TaxTMI 
TaxTMI 
TaxTMI 
2020 (2) TMI 1231
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....ee was covered u/sec. 132 of the Act. The assessment proceedings u/sec. 143(3) r.w.s. 153A were completed on 29/02/2016 by accepting the income filed by the assessee. Subsequently, the Assessing Officer has initiated penalty proceedings u/sec. 271AAB of the Income Tax Act, 1961. In the penalty order, the Assessing Officer has noted that during the course of search operation conducted at the residence of Shri Adapa Rambabu, Accountant of the assessee, some incriminating material in the form of loose sheets were found and seized vide Annexures-A/ARB/1&2 evidencing receipt of certain amounts from the students and also payments to various Doctors. During the course of search proceedings, Dr. Ganni Bhaskara Rao, Secretary & Correspondent of the society has owned-up the contents of the incriminating material found and on the basis of such material, admitted an undisclosed income of Rs. 25.00 crores in his statement recorded u/sec. 143(4) of the Act on 26/07/2013. However, he sought time to furnish the bifurcation of the undisclosed income year-wise and head-wise. When questioned about the amounts received from the students, Dr. Ganni Bhaskara Rao has stated that during the F.Y. 2012-13....
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....w-cause as to why an order imposing penalty should not be made u/sec. 271AAB of the Act. In response, the assessee has submitted that in the present case, the assessee has not admitted any undisclosed income and has admitted the donations u/sec. 115BBC which are form part of the books of account. Though, the search has not conducted, the assessee could admit the receipts at the time of filing of the return since due date of filing of return of income is 31/10/2013 and submitted that penalty may be dropped. However, the Assessing Officer has not agreed with the explanation of the assessee and observed that assessee has admitted the undisclosed income only after search proceedings and it was never voluntarily. Without conducting search and seizure action u/sec. 132 of the Act, the details of the cash received and from whom received would never come into light of the day. It was found during the course of search that these cash receipts were not recorded in its books of account or other documents maintained in the normal course relating to F.Y. 2012-13, which is on or before the date of search i.e. 25/07/2013. Hence, this income clearly falls under the definition of 'undisclosed inco....
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....he Act. In the present case, the Assessing Officer has imposed penalty u/sec. 271AAB(c) for the reason that the assessee has failed to substantiate the income derived and therefore submitted that the Assessing Officer is justified in rejecting the request of the assessee to impose penalty at 10% u/sec. 271AAB(1)(a) and submitted that penalty order passed by the Assessing Officer may be sustained. 7. On the other hand, ld.AR submitted that the assessee has filed its return of income on 31/10/2013 as per the time extended by the CBDT vide F.No. 225/117/2013/ITA.II, dated 24/10/2013. He further submitted that the finding of the Assessing Officer in rejecting the claim of the assessee and imposing penalty at 30% is not correct. He further submitted that the case of the assessee comes under the purview of section 271AAB(1)(a), therefore penalty if at all leviable is at 10% and not at 30%. He further submitted that as per sub-sections (2) & (3) of section 115BBC any anonymous donations received by any trust or institution does not maintain record of the identity indicating the name, address of the persons making such contributions and such other persons may be prescribed and submitt....
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....us persons for upliftment of the activities of the society. It is also submitted that the said donations received for the betterment of the activities of the society and the persons who have contributed such donations were not anonymously disclosed their names/identify and submitted that due to this reason the society was handicapped in recording their names and identity. Ld.DR has pointed out that the assessee has failed to substantiate the manner in which the undisclosed income is derived. So far as this aspect is concerned, as per section 115BBC, any trust or institution received anonymous donations, is not necessary to mention identity/address and other particulars in the books. Therefore, once the assessee has explained the way in which he derived income and also the purpose for which it is utilized, it is not necessary for the assessee being an educational society to substantiate further with the source of the income received in view of section 115BBC(2) & (3) of the Act. Therefore, in view of the facts and circumstances of the case, we find that the assessee has fulfilled all the conditions laid down in section 271AAB(1)(a), therefore penalty at 10% is leviable in this case.....