SHRI MAHESH KUMAR JAIN, KISHANGARH v. ASSISTANT COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE, AJMER, AJMER

ITA 630/JPR/2017 | 2014-2015
Pronouncement Date: 27-11-2017 | Result: Dismissed

Appeal Details

RSA Number 63023114 RSA 2017
Assessee PAN ADOPJ4253D
Bench Jaipur
Appeal Number ITA 630/JPR/2017
Duration Of Justice 3 month(s) 30 day(s)
Appellant SHRI MAHESH KUMAR JAIN, KISHANGARH
Respondent ASSISTANT COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE, AJMER, AJMER
Appeal Type Income Tax Appeal
Pronouncement Date 27-11-2017
Appeal Filed By Assessee
Tags mahesh kumar jain
Order Result Dismissed
Bench Allotted B
Tribunal Order Date 27-11-2017
Date Of Final Hearing 27-11-2017
Next Hearing Date 27-11-2017
Assessment Year 2014-2015
Appeal Filed On 28-07-2017
Judgment Text
VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL JAIPUR BENCHE S JAIPUR JH DQY HKKJR] U;KF;D LNL; OA JH FOE FLAG ;KNO] YS [KK LNL; DS LE{K BEFORE: SHRI KUL BHARAT JM & SHRI VIKRAM SINGH YAD AV AM VK;DJ VIHY LA-@ ITA NO. 630/JP/17 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2014-15 SH. MAHESH KUMAR JAIN R.D. MITTAL HOSPITAL CITY ROAD MADANGANJ KISHANGARHG. CUKE VS. THE ACIT CENTRAL CIRCLE AJMER . LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN NO. ADOPJ4253D VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT VK;DJ VIHY LA-@ ITA NO. 651/JP/17 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2014-15 THE DCIT CENTRAL CIRCLE AJMER. CUKE VS. SH. MAHESH KUMAR JAIN R.D. MITTAL HOSPITAL CITY ROAD MADANGANJ KISHANGARHG. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN NO. ADOPJ4253D VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT VK;DJ VIHY LA-@ ITA NO. 629/JP/17 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2014-15 SH. JAI KUMAR BAKLIWAL BAKLIWAL SADAN JAIPUR ROAD MADANGANJ KISHANGARH. CUKE VS. THE ACIT CENTRAL CIRCLE AJMER . LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN NO. AASPB1716G VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT ITA NO. 629 TO 635 & 648 TO 652/JP/17 SH. MAHESH KUMAR JAIN AND OTHERS VS. ACIT 2 VK;DJ VIHY LA-@ ITA NO. 648/JP/17 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2014-15 THE DCIT CENTRAL CIRCLE AJMER. CUKE VS. SH. JAI KUMAR BAKLIWAL BAKLIWAL SADAN JAIPUR ROAD MADANGANJ KISHANGARH. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN NO. AASPB1716G VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT VK;DJ VIHY LA-@ ITA NO. 631/JP/17 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2014-15 SH. PRAKASH CHAND JAIN NEAR BALAJI TEMPLE JAIPUR ROAD MADANGANJ KISHANGARH. CUKE VS. THE ACIT CENTRAL CIRCLE AJMER . LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN NO. AAQPJ1224R VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT VK;DJ VIHY LA-@ ITA NO. 650/JP/17 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2014-15 THE DCIT CENTRAL CIRCLE AJMER. CUKE VS. SH. PRAKASH CHAND JAIN NEAR BALAJI TEMPLE JAIPUR ROAD MADANGANJ KISHANGARH . LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN NO. AAQPJ1224R VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT VK;DJ VIHY LA-@ ITA NO. 632/JP/17 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2014-15 SH. SURESH CHAND MITTAL MITTAL TRADERS NEAR BALAJI TEMPLE MADANGANJ KISHANGARH. CUKE VS. THE ACIT CENTRAL CIRCLE AJMER . LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN NO. AAVPM6105B VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT ITA NO. 629 TO 635 & 648 TO 652/JP/17 SH. MAHESH KUMAR JAIN AND OTHERS VS. ACIT 3 VK;DJ VIHY LA-@ ITA NO. 633/JP/17 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2014-15 SH. DINESH KUMAR MITTAL VINAYAK NAGAR JAIPUR ROAD MADANGANJ KISHANGARH. CUKE VS. THE ACIT CENTRAL CIRCLE AJMER . LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN NO. AAVPM6028M VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT VK;DJ VIHY LA-@ ITA NO. 649/JP/17 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2014-15 THE DCIT CENTRAL CIRCLE AJMER. CUKE VS. SH. DINESH KUMAR MITTAL VINAYAK NAGAR JAIPUR ROAD MADANGANJ KISHANGARH. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN NO. AAVPM6028M VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT VK;DJ VIHY LA-@ ITA NO. 634/JP/17 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2014-15 SMT. ALKA JAIN NEAR BALAJI TEMPLE MADANGANJ KISHANGARH. CUKE VS. THE ACIT CENTRAL CIRCLE AJMER . LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN NO. AFQPJ8732H VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT VK;DJ VIHY LA-@ ITA NO. 635/JP/17 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2014-15 SH. PUN EE T JAIN NEAR BALAJI TEMPLE JAIPUR RAOD MADANGANJ KISHANGARH. CUKE VS. THE ACIT CENTRAL CIRCLE AJMER . LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN NO. AAQPJ1234P ITA NO. 629 TO 635 & 648 TO 652/JP/17 SH. MAHESH KUMAR JAIN AND OTHERS VS. ACIT 4 VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT VK;DJ VIHY LA-@ ITA NO. 652/JP/17 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2014-15 THE DCIT CENTRAL CIRCLE AJMER. CUKE VS. SH. PUNEET JAIN NEAR BALAJI TEMPLE JAIPUR RAOD MADANGANJ KISHANGARH. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN NO. AAQPJ1234P VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY : SHRI NIKHILESH KATARIA (CA) JKTLO DH VKSJ LS@ REVENUE BY : SHRI PRITHVIRAJ MEENA (ADDL.CIT) LQUOKBZ DH RKJH[K@ DATE OF HEARING : 18/10/2017 ?KKS'K .KK DH RKJH[K @ DATE OF PRONOUNCEMENT : 27/11/2017 VKNS'K@ ORDER PER BENCH: THESE ARE CROSS APPEALS FILED BY THE REVENUE AND RE SPECTIVE ASSESSEES AGAINST THE CONSOLIDATED ORDER OF LD. CIT(A)-2 UDA IPUR DATED 31.05.2017. ALL THESE APPEALS INVOLVED SIMILAR FACTS PATTERN AND ID ENTICAL QUESTION RELATING TO LEVY OF PENALTY U/S 271AAB. HENCE ALL THESE APPEAL S WERE TAKEN UP FOR HEARING TOGETHER AND ARE BEING DISPOSED OFF BY THIS CONSOLIDATED ORDER. 2. AT THE OUTSET THE LD. AR SUBMITTED THAT THE MAT TER RELATING TO SH. MAHESH KUMAR JAIN IN ITA NO. 630/JP2017 & 651/JP/20 17 FOR A.Y. 2014-15 MAY BE TAKEN AS A LEAD CASE. WITH THE CONSENT OF BO TH THE PARTIES THE MATTER PERTAINING SH. MAHESH KUMAR JAIN HAS BEEN TAKEN AS A LEAD CASE FOR THE PURPOSE OF PRESENT DISCUSSION AND ADJUDICATION OF T HE ISSUES THAT HAVE BEEN RAISED BEFORE US. IN THIS CASE THE RESPECTIVE GROU NDS OF APPEAL TAKEN BY THE ASSESSEE AND THE REVENUE ARE AS UNDER:- ITA NO. 629 TO 635 & 648 TO 652/JP/17 SH. MAHESH KUMAR JAIN AND OTHERS VS. ACIT 5 ASSESSEES GROUNDS OF APPEAL (ITA NO. 630/JP/17) 1.1 THE PENALTY ORDER PASSED U/S 271AAB IS BAD IN LAW AS WELL AS ON FACTS AND HENCE THE SAME MAY PLEASE BE QUASHED. 1.2 THE LD. AO ERRED IN LAW AS WELL AS ON THE FACTS OF THE PRESENT CASE IN LEVYING PENALTY U/S 271AAB (1)(C) @ 30% OF UNDI SCLOSED INCOME AND THE LD. CIT(A) HAS ALSO ERRED IN MODIFYING THE SAME @ 10% OF UNDISCLOSED INCOME U/S 271 AAB (1)(A) OF THE ACT T HE SAME MAY PLEASE BE DELETED IN TOTO. REVENUES GROUND OF APPEAL (ITA NO. 651/JP/17) 1. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES O F THE CASE THE CIT(A) WAS RIGHT IN DELETING THE PENALTY OF RS. 42 12 360/- IMPOSED BY THE AO U/S 271AAB (1)(C) OF THE INCOME T AX ACT 1961 ON UNDISCLOSED INCOME DISCLOSED DURING THE SEARCH. 3. THE FACTS OF THE CASE ARE THAT THE SEARCH AND SE IZURE OPERATION WAS CARRIED OUT AT THE RESIDENTIAL AND BUSINESS PREMISE S OF JAIN AGARWAL GROUP AT KISHANGARH INCLUDING THE ASSESSEE SH. MAHESH KUMA R JAIN ON 19.12.2013. DURING THE COURSE OF SEARCH AND SEIZURE OPERATION STATEMENT OF SH. MAHESH KUMAR JAIN WAS RECORDED U/S 132 (4) OF THE ACT ON 2 0.12.2013 WHEREIN HE SURRENDERED UNDISCLOSED INCOME OF RS. 1 40 41 210/- FOR TAXATION AS HIS UNDISCLOSED INCOME FOR A.Y. 2014-15. THE ASSESSEE S UBSEQUENTLY FILED HIS RETURN OF INCOME DISCLOSING INCOME OF RS. 1 48 24 5 60/- WHICH INCLUDED THE UNDISCLOSED INCOME OF RS. 1 40 41 210/- DECLARED DU RING THE COURSE OF SEARCH IN THE STATEMENT RECORDED U/S 132(4) OF THE ACT. D URING THE COURSE OF ASSESSMENT PROCEEDINGS THE ASSESSING OFFICER REFER RED TO THE STATEMENT RECORDED U/S 132(4) OF THE ACT AND STATED THAT THE ASSESSEE WAS ASKED TO EXPLAIN THE SOURCE OF CASH FOUND AT THE OFFICE AMOU NTING TO RS. 22 28 710/- AS PER QUESTION NO. 18 AND IN RESPONSE THE ASSESSEE HA S STATED THAT HE IS UNABLE ITA NO. 629 TO 635 & 648 TO 652/JP/17 SH. MAHESH KUMAR JAIN AND OTHERS VS. ACIT 6 TO STATE ANYTHING ABOUT THE SOURCE OF SUCH CASH F OUND AT THE OFFICE AND HE SURRENDERED THE SAME FOR TAXATION AS HIS UNDISCLOS ED INCOME FOR A.Y. 2014- 15. FURTHER DURING THE COURSE OF SEARCH VARIOUS I NCRIMINATING DOCUMENTS INCLUDING ANNEXURE AS EX-3 WERE FOUND AND SEIZED WHICH CONTAIN DETAILS OF ADVANCES GIVEN FOR LAND BY SHRI MAHESH KUMAR JAIN T O VARIOUS PARTIES AMOUNTING TO RS. 1 18 12 500/- AND IN THIS REGARD THE ASSESSEE VIDE QUESTION NOS. 20 AND 21 WAS ASKED TO PROVIDE FULL DETAILS. I N RESPONSE THE ASSESSEE HAS SUBMITTED THAT ALL THESE ENTRIES WHICH ARE RECO RDED IN DIARY 2013 (SAVING LIFE WITH EVERY INTENSION) WHICH HAS BEEN FOUND AT MY RESIDENTIAL PREMISES CONTAIN DETAILS OF ADVANCES GIVEN TO VARIO US PERSONS AGAINST PURCHASE OF LAND AND THE SAME ARE NOT RECORDED IN T HE BOOKS OF ACCOUNTS. FURTHER