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TMI Blog2018 (12) TMI 1762X X X X Extracts X X X X X X X X Extracts X X X X ..... was carried out u/s 132 of the Income-tax Act, 1961 (in short 'the Act') at the premises of the assessee. During the search action, the assessee surrendered an amount of Rs. 4 crores on account of certain loose papers found during the search action and on account of certain discrepancies in the account of the assessee. The assessee vide letter dated 11.1.2013 stated that the additional income had been declared as a result of business transactions which were not recorded in the regular books of account / for discrepancies in the books of account. 3. The assessee, however, did not deposit the due taxes on the aforesaid surrender and made a statement that the same be adjusted through P.D./ seized assets. However, the Assessing office ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (5) read with section 139(1) of the Income Tax Act and paid the due taxes. It has, therefore, been pleaded that it is not a case of levy of any penalty u/s 271AAB of the Act. Further, at the most the penalty can be levied u/s 271AAB(1) of the Act @ 10% of the undisclosed income and not u/s 271AAB (3) of the Act @30% 6. The Ld. DR, on the other hand, has relied on the findings of the lower authorities. 7. We have considered the rival submissions and have also gone through the records. Admittedly, this is not a case where the assessee was found to be possessed of cash amount of which the assessee could not disclose the source. It is a case where the assessee during the search action had surrendered an amount of Rs. 4 cores on account of d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... such assessee- (i) in the course of the search, in a statement under sub-section (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) on or before the specified date- (A) pays the tax, together with interest, if any, in respect of the undisclosed income; and (B) furnishes the return of income for the specified previous year declaring such undisclosed income therein; (b) a sum computed at the rate of twenty per cent of the undisclosed income of the specified previous year, if such assessee- (i) in the course of the search, in a statement under sub-section (4) of section 132, d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch was conducted; (c) "undisclosed income" means- (i) any income of the specified previous year represented, either wholly or partly, by any money, bullion, jewellery or other valuable article or thing or any entry in the books of account or other documents or transactions found in the course of a search under section 132, which has- (A) not been recorded on or before the date of search in the books of account or other documents maintained in the normal course relating to such previous year; or (B) otherwise not been disclosed to the Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner before the date of search; or (ii) any income of the specified previous year represented, either wholl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aforesaid amount of Rs. 4 crores, there was a liability on the assessee to deposit the due taxes before the specified date to fall within in the provisions of section 271AAB(1) of the Act which provides for minimum levy of penalty @ 10% of the undecided / surrendered income. Hence, in this case there was an existing tax liability on the assessee to pay the taxes and, therefore, the Assessing officer should have adjusted the tax from the seized assets , hence, it cannot be said that the assessee has not complied the aforesaid requirement of provisions of section 271AAAB of the Act . Even otherwise, the assessee has also explained that it was not possessed of sufficient funds and the moment it got possessed of funds, it filed the revised retu ..... X X X X Extracts X X X X X X X X Extracts X X X X
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