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2019 (2) TMI 1631 - AT - Income TaxPenalty u/s 271AAB - Penalty where search has been initiated - penalty was issued by the AO u/s 271AAA of the Act while the penalty was finally imposed u/s 271AAB - AO clearly stated that the assessee admitted as undisclosed income derived from the activity under commodity profit which was disclosed under section 132(4) of the Act and prayed to confirm the order of CIT (A) - HELD THAT:- On reading of the provision u/s 271AAB, explains that in a search case the AO may direct the assessee to pay penalty as computed at the rates specified in the clauses (a), (b) & (c) of sub section (1) of 271AAB and the assessee shall pay penalty in addition to the tax on undisclosed income disclosed by the assessee made at the stage of making statement u/s 132(4) of the Act or during the assessment proceedings. In the present case the assessee accepted disclosure of ₹ 5,00,00,000/- as its undisclosed income from undisclosed source. It is also noted that the same has been computed as disclosure u/s 134(2) in the computation of total income in the assessment order. There is no dispute regarding the payment of tax together with interest in respect of such undisclosed income and the specified date of filing return of income. So, therefore, it is clear from the record that the assessee admitted undisclosed income and the statement was recorded u/s 132(4) of the Act to that effect. The assessee also explained the manner of such earning i.e. out of commodity profit at page No.18 of AO’s order. In our opinion, the assessee is liable to pay penalty as the facts and circumstances of the present case fulfilled the conditions that required to attract penalty @ 10% in terms of clause (a) of sub-section (1) of section 271AAB The Hon’ble Supreme Court has upheld the above judgement and is reported as Sandeep Chandak vs Pr.CIT [2018 (6) TMI 106 - SC ORDER] pleased to hold that the provisions of Section 271AAB automatically attracts and the proceedings are to be carried out/completed where a search and seizure operation is carried out in which the assessee have surrendered the amount u/s 132(4) statement of undisclosed income, specify the manner in which this income was derived, filed return of income, admit the same and had paid taxes and interest on the same. As discussed above we find no infirmity in the order of CIT(A) and it is justified. Thus, ground no-1 raised by the assessee is dismissed.
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