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TMI Blog2015 (8) TMI 756X X X X Extracts X X X X X X X X Extracts X X X X ..... ncome at Rs. 6,84,35,910/-. During the course of assessment proceedings the AO noted that during the course of search proceedings at the office premises of Shri Jugal Kishore Tapadia and Tapadia Construction Ltd. statement of Shri Jugal Kishore Tapadia was recorded on 09-03-2010 by the ADIT (Investigation), Aurangabad. In reply to Question No.24 of the statement, Shri Jugal Kishore Tapadia, who is a partner of the firm, had admitted income of Rs. 7 lakhs for the impugned assessment year. The AO noted that the assessee in the return of income filed has declared income of Rs. 6,94,02,079/- as GP from the project. He observed that this income is in pursuance to the declaration of income made by the assessee during the search, therefore, he determined the income of the assessee at Rs. 6,84,35,910/- which is as per the return of income. The AO subsequently initiated penalty proceedings u/s.271AAA of the I.T. Act. He noted that the assessee in his computation of income had given a note which reads as under : "NOTE : During the year under consideration, the possession of basement floor & ground floor keeping some balance work of hyper market is handed over to Pusti Enterprises Pvt. Ltd., ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erved that as per the provisions of section 140A(1) of the Act, it is the responsibility of every assessee to pay the tax and interest payable, if any, before furnishing of return of income. Since the assessee has not paid the total tax and interest before furnishing the return of income, therefore, the assessee, according to the AO, is not eligible for the purpose of section 271AAA(2). The AO accordingly levied penalty of Rs. 69,40,208/- being 10% of the undisclosed income of Rs. 6,94,02,079/- u/s.271AAA of the I.T. Act. 5. Before CIT(A) it was submitted that the assessee has received advance consideration by bank cheques and the sale of the property and possession of the property in respect of which the said advance was received was given in subsequent year relevant to A.Y. 2013-14 and therefore infact the income taxed by the AO in the year under appeal is not the income of the assessee for A.Y. 2010-11. Therefore, the said amount of Rs. 6,94,02,079/- has been incorrectly assessed in A.Y. 2010-11 and therefore cannot be considered as the undisclosed income of A.Y. 2010-11. Accordingly, the levy of penalty is not valid. It was argued that since the consideration has been received ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of ACIT Vs. Gebilal Kanhaiyahal (HUF) reported in 252 ITR 435 and the decision of the Kolkata Bench of the Tribunal in the case of Pioneer Marbles and Interiors Pvt. Ltd. (Supra) the Ld.CIT(A) deleted the penalty levied u/s.271AAA by holding that the assessee has fulfilled the condition laid down in clause (iii) of sub-section (2) of section 271AAA since the assessee has paid the demand of Rs. 49,64,700/- much before the date of penalty order passed u/s.271AAA for the year under appeal. 9. Aggrieved with such order of the CIT(A) the Revenue is in appeal before us with the following grounds : "1) On the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in deleting the penalty of Rs. 69,40,208/- imposed u/s 271AAAof the Act. 2) On the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in holding that the cash seized at the time of search should be considered as 'Advance Tax' payment, as the Explanation to Section 132B of the I.T. Act, is clarificatory in nature, and hence, to be considered as retrospective. 3) On the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in relying upon ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 23 of the paper book the Ld. Counsel for the assessee drew the attention of the Bench to the letter addressed to the ADIT on 16-09-2010 and 22-06-2010 requesting adjustment of seized cash against the tax payable in respect of the firm. He submitted that the department has neither adjusted the cash seized nor communicated refusal for adjustment of such cash against the tax payable by the firm. Referring to the provisions of section 271AAA he submitted that the Act does not prescribe any time limit for payment of the taxes. Referring to Explanation to provisions of section 139(9) he submitted that the Act clearly lays down that return of income shall be treated as defective if the tax together with interest, if any, arrived in accordance with the provisions of section 140A has not been paid on or before the date of filing of the return. This has been inserted by the Finance Act, 2013 w.e.f.01-06-2013. Referring to provisions of section 140A(3) he submitted that as per the said provision w.e.f,. 01-04-1980 if any assessee fails to pay the whole or any part of such tax or interest or both in accordance with the provisions of sub-section (1) he shall without prejudice to any other cons ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee has not paid the entire tax and interest before filing of the return of income, therefore, penalty u/s.271AAA is leviable. It is the case of the assessee that the balance amount of Rs. 40,99,998/- has been paid on 22-03- 2012 which is much before 28-06-2012, i.e. the date of penalty order passed u/s.271AAA. Since there is no time limit prescribed for payment of tax u/s.271AAA and since the assessee has paid the entire tax along with interest due before passing of the penalty order, therefore, no penalty u/s.271AAA is leviable on the assessee. 14. We find an identical issue had come up before the Kolkata Bench of the Tribunal in the case of DCIT Vs. Pioneer Marbles and Interiors Pvt. Ltd. reported in 144 TTJ 663. In that case, the assessee company was subject to search and seizure operations u/s.132 during which the assessee made the disclosure of Rs. 50 lakhs. The income so declared was included in the income subsequently returned by the assessee which was accepted by the AO in the assessment order. However, the AO initiated penalty proceedings u/s.271AAA on the ground that the assessee had not paid full tax and interest on disclosure made u/s.132(4). It was argued by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... date of search in the books of account or other documents maintained in the normal course relating to such previous year; or (B) otherwise 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 previous year before the said date; or (ii) in which search was conducted. 7. We find that under the scheme of Section 271 AAA, there is a complete paradigm shift so far as penalty in respect of unaccounted income unearthed as a result of search operation carried out on or after 1s t June 2007 is concerned. Unli ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ships had held that "...However, the outer limit has to be the point of time when the assessment proceedings are undertaken by the Assessing Officer because the opening portion of section 271(1) of the Act requires the Assessing Officer to record satisfaction in the course of such proceedings, and the satisfaction has to be as regards the concealment of particulars of income or furnishing inaccurate particulars of income." Section 271 AAA, as the statute unambiguously provides, does not require any subjective satisfaction of the Assessing Officer to be arrived at during the assessment proceedings, and, therefore, the outer limit of payment before the conclusion of assessment proceedings will not come into play. 9. In our considered view, therefore, on the facts of the present case wherein entire tax and interest has been duly paid well within the time limit for payment of notice of demand under section 156 and well before the penalty proceedings were concluded, the assessee could not be denied the immunity under section 271AAA(2) only because entire tax, along with interest, was not paid before filing of income tax return or, for that purpose, before concluding the assessment proc ..... X X X X Extracts X X X X X X X X Extracts X X X X
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