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TMI Blog2018 (11) TMI 1254X X X X Extracts X X X X X X X X Extracts X X X X ..... er the Tribunal was correct in having directed levy of income tax only on 15% of the total receipts disclosed in proceedings under Section 158BC of the Income Tax Act, 1961 [for brevity, the Act]? (ii) Ought not the Tribunal have found that when an undisclosed income is detected on search, then the entire income has to be treated as subject to levy of income tax? 2. I.T.A. No.1312 of 2009 is with respect to the penalty proceedings on the basis of the assessment completed under Section 158BC read with Section 143(3) of the Act. 3. The question raised is reframed as follows: (i) Has not the Tribunal erred in setting aside the penalty finding the provision to be under Section 158BFA of the Act to be a quasi criminal proceeding relying on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and the Tribunal directed adoption of 15% as profits and hence the undisclosed income for the purpose of levy of tax. 6. We do not see any infirmity in the said direction. We specifically notice sub-section (2) of Section 158B of the Act, which defines "undisclosed income" as including inter alia any income based on an entry in the books of accounts or other documents or transactions representing whole or part of the income, which has not been or would not have been disclosed for the purposes of this Act. The provision does not permit tax to be levied on the entire receipt of money by an assessee and also does not deem undisclosed income to be the entire undisclosed receipts, revealed on search or otherwise. 7. Here, the sale consideratio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ermined by the Assessing Officer under clause (c) of section 158BC: Provided that no order imposing penalty shall be made in respect of a person if- (i) such person has furnished a return under clause (a) of section 158BC; (ii) the tax payable on the basis of such return has been paid or, if the assets seized consist of money, the assessee offers the money so seized to be adjusted against the tax payable; (iii) evidence of tax paid is furnished along with the return; and (iv) an appeal is not filed against the assessment of that part of income which is shown in the return. Provided further that the provisions of the preceding proviso shall not apply where the undisclosed income determined by the Assessing Officer is in exc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , indicated the entire receipts received by the assessee having not been disclosed in the books of accounts or conceded in the returns. There is a statutory obligation to file a return as provided under the Act conceding the income received in the year and paying the applicable tax. This is definitely a civil liability and even otherwise the fact of discovery of the details from the premises of the assessee itself postulates a deliberate defiance in complying with the applicable provisions of law. However, penalty could only be with respect to that income, which was not disclosed in the returns or in the return filed under Section 158BC of the Act. 11. The first proviso, to sub-section (2) of Section 158BFA, makes it clear that no order im ..... X X X X Extracts X X X X X X X X Extracts X X X X
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