TaxTMI 
TaxTMI 
2016 (5) TMI 281
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....) erred in holding that the additional income disclosed under section 132(4) did not qualify as undisclosed income within the meaning of section271AAA. (3) That the learned Commissioner of Income-tax (Appeals) erred in allowing the relief to the assessee by not considering the fact that the provisions of clause (ii) of sub-section (2) of section 271AAA has not been fulfilled in the assessee's case." 4. The brief facts of this case are that a search and seizure operation was conducted in the business premises of the assessee on 11.9.20 09. In the course of search and seizure operation in the office premises of the assessee jointly held with M/s Shree Salasar Properties & Finance Pvt Ltd and M/s Krishn a Trade & Commerce Pvt Ltd, the following books and documents were found / seized :- Annexure with Date Description Found Seized 'A 'Dt. 12-9-09 Books of a/cs SSB-1 to SSB-15 SSB-1 to SSB-15 'C' Dt. 12-9-09 Cash Rs. 14,82,430/- Rs.14.50 lakhs '2' Dt. 12-9-09 Inventory of Bank A/c 25 bank a/c s Not seized The assessee filed its return of income on 25.9.200 9 declaring total loss of Rs. 6,71,01,221/- . Pursuant to the search, notice u/s 153A of the Act was served ....
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....e all the relevant documentation or paper work as required by the Department. It was also pleaded that the disclosure petition also stated that the assessee has been carrying on bona fide and regular transactions. It was further pleaded that this claim about the bona fide and regular transactions also gets strengthened from the fact that during the course of search assessment proceedings, the learned Assessing Officer could not find any infirmity in the books of account. The assessee pleaded that it is entitled for immunity from levy of penalty as all the conditions stipulated in section 271AAA(2) of the Act have been satisfied. The learned Assessing Officer did not agree with the contentions of the assessee and proceeded to levy penalty under section 271AAA of the Act in the sum of Rs. 20,00,000 for the assessment year 2009-10 on the contention that the additional disclosure of Rs. 2,00,00,000 was not returned by the assessee in the return filed under section 139(1) of the Act but included only in the return filed under section153A of the Act. The penalty was also levied on the ground that but for the search, the assessee would not have come forward with the additional disclosure.....
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....res for the assessment year 2010-11 to avoid unnecessary long drawn litigation and to buy peace with the Department. It was also argued that the disclosure made under section 132(4) of the Act does not represent any undisclosed asset or unrecorded entry in the books of account or false expenses and, accordingly, the said offer is completely outside the scope of the definition of undisclosed income defined in section 271AAA of the Act. The assessee also placed reliance on certain decisions before the learned Commissioner of Income-tax (Appeals) in support of its propositions. Without prejudice, it was further argued that the assessee is still entitled for immunity from levy of penalty even if the assessee was not able to substantiate the manner in which the undisclosed income admitted under section 132(4) of the Act had been derived. For this proposition, reliance was placed on the decision of the co-ordinate Bench of Ahmedabad Tribunal in the case of Deputy CIT v. Sulchanadevi A. Agarwal (ITA No. 1052/Ahd/2012, dated July 20, 2012). The learned Commissioner of Income-tax (Appeals) based on the aforesaid submissions duly appreciated the contentions of the assessee and deleted the pe....
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.... "To The learned ADIT (Inv) Unit III (4) Aayakar Bhawan Annexe P-13, Chowringhee Square, Kolkata 700 069 Respected Sir, Re : Disclosure consequent to search and seizure operations carried out by the Income-tax Department on our premises on September 11, 2009/12th September, 2009 We are members of National Stock Exchange-Capital Market, F &O and Currency Derivatives, Mumbai Stock Exchange-Capital Market, F&O and Currency Derivatives, NSDL, MCX-Currency Derivatives, Calcutta Stock Exchange-Capital Market. We have done transactions on behalf of various clients and on our self account. During the course of our transactions with various parties, we have received money from various parties including advances, margin money and deposits. Your goodself has raised a query on explaining the sources of all such advances and deposits and it appears that you have raised doubts on the genuineness of certain transactions earned out by us including the receipt of funds into our company. We have been carrying out regular and bona fide transactions. However, we are not able to instantly produce all the relevant documentation or paper work which may be required by the Department. Hen....
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....tion 153A of the Act. It is also pertinent to note that this offer has been voluntarily made by the assessee without any incriminating materials found during the course of search. Hence, it goes to prove beyond doubt that the offer of undisclosed income of Rs. 2 crores was made voluntarily by the assessee without any detection by the Department and, accordingly, the argument of the learned Departmental representative that but for the search, this income would not have been offered does not hold any water and deserves to be dismissed. It is already well settled that though the income is not disclosed in the return filed under section 139(1) of the Act but duly disclosed in the petition filed under section 132(4) of the Act followed by the filing of return in response to section 153A of the Act and taxes paid thereon, then the assessee would not be invited with the levy of penalty. We find that if the argument of the learned Departmental representative that since the asses see had not offered the said income in the return filed under section 139(1) of the Act thereby levy of penalty is in order is to be accepted, then it would make the immunity provisions contemplated under section 2....
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....ns were filed by the appellant for all the years under appeal. The income as per revised returns were also accepted in toto. In the course of assessment proceedings, penal action under section271(1)(c) of the Act was initiated and, after considering the reply filed by the appellant, the learned Assistant Commissioner of Income-tax/Assessing Officer chose to levy maximum penalty under section 271(1)(c). While levying the penalty, the Assessing Officer repelled the contention of the appellant that a promise had been made not to levy the penalty, as there was no evidence to this effect on record. It was also held that the appellant was not entitled to the immunity given under section 132(4) read with section 271(1)(c) of the Act." The learned Commissioner of Income-tax (Appeals) deleted the levy of penalty under section 271(1)(c) of the Act. On second appeal by the Revenue, the Tribunal held as follows (page 210) : ". . . Although there is nothing on record to show that he was given an assurance that no penalty would be levied, the fact however clearly suggest that such an inducement must have been given by the searching party. When only partial evidence in support of concealment f....
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....rpose. However, for levying penalty, some further and stronger evidences were surely required. In the cases relied upon by the learned Departmental representative, the search itself discovered the undisclosed income. In the instant cases, the search merely led to certain clues to the undisclosed income and but for the statement made by Sri Ramesh, it would perhaps have not been possible for the Department to assess the undisclosed income over all these years in the way in which such assessments have been made. The only way for the Department in such a case would have been to assess the entire amount of undisclosed investments for the year of search as has been discussed by us above, the Department could not have been in a position to levy penalty for concealment in such a case. We are, therefore, of the opinion that the case law as cited by the Department, do not exactly support its case, so far as the present appeals are concerned. On the other hand, most of the judgments cited by the learned counsel for the assessee support the case of the assessee that on account of strong circumstantial evidences being there about inducement having been given by the Departmental authorities for....