TaxTMI 
TaxTMI 
2017 (7) TMI 1139
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....the assessee offered additional income of Rs. 83,33,375/- for assessment year 2011-12. Rs. 51,00,000/- was disclosed on account of expenditure on construction of bungalow and Rs. 32,33,375/- on account of gold jewelry. The Assessing Officer initiated penalty proceedings u/s. 271AAA of the Act. Notice u/s. 274 r.w.s. 271AAA was issued on 28-03-2013 and penalty of Rs. 16,23,180/- was levied u/s. 271AAA vide order dated 27-09-2013. Aggrieved by the order levying penalty, the assessee filed appeal before the Commissioner of Income Tax (Appeals). The Commissioner of Income Tax (Appeals) vide impugned order deleted the penalty by holding that threshold conditions for bringing the case u/s. 271AAA are not made. Now, the Revenue is in appeal before the Tribunal assailing the findings of First Appellate Authority. 3. Shri Ajay Dhake representing the Department vehemently defended the order levying penalty u/s. 271AAA of the Act. The ld. DR submitted that the Commissioner of Income Tax (Appeals) has erred in holding that additional income on which penalty was imposed does not fall under the definition of „undisclosed income‟ so as to attract penalty under the provisions of sect....
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....case cannot be said to constitute "undisclosed income" since there is nothing to indicate that it represented by any asset found or any entry either in the seized books or regular books." The assessee's submission which is also there in the penalty order at para 3 is as under "It is pertinent to note that, I have already admitted and voluntarily declared the undisclosed income of Rs. 83,33,315/- in my statement and accordingly complied the entire condition provided in subsection (2) of section 271AAA of the Act. The amount of undisclosed income assessed is part of the said disclosure only." The assessee himself is agreeing to the fact that he had undisclosed income in his submission during-penalty proceedings. In case of doubt whether there was any undisclosed income or not, the statement of the assessee u/s 132(4) may referred to while deciding on this issue. Recently, a case with such facts was decided by the ITAT CHANDIGARH BENCH in case of Shri Rajnish Vohra Vs. DCIT, in ITA number ITA No. 516/CHD/2012, held as under:- 30. Further. the provisions of Section 153A are specifically brought on the Statute book, for assessment, in case of search u/s 132(1) or requisition of....
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....T(A) and confirm the penalty order of the AO." 4. On the other hand Shri Hari Krishan appearing on behalf of the assessee vehemently supported the findings of Commissioner of Income Tax (Appeals) in deleting penalty. The ld. AR contended that during the course of search, the assessee made disclosure of Rs. 32 lakhs in respect of excess jewelry found. In the concluding statement recorded on 13-11-2010, the assessee disclosed investment to the tune of Rs. 51 lakhs in bungalow under construction. Thus, the total additional income offered by the assessee in assessment year 2011-12 was to the tune of Rs. 83,33,375/-. The ld. AR submitted that a perusal of the assessment order would show that the Assessing Officer while recording satisfaction for levy of penalty u/s. 271AAA has observed that penalty is levied for concealment of income and furnishing of inaccurate particulars of income. In the order levying penalty again the Assessing Officer has observed that he has reason to believe and conclude that the assessee has concealed his income for assessment year 2011-12. The Assessing Officer further records that in the facts he satisfied that the assessee has concealed his income for asses....
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.... The Assessing Officer may, notwithstanding anything contained in any other provisions of this Act, direct that, in a case where search has been initiated under section 132 on or after the 1st day of June, 2007 [but before the 1st day of July, 2012] the assessee shall pay by way of penalty, in addition to tax, if any, payable by him, a sum computed at the rate of 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; (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.-Fo....