IT WAS STATED BY THE ASSESSEE THAT HE DOES NOT HAVE THE FULL PARTICULARS OF THE PERSONS WHOSE NAME ARE MENTIONE D IN THOSE ENTRIES AND FINALLY THE ASSESSEE VOLUNTARILY SURRENDERED THE AM OUNT OF RS. 1 18 12 500/- AS HIS UNDISCLOSED INCOME FOR A.Y. 2014-15. THE ASSESSING OFFICER HAS STATED IN THE ASSESSMENT ORDER THAT SH. MAHESH KUMAR JAIN HAS SUBSEQUENTLY CONFIRMED THE ABOVE SU RRENDERED OF RS. 1 40 41 210/- VIDE LETTER DATED 03.03.2014. THE AO THUS HELD THAT DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE ASSESSEE FAIL ED TO FURNISH THE NAMES WITH ADDRESS OF THE PERSONS WITH WHOM THE ABOVE TR ANSACTIONS HAVE BEEN MADE AND FAILED TO SUBSTANTIATE THE MANNER IN WHICH THE UNDISCLOSED INCOME HAVE BEEN ARRIVED AT. IT WAS FURTHER HELD BY THE A O THAT ABOVE DISCLOSER WAS DISCOVERED BY ACTION U/S 132(4) AND OTHERWISE IT CO ULD NEVER BE DISCLOSED BY THE ASSESSEE. IT WAS HELD THAT SINCE THE DISCLOSER WAS NOT VOLUNTARILY BUT BASED ON SEIZED DOCUMENTS AS WELL AS SEARCH ACTION THE ASSESSES IS LIABLE FOR PENALTY U/S 271AAB (1)(C) AND ACCORDINGLY PENALTY P ROCEEDINGS U/S 271 AAB(1)(C) WERE BEING INITIATED SEPARATELY. THE ASSESSED INCOME WAS DETERMINED AT RS. 1 48 24 5 60/- THE SAME AS THE RETURNED INCOME WHICH INCLUDES THE UNDISCLOSED INCO ME OF RS 1 40 41 210/- ITA NO. 629 TO 635 & 648 TO 652/JP/17 SH. MAHESH KUMAR JAIN AND OTHERS VS. ACIT 7 AND THE ASSESSMENT ORDER U/S 143(3) WAS PASSED ON 2 9.03.2016 AND ON THE SAME DATE NOTICE U/S 274 R.W. SEC 271 AAB (1)(C) W AS ISSUED TO THE ASSESSEE TO SHOW CAUSE WHY PENALTY U/S 271 AAB(1)(C) SHOULD NOT BE IMPOSED UPON THE ASSESSEE FOR THE UNDISCLOSED INCOME FOUND AND F INALLY ASSESSED IN HIS HANDS. 4. DURING THE COURSE OF PENALTY PROCEEDINGS THE AS SESSEE SUBMITTED THAT NO PENALTY CAN BE LEVIED SINCE THE ASSESSEE DURING THE COURSE OF SEARCH IN HIS STATEMENT RECORDED U/S 134(2) SPECIFICALLY MENTIONE D THAT THE SAID SURRENDERED WAS MADE TO BUY PEACE AND AVOID LITIGAT ION WITH THE DEPARTMENT AND WAS MADE ON THE CONDITION THAT NO PENALTY CAN B E LEVIED. IT WAS FURTHER SUBMITTED THAT THE ASSESSES DISCLOSED THE SAID INCO ME IN THE RETURN FILED U/S 139(1) OF THE ACT AND IS ACCORDINGLY ENTITLED TO IM MUNITY AGAINST THE LEVY OF PENALTY. IT WAS FURTHER SUBMITTED THAT THE PENALTY U/S 271AAB IS NOT APPLICABLE AS THE ASSESSEE DURING THE COURSE OF SEA RCH IN HIS STATEMENT ADMITTED THE ADDITIONAL INCOME AND SPECIFIES THE M ANNER IN WHICH SUCH INCOME HAS BEEN DERIVED SUBSTANTIATES THE MANNER I N WHICH THE ADDITIONAL UNDISCLOSED INCOME WAS DERIVED AND PAID THE TAXES ALONG WITH THE INTEREST IN RESPECT OF SUCH ADDITIONAL INCOME. IT WAS FURTHER S UBMITTED THAT PROVISIONS OF SECTION 271AAB(1)(A) ARE APPLICABLE IN CASE OF THE ASSESSEE AS THE ASSESSEE HAS ADMITTED THE UNDISCLOSED INCOME IN HIS STATEMEN T RECORDED U/S 132(4) OF THE ACT AND THE PROVISIONS OF SECTION 271AAB(1)(C) ARE NOT APPLICABLE AS THE LATTER PROVISIONS HAVE BEEN INTRODUCED BY THE FINAN CE ACT 2012 TO PENALIZE THOSE ASSESSEES WHO NEITHER DECLARED UNDISCLOSED IN COME U/S 132(4) NOR SURRENDER/REPORT THE SAME IN THEIR RETURN OF INCOME . 5. THE ASSESSEES CONTENTION HOWEVER DID NOT FIND FAVOUR WITH THE ASSESSING OFFICER. THE ASSESSING OFFICER HELD THAT THE CONTEN TION OF THE ASSESSEE THAT THE SURRENDERED WAS MADE TO BUY PEACE AND AVOID LON G LITIGATION IS NOT ACCEPTABLE AS THERE WAS NO PROVISION IN THE ACT WHI CH GIVES IMMUNITY TO THE ASSESSEE ON SUCH BASIS. THE DISCLOSURE MADE BY THE ASSESSEE WAS ONLY ON THE ITA NO. 629 TO 635 & 648 TO 652/JP/17 SH. MAHESH KUMAR JAIN AND OTHERS VS. ACIT 8 BASIS OF SEIZED MATERIAL GATHERED DURING THE COURSE OF SEARCH WHICH WAS CONFRONTED TO THE ASSESSEE. THE ASSESSEE HAVING NO ALTERNATE BUT TO ADMIT THE UNDISCLOSED INCOME MENTIONED THEREIN AND OFFERED TH E SAME FOR TAXATION. IT WAS ACCORDINGLY HELD THAT THE DISCLOSURE MADE BY TH E ASSESSEE CANNOT BE TREATED AS VOLUNTARILY DISCLOSURE OF INCOME. FURTHE R IT WAS HELD THAT SUBSEQUENT FILING OF RETURN OF INCOME CANNOT EXONER ATE THE ASSESSEE FROM BLAME WORTHINESS OF CONCEALING OF INCOME. THOUGH TH E ASSESSEE INCLUDED THE UNDISCLOSED RETURN OF INCOME BUT HE HAS NEITHER SPE CIFIED NOR SUBSTANTIATED THE MANNER IN WHICH THE UNDISCLOSED WAS DERIVED. IT WAS HELD BY THE ASSESSING OFFICER DURING THE COURSE OF ASSESSMENT P ROCEEDINGS THE ASSESSEE WAS SPECIFICALLY ASKED TO FURNISH THE NAMES AND ADD RESSES OF THE PERSONS FROM WHOM THE ABOVE TRANSACTIONS HAVE BEEN MADE AS WELL AS SOURCES OF UNDISCLOSED INCOME SO EARNED AND TO SUBSTANTIATE TH E MANNER IN WHICH THE UNDISCLOSED HAS BEEN ARRIVED AT. BUT DURING THE COU RSE OF ASSESSMENT AS WELL AS PENALTY PROCEEDINGS THE ASSESSEE HAS COMPLETELY FAILED TO FURNISH DESIRES DETAILS SOURCES OF UNDISCLOSED INCOME AND FAILED T O SUBSTANTIATE THE MANNER IN WHICH UNDISCLOSED INCOME WAS ARRIVED AT AS REQU IRED U/S 271AAB OF THE ACT. IT WAS FURTHER HELD THAT EVEN OTHERWISE THE AS SESSEE HAS FAILED TO EXPLAIN THE SOURCES AND MANNER OF DERIVING OF ABOVE UNDISCL OSED INCOME AS APPEARING IN THE SEIZED MATERIAL WHILE RECORDING STATEMENT U/ S 132(4) OF THE ACT AND OFFERED THE SAME FOR TAXATION. IT WAS FURTHER HELD THAT DURING THE COURSE OF PENALTY PROCEEDINGS THE ASSESSEE HAS ALSO NOT SUBMI TTED ANY EVIDENCES TO SUBSTANTIATE HIS CLAIM ON RECORD. IT WAS ACCORDINGL Y HELD THAT THE ASSESSEE HAS COMPLETELY FAILED TO EXPLAIN THE ISSUES RAISED DURI NG THE ASSESSMENT AS WELL AS PENALTY PROCEEDING THEREFORE PENALTY U/S 271 AAB ( 1)(C) OF THE ACT IS IMPOSABLE IN RESPECT OF THE UNACCOUNTED INCOME. RE GARDING RELIANCE PLACED BY THE ASSESSEE ON CASE LAWS IN THE CONTEXT OF SECT ION 271AAA THE ASSESSING OFFICER HELD THAT THE FACTS AND CIRCUMSTANCES IN TH OSE CASES ARE DIFFERENT WITH THE FACTS AND CIRCUMSTANCES OF THE ASSESSEES CASE IN AS MUCH AS THE ITA NO. 629 TO 635 & 648 TO 652/JP/17 SH. MAHESH KUMAR JAIN AND OTHERS VS. ACIT 9 ASSESSEES CASE IS COVERED U/S 271AAB OF THE ACT WH ICH HAS BEEN INTRODUCED BY THE FINANCE BILL 2012 IN ORDER TO STRENGTHEN THE PENAL PROVISION WHICH ARE APPLICABLE FOR SEARCH CONDUCTED ON OR AFTER 01.07.2 012. IT WAS FINALLY HELD BY THE ASSESSING OFFICER THAT THE PROVISIONS OF SECTIO N 271AAB(1)(C) ARE APPLICABLE IN THE CASE OF THE ASSESEE AS HE HAS NOT SUBSTANTIATED THE MANNER IN WHICH THE UNDISCLOSED INCOME WAS DERIVED. HE ACC ORDINGLY LEVIED PENALTY @ 30% OF UNDISCLOSED INCOME AMOUNTING TO RS. 42 12 36 0/-. 6. BEING AGGRIEVED WITH THE ACTION OF THE AO IN LEV YING THE PENALTY THE ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE LD . CIT(A). IN HIS ORDER THE LD. CIT(A) NOTED THAT WHILE COMPLETING THE ASSESSME NT THE AO WAS OF THE OPINION THAT THE ASSESSEE FAILED TO FURNISH THE NAM E WITH ADDRESS OF THE PERSONS FROM WHOM THE ABOVE TRANSACTIONS HAVE BEEN MADE AND FAILED TO SUBSTANTIATE THE MANNER IN WHICH UNDISCLOSED INCOME HAVE BEEN ARRIVED AT AND THE AO INITIATED THE PENALTY U/S 271 AAB(1)(C) OF THE ACT FOR WHICH HE ISSUED A SHOW CAUSE DATED 23.03.2016. THE LD. CIT(A ) FURTHER NOTED THAT THE ASSESSEE HAD FILED A DETAILED REPLY BEFORE THE AO O N 11.04.2016 IN WHICH IT WAS CONTENDED BEFORE THE AO THAT THE CASE OF THE AS SESSEE IS FULLY COVERED U/S 271AAB(1)(A) AND NOT U/S 271AAB(1)(C) FOR WHICH THE PENALTY WAS INITIATED BY THE AO. IT WAS FURTHER NOTED BY THE LD . CIT(A) THAT THE ASSESSEE HAS CONTENDED BEFORE HIM AS WELL THAT THE ASSESSEE DULY COMPLY WITH THE REQUIREMENTS OF SECTION 271AAB(1)(A) OF THE ACT AND IN THE STATEMENT RECORDED U/S 132(4) THE ASSESSEE HAD CATEGORICALLY EXPLAINED THE MANNER OF EARNING SUCH INCOME AND ALSO SUBSTANTIATED THE SA ME IN REPLY TO QUESTION NO. 18 TO 21. IT WAS FURTHER CONTENDED BY THE ASSESSEE BEFORE THE LD. CIT(A) THAT PROVISIONS OF SECTION 271AAA AND SECTION 271 AAB ARE PARI-MATE RIA AND THEREFORE THE CASE LAWS CITED BY THE ASSESSEE ARE VERY MUCH RELEV ANT TO THE CASE OF THE CASE OF THE ASSESSEE. IT WAS SUBMITTED THAT THE PRO VISIONS OF SECTION 271AAA(2) AND 271AAB(1)(A) ARE PARI-MATERIA WITH A MINOR MODIFICATION OF A ITA NO. 629 TO 635 & 648 TO 652/JP/17 SH. MAHESH KUMAR JAIN AND OTHERS VS. ACIT 10 TOKEN PENALTY OF 10% OF UNDISCLOSED INCOME. IT WAS FURTHER CONTENDED BY THE ASSESSEE THAT ALL THE CONDITIONS SPECIFIED IN SECTI ON 271AAB(1)(A) ARE SATISFIED IN AS MUCH AS IN THE STATEMENT RECORDED U/S 132(4) THE ASSESSEE HAS ADMITTED THE UNDISCLOSED INCOME SPECIFIED IN THE S AID STATEMENT THE MANNER OF EARNING OF SUCH INCOME BY DOING THE BUSINESS TH E MANNER OF EARNING INCOME IS SUBSTANTIATED FROM THE FACT THAT THE ASSE SSEE IS IN THE BUSINESS AND HAS PAID TAX TOGETHER WITH INTEREST ON THE INCOME D ISCLOSED BY HIM. IT WAS ACCORDINGLY CONTENDED THAT THE PENALTY LEVIED @ 30% INSTEAD OF 10% IS NOT JUSTIFIABLE IN THE PRESENT CASE. IT WAS FURTHER CON TENDED THAT SINCE THE AO HAS LEVIED PENALTY U/S 271AAB(1)(C) WHICH ARE NOT APPL ICABLE PROVISION IT WOULD NOT BE PROPER FOR THE APPELLATE AUTHORITY TO SUSTAI N ANY PENALTY EVEN U/S 271AAB(1)(A) OF THE ACT. 7. THE LD. CIT(A) CONSIDERED THE ABOVE CONTENTIONS RAISED BY THE ASSESSEE AS WELL AS THE COMPARATIVE POSITION OF PRO VISIONS CONTAINED IN SECTION 271AAA AND 271AAB AND THEREAFTER CONFIRMED THE LE VY OF PENALTY @ 10% OF UNDISCLOSED INCOME U/S 271AAB(1)(A) OF THE ACT AND HIS RELEVANT FINDINGS ARE CONTAINED AT PARA 4.3 TO 4.8 OF HIS ORDER WHICH AR E REPRODUCED AS UNDER:- 4.3 THERE IS NO DISPUTE AS TO THE FACT THAT ASSESS EE HAS OFFERED THE INCOME IN THE STATEMENT RECORDED U/S 132(4) OFFERE D THE SAME IN THE RETURN AND PAID THE DUE TAX THEREON. THEREFORE I A GREE WITH THE SUBMISSION OF THE A/R OF THE APPELLATE THAT IN THE PRESENT CASE ALL THESE ASSESSEE HAVE SATISFIED ALL THE ABOVE CONDITI ONS 271AAB(1)(A). 