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TMI Blog2017 (5) TMI 1363X X X X Extracts X X X X X X X X Extracts X X X X ..... against confirming the penalty U/s 271AAA of the Income Tax Act, 1961 (hereinafter referred as the Act) amounting to ₹ 4,05,000/-. 2. Brief facts of the case are that the assessee belongs to Mittal group, whose premises were searched on 27/8/2008. In response to notice U/s 153A of the Act, the assessee filed return of income declaring total income of ₹ 55,44,392/- for the assessment year 2008-09 on 31/3/2009. The assessment was completed U/s 143(3) read with Section 153A of the Act at an income of ₹ 70,92,010/-. The Assessing Officer made addition of ₹ 14,29,652/- by not allowing the benefit of telescoping/realization from debtors/advances stating that no nexus has been established, ₹ 1,15,765/- by making disallowance part of expenses debited under various heads stating that the expenses have not been wholly and exclusively for the purpose of business and ₹ 2,199/- on account of difference in account of pharmaceutical companies. 3. The ld CIT(A) dismissed the appeal of the assessee. The assessee preferred appeal before the ITAT, Jaipur Benches, Jaipur and after the order of the ITAT, the addition of ₹ 1,17,964/- (1,15,765 + 2199) mad ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f section 271 shall be imposed upon the assessee in respect of the undisclosed income referred to in sub-section (1). (4) The provisions of sections 274 and 275 shall, so 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 the 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 documents maintained in the normal course relating to the specified previous year which is found to be fal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... quantified as per 271(1)(iii) in case conditions are not satisfied. Hence case laws decided in respect of Expl 5 to 271 (1)(c) are relevant for sub-section 2 of section 271AAA. While recording statement u/s 132(4), it is the duty of the authorized officer to apprise the assessee about provisions of law and if no question asked about the manner in which income has been derived, then on this ground, immunity cannot be denied. He relied on the following decisions:- (i) Gujarat High Court in the case of CIT V Mahender C. Shah 299 ITR 305 (ii) Similar finding has been recorded by Hon ble All. High Court in the case of CIT V Radha Kishan Goel 278 ITR 454. (iii) Gujarat High Court PR Commissioner of Income Tax-1 Versus M/s Geeta Prints Pvt. Ltd. Tax Appeal No. 565 of 2015 Dated: - 14 September 2015. He further relied on the following decisions: (i) ITAT Jaipur Bench in case of Late Smt Sudha Patni Vs ACIT ITA No 963/JP/2015 order dated 09/08/2016. (ii) SPS STEEL POWER LTD. vs. ASSISTANT COMMISSIONER OF INCOME TAX ITAT, KOLKATA TRIBUNAL (B) (2015) 44 CCH 0286 Kol Trib. (iii) 2016 (7) TMI 506 - ITAT Delhi in case of Sh. Vinod Chander Sinha Versus ACI ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (4) of section 132, admits the undisclosed income and specifies the manner in which such income has been derived ; (ii) Substantiates the manner in which the undisclosed income was derived; and (iii) Pays the tax, together with interest, if any, in respect of the undisclosed income. In this regard, AR has submitted that the assessee satisfies all the above three conditions as is evident from facts of the case and documents submitted. Further, the assessee, in course of search in the sworn statement recorded under section 132(4) of the Act, has admitted the undisclosed income, and clearly stated the manner in which the undisclosed income (within the meaning of Explanation (a)(i) of Section 271AAA) was derived and substantiated in statement recorded in course of search. Subsequently, the assessee paid tax, together with interest in respect of the undisclosed income and filed return of income, which stand accepted in assessment u/s 143(3) of the Act. On perusal of the above, it is seen that assessee has offered for tax his undisclosed income (Rs. 2,71,91,880/-) including jewellery as under :- Jewellery ₹ 2,25,69,380/- Cash ₹ 46,22,500/- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ticularly with reference to disclosure made under section 132(4). In the case of CIT Vs. Mahendra C. Shah (299 ITR 305) the Hon ble Gujarat High Court considered similar statement under section 132(4) to grant immunity under section 271(1)(c). The Hon ble High Court held as under:- When the statement is being recorded by the authorized officer it is incumbent upon the authorized officer to explain the provisions of Explanation 5 in entirety to the assessee concerned and the authorized officer cannot stop short at a particular stage so as to permit the Revenue to take advantage of such a lapse in the statement. The reason is not far to seek. In the first instance, the statement is being recorded in the question and answer form and there would be no occasion for an assessee to state and make averments in the exact format stipulated by the provisions considering the setting in which such statement is being recorded. Secondly, considering the social environment it is not possible to expect from an assessee, whether literate or illiterate, to be specific and to the point regarding the conditions stipulated in the second exception while making statement under section 132(4). ..... X X X X Extracts X X X X X X X X Extracts X X X X
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