TaxTMI 
TaxTMI 
2016 (11) TMI 1434
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....In this case, a search action u/s. 132 of the act was carried out at the premises of the assessee on 15th September, 2010. During the course of search, various materials were found and seized, therefore, proceedings u/s. 153A of the Act was initiated for Assessment Year 2004-05 to 2009-10. The assessee is engaged in the business of travel agent and broker. After verification, the total income was determined at Rs. 2,72,04,430/- by the Assessing Officer. Since the assesse has made disclosure of unaccounted income, therefore, the AO initiated penalty u/s. 271AAA of the act. The Assessing Officer observed that in the return of income assessee had offered income to the tune of Rs. 2,72,04,430/- but no tax was paid on the said income. In consequent the AO has issued a show cause notice for furnishing of explanation to why penalty u/s. 271AAA should not to be levied. The assessee has submitted his explanation to the show cause notice of the Assessing Officer which is reproduced under:- "a I have been served with your above notice requiring me to show cause as to why the penalty u/s. 271AAA of the Income tax Act, 1961 should not be levied for the assessment year under considerati....
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....d income The Assessing Officer observed that assessee was not eligible and immunity is available to the assessee if all the above conditions are cumulatively fulfilled. He also stated that in the present case in the statement recorded u/s. 132(4), assessee had admitted a sum of Rs. 60 lacs as his unaccounted income whereas such disclosure of unaccounted income was worked out to Rs. 272.4 lacs in the return of income filed by the assessee. Further, this immunity is available where he specifies the manner in which such income has been earned. In the statement recorded under section 132(4),the assessee had never specified in the manner in which such income has been earned. The AO further stated that such immunity is only available where the tax along with interest on undisclosed income offered is paid, however, the assessee had not paid the tax along with the interest even till the this penalty order was passed. Therefore, the Assessing Officer has levied penalty of Rs. 27,20,443/- @ 10% of the undisclosed income of the specified previous year. 5. Aggrieved against the order of the Assessing Officer, the assessee filed appeal before the ld. Commissioner of Income Tax(A). The Ld.....
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....arch in the books of account or other documents maintained in the normal course or otherwise not disclosed to the CCIT / CIT before the date of search ii) False or bogus expenses claimed, detected as a result of search: which are recorded in the books of accounts or other documents maintained in the normal course. From the bare reading of provisions of S.271AAA, it is clear that S.271 AAA is applicable with respect to "undisclosed income" of the "specified previous year"" in respect of an where search has been initiated u/s. 132 on or after 1st day of June, 2007. Penalty provisions in the case of search initiated under section 132 on or after 1st June, 2007, with respect to the "undisclosed income" of the "specified previous year" i.e. year of search and immediately if due date of filing of return has not expired and income tax return for such year has not filed, are contained and governed by 271 AAA. Thus, provisions of section 271AAA are applicable with respect to "undisclosed income" of the "specified previous year" only. Depending upon the on which is conducted, "specified previous year" shall be the year of search only in some whereas in other cases, one more year ....
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....here is a gap of only 40-45 days and this much time is definitely required by any to go through the material thoroughly and to calculate the quantum of undisclosed income on the of material. Further, the disclosure has not been enhanced by the appellant because of any queries and further investigation from the side of the Department, it is purely voluntary enhancement of disclosure by the appellant and this fact has also not been challenged by the AO in the assessment order. In the letter did. 30-11-2009 also, the appellant has clearly stated in point No.6 that this letter should be treated as forming part of the statement recorded u/s 132(4) of the Act. In view of all the above discussed facts, it is held that the appellant has satisfied the first condition specified in section 271 AAA of the Act. 6.3 So far as the manner of earning of the said undisclosed income and substantiating the same is concerned,! agree with the AO that the appellant in the statement recorded u/s 132(4) of the Act has not specified the manner of earning such income and has not substantiated the same as well. However, so far as specifying and substantiating the manner in which income has been earned i....
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.... 6.4 Now coming to the third condition of tax payment, the details of tax payable and paid are as below: Particulars Amount (Rs.) Total Tax & Interest payable 91,13,090/- Taxes paid 36,47,878/- Tax payable till date 54,65,212/- From the above, it can be seen that even till date the appellant has not paid the entire tax payable on the unaccounted income disclosed in the return. The reliance of the appellant on various judicial pronouncements mentioned above is not relevant as in all those cases the entire tax and interest was duly paid either before the completion of assessment or before the conclusion of the impugned penalty order. As against this, in the case of the appellant, even till date i.e. after 4 years of search, the taxes have not been fully paid by the appellant. Clearly, the third condition specified in section 271AAA has not been fulfilled by the appellant. Therefore, the appellant is not eligible for immunity u/s 271AAA of the Act. The request of the appellant to give proportionate relief is unacceptable since there is no such provision in the statute for allowing proportionate relief from the p....
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....2) 14 ITR (Trib) 608 (Kol) wherein it was held that once the entire tax and interest has been duly paid within well before the conclusion of the impugned penalty proceedings, the assessee cannot be denied immunity u/s. 271AAA. The learned counsel has also requested for proportionate relief from the penal provision. The learning Counsel contended that to pay the outstanding demand the Commissioner of income tax was requested vide letter dated 11.10.2011 to appropriate the seized cash of Rs. 1350,000 towards outstanding tax demand. He further stated that the Commissioner of income tax was also requested vide letter dated 24.03.2011 to release the original documents of two plots to consider for sale by the assessee to pay the outstanding tax demand. He further added that his request was not acceped for release of property documents .He further stated thatr the assessee has made payments of outstanding Demand of Rs. 20 lacs vide cheque dated 24 March 2011 and paid Rs. 25 lacs vide cheque dated 15th September 2013, and further made payment of Rs. 5, 22, 353 on 20th May 2016. 7. He contended that since the assessee had liquidated the demand he would be entitled for immunity from the p....
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.... (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 represented, either wholly or partly, by any money, bullion, jewellery or other valuable article or thing or any entry in the books of account or other documents or transactions found in the course of a search under section 132, which has-- (A) not been recorded on or before the date of search in the books of account or other documents maintained in the normal course relating to the assessee in the harvest the disclosure of Rs. 60 lakh such previous year; or (B) otherwise not been disclosed to the Chief Commissioner or Commissioner before the date of search; or (ii) any income of the specified previous year represented, either wholly or partly, by any entry in respect of an expense recorded in the books of account or other documents maintained in the normal course relating to the specified previous year which is found to be false and would not have been found to be so had the search not been conducted; (b) ....