2026 (1) TMI 240

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....Assessing Officer DCIT, Central Circle-4, New Delhi, under Section 271AAB of the Income Tax Act, 1961 (hereinafter referred to as "the Act"), for assessment year 2018-19. 2. Facts of the case leading to the instant appeal are that the assessee was subjected to search and seizure action under Section 132 of the Act which was carried out in the SMC group of cases on 21.11.2017 for A.Y. 2018-19 at 4-654, Bomanji Road, Saharanpur, U.P. The assessee filed its original return of income under Section 139(1) of the Act on 24.09.2018 declaring total income of Rs. 16,50,72,480/-. Consequent to search initiated against the assessee, the case of the assessee was picked for compulsory scrutiny and statutory notice under Section 143(2) of the Act was ....

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....he impugned penalty by observing that the additional income of Rs. 6,00,00,000/- was embodied in the return of income itself and thus penalty under Section 271AAB(1A)(b) of the Act on the basis of additional income offered during the course of search. In that view of the matter the question before us is as to whether the penalty under Section 271AAB(1A)(b) of the Act can at all be levied on additional income offered during the course of search or not. At the time of hearing of the instant appeal learned Counsel Mr. Madhur Agarwal vehemently opposed the appeal preferred by the Revenue and supported the order passed by the Learned CIT(A) on the ground that the penalty 271AAB(1A)(b) of the Act is leviable on the undisclosed income and not on t....

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....s of the matter including the record placed before us it is found that no incriminating material was unearthed during the course of search and the statement recorded during the course of search of Shri Mool Chand Agarwal of offering Rs. 6,00,00,000/- additional income, has not been reflected in the return of income filed for A.Y. 2018-19 rather the same was on the basis of regular income through regular business operation. As no such additional income has been found in the balance sheet and as such the assessee company deviated the line of disclosure Rs. 6,00,00,000/- as found during under Section 132(4) of the Act on 21.11.2017 the Learned Assessing Officer imposed penalty under Section 271AAB(1A)(b) of the Act. Under such facts and circum....