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2021 (2) TMI 1067 - AT - Income TaxPenalty u/s.271(1)(c) OR 271AAA - unexplained cash deposits - HELD THAT:- It is not in dispute that unexplained cash deposits of ₹ 51,63,987/- has been treated as undisclosed income by the ld. AO for the A.Y.2008-09. Hence, the said addition shall not be eligible for levy of penalty u/s.271(1)(c) of the Act in view of specific provisions contained in Section 271AAA(3) of the Act. Moreover, we also find that penalty in the instant case u/s.271(1)(c) of the Act has been levied by the ld. AO @200% of the tax sought to be evaded on the undisclosed income of ₹ 51,63,987/-. We find that the rate of penalty @ 200% is contemplated only u/s.271(1)(c) of the Act and not u/s.271AAA of the Act. It is elementary that the provisions of Section 271AAA and Explanation 5A to Section 271(1)(c) are distinct and separate and totally operate on two independent fields for different assessment years containing different provisions altogether. Hence, we hold that the lower authorities grossly erred in levying and confirming the penalty u/s.271(1)(c) of the Act in the facts and circumstances of the case for the A.Y. 2008-09 , being the year of search. No hesitation in directing the ld. AO to delete the said penalty for the A.Y.2008-09. Accordingly, the ground Nos. 1-5 raised by the assessee are allowed.
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