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2022 (9) TMI 336 - AT - Income TaxPenalty levied u/s 271AAB - whether no search was initiated in its case? - notice u/s 153C was issued on incriminating material belonging to the assessee was found - assessee pleaded that Section 271AAB is not applicable as no search was initiated in its case - CIT-A deleting the penalty levied - HELD THAT:- On due consideration of the facts and circumstances, we do not find any merit in this appeal because the opening line of section 271AAB contemplates that there should be a search for invoking this provision. As during the course of search, if any incriminating material belonging to some other person than the searched person was found, then AO of the searched person would record his satisfaction demonstrating the fact that material belonging to other person was found and it exhibits the escapement of some income from taxation. This satisfaction note is to be transmitted to the Ld. Assessing Officer, who is having jurisdiction on such other person and the AO of other person would issue notice under section 153C. Therefore, sections 153A and 153C deal with two different categories of assessees. The penalty leviable under section 271AAB is with respect to those assessees where search has been conducted. The case of the present assessee falls under second category. The assessment was made under section 153C of the Income Tax Act. We fail to understand from where the Ld. Assessing Officer has brought this statement of disclosure. Statement under section 132(4) is to be recorded during the course of search to find out, whether any declaration is to be made by an assessee or not. The next fatuous attempt at the end of Ld. Assessing Officer is that taxable income determined by him in the assessment order which is almost equivalent to the returned income disclosed by the assessee. The penalty is to be computed by taking cognizance of the assessed income. Here AO has imposed a penalty without making any reference to the income determined in the hands of assessee, rather taking cognizance of the statement of searched person, who might have disclosed it. It is totally against the law and the Ld. 1st Appellate Authority has rightly appreciated the facts and circumstances by deleting the penalty - Revenue appeal dismissed.
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