Delhi High Court - Orders
Principal Commissioner Of Income Tax-9 vs Amul Gabrani, on 22 March, 2024
Author: Yashwant Varma
Bench: Yashwant Varma, Purushaindra Kumar Kaurav
$~14
* IN THE HIGH COURT OF DELHI AT NEW DELHI
+ ITA 1251/2018
PRINCIPAL COMMISSIONER OF INCOME TAX-9
..... Appellant
Through: Mr. Abhishek Maratha, Sr.SC
with Mr. Parth Semwal and
Ms. Nupur Sharma, Advs.
versus
AMUL GABRANI, ..... Respondent
Through: Mr .Priyojeet Chatterjee with
Mr. Sandeep Chilana, Ms.
Snehil Sharma, Ms. Anjali
.Iain, Ms. Jagrati Rastogi, Mr.
Abdullah Tanveer and Ms.
Kannopriya Gupta, Advs.
CORAM:
HON'BLE MR. JUSTICE YASHWANT VARMA
HON'BLE MR. JUSTICE PURUSHAINDRA KUMAR
KAURAV
ORDER
% 22.03.2024
1. Having heard Mr. Maratha, learned counsel appearing for the appellant, we note that the impugned judgment rendered by the Income Tax Appellate Tribunal ["ITAT"] would give rise to the following question:-
(a) Whether the ITAT in facts and circumstances of the case was correct in law in deleting the penalty of INR 1,97,70,670/- imposed by Assessing Officer under Section 271AAA of the Income Tax Act, 1961["Act"]?
2. While dealing with the issue of penalty under Section 271AAA of the Act, the ITAT has observed as follows: -
This is a digitally signed order.
The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 28/03/2024 at 21:01:00 "2.4 If the aforesaid judicial pronouncements are analyzed with the facts of the present appeal there is uncontroverted finding in the impugned order and also in the assessment order that in computation of income, attached with the return, the assessee declared the surrendered amount of Rs. 19,77,06,696/- under the head "additional income" which was accepted by the Revenue. It is further noted that while initiating the penalty proceedings the Ld. AO nowhere stated as to why the penalty proceedings were initiated and whether the conditions laid down in the section were satisfied or not. The Ld. AO without assigning any reason and merely on the basis of surrender made by the assessee initiated penalty proceedings. The amount of surrender was made by the assessee on the basis of certain loose papers found and seized during search operation upon tecpro group at Gurgaon. There is a further observation that these papers were, dictated by the search team and further from the statement tendered by the assessee there is a condition that the surrender made by the assessee shall be without penal action by the Department whatsoever and the surrender was made to buy peace and to avoid litigation with the Department in the spirit of cooperation. Considering the totality of facts and the decision in CIT vs. Suresh Chander Mittal (251 ITR 9) (MP), we find merit in the conclusion drawn by the Ld CIT (A) and confirm the same, resultantly the appeal of the Revenue is dismissed."
3. We, however, note that Section 271AAA of the Act reads as under:-
"[271-AAA. Penalty where search has been initiated.--
(1) The Assessing Officer may, notwithstanding anything 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 1st 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 apply if the assessee,--
(i) 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;
(ii) substantiates the manner in which the undisclosed income was derived; and
(iii) pays the tax, together with interest, if any, in respect of the undisclosed income.
This is a digitally signed order.
The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 28/03/2024 at 21:01:00 (3) No penalty under the provisions of clause (c) of sub-section (1) of Section 271 shall be imposed upon the assessee in respect of the undisclosed income referred to in sub-section (1).
(4) The provisions of Sections 274 and 275 shall, so far as may be, apply in relation to the penalty referred to in this section.
Explanation.--For the purposes of this section,--
(a) "undisclosed income" means--
(i) any income of the specified previous year represented, either wholly or partly, by any money, bullion, jewellery or other valuable article or thing or any entry in the books of account or other documents or transactions found in the course of a search under Section 132, which has--
(A) not been recorded on or before the date of search in the books of account or other documents maintained in the normal course relating to such previous year; or (B) otherwise not been disclosed to the [Principal Chief Commissioner or Chief Commissioner] or [Principal Commissioner or Commissioner] before the date of search; or
(ii) any income of the specified previous year represented, either wholly or partly, by any entry in respect of an expense recorded in the books of account or other documents maintained in the normal course relating to the specified previous year which is found to be false and would not have been found to be so had the search not been conducted;
(b) "specified previous year" means the previous year--
(i) which has ended before the date of search, but the date of filing 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 said date; or
(ii) in which search was conducted.]"
4. It is in the aforesaid backdrop that we prima facie find merit in the submission of Mr. Maratha, that a mere surrender of income would not absolve the assessee from the levy of penalty.
5. We are thus of the considered opinion that the appeal merits further consideration and it shall consequently stand admitted on the This is a digitally signed order.
The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 28/03/2024 at 21:01:00 aforenoted question of law.
6. Let the appeal be called again on 24.07.2024.
YASHWANT VARMA, J.
PURUSHAINDRA KUMAR KAURAV, J.
MARCH 22, 2024/MJ This is a digitally signed order.
The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 28/03/2024 at 21:01:00