AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2022 (11) TMI 943
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....ion 271 AAA of Income Tax Act, 1961 can be invoked where assessee is found to be in possession of any money, bullion, jewelry etc in the course of a search under section 132 of the Income Tax Act, 1961. Hence order passed u/s 271 AAA is against the provisions of law. 2. That on the facts and circumstances of the case and in law the Ld CIT (Appeal) and ld. assessing officer erred in understanding the meaning of undisclosed income as defined in explanation under section 271 AAA of Income Tax Act, 1961. It is a matter on record that there is no undisclosed and no evidence in any form was found during the course of search. Hence order passed under section 271AAA is bad. 3. Without prejudice to our main contention that penalty u/s 271 AAA ....
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....e orders of the authorities below. He submitted that the orders of the authorities below may be affirmed. 5. We have heard learned DR and perused the material available on record. We find that the learned CIT(Appeals) has decided the issue by observing as under: "i. I have considered the facts of the case, the basis of the disallowance made by the Assessing Officer and the arguments of Ld. AR during appellate proceeding The issue is in respect of levy of penalty u/s 271 AAA. The comprehensive findings are as under ii. Action u/s 132 of Income Tax Act 1961 was taken on 17/08/2011 in respect of the assessee appellant. In this case. Notice u/s 143(2) was issued on 26.09.2013. During the assessment proceeding u/s 143(3) of the Income Tax ....
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....e manner in which the undisclosed income was derived; and (iii) pays the tax, together with interest, if any, in respect of the undisclosed income. (3) No penalty under the provisions of clause (c) of sub-section (1) of section 271 shall be imposed upon the assessee in respect of the undisclosed income referred to in subsection (I). (4) The provisions of sections 274 and 275 shall, so far as may be, apply in relation to the penalty referred to in this section. Explanation. -For the purposes of this section,- (a) "undisclosed income" means- (i) any income of the specified previous year represented, either wholly or partly, by any money; bullion, jewellery or other valuable article or thing or any entry- in the books of acco....
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....in this regard. The appellant made the disclosure during the post search inquiry proceedings. It would be pertinent to refer to the definition o undisclosed income per the section- Explanation. -For the purposes of this section, - (a ) "undisclosed income " means- (i) any income of the specified previous year represented, either wholly or partly, by any money, bullion, jewellery or other valuable article or thing or any entry in the books of account or other documents or transactions found in the course of a search under section 132. which has- (A ) not been recorded on or before the date of search in the books of account or other documents maintained in the normal course relating to such previous year; or (B) otherwise not b....
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....ase as the appellant made the disclosure only pursuant to action u/s 132 and there can be no scope for any element of voluntary action on part of the appellant in this scenario. There is no element of voluntary disclosure per se. However, it is also a fact that the appellant did declare, the income so disclosed, in its return of income. But, the appellant doesn't get the automated shade in form of sub-section 2 of section 271 AAA as the disclosure is not u/s 132 (4) nor is it conferred a shroud of voluntary action of disclosure. In this conduct, there is a clear and unmitigated failure on part of the appellant assessee on account of having failed to comply with the relevant provisions. The AO has correctly concluded the levy of penalty,....
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....uted at the rate of ten per cent of the undisclosed income 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. ............ . "Penalty where search has been initiated. 271AAB. (1) The Assessing Officer may, notwithstanding anything contained in any other provisions of this Act, direct that, in a case wher....