AROMA INDIA PRIVATE LIMITED,SINGRA vs. THE DEPUTY COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE - 2, GUWAHATI, GUWAHATI

PDF · subscribers
ITA 423/GTY/2025Status: DisposedITAT Guwahati09 July 2026AY 2019-2011 pages

In favour of the Revenue: the assessee's appeal was dismissed. From the AI summary of this appeal.

AI SummaryDismissed

What did the Tribunal hold?

The Tribunal held that the statement recorded under Section 132(4) has significant evidentiary value and cannot be disregarded. The Rs. 1 Crore declared in the return of income was considered undisclosed income due to its nexus with the search and subsequent confirmation, thus attracting the penalty.

What were the facts?

During a search operation, the assessee's director voluntarily disclosed an additional business income of Rs. 11 Crores. However, the assessee later declared only Rs. 1 Crore in its return of income. The Assessing Officer (AO) made an addition of Rs. 10 Crores, which was later deleted by the CIT(A). The AO then imposed a penalty under Section 271AAB(1A) on the Rs. 1 Crore declared.

What were the issues?

Whether a voluntary disclosure made during a search, partially retracted and declared in the return, attracts penalty under Section 271AAB(1A) when the addition based on the full disclosure was deleted.

Which sections of the Income-tax Act were involved?

Section 132,Section 271AAB(1A),Section 132(4)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, GUWAHATI BENCH, GUWAHATI

For Appellant: Shri Ramesh Goenka, Adv
For Respondent: Shri Santosh Kumar Karnani, Addl. CIT
Hearing: 20.05.2026Pronounced: 09.07.2026

IN THE INCOME TAX APPELLATE TRIBUNAL GUWAHATI BENCH, GUWAHATI (VIRTUAL HEARING AT KOLKATA) SHRI DUVVURU RL REDDY, VICE PRESIDENT SHRI LAXMI PRASAD SAHU, ACCOUNTANT MEMBER

ITA No. 423/GTY/2025 Assessment Year : 2019-2020

Aroma India Private Limited, Vs. The Deputy Singra, Rajapara, Guwahati - Commissioner of 781135 Income Tax, Central [PAN: AADCM6335N] Circle-2, Guwahati, Aayakar Bhawan, Christian Basti, G.S. Road, Guwahati - 781005 APPELLANT RESPONDENT

Assessee by : Shri Ramesh Goenka, Adv. Revenue by : Shri Santosh Kumar Karnani, Addl. CIT

Date of hearing : 20.05.2026 Date of Pronouncement : 09.07.2026

O R D E R PER LAXMI PRASAD SAHU, ACCOUNTANT MEMBER

This is an appeal filed by the assessee against the order passed u/s 250 of the Income Tax Act, 1961 (hereinafter referred to as “the Act”) by the Ld. Commissioner of Income Tax (Appeals), Central, NER, Guwahati [hereinafter referred to as “the Ld. CIT(A)] dated 28.10.2025, DIN & order

2 ITA No. 423/GTY/2025 Aroma India Pvt. Ltd. No. ITBA/APL/S/250/2025-26/1082058009(1) challenging the penalty of Rs. 30,00,000/- levied penalty under Section 271AAB(1A) of the Act.

2.

Briefly stated the facts that a search and seizure operation u/s 132 of the Act was conducted in the case of SK Jain Group on 26.02.2019 as part of the search, warrant of authorisation u/s 132 of the Act was executed in the case of M/s Aroma India Pvt. Ltd. at its office premises at Plot No. 60A and 60B, Brahmaputra Industrial Park, Amingaon, Guwahati. During the course of search and seizure proceeding Shri Amit Jain, Director of the assessee company made voluntarily surrendered an additional business income of Rs. 11,00,00,000/- u/s 132(4) of the Act in respect of the assessee over and above its total income for the AY 2018- 19 relevant to AY 2019-20 this declaration of additional income was made on account of failure of the assessee to furnish the details of excess expenses/investment in the business and it was assured that the disclosed amount of an additional business income in the return of income to be filed in due course and he also declared Rs. 25 Crores for the entire group. During the course of assessment proceeding, it was observed from the financial statement that the assessee disclosed only additional income of Rs. 1 Crore as against Rs. 11.00 Crores disclosed/admitted by the assessee. During the course of assessment proceedings, the assessee furnished detailed reply stating that there was voluntary disclosure made by the assessee u/s 132(4) of the Act on

3 ITA No. 423/GTY/2025 Aroma India Pvt. Ltd. 27.02.2019 to cover any probable omission/commission and there was no any specific seized material was found in respect of disclosure made. However, in the assessment proceeding, the contention of the assessee was not accepted and AO made addition of Rs. 10 Crores.

