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TMI Blog2022 (5) TMI 159X X X X Extracts X X X X X X X X Extracts X X X X ..... hin the knowledge of the assessee during the course of assessment proceedings and still the assessee had not chosen to participate in the matter of jurisdiction of the Assessing Officer to whom the case has been transferred. The assessee cannot be allowed latter to challenge the jurisdiction of the Assessing Officer as held in the case of Pannalal Binjraj vs. Union of India [ 1956 (12) TMI 1 - SUPREME COURT ] and the Hon ble Gujarat High Court in the case of Shivabhai Khodabhai Patel vs. CIT [ 1999 (12) TMI 31 - GUJARAT HIGH COURT ] - the objection raised by the assessee challenging the transfer of jurisdiction of the case does not stand the test of the law. Thus, this contention is devoid of any merit and, accordingly, we dismiss the same. Addition based on the information contained in the document impounded from the office premises of third party - As contended that the impounded document from the premises of the third party cannot be used as incriminating material for the purpose of making addition in the assessment made pursuant to notice u/s 153A - HELD THAT:- No doubt the impounded document no.98 of Annexure A-1 was impounded from the office premises of M/s. Maha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the provisions of section 271AAA to say that an assessee is required to disclose the manner in which the undisclosed income is derived and its substantiation only on a query posed to him by the Investigation Officer. Such construction only amount to adding words to the statute which is not a permissible rule of interpretation. In view of this, we find it difficult to agree with the decision of CIT vs. Mahendra C. Shah [ 2008 (2) TMI 32 - GUJARAT HIGH COURT ] and CIT v. Radha Kishan Goel [ 2005 (4) TMI 47 - ALLAHABAD HIGH COURT ] In our considered opinion, the decision of Smt. Ritu Singal [ 2018 (3) TMI 593 - DELHI HIGH COURT ] is more reasoned and considered decision and, therefore, we prefer to follow the view of the Hon ble Delhi High Court in the case of Smt. Ritu Singal (supra) and, accordingly, uphold the levy of penalty u/s 271AAA of the Act. - Decided against assessee. - ITA No. 1492/PUN/2015, 1493/PUN/2015, 1494/PUN/2015 - - - Dated:- 27-4-2022 - Shri Inturi Rama Rao, Accountant Member And Shri S. S. Viswanethra Ravi, Judicial Member For the Assessee : Shri Bhupendra Shah For the Revenue : Shri M. G. Jasnani ORDER PER INTURI RAMA RAO, AM: ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e) No sum is credited or no proof is found by the Assessing Officer of payment of Rs. 10,00,000/- and made the addition only on the basis of document impounded which is nothing but a dumb document. 4) In the facts and circumstances of the case and in law, the learned Assessing Officer erred in adding Rs. 10,00,000/- without issuing any show cause notice and thereby not affording any opportunity of rebuttal. 5) The Assessing Officer wrongly charged interest u/s 234 and initiated penalty u/s 271(1)(c). 6) In the facts and the circumstances of law, the Ld Commissioner of Income Tax(A) erred in confirming all the mentioned grounds. [B] Relief Prayed: The appellant therefore prays as follows, 1. To quash the assessment order passed u/s 143(3) r.w.s 153A only on the basis of order passed u/s 127 which itself is bad in law. 2. To delete the addition of Rs.10,00,000/- which is not based on any incriminating document seized from the Appellant. 3. To delete the addition wrongly made on the basis of document impounded in the case of third party during their survey and wrongly assessed u/s 153A. 4. To quash the assessment passed without issuing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er dated 04.12.2013 requested the appellant to explain the transactions and furnish the complete address of the said N.V. Kharote Construction Pvt. Ltd. and also prove that the said sum of Rs.36,00,000/- had been offered to tax. The appellant vide letter dated 07.01.2014 submitted that this letter was received for arbitration and guidance from N.V. Kharote which is under dispute and denied having received any payment in cash. However, the Assessing Officer had not believed the statement of the appellant and proceeded to make addition of Rs.10,00,000/- for assessment year 2006-07 and Rs.26,00,000/- for assessment year 2007-08. Even on appeal before the ld. CIT(A), the ld. CIT(A) after analyzing the contents of the impounded paper concluded that because of failure of the assessee to explain the document, Assessing Officer had inferred that the assessee had received unaccounted commission of Rs.10,00,000/- for assessment year 2006-07, and Rs.26,00,000/- for assessment year 2007-08, upheld the addition made by the Assessing Officer. 6. Being aggrieved by the above decision of the ld. CIT(A), the appellant is in appeal before us. 7. As regard to the contention of the appellant tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at Ranchi. 20. This being so, the party once acquiesced to the jurisdiction of the transferee Court, all statutory rights which the assessee gets by virtue of section 127 vanish and, therefore, the assessee cannot assert that without affording opportunity as required under section 127, the case has been transferred. In this regard see Halsbury s Laws of England, Vol. II, 3rd Ed., page 140, Pr. 265 and also the case in O.A.O.K. Lakshmanan Chettiar v. Commissioner, Corporation of Madras AIR 1927 Mad. 130, which are referred to in the decision in the case of Pannalal Binjraj v. Union of India [1957] 31 ITR 565 (SC). 21. In the case of Pannalal Binjraj (supra), which is a Constitution Bench decision, the Supreme Court lays down the law to the effect that, if an assessee has acquiesced in the jurisdiction of the Income-tax Officer to whom a case has been transferred, he cannot subsequently object to the jurisdiction of the officer and seek to get the order of transfer quashed by invoking the jurisdiction of the Court under article 226 of the Constitution . 