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2022 (11) TMI 203 - AT - Income TaxPenalty levied by the AO u/s. 271AAB r.w.s. 274 - levy penalty of 30% on undisclosed income - HELD THAT:- Penalty u/s. 271(1)(c) and penalty u/s. 271AAB operates under different circumstances and further, penalty u/s. 271(1)(c) there is a provision for levy of penalty for two situations i.e., concealment of particulars of income and also furnishing inaccurate particulars of income, whereas, u/s. 271AAB in a case where search has been initiated u/s. 132 of the Act on or after 01.07.2012, the assessee shall pay by way of penalty in addition to tax, if any, payable by him, and said penalty ranges from 10% to 30% depending upon the conduct of the assessee. In this case, there is no dispute with regard to the fact that the assessee could not satisfactorily explain with necessary evidences, source for cash seized by Railway Police and therefore, the assessee had admitted additional income in the return of income filed in response to notice issued u/s. 153A of the Act. Therefore, in our considered view, the arguments of the ld. Counsel for the assessee that the penalty cannot be levied u/s. 271AAB of the Act is devoid of merits. We find that the reasons given by the AO to levy 30% penalty on undisclosed income is not backed by cogent reasons, because clause (c) of section 271AAB is applicable, if assessee does not admit undisclosed income in the statement recorded u/s. 132(4) and also not declared said income in the return of income furnished within the specified period and pays the tax altogether with interest, if any, in respect of the undisclosed income. In this case, the assessee has admitted undisclosed income in the return of income filed in response to notice u/s. 153A of the Act and also specified the manner in which said income has been derived by filing necessary bills for cash sales made during the period between 07.12.2012 to 11.12.2012. The assessee has admitted undisclosed income in the return of income and also paid tax together with interest, if any, in respect of the undisclosed income. Although, the AO has not accepted explanation furnished by the assessee on the manner in which said income has been derived, but on the basis of evidences filed by the assessee, we are of the considered view, that the assessee has specified the manner in which said income has been derived. Therefore, in our considered view clause (a) of section 271AAB of the Act is applicable in the given facts and circumstances of this case. Therefore, we direct the AO to restrict the penalty levied u/s. 271AAB of the Act @ 10% of the undisclosed income - Appeal filed by the assessee is partly allowed.
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