULATED IN SEC. 44AA OR SEC. 44AA(2)(II) OF THE ACT BECAUSE, THESE PROVISIO NS ARE ONLY FOR ASSESSES WHO ARE EARNING INCOME UNDER THE HEAD BUS INESS OR 27 ITA NO. 971/JP/2017 SHRI ANUJ MATHUR, JAIPUR. PROFESSION. WE NOTE THAT SEC. 44AA OR SEC. 44AA(2) (II) OF THE ACT CASTS A DUTY UPON THE ASSESSEE WHO ARE INTO BUSINE SS OR PROFESSION AND SUCH ASSESSEES ARE BOUND TO MAINTA IN BOOKS OF ACCOUNT AS STIPULATED THEREIN. FOR APPRECIATING THI S SUBMISSION LET US GO THROUGH THE PROVISIONS OF LAW. 44AA. (1) EVERY PERSON CARRYING ON LEGAL, MEDICA L, ENGINEERING OR ARCHITECTURAL PROFESSION OR THE PROF ESSION OF ACCOUNTANCY OR TECHNICAL CONSULTANCY OR INTERIOR DE CORATION OR ANY OTHER PROFESSION AS IS NOTIFIED BY THE BOARD IN THE OFFICIAL GAZETTE SHALL KEEP AND MAINTAIN SUCH BOOKS OF ACCOUNT AND O THER DOCUMENTS AS MAY ENABLE THE [ASSESSING] OFFICER TO COMPUTE HIS TOTAL INCOME IN ACCORDANCE WITH THE PROVISIONS OF T HIS ACT. (2) EVERY PERSON CARRYING ON BUSINESS OR PROFESSION [NOT BEIN G A PROFESSION REFERRED TO IN SUBSECTION (1)] SHALL, (I) IF HIS INCOME FROM BUSINESS OR PROFESSION EXCE EDS [ONE LAKH TWENTY] THOUSAND RUPEES OR HIS TOTAL SALES, TURNOVE R OR GROSS RECEIPTS, AS THE CASE MAY BE, IN BUSINESS OR PROFES SION EXCEED OR EXCEEDS [TEN LAKH] RUPEES IN ANY ONE OF THE THREE Y EARS IMMEDIATELY PRECEDING THE PREVIOUS YEAR; OR (II) WHERE THE BUSINESS OR PROFESSION IS NEWLY SET UP IN ANY PREVIOUS YEAR, IF HIS INCOME FROM BUSINESS OR PROFESSION IS LIKELY TO EXCEED [ONE LAKH TWENTY] THOUSAND RUPEES OR HIS TOTAL SALE S, TURNOVER OR GROSS RECEIPTS, AS THE CASE MAY BE, IN BUSINESS OR PROFESSION ARE OR IS LIKELY TO EXCEED [TEN LAKH] RUPEES, [DURING S UCH PREVIOUS YEAR; OR (III) WHERE THE PROFITS AND GAINS FROM THE BUSINESS ARE DEEMED TO BE THE PROFITS AND GAINS OF THE ASSESSEE UNDER [SECTIO N 44AE] [OR SECTION 44BB OR SECTION 44BBB], AS THE CASE MAY BE, AND THE ASSESSEE HAS CLAIMED HIS INCOME TO BE LOWER THAN TH E PROFITS OR GAINS SO DEEMED TO BE THE PROFITS AND GAINS OF HIS BUSINESS, AS THE CASE MAY BE, DURING SUCH [PREVIOUS YEAR; OR]] (IV) WHERE THE PROFITS AND GAINS FROM THE BUSINESS ARE DEEMED TO BE THE PROFITS AND GAINS OF THE ASSESSEE UNDER SECTION 44AD AND HE HAS CLAIMED SUCH INCOME TO BE LOWER THAN THE PROFIT S AND GAINS SO DEEMED TO BE THE PROFITS AND GAINS OF HIS BUSINESS AND HIS INCOME EXCEEDS THE MAXIMUM AMOUNT WHICH IS