TMI Blog2021 (1) TMI 743X X X X Extracts X X X X X X X X Extracts X X X X ..... stained 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. 2791 And 2792/Bang/2017 - - - Dated:- 19-1-2021 - Shri Chandra Poojari, Accountant Member And Smt. Beena Pillai, Judicial Member For the Appellant : Shri S.V. Ravishankar, Advocate For the Respondent : Shri Priyadarshi Mishra, Addl.CIT(DR)(ITAT), Bengaluru. ORDER PER CHANDRA POOJARI, ACCOUNTANT MEMBER These two appeals by the assessee are directed against the orders dated 3.10.2017 and 3.7.2017 of the CIT(Appeals), Hubli for the assessment years 2012-13 2013-14 respectively. 2. The assessee has raised the following grounds of appeal:- 1. The order of the learned Commissioner of Incometax( Appeals) passed under Section 250 of the Act in so far as it is against the Appellant is opposed to law, weight of evidence, probabilities, facts and circumstances of the Appellant's case. 2. The appellant denies himself to be liable to a penalty of ₹ 6,06,360/- (AY 2012-13) ₹ 22,94000/- (AY 2013-14) under section 271AAB of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... c and that there is a discretionary power with the assessing officer not to levy penalty and the assessing officer ought to have exercised the discretion in the penalty proceedings and not to be resorted to as a routine matter of procedure, on the facts and circumstance of the case. 11. The learned CIT(A) ought to have appreciated the fact that the incomes offered in the regular return of income was not on account of undisclosed income, rather was offered to buy peace with the department and the penalty ought not to have been levied, on the facts and circumstances of the case. 12. The learned CIT(A) failed to appreciate that the provision of section 271AAB of the Act is not applicable and further without prejudice the clause (c) of section 271AAB (1) of the Act is not applicable, consequently the levy of penalty at 30% is not in accordance with law on the facts and circumstances of the case. 13. Without prejudice, the penalty levied at 30% under section 271AAB of the Act is erroneous and the penalty is required to be cancelled on the facts and circumstances of the case. 14. Without prejudice the penalty levied is highly excessive and is to be reduced substantially reduc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sideration. 6. We have heard both the parties and perused the material on record. Admittedly, there was a ground raised before the CIT(Appeals) as follows:- On the basis of aforementioned statement of facts and reasons, the Assessee prays for an Appeal on the following grounds: 1. That the Penalty order passed u/s 271AAB by the ACIT, Circle 3(1), Hubli on the basis of Assessment order passed u/s 153C by the ACIT (Central Circle), Belagum is bad in law (on account of reasons furnished in SI. No. 3 (a) to (d) above). 2. That the Penalty Notice initiated u/s 274 rws 271AAB is not proper and hence the same is bad in law (on account of reasons furnished in SI. No. 3 (b) above). 3. That the jurisdiction of passing the Penalty Order u/s 271AAB is not correct and hence the same is bad in law (on account of reasons furnished in sl. No. 4 (a) to 4 (e) above). 4. Notwithstanding anything contained herein above, that Merits of the case are not considered in passing the Penalty order and hence the same is bad in law (on account of reasons furnished in sl. No. 5 above). 5. That the Assessee prays for permitting to produce any other documents, clarifications, case laws, e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 referred to in sub-section (1). (3) The provisions of sections 274 and 275 shall, as far as may be, apply in relation to the penalty referred to in this section. Explanation.-For the purposes of this section,- (a) specified date means the due date of furnishing of return of income under sub-section (1) of section 139 or the date on which the period specified in the notice issued under section 153A for furnishing of return of income expires, as the case may be; (b) specified previous year means the previous year- (i) which has ended before the date of search, but the date of furnishing the return of income under sub-section (1) of section 139 for such year has not expired ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2 of the Act. In the absence of search under s. 132 of the Act, the assessee has no occasion to avail the concessional treatment by way of admission under s.132(4) of the Act. Thus, we find obvious merits in the observations made by the first appellate authority that provisions of Section 271AAB of the Act are not applicable to the case of the assessee. In the absence of search under 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 under s.271AAB of the Act for the purposes of imposition of penalty. Hence, we do not see any infirmity in the conclusion drawn by the CIT(A). 11. The Pune Bench of the Tribunal in the case of Volga Dresses (supra) has also taken a similar view:- 6. We have considered the rival submissions. A perusal of the provisions of section 271AAB shows that the opening words are penalty where search has been initiated a perusal of the provisions under Section 271AAB also talks of the assessee declaring any undisclosed income in the course of the search in the statement under section 132(4). Admittedly in the present case, that is in the case of the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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