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TMI Blog2016 (11) TMI 882X X X X Extracts X X X X X X X X Extracts X X X X ..... e disclosed the manner. - Decided in favour of assessee - ITA No. 7662/Mum/2014 - - - Dated:- 2-11-2016 - Shri R. C. Sharma, AM And Shri Sandeep Gosain, JM Assessee by : Shri Anuj Kisnadwala Revenue by : Shri Randhir Gupta ORDER Per R. C. Sharma ( A. M ) This is an appeal filed by the assessee against the order of CIT(A) for the assessment year 2011-12, in the matter of penalty of ₹ 1.00 lakh imposed u/s.271AAA of the IT Act. 2. Following grounds have been taken by the assessee. 1. The Learned Commissioner of Income Tax, Appeal - 40 erred in law on facts confirming penalty u/s. 271AAA of the Income Tax Act @ 10 % on cash amounting to ₹ 10,00,000/- 2. The Learned Commissioner of Income Tax, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent proceedings. 7. At the outset, learned AR placed on record the order of the Tribunal in the Group case i.e., Kanakia Spaces Pvt. Ltd., wherein during the same search, the amount was surrendered as per the statement recorded u/s. 132(4). AO levied penalty with respect to the surrendered amount u/s.271AAA. The Tribunal in its order dated 10/07/2013 in ITA No.6763/Mum/2011 has confirmed the deletion of penalty after observing as under:- 4. After considering the rival submissions, we do not see any reason to interfere with the order of CIT(A). The order is in tune with the principles laid down by various co-ordinate Benches and High Courts particularly with reference to disclosure made under section 132(4). In the case of CIT vs. Mah ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h a plea not to initiate penalty proceedings. The assessee was not asked about the manner in which such income was earned and also to substantiate the manner in which undisclosed income was derived. The provision of clause-2 of Explanation-V appended to section 271(1)(c) are similar to section 271AAA(2). The scope and meaning has been lucidly explained by the Hon'ble Allahabad High Court in the case of CIT vs. Radha Kishan Goel (2005) 278 ITR 454 (All.), which was followed by the Hon'ble Gujarat High Court in the above referred case. In view of the above principles laid down, we are of the opinion that immunity provided under s/s.(2) of section 271AAA is applicable and accordingly, the order of CIT(A) does not require any modificati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se of Mrs. Rajrani Gupta vs. DCIT the penalty imposed u/s 271AAA has been deleted with following conclusion and findings: 10. From the above statement it appears that whatever question was put to assessee, she replied, she was not asked about the manner in which such income was earned and she was never asked to substantiate the manner in which the undisclosed income was derived. During assessment proceedings u/s 271AAA the question about manner in which income was derived were asked to assessee and she had replied to that. From here it implies that had this question been posed before her during recording of statement u/s 132(4) she might have replied that. The question of penalty as contained in section 271(1)(c) prior to 1.6.2007 has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Departmental Authorities have not considered this aspects of the issue and passed the impugned orders. The impugned orders having been made contrary to the provisions contained in Section 271AAA(2), they are not sustainable for legal scrutiny. Hence, we hereby set aside the impugned orders of the authorities below are set aside and the penalty levied u/s 271AAA in the cases of the assessee is cancelled. 13. Similar penalty was deleted by ITAT-Cuttack Bench in case of Pramod Kumar Jain vs DCIT 149 TTJ 36 after observing as under:- No definition could be given to the specified manner insofar as the very statement on oath u/s.132(4) specifies the manner on which the assessee is prepared to pay tax thereon. The inscribing in the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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