9911796707
TMI Blog2007 (10) TMI 544X X X X Extracts X X X X X X X X Extracts X X X X ..... . 3,60,774/- only has been upheld and sustained by the Tribunal. 2. On 12.10.2007, the appeal was admitted to consider the following substantial question of law:- "Whether on the facts and in the circumstances of the case, the ITAT was correct in law in directing the AO to quantify penalty on tax sought to be evaded on the sustained addition of Rs. 3,60,774/- only by CIT(A) and not on the assessed income when the return was not furnished under Section 158BC(a) of the Income Tax Act?" 3. Briefly, the facts as narrated in the appeal may be noticed. The respondent is an individual in whose case search was conducted on 17.4.1997. Notice under Section 158BC of the Act was issued on 15.1.1998 which was served on the assessee on 16.1.1998 for f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ndisclosed income determined amounting to Rs. 18,10,774/-. 5. After hearing learned counsel for the appellant, we do not find any merit in the aforesaid contention. 6. It will be expedient to reproduce sub section 2 of Section 158BFA relating to imposition of penalty which reads thus:- "158BFA (1) xx xx xx xx xx xx (2) The Assessing Officer or the Commissioner (Appeals) in the course of any proceedings under this Chapter, may direct that a person shall pay by way of penalty a sum which shall not be less than the amount of tax leviable but which shall not exceed three times the amount of tax so leviable in respect of the undisclosed income determined by the Assessing Officer under clause (c) of Section 158BC: Provided that no order impo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Section 158BC; has paid the tax payable on the basis of such return or got the adjustment of the seized assets against the tax payable; has also produced the evidence of tax paid alongwith the return and has not filed any appeal against the assessment of that part of income which is shown in the return. Second proviso relates to where first Proviso is not applicable and the undisclosed income determined by the Assessing Officer is found to be in excess of the income which is declared in the return. It has been provided that in such cases, the penalty shall be imposed on that portion of the undisclosed income which is in excess of the amount of undisclosed income declared in the return. 8. In the present case, the assessee had declared a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... isclosed income determined by the AO exceeds that shown by the assessee in the return of income, the penalty to be imposed is to be on the portion of the undisclosed income determined which is in excess of the amount of undisclosed income shown in the return. In the present case, the undisclosed income shown by the assessee in his return of income was Rs. 14,50,000/-, whereas addition on account of undisclosed income as confirmed by the learned CIT(A) amounted to Rs.3,60,774/-. It is this later amount which is in excess of the amount of undisclosed income shown by the assessee in his return of income. It is on this amount that penalty has to be imposed, in keeping with the second proviso to Section 158BFA(2) of the Act, as discussed above. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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