3.

Aggrieved from the above order, the assessee filed appeal before the Ld.CIT(A). The Ld. CIT(A) deleted the addition of Rs. 10 Crores vide order dated 12.01.2023 u/s 250 of the Act which was offered by the assessee in his statement recorded u/s 132(4) of the Act . In consequence of the ld. CIT(A)’s order, the AO passed the order u/s 271AAB of the Act on 28.11.2023 observing that the declaration was made during the course of search and seizure action u/s 132(4) of the Act on the basis of seized documents marked “AKJ-01” page No. 5. However, the assessee completely denying for any undisclosed income. He further submitted that the surrendered was made on estimate basis, therefore, there was no any undisclosed income and penalty u/s 271AAB(1A)(a)(iii) r.w.s. explanation (c) on the undisclosed income is not applicable since it does not come under Explanation (c) to section 271AAB of the Act under the definition of undisclosed income. The AO after considering the entire submission and documents found during the course of search, he observed that the additional business income declared income by the assessee emanating from Annexure AKJ-01 at pages 1 to 20 and confirmed in his statements. On perusal of statement recorded u/s 132

4 ITA No. 423/GTY/2025 Aroma India Pvt. Ltd. (4) of the Act he after referring to various judgment imposed the penalty of Rs. 30,00,000/-, 30% of Rs. 1 Crore on the income declared in the return of income. As per section 271AAB(1))(A) of the Act passed the order on 28.09.2023.

Aggrieved from the above order, the assessee filed appeal before the Ld.CIT(A). The Ld.CIT(A) referring to the written submission made assessment order he upheld the order of the AO.

4.

Aggrieved from the order of the Ld.CIT(A), the assessee is in appeal before the ITAT.

5.

The Ld. Counsel reiterated the submission made before the lower authorities and further submitted that the AO has imposed the penalty u/s 271AAB(1A) of the Act without referring to any incriminating documents. During the course of search proceeding u/s 132(4) of the Act, the assessee declared voluntarily of Rs. 11 Crores and immediately filed retraction statement after the search and while filing return of income, additional income was surrendered to cover any probable omissions/commissions , therefore the provision of section 271AAB(1A) of the Act is not applicable on the estimated income and the stating income has been disclosed in while filing return of income u/s 139 of the Act, therefore, there is no any undisclosed income found during the course of search and seizure operation and penalty will not be leviable

5 ITA No. 423/GTY/2025 Aroma India Pvt. Ltd. on the voluntarily disclosure. He further submitted that on similar fact the case of the group concern M/s Lead Liquor Manufacturing Pvt. Ltd. (LED)) the same, the AO has droped penalty proceeding u/s 271AAB(1A) of the Act, during the search Shri Amit Jain was compelled to disclose Rs. 8.5 Crores as their income on totality an estimate basis despite there being no corroborating material to support the disclosure, the disclosure so made had no link/nexus seized/unaccounted material at all. Consequently, the same was substantially retracted by him vide the same affidavit dated 06.12.2019 an amount of Rs. 75,00,000/- have been surrendered as additional business income in its income tax return in order to cover any probable omission/commission, the coordinate Bench of the Guwahati Tribunal in the case of ACIT, Circle 2, Guwahati Vs. Leade Liquor Manufacturing Pvt. Ltd., CO No. 04/Gty/2023, dated 18.01.2024 set aside the penalty order of Rs. 75 lacs. Since, there was no any reference to any incriminating material found during the course of search in respect of declaration made, the facts are identical. In this case also search was conducted in the same group. Therefore, the similar view may be taken and the penalty imposed by the AO without referring to any incriminating documents voluntarily disclosure made by the assessee in the return of income may be dropped. The assessee has filed paper book containing page No. 1-140 and case law paper book containing page No. 01-150.

