TaxTMI 
TaxTMI 
TaxTMI 
2019 (6) TMI 756
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....the assessee has not fulfilled the conditions laid down u/s 271AAA(2)? ii) Whether on the facts and in the circumstances of the case and in law, the Hon'ble ITAT can delete the penalty when the assessee has not fulfilled the conditions laid down u/s 271AAA(2) as the assessee neither specified the manner of undisclosed income nor substantiated the manner in which the income was derived? iii) Whether on the facts and in the circumstances of the case and in law, the Hon'ble ITAT erred in confirming the order of the CIT(A) deleting the penalty by recognizing the tax paid after filing return as payment made before specified/due date?" 2. The facts giving rise to this appeal may be summarized as under : 2.1 The assessment order under Section 143(3) of the Act, 1961 was finalized on 22.02.2013 determining total income at Rs. 8,70,14,020/-. While finalizing the assessment order, the penalty proceedings under Section 271AAA of the Act also came to be initiated in respect of the admitted unaccounted income of Rs. 8,10,000,000/- for the assessment year 2011-12. The penalty of Rs. 81,00,000/- was levied under Section 271AAA of the Act. It appears from the materials on record that the....
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....ch such undisclosed income was derived, was not clearly stated by the assessee. On the other hand the A.R. has submitted that in reply to Q.No.6 of the statement of Shri Dilipbhai Ravani recorded u/s. 132(4) of the Act dated 20.01.2011, it was clearly explained that the said unaccounted income represented net taxable income of the projects undertaken by the appellant firm. The copy of the statement has also been perused by me. In the statement recorded, it has been clearly explained that the details mentioned in the dairy represented net taxable income for the projects run by the appellant. During the course of assessment proceedings, the appellant filed relevant details also in this regard. No evidences were found to prove that the appellant had earned the undisclosed income from any other source other than these projects' income. Thus, it is clearly seen from the first conditions as prescribed u/s.271AAA sub section (2) clause (i) is fulfilled in the case of the appellant as the manner of earning the undisclosed income has clearly been stated by Shri Dilipbhai Ravani, the partner of the appellant firm. 5.3 As regards clause (ii) of sub section (2), it says that the manner i....
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.... that where does this unaccounted income lies, Shri Dilip K. Ravani has replied that the unaccounted income lies in the form of receivables. We, further note that the assessee has offered the said undisclosed income of Rs. 8.10 crores in his Return of Income filed in response to notice section 142(1) and the AO has accepted the same "while making the scrutiny assessment, we also note that assessee has also paid due taxes and the interest thereon. Although the tax has been paid after filing of Return of Income, but before the assessment is made. Therefore, in the light of decision of Hon'ble Supreme Court in the case of ACIT vs. Gebilal Kanhailal (HUF) 348 ITR 561 (SC) and CIT vs. Mahendra C. Shah (supra) the tax on undisclosed income is deemed to have been paid for the purpose of immunity from the penalty u/s. 271AAA of the Act. 12. We further find that the perusal of statement on oath recoded u/s. 132(4) (placed at paper book, page 9 and 10) Shri Dilip K. Ravani in reply to question no.5 stated that the unaccounted income of all the three firms have been recorded in the diary in coded words. Shri Dilip K. Ravani has offered the said income for taxation, thus, it is seen that th....
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....h u/s. 132(4) of the Act, hence, not material. Therefore, we are of the opinion that the Ld.CIT(A) has rightly deleted the penalty levied u/s. 271AAA of the Act. In view of above backdrop, we do not find any infirmity in the order of Ld.CIT(A), hence, same is upheld. Accordingly, the ground raised by the Revenue are dismissed." 2.4 The Appellate Tribunal while dismissing the appeal preferred by the Revenue placed strong reliance on the decision of this Court in the case of Principal Commissioner of Income Tax-2 (PCIT-2) vs. Mukeshbhai Ramanlal Prajapati rendered in Tax Appeal No.434 of 2017. We take notice of the fact that in Mukeshbhai Ramanlal Prajapati (supra) the coordinate bench placed reliance on the decision of this Court in the case of Commissioner of Income Tax vs. Mahendra C. Shah reported in [(2008) 299 ITR 305 (Guj)]. 3. This appeal involves the interpretation of Section 271AAA of the Act. Section 271AAA of the Act reads thus :- Section 271AAA : (1) 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, the....