TMI Blog2020 (2) TMI 929X X X X Extracts X X X X X X X X Extracts X X X X ..... see about undisclosed income and default committed by the assessee. No merit or substance in the Ground No. 1 of the assessee's appeal challenging the validity of initiation of penalty proceedings and consequential order passed u/s 271AAB of the Act. Thus Ground No. 1 of the assessee is dismissed. Levy of penalty u/s 271AAB - disclosure and surrender during the course of search and seizure action - No dispute that during the course of search and seizure action, the assessee could not explain the cash of ₹ 60,311/- and jewellery of ₹ 2,31,880/- found during search. The assessee in the statement recorded u/s 132(4) of the Act has disclosed the said amount as undisclosed income and also declared the same in the return of i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... validity of order passed by the AO. 2. That on the facts and in the circumstances of the case , the ld. CIT(A) erred in sustaining the penalty of ₹ 29,129/- u/s 271AAB of the Act. 3. That on the facts and in the circumstances of the case , the ld. CIT(A) erred in recording various observations in the appellate order which are contrary to the provisions of law and also against the law decided by the Hon'ble Courts.. 4. That on the facts and in the circumstances of the case , the ld. CIT(A) erred in not considering the explanation and judicial decisions referred by the appellant. 4.1 The Ground No. 1 of the assessee is regarding the validity of initiation of penalty proceedings u/s 271AAB of the Act for want of specif ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... O. The ld. DR has submitted that in show cause notice the AO made specific charge u/s 271AAB of the Act for levying the penalty against undisclosed income. Thus the ld. DR relied on the orders of the lower authorities. 4.4 We have heard the ld. DR, written submissions of the assessee as well as the relevant materials available on record. During the course of search and seizure action carried out u/s 132(1) of the Act on 2-07-2015, the assessee in her statement recorded u/s 132(4) of the Act disclosed the unexplained cash of ₹ 60,311/- and unexplained investment in gold jewellery of ₹ 2,31,880/- totaling to ₹ 2,92,191/-. It is pertinent to note that income disclosed and surrendered by the assessee is based on the physica ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed by the AO and as such the levy of penalty u/s 271AAB is not justified. Further, it is contended that the income disclosed by her does not fall in the definition of undisclosed income provided in explanation to Section 271AAB of the Act. The assessee has relied on the decisions of this Tribunal in the case of Rajendra Kumar Gupta vs DCIT (ITA No.359/JP/2017) and in the case Padam Chand Pungliya vs ACIT (ITA No. 112/JP/2018 dated 5-04-2019). 5.3 On the other hand, the ld. DR has submitted that disclosure and surrender was made by the assessee in respect of undisclosed cash and jewellery found during the course of search and seizure action. Therefore, this disclosure is not based on any entry in the books of account or seized material ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ₹ 60,311/- and jewellery valued at ₹ 2,31,880/- found during search. Therefore, the income of ₹ 2,92,191/- falls within the definition of undisclosed income as given in clause of Explanation to Section 271AAB. 5.2 The argument of the assessee that penalty u/s 271AAB is not mandatory is found to be supported by the judicial authorities and is therefore, acceptable in principle, but the said findings does not apply in the facts of the instant case, because, as discussed in the preceding para, in the instant case, income of ₹ 2,92,191/-, in respect of which penalty u/s 271AAB has been levied, falls within the definition of undisclosed income as given in clause of Explanation to Section 271AAB. Therefore, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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