6 ITA No. 423/GTY/2025 Aroma India Pvt. Ltd. 6. On the other hand, the Ld. DR strongly relied on the order of lower authorities and submitted that during the course of search and seizure proceeding u/s 132 of the Act, the documents were found marked as AKJ-01 on the basis of that the assessee surrendered of Rs. 11 Crores and he offered only Rs. 1 Crores as income in the return of income but the AO also made addition of Rs. 10 Crores. Later on, which was deleted and here the dispute is only for Rs. 1 Crores. The addition made by the AO is based on the seized material found and statement recorded u/s 132(4) the statement recorded u/s 132(4) of the Act has great evidentiary value which is given on oath. Before conducting search the relevant provision of the Cr. P.C. are brought into the knowledge of the assessee. The statements are supported by the documents found during the course of search. Therefore, additional business income declared by the assessee is completely undisclosed income. Had the search not been conducted the assessee would not have disclosed the same in its return of income and Rs. 1 Crores was not recorded in the books of accounts at all.

6.1. He relied on the judgment of Hon’ble Apex Court in the case of PCIT Vs. Roshan Lal Sancheti reported in (2019) 306 CTR 140 (Raj.) submitted that the statement recorded during the course of search u/s 132(4) and post search enquiry u/s 131 of the Act. The retraction made by the assessee is irrelevant and on the very basis the assessee had declared

7 ITA No. 423/GTY/2025 Aroma India Pvt. Ltd. Rs. 11 Crores out of which Rs. 10 Crores has been deleted by the appellate authority and Rs. 1 Crore is declared by the assessee in its return of income as regular business income as stated. During the course of search proceeding there was seized materials which were found during the course of search which is marked as AKJ-01page No. 5. It clearly indicates that the income disclosed by the assessee is only because of search conducted and on the basis of documents marked as stated. The AO has rightly applied the provision of section 271AAB(1A) and Explanation ( c) of the Act.

8.

Considering the rival submissions and perusing the entire materials available on record and orders of authorities below and paper books filed by the assessee. We noted that during the course of search and seizure proceeding on 26.02.2019 and 27.02.2019 was carried out in the case of the assessee. During the course of statement recorded u/s 132(4) of the Act, Shri Amit Kumar Jian disclosed Rs. 25 Crores for the entire group out of which included Rs. 11 Crores on behalf of the assessee as per the detailed filed by the assessee as business additional income. In post search proceedings vide assessee’s letter 25.03.2019 as per para No. 05 of the assessment order. The assessee offered in the return of income filed u/s 139 of the Act, of Rs. 1.00 Crore only instated of Rs. 11.00 Crore as the assessee declared in the search statement u/s 132(4) of the Act on the basis of documents found marked as “AKJ-01,

8 ITA No. 423/GTY/2025 Aroma India Pvt. Ltd. page No. 5 to cover any probable omission/commission found at the time of search u/s 132 and 132(4) during statement recorded. A sum of Rs. 25 Crores declared on adhoc basis for entire group . Subsequently, Shri Amit Kumar Jian vide his letter dated 25.03.2019 addressed to DDIT (Inv.) Unit 2(1), Guwahati gave the break up of Rs. 25 Crores in which at serial Number 1. It is clearly mentioned that for assessment year 2018-19 of Rs. 11 Crores which is part of Rs. 25 Crores. Subsequently, the assessee filed letter after get photocopies of the seized documents and after analysing the same for the assessee company for FY 2018-19, additional income surrendered was Rs. 1 Crore and it is retracted by an affidavit dated 06.12.2019 which is clear from page number 12-13 of the assessment. We noted that the primary objection of the assessee is that Shri Amit Jain gave a disclosure of Rs. 25 Crores on 27.02.2019 later on retracted from the disclosure so given in the form of an affidavit . The Primary facts of the case are that Shri Amit Jain in his statement given u/s 132(4) of the Act on 26.02.2019 and 27.02.2019 disclosure of Rs. 25 Crores as additional income of SK Jain Group. After consultation and discussion he filed a letter on 25.03.2019 before the ADIT(Inv.), Unit 2(1) Guwahati on behalf of the SK Jain group quantifying the disclosure for the group wise and year wise break-up of the quantum of disclosure as reproduced in paragraphs 5 incorporated in the assessment order. During the search proceeding statement in the

