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2019 (11) TMI 597 - AT - Income TaxPenalty u/s. 271AAB - 10% OR 30% of undisclosed income - HELD THAT:- The fact remains that the seized cash of ₹ 65.50 lacs was in the Department’s custody since 20-03-2015 and the assessee in his statement dated 05-05- 2015 as also at the time of filing of the return had made requests in writing for adjustment of seized cash. For deciding the ‘date of payment’, it is wholly immaterial whether or not such payment is regarded as ‘advance tax’. Material fact is that the Department itself treated the seized cash to be the payment made towards discharge of assessee’s tax liability. In the foregoing circumstances the only conclusion which one may draw is that the date of cash seizure was the date of tax payment and therefore no interest u/s 234B could be levied once the date of payment is held to be 20.03.2015. Grounds raised before us by the Revenue’s appeal that the Revenue per se has not objected to the ld. CIT(A) specific finding of fact that the assessee in his statement u/s. 132(4) dt. 05-05-2015 had requested the AO to adjust the seized amount of ₹ 65.50 lakhs against the tax payable on the undisclosed income. This finding of fact by the ld. CIT(A) has been not challenged before us, which finding thus crystallizes and becomes final. We therefore hold that the ld. DR’s contention that assessee made the plea of adjustment of seized cash against tax on undisclosed income much after the completion of assessment is per-se wrong. CIT(A) has rightly held that the assessee did not commit the default of non-payment of tax before filing of return and therefore penalty could not be levied at 30% of the undisclosed income. And moreover, the department having taken the amount of ₹ 65.50 lakhs in their custody, cannot take unjust enrichment of it, when on one hand the department says it is assessees undisclosed income and then, not doing what he [assessee] directs to do with his money and thereafter finding fault with him and penalizing him for their [revenue] own omission cannot be accepted. We accordingly uphold the ld. CIT(A)’s order restricting the penalty levied at 10% of the undisclosed income in the facts & circumstances of the case. So, we confirm the action of Ld CIT(A) and dismiss the Ground Nos. 1and 2 of the Revenue. Benefit of Section 271AAB(1)(a) to the assessee just on the basis of payment of his tax liability on undisclosed income by way of adjustment of seized cash against the advance tax as held by him - The only ground for which the penalty was levied under Section 271AAB(1)(c) was that the assessee had failed to pay tax along with interest before filing of the return for the specified year. Except this lone reason, the AO did not cite any other reason or ground justifying the levy of penalty. We also note that the ld. CIT(A) adjudicated the assessee’s appeal with reference to correctness of such sole ground on which the AO had levied the penalty. We therefore find that Ground No. 3 taken by the Revenue does not emanate from the orders of the lower authorities. We also find merit in the ld. AR’s submission that the penalty proceedings being quasi criminal in nature, the AO was bound to spell out the precise reasons at the time of passing of the penalty order and he cannot be permitted to make out new grounds before the Tribunal justifying his action of levying penalty and thus enlarge the scope of the appeal, which is not permissible. We therefore hold that since. Ground No. 3 raised by the Revenue does not arise from the orders of lower authorities, this ground is dismissed in limine.
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