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Ashwani Kumar Arora Versus Assistant Commissioner of Income-Tax

Penalty under section 271(1)(c) - provision of penalty - disclosure of income on the basis of the search operation - Held that:- The penalty in this case, if at all leviable, it should have been levied under section 271AAA(1) and not under section 271(1)(c) as has categorically been provided in sub-section (3) of section 271AAA. The intention of the Legislature in incorporating the provisions contained under section 271AAA effective during the period June 1, 2007, to July 1, 2012, is to provide .....

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80,520 was disclosed by the assessee on the basis of the search operation conducted on February 10, 2009. So, without going into the merits of the case, we are of the considered view that the initiation of penalty proceedings as well as the penalty orders and the impugned order passed by the learned Commissioner of Income-tax (Appeals) are not sustainable in the eyes of law. Hence, the present appeal is allowed and the penalty imposed in this case is hereby deleted. - Decided in favour of assess .....

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tober 10, 2013, passed by the Commissioner of Income-tax (Appeals)-XXXIII, New Delhi, qua the assessment year 2008-09 on the grounds, inter alia, that : "1. That the Commissioner of Income-tax (Appeals) has, in view of the facts and in the circumstances of the case, erred on facts and in law in upholding the penalty order passed by the Assessing Officer. The penalty order is illegal, bad in law and without jurisdiction. 2. That the Commissioner of Income-tax (Appeals) has, in view of the fa .....

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er in the assessment order. 4. That the Commissioner of Income-tax (Appeals) has, in view of the facts and in the circumstances of the case, erred on facts and in law in upholding the invocation of Explanation 5A to section271(1)(c) of the Income-tax Act, 1961. 5. That the Commissioner of Income-tax (Appeals) has erred on facts and in law in dismissing the appeal of the assessee and the Commissioner of Income-tax (Appeals) has failed to adjudicate the matter in a judicious manner. 6. That the ev .....

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nd add the grounds of appeal any time during pendency of the appeal." 2. Briefly stated the facts of the case are : The assessee has filed its original return of income declaring its total income at ₹ 22,77,695 on December 23, 2008. On the basis of search carried out on February 10, 2009, in the Dawat group of cases including the assessee, the assessee was called upon to file its return of income under section 153A of the Income-tax Act, 1961 (hereinafter "the Act"), which i .....

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eply dated January 31, 2011, which was examined by the Assessing Officer in the light of Explanation 5A to section 271(1)(c) effective from June 1, 2007. The assessee found to have not declared the income from the trading business amounting to ₹ 36,02,828 in the original return of income which he has declared in response to the notice under section 153A of the Act on the basis of the seized documents in which numerous unaccounted cash transactions were found. The assessee chose to file the .....

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of particulars of income and, consequently, a penalty to the tune of ₹ 12,24,600 which is 100 per cent. of the tax evaded by the assessee has been levied under section 271(1)(c) of the Act. 4. The assessee carried the matter before the learned Commissioner of Income-tax (Appeals) who has affirmed the penalty order by dismissing the appeal. Feeling aggrieved, the assessee came up in appeal before the Tribunal by way of filing the present appeal. 5. During the appellate proceedings before th .....

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ction 271(1)(c) can be imposed in respect of the alleged undisclosed income. 11. That no satisfaction has been recorded while completing the assessment, hence notice issued under section 274 and the order passed under section 271(1)(c) of the Act are illegal, bad in law and without jurisdiction. 12. That the penalty has been initiated, vide notice under section 274 dated December 31, 2010, without any specific charge, hence, the notice and the order passed under section 271(1)(c) are illegal, ba .....

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d the learned authorised representatives of the parties to the appeal, gone through the documents relied upon and the orders passed by the Revenue authorities below in the light of the facts and circumstances of the case. 8. The learned authorised representative for the assessee challenging the impugned order contended, inter alia, that the penalty levied by the Assessing Officer under section 271(1)(c) of the Act is not sustainable in view of the amended provisions contained under sub-section ( .....

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assessee under section 271(1)(c) of the Act, vide order dated June 28, 2011, affirmed by the learned Commissioner of Income-tax (Appeals), vide the impugned order, is legally not sustainable in view of the amended provisions contained under sub- section (1) of section 271AAA of the Act ? 10. For facility of reference, the provisions contained under sub-section (2) of section 271AAA are reproduced as under : "271AAA. (1) The Assessing Officer may, notwithstanding anything contained in any ot .....

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ion (4) of section 132, admits the undisclosed income and specifies the manner in which such income has been derived ; (ii) substantiates 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)." 11. Undisputedly, .....

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8, which he has not disclosed earlier. It is also not in dispute between the parties to the appeal that the penalty proceedings were initiated under section 271(1)(c) read with Explanation 5A. 12. It is also not in dispute that the assessee during the search and seizure proceedings categorically admitted that the undisclosed income of ₹ 36,02,828 has been accrued to him along with his three brothers in their individual capacity by way of trading in various commodities and real estates and .....

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