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TMI Blog2022 (12) TMI 1470X X X X Extracts X X X X X X X X Extracts X X X X ..... Prafulbhai Vallabhdas Fuletra Assessment year 2017-18 "1. Penalty levied u/s. 270A of the I.T. Act of Rs. 1,06,77,476/- on dtd. 27.05.2019 (Tax Effect: Rs. 1,06,77,476/-)" 3. The brief facts of the case are that during the year under consideration the assessees Shri Prafulbhai Fuletra and Shri Dinesh Fuletra had entered into Land sale transactions in respect of several properties with total sale consideration of 46,08,000/-as per the registered sale deeds. During the year under consideration, a blue coloured calendar diary was found during the course of search at the premises of Shri Rajnikant Bhesdadia, who is the brother-in-law of the assessee and his brother. This diary contained details of cash receipts of 4,20,60,000/- as on-money on sale of agricultural land jointly held by the assessee and his brother. Along with the said diary, draft copies of two land sale deeds were found which were pertaining to land having area of 1260.09 m² and 1279.53 m² at village Vadwala. The AO observed that on the photo copies of the diary, the actual unaccounted land sale transactions of 4,20,60,000/- were recorded and accordingly the AO concluded that this unaccou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pecified conditions as mentioned therein have not been satisfied in the instant facts. Further, the assessee submitted that the AO has failed to identify the clause under which the case of the assessee is covered so as to impose the penalty under the said section. Further, the assessee submitted that since the search was conducted during the year under consideration, the books of accounts of the assessee and not yet closed and the assessee had time to file return of income for the said assessment year i.e. assessment year 2017-18. The assessee filed return of income on 08-03-2018 by taking into consideration the transactions recorded in the aforesaid seized documents in order to buy peace. Therefore, in absence of the assessee's case falling in any of the provisions of section 270A of the Act, no penalty could be levied on the assessee in the instant set of facts. 5. The Ld. CIT(Appeals) allowed the assessee's appeal with the following observations: "6.4 It has been noticed that provisions of Section 270A(2) (a to g) are invoked only in the specified conditions mentioned therein. However, the AO has failed to identify the clause under which the case of the assessee is covered so ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nts pertaining to the year in which search conducted i.e. F.Y.2016-17, it is natural that the books of accounts of said year has not been closed and the return of income was not due for filing therefore the appellant was having time for filing return of income for the said assessment year i.e. A.Y.2017-18. The appellant has filed return of income on 08.03.2018 by taking into consideration the transactions recorded in the aforesaid seized documents. Thereafter, the assessment was completed u/s. 143(1) of IT Act and subsequently u/s. 143(3) of IT Act wherein the returned income has been accepted. Further, none of the conditions specified u/s.270A(2)(a), 270A(3)(i)(a) or 270A(9) is applicable on the facts of the case, so there was no case for levy of the penalty u/s.270A of IT Act. Thus, the levy of penalty on the facts of the case is found not correct and accordingly the penalty is deleted." 6. Before us, the DR has relied upon the observations made by the Assessing Officer in the penalty order. In response, the counsel for the assessee has reiterated the submissions made before Ld. CIT(Appeals) and has on the observations made by CIT in the appellate order. 7. We have heard the r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is greater than the deemed total income assessed or reassessed immediately before such reassessment; (g) the income assessed or reassessed has the effect of reducing the loss or converting such loss into income. ....... (8) Notwithstanding anything contained in sub-section (6) or sub-section (7), where under-reported income is in consequence of any misreporting thereof by any person, the penalty referred to in sub-section (1) shall be equal to two hundred per cent of the amount of tax payable on underreported income. (9) The cases of misreporting of income referred to in sub-section (8) shall be the following, namely:- (a) misrepresentation or suppression of facts; (b) failure to record investments in the books of account; (c) claim of expenditure not substantiated by any evidence; (d) recording of any false entry in the books of account; (e) failure to record any receipt in books of account having a bearing on total income; and (f) failure to report any international transaction or any transaction deemed to be an international transaction or any specified domestic transaction, to which the provisions of Chapter X apply. 8. In our view, on a perusal ..... X X X X Extracts X X X X X X X X Extracts X X X X
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