prpri No penalty on additional income disclosed voluntarily in return filed in response to Section 153A notice  No penalty on additional income disclosed voluntarily in return filed in response to Section 153A notice 

Case Law Details

Case Name : Mukesh D. Manglani Vs ACIT (ITAT Ahmedabad)
Appeal Number : ITA No. 556/Ahd/2018
Date of Judgement/Order : 18/12/2019
Related Assessment Year : 2011-12

Mukesh D. Manglani Vs ACIT (ITAT Ahmedabad)

The penalty in the case on hand was levied under explanation 5A of section 271(1)(c) of the Income Tax Act, 1961.

A plain reading of the provisions reveals that the penalty shall be levied if the assessee in the course of such initiated under section 132 of the Act was found to be the owner of any money, bullion, jewellery or other valuable article or there is some income based on the entry in the books of accounts/documents. Then, it shall be presumed that the assessee has either concealed the particulars of income or furnished inaccurate particulars of income. However in the case on hand, we note that there is no such allegation made by the authorities below as discussed above.

Thus, it is transpired that the assessee has disclosed additional income in the return issued under section 153A of the Act voluntarily and without having found any income by the Revenue in the manner provided under explanation 5A to section 271(1)(c) of the Act. As such, there was not found any undisclosed income by the Revenue in the course of such conducted under section 132 of the Act.

Similarly, there was also no mentioned of any incriminating document in relation to the addition of Rs. 3,77,790.00 on the basis of which the addition was made by the Revenue. Thus, it is inferred that such addition was not based on the document found during the course of search.

Now the question arises, whether the assessee can be visited with the penalty with respect to the income disclosed by him in such proceedings voluntarily and without finding any incriminating document during the course of search. To our mind the answer stands in favour of the assessee.

Held that it was undisputed fact that during the course of search, no incriminating documents were found and seized. The assessee surrendered the additional income under section 132(4) at Rs.15 lacs and requested not to impose penalty under section 271(1)(c). The Assessing Officer imposed the penalty by invoking the Explanation 5A to section 271(1)(c). For imposing the penalty under Explanation 5A on the basis of statement recorded during the course of search, it is necessary to be found incriminating documents and is to be considered at the time of assessment framed under section 153A. As no incriminating documents were found during the course of search, therefore, Explanation 5A to section 271(1)(c) is not applicable. Accordingly, the penalty was to be deleted.

FULL TEXT OF THE ITAT JUDGEMENT

Out of this bunch of appeals, first three appeals by the assessee (in the case of Mukesh D.Manglani in ITA No.556 to 558/Ahd/2018) are directed against separate orders of the Commissioner of Income Tax(Appeals)-12 Ahmedabad (‘CIT(A)’ in short) all dated 22/01/2018 for AYs 2011-12, 2012-13 & 2013-14 towards confirmation of penalty u/s.271(1)(c) of the Income Tax Act (hereinafter referred to as “the Act”).

Another set of Assessee’s four appeals (in the case of Dhanraj G. Manglani in ITA Nos.560 to 563/Ahd/2018) are directed against the separate orders of the CIT(Appeals)-12, Ahmedabad all dated 22/01/2018 for AYs 2010-11 to 2013-14 towards confirmation of penalty u/s.271 AAB of the Act.

Another set of assessee’s four appeals ( in the case of Kamlesh D.Manglani in ITA Nos.564 to 567/Ahd/2018) are directed against the separate orders of the CIT(A)-12, Ahmedabad all dated 22/01/2018 for AYs 2010-11 to 2013-14 towards confirmation of penalty u/s.271(1)(c) of the Act.

Another set of assessee’s two appeals (in the case of Vinodkumar A. Chugh in ITA Nos.568 & 569/Ahd/2018) are directed against the separate orders of the CIT(A)-12, Ahmedabad both dated 23/01/2018 for AYs 2011-12 and 2012-13 towards confirmation of penalty u/s.271(1)(c) of the Act.

Another set of assessee’s six appeals ( in the case of Smt.Dhanwantiben C.Darshiyani in ITA Nos.587 to 592/Ahd/2018) are directed against the common order of the CIT(A)-12, Ahmedabad dated 22/01/2018 for AYs 2008-09 to 2013­14 towards confirmation of penalty u/s.271(1)(c) of the Act.

