TaxTMI 
TaxTMI 
TaxTMI 
2018 (12) TMI 581
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.... declaring income of Rs. 67,00,210/-. Subsequent to the search, in response to notice u/s 153A of the Act dated 07.10.2014, the assessee filed its return of income for Assessment Year 2013-14, almost 1 ½ years later, on 01.03.2016 declaring income of Rs. 1,81,47,740/-, which included undisclosed income of Rs. 1,31,50,000/-, admitted in the course of search. The assessment was completed u/s 153A r.w.s. 143(3) of the Act vide order dated 29.03.2016 wherein the assesseee's income was determined at Rs. 1,94,23,586/-. While completing the order of assessment for Assessment Year 2013-14, the Assessing Officer ('AO') initiated penalty proceedings u/s 271AAB of the Act on the amount of undisclosed income of Rs. 1,31,50,000/- admitted by the assessee on the basis of incriminating documents found in the course of search. After considering the assessee's submissions in the matter, the AO proceeded to levy penalty of Rs. 39,45,000/- u/s 271AAB(1)(c) of the Act, being 30% of the undisclosed income, holding as under at para 9 and 10 of his order: "It is no doubt that undisclosed income has been unearthed during the course of search proceedings. Therefore, levy of penalty u/s 271AAB is a....
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....of S. 271AAB(1)(c). In the case under consideration, the appellant had come forward to offer additional income voluntarily and had affirmed the same through his letter addressed to the JDIT, Investigation Unit-2, Bengaluru vide its order dated 10/07/2014. It had also declared the mode and method by which the undisclosed income was earned and the form in which it is thereafter invested. The quantum of additional income to be offered was also computed and declared before the Investigation Unit. The appellant had not retracted the quantum thereafter and had affirmed by it while filing the ROI in response to Notice u/s 153A for AY. 2013-14 and u/s 139(1) for A.Y. 2014-15. 12.2 Since the appellant had submitted his declaration and Section 132(4) before the conclusion of search proceedings, that is before drawing the appraisal report, and while the appellant had stood firmly without any subsequent modification or retraction to the declaration made, it has to be construed that such declaration is covered by the provisions of Section 132(4) and therefore it is found that the condition laid down u/s 271AAB(1)(a)(i) and 271AAB(1)(a)(ii) are satisfied. 12.3 Though the ROi for the A.Y. 201....
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....ase and therefore the order was correct. 2. The Hon'ble CIT(A) was right in considering the plea of the Respondent, that having fulfilled the condition laid down u/s 271AAB for levy of 10% penalty, by admitting the undisclosed income and also specifying the manner in which the same was derived in the Statement u/s 132(4), made during the course of the Search, substantiating the manner in which the same was derived and paying the tax together with interest and furnishes the return of income for the specified year declaring such income. 3. The Hon'ble CIT (A) having appreciated the fact that the Respondent fulfilled the condition laid down u/s 271B of the Income-tax Act 1961 and was therefore liable only for penalty of 10% of the undisclosed income. 4.1 We have heard the rival contentions and perused and carefully considered the material on record in respect of the imposition of penalty u/s 271AAB of the Act for Assessment Year 2013-14. The relevant facts of the matter, as emerge from a perusal of the record, are that there was a search action u/s 132 of the Act conducted at the assessee's premises on 20.30.2014 and 08.04.2014; in the course of which the assessee admitte....
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....n of income for the specified previous year declaring such undisclosed income therein; (b) a sum computed at the rate of twenty per cent of the undisclosed income of the specified previous year, if such assessee- (i) in the course of the search, in a statement under sub-section (4) of section 132, does not admit the undisclosed income; and (ii) on or before the specified date- (A) declares such income in the return of income furnished for the specified previous year; and (B) pays the tax, together with interest, if any, in respect of the undisclosed income; (c) a sum which shall not be less than thirty per cent but which shall not exceed ninety per cent of the undisclosed income of the specified previous year, if it is not covered by the provisions of clauses (a) and (b)." 4.4 In the case on hand, the AO, after considering the assessee's submissions, levied penalty of Rs. 39,45,000/- u/s 271AAB(1)(c) of the Act @ 30% of the undisclosed income of Rs. 1,31,50,000/-. The AO was of the view that penalty u/s 271AAB(1)(c) of the Act was attracted, since the assessee had neither furnished the return of income for Assessment Year 2013-14 in response to notice u/s 153A of t....