4.4 I ALSO FIND FROM THE UNDERLINED PROVISIONS OF S ECTION 271AAA AND 271AAB REPRODUCED IN PARA 4.1 & 4.2 ABOVE THAT THE PROVISIONS OF SECTION 271AAA(2) AND 271AAB(1) (A) ARE PARI-MATERI A WITH A MINOR MODIFICATION OF A TOKEN PENALTY OF 10% OF UNDISCLOS ED INCOME PROVIDED IN SECTION 271AAB(1)(A) WHICH WAS ABSENT IN SECTION 271AAA(2) AND THEREFORE THE RATIOS OF CASE LAWS CITED BY THE ASSE SSEE ARE RELEVANT WITH A MINOR MODIFICATION AS CATEGORISED ABOVE TO THE FA CTS OF THE CASE OF ASSESSEE THOUGH THE SAME ARE DECIDED IN THE CONTEXT OF 271AAA(2). ITA NO. 629 TO 635 & 648 TO 652/JP/17 SH. MAHESH KUMAR JAIN AND OTHERS VS. ACIT 11 4.5 HOWEVER I DO NOT AGREE WITH THE ARGUMENTS OF T HE A/R FOR THE APPELLANTS THAT SINCE THE AO HAS LEVIED PENALTY U/S 271AAB(1)(C) WHICH IS NOT APPLICABLE PROVISION IT WOULD BE NOT PROPER FOR APPELLATE AUTHORITY TO SUSTAIN ANY PENALTY U/S 271AAB(1)(A). THE CONTRO VERSY IN THE NAME OF PROVISIONS OF SECTION 271AAB(1)(C) OR PROVISIONS OF SECTION 271 AAB (1)(A) IS UNCALLED FOR AS THE ENTIRE SECTION 271 AA B IS CONCERNING PENALTY IN SEARCH CASES AND THE DIFFERENT CLAUSES OF 271AAB(1) NAMELY (A) (B) &(C) ONLY MAKES GRADES THE INTENSITY OF CO NCEALING THE UNDISCLOSED INCOME WHETHER IT IS DISCLOSED DURING T HE SEARCH OR WHILE FILING THE RETURN IT IS NOT DISCLOSED AT ALL. THE G ROUND REALITY OF THE CASE DECIDES WHICH CLAUSE IS RELEVANT TO DETERMINE THE QUANTUM OF PENALTY. THE FACTUAL MATRIX OF ALL THESE CASES FALLS WITHIN PARAMETERS OF SECTION 271AAB(1)(A) THE PENALTY HAS TO BE ADJUDICATED UND ER SECTION 271AAB(1)(A). IF THE AO HAS NOT INVOKED THE PROVISI ONS OF 271AAB(1)(A) AS CIT(A) I DO HAVE CO-TERMINUS POWE R TO INVOKE APPROPRIATE PROVISIONS FOR LEVY OF PENALTY AND I DO INVOKE THE PROVISIONS OF SECTION 271AAB (1)(A) OF IT ACT TO ADJUDICATE TH ESE PENALTY MATTERS. 4.6 THE VARIOUS COURTS INCLUDING THE DECISION OF TH E ITAT JAIPUR AND JODHPUR BENCH AND APPELLATE ORDERS BY CIT(A) (CENT RAL) JAIPUR AND CIT(A) UDAIPUR DELETED THE PENALTIES LEVIED IN THE SIMILAR FACTS AND CIRCUMSTANCES IN THE CONTEXT OF PROVISIONS OF SECTI ON 271AAA AND ERSTWHILE CORRESPONDING SECTION 271(1)(C). 4.7 THE SAME RATIONAL IS APPLIED WITH THE MINOR MOD IFICATION- A PENALTY OF 10% OF UNDISCLOSED INCOME DISCLOSED DURING SEARC H FOR THE SPECIFIED PREVIOUS YEAR AND RETURNED IN THE INCOME TAX RETURN AFTER PAYMENT OF DUE TAXES IN ACCORDANCE WITH THE PROVISIONS OF SECT ION 271AAB(1)(A) OF IT ACT AS INVOKED ABOVE. 4.8 THUS THE ACTION OF THE AO LEVYING PENALTIES AT THE RATE OF 30% OF UNDISCLOSED INCOME DISCLOSED DURING SEARCH IN ALL T HESE CASES U/S 271AAB(1)(C) OF IT ACT STAND MODIFIED/ REDUCED 10% OF UNDISCLOSED INCOME DISCLOSED DURING SEARCH 271AAB(1)(A) OF IT ACT. IN NUT SHELL THE PENALTY LEVIED BY THE AO ARE CONFIRMED TO THE EXTEN T OF ONE-THIRD AND CANCELLED TO THE EXTENT OF TWO-THIRD. ACCORDINGLY T HE GROUND OF APPEAL IN ALL THESE APPEALS ARE PARTLY ALLOWED. ITA NO. 629 TO 635 & 648 TO 652/JP/17 SH. MAHESH KUMAR JAIN AND OTHERS VS. ACIT 12 8. DURING THE COURSE OF HEARING LD. AR SUBMITTED T HAT THE ASSESSEE HAS ADMITTED THE UNDISCLOSED INCOME PAID TAXES AND FIL ED RETURNS. THE PROVISIONS OF SECTION 271AAB (1)(A) READ AS UNDER: 271AAB PENALTY WHERE SEARCH HAS BEEN INITIATED (1) THE ASSESSING OFFICER MAY NOTWITHSTANDING ANYT HING CONTAINED IN ANY OTHER PROVISIONS OF THIS ACT DIRECT THAT I N A CASE WHERE SEARCH HAS BEEN INITIATED UNDER SECTION 132 ON OR A FTER THE 1 ST DAY OF JULY 2012 THE ASSESSEE SHALL PAY BY WAY OF PENA LTY 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 ASSE SSEE (I) IN THE COURSE OF THE SEARCH IN A STATEMENT UND ER SUB- SECTION (4) OF SECTION 132 ADMITS THE UNDISCLOSED INCOME AND SPECIFIES THE MANNER IN WHICH SUCH INCOME HAS BEEN DERIVED; (II) SUBSTANTIATES THE MANNER IN WHICH THE UNDISCLO SED INCOME WAS DERIVED; AND (III) ON OR BEFORE THE SPECIFIED DATE (A) PAYS THE TAX TOGETHER WITH INTEREST IF ANY I N RESPECT OF THE UNDISCLOSED INCOME; AND (B) FURNISHES THE RETURN OF INCOME FOR THE SPECIFIE D PREVIOUS YEAR DECLARING SUCH UNDISCLOSED INCOME THEREIN;--- WE MAY SUBMIT THAT ALL THE CONDITIONS WHICH HAS BEE N STIPULATED ABOVE IN SECTION 271AAB(1)(A) OF THE ACT HAS BEEN SATISFIED BY THE ASSESSEE. THE ASSESSEE ADMITTED UNDISCLOSED INCOME IN STATEMENT R ECORDED DURING THE COURSE OF SEARCH PAID TAXES THEREON AND FILED RETU RN. THE MANNER OF DERIVING INCOME AS WELL AS SUBSTANTIATION OF THE SAME IS VER Y MUCH CLEAR FROM THE STATEMENT ITSELF. HOWEVER THE ONLY OBJECTION OF THE LD. AO IS THAT T HE ASSESSEE COULD NOT SUBSTANTIATE THE MANNER IN WHICH THE UNDISCLOSED IN COME HAS BEEN DERIVED AS APPEARING IN PARA 9 LAST PAGE OF THE ORDER OF THE LD. AO WHICH READS AS UNDER: ITA NO. 629 TO 635 & 648 TO 652/JP/17 SH. MAHESH KUMAR JAIN AND OTHERS VS. ACIT 13 9. SUB SECTION (1)(C) TO THIS SECTION 271AAB IS AP PLICABLE IN THE CASE OF THE ASSESSEE AS SHE DOES NOT SUBSTANTIATED THE MANNER IN WHICH THE UNDISCLOSED INCOME WAS DERIVED 8.1 IT WAS FURTHER SUBMITTED THAT THE SOURCE OF INC OME HAS CLEARLY BEEN EXPLAINED BY THE ASSESSEE IN RESPONSE TO THE ANSWER TO QUESTION NO.3 WHEREIN HE HAS EXPLAINED THAT HE IS EARNING INCOME FROM SAL ARY PRIVATE PRACTICE AND PROPERTY TRANSACTIONS. 8.2 IT WAS FURTHER SUBMITTED THAT IN THE INSTANT CA SE THE ASSESSEE DULY STATED THAT IT HAS GIVEN ADVANCE TO VARIOUS PERSONS FOR PURCHASING OF LAND AS WOULD APPEAR FROM ANSWER TO QUESTION NO.18 AS APPEA RING ON PAGE 2 OF THE ASSESSMENT ORDER & ALSO QUESTION NO.21 & 22 AS APPE ARING ON PAGE 5 OF THE ASSESSMENT ORDER. IN HIS ANSWER THE ASSESSEE HAS CL EARLY EXPLAINED THAT IT IS HIS INCOME OF THE CURRENT YEAR. THE LD. AO IN PARA 3 OF THE ASSESSMENT ORDER ALSO OBSERVED THAT THE ASSESSEE DERIVES INCOME FROM SALARY HOUSE PROPERTY AND OTHER SOURCES. THE ADVANCES HAVE BEEN GIVEN FOR PURCHASING OF LAND WHICH CLEARLY SUGGESTS THAT THE ASSESSEE WAS INTO T HIS BUSINESS WHICH HE HAS ALSO EXPLAINED IN RESPONSE TO QUESTION NO.3. 8.3 IT WAS FURTHER SUBMITTED THAT IT IS IMPORTANT T O NOTE THAT THE INCOME DECLARED BY THE ASSESSEE HAS BEEN ACCEPTED BY THE L D. AO AS IT IS WITHOUT DISTURBING THE SAME BY MAKING ASSESSMENT AT THE RET URNED INCOME AND FURTHER AS STATED THAT THE LD. AO HAS ALSO OBSERVED THAT THE ASSESSEE IS EARNING INCOME FROM CAPITAL GAIN AND OTHER SOURCES. THEREFORE THIS CLEARLY SUGGESTS THAT THE LD. AO WAS COMPLETELY SATISFIED W ITH MANNER AND SUBSTANTIATION OF THE UNDISCLOSED INCOME DECLARED B Y IT. THEREFORE THE LD. AO WAS INCORRECT IN GIVING FINDING THAT THE ASSESSEE F AILED TO SUBSTANTIATE THE UNDISCLOSED INCOME. 8.4 IT WAS FURTHER SUBMITTED THAT AS ALREADY EXPLAI NED THAT THE ASSESSEE MADE A SURRENDER OF UNDISCLOSED INCOME AND THE SAME WAS ASSESSED BY THE ITA NO. 629 TO 635 & 648 TO 652/JP/17 SH. MAHESH KUMAR JAIN AND OTHERS VS. ACIT 14 LD. AO ON THE SAME FIGURE. NOW ONCE THERE IS QUANTI FICATION OF AMOUNT OF UNDISCLOSED INCOME BY THE ASSESSEE FOLLOWED BY ACCE PTANCE BY THE INVESTIGATION TEAM AND SUBSEQUENT ASSESSMENT OF THE SAME AMOUNT BY THE LD. AO IT IS FULL PROOF EVIDENCE THAT THE UNDISCLOSED INCOME WAS DULY SUBSTANTIATED BY THE ASSESSEE. HENCE NO QUESTION C OULD BE RAISED BY THE LD. AO IN THE ORDER OF PENALTY. 8.5 IT WAS FURTHER SUBMITTED THAT THE TERM MANNER OF DERIVING UNDISCLOSED INCOME AND ITS SUBSTANTIATION IS NOT DEFINED IN THE ACT. SO IT WAS OTHERWISE INCUMBENT UPON THE LD. AO TO EXPLAIN TO THE ASSESSE E WHAT CONSTITUTED THESE TERMS. IN THE ENTIRE SEARCH PROCEEDINGS OR ASSESSME NT PROCEEDINGS OR PENALTY PROCEEDINGS IT IS NOT STATED BY THE DEPARTMENT THA T WHAT EXACTLY CONSTITUTED THESE TERMS AND WHAT WAS EXPECTED FROM THE ASSESSEE TO HAVE COMPLIED WITH THESE TERMS ABSENCE OF WHICH HAS COMPLETELY JEOPAR DIZE THE PENALTY PROCEEDINGS IN AS MUCH AS THERE WAS NO OPPORTUNITY FOR THE ASSESSEE TO GIVE ITS STAND. THEREFORE THE PENALTY LEVIED WAS ALSO B AD IN LAW AND AS SUCH RIGHTLY DELETED BY THE LD. CIT(A). 