NOT CHARGEABLE TO INCOME- TAX DURING SUCH PREVIOUS YEAR,] KEEP AND MAINTAIN SUCH BOOKS OF ACCOUNT AND OTHER D OCUMENTS AS MAY ENABLE THE [ASSESSING] OFFICER TO COMPUTE HIS T OTAL INCOME IN ACCORDANCE WITH THE PROVISIONS OF THIS ACT. (3) THE BOARD MAY, HAVING REGARD TO THE NATURE OF THE BUSINESS OR PROFESSION CARRIED ON BY ANY CLASS OF PERSONS, PRESCRIBE, BY R ULES, THE BOOKS OF ACCOUNT AND OTHER DOCUMENTS (INCLUDING INVENTORI ES, WHEREVER 28 ITA NO. 971/JP/2017 SHRI ANUJ MATHUR, JAIPUR. NECESSARY) TO BE KEPT AND MAINTAINED UNDER SUB-SECT ION (1) OR SUB- SECTION (2), THE PARTICULARS TO BE CONTAINED THEREI N AND THE FORM AND THE MANNER IN WHICH AND THE PLACE AT WHICH THEY SHA LL BE KEPT AND MAINTAINED. (4) WITHOUT PREJUDICE TO THE PROVISIONS OF SUB-SEC TION (3), THE BOARD MAY PRESCRIBE, BY RULES, THE PERIOD FOR WHICH THE B OOKS OF ACCOUNT AND OTHER DOCUMENTS TO BE KEPT AND MAINTAINED UNDER SUB-SECTION (1) OR SUB-SECTION (2) SHALL BE RETAINED.] SO FROM A READING OF THE ABOVE PROVISIONS WHICH CLE ARLY STIPULATES THAT ASSESSEE WHO ARE CARRYING ON BUSINESS OR PROFESSION SHALL KEEP AND MAINTAIN SUCH BOOKS OF ACCOUNT AND OTHER DOCUMENTS WHICH MAY ENABLE THE AO TO COMPUTE THE TOTAL INCOME. WE NOTE THAT AS SESSEE IN THE STATEMENT OF TOTAL INCOME FILED BEFORE THE AO HAS S HOWN INCOME ONLY UNDER TWO HEADS (I) SALARY INCOME (II) INCOME FROM OTHER SOURCES. WE WOULD LIKE TO REPRODUCE THE SUMMARY OF TOTAL INCOME OF THE ASSESSEE FILED ALONG WITH THE RETURN: INCOME FROM SALARY RS. 45,57,600 INCOME FROM OTHER SOURCES RS.3,00,24,047 RS.3,45,81,647 6. WE NOTE THAT THE AO HAS ACCEPTED THE AFORESAID STATEMENT OF TOTAL INCOME FILED BEFORE HIM WITHOUT CONTESTING THE CLAI M OF THE ASSESSEE AS TO WHETHER THE ASSESSEES CLAIM OF INCOME OTHER THAN F ROM SALARY SHOULD BE FROM INCOME FROM BUSINESS. THE CONFUSION THAT HAS ARISEN IN THIS CASE, WE NOTE IS ON THE MISDIRECTION OF AO IN THE ASSESSM ENT PROCEEDINGS WHEREIN THE ASSESSMENT ORDER OF THE ASSESSEE, THE A O HAS OBSERVED DURING SEARCH AND SEIZURE OPERATION, SHRI MANOJ BE SWAL HAD MADE A CONSOLIDATED DISCLOSURE OF RS.32 CRORE VIDE HIS DIS CLOSURE PETITION. OUT OF THIS CONSOLIDATED DISCLOSURE, THE ASSESSEE OWNED UP RS. 3 CR. IN THE DISCLOSURE PETITION SHRI MANOJ BESWAL IT WAS STATED THAT THE SOURCE OF SUCH UNDISCLOSED INCOME WAS OUT OF COMMODITY PROFIT. IT HAS BEEN SUBMITTED THAT THE AMOUNT HAS