Another set of assessee’s seven appeals ( in the case of Chunnilal P.Darshiyani (HUF) in ITA Nos.593 to 599/Ahd/2018) are directed against the separate orders of the CIT(A)-12, Ahmedabad all dated 23/01/2018 for AYs 2007-08 to 2011-12 towards confirmation of penalty u/s.271(1)(c) of the Act and 271AAB of the Act for AYs 2012-13 & 2013-14.

First we take the appeals in the case(s) of Dhanwantiben C. Darshiyani : ITA Nos. 587 to 592/Ahd/2018 for AYs 2008-09 to 592/Ahd/2018

These are six appeals filed by the assessee against the combined order of the Ld. Commissioner of Income Tax (Appeals)-12, Ahmedabad, dated 22/01/2018 the Assessment Years (AYs) 2008-09 to 2013-14.

Since all the appeals relate to the same assessee, hence the same are heard analogously and are being disposed of by way of this common order.

2. First we take up assessee’s appeal in ITA No. 587/Ahd/2018 for Asst. Year 2008-09. The assessee has raised the following grounds of appeal:-

“1.00 IMPOSITION OF PENLATY TO THE TUNE OF RS. 2,89,300/-ON ADDITION MADE ON ACCOUNT OF UNDISCLOSED INCOME.

1.01 On the facts and circumstances of appellant’s case and in law, the ld. CIT (Appeals) has erred in confirming the levy of penalty to the tune of Rs. 2,89,300/- under section 271(1)(c) of the Act by the Id. AO on addition made on account of disclosure of additional income while filing return as part of search proceedings.

While doing so, the Hon’ble CIT (Appeal) failed to appreciate that there was no addition made by the ld. AO during the course of assessment proceedings u/s 143(3) r.w.s 153A of the Act to the returned income under section 153A of the Act, and therefore appellant cannot be treated to be assessee concealing income.

1.02 Your appellant prays to hold so now and delete the impugned penalty.

2.00 YOUR APPELLANY CRAVES LEAVE TO ADD, AMEND AND /OR DELETE ALL OR ANY GROUND(S) TAKE HEREINABOVE.”

The solitary grievance of the assessee is that the learned CIT(A) erred in confirming the order of the AO by sustaining the penalty of ₹ 2,89,300/- as per the explanation 5A of section 271(1)(c) the of the Act.

3. The facts in brief are that the assessee in the present case is an individual and engaged in the business of dealing in land. The assessee is also a partner in two partnership firms. She is deriving income from House property, Business/Profession and Other Sources. There was a search and seizure operation under section 132 of the Act in the “Dhanjimama Group” of cases dated 3rd July 2012. The assessee being the part of the group was also covered under such search and seizure operation carried out dated 3rd July 2012. The assessee accordingly filed her return of income in response to the notice under section 153A of the Act declaring total income of Rs. 13,07,960.00 inclusive of the income from agricultural operation of Rs. 16,136/- only. The income declared in the return of income was also inclusive of the additional income of Rs. 4,05,795.00 disclosed during the search.

3.1 The assessment was framed by the AO under section 153A/143(3) of the Act dated 20th March 2015, after making the addition of Rs. 3,77,790.00 on account of income relating to the land transactions deals which were not disclosed in the books of accounts, at the total income Rs. 16,85,750.00 only. Accordingly, the AO initiated the penalty proceedings under section 271(1)© read with section 274 of the Act on account of the additional income offered in the return filed and the addition made for the land transaction deal as discussed above in the assessment framed under section 153A/143(3) of the Act.

3.2 The assessee in response to such notice vide letter dated 7th August 2015 submitted that there was no incriminating material found during the search proceedings. As such the additional income of Rs. 4,05,795/- was voluntarily offered.

3.3 Similarly, the addition of Rs. 3,77,790.00 was accepted as she (the assessee) failed to record such transaction due to oversight but the same does not amount either concealment of income or furnishing inaccurate particulars of income. Moreover all the relevant records were available with the Revenue and the information was provided by the Revenue regarding the income from land transactions deals.

3.4 The assessee also claimed that there is no specific charged mentioned in the assessment/ notice whether it was concealment or furnishing inaccurate particulars of income.

3.5 The assessee further claimed that there was no deliberate act on her part either to conceal the income or furnishing the inaccurate particulars of income.

3.6 In view of the above, the assessee claimed that the additional income offered to tax and the addition made in the assessment proceedings cannot be said as undisclosed income.

