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Shri Raghubar Dayal Gupta Versus The ACIT, Central Circle-XIV, New Delhi

Penalty u/s 158 BFA (2) - quantum of penalty - penalty order assessment u/s 158BC of the Act was completed at an income of ₹ 6,62,880/- against the returned income of ₹ 3,43,404/- and thus addition of undisclosed income was made of ₹ 3,19,475/- Held that:- From the para 7 of the penalty order it is vivid that the A.O has imposed penalty on the entire assessed income i.e. on ₹ 6,62,880/- which is not correct as per mandate of second provision to Section 158BFa(2). In our c .....

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the penalty was wrongly calculated and imposed on the total assessed income and penalty u/s 158 BFA (2) of the Act can only be imposed on the amount of undisclosed income determined which is in excess of the amount of undisclosed income shown in the return filed by the assessee for the relevant block period. - From the penalty order is apparent that the penalty u/s 158BFA(2) has been imposed by observing that the assessee has not filed the return showing his correct income before the search .....

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ent of the assessee that since the undisclosed income assessed by the A.O was not in excess of the returned income penalty u/s 158 BFA (2) of the Act cannot be imposed. But there were no other arguments on the imposition of penalty on the merits showing that the penalty imposed on the additions made in excess to returned amount cannot be imposed. - As there was additions in excess of returned income which is clearly undisclosed income not purely based on the estimation but was based on the s .....

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Accordingly, therefore, appeal of the assessee is dismissed with the above directions to the A.O to recalculate penalty as per letter and spirit of second proviso to Section 158BFA (2) of the Act. - I.T.A .No. 4417 /Del/2012 - Dated:- 29-8-2016 - SHRI G. D. AGRAWAL, VICE PRESIDENT, AND SHRI CHANDRA MOHAN GARG, JUDICIAL MEMBER For The Appellant : Shri Pahuja, Adv For The Respondent : Smt. Nandita Kanchan, DR ORDER PER CHANDRA MOHAN GARG, JM This appeal by the assessee has been filed against the o .....

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That the provisions laid down in proviso 1 & 2 appended to Section 158 BFA (2) have not been properly applied. 3. That the Ld.CIT(A) has grossly erred in holding that the undisclosed income determined by the A.O is ₹ 6,62,880/- as against the addition of ₹ 3,19,475/- made by the Ld. ACIT, CC-XIV. 3. We have heard arguments of both the sides and carefully perused the relevant materials placed on the record of the Tribunal, inter alia, impugned assessment orders, penalty order, ord .....

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2) of the Act as proviso 1 & 2 to said section have not been properly applied to the facts of the case. The Ld. Counsel placing reliance on the rating of the following decisions contended that penalty is not sustainable thus the same may be deleted: i. CIT Vs. Harkaran Das Ved Pal. Dated 12.11.2008 Delhi High Court ii. DCIT Vs. A.T. Invofin India Pvt. Ltd iii Super Cassettes Industries Ltd Vs JCIT, ITAT, Delhi dated 11.7.2013 iv. Dr. G. Ravindranath Sorma Kadapa Vs. ACIT dated 29.10.2010 4. .....

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r, may direct that a person shall pay by way of penalty a sum which shall not be less than the amount of tax leviable but which shall not exceed three times the amount of tax so leviable in respect of the undisclosed income determined by the Assessing Officer under clause (c) of section 158BC : Provided that no order imposing penalty shall be made in respect of a person if- (i) such person has furnished a return under clause (a) of section 158BC; (ii) the tax payable on the basis of such return .....

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return and in such cases penalty shall be imposed on that portion of the undisclosed income determined which is in excess of the amount of undisclosed income shown in the return. 7. In the present case, as per facts noted by the A.O in Para 2 of the penalty order assessment u/s 158BC of the Act was completed at an income of ₹ 6,62,880/- against the returned income of ₹ 3,43,404/- and thus addition of undisclosed income was made of ₹ 3,19,475/-. From the para 7 of the penalty o .....

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t of ₹ 3,43,404/- and total additions uphold by the CIT(A) on 5 issues, as noted by the A.O in the penalty order para 2, are of ₹ 3,19,475/-. Therefore, we are inclined to hold that the penalty was wrongly calculated and imposed on the total assessed income and penalty u/s 158 BFA (2) of the Act can only be imposed on the amount of undisclosed income determined which is in excess of the amount of undisclosed income shown in the return filed by the assessee for the relevant block peri .....

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und that the assessee himself had surrendered the amount and therefore, it could not be said that the assessee had either concealed or furnished inaccurate particulars of its income which is not case here as the A.O has assessed income u/s 158BC of the Act which is in excess of ₹ 3,19,475/- to the returned income. 10. In the case of DCIT Vs. M/s A.I. Infovin Pvt. Ltd (Supra) it was held that the audited balance sheet and P & L a/c which have were seized in the course of search containe .....

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ncome within the meaning of 158 BB(1)(c) which is also not the factum of the present case. On careful perusal of the orders of the Coordinate Bench of the Tribunal in the case of Super Cassettes Industries Ltd. u/s JCIT (Supra) and Dr. G. Ravinder Nath Sorang Vs. ACIT (Supra) it apparent that these are the cases wherein penalty u/s 158 BFA (2) of the Act was deleted by holding that there was material within the A.O to show that the impugned income which was basis of imposing penalty was not disc .....

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sed which shows that in the very case penalty is not mandatory but it is pure discretion of the Revenue Authorities as per facts of a particular case. In the present case, the A.O assessed taxable income u/s 158BC of the Act on five counts viz. (i) unexplained cash, (ii) expenditure incurred on the occasion of the marriage of the children of the assessee (iii) Expenditure incurred on the Foreign visits by the two sons and incidental expenses, (iv) investment made in pursuance of jewellery and (v .....

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Ticket, incidental charges of stay and local tour and pocket expenses including expenses incurred towards purchase of Sony Music System which was also not purely on estimate basis but based on the facts and documents revealed during the search and post search enquiries during the assessment. The addition on account of purchase of jewellery is also based on the seized material annexure A-5 and other details which was also not on purely estimated basis. The income of commission was also made on th .....

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observing that the assessee has not filed the return showing his correct income before the search and thereafter he imposed penalty on the assessed income including returned income which is not a proper approach and application of the mandate of secured proviso to Section 158BFA(2) of the Act. Since in the earlier part of this order we have observed that the penalty u/s 158BFA (2) of the Act can be imposed on the income assessed u/s 158BC of the Act which was in excess to the returned income. F .....

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