TaxTMI 
TaxTMI 
2019 (7) TMI 1052
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....ssessment year 2011-12. 2 The Revenue has proposed the following two questions of law: "[A] Whether on the facts and circumstances of the case and in law, the Appellate Tribunal was right in deleting the penalty of Rs. 92,90,000/levied under Section 271AAA of the Income Tax Act, when the assessee failed to substantiate the manner in which undisclosed income of Rs. 9,29,00,000/was derived, though the assessee was provided opportunity to substantiate such manner during the assessment as well as penalty proceedings, which happened much after recording the statement under Section 132(4) of the Income Tax Act? [B] Whether on the facts and circumstances of the case and in law, the Appellate Tribunal was right in relying the j....
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....e Act. 7. From the copy of the statement of Shri Karshanbhai M. Prjapati recorded u/s. 132(4) of the Act (assessee paper book page 13), we observe that replying to Q. Nos. 5, 6 & 7, the assessee clearly stated the manner in which of earning such undisclosed income of Rs. 9.29 crores as derived from construction business of the appellant company in the projects namely 'Swastik Universal', which was a residential complex. Then, the condition provided in sub s. (i) of s. 271AAA(2) of the Act is satisfied as the manner of earning of undisclosed income has been clearly stated by the assessee in the statement of director of assessee company recorded u/s. 132(4) of the Act. It is also not in dispute that the assessee has shown surrend....
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.... income was derived. Therefore, ratio of the decision of Hon'ble High Court of Gujarat in the case of Mahendra C. shah (supra) and recent decision dated 14.09.2015 in Tax appeal No.565/2015 in the case of PCIT vs. Geeta Prints Pvt. Ltd. (Guj), as vehemently relied by the ld. AR supports the contention and explanation of the assessee and respectfully following the same, we declined to accept stand and observations of the AO in imposing penalty u/s. 271AAA of the Act. At the same time, we further observe that the ld. CIT(A) was right in cancelling the penalty by following decision of Hon'ble Jurisdictional High Court and hence, conclusion drawn ld. First appellate authority in the impugned order is upheld. Consequently, grounds of Rev....
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....shbhai Ramanlal Prajapati reported in [2017] 398 ITR 170 (Guj) dealing with Section 271AAA of the Act. We quote the relevant observations made by this Court as follows: "It can thus be seen that this Court in case of Commissioner of Income Tax vs. Mahendra C. Shah and Allahabad High Court in case of Commissioner of Income Tax vs. Radha Kishan Goel (supra) have put considerable stress on the recording of the statement under section 132(4) of the Act in the context of the requirement of the assessee to disclose the manner in which the undisclosed income was derived in order to avoid penalty. The High Court in case of Commissioner of Income Tax vs. Mahendra C. Shah, in particular, observed that considering the social environment, it i....
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....he manner in which such income has been derived; (ii) substantiates the manner in which the undisclosed income was derived; and (iii) pays the tax, together with interest, if any, in respect of the undisclosed income." 13. Sub section (2) of Section 271AAA thus while retaining the other requirements of avoiding penalty as provided in clause (ii) of Explanation 5 has now introduced an additional requirement of the assessee having to substantiate the manner in which, the undisclosed income was derived. It is this requirement which the counsel for the Revenue would place great emphasis on. According to her, onus is now entirely shifted on the assessee not only to make a disclosure of the undisclosed income but also t....