4. However, the AO disagreed with the submission of the assessee by observing that the additional income was not disclosed by the assessee in the return of income filed before the date of search under section 139(1) of the Act. As such the additional income was disclosed in response to the notice issued under section 153A of the Act. Thus it is clear that the additional income was offered to tax by the assessee only because of the search proceedings carried out under section 132 of the Act.

4.1 Similarly, the AO also observed that the income amounting to Rs. 3,77,790.00 was not disclosed in the books of accounts. Had there not been a search, the impugned income would have gone tax-free. Therefore the same was added as business income to the total income of the assessee.

4.2 In view of the above, the AO levied penalty of Rs. 2,89,300/- being 100% of the amount of tax sought to be evaded under the provisions of section 271(1)© read with explanation 5A of the Act.

5. Aggrieved assessee preferred an appeal to the learned CIT(A) who confirmed the order of the AO by observing that the additional income declared in the return filed in response to the notice issued under section 153A of the Act and other income was detected only because of the search initiated under section 132 of the Act. Accordingly the learned CIT (A) confirmed the order of the AO.

Being aggrieved by the order of the learned CIT (A) the assessee is in appeal before us.

6. The ld. AR before us filed a paper book running from pages 1 to 173 and submitted that that the additional income was offered to tax voluntarily by the assessee which is not based on any seized materials found during the search having some incriminating values. Similarly, in case of the addition of Rs. 3,77,790.00 there was also not any reference to the incriminating document found during the course of search.

6.1 The learned AR also submitted that similar kinds of penalty were also levied in the group matters, which were also the subject matter of the same search, by the Revenue. But the ITAT has deleted such penalty. The learned AR also furnished the list of such orders of the tribunal as detailed under:

“Pramod J. Daswani – IT(ss) No.264/Ahd/2017, ITAT Order dated 14/10/2019, as per page 73 to 75 of paper book filed on 13/11/2019.

Guruprasad Infrastructure – ITA No.1658/Ahd/2017, ITAT order dated 19/07/2019, as per page 1 to 11 of paper book filed on 13/11/2019.

Parag V.Chugh – ITA No.581 to 586/Ahd/2018, ITAT Order dated 16/10/2019, as per page 102 to 112 of paper book filed on 13/11/2019.”

7. On the contrary, the ld. DR submitted that the additional income was offered to tax by the assessee as a result of search proceeding carried out under section 132 of the Act. The ld. DR vehemently supported the order of the Authorities Below.

8. We have heard the rival contentions of both the parties and perused the materials available on record. The penalty in the case on hand was levied under explanation 5A of section 271(1)(c) of the Act which reads as under:

“[Explanation 5A.—Where, in the course of a search initiated under section 132 on or after the 1st day of June, 2007, the assessee is found to be the owner of—

(i) any money, bullion, jewellery or other valuable article or thing (hereafter in this Explanation referred to as assets) and the assessee claims that such assets have been acquired by him by utilising (wholly or in part) his income for any previous year; or

(ii) any income based on any entry in any books of account or other documents or transactions and he claims that such entry in the books of account or other documents or transactions represents his income (wholly or in part) for any previous year,

which has ended before the date of search and,—

(a) where the return of income for such previous year has been furnished before the said date but such income has not been declared therein; or

(b) the due date for filing the return of income for such previous year has expired but the assessee has not filed the return,

then, notwithstanding that such income is declared by him in any return of income furnished on or after the date of search, he shall, for the purposes of imposition of a penalty under clause (c) of sub-section (1) of this section, be deemed to have concealed the particulars of his income or furnished inaccurate particulars of such income.]”

8.1 A plain reading of the provisions reveals that the penalty shall be levied if the assessee in the course of such initiated under section 132 of the Act was found to be the owner of any money, bullion, jewellery or other valuable article or there is some income based on the entry in the books of accounts/documents. Then, it shall be presumed that the assessee has either concealed the particulars of income or furnished inaccurate particulars of income. However in the case on hand, we note that there is no such allegation made by the authorities below as discussed above.

8.2 Thus, it is transpired that the assessee has disclosed additional income in the return issued under section 153A of the Act voluntarily and without having found any income by the Revenue in the manner provided under explanation 5A to section 271(1)(c) of the Act. As such, there was not found any undisclosed income by the Revenue in the course of such conducted under section 132 of the Act.

