9911796707
TMI Blog2022 (6) TMI 149X X X X Extracts X X X X X X X X Extracts X X X X ..... nt proceedings was independent and unconnected with the information found during the course of search action carried out in the Dhanjimama group of cases. Therefore, while the same may be relevant for assessment of the income under section 68 and also for the levy of penalty under section 271(1)(c) however, so far as penalty under section 271AAB of the Act is concerned, the foundation thereof is independent of assessment proceedings. Therefore, in the instant set of the facts, since no incriminating material was found during research carried out on Dhanjimama group of cases on 03.07.2012, which could have formed the basis of addition in our considered view, penalty could not have been imposed under section 271AAB of the Act only on the basis of addition on account of cash credits u/s 68 found during the course of assessment proceedings. Therefore, in our view, CIT(Appeals) has erred in fact and law in confirming action of the assessing officer imposing penalty under section 271AAB of the Act, in the instant set of facts. - Decided in favour of assessee. - ITA No. 1337/Ahd/2019 - - - Dated:- 30-5-2022 - Shri P.M. Jagtap, Vice President And Shri Siddhartha Nautiyal, Judicia ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... edings observed that the assessee had deposited various amounts in her bank accounts for which she had no plausible explanation. The assessee had failed to explain the reasons and nature of cash credits and could not establish the identity/ creditworthiness of the source of unsecured loans taken in cash. The AO further observed that this addition during the course of assessment proceedings could only be possible due to the strenuous exercise carried out by the Department in the cases of Dhanjimama Group and therefore the real income of the assessee was unearthed only due to search proceedings. Had research not taken place on Dhanjimama Group, the addition of Rs. 4,75,000/- made in the case of the assessee would have remained unnoticed. Hence, the AO imposed penalty under section 271AAB(1)(c) of the Act to the tune of ₹ 1,42,500 @ 30% of Rs. 4,75,000/- on the assessee. In appeal before Ld. CIT(Appeals), he confirmed penalty imposed by the assessing officer by holding that the search having taken place, the said money having not been disclosed before the date of search falls in the ambit of undisclosed income and thus the assessee is liable for penalty under section 271AAB of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of this Act, direct that, in a case where search has been initiated under section 132 on or after the 1st day of July, 2012 89[but before the date on which the Taxation Laws (Second Amendment) Bill, 2016 receives the assent of the President90], 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 subsection (4) of section 132, admits the undisclosed income and specifies the manner in which such income has been derived; (ii) substantiates the manner in which the undisclosed income was derived; and (iii) on or before the specified date- (A) pays the tax, together with interest, if any, in respect of the undisclosed income; and (B) furnishes the return of income for the specified previous year declaring such undisclosed income therein; (b) a sum computed at the rate of twenty 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 subsection (4) of se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e in hand. 5.2 In the case of Shiv Bhagwan Gupta v. ACIT [2021] 125 taxmann.com 306 (Patna - Trib.) it was held that for levy of penalty under section 271AAB, case must fall within four corners of definition of expression 'undisclosed income' as defined under section 271AAB itself. The ITAT observed as under: A perusal of the assessment order reveals that the Assessing Officer had not mentioned about unearthing of any undisclosed income as defined under section 271AAB during search action carried out at the premises of the assessee. The income declared by the assessee in the return of income or found or assessed by the Assessing Officer in the assessment proceedings may be relevant for assessment of the income under section 68/69 and other related provisions and also for the levy of penalty under section 271(1)(c) in view of the relevant provisions of section 68/69 and section 271(1)(c). However, for the levy of penalty under section 271AAB, the case must fall within the four corners of the definition of expression 'undisclosed income' as defined under section 271AAB itself. The assessee in this case is an individual and has earned income from partnership ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the definition . Moreover, such penal provisions are required to be interpreted in a strict, specific and restricted manner and not in an inclusive manner. If the surrendered income does not fall in the definition of undisclosed income as defined u/s. 271AAB of the Act, the penalty is not warranted. It can be further noted that the penalty under section 271AAB can be initiated in respect of undisclosed income as defined in the section 271AAB itself found during the search action, independent of the assessment proceedings . Though, the fact in a case that the assessee has been able to explain the source of the alleged 'undisclosed income' maybe relevant for final imposition of the penalty, however, for initiation of the penalty proceedings, the provisions of section 271AAB are self-contained and are not dependent upon commencement or finalization of the assessment proceedings . It is further pertinent to note here it is not mandatory for the AO to invoke provisions of section 271AAB of the Act in each every case of levy of penalty pursuant to search action. Assessee has neither made any surrender of any undisclosed income during the search action nor the penalty has bee ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
