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2020 (2) TMI 929 - AT - Income TaxValidity of initiation of penalty proceedings u/s 271AAB - Defective notice - non specifying the charge in the show cause notice - HELD THAT:- Since the assessee has offered this income in the return of income and no addition is made by the AO on this account, therefore, the AO was not under any obligation to explain and make the assessee known about the nature of charge of default committed by the assessee. Once the assessee herself has disclosed the undisclosed income based on the assets being unexplained cash and unexplained investment in the gold jewellery found during the course of search then it was very well in the knowledge of the assessee about undisclosed income and default committed by the assessee. No merit or substance in the Ground No. 1 of the assessee's appeal challenging the validity of initiation of penalty proceedings and consequential order passed u/s 271AAB of the Act. Thus Ground No. 1 of the assessee is dismissed. Levy of penalty u/s 271AAB - disclosure and surrender during the course of search and seizure action - No dispute that during the course of search and seizure action, the assessee could not explain the cash of ₹ 60,311/- and jewellery of ₹ 2,31,880/- found during search. The assessee in the statement recorded u/s 132(4) of the Act has disclosed the said amount as undisclosed income and also declared the same in the return of income filed u/s 139 of the Act. Once the disclosure and surrender made by the assessee is representing the physical assets found during the course of search and seizure action then the said amount of ₹ 2,92,191/- would fall in the definition of undisclosed income as per Explanation to Section 271AAB of the Act. The disclosure and surrender represents the underlying assets being unexplained cash as well as jewellery. Accordingly, the same will fall in the definition of undisclosed income provided in clause (c) of Explanation to Section 271AAB - Appeal of the assessee is dismissed
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