TaxTMI 
TaxTMI 
2020 (4) TMI 87
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....at the same time. 1.02 Your appellant therefore prays Your Honour to hold so now and treat the penalty proceedings as bad in law. 2.00 IMPOSITION OF PENLATY TO THE TUNE OF Rs. 4, 28,607 /-ON ADDITION MADE ON ACCOUNT OF UNDISCLOSED INCOME. 2.01 On the facts and circumstances of appellant's case and in law, the Id. CIT (Appeals) has erred in confirming the levy of penalty to the tune of Rs. 4,28,607 /- under section 271 (1)( c) of the Act by the Id. AO on addition made on account of disclosure of additional income while filing return as part of search proceedings. While doing so, the Id. CIT (Appeals) failed to appreciate that there was no addition made by the Id. AO during the course of assessment proceedings u/s 143(3) r.w.s 153A of the Act to the returned income under section 153A of the Act, and therefore appellant cannot be treated to be assessee concealing income. 2.02 Your appellant prays to hold so now and delete the impugned penalty. 2. Facts of the care as emanated from the penalty order: "A search/survey u/s 132/133A of the Income Tax Act was conducted in the Dhanjimama Group of cases on 03.07.2012. In the search....
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....as decided the matter in favour of the assessee with following observation: 17. The assessee has disclosed additional income of 6,34,172.00 in pursuance to the return filed under section 153A of the Act. The AO accordingly on such additional income disclosed by the assessee levied the penalty at the rate of 10% of additional income being 63,417.00 under the provisions of section 271AAB of the Act. The learned CIT (A) also confirmed the order of the AO. Being aggrieved by the order of the learned CIT (A), the assessee is in appeal before us. 18. The learned AR before us submitted that there was no undisclosed income available to the assessee within the meaning of explanation (c) to section 271 AAB of the Act. Therefore, there cannot be any penalty. 19. On the other hand, the learned DR vehemently supported the order of the authorities below. 20. We have heard the rival contentions of both the parties and perused the materials available on record. At the outset we note that the explanation (c) to section 271AAB of the Act has a direct bearing on the on the issue on hand which reads as under: "48[Penalty where search has b....
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....case of ACIT Vs. Marvel Associates reported in 170 ITD 353 wherein it was held as under: "9. Penalty u/s 271AAB attracts on undisclosed income but not on admission made by the assessee u/s 132(4). The AO must establish that there is undisclosed income on the basis of incriminating material. In the instant case a loose sheet was found according to the A.O., it was incriminating material evidencing the undisclosed income. In the penalty order the AO observed that loose sheet shows the cost per square feet is Rs. 3571/- per sft. and assessee stated to have submitted in sworn statement cost per sq. feet at Rs. 2200/- to Rs. 2300/- per sq. feet. However neither the AO nor the Ld.CIT(A) has verified the cost of construction with the books and projections found at the time of search. The counsel argued that it was mere projection but not the actuals. The write up heading also mentioned that summary of the projected profitability statement. There is no evidence to establish that projections reflected in the loose sheet is real. No other material was found during the course of search indicating the undisclosed income. There was no money, bullion, jewellery or valuable arti....
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....penalty levied by the authorities below. Hence we reverse the order of the authorities below and direct the AO to delete the penalty levied by him under section 271 AAB of the Act. Hence the ground of appeal of the assessee is allowed. 21. In the result the appeal of the assessee is allowed. 22. In the combined result, all the six appeals filed by the assessee are allowed. 10. Respectfully following the judgment of Hon'ble Supreme Court and in parity with the Co-ordinate Bench of ITAT, we allow the appeal of the assessee. 11. Now we come to ITA No. 1958/Ahd/2017 for A.Y. 2011-12, assessee has taken following grounds of appeal: 1.0 ORDER PASSED UNDER SECTION 271 (1) (C) IS BAD IN LAW. 1.01 On the facts and circumstances of appellant's case and in law, the Id. CIT (Appeal) has erred to appreciate the initiation of penalty proceedings is bad in law as it was silent on whether it is concealment of income or furnishing of inaccurate particulars of income as both can not exist at the same time. 1.02 Your appellant therefore prays Your Honour to hold so now and treat the penalty proceedings as bad in law. 2.00 IMPOSITION OF P....