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TMI Blog2016 (10) TMI 1006X X X X Extracts X X X X X X X X Extracts X X X X ..... I 297 - SUPREME COURT) on the impugned issue, and deleted the penalty levied. Further, admittedly ,no appeal has been filed by the Revenue against the said orders of the CIT(A). Thus we set aside the order of the Ld. CIT(A) and delete the penalty levied under section 271AAA - Decided in favour of assessee. - ITA No.635/Chd/2016 - - - Dated:- 27-10-2016 - SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND MS. ANNAPURNA GUPTA, ACCOUNTANT MEMBER Appellant by : Shri Ashok Goyal Respondent by : Shri Manjit Singh, DR O R D E R PER ANNAPURNA GUPTA, A.M. : This appeal has been filed by the assessee against the order of CIT(A) - 3 Gurgaon, dated 28/03/2016. 2. The assessee has raised the following grounds of appeal: 1. That the Worthy Commissioner of Income Tax (Appeals) has erred in upholding the penalty of ₹ 10,00,000/- levied by the Assessing Officer u/s 271AAA r.w.s. 274 of the Income Tax Act as per para 5 of his order. 2. That Worthy CIT (A) has erred in upholding that penalty u/s 271AA was leviable as the appellant had not paid taxes and interest in respect of the undisclosed income before due date of filing return of income, the condition which ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es one crore but since the assessee had only specified the quantum of undisclosed income but not its breakup or basis, nor substantiated the manner of earning the same, initiated penalty proceedings under section 271 AAA of the Income Tax Act ,1961.During the course of penalty proceedings ,the assessee filed reply reiterating the submissions made during assessment proceedings and requested that since the disclosure of the undisclosed income along with the manner in which the income had been earned had been made and the applicable taxes thereon had been paid, no penalty under section 271AAA of the Act was leviable. The Assessing Officer did not accept the assessee s contention and held that the assessee had only specified the quantum of undisclosed income but had neither specified its breakup nor the basis nor substantiated the manner of earning the same and therefore levied penalty on the undisclosed income of ₹ 1,00,00,000/-at the rate of 10% amounting to ₹ 10,00,000/-. 5. Aggrieved by the same the assessee filed an appeal before the CIT(A), reiterating the submissions made before the assessing officer and further relying upon the decision of the IT AT Chandigarh be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... further pointed out that in identical circumstances the Ld. CIT(A) had deleted the penalty levied u/s 271AAA, in the case of several assessees relating to the Pavitra group of cases. Ld. AR drew our attention to the order passed by the CIT(A)-3, Gurgaon, in the case of Sh. Harsh Goyal, New Sagar Enterprises, Anita Goyal, Kunal Goyal, Ravi Goyal, Krishan Kumar Goyal, Pooja Goyal and Suman Goyal, in which, Ld. AR stated that under similar circumstances the Ld. CIT(A) had accepted the contentions of the assessee that it had fulfilled all the conditions required for claiming immunity under section 271 AAA of the Act and deleted the penalty levied. 7. Ld. DR on the other hand relied upon the order of the CIT (A) and stated that since the assessee had not paid the due taxes on the undisclosed income surrendered, before the due date of filing of return of income, the penalty levied u/s 271AAA had been correctly upheld. 8. We have heard the rival contentions and perused the orders of the authorities below as also the documents placed before us. The sole issue arising in the present appeal is whether for claiming immunity from the levy of penalty under section 271AAA ,the assessee is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ase of ACIT, Udaipur vs M/s Gebilal Kanhaiyalal HUF, through Karta, Udaipur,(2012) 348 ITR 561 (SC) and categorically held that for the purpose of claiming immunity from the rigours of penalty under clause 2 of Explanation 5 to section 271 (1)(c), no time limit is prescribed within which the assessee should pay tax on the income disclosed in the statement under section 132 (4). The Hon ble Apex court dealt with the impugned issue as follows : Explanation 5 is a deeming provision. It provides that where, in the course of search under Section 132, the assessee is found to be the owner of unaccounted assets and the assessee claims that such assets have been acquired by him by utilizing, wholly or partly, his income for any previous year which has ended before the date of search or which is to end on or after the date of search, then, in such a situation, notwithstanding that such income is declared by him in any return of income furnished on or after the date of search, he shall be deemed to have concealed the particulars of his income for the purposes of imposition of penalty under Section 27l(1)(c). The only exceptions to such a deeming provision or to such a presumption of conce ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 11. It is clear from the above that the decision relied upon by the Ld.CIT(A) in upholding the levy of penalty, has been overruled by the Supreme Court and therefore it is settled that for the purpose of claiming immunity from penalty there is no requirement of paying taxes on the undisclosed income before the due date of return of income under section 139 (1) of the Act. Further it is not disputed that the assessee had paid taxes on the undisclosed income surrendered in the statement made under section 132(4) of the Act. The manner of earning the income and its substantiation thereof has also been accepted by the Ld. CIT(A) and is not the matter of dispute. The assessee therefore has fulfilled all the conditions required for claiming immunity from the levy of penalty under the provisions of section 271 AAA of the Act. Moreover we find that in the case of other assessees belonging to the same group, the Ld CIT(A) accepted the contentions of the assessee, wherein besides other pleadings made, the assessee relied upon the aforestated apex court decision in the case of Gebilal Kanhaiyalal (supra) on the impugned issue, and deleted the penalty levied. Further, admittedly ,no appea ..... X X X X Extracts X X X X X X X X Extracts X X X X
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