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2019 (3) TMI 86 - AT - Income TaxPenalty u/s 271(AAA) - no surrender by the assessee and the seized cash was included in the computation of income and offered for tax which was duly accepted by the AO - HELD THAT - In this case the assessee had surrendered a certain amount as undisclosed income in the statement recorded during the search proceedings and had, thereafter, not substantiated the manner in which the undisclosed income was earned. In the present case, there was no surrender by the assessee and the seized cash was included in the computation of income and offered for tax which was duly accepted by the AO without any further query. We also note that this case is covered in favour of the assessee by an order of the coordinate Bench of this Tribunal in the case of Mahavir Prasad Jaipuria vs. ACIT 2017 (10) TMI 875 - ITAT DELHI) wherein held that where the AO had accepted the assessee s surrender without any questions being asked, no penalty u/s 271AAA was leviable. Therefore, on the same analogy, we do not find this case a fit case for imposition of penalty. - Decided in favour of assessee.
Issues:
Imposition of penalty under section 271AAA of the Income Tax Act, 1961. Analysis: The case involved an appeal against the imposition of a penalty amounting to ?1,75,000 under section 271AAA of the Income Tax Act, 1961. The appellant, a Director in a group engaged in various businesses, had undisclosed cash of ?17,50,000 seized during a search and seizure action. The appellant added this amount to his income from other sources in the return filed. The Assessing Officer (AO) initiated penalty proceedings under section 271AAA, and the penalty was imposed. The appellant challenged this penalty before the ITAT, arguing that the penalty was not justified as the appellant fulfilled the conditions under section 271AAA(2). The Authorized Representative for the appellant contended that the AO's allegation that the source of the undisclosed income was not specified was incorrect, as no query was raised during the statement recording under section 132(4) of the Act. The representative argued that the surrender of the amount was not made during the search but was added to the income in the return filed, which was accepted by the AO without further additions. The representative relied on a judgment of the Delhi High Court to support the argument that the penalty was not imposable in this case. The Senior Departmental Representative, on the other hand, referred to a different judgment of the Delhi High Court to argue that merely stating the surrendered sum as undisclosed income without disclosing the source does not satisfy the conditions under section 271AAA. The representative asserted that the penalty was rightly imposed and should be upheld. After considering the submissions and examining the statement recorded during the search, the ITAT found that the appellant did not surrender the seized amount during the search but added it to the income in the return, which was accepted without further inquiry by the AO. The ITAT concluded that in this case, the conditions of section 271AAA were not met, and previous judgments supported the appellant's position. Citing a coordinate Bench's decision, the ITAT ruled in favor of the appellant, setting aside the penalty and directing the AO to delete it. In conclusion, the ITAT allowed the appeal of the assessee, and the penalty under section 271AAA was revoked.
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