AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2017 (7) TMI 773
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....s deleted by the CIT(A). 2. Briefly stated, the assessee is an individual engaged in the business of manufacturing and trading of textiles. A search action under s.132 of the I.T.Act was carried out on 11/03/2010 in the case of assessee. During the course of search, the assessee admitted an unaccounted income of Rs. 2 crores and included the aforesaid unaccounted income while filing the return of income pursuant to notice under s.153A of the Act. The income returned at Rs. 2,21,69,566/- under s.153A of the Act was assessed at the same figure and penalty under s.271AAA was imposed by the Assessing Officer (AO) for AY 2010-11 vide order dated 29/05/2012 on the ground that conditions specified in section 271AAA for exoneration from penalty ha....
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....ten per cent of the undisclosed income of the specified previous year. (2) Nothing contained in sub-section (1) shall apply if the assessee,- (i) in the course of the search, in a statement under sub-section (4) of section 132. admits the undisclosed income and specifies the manner in which such income has been derived; (i) 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." 6.1 In the case of the appellant, it is seen that the undisclosed income of Rs. 2 crore was admitted during the course of search and it was mentioned by the assessee in his statement that it was earned from taxable business. It was also admitte....
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.... manner in which the income is derived, if the income is declared and the tax thereon is paid, there would be substantial compliance not warranting any further denial under Exception 2 of Explanation 5. It is also noticed that the spirit of ratio of Hon'ble High Court in the case of Mahendra C.Shah, is clear and by analogy, the penalty u/s.271AAA is not leviable in the ease of the appellant as the facts in the instant case are applicable all the more, applying with the exemption provisions of sub section (2) of section 271AAA. b) There are few more court decisions where the Hon'ble courts have held that - i) Sulochanadevi A. Agrawal (ITA No. 1052/Ahd/2012) In this case, the assessee had voluntarily disclosed a sum of Rs.....
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....d by the assessee. The assessee failed to satisfy the pre-requisites laid down in section 271AAA(2) and therefore the assessee is not eligible to claim exception from penalty under the aforesaid provision. 7. The Ld.AR, on the other hand, relied upon the order of the CIT(A) and decision of the Co-ordinate Bench of the Tribunal in ITA No.1147/Ahd/2012 order dated 6/11/2015. The Ld.AR submitted that no specific question has been put in the statement recorded under s.132(4) about the manner in which the undisclosed income has been derived. The so-called undisclosed income as per statement under s.132(4) of the Act was included in the return of income and taxes due thereon has been paid along with return of income. Therefore, there is no warra....
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....one of the conditions for obtaining relief from the imposition of penalty under s.271AAA is that the assessee in the statement recorded under s.132(4) of the Act admits the undisclosed income and 'specifies the manner' in which such income has been derived. Section 271AAA(2)(ii) casts obligation on the part of the assessee to 'substantiate the manner' in which the undisclosed income was derived. Thus, sub-section (2)(ii) finds its genesis from sub-section 2(i) of the Act. Admittedly, the Revenue is not aggrieved by the condition stipulated in sub-section 2(ii) of the Act. Impliedly, the Revenue admits that the assessee has not failed to substantiate the manner in which the undisclosed income derived. This being so, it follows by necessary i....