TaxTMI 
TaxTMI 
2019 (12) TMI 38
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....passed by Ld. Commissioner of Income Tax (Appeal)-48, Mumbai on following amongst other grounds each of which are without prejudice to any other: - 1.0 On facts and circumstances of the case and in law, Ld. CIT(A) erred in confirming the Penalty under section 271AAB of Rs.7,95,000/- @ 10% of Rs.79,50,000/- on ignoring the fact that no search under section 132 was initiated against the appellant; 2.0 The levy of Penalty under section 271AAB confirmed by Ld. CIT(A) of Rs.7,95,000/- is erroneous since the notice under section 274 was issued in mechanical manner without framing a specific charge of the undisclosed income; 3.0 The levy of penalty is erroneous since Ld. AO had not recorded the satisfaction while initiating the Penalty under section 271AAB of the Act; 4.0 The Ld. CIT(A), before confirming the Penalty under section 271AAB, ought to have considered the bonafide explanation and existence of debate under which circumstances the levy of Penalty Under section 271aAAB is bad in law." 3. At the outset, the learned Counsel of the assessee stated that the provisions of Section 271AAB of the Act are not at all applicable to the assessee. Hence,....
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....Accordingly, the penalty u/s 271AAB is computed in understand manner: - a) Penalty u/s 271AAB(1)(a) @ 10% on undisclosed income of Rs.79,50,000/- offered by the assessee during search in statement under section 132(4) and disclosed in return of income Rs.7,95,000/- Total Penalty u/s271AAB Rs. 7,95,000/- 4. Aggrieved, assessee preferred the appeal before CIT(A). Before CIT(A), the assessee contended that the penalty levied by AO under section 271AAB of the Act is without any provision and there was no search conducted on the assessee under section 132 of the Act but the CIT(A) noted that there is no need for levy of penalty under section 271AAB of the Act that search warrant should be in the name of the assessee. The CIT(A) admitted that there is no search warrant in the name of the assessee or no search is conducted in the case of assessee but the requirement for levy of penalty under section 271AAB of the Act is fulfilled for the reason that a statement under section 132(4) of the Act was recorded admitting undisclosed income. The CIT(A) dismissed the ground raised by assessee by observing in Para 5.2 as under: - "5.2 Ground No2: This ground is....
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.... the clear provisions of section 271AAB (1) because the opening words are that the AO may direct that in case where search has been initiated under section 132 of the Act, the assessee shall pay by way of penalty in addition to tax, if any, payable by him. That means that the primary condition for levy of penalty under section 271AAB of the Act is that a search should have been initiated under section 132 of the Act in the case of the assessee. But in the present case the search was initiated in the case of Shri Chandrakant Gawde on 08.11.2012 and no search warrant was issued under section 132 of the Act in the name of the assessee. Hence, very initiation and levy of penalty under section 271AAB of the Act is bad and illegal. 6. On the other hand, the learned Sr. DR heavily relied on the orders of the lower authorities. 7. We have heard the rival contentions and gone through the facts and circumstances of the case. We noted that the search was initiated in the case of Shri Chandrakant Gawde on 08.11.2012 by issuing warrant under section 132 of the Act and no search warrant was issued under section 132 of the Act in the name of the assessee. We noted that there is no search co....
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....oke sec. 153C proceedings against the assessee. In such a scenario, we find force in the challenge raised by the assessee that without search being initiated u/s. 132 of the Act against the assessee, penalty provisions envisaged in sec. 271AAB of the Act cannot be initiated against the assessee. A perusal of the heading to the provision of sec. 271AAB reads as "penalty where search has been initiated" and on further perusal of the provision of section 271AAB it reveals about the assessee's disclosure by statement u/s. 132(4) about any undisclosed income in the course of search. Admittedly, in the present case, there has been no search u/s. 132 of the Act. Search happened in the case of Ghanshyam Misra Group of cases on 16.10.2012 and admittedly there was survey proceeding u/s. 133A on 16.10.2012 against the assessee company. We note that the AO has not initiated any 153A proceeding pursuant to the search and in case if the assessee had been search u/s. 132 of the Act, then proceedings u/s. 153A of the Act should have been initiated against the assessee. In this case, from a perusal of the notice reveals that the AO has initiated 153C proceedings against the assessee. In th....