9911796707
TMI Blog2017 (8) TMI 1291X X X X Extracts X X X X X X X X Extracts X X X X ..... present case, he has sustained the penalty on the ground that the assessee has failed to substantiate the manner in which the undisclosed income was derived. The facts are identical and arise from the same search, therefore, the finding of the ld. CIT(A) is contradictory. Under these facts and circumstances, we restore this appeal to the file of the ld. CIT(A) for decision afresh. - ITA No. 137/JP/2016, ITA No. 160/JP/2016, ITA No. 135/JP/2016 - - - Dated:- 14-6-2017 - Shri Bhagchand, AM And Shri Kul Bharat, JM Assessee by : Shri K.L. Moolchandani (CA) Revenue by : Shri B.K. Gupta (CIT DR) ORDER Per : Kul Bharat, JM. ITA No. 137/JP/2016 and 160/JP/2016 are the appeals filed by the assessee and revenue and ITA No. 135/JP/2016 filed by the assessee arise against the separate orders dated 23/12/2015 passed by the ld. CIT(A)-4, Jaipur pertaining to the assessment year 2012-13. The grounds taken by the assessee as well as the revenue are as under:- Ground of assessee s appeal ITA No. 137/JP/2016 1 On the facts and in the circumstances of the case, the authorities below have factually and legally erred in imposing and confirming penalty of ₹ 24 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 69A of the Act for unexplained jewellery and also penalty was initiated U/s 271AAA of the Act in respect of unaccounted income of ₹ 2,44,10,262/-. A penalty order was passed on 26/09/2014 levying the penalty @ 10% of the undisclosed income. 4. Being aggrieved by the order of the Assessing Officer, the assessee carried the matter before the ld. CIT(A), who after considering the submissions, dismissed the appeal of the assessee. 5. Now the assessee is in appeal before us challenging the correctness of the order of the ld. CIT(A). The only effective ground of the assessee s appeal is against confirming the penalty U/s 271AAA of the Act. The ld AR of the assessee has reiterated the submissions as made in the written submissions. He further submitted that the authorities below were not justified in levying the penalty and confirming the same U/s 271AAA of the Act. He further submitted that the assessee had duly included the income surrendered during the course of search. He submitted that initiation of penalty by the Assessing Officer is contrary to the spirit of the provisions of Section 271AAA of the Act. He also submitted that in the statement recorded during the course o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e undisclosed income referred to in sub-section (1). (4) The provisions of sections 274 and 275 shall, so far as may be, apply in relation to the penalty referred to in this section. Explanation For the purposes of this section,- (a) undisclosed income means- (i) any income of the specified previous year represented, either wholly or partly, by any money, bullion, jewellery or other valuable article or thing or any entry in the books of account or other documents 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 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 or Commissioner before the date of the search ; or (ii) any income of the specified previous year represented, either wholly or partly, by any entry in respect 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and substantiate the manner in which the undisclosed income of ₹ 51,66,579/- has been derived. In response to the notice the assessee stated that provisions contained in section 271 AAA of the Act are inapplicable to the facts of the appellant company and complete taxes had been paid by the appellant company. However, AO was not convinced with assessee s contention and levied penalty. Now it needs to be examined as to whether the assessee has been able to fulfill the requirement of section 271 AAA for claiming exemption from levy of the penalty there under. Having gone through the provisions laid down u/s 271 AAA of the Act, I find that in respect of unaccounted income in the cases where search is initiated after 1.6.2007 and before 1.7.2012, the assessee is to pay a penalty @ 10% of unaccounted income but sub section (2) of section 271 AAA also provides exemption from this penalty provisions in a situation in which (i) during the course of search In a statement under section 132(41 the assessee admits the undisclosed income and specifies the manner in which such income has been derived (ii) substantiates the manner in which the undisclosed income was derived and (iii) pays ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... which he was carrying on and not from other sources. The object of the provision is achieved by making the statement admitting the non-disclosure of money, bullion, jewellery, etc. It was held that much importance should not be attached to the statement about the manner in which such income has been derived. It can be inferred on the facts and circumstances of the case, in the absence of anything to the contrary. Therefore, mere non-statement of the manner in which such income was derived would not make Explanation 5(2) inapplicable held Hon'ble High Court. Similar view has been expressed by the Hon'ble Gujarat High Court in the case of CIT vs. Mahendra C. Shah (supra) For a ready reference relevant extract of the said decision of Hon'ble Gujarat High Court is reproduced hereunder:- In so far as the alleged failure on the part of the assessee to specify in the statement under section 132(4) of the Act regarding the manner in which such income has been derived, suffice it to state that 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 its entirety to the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... held by the first appellate authority. The Tribunal had however deleted the penalty on the basis that there is no prescribed method to indicate the manner in which income was generated when the definition of undisclosed income has been defined in the Act itself when no income of the specified previous year represented either wholly or partly which onus lay upon the assessee stood discharged. 12. When we examine the facts of the present case in view of the above Decisions, we find that no specific question was raised by the department during the course of recording of statement u/s 132(4) of the Act to specify the manner in which such income has been derived and to substantiate it, instead the assessee in reply to question No. 18 has stated that undisclosed income was from the business. Respectfully following the above decision we hold that in absence of specific query raised in this regard, the assessee would not be expected to specify the manner in which the said undisclosed income was derived and substantiate it. still the assessee has specify the manner substantiation of which cannot be disputed in absence of any adverse finding on the manner explained by the assessee a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 9/= is hereby deleted. Assessee s appeal in ground no. 1 is allowed. However, in the present case, he has sustained the penalty on the ground that the assessee has failed to substantiate the manner in which the undisclosed income was derived. The facts are identical and arise from the same search, therefore, the finding of the ld. CIT(A) is contradictory. Under these facts and circumstances, we restore this appeal to the file of the ld. CIT(A) for decision afresh. 8. Now we take assessee s appeal in ITA No. 135/JP/2016. In this case, the facts and identical as were in ITA No. 137/JP/2016 pertaining to the A.Y. 2012-13 except the change of figures. The parties have adopted same argument as were in ITA No. 137/JP/2016. By taking a consistent view, we also restore this issue to the file of the ld. CIT(A) for deciding afresh. 9. Now we take revenue s appeal in ITA No. 160/JP/2016 The only effective issue is against deleting the penalty of ₹ 51,66,579/- by the ld. CIT(A). The ld CIT DR has vehemently supported the order of the Assessing Officer and submitted that the ld. CIT(A) was not justified in deleting the penalty. 10. On the contrary, the ld AR of the as ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