8.3 Similarly, there was also no mentioned of any incriminating document in relation to the addition of Rs. 3,77,790.00 on the basis of which the addition was made by the Revenue. Thus, it is inferred that such addition was not based on the document found during the course of search.

8.4 Now the question arises, whether the assessee can be visited with the penalty with respect to the income disclosed by him in such proceedings voluntarily and without finding any incriminating document during the course of search. To our mind the answer stands in favour of the assessee. In holding so we draw support and guidance from the order of ITAT in the case of Ajay Traders Vs. DCIT reported in 81 taxmann.com 463, wherein it was held as under:

“The assessee disclosed an additional income on account of unaccounted sales. Based on said disclosures, the Assessing Officer imposed penalty under section 271(1)(c) by invoking Explanation 5A to said section.

Held that it was undisputed fact that during the course of search, no incriminating documents were found and seized. The assessee surrendered the additional income under section 132(4) at Rs.15 lacs and requested not to impose penalty under section 271(1)(c). The Assessing Officer imposed the penalty by invoking the Explanation 5A to section 271(1)(c). For imposing the penalty under Explanation 5A on the basis of statement recorded during the course of search, it is necessary to be found incriminating documents and is to be considered at the time of assessment framed under section 153A. As no incriminating documents were found during the course of search, therefore, Explanation 5A to section 271(1)(c) is not applicable. Accordingly, the penalty was to be deleted.”

8.5 From the above order, it is clear that there cannot be any penalty under explanation 5A to section 271(1)(c) of the Act until and unless it supported on the basis of incriminating document.

8.6 At the time of the hearing, a query was raised to the Ld. DR whether the income disclosed by the assessee in pursuance to the search was based on the incriminating document, but he failed to bring any material on record. Therefore, in the absence of any documentary evidence, we infer that the additional income offered to tax and addition of other business income cannot be subject to the penalty under explanation 5A to section 271(1)(c) of the Act.

8.7 We are also conscious to the fact that the impugned penalty was deleted in the case of other assessees who were part of the group and subject to the same search vis- a-vis involving identical facts and circumstances. The details of such cases have already been incorporated in the submission filed by the assessee as discussed above. Accordingly, we hold that there cannot be any penalty under explanation 5A to section 271(1)(c) of the Act in the given facts and circumstances. Hence the ground of appeal of the assessee is allowed.

9. In the result, assessee’s appeal in ITA No.587/Ahd/2018 for AY 2008-09 is allowed.

Coming to the other appeals filed by the assessee bearing ITA Nos. 588 to 590/AHD/2018 for the A.Ys. 2009-10 to 2011-12

10. At the outset we note that in the identical facts and circumstances, we have deleted the penalty imposed under section 271(1)(c) of the Act vide Paragraph No. 8 of this order. Respectfully, following the same, we delete the penalty imposed by the AO which was subsequently confirmed by the Ld. CIT (A). Hence, the ground of appeal of the assessee is allowed.

11. In the result, these appeals of the assessee are also allowed.

Coming to the assessee’s appeal bearing ITA No. 591/Ahd/2018 for the AY 2012-13.

The only issue raised by the assessee is that the ld. CIT(A) erred in confirming the penalty imposed by the AO for Rs. 11,28,165.00 under section 271AAB of the Act.

12. The assessee has disclosed additional income of Rs. 1,06,36,545.00 in pursuance to the return filed under section 153A of the Act. However, the AO further made the addition of Rs. 2,15,039.00 on account of the income of land transactions deal. Thus the assessment was framed after making the impugned addition to the total income at Rs.1,20,29,399.00 only under section 153A r.w.s. 143(3) of the Act vide order dated 20-03-2015.

12.1 Subsequently, the AO further on such additional income disclosed by the assessee and the income added in the assessment levied the penalty of Rs. 11,28,165.00 under the provisions of section 271AAB of the Act. The learned CIT (A) also confirmed the order of the AO.

Being aggrieved by the order of the learned CIT (A), the assessee is in appeal before us.

13. The learned AR before us submitted that there was no undisclosed income available to the assessee within the meaning of explanation (c) to section 271AAB of the Act. Therefore, there cannot be any penalty.

14. On the other hand, the learned DR vehemently supported the order of the authorities below.

15. We have heard the rival contentions of both the parties and perused the materials available on record. At the outset we note that the explanation(c) to section 271AAB of the Act has a direct bearing on the issue on hand which reads as under:

48[Penalty where search has been initiated.

