9911796707
TMI Blog2012 (2) TMI 261X X X X Extracts X X X X X X X X Extracts X X X X ..... he Assessing Officer are as follows: 1. That in the facts and circumstances of the case, the learned Commissioner of Income Tax (Appeals)- Central I Kolkata, erred in appreciating the facts of the case and thus erred in cancelling the penalty order under section 271 AAA of the Act. 2. That the assessee was in default to pay the tax together with interest in respect of undisclosed income and it is mentioned in sub section 2(iii) of Section 271 AAA of the Act that the assessee 'pays the tax together with interest, if any, in respect of undisclosed income'. Therefore the learned CIT(A) has erred in law in allowing the relief. 3. The issue in appeal lies in a narrow compass of undisputed facts. On 30th August 2007, the assessee company and c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed with this submission. He rejected the submissions of the assessee and proceeded to impose the penalty by observing as follows: The above submission has been considered and the assessment record has been perused. Since the search was conducted on 30/8/2007 and the disclosure was made in the statement recorded u/s 132(4) of the Act for the specified previous year, the penalty provisions of Section 271AAA was squarely applicable in this case. The sub section (2) of Section 271 AAA provides that: (2) Nothing contained in sub-section (1) shall apply if the assessee,- (i) in the course of the search, in a statement under sub-section (4) of section 132, admits the undisclosed income and specifies the manner in which such income has been deri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ere concluded, the CIT(A) deleted the impugned penalty. The Assessing Officer is not satisfied with the stand so taken by the CIT(A) and is in appeal before us. 5. We have heard the rival contentions, perused the material on record and duly considered facts of the case in the light of the applicable legal position. 6. We find that Section 271 AAA, which is applicable in respect of undisclosed income unearthed as a result of search operations carried out on or after 1st June 2007, provides as follows: Penalty where search has been initiated. 271AAA. (1) The Assessing Officer may, notwithstanding anything contained in any other provisions of this Act, direct that, in a case where search has been initiated under section 132 on or after the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ise not been disclosed to the Chief Commissioner or Commissioner before the date of search; or (ii) any income of the specified previous year represented, either wholly or partly, by any entry in respect of an expense recorded in the books of account or other documents maintained in the normal course relating to the specified previous year which is found to be false and would not have been found to be so had the search not been conducted; (b) "specified previous year" means the previous year- (i) which has ended before the date of search, but the date of filing the return of income under sub-section (1) of section 139 for such year has not expired before the date of search and the assessee has not furnished the return of income for the p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h a time limit into the scheme of the Section or to infer one. There is thus no legally sustainable basis for the stand of the Assessing Officer that in a situation in which due tax and interest has not been paid in full before filing of the relevant income tax return, the assessee will not be eligible for immunity under section 271 AAA(2). 8. While dealing with Explanation 5 to Section 271(1)(c), which is broadly on the same lines, Hon'ble Gujarat High Court, in the case of CIT Vs Mahendra C Shah (299 ITR 305) has observed that, "......there is no prescription about the point of time when the tax had to be paid qua the amount of income declared in the statement under section 132(4) of the Act". We must, however, point out that even after ..... X X X X Extracts X X X X X X X X Extracts X X X X
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