ALREADY BEEN DISCLOSED IN HIS I NCOME & EXPENDITURE ACCOUNT FOR THE AY 2013-14 UNDER THE HEAD INCOME O UT OF SPECULATIVE BUSINESS FROM SALE OF COMMODITIES. VERIFICATION OF ACCOUNTS CONFIRMS HIS CLAIM. THIS OBSERVATION IS FLAWED BECAUSE, WE NOTE THAT AO GOT CARRIED AWAY BY PERUSAL OF THE INCOME & EXPENDITURE ACCOUN T FOR AY 2013-14 SUBMITTED BY THE ASSESSEE BEFORE HIM, WHEREIN IT WA S SHOWN IN THE INCOME SIDE THAT IS RIGHT HAND COLUMN AS INCOME FR OM SPECULATIVE BUSINESS FROM SALE OF COMMODITIES AND LEFT HAND SI DE COLUMN REFLECTS THE EXPENDITURE; AND AO CAME TO THE CONCLUSION THAT ASS ESSEE HAS DISCLOSED UNDER THE HEADING INCOME OUT OF SPECULATIVE BUSINES S FROM SALE OF COMMODITIES. THE CHARACTER OF A RECEIPT AND THE HEA D UNDER WHICH IT HAS TO BE TAXED IS NOT BASED ON THE NOMENCLATURE OF REC EIPT OF INCOME SHOWN IN INCOME & EXPENDITURE ACCOUNT. ALL THE INCOMES OF REVENUE NATURE WILL BE POSTED IN THE RIGHT HAND SIDE COLUMN OF INCOME IN THE INCOME & EXPENDITURE ACCOUNT AND THE DESCRIPTION GIVEN THERE IN CANNOT DETERMINE 29 ITA NO. 971/JP/2017 SHRI ANUJ MATHUR, JAIPUR. THE HEAD OF INCOME PRESCRIBED UNDER CHAPTER IV OF T HE ACT. THEREFORE, THE OBSERVATION OF THE AO IN ASSESSMENT ORDER IN THE LI GHT OF HIS ACTION OF ACCEPTING THE STATEMENT OF TOTAL INCOME FILED BY TH E ASSESSEE ALONG WITH RETURN WHICH WITHOUT BEING CONTESTED, IS ERRONEOUS, UNLESS THE AO WAS ABLE TO NEGATE THE CLAIM OF THE ASSESSEE BY BRINGIN G THE INCOME FROM COMMODITY TRANSACTIONS AS PART OF BUSINESS INCOME. IT SHOULD BE REMEMBERED THAT UNDER THE INCOME TAX ACT 1961, THE TOTAL INCOME OF AN ASSESSEE INDIVIDUAL/COMPANY IS CHARGEABLE TO TAX U/ S. 4 OF THE ACT. THE TOTAL INCOME HAS TO BE COMPUTED IN ACCORDANCE WITH THE PROVISIONS OF THE ACT. SECTION 14 OF THE ACT LAYS DOWN THAT FOR THE P URPOSE OF COMPUTATION, INCOME OF AN ASSESSEE HAS TO BE CLASSIFIED UNDER FI VE HEADS. IT IS POSSIBLE FOR AN ASSESSEE/INDIVIDUAL/COMPANY TO HAVE FIVE DIF FERENT SOURCES OF INCOME, EACH ONE OF IT WILL BE CHARGEABLE TO INCOME TAX ACT. PROFITS AND GAINS OF BUSINESS OR PROFESSION IS ONLY ONE OF THE HEADS UNDER WHICH AN ASSESSEES INCOME IS LIABLE TO BE ASSESSED TO TAX. IF AN ASSESSEE HAS NOT COMMENCED BUSINESS THERE CANNOT BE ANY QUESTION OF ASSESSMENT OF ITS PROFITS AND GAINS OF BUSINESS. THAT DOES NOT MEAN T HAT UNTIL AND UNLESS THE ASSESSEE COMMENCES ITS BUSINESS, ITS INCOME