TMI Blog2017 (7) TMI 1139X X X X Extracts X X X X X X X X Extracts X X X X ..... penalty levied u/s. 271AAA of the Income Tax Act, 1961 (hereinafter referred to as the Act ). 2. The facts as emanating from record are : The assessee is a Chairman of Siddheshwar Group. A search action u/s. 132 of the Act was carried out in the case of Siddheshwar Group on 27-09-2010. The assessee filed his return of income on 05-03-2012 declaring total income of ₹ 1,56,73,256/- and Agricultural income of ₹ 1,22,379/-. Thereafter, the assessee filed another return of income on 14-12-2012 disclosing total income as ₹ 1,62,31,756/- and Agricultural income of ₹ 1,22,379/-. During the course of search proceedings, the assessee offered additional income of ₹ 83,33,375/- for assessment year 2011-12. ₹ 51,00,000/- was disclosed on account of expenditure on construction of bungalow and ₹ 32,33,375/- on account of gold jewelry. The Assessing Officer initiated penalty proceedings u/s. 271AAA of the Act. Notice u/s. 274 r.w.s. 271AAA was issued on 28-03-2013 and penalty of ₹ 16,23,180/- was levied u/s. 271AAA vide order dated 27-09-2013. Aggrieved by the order levying penalty, the assessee filed appeal before the Commissioner of Income T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... orded in the books of account of the assessee. Referring to para 6.7 of the Hon'ble CIT(A)'s order, he states I find that there is not a whisper in either of them about any income represented either by money-bullion, jewellery or other valuable article or thing or any entry in the books of account. The only reason cited both while initiating penalty proceedings in the assessment order and for levying penalty in the penalty order is that the assessee had disclosed/offered additional income as a consequence of search and subsequently filed RoI declaring the same in his hands. Accordingly, the additional income based on which penalty has been imposed by the Id AO in the present case cannot be said to constitute undisclosed income since there is nothing to indicate that it represented by any asset found or any entry either in the seized books or regular books. The assessee's submission which is also there in the penalty order at para 3 is as under It is pertinent to note that, I have already admitted and voluntarily declared the undisclosed income of ₹ 83,33,315/- in my statement and accordingly complied the entire condition provided in subsection (2) of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... S 271 AAA has to be levied @ 10% of the undisclosed income of the specified previous year, as referred in section 271AAA(1) of the Act. The Ld DR relied upon the decision of the Hon'ble Punjab Haryana High Court in the case of CIT vs. Mridula, Prop. Dhruv Fabrics reported in (2011) 335 ITR 266. In view of the above, it is clear that the assessee had undisclosed income as asset of ₹ 51,00,000/- in Bunglow and ₹ 32,33,375/- in Gold as per the statement U/S 132(4) as shown in the para 3 on page 2 of the assessment order. Both of these investment form part of the undisclosed income for the clause (a) of explanation to section 271AAA. Therefore, it is requested to set aside the order of Hon'ble CIT(A) and confirm the penalty order of the AO. 4. On the other hand Shri Hari Krishan appearing on behalf of the assessee vehemently supported the findings of Commissioner of Income Tax (Appeals) in deleting penalty. The ld. AR contended that during the course of search, the assessee made disclosure of ₹ 32 lakhs in respect of excess jewelry found. In the concluding statement recorded on 13-11-2010, the assessee disclosed investment to the tune of ₹ 51 la ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ied u/s. 271(1)(c) of the Act in the assessment year 2010-11 in the case of other group constituents was deleted by the Tribunal. 5. We have heard the submissions made by the representatives of rival sides and have perused the orders of the authorities below. We have also examined the documents referred to by the ld. AR of the assessee and the decisions relied upon by the representatives of rival sides. The Revenue is in appeal against the order of Commissioner of Income Tax (Appeals) in deleting penalty levied u/s. 271AAA of the Act. Before deciding the issue it would be relevant to first refer to the provisions of section 271AAA of the Act. The relevant extracts of the same are reproduced here-in-below : (1) The Assessing Officer may, notwithstanding anything contained in any other provisions of this Act, direct that, in a case where search has been initiated under section 132 on or after the 1st day of June, 2007 [but before the 1st day of July, 2012] the assessee shall pay by way of penalty, in addition to tax, if any, payable by him, a sum computed at the rate of ten per cent of the undisclosed income of the specified previous year. (2) Nothing contained in sub-sect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat the Assessing Officer was not clear in his mind while recording satisfaction whether the penalty is to be levied under the provisions of section 271(1)(c) or the provisions of section 271AAA of the Act. Similarly, in the order levying penalty u/s. 271AAA, the Assessing Officer levied penalty for concealment of income. There is no reference of undisclosed income‟ either in the assessment order or the order levying penalty u/s. 271AAA of the Act. The undisclosed income‟ as defined in Explanation to section 271AAA means any income represented either wholly or partly by any money, bullion, jewelry or other valuable article or things or any entry in the books of account or other documents or transactions found in the course of search which has not been recorded in the books of account or disclosed to the designated Income Tax Authority before the date of search. In the present case, the Assessing Officer has failed to specify the undisclosed income‟ unearthed during the search as envisaged under the provisions of section 271AAA of the Act. 7. The manner in which the entire penalty proceedings are conducted right from initiation to the order levying penalty, i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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