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TMI Blog2019 (9) TMI 629X X X X Extracts X X X X X X X X Extracts X X X X ..... inst the order of the Commissioner of Income Tax (Appeals)-5, Chennai in ITA No. 188/CIT(A)-5/2016-17 dated 28.09.2018 for the assessment year 2008-09, wherein the ld.CIT(A) upheld the action of the AO in restoring the penalty levied u/s. 271(1)(c), while giving effect to the ITAT order, in the order dated 13.01.2017. 2. The facts in brief are that there was a search and seizure operation in the premises of Shri R. Rangarajan, Chairman of M/s. Vel Tech Group of Educational Institutions and his family members, in which Smt. R. Mahalakshmi, the assessee and the daughter of Shri R. Rangarajan was also covered. Before the search and seizure operation, the assessee filed her return u/s.139 admitting a total income of ₹ 33,91,800/- on 17.10.2008. The assessee has not admitted any undisclosed income u/s. 132(4). Post search and seizure enquiry, the Revenue got confirmation from the sellers of the plots that they received on money payments from the assessee, when the such facts were brought to the assessee, she had admitted the on-money receipts of ₹ 2,46,30,500/-. Subsequently, on issue of notice u/s. 153A, the assessee filed a return admitting the total incom ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 5. The CIT(A) has gone wrong in not considering the detailed submissions of the Appellant and has disposed off the appeal in a casual and summary manner; this shows his non-application of mine. 6. Any other ground that may be adduced at the time of hearing. 5. The AR inviting our attention to the ITAT order submitted that the assessee s appeal in ITA No.986/Mds/2013 has been allowed and the Revenue s appeal in ITA No.1305/Mds/2013 is dismissed. Since, these ITAT orders have become final, the order levied by the AO is not correct and hence the order passed by the CIT(A) is also not correct. Per contra, the DR submitted that the Assessing Officer passed the order u/s. 271(1)(c). On an appeal, the CIT(A) directed the AO to levy penalty u/s. 271AAA. The assessee as well as Revenue filed appeals against the directions of the CIT(A). When the ITAT held in the order in ITA No. 986/Mds/2013 that the penalty cannot be levied u/s. 271AAA, it is automatic that the levy of penalty made u/s. 271(1)(c) is confirmed. The assessee has not challenged the levy of penalty u/s. 271(1)(c) nor there is any finding against the levy ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... me and made addition to Returned income and passed order u/s. 153A r.w.s. 143(3) of the Act determining Assessed income of ₹ 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 ₹ 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 Explanation 5 of 271(1)(c) of the Act. The Ld. AO found in the assessment order that assessee has various real estate transactions and ₹ 12,75,000/- was added as undisclosed income in the hands of assessee as there is no convincing explanations on agriculture income. Finally, the Ld. AO is of the opinion that the assessee has not disclosed the said inform ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee. Further, the Ld. CIT(A) perused the provisions of Levy of penalty and found that the assessee has disclosed total income of Rs. ₹ 33,83,635/- in the Return of income filed on 17.10.2008, whereas the Due date of filing Return of income is 31.07.2008. Subsequently, in compliance to the notice u/s. 153A Return of income was filed on 29.03.2010 with total income of ₹ 1,62,92,560/-. The Ld. CIT(A) found that there was search operations u/s. 132 of the Act of Vel Tech Group of Institutions on 26.08.2008 and the assessment being assessment year 2008-09 and the provisions of section 271AAA of the Act are attracted and not the provisions of section 271(1)(c) of the Act and due to mistake in stating the wrong section, the order cannot be said to be void and defect is curable u/s. 292B of the Act. Further, the Ld. CIT(A) is of the opinion that section 271AAA of the Act was introduced from 01.04.2007 applicable from Finance Act 2007 and as per the provisions where the search has been initiated u/s. 132 of 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 und ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... AA 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 filed Return of Income for the assessment year with disclosure of income as other income and which is not part of Regular Accounts and such income is liable for levy of penalty u/s. 271(1)(c) of the Act. We support our view on the decision of coordinate bench ITA No. 235 236/Mds/2013 dated 30.04.2013 of Assistant Commissioner of Income Tax Vs. Smt J.Mythilli on applicability of provisions of levy of penalty. Now the question arises whether the order of the Ld. CIT(A) giving directions to the Assessing Officer to levy penalty u/s. 217AAA of the Act shall survive. We read the provisions of section 271AAA(1) of the Act as under: (a) The Assessing Officer may, notwithstanding anything contained in any ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... levant portion is extracted below: The fact remains that the assessee has offered additional income and filed the Return of income to buy peace with the department and to avoid vexatious litigation and the Assessing Officer does not have any impugned document in support of undisclosed income. 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 filed Return of Income for the assessment year with disclosure of income as other income and which is not part of Regular Accounts and such inc ..... X X X X Extracts X X X X X X X X Extracts X X X X
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