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TMI Blog2016 (9) TMI 102X X X X Extracts X X X X X X X X Extracts X X X X ..... ntiate the manner in which undisclosed income was derived. The AO has simply observed that the assessee has not admitted the income himself and has not disclosed the manner. The income was disclosed by the son of the assessee. It is pertinent to say that the statement of Shri Rajesh M. Shah was recorded on behalf of group itself. He has specified the income of ₹ 25 crores not only assessable in his hand, but pointed out that it will be allocated between different entities and the persons. He has also disclosed the manner in which the income was derived. All these aspects have been specifically considered by the ld.First Appellate authority in the finding extracted supra. After perusal of the finding of the ld.CIT(A), see no reasons to interfere in it. - Decided against revenue - ITA.No.460/Ahd/2016 - - - Dated:- 27-7-2016 - SHRI RAJPAL YADAV, JUDICIAL MEMBER For The Revenue : Shri Sanjay Kumar, Sr.DR For The Assessee : Shri P.M. Mehta, AR ORDER Revenue is in appeal before the Tribunal against the order of the ld.CIT(A)-12, Ahmedabad passed for the Asstt.Year 2012-13. 2. Solitary grievance of the Revenue is that the ld.CIT(A) has erred in deleting the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... June, 2007 [but before the 1st day of July, 2012], the assessee shall pay by way of penalty, in addition to tax, if any, payable by him, a sum computed at the rate often per cent of the undisclosed income of the specified previous year. (2) Nothing contained in sub-section (i) 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 (Hi) 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 (i) of section 271 shall be imposed upon the assessee in respect of the undisclosed income referred to in sub-section (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 mone ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pecified manner or could not substantiate manner in which income was derived - Held, yes - Whether, therefore, penalty under section 271AAA was not leviable as assessee 's case fell under sub-section (2) of section 271AAA - Held, yes ii) Pramod kumar Jain v. Dpty. Commissioner of Income -Tax [2013] 33 taxmann.com 651 (Cuttack - Trib.) Head Note: Section 271AAA of the Income-tax Act, 1961 - Penalty - Where search has been initiated - Assessment years 2007-08 and 2008- 09 - Where assessee had made disclosure under section 132(4); included said amount in its return; and paid tax and interest thereon, penalty was not leviable under section 271AAA [In favour of assessee] iii) Neerat Singal v. Asstt. Commisioner of Income - Tax [2014] 101 DTK 238 (Del. Trib.) Head Note: Penalty under s. 271AAA- Conditions precedent- Surrender of income vis-a-vis manner of earning - Assessee undisputedly admitted undisclosed income in his statement under s. 132(4), paid tax there on the same was accepted by the department- Penalty levied u/s. 271AAA for the reason that assessee had not substantiated the manner in which the undisclosed income was derived as req ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssee to your goodself to kindly drop the penalty proceedings initiated u/s. 271AAA of the I.TAct. 4. The ld.AO imposed penalty of ₹ 15 lakhs. He was of the view that the assessee failed to disclose manner of earning undisclosed income and also failed to substantiate the alleged manner, as to how the income was earned. 5. Dissatisfied with the order of the AO, the assessee carried the matter in appeal before the ld.First appellate Authority. He filed detailed written submissions, which has been reproduced by the ld.CIT(A). The ld.First Appellate Authority on analysis of the submissions of the assessee arrived at conclusion that the assessee has duly disclosed the manner in which the income was earned and also substantiate such manner. Well reasoned finding of the ld.CIT(A) is worth to note. It reads as under: 4.1 I have patiently heard the ARs and minutely perused the written submissions as also the decisions relied upon and observations of the AO both in penalty and assessment orders. It has to be factually observed that the Ld. AO during both the Assessment proceedings as also during penalty proceedings called upon the appellant to explain the manner of earnin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ellant has filed the return honoring his commitment fully, which has also-been accepted during assessment without any modification to returned income, the Ld. AO's insistence for stating the manner and substantiating the same is simply superfluous and uncalled for in the circumstances, in the face of clear-cut disclosure of manner of earning and/or purpose of disclosure by the appellant, and also in light of Mahendra C. Shah (supra). Such insistence of the AO and noncompliance thereto by the appellant pleading sufficient compliance , has obviously not impacted the quantification of income and assessment thereof. 4.3 The Id. ARs have also brought my attention to and taken me through the operative portions of the Authorities relied upon by the ARs. It is further very vehemently contended that the appellant's facts are far stronger than the facts obtaining in the following cases wherein the Jursdiction HC and Tribunal found in favour of the appellant: CIT v. Mahendra C Shah 299 ITR 305 (Guj) ...The view taken by the Tribunal to the effect that even if the statement does not specify the manner in which the income is derived, if the income is declared an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t the appellant's case is squarely covered by the ratios of Mahendra C Shah and Sidh Nath Goel (supra), and thus it is to be held that the appellant has made effective and sufficient compliance to immunity condition of s. 271AAA(2)(ii) also. 6. With the assistance of the ld.representatives, I have gone through the record. Area of dispute between both the parties is whether the assessee is entitled to benefit of sub-section (2) of section 271AAA of the Income Tax or not. Section 271AAA contemplates levy of penalty upon an assessee. However, sub-section 2 provides that sub-section 1 of Section 271AAA would not be applicable upon an assessee if he fulfills the following conditions viz. (a) that the assessee in the course of 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, and (b) substantiate the manner in which the undisclosed income was derived, and (c) pays the tax together with interest, if any, in respect of undisclosed income. 7. As far as the fulfillment of clause (c) is concerned, there is not dispute between the parties. Similarly, assessee has disclosed the i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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