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TMI Blog2015 (11) TMI 109X X X X Extracts X X X X X X X X Extracts X X X X ..... . Be that as it may, as have held that penalty under section 271(1)(c) could not have been imposed on the facts of this case, the initiation aspect of the penalty is anyway no more than academic. In view of these discussions, the Assessing Officer was clearly in error in invoking the provisions of Section 271(1)(c) on the facts of this case. We, therefore, delete the impugned penalty. - Decided in favour of assessee. X X X X Extracts X X X X X X X X Extracts X X X X ..... ackdrop that the Assessing Officer initiated the penalty proceedings under section 271AAA by observing that "if the search under section 132 of the Act had not taken place, the assessee would not have disclosed this amount and the same would have gone undetected". Even though the penalty proceedings were initiated under section 271AAA, as is evident from the copy of assessment order filed before us- which has remained uncontroverted, the Assessing Officer changed his mind and finally imposed the penalty, amounting to ₹ 23,20,000, under section 271(1)(c) of the Act in respect of this income of ₹ 68,00,000 which was treated as an undisclosed income of the assessee. Aggrieved, assessee carried the matter in appeal but without any success. The assessee is not satisfied and is in further appeal before us. 6. We have heard the rival contentions, perused the material on record and duly considered the facts of the case in the light of the applicable legal position. 7. We consider it appropriate to reproduce, for ready reference, Section 271 AAA of the Act: 271AAA. Penalty where search has been initiated.- (1) The Assessing Officer may, notwithstanding anything contained in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... income for the previous year before the said date; or (ii) in which search was conducted.'. 8. The scheme of Section, which governs penalty on undisclosed income for the 'specified previous year', is like this. In the cases in which search is initiated, the penalty under section 271AAA will come into play in respect of 'undisclosed income' of 'specified previous year', and, to that extent, the provisions of Section 271(1)(c) will not be applicable. In other words, so far as penalty in respect of undisclosed income is concerned, Section 271AAA will apply to the extent of the 'specified previous year' and, for the other previous years, the provisions of Section 271(1)(c) will continue to hold the field. The expression 'specified previous year' refers to the previous year in which the search is conducted or the year which has ended but the due date for filing of income tax return in respect of the same has not ended. Coming to the facts of the present case, the search took place on 21st August 2008, and, accordingly, the due date of filing income tax return in respect of the income of this previous year was on or before 30th September 2008. Clearly, even though the previous year ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e have perused the copy of the assessment order filed by the assessee which specifically states that the penalty is initiated under section 271AAA and no other document, suggesting that penalty was initiated under section 271(1)(c), has been filed before us. Be that as it may, as have held that penalty under section 271(1)(c) could not have been imposed on the facts of this case, the initiation aspect of the penalty is anyway no more than academic. In view of these discussions, the Assessing Officer was clearly in error in invoking the provisions of Section 271(1)(c) on the facts of this case. We, therefore, delete the impugned penalty. 9. Learned counsel, however, shows, what appears to be, a somewhat rare gesture of fairness. He submits that even though the time for imposition of penalty under section 271AAA has expired by now, since the assessee had no objection to the penalty being imposed under section 271AAA anyway, he does not mind the order being confirmed to that extent or to the fresh levy of penalty under section 271AAA. He submits that his clients, as law abiding citizens, are content with the relief legally due to them and they do not wish to capitalize on the technic ..... X X X X Extracts X X X X X X X X Extracts X X X X
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