2017 (8) TMI 934 - HC - Income Tax

Penalty u/s 271AAA - time limit within which such tax had to be paid - Penalty where search has been initiated - Held that - Tribunal placed back the matter before the Assessing Officer to verify the claim of the assessee regarding involvement of the third condition of Section 271AAA namely that of payment of full tax. The Tribunal referred to the decision of the Supreme Court in case of Assistant Commissioner of Income Tax vs. Gebilal Kanhaialal, HUF reported in 2012 (9) TMI 297 - SUPREME COURT taking a view that the section did not lay down any time limit within which such tax had to be paid. As held by the Supreme Court in case of Gebilal Kanhaialal, HUF (supra), there is not time limit envisaged under section 271AAA for fulfillment of condition of payment of tax. When the Tribunal on the assertion of the assessee that the entire tax was paid up has placed the matter before the Assessing Officer for verification of such assertion, no question of law arises.

Summary

Issues:
Appeal against the Income Tax Appellate Tribunal's judgment on penalty levied under Section 271AAA for assessment year 2010-11.

Analysis:
The issue revolves around the deletion of penalty under Section 271AAA of the Income Tax Act. The Commissioner(Appeals) had initially confirmed the penalty, citing non-payment of the entire tax payable on unaccounted income disclosed in the return. The appellant's reliance on judicial pronouncements was deemed irrelevant due to the outstanding tax amount. The Tribunal, however, considered the appellant's submissions regarding attempts to pay the outstanding demand by requesting the department to release seized cash and documents for land sale. The Tribunal referred to the Supreme Court's decision in a similar case, emphasizing the absence of a time limit for tax payment under Section 271AAA.

The Tribunal's decision was based on the Supreme Court's ruling that there is no specified time limit for fulfilling the condition of tax payment under Section 271AAA. The Tribunal, upon the appellant's claim of having paid the entire tax amount, directed the matter back to the Assessing Officer for verification. Consequently, the Tribunal dismissed the Tax Appeal, as no legal question arose from the verification process initiated by the Assessing Officer. The judgment highlights the importance of fulfilling statutory conditions for penalty waiver under Section 271AAA and the discretion of authorities to verify claims made by taxpayers regarding tax payments.