TaxTMI 
TaxTMI 
2019 (6) TMI 1121
X X X X Extracts X X X X
X X X X Extracts X X X X
....eferred to as 'Act'). 2. Briefly stated a search u/s 132 was carried out at the premises of the assessee on 11.02.2016, during the course of which the assessee had admitted and surrendered undisclosed income of Rs. 2,83,00,000/- in the statement recorded on oath u/s 132{4) of the Act. The Assessing Officer(A.O) initiated penalty proceedings on the said income u/s 271AAB of the Act . In reply to the show-cause notice issued by the AO, the assessee admitted that disclosure was made as per statement recorded u/s 132(4) of the Act, and contended that the nature and source of such disclosure was explained at the time of search as well as during the assessment proceedings. It was also submitted that the impugned income had been returned to tax....
X X X X Extracts X X X X
X X X X Extracts X X X X
....de before the lower authorities that the surrendered income was declared by the assessee in his return, taxes paid thereon, the manner of earning the same specified and, therefore, no penalty was leviable and that even otherwise penalty was not automatic. He, therefore, contended that no penalty was leviable in the present case. 4. The Ld.DR, on the other hand, heavily relied on the order of the Ld.CIT(A) and pointed out that the surrender was on account of discrepancy in stock as well as purchase/sale/issue/receipt/approval and other discrepancies as per various annexures prepared during the search. The income surrendered, therefore, represented undisclosed income as defined in the explanation to sub clause(c) below section 271AAB(3) of....
X X X X Extracts X X X X
X X X X Extracts X X X X
....losed income was derived and furnishes the return of income for the specified previous year declaring such undisclosed income therein, then the assessee shall pay penalty equal to 10% of the undisclosed income. The AO had mentioned that all these conditions are fulfilled in the case of the assessee in respect of the undisclosed income of Rs. 2,83,00,000/- surrendered as a result of search. The AR has not been able to rebut the findings of the AO during the appellate proceedings. Therefore, under the facts and the circumstances of the case and in view of the clear provisions of law, the penalty of Rs. 28,30,000/- imposed by the AO u/s 271AAB in this case @ 10% of undisclosed income as per provisions of Section 271AAB(l)(a) is found sustainab....
X X X X Extracts X X X X
X X X X Extracts X X X X
....on 271AAB (l)(a) of the Act. However, the remaining part of the penalty is ordered to be deleted." 6. The Ld.DR, therefore, contended that the Ld.CI T(A) had rightly upheld the penalty levied in the present case. 7. We have heard the rival contentions, perused the orders of the authorities below and also gone through the decision of the I TAT, Chandigarh Bench referred to before us. The issue before us relates to levy of penalty u/s 271AAB of the Act, which deals with levy of penalty in cases where search has been initiated u/s 132 of the Act, on or after the 1s t day of July, 2010. As per the said section, the assessee is liable to pay penalty on the" undisclosed income" relating to the year in which search is conducted or the year i....
X X X X Extracts X X X X
X X X X Extracts X X X X
....d income is any income represented by way of any asset or any document or transaction or any entry found not recorded before the date of search in the books of account. 10. The quantum of penalty varies from 10% to 60% depending upon the fulfillment/compliance with various conditions as specified in sub clause (a) to (c) of sub section (1) to the section as under: 271AAB. (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 July, 2012, the assessee shall pay by way of penalty, in addition to tax, if any, payable by him,- (a) a sum computed at the rate of ten per cent of th....
X X X X Extracts X X X X
X X X X Extracts X X X X
....rder in the impugned year passed u/s 143(3) of the Act as under: "2. The assessee is a company. It is maintaining books of account. The books of account were produced and examined on test check basis. In the year under consideration, the assessee has voluntarily declared an income of Rs. 2,83,00,000/- being the amount of undisclosed income in the course of search operation under the head "Income from other sources" as on account of discrepancy in the stock. After discussion, the income of the assessee is assessed at Rs. 3,06,72,760/-. As the income returned includes an amount of Rs. 2,83,00,000/- being the undisclosed income within the meaning of section 132(4) of the I.T. Act, penalty proceedings u/s 271AAB is being initi....