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TMI Blog2019 (5) TMI 1260X X X X Extracts X X X X X X X X Extracts X X X X ..... ax Act on account of surrendered amount of Rs. 21,81,00,000/- during the course of search & seizure action." 2. Briefly stated the facts necessary for adjudication of the controversy at hand are : On the basis of completed assessment u/s 143 (3) of the Act at the income of Rs. 20,82,66,620/-, penalty proceedings were initiated u/s 271AAA of the Act on account of surrendered amount of Rs. 21,81,00,000/- and offered in the return of income. Declining the contentions raised by the assessee, AO proceeded to levy the penalty of Rs. 2,18,10,000/- u/s 271AA @ 10% of the undisclosed income on the ground that the assessee has failed to specify the manner in which such income has been derived and that the return of income filed u/s 139(1) cannot be considered as voluntary return as the same was filed when assessee was subjected to search u/s 132 of the Act. 3. Assessee carried the matter by way of an appeal before the ld. CIT (A) who has deleted the penalty after accepting the appeal. Feeling aggrieved, the Revenue has come up before the Tribunal by way of filing the present appeal. 4. We have heard the ld. Authorized Representatives of the parties to the appeal, gone through the documen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y is not the same as in the case of section 271(1)(c) because u/s 271AAA (2) escape route has been given to the assessee on fulfilling the three conditions viz.:- (i) in the course of the search, in a statement under subsection (4) of section 132, admits the 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. 9. The requirement for initiating the penalty proceedings u/s 271AAA is that search has been initiated u/s 132 on or after the first day of June 2007 but before 1st day of July 2012 and that undisclosed income of the specified previous year has been unearthed on which the assessee shall pay by way of penalty in addition to tax, if any, a sum computed @ 10% of the undisclosed income. 10. In view of the matter, we are of the considered view that the ld. CIT (A) has deleted the penalty on the wrong premise that the AO has not recorded his satisfaction in the assessment order itself as to the reasons why he was satisfied that penalty u/s 271AAA should be initiated. Because in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... page No. 20 of Annexure AA- 1, please explain the transactions mentioned in this paper? A.8. ABAG Hi-tech Education Private Limited is a jointly promoted company by myself and Mr. A.K. Bishnoi. It has earned income amounting to Rs. 21.81 crores (approx) which in turn was utilized by the company in land development improvement & facilitation expenses. Q.9 Do you want, to say anything else? A.9. In order to buy peace & avoid litigation with the Department and in the spirit of cooperation, I Amul Gabrani and Mr. A. K. Bishnoi offer a sum of Rs. 19,77,06,696/- and Rs. 20,34,15,254/- respectively as the additional income along with an amount of Rs. 21.81 crore (approx.) as stated above, aggregating to Rs. 61,92,41,340/- as the additional income for the F.Y. 2011-12 on account of some omission/commission papers or documents seized and or found in respect of group companies and or individuals during the course of search. The above surrender is made with the clear understanding that the necessary tax shall be paid by me and there will be no penal action by the Department whatsoever. The above disclosure is inclusive and comprises of the disclosure made on 06.03.2012. The same is b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... recording of statement u/s 132 (4) in the search proceedings instead of complying with the provisions contained under sub-section (2) of section 271AAA harped on his mercy petition that, "In order to buy peace and avoid litigation with the Department and in the spirit of cooperation, surrender is being made as additional income for FY 2011-12 on account of some omission/commission in the papers or documents seized and the said surrender is made with a clear understanding that necessary tax shall be paid by him and there will be no penalty action by the Department." 19. Ld. AR for the assessee relied upon the decision rendered by coordinate Bench of the Tribunal in case of Sita Ram Gupta vs. ACIT in ITA No.1835/Del/2013 order dated 30.06.2014 wherein the penalty has been deleted on fulfilling the conditions by the assessee laid down u/s 271AAA (2) but is not applicable to the facts and circumstances of the case. 20. Hon'ble High Court of Delhi in a case relied upon by the ld. CIT DR cited as Pr.CIT vs. Smt. Ritu Singal - (2018) 92 taxmann.com 224 (Delhi) after discussing the decisions relied upon by the ld. AR rendered by Hon'ble Apex Court in ACIT vs. Gebilal Kanhaialal 348 ITR ..... X X X X Extracts X X X X X X X X Extracts X X X X
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