SRI MAHABIR PRASAD JALAN,KOLKATA vs. A.C.I.T.,CENTRAL CIRCLE-1(1), KOLKATA

This appeal preferred by the assessee emanates from the order of Ld. CIT(A),20, Kolkata dated 22-09-2015 for the assessment year 2013-14 as per the following ground of appeal:-

Brief facts are that a search was conducted at the office premises of Ramkrishna Forging Ltd 72, Shakespeare Sarani, Kolkata-17 on 13-12-2012. There was also a search warrant in the name of the assessee on 13-12-2012 at the residential premises at 18/2 Alipore Road, Kolkata. In the course of search at the residence no incriminating documents were found. In the office of Ram Krishna Forging also no incriminating documents were found on 13-12-2012. However, only Sri Naresh Jalan one of the director’s statements recorded u/s. 132(4) of the Act, who made an adhoc disclosure of Rs. 15 crores on 13-12- 2012 for business concerns and family members. The department also put a PO on one of Sri Mahabir Prasad Jalan the wardrobes on that day of search in the office of Ramkrishna Forging P.Ltd. Thereafter the PO was opened on 8-2-2013 when some documents were seized and bunched in RKFL- 9, all of which were regular business documents duly accounted for in the books of Ramkrishna Forging except 7 sheet of documents which were page 7 to 13 of the said RKFL-9 (P.B pages 31-37) written in the same handwriting and by same pen by the accountant and all written on one day giving figures of different dates. On each of the sheet one name was written as income from commodity profit. The total of the commodity profit as per 5 sheet was round figure of Rs. 15 crores. The assessee’s name was also written on one such document being page no. 13(P.B page-31). The said Sri Naresh Jalan on 8.2.2017 filed a letter wherein he submitted the bifurcation of the sum of Rs. 15 cores for which he made the statement on 13-12-2012 in five names, which tallied with the figures stated in five sheets seized on 8.2.2012. However, in the disclosure petition made on 13-12-2012 or in the letter dated 8.2.2017 filed by Sri Naresh Jalan, he did not discuss the documents seized on 8.2.2017. It was contended by the assessee that he duly declared the commodity profit in the return of income as is apparent from para 3 and 5 of the assessment order itself as well as in the computation of income. Further it was argued that there was no reference to any disclosure in the computation of income filed by the assessee. The AO has also accepted the same as per return while completing the assessment. There is no whisper anywhere of any seized document or discussion nor any reference to any statement of the assessee u/s. 132(4) or any incriminating papers or even the statement made by Shri Naresh Janal bifurcating the sum of Rs. 15 crs in five names. The AO in the assessment order or in the order sheet has not treated the seized documents as incriminating papers nor there is any finding or even whisper that income from commodity profit recorded in other documents would not have been disclosed if there was no search. However, the AO has accepted the return filed but has imposed penalty u/s. 271AAB of the Act. The assessee has challenged the same before us.

At the time of hearing before us the Ld.AR of the assessee has vehemently argued that the notice issued u/s. 271AAB of the Act is vague and there was no specific charge

We have heard both the parties and perused the relevant records. After hearing the rival submissions and analyzing the facts and circumstances of the case and considering the judicial pronouncements placed on record before us and analyzing the provisions of section 271AAB of the Act, we find that therein three limbs of the section are mentioned as clauses (a); (b); ( c ), wherein a sum paid @ 10%, 20% and 60% respectively of the undisclosed income of the specified previous year has to be determined for purposes of penalty. Thus, it is evident that notice issued under this provision has to specify under which clause the AO wants to proceed to levy the impugned penalty and there has to be an undisclosed income of the specified previous year. In this case, when we peruse the assessment order, we find that there is not even a whisper of specified clause of the section 271AAB of the Act in which the penalty proceeding has been initiated by the AO, although the AO has accepted the return of income filed by the assessee. The AO has also not mentioned any undisclosed income in the name of the assessee. In this scenario, facts apropos are covered by various judicial pronouncements/decisions filed on record before us specifying the following principles:-

In the result, the appeal of the assessee ( AY 2013- 14) is allowed.