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TMI Blog2018 (2) TMI 974X X X X Extracts X X X X X X X X Extracts X X X X ..... had already expired. Thus we hold that where the assessee though during the course of search had offered additional income, which was declared in the return of income in response to notice under section 153A of the Act; however, in view of specific definition of ‘specified previous year’, the rigours of section 271AAA of the Act are not attracted for assessment years 2006-07 to 2010-11. Accordingly, we hold so. Thus, the assessee is not liable for levy of penalty under section 271AAA of the Act for the said assessment years. Accordingly, we uphold the order of CIT(A) in deleting penalty levied under section 271AAA of the Act, though on different grounds. - Decided in favour of assessee. CIT(A) failure to exercise his coterminous powers in not initiating the penalty u/s 271(1)(c) after deleting penalty levied u/s 271AAA - Held that:- We find no merit in the plea of Revenue since before initiating penalty proceedings under section 271AAA and / or 271(1)(c) of the Act, clear satisfaction has to be recorded by Assessing Officer as to which section is attracted in the facts of case. Sub-section (3) to section 271AAA of the Act very clearly provides that no penalty under the prov ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under section 271(1)(c) of the Act on the ground that intention for initiating penalty by the Assessing Officer was for concealment of income. 5. Briefly, in the facts of the case, the assessee for the year under consideration had furnished the return of income declaring total income of ₹1,83,83,761/-. Search action under section 132 of the Act was carried out in the case of Shri Ramchandra Maruti Mohite on 25.08.2011. The assessee was one of the group members and was also covered under the search. The Assessing Officer issued notice under section 153A(a) of the Act, in response to which the assessee filed the return of income declaring Nil income. The assessee declared the gross total income of ₹ 3,83,83,761/-, on which it claimed deduction under Chapter VI-A under section 80IA(4) of the Act at ₹ 3.83 crores and furnished the return of income at Nil. The Assessing Officer in the assessment order passed under section 143(3) r.w.s. 153A(b) of the Act denied deduction under section 80IA of the Act holding the assessee to be a contractor and not developer and hence, assessed income in the hands of assessee at ₹ 3.83 crores. The Assessing Officer in the asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f appeals is against levy of penalty under section 271AAA of the Act. The learned Authorized Representative for the assessee has raised a legal plea in support of the order passed by the CIT(A) deleting penalty levied under section 271AAA of the Act. The case of assessee before us is that under Income-tax (Appellate Tribunal) Rules, 1963 (in short Rules ), the assessee is at liberty to support the order of CIT(A) on a ground which is purely legal but which was not raised before the CIT(A). Rule 27 of Rules gives such liberty to the respondent to raise a plea on a ground other than the one on which relief has been granted by the CIT(A). The plea raised by the assessee is purely a legal plea and hence, we admit the same for adjudication. 11. Section 271AAA of the Act reads as under :- 271AAA. Penalty where search has been initiated.- (1) The Assessing Officer may, notwithstanding anything contained in any other provisions of this Act, direct that, in a case where search has been initiated under section 132 on or after the 1st day of June, 2007, the assessee shall pay by way of penalty, in addition to tax, if any, payable by him, a sum computed at the rate of ten per cent of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... addition to tax, if any, payable by the assessee which would be equivalent to sum computed @ 10% of undisclosed income of the specified previous year . Hence, the said penalty is leviable in cases where search had been initiated under section 132 of the Act on or after 1st day of June, 2007 but before 1st July, 2012. Search in the case of assessee was carried out on 25.08.2011, hence it was within range provided in section. Sub-section (2) to section 271AAA of the Act provides certain conditions to be fulfilled, on the fulfillment of which the assessee shall not be liable to levy of penalty under section 271AAA of the Act. Sub-section (3) provides that no penalty under section 271(1)(c) of the Act shall be imposed upon the assessee in respect of undisclosed income which is referred to in sub-section (1). Explanation thereunder explains the term undisclosed income under clause (a) and specified previous year under clause (b). The basic condition which attracts the provisions of section 271AAA of the Act is search carried out at the premises of assessee, during which undisclosed income has been detected for the specified previous year . The assessee in the present case had du ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Act is not applicable to assessment years 2006-07 to 2010-11 where the assessee was due to file the return of income us 139(1) of the Act much before the date of search. The assessee claims that it had furnished the said returns of income for the respective years before the date of search and the time limit prescribed under section 139(1) of the Act had already expired. In such circumstances and in view of the clear-cut provisions of the Act, we hold that where the assessee though during the course of search had offered additional income, which was declared in the return of income in response to notice under section 153A of the Act; however, in view of specific definition of specified previous year , the rigours of section 271AAA of the Act are not attracted for assessment years 2006-07 to 2010-11. Accordingly, we hold so. Thus, the assessee is not liable for levy of penalty under section 271AAA of the Act for the said assessment years. Accordingly, we uphold the order of CIT(A) in deleting penalty levied under section 271AAA of the Act, though on different grounds. 14. The learned Departmental Representative for Revenue has also relying on the grounds of appeal pointed out ..... X X X X Extracts X X X X X X X X Extracts X X X X
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