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2014 (10) TMI 421 - AT - Income TaxPenalty u/s 271AAA in case of search – AO was of the view that the assessee did not specify the manner in which undisclosed income was derived and also did not substantiate - Held that:- The assessee surrendered ₹ 20 lakh during search and seizure operation conducted on 28/09/2007 and the department treated the same as income from undisclosed sources - the statement of the assessee was recorded in question and answer form and during the statement recorded u/s 132(4) of the Act on oath she was asked to explain the source of jewellery – if the statement of the assessee recorded u/s 132(4) of the Act does not specify the manner in which the income is derived, if the income is declared and tax thereon has been paid, there would be substantial compliance not warranting any further denial of the benefit under exception no. 2 in Explanation 5 attached to section 271(1) of the Act - relying upon Mothers Pride Education Personna P. Ltd. Versus Deputy Commissioner of Income Tax, CC 5 New Delhi [2012 (10) TMI 774 - ITAT, DELHI] - during assessment proceedings u/s 271AAA the question about manner in which income was derived were asked to assessee and she had replied to that - the penalty provisions on search and seizure were contained in section 271(1)(c) and immunity was granted to the assessee vide clause (2) of explanation 5 appended to section 271(1)(c). Provisions of clause (2) of explanation 5 appended to section 271(1)(c) are similar to immunity granted to assessee under clause (2) of section 271AAA – thus, the order of the CIT(A) is to be set aside – Decided in favour of assessee.
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