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TMI Blog2018 (9) TMI 1324X X X X Extracts X X X X X X X X Extracts X X X X ..... t the condition provided u/s. 271AAA(2) stood satisfied as assessee was not asked to specify the manner in which such income was earned and substantiate the manner in which income was derived, even though as per the provisionit was for the assessee to voluntarily state the above even if no such query was put to the assessee?" 2. The issue pertains to penalty levied by the Assessing Officer under section 271AAA of the Income Tax Act, 1961 ['the Act' for short]. On the ground that though the assessee had made the disclosures, it had now showed the manner of deriving such income. CIT(A) came to the conclusion that the assessee had satisfied this additional requirement for claiming immunity also since there was substantial compliance ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the assessee to specify in the statement under Section 132(4) of the Act regarding the manner in which such income has been derived, suffice it to state that when the statement is being recorded by the authorized officer it is incumbent upon the authorized officer to explain the provisions of Explanation 5 in entirety to the assessee concerned and the authorized officer cannot stop short at a particular stage so as to permit the Revenue to take advantage of such a lapse in the statement. The reason is not far to seek. In the first instance, the statement is being recorded in the question and answer form and there would be no occasion for an assessee to state and make averments in the exact format stipulated by the provisions considering ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent, however, must be seen as consequential to or corollary to the base requirement of specifying the manner, in which, the undisclosed income was derived. It is only when such declaration is made, the question of substantiating such disclosure or claim would arise. If, as in the present case, the Revenue failed to question the assessee while recording his statement under section 132 (4) of the Act as regards the manner of deriving such income, the Revenue cannot jump to the consequential or later requirement of substantiating the manner of deriving the income. In the context of the requirement of the assessee specifying the manner of deriving the income the decision of this Court in case of Commissioner of Income Tax vs. Mahendra C.Shah (s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in addition to confirming the disclosure of undisclosed income, further stated that the income was earned by the group out of land related transactions which was not previously recorded in the books. This was thus specifically in compliance with the requirement of establishing the manner, in which, the income was earned. It is true that at this stage, he could not give the break up of such income person wise or firm wise citing the reason of sealing of the bank locker. In our opinion, this would not be of much relevance. Firstly as noted, the answer was in sufficient compliance of requirement of manner of earning income. Secondly, as recorded by the CIT (A), the Assessing Officer had made additions taxing the admitted amounts in respective ..... X X X X Extracts X X X X X X X X Extracts X X X X
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