TaxTMI 
TaxTMI 
2026 (1) TMI 1030
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....following grounds of appeal: 1 The appellant submits that while applying the penal provisions total circumstances have to be considered as penal provisions are for deterrence for not repeating the mistake. The appellant submits that no material is found and seized and declaration is made to purchase peace with the department. The appellant has got supporting income for holding of cash found during search. Hence the levy of penalty is unjustified. 2 The appellant craves leave of the Hon'ble Tribunal to amend OR raise any other ground, cross objection, including any additional ground of appeal not set out in the appeal Memo 3 The order passed by the Ld. CIT(A) is opposed to law, equity, weight of evidences, facts and cir....
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....g the assessment proceedings, the Ld. AO taxed the sum of Rs. 35 lakhs disclosed by the assessee during the search, including Rs. 7 lakhs in cash seized during the search, by invoking section 69B r.w.s. 115BBE of the Act. The appeal of the assessee for the treatment of addition of Rs. 35 lakhs as income under section 69B r.w.s. 115BBE of the Act had reached this Tribunal. Vide order dated 30.08.2023 in ITA No. 177/Hyd/2023, this Tribunal held that the provisions of section 69B r.w.s. 115BBE of the Act shall apply only to the cash component of Rs. 7 lakhs, and the balance Rs. 28 lakhs is to be taxed under the normal provisions. Pursuant to this order of the Tribunal, the Ld. AO passed a consequential order on 17.10.2023, taxing Rs. 7 lakhs u....
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....on of the assessee was bona fide. Accordingly, the Ld. AR prayed for deletion of the penalty. 6. Per contra, the Learned Departmental Representative ("Ld. DR") relied on the orders of the lower authorities. It was submitted that this Tribunal, in its order dated 30.08.2023, has conclusively upheld the applicability of section 69B r.w.s. 115BBE of the Act to the cash component of Rs. 7 lakhs. The Ld. DR submitted that once the addition has been sustained under section 69B of the Act, penalty under section 271AAC of the Act becomes mandatory, as the statutory scheme does not provide any exemption merely because the assessee disclosed the income during search or included it in the return. The Ld. DR argued that the penalty is consequential ....
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....e quantum proceedings, has upheld the addition under section 69B of the Act, thereby affirming that the impugned sum falling squarely within the deeming provisions of section 69B of the Act. Once the nature of income is so determined and is brought to tax in accordance with section 115BBE of the Act, the legal consequence flowing from such determination must be understood in the context of section 271AAC of the Act. 9. The Ld. DR has correctly contended that section 271AAC of the Act provides for levy of penalty where income is assessed under sections 68 to 69D of the Act and brought to tax under the special rate in section 115BBE of the Act. The penalty provision under section 271AAC of the Act is statutory in character and is specifica....