TaxTMI 
TaxTMI 
2018 (12) TMI 1201
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....ceed to hear the appeals and cross-objections together taking into consideration the facts and circumstances in ITA No.1537/Kol/2017 as base and pass a common order for the sake of convenience. ITA No.1537/Kol/2017 (AY:2013-14 by the Revenue) 3. Heard both and perused the material evidence available on record. Brief facts emanating from the record are that the assessee is an individual, derives income from salary and from other sources. The assessee conducts his business in the name and style of M/s. Vishal and it is his Proprietory concern. A search and seizure operation was conducted on Agarwal Group on 13.02.2013 and on subsequent days. In the course of search & seizure operation, cash, jewellery, books of accounts, documents & other assets were found and seized. The assessee filed return of income declaring a total income of Rs. 1,00,98,240/- on 30- 09-2013. 4. During the course of scrutiny assessment proceedings, the assessee produced books of accounts alongwith documents, bank statements, evidences and filed written submission in support of its contentions and claims. Having examined the record, the AO asked the assessee to furnish the basis of calculation of u....
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.... of section 271AAB of the Act and requested to drop the penalty. Further reliance was placed on the decision of Hon'ble Supreme Court in the case of Dilip N.Shroff vs Jt.CIT reproted in 291 ITR 519 (SC) for the proposition that the imposition of penalty is not automatic and levy of penalty is not only discretionary and to be exercised by the AO. The AO considering the submissions above held that the facts of the cited judgement of Hon'ble Supreme Court does not cover the facts of the case on hand and by applying the decision of Hon'ble Supreme Court in the case of M/s Mak Data Pvt. Ltd. Vs CIT imposed penalty of Rs. 36,90,000/- @ 30% on disclosure u/s 271AAB (1) (c) of the Act. 7. We find that the assessee reiterated the same submissions before the CIT(A). Further placed reliance on the decision of Hon'ble High Court of Gujarat in the case of Girish Devchand Rajani [2013] 33 taxmann.com 174 (Gujarat) and in the case of Punjab Tyres [1986] 162 ITR 517 (Madhya Pradesh). The CIT(A) cancelled the penalty imposed by the AO u/s 271AAB(1)(c) of the Act by placing reliance in the case of Sudharsan Silk & Sarees 300 ITR 30 (SC) for the proposition that no penalty is leviable on the amoun....
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....the specified previous year declaring such undisclosed income therein; (b) a sum computed at the rate of twenty percent of the undisclosed income of the specified previous year, if such assessee - (i) in the course of 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 percent 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). (2) 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). (3) The provisions of sections 274 and 275 shall, as far as may be, apply in relation to the penalty referred to in this section." 12. On perusal of the provision u/s 271AAB ....
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....he assessing authority during the course of the assessment proceedings. provides the procedure for penalty where the search has been initiate Section 271AABed. In the present case, admittedly a search and seizure operation is carried out in which the assessees have surrendered the amount of Rs. 4 crores each (Rs.4 lakh each by all the three assessees) and therefore, in view of the provisions of Section 271AAB the assessees are required to pay, by way of, penalty in addition to tax, if any, a sum computed @ 10% of undisclosed income of the specified period or previous years. In the case where the assessee in the course of search in a statement (under Section 4 of Section 132) admits the undisclosed income and specified manner in which such income has been derived, than the provisions of Section 271AAB automatically attracts and the proceedings are to be carried out/completed. We have noticed that the penalty notice has been issued under Section 274 read with section 271. Section 274 provides that no order imposing a penalty shall be made unless the assessee has been heard or has been given a reasonable opportunity of being heard. In the instant case the penalty notice issued clearly....
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....uiries made and subsequent additions made during course of assessment proceedings. In other words, this penalty is not based upon the facts gathered during course of assessment proceeding. It is dur to this reason, in my opinion, satisfaction of the AO is not required to be recorded by AO during assessment proceedings or at the time of completion of the proceedings. Thus, initiation of the penalty after the completion of assessment proceeding is not vitiated by law. The Ld. A.Rs have also challenged that the caption of the notice mentioned only Section 271 and not 271AAB. In this respect, the copy of notice has been produced by the Ld. A.R. before me. It is seen that the Ld. A.R. is correct in observing that the section of penalty has not been correctly mentioned by the AO in the caption. However, the AO will get the benefit of section 292BB of the Income Tax Act, 1961 because firstly, the assessee has raised no objection before the AO in this regard. Secondly, last line of the notice clearly mentions section 271AAB. Thirdly, the assessee has given reply to said notice which shows that the assessee fully comprehended the implication of the notice that it is for section 271....
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....under:-[1]. Search action u/s 132 of the Income Tax Act, 1961 should be initiated u/s 132 on or after 01.06.2012; [2]. The assessee has made disclosure of undisclosed income during the course of search action, has paid the tax together with interest and has filed return of income; and [3]. The assessee substantiates the manner in which he has earned the undisclosed income and in view of the above, the order of CIT(A) is set aside. Ground No-1 raised by the Revenue is partly allowed. Thus, the order of AO is restored to the extent s indicated above. 16. In the result, the appeal of the Revenue is partly allowed. ITA No.1540/Kol/2017 (A.Y.2013-14 by the Revneue) 17. Ground No.1 raised by the Revenue in this appeal is similar to the Ground No.1 raised in ITA No.1537/Kol/2017 which was discussed in the afore-mentioned paragraphs and a view has been taken partly in favour of the Revenue, the same view is applicable to this ground also. Accordingly, Ground No.1 of the appeal raised by the Revenue in this appeal is partly allowed. 18. In the result, the appeal of the Revenue is partly allowed. C.O.No.-106/Kol/2017 (A.Y.2013-14 by the assessee) 19. The assesse....