TaxTMI 
TaxTMI 
2012 (5) TMI 6
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.... the Assessing Officer in both the appeals are as follows: 1. That in the facts and circumstances of the case, the learned Commissioner of Income Tax (Appeals)-Central I Kolkata, erred in appreciating the facts of the case and thus erred in cancelling the penalty order under section 271AAA of the Act. 2. That the assessee was in default to pay the tax together with interest in respect of undisclosed income and it is mentioned in sub section 2(iii) of Section 271AAA of the Act that the assessee 'pays the tax together with interest, if any, in respect of undisclosed income'. Therefore the learned CIT(A) has erred in law in allowing the relief. 3. The issue in appeal lies in a narrow compass of undisputed facts. On 3....
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....d was adjusted against the tax liability. There was also a demand for sections 234B and 234C liabilities and there is no dispute that the assessee later on paid over the shortfall, within permissible time, upon receiving the notice of demand under section 156. So far as assessment year 2008-09 is concerned, the assessee had duly paid tax liability before filing of income tax return but the assessee did not, due to inadvertent mistake, compute interest under sections 234B and 234C. There was also a demand for sections 234B and 234C liabilities and there is no dispute that the assessee later on paid over the shortfall, within permissible time, upon receiving the notice of demand under section 156. It was thus argued that the tax, together wit....
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....dmittedly did not pay the mandatory interest payable under section 234C of the Act. Thus, all the conditions of 271AAA(2) have not been complied with. Ignorance of law cannot be taken as a plea to get immunity. The assessee has exposed himself to the penal provisions of Section 271AAA(1). Considering the facts and circumstances of the case, I am of the opinion that it is a fit case for imposition of penalty under section 271AAA. The quantum of penalty is computed @ 10% of the amount of disclosure at Rs. 50,00,000. 4. Aggrieved, assessee carried the matter in appeal before the CIT(A). Learned CIT(A) noted that "from a plain reading of the above section (i.e. 271AAA) it is apparent that if the conditions laid down under sub section 2 of Sec....
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...., 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) pays the tax, together with interest, if any, in respect of the undisclosed income. (3) No penalty under the provisions of clause (c) of sub-section (1) of section 271 shall be imposed upon the assessee in respect of the undisclosed income referred to in sub-section (1). (4) The provisions of sections 274 and 275 shall, so far as may be, apply in relation to the penalty referred to in this section. Explanation : For the purposes of this section,- (a) "undisclosed income" means- (i) any income of the specified previous year rep....
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.... Unlike in the case of penalty under section 271(1)(c), Section 271AAA, without any reference to findings or presumptions of concealment of income or the findings or presumptions of furnishing of inaccurate particulars, provides that in respect of unaccounted income in the cases where search initiated after 1st June 2007, the assessee is to pay a penalty @ 10% of unaccounted income. Sub section 2 of Section 271AAA, however, relaxes the rigour of this penalty provision in a situation in which (i) in the course of the search, in a statement under section 132(4), 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) pays....
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....he satisfaction in the course of assessment proceedings itself - something which is not a condition precedent for imposition of penalty under section 271AAA. Their Lordships had held that "...However, the outer limit has to be the point of time when the assessment proceedings are undertaken by the Assessing Officer because the opening portion of section 271(1) of the Act requires the Assessing Officer to record satisfaction in the course of such proceedings, and the satisfaction has to be as regards the concealment of particulars of income or furnishing inaccurate particulars of income." Section 271 AAA, as the statute unambiguously provides, does not require any subjective satisfaction of the Assessing Officer to be arrived at during the a....