271AAB. (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 July, 2012 49[but before the date on which the Taxation Laws (Second Amendment) Bill, 2016 receives the assent of the President50], the assessee shall pay by way of penalty, in addition to tax, if any, payable by him,—

XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX

(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 54[Principal Chief Commissioner or] Chief Commissioner or 54[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.]”

15.1 From the above provision, it is clear that the penalty shall be imposed under section 271AAB of the Act where there is undisclosed income within the meaning of the explanation © to 271AAB of the Act. However, we note that there was no documentary evidence found by the search team suggesting that there was any undisclosed income of the assessee. As such the voluntary income disclosed by the assessee and the addition made by the AO was without having found any incriminating document in the course of search. We also note that there no reference made by the authorities below to the documents of incriminating nature having bearing on the income of the assessee in their respective orders. The ld. DR has not advanced any arguments against the contentions raised by the ld. AR for the assessee. In holding so we draw support and guidance from the order of the Tribunal in the case of ACIT Vs. Marvel Associates reported in 170 ITD 353 wherein it was held as under:

“9. Penalty u/s 271AAB attracts on undisclosed income but not on admission made by the assessee u/s 132(4). The AO must establish that there is undisclosed income on the basis of incriminating material. In the instant case a loose sheet was found according to the A.O., it was incriminating material evidencing the undisclosed income. In the penalty order the AO observed that loose sheet shows the cost per square feet is Rs.3571/- per sft. and assessee stated to have submitted in sworn statement cost per sq. feet at Rs.2200/- to Rs.2300/- per sq. feet. However neither the AO nor the Ld.CIT(A) has verified the cost of construction with the books and projections found at the time of search. The counsel argued that it was mere projection but not the actuals. The write up heading also mentioned that summary of the projected profitability statement. There is no evidence to establish that projections reflected in the loose sheet is real. No other material was found during the course of search indicating the undisclosed income. There was no money, bullion, jewellery or valuable article or thing or entry in the books of accounts or documents transactions were found during the course of search indicating the assets not recorded in the books of accounts or other documents maintained in the normal course, wholly or partly. The revenue did not find any undisclosed asset, any other undisclosed income or the inflation of expenditure during the search/ assessment proceedings. Though a loose sheet of page No.107 of Annexure A/GS/MA/1 was found that does not indicate any suppression of income but it is only projection of profit statement. The amount of Rs.3571/- mentioned in the projections refers to cost and profit which is approximate sale price but not the cost as stated by the AO in the penalty order. The cost of construction in the projections projected at Rs.2177/- which is in synch with the statement given by the assessee. The AO was happy with the disclosure given by the assessee and did not verify the factual position with the books of accounts and projections and bring the evidence to unearth the undisclosed income. Neither the A.O. nor the investigation wing linked the cost of profit or cost of asset to the entries in the books of accounts or to the sales conducted by the assessee to the sale deeds. Therefore, we are unable to accept the contention of the revenue that the loose sheet found during the course of search indicates any undisclosed income or asset or inflation of expenditure. The Hon’ble ITAT Delhi Bench in the case of Ajay Sharma v. Dy. CIT [2013] 30 taxmann.com 109 held that with respect to the addition on account of alleged receivables as per seized paper, there is no direct material which leads and establishes that any income received by the assessee has not been declared by the assessee. An addition has been made on the basis of loose document, which did not closely prove any concealment or furnishing of inaccurate particulars by the assessee. Hence penalty u/s 158BFA (2) of the Act is not leviable.

The facts of the assessee’s case shows that there was no undisclosed income found during the course of search and no incriminating material was found, hence we hold that there is no case for imposing penalty u/s 271AAB of the Act, accordingly, we set aside the order of the lower authorities and cancel the penalty u/s 271AAB of the Act.”

15.2 We are also conscious to the fact that the impugned penalty was deleted in the case of other assessees who were part of the group and subject to the same search vis-a-vis involving identical facts and circumstances. The details of such cases have already been incorporated in the submission filed by the assessee as discussed above somewhere in the preceding paragraph. In view of the above, we are not convinced with the penalty levied by the authorities below. Hence we set aside the order of the ld. CIT-A and direct the AO to delete the penalty levied by him under section 271 AAB of the Act. Hence the ground of appeal of the assessee is allowed.