FROM AN Y OTHER SOURCE WILL NOT BE TAXED AS HELD BY THE HONBLE SUPREME COURT I N THE CASE OF TUTICORIN ALKALI & CHEMICALS LTD. VS. CIT (1997) 22 7 ITR 172 (SC). IT HAS BEEN FURTHER HELD THAT WHEN THE QUESTION IS WHETHER A RECEIPT OF MONEY IS TAXABLE OR NOT OR WHETHER CERTAIN DEDUCTION FROM TH AT RECEIPT IS PRINCIPLES OF LAW AND NOT IN ACCORDANCE WITH ACCOUNTANCY PRACT ICE. FURTHER, THE HONBLE APEX COURT HELD THAT THE QUESTION AS TO WHE THER A PRINCIPAL RECEIPT IS OF THE NATURE OF INCOME AND FALLS WITHIN THE CHA RGE OF SEC. 4 OF THE ACT IS A QUESTION OF LAW WHICH HAS TO BE DECIDED BY THE CO URT ON THE BASIS OF THE PROVISIONS OF THE ACT AND INTERPRETATION OF THE TER M INCOME GIVEN IN A LARGE NUMBER OF DECISIONS OF THE HONBLE SUPREME CO URT, HIGH COURT AND PRIVY COUNCIL. AFTER TAKING NOTE OF THE APEX COURT ORDER AS ABOVE, WE NOTE THAT THE AO IN THE ASSESSMENT ORDER AFTER HAVING AC CEPTED THE STATEMENT OF TOTAL INCOME (SUPRA) AND THE RETURN WHEREIN THE ASSESSEE HAS SHOWN THE INCOME FROM COMMODITIES UNDER THE HEAD INCOME FROM OTHER SOURCES CANNOT NOW AFTER PERUSAL OF INCOME & EXPE NDITURE ACCOUNT DETERMINE THE CHARACTER OF TRANSACTION IN THE PENAL TY PROCEEDINGS AS INCOME FROM BUSINESS OR PROFESSION WHICH APPROACH /ACTION IS ERRONEOUS. WE NOTE THAT THE ASSESSEE IN HIS STATEME NT OF TOTAL INCOME ALONG WITH RETURN HAS CLASSIFIED HIS INCOME UNDER T WO HEADS (I) SALARY AND (II) FROM OTHER SOURCES AND THE INCOME OF RS. 3 CR. AS INCOME FROM OTHER SOURCES, WHICH WE FIND THE AO HAS NOT CONTESTED IN THE ASSESSMENT ORDER, HAS THUS CRYSTALLIZED AND THE NECESSARY INFERENCE D RAWN IS THAT ASSESSEE AN INDIVIDUAL WHO WAS ADMITTEDLY A SALARIED PERSON ENGAGED IN THE PREVIOUS YEAR RELEVANT TO THE ASSESSMENT YEAR UNDER CONSIDERATION (THAT TOO FOR THE FIRST TIME) IN AN ACTIVITY FROM WHICH H E DERIVED INCOME FROM OTHER SOURCES ARE NOT REQUIRED TO MAINTAIN BOOKS O F ACCOUNT WHICH ARE APPLICABLE ONLY IF THE ASSESSEE WAS ENGAGED IN BUSI NESS OR PROFESSION. HOWEVER, WE FURTHER NOTE THAT THE TRANSACTIONS WHIC H YIELDED INCOME, THE ASSESSEE HAD IN FACT MAINTAINED RECORDS FROM WHICH THE AO WAS ABLE TO DEDUCE THE TRUE INCOME AND EXPENDITURE OF THE ASSES SEE. WE NOTE THE AO IN THE ASSESSMENT ORDER HAS ACCEPTED THE RETURNED I NCOME COMPRISING OF INCOME FROM SALARY AND INCOME FROM OTHER SOURCES BY OBSERVING AS UNDER : 30 ITA NO. 971/JP/2017 SHRI