TMI Blog2023 (1) TMI 522X X X X Extracts X X X X X X X X Extracts X X X X ..... erest u/s. 234B of the Act the AO is accordingly directed to delete the interest charged u/s. 234 B of the Act. Penalty u/s. 271AAB - 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 - AO found that the sum of Rs. 88 lacs which was offered voluntarily for taxation u/s. 69 A was not shown in the return of income by the assessee - HELD THAT:- 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 Assessee offered the income in the letter filed during the course of the assessment proceedings as the return could not have been revised electronically for want of tax payment and the amount of Rs.88 lacs was lying with the department since 01.12.2018 the assessee was helpless and was not in a position to pay the taxes. Since the income was offered for taxation even before the search was c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arily 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 respect of the same. The assessee stated that he wanted to pay the taxes but had no means to pay the same and further prayed for accepting the revised income through a letter in which the assessee added Rs. 88 lacs. It was further stated that since the income tax portal is not accepting the revised return of income for want of tax, therefore, the income is revised through the letter. 10. This prayer of the assessee was dismissed by the AO and further by the CIT(A) and the assessment was accordingly completed at Rs. 9065830/- after adding the sum of Rs.88 lacs. 11. Before the CIT(A) assessee did not challenge the addition of Rs. 88 lacs but challenged the levy of interest u/s. 234 B of the Act pleading that since the amount of Rs. 88 lacs was with the income tax department and since the assessee had voluntarily accepted to tax the same u/s. 69A of the Act, therefore, the amount should have been adjusted against the demand by the AO and, therefore, no interest should have been levied from the date of acceptance by the assessee. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e 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 an assessed income of Rs.90,65,830/- which included of Rs.88 lacs. 20. The penalty proceeding were separately initiated and accordingly the AO levied penalty @ 60% of the undisclosed income at Rs.52,80,0000/-. The AO observed as under :- 5. Conclusion: - 5.1 Since, the search was conducted u/s 132 of the Income Tax Act, 1961 on 01.12.2018 in Faquir Chand Lockers Vaults Pvt. Ltd. Group of cases, the assessee s Locker No. 106 at 6704A, Khari Baoli, Delhi-110006 was also covered u/s 132(1) of the Income Tax Act, 1961, and as the date of search is after December 2016 i.e the date on which the Taxation Laws (Second Amendment) Bill, 2016 receives the assent of the President (w.e.f. 01.04.2017), the undersigned holds that it is a fit case for imposition of penalty u/s 271AAB(1A) of the Income Tax Act, 1961. The same is reproduced as under: As per the provisions of the Act u/s 271AAB(1A): 271AAB(1A): The Assessing Officer may, notwithstanding anything contained in any other provisions of this Act, direct that, in a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... earch seizure operation and has not paid taxes together with interest. Therefore, I am satisfied that assessee is liable for penalty u/s 271AAB(1A)(b) of the Income Tax Act, 1961. Assessed Income u/s 143(3) of the Act Rs.90,65,830/- Amount of undisclosed income in respect of which penalty is imposed Rs.88,00,000/- Penalty Amount (@60% of the undisclosed income) Rs.52,80,000/- 7. Accordingly, I hereby impose penalty u/s 271AAB(1A) of I.T. Act, 1961 of Rs.52,80,000/- (@60% of the undisclosed income). This order has been passed with the prior approval of the Addl. Commissioner of Income Tax, Central Range-05, New Delhi vide letter No Addl.CIT/CR-5/2021 -22/1331 dated 24.03.2022. 21. Representatives of both the sides were heard at length. Case records carefully perused. 22. Provisions of section 271 AAB read as under:- (1) 271 AAB The assessee officer [or the Commissioner of (Appeals) may, notwithstanding anything contained in any other provisions of this Act, direct that, in a case where search has been initiated under sect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s 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 been disclosed to the [Principal Chief Commissioner or] Chief Commissioner or [Principal Commissioner or] Commissioner before the date of search; or (ii) any income of the specified previous year represented, either wholly or partly, by any entry in respect of an expense recorded in the books of account or other documents maintained in the normal course relating to the specified previous year which is found to be false and would not have been found to be so had the search not been conducted.] 24. Clause B is relevant and the assessee has otherwise disclosed Rs.88 lacs in response to the summon issued u/s. 131 (1A) of the Act. 25. Further it has been explained in detail in ITA No. 300/Del/2022 (supra) that the assessee offered the income in the letter filed during the course of the assessment proceedings as the return could not have been revised electronically for want of tax payment and the amount of Rs.88 lacs was ..... X X X X Extracts X X X X X X X X Extracts X X X X
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