15.3. In the result, the appeal of the assessee in ITA No.591/Ahd/2018 for AY 2012-13is allowed.

Coming to the other appeal filed by the assessee bearing ITA No. 592/Ahd/2018 for the AY 2013-14

16. At the outset, we note that in the identical facts and circumstances, we have deleted the penalty imposed under section 271AAB of the Act vide Paragraph No. 15 of this order in the own case of the assessee in ITA No.591/Ahd/2018. Respectfully, following the same, we delete the penalty imposed by the AO which was subsequently confirmed by the Ld. CIT (A). Hence, the ground of appeal of the assessee is allowed.

17. In the result, the appeal of the assessee in ITA No.592/Ahd/2018 for AY 2013-14 is allowed.

Coming to the appeal of the assessee in the case (s) of Vinodkumar A. Chung:

Coming to ITA No. 568/Ahd/2018 for the AY 2011-12

18. At the outset, we note that in the identical facts and circumstances, we have deleted the penalty imposed under section 271(1)(c) of the Act vide Paragraph No. 8 of this order in the case of Dhanwantiben C. Darshiyani (supra) in ITA No. 587/AHD/2018. Respectfully, following the same, we delete the penalty imposed by the AO which was subsequently confirmed by the Ld. CIT (A). Hence, the ground of appeal of the assessee is allowed.

19. In the result, the appeal of the assessee in ITA No.568/Ahd/2018 for AY 2011-12 is also allowed.

Coming to ITA Nos. 569/Ahd/2018 for the AY 2012-13

20. At the outset, we note that in the identical facts and circumstances, we have deleted the penalty imposed under section 271AAB of the Act vide Paragraph No. 15 of this order in the case of Dhanwantiben C. Darshiyani (supra) in ITA No. 591/AHD/2018. Respectfully, following the same, we delete the penalty imposed by the AO which was subsequently confirmed by the Ld. CIT (A). Hence, the ground of appeal of the assessee is allowed.

21. In the result the appeal of the assessee in ITA No.569/Ahd/2018 for AY 2012-13 is allowed.

Coming to the assessee appeals in the case(s) of Mukesh B. Manglani:  Coming to ITA Nos. 556/AHD/2018 for the AY 2011-12

22. At the outset, we note that in the identical facts and circumstances, we have deleted the penalty imposed under section 271(1)(c) of the Act vide Paragraph No. 8 of this order in the case of Dhanwantiben C. Darshiyani (supra) in ITA No. 587/AHD/2018. Respectfully, following the same, we delete the penalty imposed by the AO which was subsequently confirmed by the Ld. CIT (A). Hence, the ground of appeal of the assessee is allowed.

23. In the result, the appeal of the assessee in ITA No.556/Ahd/2018 for AY 2011-12 is also allowed.

Coming to ITA Nos. 557 & 558/AHD/2018 for the AYs 2012-13 and 2013-14

24. At the outset, we note that in the identical facts and circumstances, we have deleted the penalty imposed under section 271AAB of the Act vide Paragraph No. 15 of this order in the case Dhanwantiben C. Darshiyani (supra) in ITA No. 591/AHD/2018. Respectfully, following the same, we delete the penalty imposed by the AO which was subsequently confirmed by the Ld. CIT (A). Hence, the ground of appeal(s) of the assessee is allowed.

25. In the result, both the appeals of the assessee in ITA Nos.557 & 558/Ahd/2018 for AYs 2012-13 & 2013-14 are allowed.

Coming to assessee appeals in the case(s) of Dhanraj G. Manglani  Coming to ITA Nos. 560 & 561/AHD/2018 for the AYs 2010-11 & 2011-12

26. At the outset, we note that in the identical facts and circumstances, we have deleted the penalty imposed under section 271(1)(c) of the Act vide Paragraph No. 8 of this order in the case of Dhanwantiben C. Darshiyani (supra) in ITA No. 587/AHD/2018. Respectfully, following the same, we delete the penalty imposed by the AO which was subsequently confirmed by the Ld. CIT (A). Hence, the ground of appeal(s) of the assessee is allowed.

27. In the result, both the appeals of the assessee in ITA Nos.560 & 561/Ahd/2018 for AYs 2010-11 & 2011-12 are also allowed.