8.6 IT WAS FURTHER SUBMITTED THAT THE ASSESSEE HIM SELF HAS SURRENDERED THE INCOME PAID TAXES AND FILED RETURN OF INCOME. THER E HAS BEEN NO FURTHER PROBE BY THE INVESTIGATING TEAM DURING THE COURSE O F SEARCH AFTER SURRENDER OF INCOME BY THE ASSESSEE. EVEN MORE THIS SURRENDER H AS BEEN ACCEPTED BY THE LD. AO ON THE SAME INCOME WITHOUT ANY MODIFICATION AS HAS BEEN DECLARED BY THE ASSESSEE IN ITS RETURN OF INCOME. THE LD. AO SI MPLY STATED IN ITS ORDER THAT THE ASSESSEE DID NOT MAKE SURRENDER VOLUNTARILY BUT IT IS A FACT ON RECORD THAT THE ALLEGED NON DISCLOSURE NOT IN ANY WAY AFFECTED THE ASSESSED INCOME. THEREFORE IT HAS TO BE ACCEPTED THAT THERE HAS BEEN COMPLETE DISCLOSURE OF MANNER AND SUBSTANTIATION OF UNDISCLOSED INCOME DEC LARED BY THE ASSESSEE. ITA NO. 629 TO 635 & 648 TO 652/JP/17 SH. MAHESH KUMAR JAIN AND OTHERS VS. ACIT 15 8.7 IT WAS FURTHER SUBMITTED THAT THE ONLY REASON F OR LEVY OF PENALTY U/S 271AAB (1)(C) OF THE ACT BY THE LD. AO WAS THAT THE ASSESSEE HAS FAILED TO SUBSTANTIATE THE MANNER IN WHICH THE UNDISCLOSED IN COME HAS BEEN EARNED. HOWEVER IT WOULD APPEAR FROM THE PERUSAL OF THE ST ATEMENT THAT WHILE RECORDING OF STATEMENT NO SPECIFIC QUESTIONS WERE ASKED FROM THE ASSESSEE TO EXPLAIN THE MANNER OF EARNING OF INCOME OR TO SUBST ANTIATE THE UNDISCLOSED INCOME DECLARED BY THE ASSESSEE. AS STATED ABOVE T HE ASSESSEE SURRENDERED THE UNDISCLOSED INCOME IN RESPONSE TO QUESTION NO. 18 21 & 22 AND AFTERWARDS THERE IS NO FURTHER QUESTION FOR THE MA NNER OF EARNING THE SAME OR TO SUBSTANTIATE THE SAME. THERE IS CONSISTENT VI EW OF VARIOUS COURTS AND BENCHES THAT IN CASE THE DEPARTMENT HAS NOT RAISED ANY SPECIFIC QUERY REGARDING THE MANNER IN WHICH THE UNDISCLOSED INCOM E HAS BEEN DERIVED AND ITS SUBSTANTIATION THE LD. AO WOULD NOT BE JUSTIFI ED IN LEVY OF PENALTY U/S 271AAA. 8.8 IT WAS FURTHER SUBMITTED THAT THE PROVISIONS OF SECTION 271AAB IS PARI MATERIA TO SECTION 271AAA EXISTED EARLIER. THE PROVISIONS OF SECTION 271AAA WHICH WAS APPLICABLE FOR THE SEARCHES CARRIED OUT B EFORE 1-7-2012 READ AS UNDER: SECTION 271AAA PENALTY WHERE SEARCH HAS BEEN INITI ATED (1) THE ASSESSING OFFICER MAY NOTWITHSTANDING ANYT HING 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 1S T DAY OF JUNE 2007 BUT BEFORE THE 1ST DAY OF JULY 2012 THE ASSESSEE SHALL PAY BY WAY OF PENALTY IN ADDITION TO TAX IF ANY PAYABLE BY HIM A SUM COMPUTED AT THE RATE OF TEN PER CENT. OF THE UNDISCLOSED INCOME OF THE SPECIFIED PREVIOUS YEAR. (2) NOTHING CONTAINED IN SUB-SECTION (1) SHALL APPL Y IF THE ASSESSEE ITA NO. 629 TO 635 & 648 TO 652/JP/17 SH. MAHESH KUMAR JAIN AND OTHERS VS. ACIT 16 (I) IN THE COURSE OF THE SEARCH IN A STATEMENT UND ER SUB-SECTION (4) OF SECTION 132 ADMITS THE UNDISCLOSED INCOME AND S PECIFIES THE MANNER IN WHICH SUCH INCOME HAS BEEN DERIVED; (II) SUBSTANTIATES THE MANNER IN WHICH THE UNDISCLO SED INCOME WAS DERIVED; AND (III) PAYS THE TAX TOGETHER WITH INTEREST IF ANY IN RESPECT OF THE UNDISCLOSED INCOME. (3) NO PENALTY UNDER THE PROVISIONS OF CLAUSE (C) O F SUB-SECTION (1) OF SECTION 271 SHALL BE IMPOSED UPON THE ASSESSEE IN R ESPECT OF THE UNDISCLOSED INCOME REFERRED TO IN SUB-SECTION (1). WE MAY SUBMIT THAT THE PROVISIONS OF SECTION 271AAB ARE APPLICABLE ON THE SEARCHES INITIATED ON OR AFTER 1-7-2012 AND BEFORE THAT SECTION 271AAA WAS IN FORCE FOR THE PERIOD FROM 1-6-2007 TO 30-6-2012 AND THE LANGUAGE AND INTERPRETATION OF SECTION 271AAB IS IN PARI MATERIA TO SECTION 271AAA OF THE ACT. THE CONDITIONS FOR NON LEVY OF PENALTY INCLUDI NG DISCLOSURE OF THE MANNER OF DERIVING OF UNDISCLOSED INCOME AND SUBSTANTIATIN G THE SAME U/S 271AAA(2) IS IDENTICAL TO SECTION 271AAB(1)(A) WHICH SPEAKS O F LEVYING OF PENALTY @10% IN CASE OF CERTAIN CONDITIONS BEING SATISFIED. IT I S ALSO NOTABLE THAT THE PROVISIONS OF BOTH THE SECTIONS ARE PERIOD SPECIFIC AND NOT APPLICABLE SIMULTANEOUSLY. AS SUCH THE DECISIONS AND INTERPRETATION GIVEN BY VARIOUS COURTS WITH RESPECT TO SECTION 271AAA WOULD BE EQUA LLY APPLICABLE TO THE PROVISIONS OF SECTION 271AAB IN WHICH THE PENALTY H AS BEEN LEVIED IN THE CASE OF THE ASSESSEE. SIMILAR OBSERVATIONS HAVE BEEN MAD E BY THE HONBLE DELHI ITAT IN THE MATTER OF NEERAJ SINGAL VS. ACIT 146 IT D 152 (DEL) AT PARA 11 WHEN INTERPRETING THE PROVISIONS OF SECTION 271AAA WHILE RELYING ON THE DECISIONS RENDERED IN CONTEXT OF EXPLANATION 5(2) O F SECTION 271(1)(C). THEREFORE IT IS INCORRECT & UNJUSTIFIED TO CONCLUD E THAT THE DECISIONS CITED BY ITA NO. 629 TO 635 & 648 TO 652/JP/17 SH. MAHESH KUMAR JAIN AND OTHERS VS. ACIT 17 THE ASSESSEE ON SECTION 271AAA ARE NOT APPLICABLE W HILE DEALING WITH PROVISIONS OF SECTION 271AAB WHICH IS IN QUESTION. 8.9 IT WAS FURTHER SUBMITTED THAT THE MATTER IS COV ERED BY A RECENT JUDGEMENT THE HONBLE DELHI HIGH COURT IN THE MATT ER OF PR. CIT (CENTRAL) VS. EMIRATES TECHNOLOGIES PVT. LTD. ITA NO. 400/2017 DT .18-7-2017 DISMISSING THE APPEAL OF THE REVENUE WHILE CONFIRMING THE ORDE R OF HONBLE ITAT IN THE MATTER IN ITA NO.476/DEL/2014 DT.28-10-2016 WHEREIN THE HONBLE ITAT IN ITS ORDER HELD AS UNDER: 5.1 IN VIEW OF THE FACTS OF THE PRESENT CASE AND T HE FINDINGS RECORDED BY THE LD. CIT(A) WHICH COULD NOT BE NEGATED BY THE LD. DR IT IS EVIDENT THAT THE DEPARTMENT HAS NOT RAISED ANY SPECIFIC QUE RY REGARDING THE MANNER IN WHICH THE UNDISCLOSED INCOME HAS BEEN DER IVED. IN ABSENCE OF QUERY ABOUT THE MANNER IN WHICH THE UNDISCLOSED INCOME WAS DERIVED AND ITS SUBSTANTIATION IT IS OUR CONSIDERE D VIEW THAT THE AO WAS NOT JUSTIFIED IN IMPOSING PENALTY U/S 271AAA SP ECIALLY WHEN THE OFFERED UNDISCLOSED INCOME WAS ACCEPTED BY THE AO A ND TAX DUE THEREON HAD BEEN PAID BY THE ASSESSEE. WE DRAW OUR STRENGTH FROM THE DECISION OF THE ITAT DELHI BENCH IN CASE OF NEE RAJ SINGAL VS. ACIT IN ITA NO.337/DEL/2013 REPORTED IN 2015(3)-TMI-680- ITAT DELHI WHICH IS IDENTICAL TO THE PRESENT CASE. ACCORDINGLY WE UPHOLD THE ORDER OF LD. CIT(A). 6. IN THE FINAL RESULT THE APPEAL FILED BY THE DEP ARTMENT IS DISMISSED. THUS THE CASE OF THE ASSESSEE IS SQUARELY COVERED B Y THE ABOVE DECISION OF HONBLE DELHI HIGH COURT IN AS MUCH AS IN THE PRESE NT CASE ALSO ABSOLUTELY NO QUESTION WAS ASKED BY THE LD. AO REGARDING THE MANN ER OF DERIVING OF UNDISCLOSED INCOME & SUBSTANTIATING THE SAME. AS WO ULD APPEAR FROM THE STATEMENT AFTER MAKING OF SURRENDER OF UNDISCLOSED INCOME BY THE ASSESSEE ITA NO. 629 TO 635 & 648 TO 652/JP/17 SH. MAHESH KUMAR JAIN AND OTHERS VS. ACIT 18 THE LD. AO STOPPED AND ON THIS ISSUE THE LD. AO DI D NOT ASK ANY FURTHER QUESTION FROM THE ASSESSEE. THEREFORE THERE BEING IDENTICAL FACTS FOLLOWING T HE VERDICT OF HONBLE DELHI HIGH COURT PENALTY U/S 271AAB(1)(C) CANNOT BE SUSTA INED AND AS SUCH THE LD. CIT(A) WAS FULLY JUSTIFIED IN DELETING THE SAME. 8.10 IT WAS FURTHER SUBMITTED THAT THE HONBLE JAIP UR ITAT IS TAKING AN IDENTICAL AND CONSISTENT VIEW AS HAS BEEN TAKEN BY THE HONBLE DELHI HIGH COURT IN ITS RECENT DECISION IN EMIRATES TECHNOLOGI ES PVT. LTD. (SUPRA). IN CASE OF LATE SUDHA PATNI VS. ACIT IN ITA NO. 963/JP/2015 DT.9-8-2016 (JP)(TRI) IT WAS HELD AS UNDER: 4. AFTER CONSIDERING THE RIVAL SUBMISSIONS WE DO N OT SEE ANY REASON TO INTERFERE WITH THE ORDER OF CIT(A). THE ORDER IS IN TUNE WITH THE PRINCIPLES LAID DOWN BY VARIOUS CO-ORDINATE BENCHES AND HIGH COURTS PARTICULARLY WITH REFERENCE TO DISCLOSURE MADE UNDE R SECTION 132(4). IN THE CASE OF CIT VS. MAHENDRA C. SHAH (299 ITR 305) THE HONBLE GUJARAT HIGH COURT CONSIDERED SIMILAR STATEMENT UND ER SECTION 132(4) TO GRANT IMMUNITY UNDER SECTION 271(1)(C). THE HON BLE HIGH COURT HELD AS UNDER:- WHEN THE STATEMENT IS BEING RECORDED BY THE AUTHOR IZED OFFICER IT IS INCUMBENT UPON THE AUTHORIZED OFFICER TO EXPL AIN THE PROVISIONS OF EXPLANATION 5 IN ENTIRETY TO THE ASSE SSEE CONCERNED AND THE AUTHORIZED OFFICER CANNOT STOP SHORT AT A P ARTICULAR STAGE SO AS TO PERMIT THE REVENUE TO TAKE ADVANTAGE OF SU CH A LAPSE IN THE STATEMENT. THE REASON IS NOT FAR TO SEEK. IN TH E FIRST INSTANCE THE STATEMENT IS BEING RECORDED IN THE QUESTION AND ANSWER FORM AND THERE WOULD BE NO OCCASION FOR AN ASSESSEE TO S TATE AND MAKE AVERMENTS IN THE EXACT FORMAT STIPULATED BY TH E PROVISIONS CONSIDERING THE SETTING IN WHICH SUCH STATEMENT IS BEING ITA NO. 629 TO 635 & 648 TO 652/JP/17 SH. MAHESH KUMAR JAIN AND OTHERS VS. ACIT 19 RECORDED. SECONDLY CONSIDERING THE SOCIAL ENVIRONM ENT IT IS NOT POSSIBLE TO EXPECT FROM AN ASSESSEE WHETHER LITERA TE OR ILLITERATE TO BE SPECIFIC AND TO THE POINT REGARDING THE CONDI TIONS STIPULATED IN THE SECOND EXCEPTION WHILE MAKING STATEMENT UNDE R SECTION 132(4). EVEN IF THE STATEMENT DOES NOT SPECIFY THE MANNER IN WHICH THE INCOME IS DERIVED IF THE INCOME IS DECLA RED 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 TO EXPLAIN THE ENTRIES IN THE WORK-IN-PROGRESS SHEET AND ASSESSEE IN THE COURSE OF STATEMENT OFFERED THE INCOME WITH A PLEA NOT TO INITIATE PENA LTY PROCEEDINGS. THE ASSESSEE WAS NOT ASKED ABOUT THE MANNER IN WHICH SU CH INCOME WAS EARNED AND ALSO TO SUBSTANTIATE THE MANNER IN WHICH UNDISCLOSED INCOME WAS DERIVED. THE PROVISION OF CLAUSE-2 OF EX PLANATION-V APPENDED TO SECTION 271(1)(C) ARE SIMILAR TO SECTIO N 271AAA(2). THE SCOPE AND MEANING HAS BEEN LUCIDLY EXPLAINED BY THE HONBLE ALLAHABAD HIGH COURT IN THE CASE OF CIT VS. RADHA KISHAN GOEL (2005) 278 ITR 454 (ALL.) WHICH WAS FOLLOWED BY THE HONBLE GUJAR AT HIGH COURT IN THE ABOVE REFERRED CASE. IN VIEW OF THE ABOVE PRINCIPLE S LAID DOWN WE ARE OF THE OPINION THAT IMMUNITY PROVIDED UNDER S/S. (2 ) OF SECTION 271AAA IS APPLICABLE AND ACCORDINGLY THE ORDER OF CIT(A) DOES NOT REQUIRE ANY MODIFICATION. REVENUES GROUNDS ARE REJECTED. RESPECTFULLY FOLLOWING THE DECISION OF THE COORDINA TE BENCHES WE SET ASIDE THE ORDERS OF THE AUTHORITIES BELOW. THE AO I S DIRECTED TO DELETE THE ADDITION. THE APPEAL OF THE ASSESSEE IS ALLOWED . 