Smt. Aparna Agrawal Vs DCIT (ITAT Jaipur)
The case of Rajendra Agrawal vs. DCIT (ITAT Jaipur) involves two cross-appeals concerning the penalty imposed under section 271AAB of the Income Tax Act, 1961, for the assessment year 2015-16. The assessee, an individual associated with the Kota Dall Mill Group, filed his income tax return on 30 August 2015 declaring a total income of ₹12.01 crore, which included surrendered income of ₹10.87 crore on account of Long Term Capital Gains (LTCG) and commission charges of ₹9,000. The Assessing Officer (AO) completed the assessment under sections 143(3) and 153B at ₹12.24 crore. Subsequently, the AO initiated proceedings for penalty under section 271AAB, issuing a show-cause notice on 12 January 2018. The AO levied a penalty of 30% on the surrendered income amounting to ₹11.05 crore, which the assessee challenged before the Commissioner of Income Tax (Appeals) [CIT(A)]. The CIT(A) reduced the penalty from 30% to 10%, prompting both the assessee and revenue to file cross-appeals.
The assessee contended that the AO failed to specify under which clause of section 271AAB(1) the penalty was levied, whether (a), (b), or (c), each having distinct conditions. He argued that the CIT(A) erred in applying section 271AAB(1)(a) when the AO had invoked clause (c) without issuing a proper notice as required under section 251(2). The assessee further claimed that there was no undisclosed income within the meaning of section 271AAB, the penalty was based solely on his statement under section 132(4) without any incriminating material found during the search, and the LTCG was supported by uncontroverted documentation. The assessee also argued that the penalty under section 271AAB is not mandatory, and the CIT(A) failed to consider whether he had the requisite mens rea or intent to evade tax.
