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TMI Blog2015 (4) TMI 1245X X X X Extracts X X X X X X X X Extracts X X X X ..... e failed to disclose the manner of earning of surrendered income, penalty proceedings under section 271AAA were initiated. 4. In response to the show cause notice for levy of penalty it was mainly submitted that since assessee has admitted the undisclosed income and surrendered the same and has included this surrendered income in the return of income and paid taxes therefore assessee was entitled to immunity provided under section 271AAA. After considering these submissions AO again observed that since assessee has not substantiated the manner of earning income therefore penalty @ 10% amounting to Rs. 12.50 Lacs was levied under section 271AAA. 5. On appeal various decisions of Chandigarh benches of the Tribunal including the decision in case of ACIT, CC Patiala v. Gian Chand Gupta /Mohinder Gupta/Sanjay Kumar Gupta in ITA No. 1005/1006/1007/Chd/2013 were relied for seeking immunity. Ld. CIT(A) following the decision in case of ACIT, CC Patiala v. Gian Chand Gupta and others decisions deleted the penalty. 6. Before us Ld. DR strongly supported the order of AO. 7. Before Ld. CIT(A) various orders were cited including decision of Mumbai Bench of the Tribunal in case of ACIT v. Ka ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Tribunal in ITAs No. 1003 & 1004/2013 in case of Munish Kumar Goyal and Harish Kumar Singla vide paras 4 to 11 which read as under: "4. After considering the rival submissions and the material on record, we find that identical issues came up for consideration of the Tribunal in ITAs No. 1003 & 1004/2013 in case of Munish Kumar Goyal and Harish Kumar Singla which were adjudicated vide paras 8 to 13 which is as under: 8. We have gone through the rival submissions carefully. The Ld. CIT(A) has decided this issue vide para 5 which is as under: "I have considered the basis of penalty imposed by the AO and the arguments of the AR on the issue. The perusal of the provisions of section 271AAA make it clear that the penalty can be levied on undisclosed income of the specified year if the conditions specified in Sub-section (2) of section 271AAA are not satisfied. It, therefore, follows that first thing to determine is what is the amount of undisclosed income under the given circumstances. The concept of undisclosed income has been clearly defined by explanation to section 271AAA and the same reads as under:-- "Undisclosed income" means- i) any income of the specified previous ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... could be penalty proceedings u/s. 271AAA as well as 271(1)(c) for the same assessment year, however in respect of different income. The AO in the penalty order has clearly accepted that disclosure of income by the assessee to the tune of Rs. 3,80,12,500/- is not represented by any assets/documents found during the course of search operation and has also observed that the same was part of the undisclosed income just because this disclosure had come during the course of search and was therefore as a result of the search. There is a clear acceptance of the fact that the said disclosure is not with reference to any assets/documents found during the course of search. It is only because the said disclosure happened during the search that the same has been clubbed in the definition of undisclosed income requiring the assessee to fulfill the condition as specified in Sub-section (2) of 271AAA. I am of the clear view that income to the extent of Rs. 3,80,12,500/- does not come under the definition of undisclosed income as defined under section 271AAA and therefore no penalty u/s.271AAA could be levied. The second aspect of the penalty order passed by the Assessing Officer is that whether th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d income. (3) No penalty under the provisions of clause (c) of sub-section (1) of 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 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 th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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