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of <h1>ITAT Upholds Deletion of Penalty for Undisclosed Income</h1> <h3>DCIT Versus RIVAA EXPORTS LTD</h3> DCIT Versus RIVAA EXPORTS LTD - TMI Issues:Appeal against deletion of penalty under section 271AAA for assessment year 2009-2010.Analysis:1. The appeal was filed by the Revenue against the order of Ld. CIT(A)-II, Ahmedabad dated 28.9.2012, where a penalty of Rs. 7,50,000/- levied by the Assessing Officer under section 271AAA was deleted.2. Both parties agreed that the facts in both appeals were identical, except for the amount, and that CIT(A) had passed a consolidated order for both assessees.3. In the case of Rivaa Exports, unrecorded cash of Rs. 6.5 lacs was found during a search, admitted by the Assessee as unrecorded sale for F.Y. 08-09. The Assessing Officer levied a penalty under section 271AAA, which was later deleted by CIT(A).4. CIT(A) held that the conditions of section 271AAA(2) were not fulfilled by the appellant, focusing on the requirement of admitting undisclosed income, specifying its manner of derivation, substantiating it, and paying the tax with interest.5. The authorized officer did not ask specific questions on substantiating the manner of income derivation, but the appellant disclosed the income from unaccounted trading. CIT(A) relied on precedents to support the decision.6. The appellant had paid the tax and interest on the undisclosed income admitted during the search, and the Assessing Officer accepted the returned income without questioning the source or nature of income.7. The ITAT upheld CIT(A)'s decision, noting that the appellant had substantially discharged the onus of explaining and substantiating the undisclosed income, following relevant legal principles and decisions.8. In another case involving Shri Hari Kishan Virmani, the facts were found to be identical to the previous case, leading to the dismissal of the Revenue's appeal.9. The ITAT dismissed both appeals of the Revenue, upholding the decisions of CIT(A) based on the facts and legal principles discussed in the judgments.This detailed analysis covers the issues involved in the legal judgment regarding the deletion of penalty under section 271AAA for the assessment year 2009-2010.
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