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2022 (6) TMI 149 - ITAT AHMEDABADLevy of penalty u/s 271AAB - Undisclosed Income - unexplained cash credits - assessee argued there is no deliberate intention of appellant to defraud the revenue for concealment of income - whether if the assessment proceedings are conducted in consequence to search carried out at the group’s premises, and subsequently during the course of assessment, unexplained cash credits are unearthed, the penalty can be imposed under section 271AAB? - HELD THAT:- Admittedly, in this case the unexplained cash credits were not discovered/unearthed during the course of search on Dhanjimama group, but were unearthed during the course of assessment proceedings on the assessee, albeit the assessment proceedings on the assessee were conducted as a consequence to search proceedings. A perusal of the assessment order reveals that the AO has not mentioned anything about unearthing of any undisclosed income in respect of the assessee, during search action carried out in the Dhanjimama group of cases on 03.07.2012. The income unearthed/discovered by the Assessing Officer during the course of assessment proceedings was independent and unconnected with the information found during the course of search action carried out in the Dhanjimama group of cases. Therefore, while the same may be relevant for assessment of the income under section 68 and also for the levy of penalty under section 271(1)(c) however, so far as penalty under section 271AAB of the Act is concerned, the foundation thereof is independent of assessment proceedings. Therefore, in the instant set of the facts, since no incriminating material was found during research carried out on Dhanjimama group of cases on 03.07.2012, which could have formed the basis of addition in our considered view, penalty could not have been imposed under section 271AAB of the Act only on the basis of addition on account of cash credits u/s 68 found during the course of assessment proceedings. Therefore, in our view, CIT(Appeals) has erred in fact and law in confirming action of the assessing officer imposing penalty under section 271AAB of the Act, in the instant set of facts. - Decided in favour of assessee.
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