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TMI Blog2017 (10) TMI 935X X X X Extracts X X X X X X X X Extracts X X X X ..... to impose the penalty. We agree with the Ld. CIT(A) that when the income disclosed u/s. 132(4) of the Act in the course of search itself cannot be treated as undisclosed income within the meaning of undisclosed income as provided in explanation to 271AAA the same cannot be treated as undisclosed income to impose the penalty under that section. We note that ₹ 4 lacs seized has been offered by the assessee in the disclosure petition to be taxed in the hands of M/s. Rahee Infratech Ltd. so, without the AO pointing out that the assessee had undisclosed income in the nature as given in explanation to section 271AAA of the Act, the penalty ought not to have been imposed and that has been rightly deleted by the Ld. CIT(A). - Decided in favo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1.03.2014 at the assessed income at ₹ 1,53,13,440/- i.e. the returned income of the assessee was accepted. While completing the assessment, the AO initiated penalty proceedings u/s. 271AAA of the Act on the additional income admitted by the assessee in the course of the statement given u/s. 132(4) of the Act which was duly declared in the return of income. During the penalty proceedings assessee pleaded that he should be given immunity from levy of penalty as all the conditions stipulated in section 271AAA(2) of the Act has been satisfied. However, the AO did not agree with the contention of the assessee and levied penalty u/s. 271AAA of the Act to the sum of ₹ 1.5 cr. on the plea that assessee has not paid tax together with int ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee has paid the entire tax as demanded by the AO before the penalty proceedings were concluded. Therefore, just because the assessee did not remit the entire tax with interest along with the return of income cannot be the ground to deny immunity to the assessee. We note that the assessee had filed a disclosure petition which has been reproduced by the AO at para VI which is reproduced as under: DISCLOSURE The disclosure petition filed in course search is reproduced below: Disclosure Petition 1. A search and seizure operation was conducted on Sri Pradeep Kumar Khaitan and also on M.s Rahee Track Technologies Pvt. Ltd. (of which he is a Director). 2. In course of said search, Sri Pradeep Kumar Khaitan un ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... een found in the course of operation. 5. It is submitted that the cash seized amounting to ₹ 4,00,000/- from the residential premises may please be adjusted with the taxes payable by Rahee lnfratech Ltd. against the undisclosed income offered for taxation hereinabove. Balance tax payable on the unaccounted income shall be paid in due course. 6. This petition is being made only to buy peace of mind and to avoid protracted litigation; the Group hereby confirms disclosure of an amount of ₹ 12 (Twelve) Crore as its additional income in view of provisions of section 271 AAA of the Act, if any. 7. The disclosure is made by the Group as a token of its bonafide intentions and to extend a hand of co-operation to the Dep ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ar 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urse of search which was not recorded in the books of account. We are of the opinion that merely for the reason that the assessee had admitted additional income in the course of search for taxation, it cannot be said that such admitted income was undisclosed income within the meaning of 'undisclosed income' provided in Explanation to section 271AAA of the Act to impose the penalty. We concur with the Ld. CIT(A) that when the income disclosed u/s 132(4) in the course of search, itself cannot be treated as undisclosed income within the meaning or undisclosed income as provided in Explanation to 271AAA of the Act, the same cannot be treated as undisclosed income to impose the penalty under that section. As rightly noted by the Ld. CIT( ..... X X X X Extracts X X X X X X X X Extracts X X X X
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