ANURAG TOMAR,JAIPUR vs. DY. CIT, C.C.-1 JAIPUR, JAIPUR

IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES, “SMC” BENCH, JAIPUR BEFORE SMT. ANNAPURNA GUPTA, ACCOUNTANT MEMBER ITA No. 1857/JPR/2025 (Assessment Year:2013-14)

Anurag Tomar Vs. DCIT 4, Govind Marg, Adarsh Central Circle 1 Nagar, Jaipur Jaipur �थायीलेखासं./जीआइआरसं./PAN/GIR No:AAVPT 6050 E Appellant .. Respondent

Appellant by : Sh. G.N. Mehta, CA Respondent by : Mrs. Aarti Rawat, JCIT

Date of Hearing 15.07.2026 Date of Pronouncement 22.07.2026 O R D E R The present appeal has been filed by the assessee against the order passed by the Office of the Commissioner of Income Tax, Appeal, CIT(A), Jaipur-04(hereinafter referred to as “Ld. CIT(A)”), dated 29.10.2025under Section 250 of the Income Tax Act, 1961 (hereinafter referred to as “the Act”). 2. The assessee in this appeal has taken following grounds of appeal:- 1. Ld. CIT(A) was not justified in sustaining penalty of Rs.5,29,495/- under sec. 271(1)(c) of I.T. Act as against levy of penalty under sec. 271AAB of I.T. Act in search cases and that too on higher value of property adopted by Sub-Registrar for charging stamp duty

P a g e | 2 ITA No.1857/JPR/2025 Anurag Tomar for registration after conversion of two pre-owned plots of land to urban plots by Jaipur Development Authority. 2. Without prejudice to ground No. (1) ld. CIT(A) has erred in sustaining the penalty under section 271(1)(c) of Act on value of immovable properties in subsequent year adopted by Sub-Registrar for registration (on 14th March 2014 relevant to A.Y. 2014-15) without any allegation of any on-money payment.. 3. Ld. CIT (A) has acted against the provisions of law by avoiding different binding judicial pronouncements brought to his notice by a defective show-cause notice under sec. 271(1)(c) of I.T. Act, issued by ld. AO by placing reliance on unrelated and irrelevant facts/decisions, as against binding precedent referred to him even in case of assessee wife (Mrs. Swati Tomar) wherein, on identical facts, penalty under sec. 271(1) (c) of Act was deleted by this Honorable Tribunal, but was misinterpreted as deletion of penalty on technical grounds. 3. The solitary issue in the present appeal pertains to levy of penalty u/s 271AAB of the Act. The facts relating to the case are that search action u/s 132(1) was carried out on 30.10.2014 on various premises of the NIMS Group which included the assessee also. Subsequently, assessment u/s 153A was framed, and addition made on account of undisclosed investment in property of Rs.17,59,239/-, which was confirmed by the Ld. CIT(A) and the Hon’ble ITAT in its order passed dated 20.08.2019 partly confirmed the addition made by the AO to the tune of Rs.17,13,576/-. Penalty proceedings were initiated u/s 271(1)(c) of the Act for furnishing inaccurate particulars of income, and penalty thereafter, levied on the addition confirmed by the ITAT to the tune of Rs.17,13,576/- imposing penalty at the rate of 100% of the tax sought to be evaded thereon amounting to Rs.5,29,495/-. 4. The matter was carried out in appeal before Ld. CIT(A), who confirmed the penalty so levied.

P a g e | 3 ITA No.1857/JPR/2025 Anurag Tomar 5. Before me, ld. Counsel for the assessee contended that, in the impugned year, the penalty was to be levied in terms of the provisions of Section 271AAB of the Act and not as per Section 271(1)(c) of the Act. He drew my attention to provisions of Section 271AAB of the Act, which read as under:- ………. Penalty where search has been initiated. 271AAB. (1) The Assessing Officer or the Commissioner (Appeals) 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 July, 2012 but before the date on which the Taxation Laws (Second Amendment) Bill, 2016 receives the assent of the President, the assessee shall pay by way of penalty, in addition to 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 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) 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 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 assessee— (i) in the course of the search, in a statement under 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

P a g e | 4 ITA No.1857/JPR/2025 Anurag Tomar (B) pays the tax, together with interest, if any, in respect of the undisclosed income; (c) a sum computed at the rate of sixty per cent of the undisclosed income of the specified previous year, if it is not covered by the provisions of clauses (a) and (b). …………….. 6. Referring to the same, he pointed out that for searches initiated under Section 132 on or after 1st day of July, 2012 but before the date on which the Taxation Laws (Second Amendment) Bills, 2016 received the assent of President, penalty was to be levied in terms of Section 271AAB of the Act, on undisclosed income of the assessee, which was defined in the Explanation to the section at sub-clause (c) as under:- ………………… Explanation.—For the purposes of this section,— (c) "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. ……………………

