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TMI Blog2021 (10) TMI 1250X X X X Extracts X X X X X X X X Extracts X X X X ..... al justice and deciding that the appeal was not prosecuted by the appellant. 4. The learned Commissioner of Income-tax, (Appeals)-18, erred in not appreciating the fact that the appellant had voluntarily admitted the additional income in the return of income filed even when no incriminating materials were found or seized by the department. 5. The learned Commissioner of Income-tax, (Appeals)-18, erred in not appreciating the fact that the appellant had not specified the manner in which such income was earned. 6. The learned Commissioner of Income-tax, (Appeals)-18, erred in not appreciating the fact that the additional income admitted by the appellant does not fall under the income as defined in the Explanation (C) to section 271AAB of the Act. 7. The learned Commissioner of Income-tax, (Appeals)-18, erred in not appreciating the fact that the Notice issued by the Assessing officer did not specify whether penalty had been initiated u/s 271AAB(1)(a) or 271AAB(1)(b) or 271AAB(1)(c) and hence the penalty imposed is illegal and bad in law. 8. The learned Commissioner of Income-tax, (Appeals)-18, erred in dismissing the appeal without considering the issues raised by the appel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ppeal before learned CIT(A). Before the learned CIT(A), the assessee neither appeared nor filed any written submissions to justify his case. Therefore, the learned CIT(A) decided issue and confirmed penalty levied by the Assessing Officer u/s.271AAB of the Act by following certain judicial precedents, including decision of the Hon'ble Delhi High Court in the case of PCIT Vs Smt. Ritu Singhal (2018) 92 taxmann.com 224 (Del). The relevant findings of the learned CIT(A) are as under:- "4.1 I have gone through the penalty order, grounds of appeal filed by the appellant in this regard. However, during the appellate proceedings it is observed that one has been attending the appellate proceedings . The following chart in tabular form shows the number of opportunities given to the appellant to explain his position in this regard. Sl.No. Date of Notice Date of hearing Response of the appellant 1. 28.10.2019 20.11.2019 No response 2. 22.11.2019 09.12.2019 Sought adjournment vide letter dt 20.11.19 3. 12.12.2019 23.12.2019 Sought adjournment However, it is seen that enough opportunity has been given to the appellant and since no further information is coming forth except s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt had admitted Rs. 1 cr for the FY 2013-14 relevant to AY 2014-15 being the subject matter of appeal). It has been brought on record by the AO that the appellant had pleaded that the investments in gold and diamond jewellery worth Rs. 58.8 lakhs and loan lent by his father in cash to Shri Lakshmanan, Shri Paranthaman and Shri Viswanathan during the FY 2013- 14 besides the cash expenditure incurred outside the books of account were from out of the undisclosed income admitted. 7. At this stage it is apposite to refer to the provisions of Sec.271AAB as it stood at the relevant point in time. Penalty where search has been initiated. 27IAAB. (1) The Assessing Officer may, notwithstanding anything contained in any other provisions of this Act, direct that, in a case where search has been initiated under section 132 on or after the 1st day of July, the assessee shall pay by way of penalty, in addition to tax, if any, payable by him,- (a) a sum computed at the rate of ten per cent of the undisclosed income of the specified previous year, if such assessee. (i) in the course of the search, in a statement under sub-section (4) of section 132 admits the undisclosed income and specif ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... transactions 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 relating to such previous year; or (B) otherwise not been disclosed to the24Principal Chief Commissioner or j Chief Commissioner or 24[Principal Commissioner or Commissioner before the date of search; or (ii) any income of the specified previous year represented, either wholly or partly, by any entry in respect of an expense recorded in the books of account or other documents maintained in the normal course relating to the specified previous year which is found to be false and would not have been found to be so had the search not been conducted. 8. Section 271AAB provides the procedure for penalty where the search has been initiated. On analysis of the said section, as per the law as it stood at the relevant point in time, it becomes that the AO may, in respect of specified years, in relation to undisclosed income, levy penalty of (a)l0% if the taxpayer admits the undisclosed income u/s 132(4); substantiates the manner of earning such undisclosed income and files return of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... admitted falls within the ambit of undisclosed income defined in clause (c) of explanation of the Section. In view of the fact that the appellant had admitted undisclosed income in the course of search but had not furnished the return of income declaring such undisclosed income therein by paying tax together with interest in respect of the undisclosed income before the due date, the appellant's case is hit by Sec. 271AAB(l)(c). 11. Accordingly, as per the provisions of Section 27IAAB the appellant is liable to pay, by way of, penalty in addition to tax, if any, a sum computed @ 30% of undisclosed income of the specified period or previous years, for in this case the appellant in the course of search in a statement u/s 132(4) had admitted the undisclosed income and specified manner in which such income has been derived as manifested as business income but has not filed return of income within the due date. Thus, the appellant's case is squarely covered by clause(c) of Section 271AAB(1) of the Act and therefore the provisions of Section 271AAB get automatically attracted. 12. The Hon'ble High Court of Allahabad in the case of Pr. CIT vs Sandeep Chandak (2018) 93 taxmann.eom 405/ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... less such facts are mentioned with some specificity, it cannot be said that the assessee has fulfilled the requirement that she, in her statement (under Section 132 (4))- substantiates the manner in which the undisclosed income was derived. Such being the case, this court is of opinion that the lower appellate authorities misdirected themselves in holding that the conditions in Section 271AAA (2) were satisfied by the assessee." 13.1 Though this decision has been rendered in the context of S.27IAAA [that is applicable to search conducted from 1.6.2007 to 30.6.2012], the scope and tone & tenor are in accord with S271 AAB [that is applicable in the appellant case on hand. 14. Further, the Hon'ble ITAT ,Kolkata Bench D in the case of DCIT, Central Circle 2(2),Kolkata Vs Anil Agarwal [2017] 88 taxrnann.com 288 (Kolkata-Trib) in para 9 has held that "We have heard the ld. DR and perused the materials available on record. It is not in dispute that the assessee's case falls within the ambit of 271AAB(1)(a) of the Act as admittedly the assessee had satisfied the cumulative conditions prescribed thereon. We are not inclined to accept arguments of the assessee that he is not required ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... heard learned DR, perused materials available on record and gone through orders of the authorities below. The facts borne out from records clearly indicate that the assessee has undisclosed income, which was offered to tax in the sworn statement recorded u/s.132(4) of the Act. The assessee had also filed revised return and declared undisclosed income offered to tax during course of search and paid taxes. As per provisions of section 271AAB, penalty is mandatory, where the assessee has admitted undisclosed income during the course of search in the statement recorded u/s.132(4) of the Act and specifies manner in which such income has been derived. In this case, the assessee has admitted undisclosed income in the statement recorded u/s.132(4) of the Act and substantiates the manner in which undisclosed income was derived. Therefore, we are of the considered view that reasons given by the Assessing Officer to levy penalty of 30% of undisclosed income is in accordance with law and thus, we are inclined uphold order of the learned CIT(A) and dismiss appeal filed by the assessee. 7. In the result, appeal filed by the assessee is dismissed. Order pronounced in the open court on 26th Oct ..... X X X X Extracts X X X X X X X X Extracts X X X X
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