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2017 (5) TMI 1679 - AT - Income TaxPenalty levied u/s 271AAA - revenue has carried out survey operations only u/s 133A of the Act in the hands of the partnership firms and not individual partners - HELD THAT:- It is an admitted fact that the assessee Shri Kumar Satur Nathani was only subjected to search operations u/s 132. The revenue has carried out survey operations in the hands of business firms u/s 133A of the Act and the assessee Shri Roop Kishanchand Khemani has given statement u/s 131 of the Act. There should not be any dispute that the provisions of sec. 271AAA shall apply to the assessee in whose hand the search was conducted during the period commencing from 01-06-2007. Even though the D.R contends that the search conducted in the hands of Shri Kumar Satur Nathani should be extended, yet we are unable to agree with the said contentions, since the provisions of sec. 132 of the Act shall apply only in respect of persons in whose case the search warrant was issued. Under the Act, a partnership firm and its partners are treated as separate taxable persons. In any case the revenue has carried out survey operations only u/s 133A of the Act in the hands of the partnership firms. Hence, in the absence of search operation u/s 132 of the Act in the hands of Shri Roop Kishanchand Khemani, we are of the view that the assessing officer has misdirected himself in levying penalty u/s 271AAA Penalty levied u/s 271(1)(c) - contentions of the assessee are that the revenue was having only incomplete information in its hand - HELD THAT:- The assessees have voluntarily furnished all the details that were available with them. Further they have given authorization to the AO to collect necessary details from the HSBC bank. Thus, they have furnished all the materials available with them and they have also offered explanations as to why this income was not declared by them. Even though the income does not belong to the AY 2007-08, still they have agreed to offer the same in that year and also paid taxes. None of the explanations of the assessee was found to be false. Under these set of facts, the Ld A.R contended that the immunity given under Explanation 1 shall be available to the assessee. We also find merit in the said submissions and accordingly accept the same. The penalty levied in the hands of both the assessee u/s 271(1)(c) in AY 2007-08 is not sustainable on account of legal issues discussed above as well as on merits. Appeals of the assessee are allowed.
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