P a g e | 5 ITA No.1857/JPR/2025 Anurag Tomar 7. Hethereafter, pointed out that in the facts of the present case, search was conducted within the period specified in Section 271AAB that between 1st day of July, 2012 and 2016, having been conducted on 30.10.2014. He further, contended that the addition was confirmed by the ITAT noting at para 19 of its order that during course of search, Pattas of two plots were found and the amount paid noted in the pattas for all these plots was not found recorded in the books of the assessee. That the Pattas of these plots constituted incriminating material and noting so, the ITAT confirmed the addition made by the AO. He drew my attention to para 19 of the order stating so as under:- ……….. 19. Thus, it is clear from the above decision of the Coordinate Bench that the addition was deleted on the plea of assessment being not pending on the date of search and no incriminating material was found during the course of search. However, in both the cases before us i.e. Dr. Swati Tomar and Dr. Anurag Tomar, assessments were pending. In so far as in case of Dr. Swati Tomar is concerned, the return for the relevant assessment year was filed on 04/6/2014 and six months for the issue of notice U/s 143(2) of the Act was not expired and the search took place on30/10/2014. Similarly, in the case of Dr. Anurag Tomar, return was filed on 30/05/2014, the time period of issue of notice U/s 143(2) was very much there in so far as search was undertaken on 30/10/2014. Thus, we found that in both these cases, assessments were abated meaning thereby these were pending as on the date of search. We further observe that during the course of search, Pattas of these two plots were found and the amount paid for acquisition of these plots were not found recorded in the books of account. The pattas of these plots constituted incriminating material, therefore, there is no merit in the contention of the Id AR that the addition should be deleted by following the decision of the Coordinate Bench. So far as the merit of the addition is concerned, we found that the A.O. has correctly taken value of these plots so determined by the JDA, the registered value of plots as per JDA pattas and Sub-Registrar, Jaipur-4. Thus, we confirm the addition so made by the A.O. subject to further direction to the A.O. to reduce this addition only to the extent of any investment, if any, shown by the assessee in regular books of account before the date of search in respect of any of these plots so acquired. We direct accordingly. 8. Ld. Counsel for the assessee contended that clearly, the addition made to the income of the assessee constituted undisclosed income in

P a g e | 6 ITA No.1857/JPR/2025 Anurag Tomar terms of Explanation (c) to Section 271AAB of the Act, which clearly states that any income of the specified 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 during the course of search, which has not been recorded in the books of the assessee. 9. In the facts of the present case of the assessee, the document relating to Pattas of land sold were found which was treated as incriminating material and was the basis of addition made to the income of the assessee, noting that the investment made as disclosed in the Pattas was not recorded in the books of the assessee. That therefore, clearly, the addition made constituted undisclosed income of the assessee in terms of Section 271AAB of the Act. He contended therefore, that the assessee satisfied the conditions prescribed u/s 271AAB of the Act, and the penalty ought to have been levied in terms of the said provision alone .That the penalty levied u/s 271(1)(c) of the Act, in the present case, was thereafter, in contravention of the law prescribed in this regard. 10. He further pointed out that the ITAT in the case of assessee’s wife Dr. Swati Tomar had deleted identical penalty levied u/s 271(1)(c) of the Act holding that the penalty was leviable u/s 271AAB of the Act. Copy of the order of the ITAT in ITA No.1345/JP/2024 dated 30th June 2025, was placed before me, and my attention to para 9 of the order holding so:- ………………………

P a g e | 7 ITA No.1857/JPR/2025 Anurag Tomar 9. We have heard the rival contentions and perused the material placed on record. First we take up the additional ground raised by the assessee wherein the assessee contended that ld. CIT(A) was not justified in sustaining penalty of Rs.4,12,330/- under sec. 271(1)(c) of the Act as against levy of penalty under sec. 271AAB of I.T. Act in search case which based on higher value adopted by Sub-Registrar for registration of plots of land on conversion of pre- owned plots of land by assessee, already appearing in her Balance sheet when purchased as unapproved plots of land. Record reveals that in this case search was conducted on 30.10.2014 and the law has been amended w.e.f. 01.07.2012 that when there has been a search the penalty is leviable as per provision of section 271AAB of the Act which read as under: Penalty where search has been initiated. 271AAB. (1) The Assessing Officer or the Commissioner (Appeals) may, not with standing 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 July, 2012 but before the date on which the Taxation Laws (Second Amendment) Bill, 2016 receives the assent of the President, the assessee shall pay by way of penalty, in addition to 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 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) 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 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 assessee— (i) in the course of the search, in a statement under 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;

P a g e | 8 ITA No.1857/JPR/2025 Anurag Tomar (c) a sum computed at the rate of sixty per cent of the undisclosed income of the specified previous year, if it is not covered by the provisions of clauses (a) and (b).

