TaxTMI 
TaxTMI 
2019 (3) TMI 810
X X X X Extracts X X X X
X X X X Extracts X X X X
....ct, 1961, without considering the facts and circumstances of the case. 2)On the facts and circumstances of the case as well as in Law, the Learned CIT(A) has erred in confirming the action of Learned Assessing Officer erred in levying a penalty of Rs. 86,85,000/- U/s 271AAB of the Income Tax Act,1961,being 30 of the additional income of Rs. 2,89,50,000/-- without considering the facts and circumstances of the case. 3)On the facts and circumstances of the case as well as in Law, the Learned CIT(A) has erred in confirming the action of Learned Assessing Officer erred in Levying a penalty of Rs. 86,85,000/- -on the alleged plea that the assessee could not specify and substantiate the manner in which the undisclosed income has been arrived ,without considering the facts and circumstances of the case. 4)On the facts and circumstances of the case as well as in Law, the Learned CIT(A) has erred in confirming the action of Learned Assessing Officer has erred imposing a penalty of Rs. 86,85,000/- without appreciating the fact that the quantum of penalty imposed by him is not in accordance with the provision of section 271 AAB of the Income Tax Act, 1961, without c....
X X X X Extracts X X X X
X X X X Extracts X X X X
....losed income has been accepted by the assessee during the course of search and duly offered to tax in the return of income along with paying due taxes. However, Ld. CIT(A) did not find any merits in the contentions of the assesee and sustained the finding of Ld. A.O thereby confirming the penalty of Rs. 86,85,000/- imposed u/s 271AAB of the Act. 5. Now the assessee is in appeal before the Tribunal raising various grounds but the sole grievance both on legal as well as merits is against the levy of penalty of Rs. 86,85,000/- u/s 271AAB of the Act. 6. Ld. Counsel for the assessee challenging the legality of proceeding initiated u/s 271AAB of the Act referring to the provisions of 271AAB of the Act made following written submissions; "That from the provision of Section 271AAB of the Act it is evident that the necessary ingredients for imposition of penalty u/s 271AAB are: a. Search after 1.7.2012 1. A penalty @10% or20% or 30% of the undisclosed income of the specified previous year. (underlined to supply emphasis) Explanation: (b) Specified previous year means the previous year- (i) which has ended before the date o....
X X X X Extracts X X X X
X X X X Extracts X X X X
....53A of the Act return of income was filed on 28.1.2014 including the surrendered income of Rs. 2,89,50,000/- thereby showing the total income of Rs. 2,89,93,775/-. This income was accepted by the Ld. A.O as assessed income. After assessing the income u/s 153A r.w.s. 143(3) of the Act for Assessment Year 2012- 13 accepting the return of income as assessed income at Rs. 2,89,93,780/-, penalty proceedings u/s 271AAB were initiated and after giving due opportunity to the assessee penalty of 30% was levied u/s 271AAB of the Act. Now the assessee has challenged the levy of penalty by raising four grounds. 10. Through Ground No.1 and 4 Ld. Counsel for the assessee has pleaded that in the given facts of the case provisions of Section 271AAB cannot be invoked instead Ld. A.O ought to have initiated the penalty proceedings u/s 271(1)(c) of the Act. In other words legality of the provisions u/s 271AAB of the Act has been challenged and in the remaining Ground No.2 & 3 assessee has challenged the levy of penalty @30% by contending that assessee has duly substantiated and specified the manner in which the undisclosed income has been arrived. 11. We will first take up Ground No. 1 & 4 chal....
X X X X Extracts X X X X
X X X X Extracts X X X X
....n- (a) "specified date" means the due date of furnishing of return of income under sub-section (1) of section 139 or the date on which the period specified in the notice issued under section 153A for furnishing of return of income expires, as the case may be; (b) "specified previous year" means the previous year- (i) which has ended before the date of search, but the date of furnishing the return of income under subsection (1) of section 139 for such year has not expired before the date of search and the assessee has not furnished the return of income for the previous year before the date of search; or (ii) in which search was conducted; (c) "undisclosed income" means- (c) 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 s....
X X X X Extracts X X X X
X X X X Extracts X X X X
....nished its Income Tax Return on 13.9.2012 i.e. before the date of search. This return of income was e-filed by the assessee showing income of Rs. 43,775/-. Thus we can safely conclude that the assessee does not fall under category (i) of the specified previous year. What remains is category(ii) i.e. the year in which search was conducted i.e. Assessment Year 2013-14 as the date of search was on 21.09.2012 falling under financial year 2012-13. But the penalty proceedings u/s 271AAB of the Act have been initiated by the Ld. A.O for Assessment Year 2012-13 which in our considered view was not a correct step. 15. It seems that Ld. A.O has wrongly invoked the provisions of Section 271AAB of the Act for Assessment Year 2012-13 but the situation may have been different and much favourable to the Revenue if the Assessing Officer had invoked provisions of Section 271(1)(c) of the Act which gives power to the Assessing Officer to levy the penalty u/s 271(1)(c) of the Act in the case falling under explanation 5A of Section 271(1)(c) of the Act which reads as follows; Explanation 5A.- Where, in the course of a search initiated under section 132 on or after the 1st day of June, 2....