TMI Blog2015 (11) TMI 1440X X X X Extracts X X X X X X X X Extracts X X X X ..... -fidely for the purpose of buying peace of mind and to avoid protracted litigation, no independent determination of undisclosed income as per Section158BF(c) and Section 158BB(1) of the Act has been a made, there is no question of imposing penalty u/s 158BFA(2) of the Act. - Decided in favour of assessee. - I.T. (SS). No.14 /Del/2011 - - - Dated:- 13-10-2015 - Shri T. S. Kapoor, Accountant Member And Shri Kuldip Singh, Judicial Member For the Appellant : Shri S. K. Gupta, CA For the Respondent : Ms. Sulekha Verma, CIT DR ORDER Per Kuldip Singh, JM The assessee, by filing the present appeal, sought to set aside the impugned order dated 27.12.2010, passed by Ld. CIT(A) XXIV, New Delhi for the block period 01.04.1996 to 13.02.2003, imposing penalty u/s 158 BFA(2) of the I. T. Act, 1961 (hereinafter referred to as the Act ), on the grounds inter alia that: The Ld. CIT(A) has erred both on facts and in law in confirming the levy of penalty of ₹ 2,27,491/- u/s 158BFA(2) of the I. T. Act, 1961. 2. Briefly stated, the facts of this case are that the assessee, Director in various companies running in the name and style of M/s. Shri Gopal Vanas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 5. On the other hand, Ld. D.R. repelled the submissions made by the Ld. A.R. by contending inter alia that the assesses has never challenged the findings returned by Ld. CIT(A) nor he has accepted the income and seized material by filing return; that when assessee has voluntarily accepted the undisclosed income, he is not entitled to claim shortage of time as a ground to file the return; that the assessee has not challenged the finding of facts and as such appeal is liable to be dismissed. 6. We have heard Ld. authorized representatives of both the parties, gone through documents relied upon in the light of facts and circumstances of the case. 7. Primarily, the Ld. A.R. concentrated his arguments on the fact that the A.O. has not given sufficient time to the assessee for compliance to file the return and that A.O. has computed the undisclosed income of the block period at ₹ 3,61,097/- on lump-sum basis without computing the income of each assessment year. 8. Undisputedly, search and seizure operation was conducted in this case on 13.02.2003 and assessment was completed on 28.02.2005 and notice u/s 158BC was issued on 08.02.2005 i.e. after a period of about two y ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d principle of law that penalty proceedings u/s 158 BFA(2) are akin to Section 271(1)(c) proceedings and the burden is on the Department to prove the factum of concealment, though the assessee has voluntarily accepted the undisclosed income brought on record by way of seized material may be for the reason to buy peace of mind and to avoid protracted litigation. Except voluntary acceptance of undisclosed income, no material whatsoever has been collected by the A.O. by conducting independent investigation to prove the concealment of income. Moreover, most of the seized documents are house hold items like Air-conditioner, Microwave Oven, clothes, phone sets, purchase of used car etc and none of the items is more than the value of ₹ 1,00,000/-. In the face of the fact that undisclosed income was assessed to ₹ 3,61,097/-, such items appear to have lost sight of assessee to bring the same to tax as the same have been purchased within a period of about eight years as the last payment of ₹ 70,000/- as per seized documents was paid in cash in August, 1995. 13. Ld. Counsel for the assessee by relying upon the judgement cited as Chain Sukh Rathi Vs CIT 270 ITR 0368 conten ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (c) of the said Act or the effect of the insertion of the Explanation therein, when there is a bona fide surrender and the undisclosed income is computed merely on the basis of such surrender, no penalty would be imposable under Section 158 BFA (2) of the said Act. This would be because there is no determination' of undisclosed income by the assessee under clause (c) of Section 158 BC which is the requirement for imposition of penalty. The sum and substance of all this is that, had there been no surrender, the Assessing Officer could not have determined the undisclosed income inasmuch as the Tribunal has returned a finding of fact that there is no evidence relatable to the search on the basis of which such undisclosed income could have been determined. 16. The ratio of judgement (supra) is applicable to the facts and circumstances of the present case because de-hors the surrender is no evidence which could have been said to have been found as a result of search and, therefore, the computation of undisclosed income by the A.O. in the block assessment period cannot be construed as determination of undisclosed income contemplated u/s 158BC(c) or by 158BB of the Act. So, whe ..... X X X X Extracts X X X X X X X X Extracts X X X X
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