TMI Blog2015 (7) TMI 333X X X X Extracts X X X X X X X X Extracts X X X X ..... search, offers it to be taxed in the return, pays tax thereupon, no penalty can be levied particularly in the absence of any question being raised in respect thereof by the Assessing Officer. The Revenue fails to point out any exception to the same. It also does not rebut the CIT(A) crucial findings that the assessee had not been put to specific question specifying and substantiating the manner of having derived the impugned undisclosed income. - Decided against revenue. - ITA No.2090 & 2091/Ahd/2011 - - - Dated:- 26-6-2015 - Shri G.D. Agrawal and Shri S.S. Godara , JJ. For the Petitioner : Shri V.K. Singh, Sr.D.R., For the Respondent : Shri Rajesh Shah, A.R. ORDER PER S.S. GODARA, JUDICIAL MEMBER These Revenue s appeals for A.Y.2008-09, arise from separate orders of the CIT(A)-II, Ahmedabad, dated 13.06.2011 and 15.06.2011, passed in case nos.CIT(A)-II/CC.1/73/2010-11 and CIT(A)-II/CC.1/76/2010-11, deleting penalties of ₹ 30 lacs and ₹ 70 lacs; respectively, in proceedings under section 271AAA of the Income Tax Act, 1961, in short the Act . 2. Both parties inform us at the outset that facts involved in the two cases are identical. We fin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sure of unaccounted income while recording the statement u/s.132(4) of the I.T. Act. He has also admitted that undisclosed income was invested in land, unaccounted cash, jewellery and receivables and undisclosed income was not recorded in the books of accounts. The disclosure made by the assessee for undisclosed income of ₹ 3,00,00,000/-, is clearly covered under the definition of 'undisclosed income' as per Expl.(a) to section 271AAA of the I.T. Act. 5.2 On perusal of assessment order it is found that in para 6 of the order the assessing officer issued notice for initiating penalty under section 274 r.w.s. 271 (1)(c) of the income tax act and not under section 271 AAA. I also perused the statement of the assessee recorded under section 132 (4) of income tax act. The AO has levied the penalty u/s 271AAA of the Act because the first two conditions of section 271AAA(2) are not fulfilled by the appellant. The three conditions provided in sub section (2) of section 271 AAA are reproduced as under: (i) In the course of search, in a statement under sub-section (4) of section 132, admits the undisclosed income and specifies the manner in which such income has be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... p short at a particular stage so as to permit the revenue to take advantage of such lapse in the statement. The reason is not far to seek. In the first instance, the statement is being recorded in the question and answer form and there would be no occasion for an assessee to state and make averments in the exact format stipulated by the provisions considering the setting in which such statement is being recorded. Secondly, considering the social environment it is not possible to expect from an assessee, whether literate or illiterate, to be specific and to the point regarding the conditions stipulated by the second exception while making statement under section 132(4). Even if the statement does not specify the manner in which the income is derived, if the income is declared and tax thereon paid, there would be substantial compliance not warranting any further denial of the benefit. In the case of CIT v. Radha Krishna Goel [2005] 278 ITR 454, the Hon'ble Allahabad High Court gave similar findings and laid down similar principles as under:- ...From a perusal Explanation 5, it is evident that the circumstances which otherwise did not attract the penalty provisions of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t case it is applicable for section 271AAA instead of explanation 5 of Section 271(1). In the whole, statement recorded under section 132(4) on 19 20.2.2008, the authorized Officer has not asked any further question but was satisfied with the manner the income was earned by the assessee. Clause (iii) lays down the third condition regarding the payment: of tax along with interest on undisclosed income admitted in the course of search. It is undisputed fact that the tax and interest had been paid by the assessee. The Assessing Officer himself stated the same in the penalty order. The assessee has made disclosure of unaccounted income while recording statement under section 132(4) of the Income tax Act and paid the taxes with interest. The disclosure was neither made against any money, bullion, jewellery or other valuable articles or things found during the course of search nor made against any entry in the books of accounts or other documents or transactions found in the course of search because no such assets or transactions were found during the course of search. The disclosure of unaccounted income in the entire group was made in the statement of Shri Jaiprakash K. Aswani ..... X X X X Extracts X X X X X X X X Extracts X X X X
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