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2015 (3) TMI 361 - AT - Income TaxPenalty levied u/s. 271(1)(c) - CIT(A) deleted the levy - Held that - In this case admittedly the search has taken place after 01.06.2007 and the return of income for the A.Y. 2008-09 had fallen due much before the date of search. In the return of income filed prior to the date of search, the income of ₹ 49,21,666/- was not included by the assessee. The additional income which has been declared after the date of search was in the return of income filed u/s 153A and not earlier. Thus in our view Explanation-5A is clearly attracted and the penalty levied by the AO u/s 271(1)(c) has rightly been confirmed by the Ld.CIT(A). Accordingly, the grounds raised by the assessee is dismissed and the assessee s appeal for A.Y. 2008-09 is dismissed. Penalty levied u/s. 271AAA - CIT(A) deleted the levy - Held that - No finding by the ld. CIT(A) in respect of substantiation of the manner of deriving the undisclosed income, which stipulation, while missing in section 271(1)(c), stands incorporated in section 271AAA. The A.O. clearly records a finding, both in respect of the assessee having failed to specify the manner in which the undisclosed income is derived as well as of the assessee having failed to substantiate the same, and which in fact the ld. CIT(A) notes vide para 6.5.2 of his order. Clearly, these findings of fact would need to be addressed by the ld. CIT(A), either endorsing or reversing or otherwise modifying the same, i.e., based on his reappraisal of the materials found from the possession of, or otherwise furnished by, the assessee, or even the evidences led by it before him for the first time, of-course by and upon observing the due process of law (refer r. 46A). The onus to satisfy the conditions of the provision though, would only be on the assessee. In fact, all this would precisely be the purview of the first appellate authority in the set aside proceedings. - Decided in favour of revenue for statistical purposes
Issues Involved:
1. Levy of penalty under section 271(1)(c) of the Income Tax Act, 1961. 2. Levy of penalty under section 271AAA of the Income Tax Act, 1961. Issue-wise Detailed Analysis: 1. Levy of Penalty under Section 271(1)(c): The appeals filed by the assessee pertain to the levy of penalty under section 271(1)(c) of the Income Tax Act, 1961. The penalty was imposed following a search action conducted on 09/02/2009 on the Prakash Steelage group of companies. The concealment penalty was imposed on the income disclosed in the return filed in response to a notice under section 153A, which was over and above the original return. The Tribunal referred to its previous order in the case of Prakash Steelage Ltd. (ITA No. 5257/Mum/2012 dated 26/11/2014), where the issue of penalty under section 271(1)(c) was decided against the assessee. The Tribunal noted that in the matters relating to penalty under section 271(1)(c), the issue had already been decided against the assessee in the aforementioned order. The Tribunal reproduced relevant observations from the previous order, emphasizing that the additional income of Rs. 49,21,666 was not included in the original return filed before the search and was only declared in the return filed under section 153A. The Tribunal held that Explanation 5A to section 271(1)(c) was clearly attracted, and the penalty levied by the AO was rightly confirmed by the CIT(A). Consequently, the appeals filed by the assessee were dismissed. 2. Levy of Penalty under Section 271AAA: The appeals filed by the Revenue pertain to the levy of penalty under section 271AAA of the Income Tax Act, 1961, for the assessment year 2009-10. The penalty was imposed in each case of the respective assessees and was deleted by the CIT(A), against which the Revenue filed the appeals. The Tribunal referred to its previous order in the case of Prakash Steelage Ltd. (ITA No. 5221/Mum/2012 dated 28/01/2015), where the issue of penalty under section 271AAA was restored back to the file of the CIT(A) for fresh consideration on merits. The Tribunal noted that the CIT(A) had grossly misapplied himself by considering the provisions of section 271(1)(c) instead of section 271AAA, which has different ingredients and scope. The Tribunal emphasized that the penalty under section 271AAA is applicable only for undisclosed income as defined under the section and requires the assessee to substantiate the manner in which the undisclosed income was derived. The Tribunal restored the matter back to the file of the CIT(A) to adjudicate the issue afresh, considering the applicability of section 271AAA in the facts of the case and allowing the assessee an opportunity to state its case. The Tribunal also provided prima facie observations for the CIT(A) to consider while deciding the case, emphasizing the need for a finding that the impugned incomes were indeed undisclosed incomes and that the conditions specified under section 271AAA(2) were satisfied by the assessee. In conclusion, the Tribunal dismissed the appeals filed by the assessee regarding the penalty under section 271(1)(c) and allowed the appeals filed by the Revenue for statistical purposes, restoring the matter back to the CIT(A) for fresh consideration regarding the penalty under section 271AAA. The order was pronounced in the open court on 23/02/2015.
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