ANUJ MATHUR, JAIPUR. TOTAL INCOME ASSESSED AS PER RETURN RS.3,44,65,120 /-. AND FURTHER WE NOTE THAT THE AO HAD SPECIFICALLY ST ATED IN THE BODY OF THE ASSESSMENT ORDER VIDE COLUMN NO. 10 THAT THE ASSESS EE IS HAVING ONLY SALARY INCOME AND INCOME FROM OTHER SOURCES. THUS F ROM A PERUSAL OF THE ASSESSMENT ORDER, IT IS NOT IN DISPUTE THAT ASSESSE E IS NOT ENGAGED IN ANY BUSINESS. AND THE AO CANNOT CHANGE THE CHARACTER OF INCOME IN A DERIVATIVE PROCEEDING WHICH IS AN OFF-SHOOT OF ASSE SSMENT PROCEEDINGS I.E. THE PENALTY PROCEEDINGS WITHOUT CONTESTING AND MAKI NG A FINDING AGAINST THE CLAIM OF THE ASSESSEE IN THE ASSESSMENT ORDER A S DISCUSSED ABOVE. 7. FINALLY, THE LD. AR SUBMITTED THAT DURING THE S EARCH, THE SEARCH PARTY FOUND THE RECORDS OF THE ASSESSEES TRANSACTI ONS IN SPECULATIVE COMMODITY FROM THE DRAWER OF ASSESSEES ACCOUNTANT FROM WHICH THE AO COULD COMPUTE THE INCOME OF THE ASSESSEE FROM THE S AID TRANSACTION WHICH AMOUNT ASSESSEE DECLARED DURING SEARCH AND WH ICH WAS DULY RETURNED AND WHICH FIGURE WAS ACCEPTED BY THE AO. A CCORDING TO LD. AR, THE FACT THAT SEARCH HAPPENED ON 01.08.2012 NEED TO BE TAKEN NOTE OF SINCE UNDISPUTEDLY THERE WAS ENOUGH AND MORE TIME F OR THE ASSESSEE TO SUBMIT THE ACCOUNTS DURING ASSESSMENT PROCEEDINGS W HICH FACT HAS BEEN TAKEN NOTE OF AND CONCURRED BY THE LD. CIT(A). THER EAFTER, THE LD. AR DREW OUR ATTENTION TO THE DEFINITION OF UNDISCLOSED INCOME GIVEN UNDER SECTION 271AAB WHICH READS AS UNDER: PENALTY WHERE SEARCH HAS BEEN INITIATED. '271AAB. (1) THE ASSESSING OFFICER MAY, NOTWITHSTAN DING ANYTHING CONTAINED IN ANY OTHER PROVISIONS OF THIS ACT, DIRE CT THAT, IN A CASE WHERE SEARCH HAS BEEN INITIATED UNDER SECTION 132 ON OR A FTER THE 1ST DAY OF JULY, 2012, THE ASSESSEE SHALL PAY BY WAY OF PENALTY, IN ADDITION TO TAX, IF ANY, PAYABLE BY HIM, (A) A SUM COMPUTED AT THE RATE OF TEN PER CENT OF T HE UNDISCLOSED INCOME OF THE SPECIFIED PREVIOUS YEAR, IF SUCH ASSESSEE ******** EXPLANATION FOR THE PURPOSES OF THIS SECTION, - (A) . (B) . (C) 'UNDISCLOSED INCOME' MEANS (I) ANY INCOME OF THE SPECIFIED PREVIOUS YEAR REPR ESENTED, EITHER WHOLLY OR PARTLY, BY ANY MONEY, BULLION, JEWELLERY OR OTHE R VALUABLE ARTICLE OR THING OR ANY ENTRY IN THE BOOKS OF ACCOUNT OR OT HER DOCUMENTS OR TRANSACTIONS FOUND IN THE COURSE OF A SEARCH UNDER SECTION 132, 31 ITA NO. 971/JP/2017 SHRI ANUJ MATHUR, JAIPUR. WHICH