TMI Blog2018 (2) TMI 1778X X X X Extracts X X X X X X X X Extracts X X X X ..... tracting the relevant search statement(s) followed by necessary correspondence with the DDIT-1. Mr. Soparkar’s case is that no such specific query on the relevant “manner issue” came to be raised from the authorized officer. We therefore conclude that the CIT(A) has rightly deleted all the impugned penalties after holding that all these assessees had duly complied with the relevant immunity conditions u/s.271AAA of the Act. The Revenue’s identical sole substantive grievance in all these appeals is therefore rejected. - Decided against revenue - ITA No. 1089/Ahd/2016 , ITA No. 1090/Ahd/2016, ITA No. 1091/Ahd/2016, ITA No. 1092/Ahd/2016, ITA No. 1093/Ahd/2016, ITA Nos. 1098 & 1099/Ahd/2016 - - - Dated:- 21-2-2018 - SHRI S. S. GODARA, JUDICIAL MEMBER AND SHRI AMARJIT SINGH, ACCOUNTANT MEMBER By Revenue : Shri V. K. Singh, Sr. D.R. By Assessee : Shri Nirav Shah, A.R., Shri S. N. Soparkar Shri Parin Shah, A.Rs. Deputy Commissioner of Income-tax, ORDER PER BENCH Revenue has filed instant batch of seven appeals pertaining to six different assessees for assessment year 2012-13 in all appeals except in case M/s. Sun Incorporate s assessment year 2011-12 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1) Disclosure by key-person of the group for and on behalf of the appellant is sufficient compliance to immunity condition of 271AAA(2)(i): The disclosure made by Key person of the group for the whole group, followed up by appropriate communication to the Investigating Officer or acquiescence by the Investigating Officer followed by filing of return u/s 153A/153C/139 by respective constituents, totalling, in all, to the group disclosure by the key person is held by me to be sufficient compliance to the immunity condition of 271AAA(2)(i) both by key person as also the constituents, particularly when the incomes returned in respective hands is accepted by the AO exclusively on the basis of the disclosure in respective hands without any adverse finding. The operative portion of my order in the case of Umesh C Patel (CIT(A)-12/370B,371B/CC-2 Baroda/2013-14 dated 28/10/2015) is reproduced as under: 4.1 After carefully going through the material available and the case law or facts relied upon both by the AO and the AR, I am persuaded by the contentions raised on behalf of the appellant that sufficient and substantial compliance to eligibility conditions for immunity prescribed u/s 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eof with finding that the appellant himself has not made the disclosure u/s 132(4). The conclusion arrived at as above is not only in conformity with Balaji Formalin (supra), but is also fortified by the SC decision in Hindustan Steel Ltd (1972) 83 ITR 26 with following observations: .........Penalty will not also be imposed merely because it is lawful to do so. Whether penalty should be imposed for failure to perform a statutory obligation is a matter of discretion of the authority to be exercised judicially and on a consideration of all the relevant circumstances. Even if a minimum penalty is prescribed, the authority competent to impose the penalty will be justified in refusing to impose penalty, when there is a technical or venial breach of the provisions of the Act or where the breach flows from a bona fide belief that the offender is not liable to act in the manner prescribed by the statute...... 4.2 In the facts and circumstances as discussed above, thus, the appellant is deemed to have made admission u/s 132(4) of amounts as tabulated in para 2. la of the penalty order and para 5 of the assessment order for the years under reference. It is therefore held that appellan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n assessee to state and make averments in the exact format stipulated by the provisions, considering the setting in which such statement was being recorded. Secondly, considering the social environment, it is not possible to expect from an assessee, whether literate or illiterate, to be specific and to the point regarding the conditions stipulated by the Exception No. 2 while making statement under section 132(4). The view taken by the Tribunal to the effect that even if the statement does not specify the manner in which the income is derived, if the income is declared and tax thereon is paid, there would be substantial compliance not warranting any further denial of the benefit under the Exception No. 2 in the Explanation 5 was commendable. [Para 15] Hence, the Tribunal was justified in coming to the conclusion that insofar as the value of diamonds was concerned, the assessee having made a declaration under section 132(4) and having paid taxes thereon, had fulfilled all the conditions for availing of the benefit of immunity from levy of penalty as provided under the Explanation 5 to section 271(l)(c). (ii) Decision of Hon'ble Ahmedabad Tribunal in case of Sulochanadevi A. A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as been made by the AO, He has further given a finding that AO was satisfied about the disclosed income offered in the return of income and the manner in which the income was derived. We thus find that Ld. CIT(A) by a detailed and reasoned order deleted the penalty. Before us, Revenue has not brought any material on record to controvert the findings of the CIT(A) or how the ratio of decisions relied by Id. CIT(A) not applicable to the present facts. In view of the aforesaid facts, we find no reason to interfere with the order of Ld. CIT(A) and thus this ground of Revenue is dismissed. . 5.2 When seen in the light of Mahendra C Shah (supra), I find force in the contention of the ARs that subsequent to admission u/s 132(4), clearly indicating the broad manner of earning to be being from land transactions, capital gains and miscellaneous followed by offering in the return, and unconditional and unaltered bringing of the same to tax by the AO, substantially tantamount to stating the manner and substantiating the same, and that the AO cannot hold otherwise during penalty proceedings without bringing in positive evidence to establish the absence of substantiation or the fal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... further material brought by the Ld. AO to hold otherwise. Thus, I find that the appellant's case is squarely covered by the ratios of MahendraC Shah and SidhNathGoel (supra), and thus it is to be held that the appellant has made effective and sufficient compliance to immunity condition of s. 271AAA(2)(ii) also. I may also add that the law laid down in Mahendra C Shah and SidhNathGoel has been further explained and applied by the Ahmedabad Tribunal in Geeta Prints Put Ltd and Sulochana Devi Agganval in the context of immunity conditions contained in s. 271AAA(2)(i) and (if) in ITA Nos. 2093/2011 and 1052/2012 (supra) holding as above, and, further, Geeta Prints has also been further (approved by the HC in Tax Appeal No 565/2015 dated 14/09/2015. (3) When penalty is on income returned u/s 153A: In addition to the fulfillment of immunity conditions as prescribed u/s 271AAA(2)(i) and (ii) as above, following Kirit Dahyabhai (supra] as explained and applied by Ahmedabad Tribunal in Sandeep Navneetlal (supra), it has been further held by me in the above referred appeals that in view of the fact that the penalty u/:: 271AAA has been levied on the income already disclosed in the re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ble jurisdictional high court s recent judgment in Tax Appeal No. 434 of 2017 Pr.CIT vs. Mukeshbhai Ramanlal Prajapati holds after discussing a catena of case laws that it is incumbent for an authorized officer to put the searched assessee to question about the manner of having derived the relevant undisclosed income. Their lordships are of the view that the burden then shifts on the concerned deponents to substantiate the said manner of having derived the undisclosed income in issue. We sought to know from learned Departmental Representative as to whether the authorized officer had raised manner query in the course of search statement or not. He fails to pinpoint any such question raised in search statement. Learned counsel refers to CIT(A) s order(s) under challenge pages 4 onwards extracting the relevant search statement(s) followed by necessary correspondence with the DDIT-1. Mr. Soparkar s case is that no such specific query on the relevant manner issue came to be raised from the authorized officer. We therefore quote hon ble jurisdictional high court s above referred judgment to conclude that the CIT(A) has rightly deleted all the impugned penalties after holding that all ..... X X X X Extracts X X X X X X X X Extracts X X X X
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