5. IN THE RESULT APPEAL OF THE ASSESSEE IS ALLOWED . ITA NO. 629 TO 635 & 648 TO 652/JP/17 SH. MAHESH KUMAR JAIN AND OTHERS VS. ACIT 20 THUS THE CASE OF THE ASSESSEE IS SQUARELY COVERED B Y THE DECISIONS OF HONBLE JAIPUR ITAT IN AS MUCH AS THERE BEING IDENTICAL FAC TS IN THE PRESENT CASE AND HENCE THE PENALTY U/S 271AAB(1)(C) RIGHTLY DELETED BY THE LD. CIT(A) 8.11 IT WAS FURTHER SUBMITTED THAT THERE IS ALMOST CONSENSUS BETWEEN VARIOUS BENCHES OF HONBLE ITAT THAT NO ADVERSE INF ERENCE COULD BE TAKEN WHERE THE DEPARTMENT HAS NOT RAISED ANY QUESTION RE GARDING THE MANNER AND SUBSTANTIATION OF UNDISCLOSED INCOME. FEW SUCH DECI SIONS ARE AS UNDER: DCIT VS. BABU LAL MOTAWAT ITA NO.93/JU/2014 DT.7-5- 2014 (JODH)(TRI) DCIT VS. PIYUSH MARU ITA NO.21/JODH/2014 DT.9-6-201 4 (JODH)(TRI) DCIT VS. SULOCHANA DEVI A AGARWAL ITA NO. 1052/AHD/ 2012 (AHD)(TRI) ACIT VS. AJIT SINGH ITA NO.714/JP/2014 DT.26-9-2016 (JP)(TRI) ACIT VS. KANAKIA SPACES PVT. LTD. 6763/MUM/2011 DT. 10-7-2013 (MUM)(TRI) PRAMOD KUMAR JAIN VS DCIT (2012) 77 DTR 0244 (CUTTA CK TRI) 8.12 FURTHER RELIANCE WAS PLACED ON THE FOLLOWING HIGH COURT DECISIONS: CIT VS. MAHENDRA C SHAH (2008) 215 CTR 0493 (GUJ)(H C) CIT VS. RADHA KISHAN GOEL (2006) 200 CTR 0300 (ALL) (HC) 8.13 IT WAS FURTHER SUBMITTED THAT WITHOUT PREJUDI CE TO OUR FOREGOING SUBMISSION EVEN IF IT IS HELD THAT THE ASSESSEE FA ILED TO SPECIFY THE MANNER AND SUBSTANTIATION THEREOF THEN STILL PENALTY @20% COULD ONLY BE LEVIED AS PER THE PROVISIONS OF 271AAB(1)(B)WHICH READS AS UN DER: --- (B) A SUM COMPUTED AT THE RATE OF TWENTY PER CENT OF THE UNDISCLOSED INCOME OF THE SPECIFIED PREVIOUS YEAR IF SUCH ASSESSEE (I) IN THE COURSE OF THE SEARCH IN A STATEMENT UND ER SUB- SECTION (4) OF SECTION 132 DOES NOT ADMIT THE UNDI SCLOSED INCOME; AND (II) ON OR BEFORE THE SPECIFIED DATE (A) DECLARES SUCH INCOME IN THE RETURN OF INCOME FU RNISHED FOR THE SPECIFIED PREVIOUS YEAR; AND (B) PAYS THE TAX TOGETHER WITH INTEREST IF ANY I N RESPECT OF THE UNDISCLOSED INCOME; ITA NO. 629 TO 635 & 648 TO 652/JP/17 SH. MAHESH KUMAR JAIN AND OTHERS VS. ACIT 21 IN THE INSTANT CASE UNDISPUTEDLY THE ASSESSEE DULY ADMITTED THE UNDISCLOSED INCOME IN THE STATEMENT AND PAID THE TAXES INTERES T AND DECLARED THE INCOME IN THE RETURN OF INCOME AND THEREFORE A MAXIMUM PE NALTY @20% COULD BE LEVIED BY THE LD. AO 8.14 NOW COMING TO ASSESSEES OWN APPEAL THE LD A R SUBMITTED THAT THE LD. CIT(A) HAS ERRED IN LEVYING PENALTY U/S 271AAB(1)(A ) WHEN THE AO SPECIFICALLY INITIATED AND LEVIED PENALTY U/S 271AAB(1)(C). IN T HIS REGARD IT WAS SUBMITTED THAT THE LD. AO ISSUED THE NOTICE SPECIFICALLY U/S 271AAB(1)(C) WHICH IS CLEAR FROM PARA 1 OF THE PENALTY ORDER. ULTIMATELY THE P ENALTY WAS LEVIED IN THIS PARTICULAR SECTION ONLY AGAINST WHICH THE ASSESSEE FILED THE APPEAL AND THEREFORE THE ISSUE BEFORE THE LD. CIT(A) WAS LIMI TED ON APPLICATION OF THIS SPECIFIC SECTION. 8.15 OTHERWISE ALSO IT WAS SUBMITTED THAT SECTION 271AAB(1)(B) COULD ONLY BE INVOKED AS PER FINDING IN PENALTY ORDER. WE MAY ALSO SUBMIT THAT IT IS CLEAR FROM THE FACTS AND FINDINGS GIVEN BY THE LD. AO IN THE PENALTY ORDER THAT THE ASSESSEE DULY ADMITTED THE UNDISCLOSED INCOME IN TH E STATEMENT TAKEN DURING THE COURSE OF SEARCH AND FURTHER THAT IT PAID TAXES AND FILED RETURN OF INCOME. SO EVEN IN WORST CASE SCENARIO MAXIMUM A PENALTY U/ S 271AAB(1)(B) COULD HAVE BEEN LEVIED AS HAS ALSO BEEN DISCUSSED IN PARA 1.4 ABOVE. THEREFORE THE PENALTY ORDER PASSED BY THE LD. AO WAS BAD IN LAW A ND ON THE FACTS OF THE PRESENT CASE. SO ONCE THE ORDER ITSELF IS HELD TO B E BAD IN LAW THE SAME CANNOT BE REVIVED BY THE LD. CIT(A) SO AS TO BRING IN PENALTY WITH SOME DIFFERENT SECTION. 8.16 REFERENCE WAS DRAWN BY THE LD AR TO SECTION 2 51 WHICH DEALS WITH THE POWER OF COMMISSIONER (APPEALS) WHILE DISPOSING OF AN APPEAL READS AS UNDER: ITA NO. 629 TO 635 & 648 TO 652/JP/17 SH. MAHESH KUMAR JAIN AND OTHERS VS. ACIT 22 POWERS OF THE COMMISSIONER (APPEALS) (1) IN DISPOSING OF AN APPEAL THE COMMISSIONER (AP PEALS) SHALL HAVE THE FOLLOWING POWERS (A) IN AN APPEAL AGAINST AN ORDER OF ASSESSMENT HE MAY CONFIRM REDUCE ENHANCE OR ANNUL THE ASSESSMENT; (AA) IN AN APPEAL AGAINST THE ORDER OF ASSESSMENT I N RESPECT OF WHICH THE PROCEEDING BEFORE THE SETTLEMENT COMMISSION ABA TES UNDER SECTION 24 HA HE MAY AFTER TAKING INTO CONSIDERAT ION ALL THE MATERIAL AND OTHER INFORMATION PRODUCED BY THE ASSESSEE BEFO RE OR THE RESULTS OF THE INQUIRY HELD OR EVIDENCE RECORDED BY THE SET TLEMENT COMMISSION IN THE COURSE OF THE PROCEEDING BEFORE IT AND SUCH OTHER MATERIAL AS MAY BE BROUGHT ON HIS RECORD CONFIRM REDUCE ENHANCE OR ANNUL THE ASSESSMENT;] (B) IN AN APPEAL AGAINST AN ORDER IMPOSING A PENALT Y HE MAY CONFIRM OR CANCEL SUCH ORDER OR VARY IT SO AS EITHER TO ENH ANCE OR TO REDUCE THE PENALTY. (C) IN ANY OTHER CASE HE MAY PASS SUCH ORDERS IN T HE APPEAL AS HE THINKS FIT. (2) THE COMMISSIONER (APPEALS) SHALL NOT ENHANCE AN ASSESSMENT OR A PENALTY OR REDUCE THE AMOUNT OF REFUND UNLESS THE APPELLANT HAS HAD A REASONABLE OPPORTUNITY OF SHOWING CAUSE AGAIN ST SUCH ENHANCEMENT OR REDUCTION. EXPLANATION. IN DISPOSING OF AN APPEAL THE COMMIS SIONER (APPEALS) MAY CONSIDER AND DECIDE ANY MATTER ARISING OUT OF T HE PROCEEDINGS IN WHICH THE ORDER APPEALED AGAINST WAS PASSED NOTWIT HSTANDING THAT SUCH MATTER WAS NOT RAISED BEFORE THE COMMISSIONER (APPEALS) BY THE APPELLANT. THE ABOVE MAKES IT CLEAR THAT THE COMMISSIONER (APP EALS) MAY ONLY CONFIRM CANCEL REDUCE OR ENHANCE THE PENALTY WHICH IS UNDER APPEAL AND IT IS NO WHERE PROVIDED THAT THE LD. CIT(A) MAY PROCEED TO L EVY PENALTY IN SOME OTHER SECTION. 8.17 IT WAS FURTHER SUBMITTED THAT THE LEVY OF PENA LTY U/S 271AAB(A) WAS NOT BEFORE THE LD. CIT(A). WE MAY SUBMIT THAT THE ISSUE OF LEVY OF PENALTY WAS NOT BEFORE THE LD. CIT(A) AND THE APPEAL WAS FILED BY T HE ASSESSEE TO CHALLENGE APPLICATION OF SECTION 271AAB(C) ONLY. SO ONCE THE PENALTY U/S 271AAB(1)(C) ITA NO. 629 TO 635 & 648 TO 652/JP/17 SH. MAHESH KUMAR JAIN AND OTHERS VS. ACIT 23 WAS CANCELLED THE LD. CIT(A) COULD NOT HAVE PROCEE DED TO LEVY PENALTY UNDER SECTION 271AAB(1)(A). 8.18 IT WAS FURTHER SUBMITTED THAT THE EXPLANATION TO SECTION 251 IS NOT RELEVANT. IT WAS SUBMITTED THAT THOUGH THERE IS EX PLANATION GIVEN IN THE SECTION THAT THE LD. CIT(A) MAY CONSIDER AND DECIDE ANY MATTER ARISING OUT OF THE PROCEEDINGS IN WHICH THE ORDER APPEALED AGAINST WAS PASSED BUT WE MAY SUBMIT THAT THE ISSUE OF PENALTY U/S 271AAB(1)(A) W AS NEVER CONSIDERED BY THE LD. AO AND THEREFORE THIS ISSUE IS NOT ARISING OUT OF THE APPEAL BEFORE HIM. ACCORDINGLY THE EXPLANATION TO SECTION 251 CANNOT BE EXTENDED TO LEVY PENALTY U/S 271AAB(1)(A) WHEN THIS WAS NEVER CONSID ERED BY THE LD. AO AND THE ORDER OF THE LD. AO ITSELF WAS OUT OF JURISDICT ION. IN VIEW OF THE ABOVE THE LD. CIT(A) COULD NOT HAVE PROCEEDED TO LEVY PENALTY U/S 271AAB(1)(A) OF THE ACT AND HENCE THE APPEAL O F THE ASSESSEE DESERVES TO BE ALLOWED 8.19 IT WAS FURTHER SUBMITTED THAT IN A RECENT JUD GEMENT THE HONBLE SUPREME COURT HAS DISMISSED AN APPEAL FILED BY THE REVENUE IN THE CASE OF CIT VS. SSA EMERALD MEADOWS SLP 11485/2016 DT.5-8-2 016 (SC) WHEREIN THE HONBLE KARNATAKA HIGH COURT HAS DISMISSED THE FOLLOWING SUBSTANTIAL QUESTION OF LAW FILED BY THE DEPARTMENT IN THE CASE OF CIT VS. SSA EMERALD MEADOWS ITA NO.380/2015 DT.23-11-2015 (KAR)(HC) WHE REIN THE HONBLE HIGH COURT HAS FOLLOWED THE JUDGEMENT OF THE SAME C OURT IN THE CASE OF CIT VS. MANJUNATHA COTTON & GINNING FACTORY 359 ITR 565 (KAR): WHETHER OMISSION OF ASSESSING OFFICER TO EXPLICIT LY MENTION THAT PENALTY PROCEEDINGS ARE BEING INITIATED FOR FURNISH ING OF INACCURATE PARTICULARS OR THAT FOR CONCEALMENT OF INCOME MAKES THE PENALTY ORDER LIABLE FOR CANCELLATION EVEN WHEN IT HAS BEEN PROVE D BEYOND REASONABLE DOUBT THAT THE ASSESSEE HAD CONCEALED IN COME IN THE FACTS AND CIRCUMSTANCES OF THE CASE? IN THE PRESENT CASE ALSO THE NOTICE HAVE BEEN ISSU ED UNDER THE PROVISIONS OF SECTION 271AAB(1)(C) OF THE ACT AND NOT 271AAB(1)(A ) AND HENCE COVERED BY ITA NO. 629 TO 635 & 648 TO 652/JP/17 SH. MAHESH KUMAR JAIN AND OTHERS VS. ACIT 24 THE ABOVE DECISION OF HONBLE SUPREME COURT AND HEN CE SUSTENANCE OF PENALTY UNDER DIFFERENT SECTION WAS BAD IN LAW 8.20 IT WAS FURTHER SUBMITTED THAT EVEN THE LD. CIT (A) COULD NOT HAVE LEVIED THE PENALTY IN A DIFFERENT SECTION. IT HAS BEEN HEL D BY SOME OF THE BENCHES OF HONBLE ITAT THAT THE LD. CIT(A) CAN ONLY VARY OR C ANCEL THE PENALTY BUT CANNOT SUSTAIN IT IN SOME DIFFERENT SECTION AND RE LIANCE WAS PLACED ON FOLLOWING DECISIONS: AJIT RAMCHANDRA JADHAV VS. ACIT 178 TTJ 204 135 DT R 1 (PUNE)(TRI) ASHWANI KUMAR ARORA VS. ACIT 50 ITR 37 (DELHI)(TRI) DR. SARITA MILIND DAVARE VS. ACIT ITA NO. 2187 & 17 89 /MUM/2014 DT. 21-12-2016 (MUM)(TRI) K.N. DADINA (P) LTD. VS. DCIT (1997) 60 ITD 0010 (K OL)(TRI) INDIAN STANDARD METAL CO. LTD VS. ITO (1982) 14 TTJ 0335 (MUM) (TRI) 9. THE LD DR IS HEARD WHO HAS VEHEMENTLY ARGUED T HE MATTER TOOK US THROUGH THE FINDINGS OF THE AO IN ASSESSMENT AND PE NALTY PROCEEDINGS AND SUBMITTED THAT THE AO HAS RIGHTLY LEVIED THE PENALT Y U/S 271AAB(1)(C) OF THE ACT. 10. THE FIRST AND FOREMOST QUESTION THAT ARISES F OR CONSIDERATION IS THE NATURE OF PENALTY PROVISIONS AS CONTAINED IN SECTIO N 271AAB(1)(A) AND 271AAB(1)(C). IN OTHER WORDS WHETHER THESE PROVISI ONS PROVIDE FOR LEVY OF PENALTY ON ACCOUNT OF SEPARATE AND INDEPENDENT CHAR GES OR THESE PROVISION