TaxTMI 
TaxTMI 
2016 (10) TMI 586
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.... the facts and circumstances of the case, the Ld. ACIT, CC-XIV, New Delhi grossly eared in imposing the penalty of Rs. 191,700/- u/s 158BFA (2) of the I.T, Act, 1961 which has been wrongly upheld by the Ld.CIT(A) - XXXIII. 2. That the provisions laid down in proviso 1 & 2 appended to Section 158 BFA (2) have not been properly applied. 3. That the Ld.CIT(A) has grossly erred in holding that the undisclosed income determined by the A.O is Rs. 6,62,880/- as against the addition of Rs. 3,19,475/- made by the Ld. ACIT, CC-XIV." 3. We have heard arguments of both the sides and carefully perused the relevant materials placed on the record of the Tribunal, inter alia, impugned assessment orders, penalty order, order of the CIT(A) and paper bo....
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....hall pay by way of penalty a sum which shall not be less than the amount of tax leviable but which shall not exceed three times the amount of tax so leviable in respect of the undisclosed income determined by the Assessing Officer under clause (c) of section 158BC : Provided that no order imposing penalty shall be made in respect of a person if- (i) such person has furnished a return under clause (a) of section 158BC; (ii) the tax payable on the basis of such return has been paid or, if the assets seized consist of money, the assessee offers the money so seized to be adjusted against the tax payable; (iii) evidence of tax paid is furnished along with the return; and (iv) an appeal is not filed against the assessment of that part of ....
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....f the Act can only be imposed on the amount of undisclosed income determined which is in excess of the amount of undisclosed income shown in the return filed by the assessee for the relevant block period. 8. Now, we proceed to evaluate the penalty order and First Appellate Order as to whether the penalty imposed and upheld by the CIT(A) is not sustainable. 9. First of all, we find it appropriate to consider the ratio of the decision relied by the assessee, as listed above, in the light of the facts and circumstances of the present case. In the case of CIT Vs. Harkarandas Vedpal (Supra), the Hon'ble High Court of Delhi upheld the order of the Tribunal which cancelled the penalty on the ground that the assessee himself had surrendered t....
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....ugned income on which penalty was imposed was shown in the return of income thus penalty is not leviable which is not the factum of the present case as in the present case the assessed income u/s 158BC of the Act was in excess of returned income to the tune of Rs. 3,19,475/- which certainly attracts penalty u/s 158BFA (2) of the Act. 11. He may also point out that ion the provision of Section 158 BFA (2) of the Act the word "May" has been used which shows that in the very case penalty is not mandatory but it is pure discretion of the Revenue Authorities as per facts of a particular case. In the present case, the A.O assessed taxable income u/s 158BC of the Act on five counts viz. (i) unexplained cash, (ii) expenditure incurred on the occas....
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....ted basis but was made on the premise of sound evidence found from the possession of the assessee. 13. From the penalty order is apparent that the penalty u/s 158BFA(2) has been imposed by observing that the assessee has not filed the return showing his correct income before the search and thereafter he imposed penalty on the assessed income including returned income which is not a proper approach and application of the mandate of secured proviso to Section 158BFA(2) of the Act. Since in the earlier part of this order we have observed that the penalty u/s 158BFA (2) of the Act can be imposed on the income assessed u/s 158BC of the Act which was in excess to the returned income. From the relevant operative part of the First Appellate order ....