TaxTMI 
TaxTMI 
TaxTMI 
2019 (3) TMI 1305
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....n a tacit assurance of immunity from penalty by Sh. Gaurav Dudeja, the then DDIT while recording the appellant's statement u/s 132(4). 2. That the Ld. A.O. has further erred in law as well as on facts in initiating and imposing penalty u/s 271 AAA of the I.T. Act when the appellant has fulfilled all the three conditions as contained in section 271AAA(2) of the Income tax Act, 1961 as under: (i) in the course of the search the assessee has made a statement under section 132(4), admitted the undisclosed income and specified the manner in which such income has been derived and has declared undisclosed income of Rs. 20 crores. (ii) That the assessee has substantiated the manner in which the undisclosed income was derived. (iii) That the assessee has paid the tax, together with interest, in respect of the undisclosed income. 3. That the Ld. A.O. has erred in law as well as on facts in imposing Penalty of Rs. 2,00,00,000 u/s 271 AAA and the Ld. CIT(A) further erred in law as well as on facts in dismissing the appeal based on incomplete and wrong information that total payment of taxes in respect of A.Y. 2011-12 is Rs. 34249900 against the net amount of tax payable at Rs. 820110....
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....otice on 25/3/2013 requiring him to explain why penalty should not be imposed. The assessee did not file any reply. Therefore further opportunity was granted, assessee submitted written reply on 3/9/2013 stating that in the course of search in the statement u/s 132 (4) assessee admitted the undisclosed income and specified the manner in which such income has been derived. It is also substantiated the manner in which the undisclosed income was derived. The assessee has also paid the tax altogether with interest in respect of the undisclosed income before assessment. Further the returned income has been accepted without making any addition and assessee has fully cooperated during the search and after the search, therefore, no penalty should be levied. The learned assessing officer rejected the explanation of the assessee and stated that during the course of search the undisclosed income to the tune of INR 200,000,000 was found which was disclosed by the assessee in the statement recorded u/s 132 (4) of the act but has not paid the full tax together with interest in respect of such undisclosed income till the due date of filing the return, therefore, the assessee is liable for levy o....
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....sessee and the tax on the surrendered income along with the interest is required to be paid immediately and in any case, before the due date of filing of return. Therefore he confirmed the penalty levied by the learned AO as in the present case the due taxes along with the interest has not been paid by the appellant up to the date of filing of return of income and hence the assessee cannot avail the immunity. The assessee aggrieved with the order of the learned CIT - A has preferred an appeal before us. 6. The learned authorised representative submitted that penalty of INR 20,000,000 has been levied wrongly on the assessee. He submitted that on 25/4/2017 an order under section 154 of the income tax act 1961 was passed by the learned assessing officer wherein it was stated that the cash seized of INR 12,100,000 was adjusted on 10/6/2013 and therefore the interest u/s 234B and other consequential interest should be reduced to that extent. Such mistake was rectified and according to that net tax payable was a refund of INR 4739869/-. He therefore submitted that it is apparent that the whole tax has been paid by the assessee before the levy of the penalty. He also stated that in the a....
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.... for which was required to be filed on or before 30/9/2011, assessee filed its return of income on 20/9/2012 and the assessment u/s 143 (3) of the act was passed on 25/3/2013. Up to 30/09/2011, i.e. due date for filing of the return of income, as stated by the learned CIT - A, assessee did not deposit the cheques of the tax. Therefore on the disclosure, the tax was not paid before the due date of filing of the return, hence, penalty was levied. Here the total disclosure of INR 200,000,000 was made and the penalty levied is also of INR 20,000,000 being 10% of the total disclosure. 9. The provisions of section 271AAA provides that where the search has been initiated u/s 1324 after 01/06/2007 but before 01/07/2012, assessee shall pay by way of a penalty in addition to tax payable by him a sum computed at the rate of 10% of the undisclosed income of the specified previous year. In the present case the search has been initiated on 18/1/2011 therefore the provisions of this section are applicable. Assessee gets immunity from payment of the above penalty if it satisfies all the following conditions as contained in subsection (2), a. he admits the undisclosed income and specify the man....
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.... of concealment. The Court then said: "It provides that where, in the course of search under Section 132, the assessee is found to be the owner of unaccounted assets and the assessee claims that such assets have been acquired by him by utilizing, wholly or partly, his income for any previous year which has ended before the date of search or which is to end on or after the date of search, then, in such a situation, notwithstanding that such income is declared by him in any return of income furnished on or after the date of search, he shall be deemed to have concealed the particulars of his income for the purposes of imposition of penalty under Section 271(1)(c). The only exceptions to such a deeming provision or to such a presumption of concealment are given in Sub-Clauses (1) and (2) of Expln. 5. In this case, we are concerned with interpretation of Clause (2) of Expln. 5, which has been quoted above. Three conditions have got to be satisfied by the assessee for claiming immunity from payment of penalty under Clause (2) of Expln. 5 to Section 271(1)(c).The first condition was that the assessee must make a statement under Section 132(4) in the course of search stating that the una....
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....of income to be furnished before expiry of time specified in Section 139(1). The second condition for availing of the immunity from penalty under Section 271(1)(c) is that the assessee should specify, in his statement under Section 132(4), the manner in which such income stood derived. The revenue contended Gebilal Kanhaialal's case (supra) that though the second condition stood satisfied, the third condition was not sought. It urged that the assessee was not entitled to immunity under Clause (2) as he did not satisfy the third condition for availing the benefit of waiver of penalty under Section 271(1)(c) as he failed to file his return of income on 31st July, 1987 and pay tax thereon particularly when the assessee conceded on 1st Aug., 1987 that there was concealment of income. The third condition under Clause (2) was that the assessee had to pay the tax together with interest, if any, in respect of such undisclosed income. The court held that no timelimit for payment of such tax stood prescribed under Clause (2) and that the only requirement stipulated in the third condition was for the assessee to "pay tax together with interest". It was held in Gebilal Kanhaialal's cas....