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2015 (11) TMI 109

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....much as all the three appellants before us are medical professionals associated with Care Cardiologists and Consultants Private Limited which was subjected to search and seizure operation on 21st August 2008, we are taking up the case of Dr Naman A Shastri as the lead case, and whatever we decide in this case, as the learned representatives fairly agree, will apply mutatis mutandis in other two cases as well. 3. In ITA No. 561/Ahd/11, the assessee, i.e. Dr Shastri, has called into question correctness of the order dated 8th September 2011 passed by the CIT(A), in the matter of penalty of Rs. 23,20,000 imposed on the assessee under section 271(1)(c) of the Income Tax Act, 1961, for the assessment year 2008-09. 4. Grievances raised by the a....

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....er alia, disclosed an income of Rs. 68,00,000, as income from other sources, which was in respect of cash payment for his contribution for the acquisition of land for the hospital project. During the course of scrutiny assessment proceedings of this return, in a statement recorded under section 131(1), the assessee "confirmed the fact of having paid cash of Rs. 68,00,000 towards the purchase of land for the hospital project". It was in this backdrop that the Assessing Officer initiated the penalty proceedings under section 271AAA by observing that "if the search under section 132 of the Act had not taken place, the assessee would not have disclosed this amount and the same would have gone undetected". Even though the penalty proceedings wer....

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....the manner in which the undisclosed income was derived; and (iii) pays the tax, together with interest, if any, in respect of the undisclosed income. (3) No penalty under the provisions of clause (c) of sub-section (1) of section 271 shall be imposed upon the assessee in respect of the undisclosed income referred to in sub-section (1). (4) The provisions of sections 274 and 275 shall, so far as may be, apply in relation to the penalty referred to in this section. Explanation.-For the purposes of this section,- (a) "undisclosed income" means- (i) any income of the specified previous year represented, either wholly or partly, by any money, bullion, jewellery or other valuable article or thing or any entry in the books of account o....

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....as penalty in respect of undisclosed income is concerned, Section 271AAA will apply to the extent of the 'specified previous year' and, for the other previous years, the provisions of Section 271(1)(c) will continue to hold the field. The expression 'specified previous year' refers to the previous year in which the search is conducted or the year which has ended but the due date for filing of income tax return in respect of the same has not ended. Coming to the facts of the present case, the search took place on 21st August 2008, and, accordingly, the due date of filing income tax return in respect of the income of this previous year was on or before 30th September 2008. Clearly, even though the previous year ending 31st March 2008 relatabl....

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....which has been treated as 'income from other sources' in the hands of all the persons jointly making this investment, penalties have been levied under section 271AAA in the cases of Dr Anil Jain, Dr Vishal Gupta and B Srinivas Mallaya. It is contended that it cannot be open to the Assessing Officer to take different stand in the cases of different assessees placed in the same situation. However, we see no need to deal with this contention since we have upheld the plea of the assessee on merits that the penalty for undisclosed income', on the given facts and in respect of the assessment year before us, could only be imposed, if at all, only under section 271AAA and not under section 271(1)(c). In any case, once the penalty is initiated under....

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....e to follow such a path, we may only say that it is not open to us to suitably modify this penalty order under section 271(1)(c), or to partially confirm the order, to the extent of what would have been the quantum of penalty due under section 271AAA. We take learned counsel's submission on record and leave it for the Assessing Officer and the assessees to take the matter further. The impugned penalty, in our considered view, is unsustainable in law and, for that reasons, we have deleted it. The matter rests at that so far as this forum is concerned. 10. As learned representatives have fairly agreed, whatever we decide in the case of Dr Shastri in IT(SS)A No. 561/Ahd/2011 will equally apply in the cases of Dr Mehta, in IT(SS)A No. 562/Ahd/....