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2018 (2) TMI 748

the head income from other sources. A perusal of the assessment order shows that the assessee has surrendered the income, explained the manner in which it was earned and has paid the taxes due thereon. Therefore, the assessee has fulfilled all the conditions laid down in Section 271AAA for non-levy of penalty under the said provisions. Even otherwise also, it is an admitted fact that no search has taken place in the premises of the assessee and, therefore, provisions of Section 271AAA are not at all applicable. - Decided against revenue. - ITA NO. 6379 /DEL/2016 - Dated:- 12-2-2018 - SHRI R. K. PANDA, ACCOUNTANT MEMBER AND SMT. BEENA A PILLAI, JUDICIAL MEMBER For The Appellant : Sh. Rajkumar & Sh. Sumit Goyal, CA For The Respondent : Sh. Amit Jain, Sr. DR ORDER PER R. K. PANDA , AM This appeal filed by the Revenue is directed against the order dated 6th October, 2016 of the CIT(A)-5, Delhi relating to Assessment Year 2012-13. 2. Deletion of penalty of ₹ 22,71,150/- levied by the A.O. u/s 271AAA is the only issue raised by the Revenue against the order of the ld. CIT(A) in the grounds of appeal. 3. Facts of the case, in brief, are that the assessee is a company and filed i .....

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see company has admitted the amount of undisclosed income voluntarily and surrendered a sum of ₹ 2.10 lakhs in respect of discrepancies found in the books of accounts and the documents seized from its premises. The assessee has substantiated the manner of earning of such income by explaining each and every entry of the seized material and has paid the tax due thereon along with interest in respect of such undisclosed income. Various decisions were also brought to the notice of the A.O. 6. However, the A.O rejected the explanation given by the assessee and levied penalty of ₹ 22,71,150/- of the I.T. Act u/s 271AAA of the I.T Act. While doing so, he observed that the assessee failed to specify the manner in which such income was derived and also failed to substantiate the manner in which the undisclosed income was derived. Further, such undisclosed income was not recorded on or before the date of search, in the books of accounts or other documents maintained in the normal course or otherwise not disclosed to the Chief Commissioner of Income Tax or Commissioner of Income Tax before the date of search. According to the A.O. if the search and seizure operation had not been c .....

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e 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). (4) The provisions of sections 274 and 275 shall, so far as may be, apply in relation to the penalty referred to in this section. Explanation. - For the purposes of this section,- (a) undisclosed income means- (i) any income of the specified previous year 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(A) 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 (B) otherwise not been disclosed to the 22[Principal Chief Commissioner or] Chief Commissioner o .....

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distinction to the facts mentioned at para 2 and para 5 of the penalty order. The present penalty proceedings emanate from the assessment proceedings and hence, the facts mentioned in the assessment order by the A.O have to be given precedence. In sum total, therefore, the facts clearly show that there was no search on the appellant company. The appellant has placed reliance on the Delhi ITAT decision in the case of Sam India Abhimanyu Housing ITA no. 1257/Del/2015 wherein the facts were that the penalty had been deleted by the CIT (A) since the assessee was not covered u/s 132 i.e. no search had been conducted on the assessee but the assessee was covered by survey u/s 133A. The Tribunal upheld the finding of the CIT(A) that the penalty u/s 271AAA was legally not sustainable. Since the facts of the present case are identical and even better, as there is no mention of even survey action in the appellant's case, the penalty cannot be legally sustained. 3.2.2 It is found that the courts have held that section 271AAA and 271(l)(c) penalties are mutually exclusive and cannot be substituted to each other. In the case of Marvel Tea Estate 171 TTJ 589 when the A.O levied penalty u/s 27 .....

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