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TMI Blog2016 (6) TMI 1319X X X X Extracts X X X X X X X X Extracts X X X X ..... her substantiate the manner of earning undisclosed income. The ld. CIT(Appeals), therefore, correctly found that when revenue never asked any question regarding manner of earning the income, therefore, no penalty should be levied against the assessee. - decided in favour of assessee - ITA No. 178/CHD/2016 - - - Dated:- 13-6-2016 - SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND Ms. ANNAPURNA GUPTA, ACCOUNTANT MEMBER For The Appellant : Shri Manjit Singh For The Respondent : None ORDER PER BHAVNESH SAINI, JM This appeal by revenue has been directed against the order of ld. CIT(Appeals)-III Gurgaon dated 31. 12. 2015 for assessment year 2010-11, challenging the cancellation of penalty under section 271AAA of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ade voluntary disclosure under section 132(4) of the Act and paid the taxes thereon. The assessee relied upon several decisions in support of the contention that when the revenue did not ask any question to the assessee at the time of recording the statement, then revenue cannot take advantage of such lapse in the statement of the assessee. The authorized officer shall have to explain provision of law. When no questions have been asked to the assessee, there was no occasion for the assessee to explain the manner of earning undisclosed income. The ld. CIT(Appeals), considering explanation of the assessee and material on record, cancelled the penalty and allowed appeal of the assessee. Findings of ld. CIT(Appeals) in para 5 and 6 of the appel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , 00, 000/- on account of cash found during the time of search. (iii) The income tax alongwith interest was paid on this surrendered amount. 6. 3 Similar issue recently came up before the Hon'ble ITAT Chandigarh Bench in ITA No. 188/Chd/2015 in the case of DCIT Central Circle-II vs Shri Harmohinder Singh Chadha and the issue was discussed as reproduced below:- We have considered the rival submissions carefully and find that Hon'ble Gujrat High Court in case of CIT v. Mahendra C. Shah (Supra) has made following observations in this regard. '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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y of July 2012, the assessee shall pay by way of penalty, in addition to tax, if any, payable by him, a sum computed at the rate often percent of the undisclosed income of the specified previous year . (2) Nothing contained in sub-section (1) shall apply if the assessee, ____ (i) in the course of search, in a statement under sub-section (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 . (ii) pays the tax, together with interest, if any, in respect of the undisclosed income. (3) No penalty under the provisions of clause (c) of sub-section (1) of section 271 shall be impos ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion (1} of this section. In the case before us, the amount of ₹ 4 crores which was surrendered during search, has been declared by the assessee in the return and taxes have been paid accordingly. Therefore the assessee is normally entitled for the immunity provided in section 271AAA itself. However, the Revenue has raised further dispute that whether the assessee has disclosed the manner in which the income has been earned. In the penalty order passed by the Assessing Officer following questions and answers have been extracted: Q. Do you want to say anything more ? Ans I voluntarily surrender a sum ofRs. 4. 00 crore [ Rs. Four Crores) for current financial year i. e. 2009-10 relevant to AY 2010-11 in any (should be 'my ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ve been levied. Accordingly we set aside the order of the Ld. CIT(A) and delete the penalty. In the present case also Revenue never asked any question regarding manner of earning the income therefore following above order we decide this issue against the revenue. In view of the facts of the case, submissions made by the appellant and following the judicial pronouncements on this issue including the above decision of Hon'ble ITAT Chandigarh Bench, penalty u/s 271AAA amounting ₹ 15, 52, 597/- in this case is directed to be deleted. 6. As a result, the appeal of the appellant is allowed. 5. After hearing submissions of the ld. DR, we do not find any merit in the appeal of the revenue. The ld. CIT(Appeals) has ..... X X X X Extracts X X X X X X X X Extracts X X X X
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