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TMI Blog2016 (11) TMI 1037X X X X Extracts X X X X X X X X Extracts X X X X ..... ur dated 27.10.2015 pertaining to assessment year 2012-13. The ground raised by the assessee is as under : 1. On the facts and in the circumstances of the case and in law the ld. CIT (A) erred in confirming the imposition of penalty of ₹ 27,19,188/- under section 271AAA of Income Tax Act, 1961. 2. The assessee prays for leave to add, to amend, to delete, or modify the all or any grounds of appeal on or before the hearing of appeal. 2. Briefly stated the facts are that a search and seizure action under section 132 of the I.T. Act, 1961 (hereinafter referred to as the Act) was conducted on 29.06.2011 on Ganpati Lockers Pvt. Ltd. situated at Ganpati Plaza, M.I. Road, Jaipur. During the course of search action, valuables being gold bullion, loose diamonds, jewellery etc. which was valued at ₹ 2,84,19,380/- and cash amounting to ₹ 46,22,500/- aggregating to ₹ 3,30,41,880/- were seized 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 valua ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessment of assessee for AY 2012-13 was completed by ld AO vide his order dated 10.03.2014 and the returned income of the assessee was accepted. 4.2. The ld. Counsel further submitted that the penalty u/s 271AAA was imposed by treating the income of ₹ 2,71,91,880/- declared by the assessee in return as undisclosed income of the assessee within the definition 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 section 271AAA and therefore, the lower authorities have not justified in levy of penalty u/s 271AAA. In this regard, the assessee submits that the following facts are not in dispute: - (i) In the statement recorded by DDI wing the assessee admitted the undisclosed income. (ii) The manner in which the undisclosed income derived was also explained. The assessee has spelled out in detail the 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 Abhishek Patni ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of sub-section (2) of section 271AAA have been satisfied by the assessee and consequently 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 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 order 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 prejudice to above since the assessee has not acted deliberately in defiance of law or was not guilty of conduct contumacious or dishonest, or has not acted in conscious 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 Steels Ltd. Vs. State of Orissa, 83 ITR 26 (SC). Hon ble Apex Court has held that - An order imposing penalty for failure to carry out a statutory obligation is the result of a quasi-crimin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ee 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 statement recorded under section 132(4) of the Act, has admitted the undisclosed income, 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 statement recorded in course of search. Subsequently, the assessee paid tax, together with interest in respect of the undisclosed income and filed return of income, which 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 ₹ 2,25,69,380/- Cash ₹ 46,22,500/- ₹ 2,71,91,880/- We find that the case of the assessee is squarely covered 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/2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Court held as under:- When the statement is being recorded by the authorized officer it is incumbent upon the authorized officer to explain the provisions of Explanation 5 in entirety to the assessee concerned and the authorized officer cannot stop short at a particular stage so as to permit the Revenue to take advantage of such a lapse in the statement. The reason is not far to seek. In the first instance, the statement is being recorded in the question and answer form and there would be no occasion for an assessee to state and make averments in the exact format stipulated by the provisions considering the setting in which such statement is being recorded. Secondly, considering the social environment it is not possible to expect from an assessee, whether literate or illiterate, to be specific and to the point regarding the conditions stipulated in the second exception 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 denial of the benefit. 4.1 In this case, the assessee was asked ..... X X X X Extracts X X X X X X X X Extracts X X X X
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