PROVIDE FOR LEVY OF PENALTY FOR THE SAME CHARGE UND ER SECTION 271AAB HOWEVER SUBJECT TO SATISFACTION OF THE PRESCRIBED CONDITIONS THE QUANTUM OF PENALTY MAY VARY AS SPECIFIED IN THE RESPECTIVE SUB -CLAUSES OF 271AAB OF THE ACT. 11. IN THIS REGARD WE REFER TO THE PROVISIONS OF SECTION 271AAB WHICH ARE REPRODUCED AS UNDER: ITA NO. 629 TO 635 & 648 TO 652/JP/17 SH. MAHESH KUMAR JAIN AND OTHERS VS. ACIT 25 271AAB. (1) THE ASSESSING OFFICER MAY NOTWITHSTAN DING ANYTHING CONTAINED IN ANY OTHER PROVISIONS OF THIS ACT DIRECT THAT I N A CASE WHERE SEARCH HAS BEEN INITIATED UNDER SECTION 132 ON OR AFTER THE 1ST DAY OF JULY 2012 THE ASSESSEE SHALL PAY BY WAY OF PENALTY IN ADDITION T O 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 U NDER SUB-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 UNDISC LOSED INCOME 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 SPECIF IED PREVIOUS YEAR DECLARING SUCH UNDISCLOSED INCOME THEREIN; (B) A SUM COMPUTED AT THE RATE OF TWENTY PER CENT OF THE UNDISCLOSED INCOME OF THE SPECIFIED PREVIOUS YEAR IF SUCH ASSE SSEE (I) IN THE COURSE OF THE SEARCH IN A STATEMENT U NDER SUB-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 FURNISHED FOR THE SPECIFIED PREVIOUS YEAR; AND (B) PAYS THE TAX TOGETHER WITH INTEREST IF ANY IN RESPECT OF THE UNDISCLOSED INCOME; (C) A SUM WHICH SHALL NOT BE LESS THAN THIRTY PER CENT BUT WHICH SHALL NOT EXCEED NINETY PERCENT OF THE UNDISCLOSED INCOME OF THE SPECIFIED PREVIOUS YEAR IF IT IS NOT COVERED BY THE PROVISIO NS OF CLAUSES (A) AND ITA NO. 629 TO 635 & 648 TO 652/JP/17 SH. MAHESH KUMAR JAIN AND OTHERS VS. ACIT 26 (B). (2) NO PENALTY UNDER THE PROVISIONS OF 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) 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 FURNIS HING OF RETURN OF INCOME UNDER SUB-SECTION (1) OF SECTION 139 OR THE DATE ON WHICH THE PERIOD SPECIFIED IN THE NOTICE 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 BU T 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 DATE OF SEARCH; OR (II) IN WHICH SEARCH WAS CONDUCTED; (C) 'UNDISCLOSED INCOME' MEANS (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 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 SE ARCH IN THE BOOKS OF ACCOUNT OR OTHER DOCUMENTS MAINTAINED IN THE NORMAL COURSE RELATING ITA NO. 629 TO 635 & 648 TO 652/JP/17 SH. MAHESH KUMAR JAIN AND OTHERS VS. ACIT 27 TO SUCH PREVIOUS YEAR; OR (B) OTHERWISE NOT BEEN DISCLOSED TO THE PRINCIPAL CHIEF COMMISSIONER OR CHIEF COMMISSIONER OR PRINCIPAL COMMISSIONER OR] CO MMISSIONER BEFORE THE DATE OF SEARCH; OR (II) ANY INCOME OF THE SPECIFIED PREVIOUS YEAR REPRESENT ED EITHER WHOLLY OR PARTLY BY ANY ENTRY IN RESPECT OF AN EXPENSE RECOR DED 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 CO NDUCTED. 12. ON READING OF THE ABOVE PROVISIONS IT PROVID ES THAT THE ASSESSING OFFICER MAY NOTWITHSTANDING ANYTHING CONTAINED IN ANY OTHE R PROVISIONS OF THIS ACT DIRECT THAT IN A CASE WHERE SEARCH HAS BEEN INITIA TED UNDER SECTION 132 ON OR AFTER THE 1ST DAY OF JULY 2012 THE ASSESSEE SHALL PAY BY WAY OF PENALTY IN ADDITION TO TAX IF ANY PAYABLE BY HIM A SUM COMP UTED AT THE RATE OF 10% OF THE UNDISCLOSED INCOME OF THE SPECIFIED PREVIOUS YE AR IF SUCH ASSESSEE IN THE COURSE OF THE SEARCH IN A STATEMENT UNDER SUB-SECT ION (4) OF SECTION 132 ADMITS THE UNDISCLOSED INCOME AND SATISFIES OTHER C ONDITIONS AS PROVIDED IN 271AAB(1)(A). IT FURTHER PROVIDES THAT WHERE THE D ECLARATION OF UNDISCLOSED INCOME IS NOT MADE BY THE SEARCHED PERSON IN THE CO URSE OF SEARCH BUT IS DECLARED IN THE RETURN OF INCOME FURNISHED FOR THE SPECIFIED PREVIOUS YEAR AND SUBJECT TO SATISFACTION OF OTHER CONDITIONS PENALT Y @ 20% IS PAYABLE BY HIM. IT FURTHER PROVIDES THAT WHERE THE DECLARATION OF U NDISCLOSED INCOME IS NEITHER MADE BY THE SEARCHED PERSON IN THE COURSE OF SEARCH NOR DECLARED IN THE RETURN OF INCOME FURNISHED FOR THE SPECIFIED PREVIO US YEAR AND ADDITIONS ARE MADE DURING THE COURSE OF ASSESSMENT PROCEEDINGS P ENALTY WHICH CAN VARY FROM 30% TO 90% IS PAYABLE BY HIM. 13. BOTH THE PROVISIONS AS CONTAINED IN SECTION 271 AAB(1)(A) AND 271AAB(1)(C) THUS PROVIDES FOR LEVY OF PENALTY IN C ASES WHERE SEARCH HAS ITA NO. 629 TO 635 & 648 TO 652/JP/17 SH. MAHESH KUMAR JAIN AND OTHERS VS. ACIT 28 BEEN INITIATED UNDER SECTION 132 ON OR AFTER THE 1ST DAY OF JULY 2012 AND QUANTUM OF PENALTY HAS BEEN KEPT AT 10% WHERE THERE IS DECLARATION IN THE STATEMENT RECORDED DURING THE COURSE OF SEARCH AND WHERE THERE IS NEITHER A DECLARATION IN THE STATEMENT U/S 132(4) RECORDED DU RING THE COURSE OF SEARCH NOR A DECLARATION IN THE RETURN OF INCOME THE PENA LTY HAS BEEN KEPT AT A HIGHER PEDESTAL WHICH CAN VARY FROM 30% TO 90%. FU RTHER IT IS NOTED THAT THE PROVISIONS OF SECTION 271AAB OVERRIDES SECTION 271(1)(C) WHICH INFACT CONTAIN PROVISIONS FOR LEVY OF PENALTY UNDER TWO SE PARATE LIMBS- CONCEALMENT OF PARTICULARS OF INCOME OR FURNISHING INACCURATE P ARTICULARS OF INCOME. FURTHER THE DECISION OF THE HONBLE SUPREME COURT IN CASE OF SAS EMERALD MEADOWS (SUPRA) RENDERED IN THE CONTEXT OF TWO SEPA RATE LIMBS/CHARGES UNDER SECTION 271(1)(C) THEREFORE DOESNT SUPPORT T HE CASE OF THE ASSESSEE COMPANY. IN OUR CONSIDERED VIEW BOTH THE PROVISION S OF SECTION 271AAB(1)(A) AND 271AAB(1)(C) PROVIDES FOR LEVY OF PENALTY FOR A N IDENTICAL CHARGE I.E UNDISCLOSED INCOME FOR THE SPECIFIED PREVIOUS YEAR WHICH IS FOUND DURING THE COURSE OF SEARCH INITIATED UNDER SECTION 132 ON OR AFTER THE 1ST DAY OF JULY 2012. THEREFORE WE ARE UNABLE TO ACCEDE TO THE CO NTENTION OF THE LD AR THAT THE LD CIT(A) HAS ERRED IN CONFIRMING THE LEVY OF P ENALTY U/S 271AAB(1)(A) WHICH PROVIDES FOR A SEPARATE AND INDEPENDENT CHARG E AND COMES UNDER DIFFERENT SECTION THAN THE PROVISIONS OF SECTION 27 1AAB(1)(C) WHICH HAS BEEN SPECIFICALLY INVOKED BY THE AO. 14. THE SECOND ISSUE THAT ARISE FOR CONSIDERATION IS WHETHER THE LD CIT(A) WAS WELL WITHIN HIS POWERS U/S 251 TO CONFIRM THE L EVY OF PENALTY UNDER SECTION 271AAB(1)(A) GIVEN THAT THE PROVISIONS OF S ECTION 271AAB(1)(C) HAVE ONLY BEEN SPECIFICALLY INVOKED BY THE AO. THE PROVISIONS OF SECTION 251(1)(B) PROVIDES THAT IN AN APPEAL AGAINST AN ORD ER IMPOSING A PENALTY THE LD CIT(A) MAY CONFIRM OR CANCEL SUCH ORDER OR V ARY IT SO AS EITHER TO ENHANCE OR TO REDUCE THE PENALTY. AS WE HAVE HELD A BOVE THERE IS NO DISTINCTION IN THE NATURE OF CHARGE AS PROVIDED IN CLAUSE (A) OF SUB-SECTION ITA NO. 629 TO 635 & 648 TO 652/JP/17 SH. MAHESH KUMAR JAIN AND OTHERS VS. ACIT 29 (1) OF 271AAB AND CLAUSE (C) OF SUB-SECTION (1) OF 271AAB HOWEVER THE QUANTUM OF PENALTY MAY VARY DEPENDING UPON THE DECL ARATION OF UNDISCLOSED INCOME IN THE STATEMENT RECORDED U/S 13 2(4) DECLARATION IN THE RETURN OF INCOME AND SATISFACTION OF OTHER COND ITIONS. THE LD CIT(A) WHO WAS CEASED OF THE WHOLE PENALTY MATTER UNDER SE CTION 271AAB AFTER DETAILED EXAMINATION CAME TO A CONCLUSION THAT LEV Y OF PENALTY @ 10% UNDER CLAUSE (A) IS MORE APPROPRIATE AS AGAINST LEV Y OF PENALTY @ 30% UNDER CLAUSE (C) AND HE ACCORDINGLY VARIED AND RED UCED THE PENALTY AND CONFIRMED THE LEVY OF PENALTY @ 10%. IN ANY CASE WHERE THE LD CIT(A) HAS COME TO A CONCLUSION THAT LEVY OF PENALTY UNDER CLAUSE (A) AND NOT UNDER CLAUSE (C) IS MORE APPROPRIATE IN THE FACTS O F THE PRESENT CASE HE COULDNT HAVE CANCELLED THE PENALTY ORDER MERELY BE CAUSE THE AO HAS INVOKED CLAUSE (C) SPECIFICALLY. OUR VIEW IS FORTI FIED BY THE DECISION OF THE HONBLE SUPREME COURT IN CASE OF CIT VS ASSAM TRAVE L SHIPPING SERVICES REPORTED IN 199 ITR 1 WHERE THE HONBLE SUPREME COU RT WAS PLEASED TO HELD THAT IN VIEW OF SECTION 251(1)(B) IT WAS ALSO CLEAR THAT THE AAC WAS WRONG IN TAKING THE VIEW THAT HE HAD NO POWER TO EN HANCE THE PENALTY IN ACCORDANCE WITH LAW ON REACHING THE CONCLUSION THAT THE COMPUTATION OF PENALTY MADE BY THE ITO WAS ILLEGAL AND THAT HE CO ULD ONLY CANCEL EVEN THE LESSER PENALTY WHICH HAD BEEN IMPOSED BY THE IT O. DRAWING SUPPORT FROM THE SAID LEGAL PROPOSITION IN THE INSTANT CAS E THE LD CIT(A) HELD THAT THE AO WAS WRONG IN LEVYING PENALTY @ 30% AND ON AP PRECIATION OF THE SAME FACTS THE LD CIT(A) REDUCED IT TO 10% WHICH I S CLEARLY WITHIN HIS JURISDICTION AS LAID DOWN IN SECTION 251(1)(B) OF T HE ACT. 15. FURTHER AS WE HAVE HELD ABOVE BOTH THE CLAUS ES FALL UNDER SAME SECTION 271AAB WHICH PROVIDE FOR THE SAME CHARGE FO R LEVY OF PENALTY. IT IS THEREFORE NOT A CASE THAT THE LD CIT(A) CANCELLE D THE PENALTY UNDER CLAUSE (C) AND LEVIED THE PENALTY UNDER CLAUSE (A). ALL HE HAS DONE IS VARY AND REDUCED THE LEVY OF PENALTY FOR THE SAME CHARGE WHICH REMAIN ITA NO. 629 TO 635 & 648 TO 652/JP/17 SH. MAHESH KUMAR JAIN AND OTHERS VS. ACIT 30 UNDISPUTED. THE COORDINATE BENCH DECISIONS CITED BY THE LD AR IN THIS REGARD THEREFORE DOESNT SUPPORT THE CASE OF THE AS SESSEE. IN OUR VIEW THE LD CIT(A) ACTED WELL WITHIN HIS POWERS AND JURISDIC TION IN VARYING AND REDUCING THE PENALTY @ 10% AS AGAINST LEVY OF PENA LTY @ 30% BY THE AO UNDER SECTION 271AAB OF THE ACT. 16. THE NEXT ISSUE THAT ARISE FOR CONSIDERATION IS WHET HER THE CONDITIONS SPECIFIED IN SECTION 271AAB(1)(A) ARE SATISFIED IN THE INSTANT CASE AND THE LD CIT(A) HAS RIGHTLY INVOKED THE SAID PROVISIONS AS AGAINST