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TMI Blog2019 (2) TMI 736X X X X Extracts X X X X X X X X Extracts X X X X ..... 271AAA. It is only when the officer of the raiding party recording the statement of the assessee under section 132(4) of the Act elicits a response from the assessee's this requirement, the assessee's responsibility to substantiate the manner of deriving such income would commence. When the base requirement itself fails, the question of denying the benefit of no penalty would not arise. - INCOME TAX APPEAL NO.1688 OF 2016 - - - Dated:- 7-2-2019 - AKIL KURESHI AND B.P. COLABAWALLA, JJ. Mr. Tejveer Singh for the Appellant. Mr. Madhur Agrawal i/by Mr. Atul Karsandas Jasani for the Respondent. P.C.: 1. This appeal is filed by the revenue to challenge the judgment of Income Tax Appellate Tribunal. Following question is pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... enalty relying on the decisions of Allahabad High Court in case of Commissioner of Income-Tax Vs. Radha Kishan Goel (2005) 278 ITR 454(All) and that of the Gujarat High Court in case of Commissioner of Income-Tax Vs. Mahendra C. Shah (2008) 299 ITR 305 (Guj). 3. Having heard learned counsel for the parties and having perused the documents on record, we do not find any error in the view of the Tribunal. The requirement in question flowing from clause (i) of subsection (2) of Section 271AAA of the Act is similar to one specified in sub-clause (2) of Explanation 5 to Section 271 of the Act. In context of this provision that Allahabad High Court in case of Radha Kishan Goel (supra) had held that unless the Authorized Officer reco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... possible to expect from an assessee, whether literate or illiterate, to be specific and to the point regarding the conditions stipulated by Exception No. 2 while making statement under Section 132(4) of the Act. The view taken by the Tribunal as well as Allahabad High Court to the effect that 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 under Exception No. 2 in Explanation 5 is commendable. 5. This decision of the Gujarat High Court in case of Mahendra C. Shah(supra) came up for consideration before the said High Court in case of Mukeshbhai Ramanlal Prajapati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... section 271AAA of the Act and the statutory provisions enabling the assessee to avoid such a penalty are entirely different as compared to Explanation 5 to section 271. 12. Sub section (1) of section 271AAA provides for a penalty in addition to tax at the rate of ten percent of the undisclosed income in case where the search has been initiated under section 132 of the Act on or after 1st day of June 2007 but before 1st day of July 2012. Such penalty may, however, be avoided if the conditions specified under sub section (2) are satisfied which are as under: (2) Nothing contained in sub section (1) shall apply if the assessee (i) in the course of the search, in a statement under sub section (4) of section 132 admits the undisc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... having to substantiate the manner in which, the undisclosed income was derived. This requirement, however, must be seen as consequential to or corollary to the base requirement of specifying the manner, in which, the undisclosed income was derived. It is only when such declaration is made, the question of substantiating such disclosure or claim would arise. If, as in the present case, the Revenue failed to question the assessee while recording his statement under section 132 (4) of the Act as regards the manner of deriving such income, the Revenue cannot jump to the consequential or later requirement of substantiating the manner of deriving the income. In the context of the requirement of the assessee specifying the manner of deriving ..... X X X X Extracts X X X X X X X X Extracts X X X X
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