TMI Blog2016 (12) TMI 752X X X X Extracts X X X X X X X X Extracts X X X X ..... se of Gebilal Kanhaiyalal (2012 (9) TMI 297 - SUPREME COURT) on the impugned issue, and deleted the penalty levied. Further, admittedly, no appeal has been filed by the Revenue against the said orders of the CIT(A). - Decided in favour of assessee. - ITA No. 729/Chd/2016 - - - Dated:- 9-11-2016 - Bhavnesh Saini, Judicial Member And Annapurna Gupta, Accountant Member N. K. Saini for the Appellant Inoshi Sharma, DR for the Respondent ORDER Per Annapurna Gupta, AM This appeal has been filed by the assessee against the order of learned Commissioner of Income Tax (Appeals)-3, Gurgaon dated 23.2.2016 for assessment year 2011-12, confirming the levy of penalty under section 271AAA of the Income Tax Act, 1961 (in short 'the Act'). 2. The assessee has raised the following grounds of appeal:- 1. The order passed by the learned CIT (A) is contrary to law and facts of the case. 2. The learned CIT (Appeal) has erred in law in confirming the penalty of ₹ 24,05,192/- levied u/s. 271AAA of IT Act 1961 on the ground that taxes and Interest in respect of undisclosed income were not paid in this case in due time, the third condition for non levy of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 71AAA of the Act were initiated. 5. During the penalty proceedings, the assessee submitted that it had complied with all the conditions outlined under section 271AA of the Act in claiming the immunity from levy of penalty since it had disclosed the undisclosed income in the statement made under section 132(4) at the time of search, had specified the manner in which the income had been earned and had also paid taxes on the same. The assessee, therefore, stated that the penalty under section 271AA of the Act could not be levied. The Assessing Officer rejected the assessee's contention and stated that the assessee had only specified the quantum of undisclosed income but neither specified its basis nor substantiated the manner of earning the same. Further, the Assessing Officer held that the assessee had not paid full taxes on the surrendered income at the time of filing of the return of income. The Assessing Officer therefore, levied penalty under section 271AA of the Act on the surrendered income of ₹ 2,40,51,920/- @ 10% of the same amounting to ₹ 24,05,192/-. 6. The matter was carried in appeal before the Ld. CIT (Appeals) where the assessee reiterated the cont ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... isputed:- 22.07.2013 Rs.20,20,000/- 04.10.2013 Rs.15,00,000/- 10.10.2013 Rs.15,00,000/- 13.12.2013 Rs.15,00,000/- 24.12.2013 Rs.14,47,890/- TDS deducted Rs.18,870/- Total Rs.79,86,760/- 10. Further, we find that assessment, under section 153A r.w.s. 143(3) of the Act, was framed on the assessee vide order dated 30.3.2014 and penalty initiated under section 271AAA on the same date i.e. 30.3.2014. Thus clearly all due taxes on the undisclosed income had been paid before framing of assessment and the initiation of penalty proceedings under section 271AA of the Act. Moreover, the Hon'ble Apex Court in the case of M/s. Gebilal Kanhaiyalal HUF, through Karta, Udaipur (supra) has categorically held that the only condition required for getting immunity from penalty, as per Explanation-5 to section 271(1)(c) of the Act, is that the assessee has to pay taxes together with intere ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eading of Explanation 5 to section 271(1)(c) of the Act, it is evident that this concession is meant for persons who after surrendering the undisclosed income for the current year, pay the amount of tax along with interest, if any, on such income before the due date. This does not give liberty to the assessee to plead that no penalty should believed on him for concealment of income merely for the reason that having failed to pay the due tax and the interest on the due date, the assessee paid the statutory interest thereon. In our view, the concession, as provided in Explanation 5, referred to above, can be availed of only by an assessee who after surrendering the income, pays the tax immediately and not belatedly. [para 2] 9. It is clear from the above that the Hon'ble High Court had held that immunity from penalty is to be availed by the assessee invoking the provisions of Explanation 5 to section 271 (1)(c) of the Act, only if tax on the surrendered income along with the interest is paid immediately and in any case before the due date of filing of return of Income. 10. We find that the Hon'ble Supreme Court has reversed the above proposition in the case of AC ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed to immunity under clause (2) as he did not satisfy the third condition for availing the benefit of waiver of penalty under Section 271(1)(c) as the assessee failed to file his return of income on 31st July, 1987 and pay tax thereon particularly when the assessee conceded on August 1, 1987 that there was concealment of income. The third condition under clause (2) was that the assessee had to pay the tax together with interest, if any, in respect of such undisclosed income. However, no time limit for payment of such tax stood prescribed under clause (2). The only requirement stipulated in the third condition was for the assessee to pay tax together with interest . In the present case, the third condition also stood fulfilled. The assessee has paid tax with interest upto the date of payment. The only condition which was required to be fulfilled for getting the immunity, after the search proceedings got over, was that the assessee had to pay the tax together with interest in respect of such undisclosed income upto the date of payment. Clause (2) did not prescribe the time limit within which the assessee should pay tax on income disclosed in the statement under Section 132(4). ..... X X X X Extracts X X X X X X X X Extracts X X X X
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