RESIDUARY PROVISIONS OF SECTION 271AAB(1)(C) INVOKED BY THE A O. 17. THE PROVISIONS OF SECTION 271AAB(1)(A) PROVID ES FOR SATISFACTION OF THE FOLLOWING CONDITIONS: (A) IF SUCH ASSESSEE IN THE COURSE OF THE SEARCH IN A STATEMENT UNDER SUB-SECTION (4) OF SECTION 132 ADMITS THE UNDISCLOSED INCOME AND SPECIFIES THE MANNER IN WHICH SUCH INCOME HAS BEEN DERIVED; (B) SUBSTANTIATES THE MANNER IN WHICH THE UNDISCLOSED I NCOME WAS DERIVED; AND (C) 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; 18. THERE IS NO DISPUTE THAT THE ASSESSEE IN THE COURSE OF THE SEARCH IN A STATEMENT UNDER SUB-SECTION (4) OF SECTION 132 HAS ADMITTED THE UNDISCLOSED INCOME OF RS 1 40 41 210. THERE IS ALS O NO DISPUTE THAT ON OR BEFORE THE SPECIFIED DATE THE ASSESSEE HAS PAID TH E TAXES ALONG WITH ITA NO. 629 TO 635 & 648 TO 652/JP/17 SH. MAHESH KUMAR JAIN AND OTHERS VS. ACIT 31 INTEREST IN RESPECT OF THE UNDISCLOSED INCOME FOR T HE SPECIFIED PREVIOUS YEAR AND HAS FURNISHED THE RETURNED OF INCOME FOR T HE SPECIFIED PREVIOUS YEAR DECLARING SUCH UNDISCLOSED INCOME THEREIN. TH E SAME IS EVIDENT FROM THE RETURN OF INCOME FILED ON 28.07.2014 DECLARING THE UNDISCLOSED INCOME OF RS 1 40 41 210 WHICH HAS BEEN ACCEPTED AND THE A SSESSMENT COMPLETED AT THE RETURNED INCOME WITHOUT ANY FURTHER ADDITION S MADE BY THE AO. 19. THE ONLY DISPUTE WHICH HAS ALSO BEEN SPECIFIC ALLY RAISED BY THE AO RELATES TO WHETHER IN THE STATEMENT RECORDED UNDER SECTION 132(4) DURING THE COURSE OF SEARCH THE ASSESSEE HAS SPECIFIED TH E MANNER IN WHICH SUCH UNDISCLOSED INCOME HAS BEEN DERIVED AND SUBSTANTIAT ES THE MANNER IN WHICH THE UNDISCLOSED INCOME WAS DERIVED. 20. IN THIS REGARD THE PRINCIPLE CONTENTION OF THE LD AR IS THAT FROM THE PERUSAL OF THE STATEMENT OF THE ASSESSEE RECORDED U /S 132(4) IT MAY BE NOTED THAT WHILE RECORDING THE SAID STATEMENT NO SPECIFI C QUESTIONS WERE ASKED FROM THE ASSESSEE TO EXPLAIN THE MANNER OF EARNING OF INCOME OR TO SUBSTANTIATE THE UNDISCLOSED INCOME DECLARED BY THE ASSESSEE. IT WAS SUBMITTED THAT THE ASSESSEE SURRENDERED THE UNDISCL OSED INCOME IN RESPONSE TO QUESTION NO.18 21 & 22 AND AFTERWARDS THERE IS NO FURTHER QUESTION FOR THE MANNER OF EARNING THE SAME OR TO SUBSTANTIATE T HE SAME. 21. IT WAS FURTHER SUBMITTED THAT AND TO WHICH WE AGREE THE PROVISIONS OF SECTION 271AAB(1)(A) IS PARI MATERIA TO SECTION 271AAA(2) SO FAR AS IT RELATES TO SATISFACTION OF CONDITION WHEREBY IT REQUIRES SP ECIFYING THE MANNER OF EARNING OF UNDISCLOSED INCOME AS WELL AS TO SUBSTAN TIATE THE MANNER IN WHICH THE UNDISCLOSED INCOME WAS DERIVED. 22. IT WAS FURTHER SUBMITTED THAT THERE IS CONSI STENT VIEW OF VARIOUS COURTS AND BENCHES OF THE TRIBUNAL THAT IN CASE THE DEPART MENT HAS NOT RAISED ANY SPECIFIC QUERY REGARDING THE MANNER IN WHICH THE UN DISCLOSED INCOME HAS BEEN DERIVED AND ITS SUBSTANTIATION THE LD. AO WOU LD NOT BE JUSTIFIED IN LEVY ITA NO. 629 TO 635 & 648 TO 652/JP/17 SH. MAHESH KUMAR JAIN AND OTHERS VS. ACIT 32 OF PENALTY U/S 271AAA OF THE ACT. IT WAS SUBMITTED THAT THE LEGAL PROPOSITION SO LAID DOWN CONTINUES TO APPLY IN CONTEXT OF SECTI ON 271AAB(1)(A) WITH A VARIATION OF LEVY OF PENALTY @ 10% AS AGAINST DISCH ARGE FROM LEVY OF PENALTY UNDER SECTION 271AAA(2) OF THE ACT. IN THIS REGARD WE REFER TO THE VARIOUS AUTHORITIES ON THE SUBJECT. 23. THE HONBLE ALLAHABAD HIGH COURT IN CASE OF RADHA KISHAN GOEL REPORTED IN 278 ITR 454 IN CONTEXT OF EXPLANATION 5 TO SECTION 271(1)(C) HAS HELD AS UNDER: 10. UNDER SECTION 132(4) OF THE ACT IT IS THE AUT HORISED OFFICER WHO EXAMINES ON OATH ANY PERSON WHO IS FOUND TO BE IN POSSESSION OR CONTROL OF ANY BOOKS OF ACCOUNT DOCUMENTS MONEY BULLION JEWELLERY OR OTHER VALUABLE ARTICLE OR THING THEREFORE IT I S FOR THE AUTHORISED OFFICER TO RECORD THE STATEMENT IN HIS OWN WAY. THE REFORE IT IS NOT EXPECTED FROM THE PERSON TO STATE THOSE THINGS WHI CH ARE NOT ASKED BY THE AUTHORISED OFFICER. 11. IT IS A MATTER OF COMMON KNOWLEDGE WHICH CANNO T BE IGNORED THAT THE SEARCH IS BEING CONDUCTED WITH THE COMPLETED TE AM OF THE OFFICERS CONSISTING OF SEVERAL OFFICERS WITH THE POLICE FORC E. USUALLY TELEPHONE AND ALL OTHER CONNECTIONS ARE DISCONNECTED AND ALL INGRESS AND EGRESS ARE BLOCKED. DURING THE COURSE OF SEARCH PERSON IS SO TORTURED HARASSED AND PUT TO A MENTAL AGONY THAT HE LOSES HI S NORMAL MENTAL STATE OF MIND AND AT THAT STAGE IT CANNOT BE EXPECT ED FROM A PERSON TO PREEMPT THE STATEMENT REQUIRED TO BE GIVEN IN LAW A S A PART OF HIS DEFENCE. 12. IN THESE CIRCUMSTANCES WE ARE OF THE VIEW THAT UNDER SECTION 132(4) OF THE ACT UNLESS THE AUTHORIZED OFFICER PUT S A SPECIFIC QUESTION WITH REGARD TO THE MANNER IN WHICH INCOME HAS BEEN DERIVED IT IS NOT EXPECTED FROM THE PERSON TO MAKE A STATEMENT IN THI S REGARD AND IN ITA NO. 629 TO 635 & 648 TO 652/JP/17 SH. MAHESH KUMAR JAIN AND OTHERS VS. ACIT 33 CASE IN THE STATEMENT THE MANNER IN WHICH INCOME HA S BEEN DERIVED HAS NOT BEEN STATED BUT HAS BEEN STATED SUBSEQUENTL Y THAT AMOUNTS TO THE COMPLIANCE WITH EXPLANATION 5(2) OF THE ACT. WE ARE ALSO OF THE OPINION THAT IN CASE THERE IS NOTHING TO THE CONTRA RY IN THE STATEMENT RECORDED UNDER SECTION 132(4) OF THE ACT IN THE AB SENCE OF ANY SPECIFIC STATEMENT ABOUT THE MANNER IN WHICH SUCH INCOME HAS BEEN DERIVED IT CAN BE INFERRED THAT SUCH UNDISCLOSED INCOME WAS DE RIVED FROM THE BUSINESS WHICH HE WAS CARRYING ON OR FROM OTHER SOU RCES. THE OBJECT OF THE PROVISION IS ACHIEVED BY MAKING THE STATEMENT A DMITTING THE NON- DISCLOSURE OF MONEY BULLION JEWELLERY ETC. THUS WE ARE OF THE OPINION THAT MUCH IMPORTANCE SHOULD NOT BE ATTACHED TO THE STATEMENT ABOUT THE MANNER IN WHICH SUCH INCOME HAS BEEN DERIVED. I T CAN BE INFERRED ON THE FACTS AND CIRCUMSTANCES OF THE CASE IN THE ABSENCE OF ANYTHING TO THE CONTRARY. THEREFORE MERE NON-STATEMENT OF T HE MANNER IN WHICH SUCH INCOME WAS DERIVED WOULD NOT MAKE EXPLANATION 5(2) INAPPLICABLE. 24. THE HONBLE GUJARAT HIGH COURT IN CASE OF M AHENDRA C SHAH REPORTED IN 299 ITR 305 IN CONTEXT OF EXPLANATION 5 TO SECTION 271(1)(C) HAS HELD AS UNDER: 15. INSOFAR AS THE ALLEGED FAILURE ON THE PART OF THE ASSESSEE TO SPECIFY IN THE STATEMENT UNDER SECTION 132(4) OF THE ACT RE GARDING THE MANNER IN WHICH SUCH INCOME HAS BEEN DERIVED SUFFICE IT T O STATE THAT WHEN THE STATEMENT IS BEING RECORDED BY THE AUTHORIZED OFFIC ER IT IS INCUMBENT UPON THE AUTHORIZED OFFICER TO EXPLAIN THE PROVISIO NS OF EXPLANATION 5 IN ENTIRETY TO THE ASSESSEE CONCERNED AND THE AUTHORIZ ED OFFICER CANNOT STOP SHORT AT A PARTICULAR STAGE SO AS TO PERMIT TH E REVENUE TO TAKE ADVANTAGE OF SUCH A LAPSE IN THE STATEMENT. THE REA SON 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 OCCA SION FOR AN ITA NO. 629 TO 635 & 648 TO 652/JP/17 SH. MAHESH KUMAR JAIN AND OTHERS VS. ACIT 34 ASSESSEE TO STATE AND MAKE AVERMENTS IN THE EXACT F ORMAT STIPULATED BY THE PROVISIONS CONSIDERING THE SETTING IN WHICH SUC H STATEMENT IS BEING RECORDED AS NOTED BY ALLAHABAD HIGH COURT IN CASE OF RADHA KISHAN GOEL (SUPRA). SECONDLY CONSIDERING THE SOCIAL ENVI RONMENT IT IS NOT POSSIBLE TO EXPECT FROM AN ASSESSEE WHETHER LITERA TE OR ILLITERATE TO BE SPECIFIC AND TO THE POINT REGARDING THE CONDITIONS STIPULATED BY EXCEPTION NO. 2 WHILE MAKING STATEMENT UNDER SECTIO N 132(4) OF THE ACT. THE VIEW TAKEN BY THE TRIBUNAL AS WELL AS ALLA HABAD HIGH COURT TO THE EFFECT THAT EVEN IF THE STATEMENT DOES NOT SPEC IFY THE MANNER IN WHICH THE INCOME IS DERIVED IF THE INCOME IS DECLA RED AND TAX THEREON PAID THERE WOULD BE SUBSTANTIAL COMPLIANCE NOT WAR RANTING ANY FURTHER DENIAL OF THE BENEFIT UNDER EXCEPTION NO. 2 IN EXPL ANATION 5 IS COMMENDABLE. 25. THE HONBLE DELHI HIGH COURT IN CASE OF EMI RATES TECHNOLOGIES (IN ITA NO. 400/2017 DATED 18.7.2017) IN CONTEXT OF SECTION 271AAA HAS HELD AS UNDER: 3. THE CIT(A) IN PARA 4.7 OF THE ORDER DATED 4 TH NOVEMBER 2013 NOTED THAT NO SPECIFIC QUERY HAD BEEN PUT TO THE ASSESSEE BY DRAWING HIS ATTENTION TO SECTION 271AAA OF THE ACT ASKING HIM T O SPECIFY THE MANNER IN WHICH THE UNDISCLOSED INCOME SURRENDERED DURING THE COURSE OF SEARCH HAD BEEN DERIVED. THE CIT(A) THEREFORE RE LYING ON THE DECISIONS OF THIS COURT HELD THAT THE JURISDICTIONA L REQUIREMENT OF SECTION 271AAA WAS NOT MET. 4. THE ABOVE VIEW HAS BEEN CONCURRED WITH BY THE IT AT. 5. IN THE FACTS AND CIRCUMSTANCES OF THE CASE THE COURT IS OF THE VIEW THAT CONCURRENT DECISION OF THE CIT(A) AND THE ITAT REPRESENT A PLAUSIBLE VIEW WHICH CANNOT BE SAID TO BE PERVERSE. ITA NO. 629 TO 635 & 648 TO 652/JP/17 SH. MAHESH KUMAR JAIN AND OTHERS VS. ACIT 35 26. IN LIGHT OF ABOVE DISCUSSIONS IT IS CLEAR T HAT THE LEGAL PROPOSITION WHICH HAS BEEN LAID DOWN BY THE COURTS IN THE CONTEXT OF EXPLANATION 5 TO SECTION 271(1)(C) HAS BEEN FOLLOWED IN THE CONTEXT OF SECTI ON 271AAA AS APPARENT FROM THE RECENT DECISION OF THE HONBLE DELHI HIGH COURT IN CASE OF EMIRATES TECHNOLOGIES. SIMILAR VIEW HAS BEEN TAKEN BY THIS B ENCH IN CASE OF LATE SUDHA PATNI (ITA NO. 963/JP/2015 DATED 9.8.2016) AJIT SINGH (ITA NO. 714/JP/2014 DATED 26.09.2016) AND OTHERS. AS WE HAVE NOTED ABOVE THE PROVISIONS OF SECTION 271AAB(1)(A) ARE PARI MATERIA TO SECTION 271AAA(2) SO FAR AS IT RELATES TO SATISFACTION OF CONDITION WHER EBY IT REQUIRES