9911796707
TMI Blog2016 (6) TMI 1319X X X X Extracts X X X X X X X X Extracts X X X X ..... fying the date of hearing to the assessee. The assessee is, therefore, proceeded ex-parte. 3. The facts as noted in the impugned order are that the Assessing Officer in the penalty order has discussed the levy of penalty under section 271AAA of the Act by mentioning that assessee during the course of search, surrendered additional income of Rs. 3 Cr. Relevant statement of the assessee is reproduced through which surrender of Rs. 3 Cr was made. In assessment year under appeal, assessee made total surrender of Rs. 1, 55, 25, 970/- on account of cash and stock surrendered. The Assessing Officer considered the provisions of Section 270AAA of the Income Tax Act and facts of the case and noted that assessee has not brought on record any document ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... usal of the provisions of the section 271AAA make it clear that the penalty can be levied on undisclosed income of the specified year if the conditions specified in the 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. However, the AO has imposed the penalty on the ground that the appellant had not substantiated the manner in which the income was earned. 6. 1 The AO has made following observations in this case: (i) The assessee made a surrender of Rs. 1, 55, 25, 970 for the year under consideration. (ii) This di ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... first instance, the statement is being recorded in the question an answer from 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 by the second exception while making statement u/s 132(4). Even if the statement does not specify the manner in which the income is derived if the income is declared and tax thereon paid, there would be substantial compliance not warranting any further denial of the benefit. " 8. Furthe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 document or transaction 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 retaining 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... once the income is surrendered during the course of search u/s 132(4) it can be safely assumed that during discussion the assessee must have disclosed the manner. In any case we find force in the submissions of the Id. Counsel for the assessee that in the explanation of the assessee has been accepted for a sura ofRs. 1987500 out of total surrender of Rs. 4 crores then same manner should have been accepted for the whole amount. It is not clear from the penalty order how explanation for Rs. 1987500 was accepted. In any case the Ld. C!T(AJ has considered all these material or decision which can controvert the findings of the CIT(A). In the following cases which have been relied on by the Id. counsel for the assessee which was clearly held tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... income was earned. Therefore, issue was found covered by judgement of Gujrat High Court in the case of CIT Vs Mahendra C. Shah. Since no question is asked during the statement recorded under section 132(2) of the Act, then the assessee cannot be expected to further 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. It, therefore, appears that issue is covered by the decisions of the Tribunal and Gujrat High Court as have been referred in the findings of ld. CIT(Appeals). No infirmity have been pointed out in the order of the ld. CIT(Appeals) in ca ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
