TMI Blog2019 (10) TMI 1175X X X X Extracts X X X X X X X X Extracts X X X X ..... case of the assessee. In the absence of search u/s 132 of the Act, the consequential or incidental assessment proceedings under s.153C of the Act will not, in our view, entitle the AO to usurp jurisdiction u/s 271AAB of the Act for the purposes of imposition of penalty. Penalty in the case of assessee cannot be sustained as the assessee was not a person who was subjected to search u/s. 132 of the Act and consequently the provisions of section 271AAB could not be invoked in his case. - Decided in favour of assessee. - ITA Nos. 2950 to 2955/Bang/2018 - - - Dated:- 25-10-2019 - Shri N V Vasudevan, Vice President And Shri G Manjunatha, Accountant Member For the Appellant : Shri S.V. Ravi Shankar, Advocate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ppeals, the issue that requires adjudication is as to whether the revenue authorities were justified in imposing penalty on the assessee u/s. 271AAB of the Income-Tax Act, 1961 [ the Act ]. The admitted factual position is that assessee is an individual. He was a partner of a firm by name M/s. Kerudi Hospital Research Centre. The partnership firm was subjected to a search u/s. 132 of the Act on 21.11.2012 at Bagalkot. Certain evidence was found during the course of such search and based on those documents proceedings u/s. 153C of the Act were initiated against the assessee in AYs 2007-08 to 2012-13. Various additions were made to the total income of the assessee in the order passed u/s. 153C of the Act r.w.s. 143(3) of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) of section 132, does not admit the undisclosed income; and (ii) on or before the specified date- (A) declares such income in the return of income furnished for the specified previous year; and (B) pays the tax, together with interest, if any, in respect of the undisclosed income; (c) a sum which shall not be less than thirty per cent but which shall not exceed ninety per cent of the undisclosed income of the specified previous year, if it is not covered by the provisions of clauses (a) and (b). (2) 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 referre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... B) otherwise not been disclosed to the Chief Commissioner or Commissioner before the date of search; or (ii) any income of the specified previous year represented, either wholly or partly, by any entry in respect of an expense recorded in the books of account or other documents maintained in the normal course relating to the specified previous year which is found to be false and would not have been found to be so had the search not been conducted. 6. The AO imposed penalty on the assessee ignoring the plea of assessee that the amount brought to tax was accepted and taxes paid thereon just to purchase peace. The CIT(Appeals) confirmed the order of AO. 7. Aggrieved by the order of CIT(Appeal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 271AAB(1) clearly provides that the AO may direct the assessee to pay a sum by way of penalty at specified percentage where undisclosed income of the specified previous year has been detected as a result of search under s.132 of the Act. Section 271AAB(1)(a) however simultaneously provides concessional treatment in the matter of penalty under s.271AAB where the assessee admits the undisclosed income in a statement under subsection 4 of Section 132 of the Act subject to fulfillment of other conditions with which we are presently not concerned with. Therefore, it is manifest that applicability of Section 271AAB is integrally connected to search under s.132 of the Act. In the absence of search under s. 132 of the Act, the ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s not been able to point out as to how this finding of the learned CIT(A) is erroneous. This being so the finding of the learned CIT(A) on this issue stands confirmed. 12. In view of the aforesaid decision of coordinate Benches, we are of the view that the penalty in the case of assessee cannot be sustained as the assessee was not a person who was subjected to search u/s. 132 of the Act and consequently the provisions of section 271AAB could not be invoked in his case. 13. In view of the above conclusion, we are not dealing with the other aspects of imposing penalty raised by the assessee in the grounds of appeal. 14. In the result, all the appeals of the assessee are allowed. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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