TMI Blog2020 (4) TMI 741X X X X Extracts X X X X X X X X Extracts X X X X ..... Member And Shri Mahavir Prasad, Judicial Member For the Appellant : Shri Ketan Shah and Aman Shah, AR For the Respondent : Shri L. P. Jain, Sr. D.R. ORDER PER MAHAVIR PRASAD, JUDICIAL MEMBER 1. This appeal filed by the Assessee is directed against the order of the Ld. CIT(A)-12, Ahmedabad dated 28.02.2017 pertaining to A.Y. 2012-13 and following grounds have been taken: 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 ₹ 2,70,377 /- 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 ₹ 2,70,377 /- under se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s to why penalty should not be imposed or if she wishes to be heard in person, either she or her authorised representative may appear on or before that date. In response, the assessee filed her reply in this office as per letter dated 16.06.2015. The assessee, in this submission, has mainly contended that the search in her case was not carried out. Therefore, provisions of section 271AAB of the Act are not attracted in her case. The assessee further contended that the assessee's case, at the most, covered by the provisions of section 271AAA and not 271AAB of the Act. The contentions of the assessee in the submission are reproduced as under:- I have received captioned letter dated 14/05/2015 with regards to penalty proceedings u/s 271AAB of the Income Tax Act, 1961 ('the Act' for short) for A. Y.2012-13. In that respect I wish to submit as under: 1. I had filed return of income for A.Y.2012-13 and assessment was completed u/s 143(3) r.w.s. 153A of the Act without making any addition to my returned income. However, while passing assessment order for said assessment year, you have mentioned as under: The assessee in his return of income has offered additio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a statement u/s 132(4) of the Act during search therefore the question of levy of penalty u/s 271AAB does not arise. However, on the additional income declared in the return of income filed u/s 153A due taxes were paid with interest within specified date. Accordingly I have complied sub-clauses (ii) and (iii) of clause (a) of sub section (1) of section 271AAB of the Act. Since I do not fall under sub-clause (i) herein above, no penalty is leviable u/s 271AAB of the Act 5. The clause (b) of sub-section (1) of section 271AAB provides that the assessee shall pay by way of penalty, in addition to tax, if any payable by him, 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, does not admit the undisclosed income; (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. As mentioned herein above, I had neither declared any income in a s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... statutory appeal before the ld. CIT(A) who confirmed the penalty: I find no infirmity in the action of the AO in levying penalty. I, however, also find that the appellant's categorical contention that the disclosure u/s 132(4) is not made by the appellant herself but is made by Shri Dhanraj Manglani and therefore, penalty is not leviable has not been specifically and expressly dealt with by the Ld. AO. In this behalf, I may observe that if this argument of the appellant is taken to the logical end, the penalty at 20%, in place of 10% levied by the AO, would become payable by the appellant under clause (b) of section 271AAB because it remains indisputable that the subject matter of disclosure is indeed the incriminating documents/unaccounted assets which have not found any reference or entry in the regular books of accounts maintained by the appellant. However, I am also aware of Jurisdictional Tribunal decision in the case of Balaji Formalin Put. Ltd. dated 8/8/2013 of Hon'ble Ahmedabad Tribunal vide ITA No: 1274/Ahd/2012 has held that the disclosure made by the director of the Appellant company will entitle the assessee company to get immunity from provision of sect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The AO accordingly on such additional income disclosed by the assessee levied the penalty at the rate of 10% of additional income being 63,417.00 under the provisions of section 271AAB of the Act. The learned CIT (A) also confirmed the order of the AO. Being aggrieved by the order of the learned CIT (A), the assessee is in appeal before us. 18. The learned AR before us submitted that there was no undisclosed income available to the assessee within the meaning of explanation (c) to section 271 AAB of the Act. Therefore, there cannot be any penalty. 19. On the other hand, the learned DR vehemently supported the order of the authorities below. 20. We have heard the rival contentions of both the parties and perused the materials available on record. At the outset we note that the explanation to section 271AAB of the Act has a direct bearing on the on the issue on hand which reads as under: 48[Penalty where search has been initiated. 271AAB. (1) The Assessing Officer 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 4 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... incriminating material. In the instant case a loose sheet was found according to the A.O., it was incriminating material evidencing the undisclosed income. In the penalty order the AO observed that loose sheet shows the cost per square feet is ₹ 3571/- per sft. and assessee stated to have submitted in sworn statement cost per sq. feet at ₹ 2200/- to ₹ 2300/- per sq. feet. However neither the AO nor the Ld.CIT(A) has verified the cost of construction with the books and projections found at the time of search. The counsel argued that it was mere projection but not the actuals. The write up heading also mentioned that summary of the projected profitability statement. There is no evidence to establish that projections reflected in the loose sheet is real. No other material was found during the course of search indicating the undisclosed income. There was no money, bullion, jewellery or valuable article or thing or entry in the books of accounts or documents transactions were 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 fi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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