TMI Blog2017 (5) TMI 718X X X X Extracts X X X X X X X X Extracts X X X X ..... r The Revenue : Shri Arun Shenoy, DR ORDER PER N.K. PRADHAN, AM This is an appeal filed by the assessee. The relevant assessment year is 2010-11. The appeal is directed against the order of the Commissioner (Appeals) 38, Mumbai and arises out of the order u/s 271AAA of the Income Tax Act, 1961 (the Act ). 2. The grounds of appeal filed by the assessee read as under: i. On the facts and circumstances of the case as well as in Law, the Learned CIT(A) has erred in confirming the action of Learned Assessing Officer in levying a penalty of ₹ 2,20,00,000/- u/s 271AAA of the Income Tax Act, 1961 being 10% of the additional income of ₹ 22,00,00,000/- without considering the facts circumstances of the case. ii. On the facts and circumstances of the case as well as in Law, the Learned CIT(A) has erred in confirming the action of Learned Assessing Officer in levying a penalty on the additional income of ₹ 22,00,00,000/- without appreciating the fact that the appellant had ITA No. 1967/MUM/2014 2 admitted the additional income during the search proceedings and offered the said income in the return of income and paid taxes along with interest only ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... voluntary compliance (ii) since the assessee himself offered the additional income of ₹ 22,00,00,000/- on account of unexplained cash of ₹ 12,48,85,000/- and also on account of incriminating document found during the search, it is evident that he had concealed the particulars of income. Therefore, the learned CIT(A) confirmed the penalty of ₹ 2,20,00,000/- levied by the A.O. 5. Before us, the learned counsel of the assessee relied on the decision in the case of CIT vs. Mahendra C. Shah (2008) 299 ITR 305 (Guj), Sita Ram Gupta vs. ACIT (2014) 151 ITD 449 (Del), DCIT vs. Rajendra Prasad Dokania (2012) 32 CCH 260 (Ahd-Trib), DCIT vs. Tapadia Kasliwal Associates (2015) 44 CCH 518 (Pune-Trib), Concrete Developers vs. ACIT (2013) 34 taxman.com 62 (Nagpur-Trib), AC CC vs. M/s. Phoenix Mills Ltd. (ITA No. 6190/Mum/2013 (Mum- Trib) and ACIT vs. Gebilal Kanhaialal HUF (2012) 348 ITR 561 (SC). The learned counsel also relied on the order of the ITAT D Bench, Mumbai in the case of Shri Dinesh Kiran Aggarwal for the A.Y. 2010-11 (ITA No. 2634/Mum/2013). 6. The learned DR relied on the order of the learned CIT(A) confirming the penalty of ₹ 2,20,00,000/- im ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hich included ₹ 50,00,000/- disclosed during the course of search. This was accepted by the A.O. in assessment order passed u/s 143(3). The A.O. then initiated penalty proceedings u/s 271AAA and imposed a penalty of ₹ 5,00,000/-. The Tribunal held that no penalty u/s 271AAA can be imposed where assessee has fulfilled all the conditions as laid down therein. In Tapadia Kasliwal Associates (supra), it is held that while payment of taxes, along with interest, by assessee is one of conditions precedent for availing immunity u/s 271AAA(2), there is no time limit set out for such payments by assessee . In Concrete Developers (supra), a search and seizure operation u/s 132 of the Act was carried out by the Department in the business premises of the assessee-firm and residential premises of the partners of the firm. A statement u/s 132(4) of N , partner of the assessee-firm was recorded by which the assessee offered for taxation an amount of ₹ 67 lakhs as unexplained cash and additional income of ₹ 1.53 crore in the hands of the firm. The A.O. completed the assessment u/s 143(3) and initiated penalty u/s 271AAA. The A.O. held that the assessee could not sp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he first condition was that the assessee must make a statement under Section 132(4) in the course of search stating that the unaccounted assets and incriminating documents found from his possession during the search have been acquired out of his income, which has not been disclosed in the return of income to be furnished before expiry of time specified in Section 139(1). Such statement was made by the Karta during the search which concluded on August 1, 1987. It is not in dispute that condition No.1 was fulfilled. The second condition for availing of the immunity from penalty under Section 271(1)(c) was that the assessee should specify, in his statement under Section 132(4), the manner in which such income stood derived. Admittedly, the second condition, in the present case also stood satisfied. According to the Department, the assessee was not entitled 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 th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the undisclosed income. If the above three conditions are satisfied penalty u/s 271AAA (i.e. 10% of undisclosed income of the specified previous year ) can be avoided. For the purposes of section 271AAA, undisclosed income has been defined so as to mean a. Any income of the specified previous years represented, either wholly or partly, by any money, bullion, jewellery or other valuable article or thing or any entry in the books of account or other documents or transactions found in the course of a search under section 132, which has not been recorded on or before the date of search in the books of account or other documents maintained in the normal course relating to such previous year, or which has otherwise not been disclosed to the Commissioner before the date of the search. b. Any income of the specified previous years represented, either wholly or partly, by any entry in respect of an expense recorded in the books of account or other documents maintained in the normal course relating to the specified previous year which is found to be false and would not have been found to be so had the search not been conducted. Specified previous year means the pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he entire sum found (Rs. 12,69,85,000/-)/seized (Rs. 12,45,00,000/-) from his premise during the course of action u/s 132 belongs to him and only him in his personal capacity. Not a single rupee found during the action, from my father s premise belongs to any of my other companies or me or to any of my other family members. Q 12 Do you want to say anything more? Ans. Yes. As mentioned in the answers of the above referred questions, I hereby summarise and state/confirm to declare a total amount to the tune of ₹ 58,35,05,065/- in the hands of the company M/s. Orbit Corporation Ltd. I would be paying due taxes on the above mentioned additional income declared on or before 28th February, 2010. Further my father has also declared an additional income to the tune of ₹ 12.48 crores over and above his regular income. The cash seized may be adjusted against the demand of Shri Ravi Kiran Aggarwal as well as M/s. Orbit Corporation Ltd. 7.5 Thus the assessee has admitted undisclosed income of ₹ 12,48,85,000/- in his statement recorded u/s 132(4) of the Act on 12.02.2010. This is also substantiated by Shri Pujit Aggarwal, Managing Director of M/s. OCL. and the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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