22. This being the law in respect of cases where the assessee has acquiesced to the jurisdiction of the transferee C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not correct. This presumption raised u/s 132(4A) remains uncontroverted by the appellant by leading necessary evidence. It would clear that it is a document showing the receipt of commission income, the onus lies upon the assessee to show that the said transaction was reflected in the regular books of account maintained and offered to tax. In the circumstances, Assessing Officer would be justified in drawing adverse inference on failure of the assessee to explain the contents of the document. Therefore, the Assessing Officer is justified in drawing an adverse inference that the appellant is in receipt of unaccounted income of Rs.10,00,000/- for the year under consideration and Rs.26,00,000/- for the assessment year 2007-08. 13. In the light of the above discussion, we confirm the finding of the lower authorities. Accordingly, the ground of appeal no.2, 3 and 4 raised by the assessee stands dismissed. 14. In the result, the appeal of the assessee in ITA No.1492/PUN/2015 for the assessment year 2006-07 stands dismissed. ITA No.1493/PUN/2015, A.Y. 2007-08 : 15. Since the facts and issues involved in appeal of the assessee in ITA No.1493/PUN/2015 for A.Y. 2007-08 are i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n, no penalty can be levied u/s 271AAA of the Act placing reliance on the decision of the Hon ble Allahabad High Court in the case of Radha Kishan Goel (supra). 20. On the other hand, ld. CIT-DR submitted that when the assessee did not satisfy during course of the statement recorded u/s 132(4) as to how the undisclosed income was derived on such failure, it could not be concluded that the assessee had fulfilled the requirements of sub-section (2) of section 271AAA of the Act. The ld. CIT-DR also placed reliance on the decision of the Hon ble Delhi High Court in the case of PCIT vs. Smt. Ritu Singal, 403 ITR 97 (Delhi). 21. We heard the rival submissions and perused the material on record. The issue in the present appeal relates to the levy of penalty u/s 271AAA of the Act. The provisions of section 271AAA provides that in a case where the search has been initiated u/s 132 on or after first day of June, 2007 but before the first day of July, 2007, the Assessing Officer shall levy the penalty, in addition of tax at the rate of 10% of the undisclosed income. Sub-section (2) of section 271AAA provides that no penalty shall be levied u/s 271AAA in a case where the assessee, during ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... if the conditions in Section 271AAA (2) are not met with. This is quite different from the penal provision under Section 271 (1) (c) of the Act, which directs that if income is concealed or inaccurate returns are filed, which are disallowed by the AO, the penalty shall be three times the amount of tax sought to be evaded . In the case of amounts disclosed during the course of search, the penalty amount is only ten percent of the undisclosed income. Parliament has, therefore, given a different treatment to the latter category. At the same time, if an assessee were to successfully urge the escape route so to say, of Section 271AAA (2), all three conditions mentioned in the provision, (as held in Gebilal Kanhaialal's case (supra) in respect of pari material provisions) have to necessarily be fulfilled. In the preset case, the assessee, while declaring the undisclosed income also stated, that the surrender is being made subject to no penal action of Section 271 (1) (c) . 15. While dealing with a case of similar surrender- but made in the course of survey proceedings, by an assessee (which led to imposition of penalty), the Supreme Court, in Mak Data (P) Ltd. v CIT [2013 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat the sums advanced were undisclosed income. However, she did not specify how she derived that income and what head it fell in (rent, capital gain, professional or business income out of money lending, source of the money etc). Unless such facts are mentioned with some specificity, it cannot be said that the assessee has fulfilled the requirement that she, in her statement (under Section 132 (4)) substantiates the manner in which the undisclosed income was derived . Such being the case, this court is of opinion that the lower appellate authorities misdirected themselves in holding that the conditions in Section 271AAA (2) were satisfied by the assessee. 23. Thus, we find that there is a clear cleavage of judicial opinion among above three High Courts. In the circumstances, the Hon ble Jurisdictional High Court in the case of CIT vs. Thana Electricity Supply Ltd., 206 ITR 727 held that it is satisfaction of the Court interpreting the law, language of the taxing provisions ambiguous or capable of more meaning than once which is material. If the court does not think so, the fact that two different opinions have been expressed by the parties or accepted by some Tribunal or High ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t sufficient to attribute any ambiguity or doubt as to the true scope of the provision. ... It is, therefore, clear that it is the satisfaction of the court interpreting the law that the language of the taxing provision is ambiguous or reasonably capable of more meanings than one, which is material. If the court does not think so, the fact that two different views have been advanced by parties and argued forcefully, or that one such view which is favourable to the assessee has been accepted by some Tribunal or High Court, by itself will not be sufficient to attract the principle of beneficial interpretation. In the instant case, as we are not satisfied with the interpretation given by the Tribunal or the Calcutta High Court to section 33(6) of the Act, in our opinion, accepting those decisions by applying the test of beneficial interpretation does not arise. 24. We now turn to the facts of the present case. It is admitted position that the appellant during the course of giving statement u/s 132(4) had not disclosed the manner in which the undisclosed income had been derived and its substantiation nor was there any query posed by the Investigating Officer of the Departmen ..... X X X X Extracts X X X X X X X X Extracts X X X X
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