HAS (A) NOT BEEN RECORDED ON OR BEFORE THE DATE OF SEA RCH IN THE BOOKS OF ACCOUNT OR OTHER DOCUMENTS MAINTAINED IN THE NORMAL COURSE RELATING TO SUCH PREVIOUS YEAR; OR (B) OTHERWISE NOT BEEN DISCLOSED TO THE [PRINCIPAL CHIEF COMMISSIONER OR] CHIEF COMMISSIONER OR [PRINCIPAL COMMISSIONER O R] COMMISSIONER BEFORE THE DATE OF SEARCH; OR (II) ANY INCOME OF THE SPECIFIED PREVIOUS YEAR REPR ESENTED, EITHER WHOLLY OR PARTLY, BY ANY ENTRY IN RESPECT OF AN EXP ENSE RECORDED IN THE BOOKS OF ACCOUNT OR OTHER DOCUMENTS MAINTAINED IN T HE NORMAL COURSE RELATING TO THE SPECIFIED PREVIOUS YEAR WHICH IS FO UND TO BE FALSE AND WOULD NOT HAVE BEEN FOUND TO BE SO HAD THE SEARCH NOT BEE N CONDUCTED. ACCORDING TO THE LD. AR, FROM THE FACTS AND CIRCUMS TANCES DESCRIBED ABOVE, SINCE THE ASSESSEE IS NOT ENGAGED IN BUSINES S OR PROFESSION, HE DOES NOT REQUIRE TO MAINTAIN THE BOOKS OF ACCOUNT A S PER SEC. 44AA OR SEC. 44AA(2) OF THE ACT, THEREFORE, THE ASSESSEES CASE FALLS IN THE SECOND LIMB I.E. OR OTHER DOCUMENTS AS STIPULATED U/S. 2 71AAB EXPLANATION (C) (SUPRA) WHICH DESCRIBES UNDISCLOSED INCOME FOR THE PURPOSES OF THIS SECTION WHICH IS VERY IMPORTANT TO ADJUDICATE THIS ISSUE. THEREFORE, THE QUESTION IS WHEN THE SEARCH TOOK PLACE, THE ASSESSE ES TRANSACTIONS (IN THIS CASE, THE SPECULATIVE TRANSACTION) HAS BEEN FO UND TO BE RECORDED IN THE OTHER DOCUMENTS WHICH IS (RETRIEVED FROM THE ASSESSEES ACCOUNTANTS DRAWER) AND BASED ON THAT THE ASSESSEE DECLARED RS. 3 CR. DURING SEARCH AND LATER RETURNED INCOME OF RS. 3 CR . AS INCOME UNDER THE HEAD INCOME FROM OTHER SOURCES WHICH WAS ACCEPTED BY THE AO IN TOTO. WE NOTE THAT SINCE THE INCOME UNDER QUESTION (RS. 3 CR.) WAS IN FACT ENTERED IN THE OTHER DOCUMENTS MAINTAINED IN THE NORMAL COURSE RELATING TO THE AY 2013-14, WHICH DOCUMENT WAS RETRIEVED DUR ING SEARCH, HENCE, THE AMOUNT OF RS. 3 CR. OFFERED BY THE ASSESSEE DOE S NOT FALL IN THE KEN OF UNDISCLOSED INCOME DEFINED IN SEC. 271AAB OF THE ACT. SO, RS. 3 CR. WHICH WAS COMMODITY PROFIT RECORDED IN THE OTHER DO CUMENT MAINTAINED BY THE ASSESSEE WHICH WAS RETRIEVED DURING SEARCH CANN OT BE TERMED AS UNDISCLOSED INCOME IN THE DEFINITION GIVEN U/S. 2 71AAB OF THE ACT. SINCE RS. 3 CR. CANNOT BE TERMED AS UNDISCLOSED INCOME AS PER SEC. 271AAB OF THE ACT, NO PENALTY CAN BE LEVIED AGAINST THE AS SESSEE. THEREFORE, WE UPHOLD THE ORDER OF THE LD. CIT(A) ON THE AFORESAID REASONING RENDERED BY US. 8. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISM ISSED. 4. WE FIND THAT THE FACTS IN THE AFORESAID CASE AN D THE DECISION RENDERED THEREON ARE SQUARELY APPLICABLE TO THE FAC TS OF THE INSTANT CASES BEFORE US AND RESPECTFULLY FOLLOWING THE SAME, WE D ISMISS THE APPEALS OF THE REVENUE. 32 ITA NO. 971/JP/2017 SHRI ANUJ MATHUR, JAIPUR. THEREFORE, WHEN THE ASSESSEE IS NOT REQUIRED TO MAI NTAIN THE BOOKS OF ACCOUNT AS PER SECTION 44AA, THEN THE MATTER IS REQ UIRED TO BE EXAMINED WHETHER THE ALLEGED UNDISCLOSED INCOME IS RECORDED IN THE OTHER DOCUMENTS MAINTAINED IN THE NORMAL COURSE AS PER CLAUSE (C) T O EXPLANATION TO SECTION 271AAB. UNDISPUTEDLY THE ALLEGED INCOME WAS FOU ND RECORDED IN THE DIARY WHICH IS NOTHING BUT THE OTHER RECORD MA INTAINED IN THE NORMAL COURSE, THUS THE SAME WOULD NOT FALL IN THE DEFINIT ION OF UNDISCLOSED INCOME. ONCE THE SAID INCOME IS FOUND AS RECORDED IN THE OT HER DOCUMENTS MAINTAINED IN THE NORMAL COURSE, THEN IT CANNOT BE PRESUMED THAT THE ASSESSEE WOULD NOT HAVE DISCLOSED THE SAME IN THE R ETURN OF INCOME TO BE FILED AFTER ABOUT ONE YEAR FROM THE DATE OF SEARCH. HENCE, IN VIEW OF THE ABOVE FACTS AND CIRCUMSTANCES OF THE CASE AS WELL A S THE VARIOUS DECISIONS ON THIS POINT, WE HOLD THAT THE PENALTY LEVIED UNDER S ECTION 271AAB IS NOT SUSTAINABLE AND THE SAME IS DELETED. 10. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWE D. IN VIEW OF OUR FINDINGS IN THE CASE OF RAVI MATHUR IN ITA NO. 969/JP/2017, THE PENALTY LEVIED BY THE AO UNDER SECTION 271AAB STAND S CANCELLED. 4. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED . ORDER PRONOUNCED IN THE OPEN COURT ON 13/06/2018 . SD/- SD/- HKKXPUN FOT; IKY JKWO (BHAGCHAND) ( VIJAY PAL RAO ) YS[KK LNL;@ ACCOUNTANT MEMBER U;KF;D LNL;@ JUDICIAL MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 13/06/2018. DAS/ 33 ITA NO. 971/JP/2017 SHRI ANUJ MATHUR, JAIPUR. VKNS'K DH IZFRFYFI VXZSFKR@ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ@ THE APPELLANT-SHRI ANUJ MATHUR, JAIPUR. 2. IZR;FKHZ@ THE RESPONDENT-THE DCIT, CENTRAL CIRCLE-4, JAIPUR. 3. VK;DJ VK;QDR@ CIT 4. VK;DJ VK;QDR@ CIT(A) 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ@ DR, ITAT, JAIPUR 6. XKMZ QKBZY@ GUARD FILE {ITA NO. 971/JP/2017} VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASST. REGISTRAR