Addition under Section 69A fails when DVO report accepts declared property prices, while Section 271B penalty stands without reasonable cause.

ORDER

Satbeer Singh Godara, Judicial Member.- The instant batch of six cases involves the three assessees herein, namely, Sh. Raghu Nath Arora, his spouse Smt. Meena Arora and son Sh. Virat Arora. All other relevant details stand tabulated as under:

Heard all the assessees as well as the department at length. Case files perused.

2. We advert to the former twin assessees, namely, Sh. Raghu Nath Arora and Mrs. Meena Arora’s respective twin quantum appeals each i.e. ITA No.115 & 116/DDN/2026 and ITA Nos. 118 & 119/DDN/2026; respectively, totalling four cases wherein they are aggrieved against the learned lower authorities’ action, inter alia, making section 69A addition(s) of Rs.10,00,480/- and Rs.57,43,570/- and similar addition(s) of Rs.88,70,170/- and Rs.1,05,49,351/- in their hands in both these assessment years; respectively. There is hardly any dispute between the parties that the learned departmental authorities had carried out the relevant section 132 search action in this family’s case(s) on 07.02.2022 wherein they allegedly came across the seized materials indicating various unaccounted transactions representing cash receipts and expenses etc. by both these assessees. And that the learned Assessing Office thereafter made the impugned additions in both these assessees’ respective hands to the extent indicated hereinabove which stand upheld in the CIT(A)’s detailed discussion.

3. That being the case, both these assessees as well as the department vehemently reiterate their respective stands against and in support of the impugned additions. The Revenue’s case, more particularly, is that the learned Assessing Officer as well as the CIT(A) have discussed the entire issue(s) at length that the same are ought to be upheld in the assessees’ cases since based on diary Annexure A-1 found/seized from their possession.

4. Faced with this situation, learned counsel representing assessee seeks to buttress the point that although they have canvassed various legal as well as factual issues challenging the impugned additions, the departmental authorities herein are first of all bound by DVO’s report dated 18.11.2022 inter alia agreeing with their stand throughout that the declared sales/purchases price(s); as the case may be, of all these 36 properties, including 8 agricultural lands, 10 residential parcels, 16 commercial assets and 2 residential assets; as the case may be, indeed match with the corresponding fair market value “FMV”. This detailed report further suggests that the learned DDIT/ADIT, Haldwani has made the necessary reference to the DVO under section 142(A) of the Act on 12.05.2022. This clinching factual position has gone unrebutted from the Revenue side.

5. We are of the considered view in this factual backdrop that the impugned additions made in the assessees’ hands in both the lower proceedings could not be sustained since going against the DVO report submitted under section 142(A)(i) of the Act. We further wish to emphasize here that case-law CIT v. Dr. Indra Swaroop Bhatnagar [2012] 349 ITR 210 (Allahabad), CIT v. D.M. Prunesh [2020] 426 ITR 169 (Kar)and Smt. B. Jayalakshmi v. Asstt. CIT [2018]  407 ITR 212 (Madras), inter alia, hold that such valuer report; or, for that, even a favourable remand report is very much binding on the learned departmental authorities wherein the department could not be treated as an aggrieved party as well. We thus adopt the very precise reason hereinabove to conclude that both these assessees’ corresponding substantive grounds challenging section 69A unexplained money additions deserve to be accepted therefore. We order accordingly in very terms.

These twin assessees’ as many appeals two each i.e. ITA No.115 & 116/DDN/2026 and ITA Nos. 118 & 119/DDN/2026 succeed therefore.

6. Next comes Sh. Raghu Nath Arora’s and Sh. Virat Arora’s twin appeals ITA Nos. 117 & 120/DDN/2026; respectively, wherein they are aggrieved against the learned lower authorities’ action levying section 271B penalties on account of their failure in getting the books of account audited. After vehemently arguing for quite some time, learned counsel could hardly dispute that both these assessees have not been able to plead and prove any explanation much less a “reasonable” cause that they could not get their books of account audited due to the circumstances beyond control. We thus find no reason to interfere in both the learned lower authorities’ respective findings levying section 271B penalty(ies) in their respective cases. These latter twin appeals ITA Nos.117 & 120/DDN/2026 fail therefore.

7. These twin assessees’ (Sh. Raghu Nath Arora & Smt. Meena Arora) respective quantum appeals ITA No.115 & 116/DDN/2026 & ITA Nos.118 & 119/DDN/2026 are allowed and the former’s three assessee’s penalty(ies) appeals ITA Nos.117 & 120/DDN/2026 are dismissed. A copy of this common order be placed in the respective case files.