TaxTMI 
TaxTMI 
2018 (10) TMI 1757
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....e penalty of Rs. 2,00,00,000/- imposed u/s. 271AAA of the Act, 1961, ignoring the fact that the assessee has not satisfied the conditions laid down in section 271AAA(2)(ii) of the Act. 2. The ld. CIT(A) has not appreciated that the section 271AAA(2) casts the onus on the assessee to admit, specify and substantiate the undisclosed income and pay tax and interest thereon. The Income Tax Act does not cast the onus on the Assessing Officer to establish the source of unaccounted income. 3. We have heard the arguments of both sides and carefully perused the relevant material placed on the record of the Tribunal. The ld. CIT-DR submitted that the ld. CIT(A) has erred in law and on facts in deleting the penalty of Rs. 2,00,00,000/- imposed u/s. 271AAA of the Act, 1961, ignoring the fact that the assessee has not satisfied the conditions laid down in section 271AAA(2)(ii) of the Act. He further contended that the ld. CIT(A) has not appreciated that the section 271AAA(2) casts the onus on the assessee to admit, specify and substantiate the undisclosed income and pay tax and interest thereon. The Income Tax Act does not cast the onus on the Assessing Offic....
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....undisclosed income. Therefore, undisputedly condition of clause (iii) of sub section (2) of s. 271AAA of the Act has been complied with by the assessee. In this situation, we hold that benefit of the ratio of the order of ITAT, Pune in the case of Shailesh Gopal Mhaske 167 ITD 344 (Pune-Trib.) as relied by the ld. CIT-DR, is not available for the Revenue as in that case assessee has not paid tax on the undisclosed income. Therefore, in that case the Tribunal declined to grant immunity from the penalty u/s. 271AAA of the Act as in the present case the assessee has paid due taxes etc. on the undisclosed income surrendered during the statement u/s. 132(4) of the Act thus, assessee is entitled to get immunity from penalty on complying with the condition and requirement of clause (iii) of sub section (2) of s. 271AAA of the Act. 7. Furthermore, we proceed to adjudicate as to whether the assessee has complied with the conditions as provided in clauses (i) & (ii) of sub section (2) of s. 271AAA of the Act, and it is entitled for immunity from imposing of penalty u/s. 271AAA of the Act. First of all, we find it appropriate to reproduce the relevant part of first appell....
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.... where search has been initiated under Section 132 on or after the Is' day of June, 2007 [but before the 1st day of July 2012] the assessee shall pay by way of penalty, in addition to tax, if any, payable by him, a sum computed at the rate often per cent of the undisclosed income of the specified previous year. [2] Nothing contained in sub section [1] shall apply if the assessee- i) in the course of the search, in a statement under sub section [4] of Section 132, admits the undisclosed income and specifies the 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. Perusal of Section shows that to avail exemption from penalty u/s. 271 AAA, the assessee has to fulfill three pre-requisites as mentioned in sub section [2]. In the case of appellant, additional Income is stated to have been earned by the appellant as on money received from its project i.e. RT&U wing of RKT market. It was stated that the appellant group has constructed Radha Kishan Textile Market as well as Projec....
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....ubsequently, that will amount to the compliance of explanation 5[2] of Section 271(1)(c). In absence of any specific statement about manner of earning income, it can be inferred that undisclosed income was derived from business which he was carrying on or from other sources. The objection of provision is achieved by making statement admitting non disclosure of money, bullion, jewelry, etc. [Radhakishan Goya! 278 ITR 454 - Alld .H.C.] It is seen that the judgements of Mahendra C Shah and Radhakishan Goyal both were delivered in the context of Section 271(1)(c) explanation 5[2] but the provisions are akin to Section 271AAA[2], There are various other court decisions also which support this view that-if assessee declares voluntarily, additional income during the statement u/s. 132[4j and states the manner of earning said income supported by identified assets and taxes along with interest paid thereon, the conditions of Section 271AAA[2] will be treated as fulfilled and penalty u/s. 271AAA shall not be leviable for e.g. i) Sulochanadevi A Agarwai !TA No. 1052/Ahd/2012. ii) ITO V. Shilpaben ....
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....h interest, it is observed that it is not in dispute as the A.O. himself has admitted in the penalty order that the taxes along with the interest have been paid by the appellant properly. Thus, taking into account, the entire facts and circumstances of the case as well as the legal position, I am of the view that the A.O. was not justified in levying the penalty u/s. 271AAA. The same is directed to be deleted. The appellant gets relief." 8. In view of above conclusion drawn by the ld. first appellate authority, we observe that the ld. CIT(A) has followed ratio of the decision of the decision Hon'ble Jurisdictional High Court in the case of Mahendra C. Shah (supra), wherein following the ratio of the decision of Hon'ble Allahabad High Court in the case of CIT v. Radhakishan Goel 278 ITR 454 (All), it was held that the statement is being recorded in the question and answer form and there would be no occasion for an assessee to state and make averments in the exact format stipulated by the provision of sub section (2) of s. 271AAA of the Act. 9. In the present case, the disclosure was made in the statement of Shri Jerambhai Patel, a promine....