Thus, when the assessment has completed pursuant to search u/s. 153A of the Act penalty cannot be levied u/s. 271(1)(c) of the Act. We get strength of this view from the decision of Hon’ble Jharkhand High Court in the case of PCIT Vs. Jai Maa Jagdamba Flour (P) Ltd. [ 150 taxmann.com 26 (Jharkhand) ] wherein the Hon’ble High Court held as under : 9. From the order passed by the CIT (Appeals), it clearly transpires that he has deliberated the issue of initiation of proceeding under section 271AAB in details which in our view is in accordance with law. We further find that the learned tribunal after examining the order passed by the CIT (Appeal) sustained the same. We do not find any infirmity in the order as stated hereinabove. At the cost of repetition, a case where a search has been initiated under section 132(1) of the Act on or after 1st day of July, 2012, the penalty, if any, should be levied under section 271AAB and not under section 271(1)(c) of the Act as the case falls under specified previous year. The argument of learned counsel for the revenue does not stand in the eye of law because the penalty proceeding was initiated pursuant to a search conducted on 3-9-2014 i.e., after the amendment made in the Act; as such whether incriminating document was found or not is immaterial because the law mandates that the penalty if any should have been taken under section 271AAB of the Act where search has been initiated on or after first day of July 2012. 10. In view of the aforesaid discussions, both the questions of law are decided against the revenue. Consequently, the instant appeal is dismissed being devoid of merit. Respectfully following the above decision and the provision of the law we considered the additional ground raised by the assessee. Since we have allowed the appeal of the assessee on technical ground, the grounds raised on the merits of the disputed becomes academic. ………… 11. Ld. DR before me, though vehemently supported the orders of the Authorities below, confirming the levy of penalty u/s 271(1)(c) of the Act, however, was unable to controvert the contention of the ld. Counsel for the assessee before me, that the issue stood covered in favour of the assessee by the order of ITAT in the case of wife of assessee Dr. Swati Tomar(Supra) rendered in identical facts.

P a g e | 9 ITA No.1857/JPR/2025 Anurag Tomar 12. Considering the above, I find merit in the contention of the ld. Counsel for the assessee, that the penalty levied in the present case u/s 271(1)(c) of the Act is not as per law. I have gone through the provisions of Section 271AAB of the Act, and I have noted that the assessee’s case qualifies for levy of penalty under the said section along since the condition of the assessee being subjected to search action after 1st of July, 2012 but before 2016 is fulfilled in the present case, the assessee being subjected to search action in the year 2014, and also the condition of there being undisclosed income of the assessee in the form of documents being found during search revealing the assessee to have made investment in land which were not recorded in the books of account of the assessee. Ld. Counsel for the assessee has fairly pointed out to me, the findings of the ITAT in quantum proceedings, recording the aforesaid fact that there were Pattas of land found during search on the assessee which revealed unrecorded investment made by the assessee in the land and these Pattas found constituted incriminating material for framing the assessment of the assessee. There is no iota of doubt, I hold, that the addition made in the case of the assessee constituted undisclosed income as defined in Explanation (c) to Section 271AAB of the Act. 13. In view of the above, I completely agree with the ld. Counsel for the assessee that for the impugned year penalty u/s 271AAB of the Act ought to have been levied on the assessee. The order passed by the AO levying penalty u/s 271(1)(c) of the Act is, clearly, I hold, against the provision of law and is not sustainable.

P a g e | 10 ITA No.1857/JPR/2025 Anurag Tomar 14. I have also noted the fact, pointed out by the ld. Counsel for the assessee before me, and which the ld. DR has unable to controvert, that in identical facts and circumstances, the ITAT had deleted the levy of penalty u/s 271(1)(c) of the Act in the case of wife of the assessee, Dr. Swati Tomar(Supra)holding that the penalty ought to have been levied in terms of the provisions of Section 271AAB of the Act. The said decision squarely applies to the facts of the present case. And for the same also the penalty levied u/s 271(1)© of the Act is , I hold, not sustainable. 15. In view of the above, the order passed u/s 271(1)(c) of the Act is held to be not sustainable in law and is accordingly, quashed. 16. In effect, the appeal of the assessee is allowed. Order pronounced in the Open Court on 22.07.2026

Sd/- (Annapurna Gupta) ACCOUNTANT MEMBER Dated 22.07.2026 Mittali, Sr. PS Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals) 5. DR: ITAT

P a g e | 11 ITA No.1857/JPR/2025 Anurag Tomar By Order, Asst. Registrar ITAT, Jaipur