TaxTMI 
TaxTMI 
2020 (1) TMI 287
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....ection 271AAB was applicable as the appellant had not filed the return of income within time prescribed but had paid tax as payable. 4. That the appellant reserves the right to add , alter or take fresh ground either before or during the course of hearing. 3. From the above grounds it is gathered that only grievance of the assessee relates to the sustenance of penalty of Rs. 57,00,000/- levied by the A.O. under section 271AAB of the Income Tax Act, 1961 (hereinafter referred to as 'Act'). 4. Facts of the case in brief are that a search and survey operation under section 132(1) of the Act was conducted on 31/10/2012 on the business and residential premises belonging to the assessee. During the course of assessment proceedings the A.O. noticed that the assessee at the time of search admitted an undisclosed income of Rs. 1.90 Crores under section 132(4) of the Act, he therefore initiated the penalty proceedings under section 271AAB of the Act. In response the assessee submitted that he had filed an appeal before the Ld. CIT(A), therefore the penalty may be kept in abeyance till the disposal of the appeal. The A.O. observed that the assessee had not substantiated the manner and mod....
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....132 on or after the 1st day of July, 2012, the assessee shall pay by way of penalty, in addition to tax, i f any, payable by him,- (a) a sum computed at the rate of ten per cent of the undisclosed income of the specified previous year, i f such 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) on or before the specified date- (A) pays the tax, together with interest, i f any, in respect of the undisclosed income; and (B) furnishes the return of income for the specified previous year declaring such undisclosed income therein; (b) a sum computed at the rate of twenty per cent of the undisclosed income of the specified previous year, i f such assessee- (i) in the course of the search, in a statement under sub-section (4) o f section 132, does not admit the undisclosed income; and (ii) on or before the specified date- (A) declares such income in the return of income furnished for the specified previous year; and (B) pays the tax, together with....
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....essee admits the undisclosed income under Section 132(4), substantiate the manner in which the undisclosed income was derived and pays the tax together with interest & furnishes the return of income declaring such undisclosed income on or before the specified date then penalty @ 10% of the undisclosed income will be levied as per section 271AAB(l)(a). Also if the undisclosed income is not admitted during the search u/s 132 but the assessee declares such income in the return of income & pays the tax together with interest on or before the specified date, then penalty @ 20% of the undisclosed income is leviable as per section 271AAB(l)(b). In other cases, not covered under clause (a) and clause (b) of sub-section (1) of section 271AAB, penalty @ 30% of the undisclosed income is attracted as per the provisions of the section 271AAB(l)(c) if the search under Section 132 was conducted after 1st July, 2012. It is also provided under Section 271AAB(2) that no penalty under Section 271(l)(c) is leviable in respect of undisclosed income referred to in sub-Section 271AAB(1). Therefore, Explanation-5 to Section 271(l)(c) referred by the AR in his submission is not applicable in the present ca....
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.... 271AAB (l)(b). The case of the assessee is accordingly, covered under the provisions of section 271AAB (l)(c) and the penalty @ minimum 30% or maximum 90% is attracted. In view of the above, the submissions of the AR are not found acceptable and the case laws referred/relied upon by the AR relates to penalty under Section 271AAA which, already mentioned, is not applicable in this case. Therefore, under the facts and circumstances of the case, the penalty imposed by the AO in this case is found sustainable as per law and hence confirmed. 7. Now the assessee is in appeal. 8. Ld. Counsel for the assessee reiterated the submissions made before the authorities below and further submitted that this issue is squarely covered vide order dt. 20/12/2018 in ITA No. 697/Chd/2017 for the A.Y. 2013-14 in the case of M/s Palace Jewellers Pvt. Ltd. Ludhiana Vs. The DCIT, CC-III, Ludhiana decided by this Bench of the Tribunal, copy of the said order was furnished which is placed on record. 9. In his rival submissions the Ld. CIT(DR) strongly supported the orders of the authorities below. 10. We have considered the submissions of both the parties and perused the material available on the reco....
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.... has to substantiate the said manner. From the facts of this case, it is apparent that the assessee had disclosed / surrendered the aforesaid amount of Rs. 4 crores on account of undisclosed business income and has also explained that the same was on account of certain discrepancy / unrecorded business transactions. For the sake of convenience, the provisions of section 271AAB are reproduced 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 [but before the date on which the Taxation Laws (Second Amendment) Bill, 2016 receives the assent of the President], 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 the undisclosed income of the specified previous year, if such 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 i....
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....her documents maintained in the normal course relating to such previous year; or (B) otherwise not been disclosed to the Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner before the date of search; or (ii) any income of the specified previous year represented, either wholly or partly, by any entry in respect of an expense recorded in the books of account or other documents maintained in the normal course relating to the specified previous year which is found to be false and would not have been found to be so had the search not been conducted. 8. The provisions of section 271AAB (1) are little bit akin to provisions of section 271AAA of the Act. However, the difference is that if the assessee surrendered the undisclosed income in a statement u/s 132(4) of the Act and specify and substantiate the manner in which the income has been derived and pays the due taxes together with interest in respect to such undisclosed income before the specified date, then, as per the provisions of section 271AAB of the Act, the Assessing officer may levy penalty @ 10% of the such undisclosed income, whereas, as per the provisions of section 271AAA of the....