2023 (1) TMI 522

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.... to represent his case and, therefore, the Bench asked advocate Sh. Somil Aggarwal to represent the assessee pro bono. 5. Advocate Somil Aggarwal was kind enough to assist the Bench by representing the assessee. Today i.e. 09.01.2023 the Bench heard Mr. Somil Aggarwal at length and the Ld. DR was also heard on rebuttal. 6. The facts emanating from the record show that a search seizure operation u/s. 132 of the Act was conducted by investigation wing of the income tax department on 01.12.2018 in Faquir Chand Lockers and Valuts Pvt. Ltd. Group of cases. Since the assessee also had a locker there it was also covered u/s. 132 (1) of the Act. The sum of Rs. 88 lacs was found and seized from the locker and the assessee immediately offered the same for taxation and accepted the same to be taxed u/s. 69 A of the Act. 7. The cash was seized by the revenue officers and the assessee was penny less and could not pay the requisite taxes but filed his return of income. 8. The AO found that the sum of Rs. 88 lacs which was offered voluntarily for taxation u/s. 69 A of the Act was not shown in the return of income by the assessee. 9. A show cause notice was issued to the assessee in....

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....th the department mentioned elsewhere clearly suggest that the assessee was not asking to adjust the seized cash towards advance tax but was praying the adjustment towards self assessment tax. On these peculiar facts of the case we do not find any merit in charging the interest u/s. 234B of the Act the AO is accordingly directed to delete the interest charged u/s. 234 B of the Act. The other grounds were not seriously contested and are accordingly dismissed. 15. In the result, the appeal of the assessee is partly allowed. 16. We would like to make it clear that our decision is based on the peculiar facts of the appeal in hand and does not set in precedence. 17. Now, we will address ITA No.2748/Del/2022 which relates to the levy of penalty u/s. 271 AAB(1A) of the Act. 18. The facts of the case are that a search and seizure operation u/s. 132 of the Act was conducted in Faquir Chand Lockers & Vaults Pvt. Ltd. Group of cases. Since the locker of the assessee was also there. It was also covered on 01.12.2018 u/s. 132 (1) of the Act. 19. The sum of Rs.88 lacs was found seized and accordingly assessment was completed vide order dated 27.02.2021 u/s. 143 (3) of the Act at a....

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....nt proceedings, the same remained unexplained. Further, the assessee has filed his ITR but did not declare his undisclosed income in the ITR filed u/s 139 and consequently has not paid any taxes on the undisclosed income thereof Thus, this case clearly falls u/s 271AAB(1A)(b). 5.3 The aforesaid addition has also been confirmed by the Ld. CIT(Appeals) vide order no. 27/10774/2018-19 dated 21.01.2022 as the assessee failed to substantiate the unexplained money, even before the CIT(A). 5.4 Further, during the course of penalty proceedings, assessee failed to comply the notices issued on 27.02.2021, 19.08.2021 and 05.03.2022. 6. The assessee has failed to discharge the onus to provide a satisfactory explanation. Further, it may be noted that the burden of proving to the satisfaction of the Assessing Officer in respect of undisclosed income lies on the assessee, which he failed to discharge. Also, the assessee has not furnished the return of income for the year under consideration declaring the undisclosed income u/s 69A "unexplained money" found during the search & seizure operation and has not paid taxes together with interest. Therefore, I am satisfied that....

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.... undisclosed income; (C) a sum [ computed at the rate of sixty per cent ] of the undisclosed income of the specified previous year, if it is not covered by the provisions of clause (a) and (b). 23. Clause b is relevant for the facts of the case in hand as in his statement recorded u/s. 131 (1A) on 30.11.2018 response to summon issued on 26.11.2018 the assessee has already surrendered Rs.88 lacs being cash amount in the locker as undisclosed income to be taxed u/s. 69 A of the Act and offered the same for taxation. Therefore, it can be safely concluded that the assessee declared on or before the specified date as per the definition of undisclosed income given in clause C of section 271 AAB (2) of the Act which read as under :- (c) "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....