9911796707
TMI Blog2013 (10) TMI 598X X X X Extracts X X X X X X X X Extracts X X X X ..... fied and monies were released. The balance cash of Rs.14,50,000 was seized vide Panchnama dated 26.3.2008. Subsequently, again on 30.04.2008, three employees of the assessee were detained by the police and cash of Rs.25,02,500 was retained to the extent of Rs.23,52,500 vide panchnama dated 30.4.2008. The DDIT(Inv) Unit II(2) recorded a statement from the assessee on 21.5.2008 and the CIT Gandhinagar notified the assessee's case to the Assessing Officer Range-4, Hyderabad, vide order dated 16.10.2008 under S.127(2) of the Income-tax Act, 1961. The assessee vide affidavit dated 16th day of February, 2008 placed before the IT authorities at Gujarat, requested for transfer of proceedings to Gujarat, as it would be undue burden to attend the proceedings at Hyderabad. The assessee also volunteered to initiate action under S.153C of the Act in respect of cash seized in the case of the deponent and requested to drop the formality of action under S.153A in the case of the assessee. He also vide letter dated 16.10.2008 addressed to Dy. Director of Income tax(Inv.) Unit II, Hyderabad, filed before the Assessing Officer at Mehsana requested the transfer of seized cash or appropriate the same t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ess and even after getting caught, does not admit to the truth but further tries to create a web of false evidence. It is to be noted that the search had taken place and the amount was seized on 26.3.2008 almost one year before the alleged returns are supposed to have been filed. Therefore, there is no question of any voluntariness as stated by the appellant. 7.6 From the above facts and circumstances and keeping in view the case-law discussed, I find that the case of the appellant is fit for imposition of penalty under section 271(l)(c) of the Act. The conduct of the appellant in keeping such a elaborate and deceitful system of unaccounted business coupled with his attempt to create further false evidence even after getting caught reveals an unrepentant mind and an undying attempt at falsity and tax evasion. This is definitely a case of fraud coupled with gross and willful tax evasion. This is a fit case for imposing a t1igher penalty than 100%. I full agree with the Assessing Officer that the maximum penalty should be imposed on a person who creates and sustains such a well planned activity of unaccounted and hawala business. The penalty imposed is accordingly confirmed." 5. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and on seizure through his employees on respective dates, the assessee had to file the returns at Hyderabad, consequent to assigning the jurisdiction to the Assessing Officer at Hyderabad by the CIT Gujarat. It is also not in dispute that the assessee's returns were sent by post and has furnished evidence of dispatching them by post before the authorities. 8. Even though the acknowledgement given by the postal authorities in respect of the return for assessment year 2008-09 was dated 2.3.2009, and there were other acknowledgments also of various letters addressed to CIT, Ahmedabad, Director General of Income tax, Ahemdabad, Assitant Commissioner Aayakar Bhavan, Hyderabad etc. on the reason that there was overwriting on this acknowledgement, the learned CIT(A) in our opinion, came to a wrong conclusion that the despatch of return by that date as incorrect. If the returns were received, but have not been placed on record by the Assessing Officer, it is not the fault of the assessee, as the same Assessing Officer accepted the returns filed with the same date and completed the assessment proceedings, even though the date of the filing of the returns was stated to be 29.10.2010. Be tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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." As can be seen from the above, where any search has been initiated under S.132 of the Act on or after 1.6.2007 but before 1.7.2012 and the impugned income pertained to any previous year which has ended before the date of search or where the assessee has not declared the impugned income in return filed before the date of search or due date for furnishing the return for the relevant previous year has expired and the assessee has not filed the return, then only Explanation 5A can be invoked. This explanation applies to the assets or income which was found to be not declared or accounted pertaining to an year the previous year ended before search and in the return it was not declared or return was not filed. As noted above, in the present case, the event relevant for asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o far as may be, apply in relation to the penalty referred to in this section. Explanation. For the purposes of this section,- (a) "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 Chief 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 do ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t, direct that, in a case where search has been initiated under section 132 on or after the 1st day of June, 2007, the assessee shall pay by way of penalty, in addition to tax, if any, payable by him, a sum computed at the rate of ten per cent of the undisclosed income of the specified previous year. (3) No penalty under the provisions of clause (c) of sub-section (1) of section 271 shall be imposed upon the assessee in respect of the undisclosed income referred to in sub-section (1)." 8. It is clear from the above that the learned AO has not invoked the correct provisions of law for levying the penalty. In this case search was conducted in the premises of the assessee on 24-09-2008, thus the date of initiation of search was on 24-09-2008. From the provisions of Section 271AAA it is clear that in the case where action U/s 132 is initiated on or after 01/06/2007, penalty cannot be levied U/s 271 (1)(c)of the Act. Penalty can be levied only U/s. 271AAA of the Act when certain conditions stipulated therein is not complied. Therefore, we do not have any option than to confirm the order of the learned CIT(A) del ..... X X X X Extracts X X X X X X X X Extracts X X X X
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