SPECIFYING THE MANNER OF EARNING OF UNDISCLOSED INCOME AS WELL AS TO SUBSTANTIATE THE MANNER IN WHICH THE UNDISCLOSED INCOME WAS DERIVED. THE LEGAL PROPOSITION SO LAID DOWN IN CONTEXT OF SECTION 271AAA(2) THUS E QUALLY APPLIES IN CONTEXT OF SECTION 271AAB(1)(A) OF THE ACT. 27. IN LIGHT OF ABOVE LEGAL PROPOSITION LETS EX AMINE THE STATEMENT OF THE ASSESSEE RECORDED DURING THE COURSE OF SEARCH UND ER SECTION 132(4) OF THE ACT WITH A VIEW TO DETERMINE WHETHER ANY SPECIFIC Q UESTION(S) WERE RAISED TO THE ASSESSEE DRAWING HIS ATTENTION TO THE PROVISION S OF SECTION 271AAB WHICH REQUIRE THE ASSESSEE TO SPECIFY THE MANNER OF EARNI NG OF UNDISCLOSED INCOME AS WELL AS TO SUBSTANTIATE THE MANNER IN WHICH THE UNDISCLOSED INCOME WAS DERIVED. THE RELEVANT QUESTIONS ARE QUESTION NO. 3 18 19 20 21 22 AND 23 AND THE SAME ARE REPRODUCED AS UNDER: IZ'U 3 VKIDH VKENUH DS L=KSR CRKB;S& MKJ EQ>S ES- VKJ-MH-FERY] GKWFLIVY] FD'KUX<+ LS O SRU IZKIR GKSRK GSA IZKBOSV IZSFDVL LS VK; GSA IZKSIVHZ DK DK;Z HKH DJR K GWWAA IZ'U 18 VKIDS VKOKL DH HKKSFRD RYK'KH DS NKSJKU VKIDS VKOKL LS :I;S 22]28]710@& DH UDNH IZKIR GQBZ GSA TCFD VKIUS IZ'U 7 DS MKJ ESA :I;S 25 YK[K DH UDNH GKSUK CRK;K GSA D`I;K VKI BL ITA NO. 629 TO 635 & 648 TO 652/JP/17 SH. MAHESH KUMAR JAIN AND OTHERS VS. ACIT 36 UDN JKF'K DS L=KSR DK IW.KZ C;KSJK IZLRQR DJSAA MKJ TH GKWA HKKSFRD RYK'KH DH DK;ZOKGH DS NKSJKU IK;H X ;H UDNH ESJH GH GSA ;G JKF'K ESJH YS[KK IQLRDKSA ESA NTZ UGH GSA ESA BUDS L=KSR DS CKJS ESA VHKH O HKFO; ESA DQN HKH CR KUS ESA VLEFKZ GWWAA VR% BLS PKYW FOK OKZ DH VK; EKURS GQ FOK OKZ 2013&14 E SA VK;DJ GSRQ LOSPNK LS LEFIZR DJRK GWWAA BL IJ TKS HKH VK;DJ NKF ;RO CUSXK OKS ESA DJ DS :I ESA TEK DJK NWAXKA IZ'U 19 VKIDS VKOKL LS HKKSFRD RYK'KH DS NKSJKU IZK IR GQBZ SUPER FINE NOTE BOOK (ASI) O ANAND NOTE BOOK FN[KK JGK GWWAA FTLESA DBZ IZFOFV;KWA GS BLESA 1 LS 18 RD FY[KS GQ IQB GS B LDS CKJS ESSA IW.KZ C;KSJK NHFT;SA MKJ TH GKWA ESUS SUPER FINE NOTE BOOK (ASI) NS[K YH GS ;G ESJS VKOKL LS GH FEYH GS BLESA DQY 18 IQB F Y[KS GQ;S GSA O DQY I`B LA[;K 1 LS 46 RD GSA BLESA ESJS O;OLK; LS LACF/K IZFOFV; KWA GSA TKS ESJH YS[KK IQLRDKSA ESA NTZ GSA IZ'U 19 ESA VKIDKS VKIDS VKOKL LS HKKSFRD RYK'KH DS NKSJKU IZKIR GQBZ ANAND EXERCISE NOTE BOOK FN[KK JGK GWWA FTLESA DQY I`B 15 5 GS O FY[KS GQ I`B 41 GSA D`I;K BLESA FY[KS I`BKSA D K IW.KZ FOOJ.K NSOSAA MKJ ;G ANAND EXERCISE BOOK ESUSA NS[K YH GS ;G RYK'KH DS NKSJKU ESJS VKOKL LS FEYH GS BLESA NTZ IZFOFV;KWA ESJS CSAD [K KRKSA DK FOOJ.K GS TKS ESJH YS[KK IQLRDKSA ESA NTZ GSA IZ'U 20 VKIDS VKOKL LS RYK'KH DK;ZOKGH DS NKSJKU FEYH MK;JH 2013 (SAVING LIFE WITH EVERY INFUSION) FN[KK JGK GWWA FTLES FY[KS GQ I`B 16 GSA FTUESA FUEU IZFOFV;KWA VAFDR GSA 1 RS.500000 ADVANCE DT.06/04/2013 2 RS.450000 ADVANCE DT.13/04/2013 3 RS.1000000 ADVANCE DT.27/04/2013 4 RS.811000 ADVANCE DT.14/05/2013 5 RS.750000 ADVANCE DT.30/05/2013 6 RS.200000 ADVANCE DT.06/06/2013 7 RS.721000 ADVANCE DT.29/06/2013 8 RS.571000 ADVANCE DT.09/07/2013 9 RS.300000 ADVANCE DT.09/07/2013 10 RS.631000 ADVANCE DT.23/07/2013 11 RS.455000 ADVANCE DT.01/08/2013 12 RS.1172500 ADVANCE DT.26/09/2013 ITA NO. 629 TO 635 & 648 TO 652/JP/17 SH. MAHESH KUMAR JAIN AND OTHERS VS. ACIT 37 DQY 1]18]12]500 DS VFXZE DH IZFOFV;KWA NTZ GS D`I; K BUDK IW.KZ C;KSJK NHFT;SA MKJ TH GKWA ESUSA DIARY 2013 NS[K YH GS O BLESA VAFDR IZFOFV;KWA HKH NS[K YH GSA ;G MK;JH ESJS VKOKL LS FEYH GS BLESA VAFDR I ZFOFV;KWA DH DQY JKF'K :I;S 1]18]12]500@& GKSRH GS TKS ESUSA DBZ O;FDR;KSA DKS TEHU GSRQ VFXZE NS J[KH GSA ;G YS[KK IQLRDKSA ESA N TZ UGH GSA OA BLDK DKSBZ VU;K FGLKC&FDRKC HKH ESJS IKL UGH GSA IZ'U 21 VKIUS IZ'U 20 DS MKJ ESA :I;S 1]18]12]500@& FOFHKU U O;FDR;KSA DKS TEHU [KJHNUS GSRQ VFXZE NSUK CRK;K GSA D`I;K VK I BU O;FDR;KSA DK IW.KZ C;KSJK IZLRQR DJSAA MKJ TKS MK;JH 2013 IZKIR GQBZ GS MLESA VAFDR O;FDR;KSA DS UKE IRKSA DK FOOJ.K ESJS IKL MIYC/K UGHA GS O U GH DKSBZ VU; FOO J.KA C;KSJK ESJS IKL EKSTWN GSA VR% BLS EJSH V?KKSFKR VK; EKUR S GQ ESA LOSPNK LS :I;S 1]18]12]500@& FOKH; OKZ 2013&14 ESA VK;DJ GSRQ LEFIZR DJRK GWWAAA FTL IJ TKS HKH VSDL CUS XK OKS ESA TEK DJK NWWAAXKA IZ'U 22 VKIUS IZ'U 18 DS MKJ ESA :I;S 22]28]710@7 UDN JKF' K DKS VK;DJ GSRQ LEFIZR FD;K GS O IZ'U 21 DS MKJ ESA :I; S 1]18]12]500@& VR% DQY LEFIZR JKF'K :- 11812500$2228710 :I;S 1]40]41]210@& D DJKSM+ PKYHL YK[K BDRKFYL GT KJ NKS LKS NL GKSRH GS BL CKJS ESA VKIDKS DQN DGUK GKS RKS CRK;SAA MKJ ESA LOSPNK LS UDN IZKIR JKF'K 22]28]710@& O 1]18]12 ]500@& FOFHKUU IZFOFV;KWA VFXZE JKF'K DH DQY 1]40]41]210@ & FOK OKZ 2013&14 GSRQ V?KKSFKR VK; EKURS GQ LOSPNK LS LEFI ZR DJRK GWWAA FTL IJ TKS HKH NKF;RO VK;DJ DK CUSXK OKS ESA TEK DJ K NWWAXKA IZ'U 23 VKI VIUS IZFRBKKU DH YS[KK IQLRDKSA DK IW. KZ C;KSJK NSOSA MKJ GEKJS IZFRBKU DH YS[KK IQLRDSA DEI;WVJ IJ RS;KJ GK SRH GSA VKT GEKJS YS[KKIKY CHEKJ GS OA MIYC/K UGHA GS VR% ESA VKT YS[K K IQLRDS IZLRQR UGHA DJ LDRKA YSFDU ESA VKIDKS DGUK P KGRK GWWWA FD MIJKSDR V?KKSFKR VK; :I;S 1]40]41]210@& ESJH YS [KK IQLRDKSA ESA NTZ UGH GSA ;G ESJH V?KKSFKR VK; GSA FTLS ESA IQU% V?KKSFKR EKURS GQ VK;DJ GSRQ LEFIZR DJRK GWWAA 13 RS.600000 ADVANCE DT.14/10/2013 14 RS.350000 ADVANCE DT.28/10/2013 15 RS.1100000 ADVANCE DT.01/11/2013 16 RS.1001000 ADVANCE DT.06/11/2013 17 RS.500000 ADVANCE DT.18/11/2013 18 RS.700000 ADVANCE DT.02/12/2013 ITA NO. 629 TO 635 & 648 TO 652/JP/17 SH. MAHESH KUMAR JAIN AND OTHERS VS. ACIT 38 28. ON REVIEW AND EXAMINATION OF ABOVE STATEMENT OF THE ASSESSEE RECORDED U/S 132(4) OF THE ACT WE FIND THAT NO SPE CIFIC QUESTION(S) WERE RAISED TO THE ASSESSEE DRAWING HIS ATTENTION TO THE PROVISIONS OF SECTION 271AAB WHICH REQUIRE THE ASSESSEE TO SPECIFY TH E MANNER OF EARNING OF UNDISCLOSED INCOME AS WELL AS TO SUBSTANTIATE THE MANNER IN WHICH THE UNDISCLOSED INCOME WAS DERIVED. WE ARE THEREFORE OF THE VIEW THAT IN ABSENCE OF A SPECIFIC QUERY RAISED DURING THE COURS E OF SEARCH DRAWING ASSESSEES ATTENTION TO THE PROVISIONS OF SECTION 271AAB WHERE THE STATEMENT OF THE ASSESSEE WAS RECORDED U/S 132(4) A BOUT THE MANNER IN WHICH THE UNDISCLOSED INCOME HAS BEEN DERIVED AND I TS SUBSTANTIATION THEREOF THE AO WAS NOT JUSTIFIED IN INVOKING THE R ESIDUARY PROVISIONS OF CLAUSE (C) OF SECTION 271AAB(1) INSTEAD OF CLAUSE ( A) OF SECTION 271AAB(1) OF THE ACT. THE ASSESSEE HAVING SATISFIE D THE OTHER CONDITIONS SPECIFIED IN SECTION 271AAB(1)(A) WHICH REMAIN UNDISPUTED IN TERMS OF ADMISSION OF UNDISCLOSED INCOME IN THE STAT EMENT RECORDED U/S 132(4) PAYMENT OF TAXES TOGETHER WITH INTEREST IF ANY IN RESPECT OF UNDISCLOSED INCOME ON OR BEFORE THE SPECIFIED DATE AND DECLARING THE UNDISCLOSED INCOME IN THE RETURN OF INCOME FOR THE SPECIFIED PREVIOUS YEAR ON OR BEFORE THE SPECIFIED DATE WE ARE OF THE VIEW THAT THE LD CIT(A) HAS RIGHTLY VARIED THE LEVY OF PENALTY AND C ONFIRM THE LEVY OF PENALTY @ 10% IN TERMS OF SECTION 271AAB(1)(A) OF T HE ACT. IN THE RESULT WE AFFIRM THE ORDER OF THE LD CIT(A) AND DI SMISS THE APPEAL OF THE ASSESSEE AS WELL AS THE REVENUE. 29. IN ITA NO. 629/JP/2017 IN CASE OF SH. JAI KUMAR BAK LIWAL VS. ACIT IN ITA NO. 648/JP/2017 IN CASE OF DCIT VS. SH . JAI KUMAR BAKLIWAL IN ITA NO. 631/JP/2017 IN CASE OF SH. PRA KASH CHAND JAIN VS. ACIT IN ITA NO. 650 /JP/2017 IN CASE OF DCIT VS. PRAKASH CHAND JAIN IN ITA NO. 629 TO 635 & 648 TO 652/JP/17 SH. MAHESH KUMAR JAIN AND OTHERS VS. ACIT 39 ITA NO. 632/JP/2017 IN CASE OF SH. SURESH CHAND M ITTAL VS. ACIT IN ITA NO. 633/JP/2017 IN CASE OF SD. DINESH KUMAR MIT TAL VS. ACIT IN ITA NO. 649/JP/2017 IN CASE OF DCIT VS. SH. DINESH KUMA R MITTAL I N ITA NO. 634/JP/2017 IN CASE OF SMT. ALKA JAIN VS. ACIT IN ITA NO. 635/JP/2017 IN CASE OF SH. PUNEET JAIN VS. ACIT AND IN ITA NO. 652/JP/2017 IN CASE OF DCIT VS. SH. PUNEET JAIN WHICH ARE CROSS APPEALS FILED BY THE REVENUE AND THE RESPECTIVE ASSESSES B OTH THE PARTIES SUBMIT AND AGREE THAT UNDER IDENTICAL FACT AND CIRCUMSTANCES OF THE CASE THE PENALTY HAS BEEN LEVIED BY THE AO UNDER SECTION 271AAB(1)(C) WH ICH HAS BEEN VARIED BY THE LD CIT(A) AND UPHELD @ 10% IN TERMS O F SECTION 271AAB(1)(A) OF THE ACT. OUR FINDINGS AND DIRECTIONS CONTAINED IN ITA NO. 630/JP/2017 & 651/JP/17 SHALL ACCORDINGLY APPLY MUTATIS MUTANDIS TO THESE APPEALS. IN THE RESULT WE AFFIRM THE ORDER OF THE LD CIT(A) IN ALL THESE C ASES AND ALL THESE CROSS APPEALS FILED BY THE REVENUE AND TH E ASSESSEE ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 27/11/2017. SD/- SD/- (KUL BHARAT ) (VIKRAM SINGH YADAV) U;KF;D LNL;@ JUDICIAL MEMBER YS[KK LNL;@ ACCOUNTANT MEMBER JAIPUR DATED:- 27/11/2017 *GANESH KR. VKNS'K DH IZFRFYFI VXZSF'KR@ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ@ THE APPELLANT- SHRI MAHESH KUMAR JAIN SURESH CHAND MITTAL PRAKASH CHAND JAIN DINESH KUMAR MITTAL JAI KUMAR BAKLIWA L SMT. ALKA JAIN & PUNEET JAIN KISHANGARH. 2. IZR;FKHZ@ THE RESPONDENT- THE ACIT CENTRAL CIRCLE/DCIT CENTR AL CIRCLE AJMER. ITA NO. 629 TO 635 & 648 TO 652/JP/17 SH. MAHESH KUMAR JAIN AND OTHERS VS. ACIT 40 3. VK;DJ VK;QDR@ CIT III JAIPUR 4. VK;DJ VK;QDRVIHY@ THE CIT(A)-III JAIPUR 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ@ DR ITAT JAIPUR 6. XKMZ QKBZY@ GUARD FILE (ITA NO.629 TO 635 & 648 TO 652 /JP/2017 ) VKNS'KKUQLKJ@ BY ORDER LGK;D IATHDKJ@ ASSISTANT. REGISTRAR.