Coming to ITA Nos. 562 & 563/AHD/2018 for the AYs 2012-13 & 2013-14

28. At the outset, we note that in the identical facts and circumstances, we have deleted the penalty imposed under section 271AAB of the Act vide Paragraph No. 15 of this order in the case Dhanwantiben C. Darshiyani (supra) in ITA No. 591/AHD/2018. Respectfully, following the same, we delete the penalty imposed by the AO which was subsequently confirmed by the Ld. CIT (A). Hence, the ground of appeal(s) of the assessee is allowed.

29. In the result, both the appeals of the assessee in ITA Nos.562 & 563/Ahd/2018 for AYs 2012-13 & 2013-14 are allowed.

Coming to assessee appeals in the case(s) of Chunnilal P. Darshiyani (HUF):  Coming to ITA Nos. 593 to 597/AHD/2018 for the AY 2007-08 to 2011-12

30. At the outset, we note that in the identical facts and circumstances, we have deleted the penalty imposed under section 271(1)(c) of the Act vide Paragraph No. 8 of this order in the case of Dhanwantiben C. Darshiyani (supra) in ITA No. 587/AHD/2018. Respectfully, following the same, we delete the penalty imposed by the AO which was subsequently confirmed by the Ld. CIT (A). Hence, the ground of appeal(s) of the assessee is allowed.

31. In the result, all the five appeals of the assessee in ITA No.593 to 597/Ahd/2018 for AYs 2007-08 to 2011-12 are also allowed.

Coming to ITA Nos. 598 & 599/AHD/2018 for the AYs 2012-13 & 2013-14

32. At the outset, we note that in the identical facts and circumstances, we have deleted the penalty imposed under section 271AAB of the Act vide Paragraph No. 15 of this order in the case Dhanwantiben C. Darshiyani (supra) in ITA No. 591/AHD/2018. Respectfully, following the same, we delete the penalty imposed by the AO which was subsequently confirmed by the Ld. CIT (A). Hence, the ground of appeal(s) of the assessee is allowed.

33. In the result, both the appeals of the assessee in ITA Nos.588 & 599/Ahd/2018 for AYs 2012-13 & 2013-14 are allowed.

Coming to assessee appeals in the case(s) of Kamlesh D. Mangalani

34. The learned counsel for the assessee, at the time of hearing, sought an adjournment but we decline the same on the reasoning that the impugned appeals were part of the group listed today for hearing. Therefore, we deemed appropriate to hear these appeals too along with the other appeals who are part of the group.

However, Shri M.K. Patel, the learned counsel for the assessee has been taken on record as proxy counsel on behalf of Shri M.J. Shah (the counsel for the assessee) as he (Shri M.K. Patel ) claimed to have obtained the consent from Shri M.J. Shah. Accordingly, we proceed to adjudicate the issue on hand after hearing the proxy counsel as discussed above.

Coming to ITA Nos. 564 & 565/AHD/2018 for the AYs 2010-11 & 2011-12

34. At the outset, we note that in the identical facts and circumstances, we have deleted the penalty imposed under section 271(1)(c) of the Act vide Paragraph No. 8 of this order in the case of Dhanwantiben C. Darshiyani (supra) in ITA No. 587/AHD/2018. Respectfully, following the same, we delete the penalty imposed by the AO which was subsequently confirmed by the Ld. CIT (A). Hence, the ground of appeal(s) of the assessee is allowed.

35. In the result, both the appeals of the assessee in ITA Nos.564 & 565/Ahd/2018 for AYs 2010-11 & 2011-12 are also allowed.

Coming to ITA Nos. 566 & 567/AHD/2018 for the AYs 2012-13 & 2013-14

36. At the outset, we note that in the identical facts and circumstances, we have deleted the penalty imposed under section 271AAB of the Act vide Paragraph No. 15 of this order in the case Dhanwantiben C. Darshiyani (supra) in ITA No. 591/AHD/2018. Respectfully, following the same, we delete the penalty imposed by the AO which was subsequently confirmed by the Ld. CIT (A). Hence, the ground of appeal(s) of the assessee is allowed.

37. In the result, both the appeals of the assessee in ITA Nos.566 & 567/Ahd/2018 for AYs 2012-13 & 2013-14 are allowed.

38. In the combined result, all the twenty-six appeals filed by the assessees are allowed.

This Order pronounced in Open Court on 18/12/2019

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