9 ITA No. 423/GTY/2025 Aroma India Pvt. Ltd. form of question and answer were recorded which is referred by the AO for framing assessment and later on the assessee on 25.03.2019 made detailed disclosure which is confirmation of statement recorded u/s 132(4) of the Act for group disclosure of Rs. 25 Crores. For the sake of convenience, we are reproducing section 271AAB(1) of the Act where the undisclosed income has been defined.

“271AAB. (1A) The Assessing Officer 19[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 date on which the Taxation Laws (Second Amendment) Bill, 2016 receives the assent of the President20, 20a[but before the 1st day of September, 2024] 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 thirty per cent of the undisclosed income of the specified previous year, 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) on or before the specified date— (A) pays the tax, together with interest, if any, in respect of the undis- closed income; and (B) furnishes the return of income for the specified previous year declar- ing such undisclosed income therein; (b) a sum computed at the rate of sixty per cent of the undisclosed income of the specified previous year, if it is not covered under the provisions of clause (a).] (2) No penalty under the provisions of 21[section 270A or] 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) 18[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 furnishing of return of income under sub-section (1) of section 139 or the date on which the period specified in the notice issued 22[un- der section 148 or under section 153A, as the case may be,] 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, but the date of furnishing the return of income under sub-section (1) of section 139 for such year has not expired

10 ITA No. 423/GTY/2025 Aroma India Pvt. Ltd. before the date of search and the assessee has not furnished the return of in- come 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 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 ac- count or other documents maintained in the normal course relating to such previous year; or (B) otherwise not been disclosed to the 23[Principal Chief Commissioner or] Chief Commissioner or 23[Principal Commissioner or] Commis- sioner 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 con- ducted.]

9.

On going through the above definition “disclosed income” and statement recorded u/s 132(4) of the Act relying on the judgment of Hon’ble Apex Court in the case of PCIT Vs. Roshan Lal Sancheti (supra) it has been held that the statement recorded has great evidentiary value which cannot be brushed aside. Therefore, the disclosure by the assessee is Rs. 1 Crores in the return of income only because of search conducted and there is direct nexus with the statements u/s 132(4) of the Act and subsequent confirmation before the ADIT (Inv.) dated 25.03.2019 of Rs. 11.00 Crore is treated as undisclosed business income however the appellate authorities have deleted the addition of Rs. 10.00 Crore but confirmed the Rs. 1.00 Crore as offered in the return of income. Once conceded during the search statement u/s 132(4) and after search

11 ITA No. 423/GTY/2025 Aroma India Pvt. Ltd. proceeding confirmed by the assessee is comes under the definition of undisclosed income which attract penalty, therefore, the penalty is lev- ied by the AO u/s 271AAB(1)(a) of the Act is justified. Accordingly, we upheld the order of the lower authorities and case law relied by the Ld. Counsel are not applicable in the present facts of the case referring to the judgment of Hon’ble Apex Court (supra) in the case of Roshan Lal Sancheti (supra) and appeal of the assessee is dismissed.

10.

In the result, appeal of the assessee is dismissed.

Order pronounced on 09.07.2026. Sd/- Sd/- (Duvvuru RL Reddy) (Laxmi Prasad Sahu) Vice President Accountant Member Dated: 09.07.2026 AK, Sr. P.S. Copy of the order forwarded to: 1. Appellant 2. Respondent 3. Pr. CIT 4. CIT(A) 5. CIT(DR)

//True copy// By order

Assistant Registrar, Kolkata Benches

More judgments on Section 132

All 14,598 judgments and leading authorities on Section 132 →

Recent GST High Court judgments

Search GST case law →