TMI Blog2016 (8) TMI 207X X X X Extracts X X X X X X X X Extracts X X X X ..... earned has been answered to the satisfaction of the authorised person as well as assessing officer. Moreover it needs to be understood that in absence of any specific procedure prescribed in the Act, for specifying and substantiating the undisclosed income, the fact that the same has been accepted without any variation by the AO is by itself enough evidence of the said criteria is having been met and satisfied. And this of our view is duly supported with the decision of Delhi tribunal in Ritu Singhal case (2015 (3) TMI 310 - ITAT DELHI ) - Decided in favour of assessee - ITA No.6876/Mum/2014 - - - Dated:- 24-7-2016 - SHRI D.KARUNAKARA RAO, ACCOUNTANT MEMBER AND SHRI PAWAN SINGH, JUDICIAL MEMBER For The Revenue : Ms. Ramapriya Raghavan (Sr. DR) For The Assessee : Shri Senehal Shah (AR) ORDER PER PAWAN SINGH, JM: 1. The Revenue has filed the present appeal against the order of CIT(A)-26, Mumbai dated 04.08.2014 for Assessment Year (AY) 2011-12. The Revenue has raised the following Ground of appeal:- 1. Whether on the facts and in the circumstances of the case and in law, the learned CIT(A) is justified in deleting the penalty u/s. 271AAA of ₹ 13, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f having paid such amount and proof on receipt of the said amount of ₹ 1.33 Crore (approx). The assessee has not fulfilled the conditions of section 271AAA (2)(ii) of the Act. The assessee failed to disclose his taxable income truly and correctly. The AO worked out the penalty of ₹ 13,29,634/- being 10% of undisclosed income ₹ 1,32,96,340/-, which was not substantiated. Aggrieved by the order of AO, the assessee filed an appeal before the CIT(A), and succeeded vide impugned order dated 04.08.2014. Against the order of CIT(A), the Revenue filed the present appeal before us. 4. We have heard the Departmental Representative (DR) of the Revenue and Authorised Representative (AR) for assessee and perused the material available on record. DR for Revenue argued that during the search seizure action, the statement of Shri Subhash Vincent Joseph was recorded u/s 132(4) of the Act, wherein ₹ 3,00,00,000/- was offered as an undisclosed income. Out of ₹ 3,00,00,000/-, ₹ 1.67 Crore was duly substantiated with the documents seized. ₹ 1.33 Crore (approx) was not substantiated by assessee and thus all three condition attached with subsection (2) of se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s. Ld. DR relied upon the decision of Mumbai Tribunal in ACIT vs. Prakash Steelage Ltd. (supra) wherein the Co-ordinate Bench while dealing with the levy of penalty u/s 271AAA held as under: There was a search and seizure action under section 132 at premises of assessee- Several incriminating materials were found leading to disclosure of undisclosed income vide statement under section 132(4) Addition was made by Assessing Officer- Thereafter, penalty under section 271AAA had been levied by Assessing Officer as assessee could not specify manner in which such income had been derived- Commissioner (Appeals) deleted penalty on basis of a finding that there was substantial compliance, not warranting any further denial of benefit of Explanation 5A to section 271(1)(c) whether Commissioner (Appeals) having examined levy on basis and anvil of a different provision, matter was to be restored back to him for consideration afresh. On the other hand Ld. AR for assessee relied upon the decision of ACIT, Chennai vs. Kishore Kumar Gokul Das, ITAT, Delhi Tribunal, in Smt. Raj Rani Gupta vs. DCIT (ITA No. 3371/Del/2011, ACIT vs. Ritu Singhal (ITA No. 5257/Del/2013) and ITAT, Kolkata ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... derived. Therefore, You could be penalized. 7. The appellant is layman whereas Oath Administrator was representing Income Tax Department and conducting search with many officers. In a way he must be very well aware of the 5 ITA No3371/Del/11 provisions of the law and especially provisions related to search and seizure. 8. framing of the questions were not in the scope of the appellant. 9. The appellant rely the decision of CIT v. Radha Kishan Goel 278 ITR 454 where the Hon'ble Allahabad High Court accepted that unless the authorized officer puts a specific question with regard to the manner in which income has been derived. It is not expected from the person to make a statement in this regard. 10. The appellant further clarified the nature and source of income in the assessment and penalty proceedings. The appellant was not having any documentary evidence of the additional income otherwise it would have been discovered during the search. 6. The Ld AR relied upon the decision of Hon'ble Apex Court in the case of Hindustan Steel Ltd. v. State of Orissa (1972) 83-ITR 26 (SC) He particularly made reference to the following observation of Hon'b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ld as under: (12) An overview of the provisions of S 271AAA of the Act will make it clear that no penalty is leviable in case an Appellant discloses and substantiates the manner in which the undisclosed income was earned and pays the taxes due thereon with interest. In the instant case the Appellant had disclosed the manner in which the income has been earned and the same has also got substantiated with reference to the documents seized during the course of search and accordingly the question of levy of penalty u/s 271AAA of the Income Tax Act, 1961 gets answered in the negative. In SPS Steel Power Ltd versus ACIT(supra) it was held: penalty under section 271 AAA could not be levied nearly on admission of assessee during search proceedings and there must be some conclusive evidence before assessing officer that Antrim eight in seized documents represented undisclosed income of assessee Further Co-ordinate Bench of Mumbai Tribunal in ITA No. 807/Mum/2012 titled as Shri Purnandu Jain vs. ACIT (authored by Ld. AM), held as under: 7. We have heard both the parties and perused the orders of the Revenue Authorities as well as the cited order of the Tribunal and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... issued by the Central Government and of the State Government represent merely understanding of the statutory provision. They are not binding upon the court. It is for the Court to declare what the particular provision of the statute says and it is not for the executive. Thus, the law on this issue is very much clear that wherever question regarding interpretation of a provision is applicable the interpretation adopted by the Court will have a preference over the interpretation give by the CBDT. Therefore, this contention of Ld CIT DR has to be rejected particularly in the view of the fact that Ld CIT DR could not cite any decision of any Court by which the aforementioned view of the CBDT is supported. Moreover, we are considering the provision regarding levy of penalty. Where two interpretations are possible, levy of concealment penalty is not justified. Even according to law of precedence, the decision rendered by Madras High Court, in absence of decision of jurisdictional High Court on the issue will have persuasive value and view has been taken after considering the relevant provisions. Accordingly, we hold that Ld CIT (A) did not commit any error in deleting the penalty by foll ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... interpreted that assessee has substantiated the manner in which undisclosed income amounting to ₹ 1.33 Crore (approx) has been derived. And concluded, if the said amount is not treated as income offered in legitimate manner, the question of paying tax on the same does not arise. The assessee-company has paid tax of ₹ 9.70 Lacs for undisclosed income despite the fact that huge refund was due to the assessee. The CIT(A) while relying upon the decision of Co-ordinate Bench reported in [2013] 59 SOT 36 Mum(Trib.) titled as Marathon Nextgen Reality Textiles Lt. Vs. DCIT wherein it was held that: when a statement is recorded from the assessee and addition is made on the basis of the statement recorded then the same statement has to be accepted in full or rejected in full . The revenue cannot pick-up and chooses the portion which is favourable to the department and against the assessee and deleted the penalty and levied by AO. 7. In our considered opinion, the only issue that arises for our consideration is, whether the manner in which the, undisclosed income has been derived is substantiated or not when the assessee was asked to explained it. If we examine the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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