TMI Blog2020 (4) TMI 682X X X X Extracts X X X X X X X X Extracts X X X X ..... AL MEMBER 1. These two appeals filed by the Assessee are directed against the order of the Ld. CIT(A). Since the dispute in both the appeals are common except the penalty amount therefore for the sake of brevity, we would like to dispose of all appeals together. The assessee has taken following grounds of appeal: 1.0 ORDER PASSED UNDER SECTION 271 (1) (C) IS BAD IN LAW. 1.01 On the facts and circumstances of appellant's case and in law, the Id. CIT (Appeal) has erred to appreciate the initiation of penalty proceedings is bad in law as it was silent on whether it is concealment of income or furnishing of inaccurate particulars of income as both can not exist at the same time. 1.02 Your appellant therefore prays Your Honour to hold so now and treat the penalty proceedings as bad in law. 2.00 IMPOSITION OF PENLATY TO THE TUNE OF ₹ 7, 54,231/-ON ADDITION MADE ON ACCOUNT OF UNDISCLOSED INCOME. 2.01 On the facts and circumstances of appellant's case and in law, the Id. CIT (Appeals) has erred in confirming the levy of penalty to the tune of ₹ 7,54,231 /- under section 271 (1)( c) of the Act by the Id. AO on addition made on account of disclo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t automatic, and that reliance merely on statement u/s 132(4) may possibly justify addition but cannot justify levy of penalty. The appellant also relied on various Authorities as per page 4 to 6 of the Penalty Order to argue, that no penalty u/s 271(l)(c) is leviable on income already disclosed in return u/s 153A. The AO has, after minutely analyzing the facts and the provisions of Explanation 5A to section 271(l)(c), observed that the additional income disclosed in returns filed u/s 153A on the basis of and on account of incriminating seized documents/ seized assets evidencing undisclosed Income not hitherto disclosed in earlier returns filed u/s 139 clearly attracts levy of penalty u/s 271(l}(c) read with Explanation 5A, The AO has summed up the issue in para 5-6 of the penalty order, and held that on facts, Explanation 5A to section 271(l)(c) is applicable and therefore, he has levied the minimum penalty at 100% of the tax sought to be evaded amounting to ₹ 7,54,231/-. 3. Against the imposition of penalty, assessee preferred first statutory appeal before the ld. CIT(A) who confirmed the action of the ld. A.O. 4. Now assessee has come before us. 5. In this case, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r may, notwithstanding anything contained in any other provisions of this Act, direct that, in a case where search has been initiated under section 132 on or after the 1st day of July, 2012 49[but before the date on which the Taxation Laws (Second Amendment) Bill, 2016 receives the assent of the President50], the assessee shall pay by way of penalty, in addition to tax, if any, payable by him,-- XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX (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 54[Principal Chief Commissioner or] Chief Commissioner or 54[Principal Commissioner or] Commissioner before the date of search; or (ii) any income of the specified previous year represented, either whol ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... found during the course of search indicating the assets not recorded in the books of accounts or other documents maintained in the normal course, wholly or partly. The revenue did not find any undisclosed asset, any other undisclosed income or the inflation of expenditure during the search/ assessment proceedings. Though a loose sheet of page No.107 of Annexure A/GS/MA/1 was found that does not indicate any suppression of income but it is only projection of profit statement. The amount of ₹ 3571/- mentioned in the projections refers to cost and profit which is approximate sale price but not the cost as stated by the AO in the penalty order. The cost of construction in the projections projected at ₹ 2177/- which is in synch with the statement given by the assessee. The AO was happy with the disclosure given by the assessee and did not verify the factual position with the books of accounts and projections and bring the evidence to unearth the undisclosed income. Neither the A.O. nor the investigation wing linked the cost of profit or cost of asset to the entries in the books of accounts or to the sales conducted by the assessee to the sale deeds. Therefore, we a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... On the facts and circumstances of appellant's case and in law, the Id. CIT (Appeals) has erred in confirming the levy of penalty to the tune of ₹ 14,43,411 /- under section 271 (1)( c) of the Act by the Id. AO on addition made on account of disclosure of additional income while filing return as part of search proceedings. While doing so, the Id. CIT (Appeals) failed to appreciate that there was no addition made by the Id. AO during the course of assessment proceedings u/s 143(3) r.w.s 153A of the Act to the returned income under section 153A of the Act, and therefore appellant cannot be treated to be assessee concealing income. While doing so, the ld. CIT(A) has erred in treating appellant as relying on decision of Kirit Dahyabhai of the Jurisdictional High Court though that was not the case. 2.02 Your appellant prays to hold so now and delete the impugned penalty. 12. Since on similar facts and circumstances of the case, we have given relief to the assessee in connected IT(SS)A No. 258/Ahd/2017. Thus, in parity with the said appeal, we allow the appeal of the assessee. 13. In the result, both the appeals of the assessees are allowed and we direct th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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