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TMI Blog2016 (11) TMI 1609X X X X Extracts X X X X X X X X Extracts X X X X ..... nnai in I.T.A. No. 34/2011-12/A-II dated 06.03.2013 for the assessment year 2008-09 in the case of Shri R. Rangarajan and I.T.A. No. 20/11-12/A-II dated 06.03.2013 of Smt. R. Mahalakshmi. Since, the issues in these appeals are common in nature, these appeal are clubbed and heard together and disposed by the common order. For the sake of convenience we first take up assessee's appeal ITA No. 985/Mds/2013. 2. The assessee has raised following grounds of appeal: 2.1 The CIT(A) went wrong in directing the Assessing Officer to levy penalty u/s. 271 AAA of the Income Tax Act on the undisclosed income. 2.2 The CIT(A) having found that the penalty levied u/s. 271(1)(c) is untenable, ought to have quashed the entire order impugned before h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the Act determining Assessed income of Rs. 1,75,71,560/-. Subsequently, the Ld. AO has initiated penalty proceedings and issued notice. In compliance, the Ld. AR appeared and explained that the assessee has admitted the income and paid taxes and immuned from penalty provisions as per explanation 5 to section 271(1)(c) of the Act. The Ld. AO relied on the submissions and provisions of law observed that the assessee has filed the Return of income u/s. 153A of the Act admitting the total income of Rs. 1,62,96,560/- and due to search u/s. 132 of the Act, income has been unearth. The Ld. AR explained that the disclosed income pertains to the said financial year and the difference in the total income was already furnished and covered by the Exp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The Ld. CIT(A) considered the arguments and findings of the Assessing Officer made in the Assessment Order and the penalty order. The Ld. AR explained in the penalty proceedings that the assessee has admitted additional income to purchase peace and avoid litigation and this amount was offered without any conditions. The Income Tax Department after the search has recorded statement on money payments made by the assessee which was already offered and the agricultural income is genuine source and is not taxable. Therefore, no penalty cannot be levied, the admission of income cannot be concealment of income and no impounded material was found in respect of transaction of on money payments and relied on the jurisdictional High Court decision an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Act on or after 1st June 2007, the assessee shall be liable to pay by way of penalty in addition to tax, if any payable by him as computed at the rate of 10% of undisclosed income of the specified previous year and dealt exhaustively on the provisions at page 5 and 6 of the order and conclude that the provisions of section 271AAA of the Act are applicable to the assessee. The Ld. CIT(A) found that the undisclosed income offered by the assessee and addition in the assessment proceedings are liable for penalty u/s. 271AAA of the Act and directed the Assessing Officer to levy penalty @ 10% of such undisclosed income of the assessee and partly allowed the appeal. Aggrieved the assessee has filed an appeal with the Tribunal. 5. Before us, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... me. The Assessing Officer relied only on the statement of the assessee and the Return of income filed and levied penalty. The assessee has not retracted the statement on disclosure of income. The Ld. CIT(A) gave the directions to the Assessing Officer to levy penalty u/s. 271AAA of the Act as against provisions of section 271(1)(c) of the Act. We found that the statement is recorded by the Assessing Officer and the Ld. AO came to a unilateral conclusion that the search was initiated on assessee and because of such action income was disclosed by the assessee to the Income Tax Department. Prima facie due to search operations on M/s. Vel Tech Group of institutions the assessee was served with notice u/s. 153A of the Act and the assessee has fi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e directions of the CIT(A) to levy of penalty u/s. 271AAA cannot be sustained. On application of said provisions to the present case, the search u/s. 132 of the Act was conducted on 26.08.2008 and the due date of filing the Return of income of assessee is 31.07.2008 and the assessee has filed the Return of income on 17.10.2008, which is after the due date of Return of Income u/s. 139(1) of the Act and in compliance to the provisions of section 271AAA of the Act. The specified the previous year applicability for the year ended is 31.03.2008 and the present assessment year being assessment year 2008-09, and the due date u/s. 139(1) of the Act being 31.07.2008 and whereas search u/s. 132 of the Act took place on 26.08.2008 and the due date of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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