TMI Blog2021 (7) TMI 1076X X X X Extracts X X X X X X X X Extracts X X X X ..... No. 4674/Mum/2018 - - - Dated:- 28-6-2021 - Shri Rajesh Kumar, Accountant Member And Shri Pavan Kumar Gadale, Judicial Member For the Appellant : Shri V.K. Tulsiyan, AR For the Respondent : Shri S.S. Iyengar DR ORDER PER PAVAN KUMAR GADALE.JM: The assessee has filed the appeal against the order of the Commissioner of Income Tax (Appeals)-47, Mumbai, passed u/s 271AAA and 250 of the Income Tax Act, 1961. The assessee has raised the following grounds of appeal: 1. Whether the CIT(A) was justified by deciding the appeal without affording a reasonable opportunity of being heard. 2. Whether the CIT(A) was justified by upholding the Penalty order passed u/s 271AAA which is neither only contrary to law but also beyond the order / spirit of Hon ble ITAT order dt. 22.04.15 on the quantum appeal, void ab initio because it was beyond the jurisdiction. 3. Whether the CIT(A) was justified by upholding the AO exercise of assumption of jurisdiction u/s 271AAA which all are based upon presumption of pretty commission income at Adhoc s basis. 4. Whether the CIT(A) was justified by upholding the penalty order despite the facts that decision on quantum ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dated 26.12.2011. Subsequently, the A.O has initiated penalty proceedings u/s 271AAA of the Act as the assessee has not provided the complete details of the undisclosed income. The A.O. relied on the findings of the assesseement proceedings and the relief granted by the Honble ITAT and levied penalty @ 10% of undisclosed income which works out to ₹ 6,61,686/- and passed order u/s 271AAA of the Act dt 31.12.2015. 3. Aggrieved by the penalty order, the assessee has filed an appeal with the CIT(A). Whereas, the CIT(A) considered the assessee s submissions and the declarations made by the assessee in the course of search and confirmed the action of the A.O. in leying the penalty and dismissed the appeal of the assessee. Aggrieved by the order of the CIT(A) the assessee has filed an appeal with the Hon ble Tribunal. 4. At the time of hearing, the Ld. AR submitted that the CIT(A) erred in confirming the action of the A.O in levying the penalty. Whereas, the assessee against the quantum addition has filed an appeal with the Hon ble Tribunal and the relief was granted, as the additions made by the A.O are based on the surmises without any adverse material. The assessee has f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ated over the years. It is known to everyone that the rate of gold is rising consistently over the years. However, the value of jewellery has been assessed in AY 2010-11 by taking the rate prevailing in that year. Further, the Indian families normally own certain quantity of jewellery over the years. Considering all these facts, we are of the view that there is no justification in assessing the balance value of jewellery amounting to ₹ 10,29,020/-. With regard to the cash also, the assessing officer has not given credit for book balance. Considering the smallness of the amount, we are of the view that the addition of ₹ 30,200/- is also not warranted. Accordingly, we set aside the order of Ld CIT(A) on these two issues and direct the assessing off icer to delete these additions. 6.1 The contentions of the Ld. AR that the jewellery has been accumulated over two decades. The old cumulative jewellery has been declared in the assessee s return of income tax for the A.Y 2010-11 and paid the taxes. Further, there is no evidence to suggest that the jewellery valued at the time of search was purchased in the relevant assessment year. It is admitted fact that there is no addi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 15a[Principal Chief Commissioner or] Chief Commissioner or 15a[Principal Commissioner or] Commissioner before the date of search; or (ii) any income of the specified previous year represented, either wholly or partly, by any entry in respect of an expense recorded in the books of account or other documents maintained in the normal course relating to the specified previous year which is found to be false and would not have been found to be so had the search not been conducted; (b) specified previous year means the previous year- (i) which has ended before the date of search, but the date of filing the return of income under sub-section (1) of section 139 for such year has not expired before the date of search and the assessee has not furnished the return of income for the previous year before the said date; or (ii) in whi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of section 271AAB are self contained and are not dependent upon commencement or finalization of the assessment proceedings. It is further pertinent to note here it is not mandatory for the AO to invoke provisions of section 271AAB of the Act in each every case of levy of penal ty pursuant to search action. There is no bar to the assessing Off icer to initiate penal ty proceedings u/s 271(1)(c) of the Act even in cases involving search actions if in the facts and circumstances of the case, it is so warranted. The only bar is that no penal ty under the provisions of section 270A or section 271(1)(c) of the Act shall be imposed in respect of the undisclosed income, as defined u/s 271AAB of the Act, unearthed during the search action carried out u/s 132 of the Act. It is to be noted that the provisions of section 271AAB and section 271(1)(c) of the Act simultaneously existed and were operational till the provisions of section 271AAC become effective from 01.04.2017. The Assessing Off icer has levied penal ty @ 10% of the alleged undisclosed income, however, it is a matter of record in this case that the assessee has not made any surrender of any undisclosed income during the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ated on the basis of undisclosed income found during such search action. In view of the above factual position, the impugned order of the AO imposing the penal ty on the assessee under section 271AAB of the Act does not pass the mandate of the provisions of section 271AAB of the Act, therefore, the same being bad in law is hereby quashed. In the result, the appeal of the assessee stands allowed. 9. We find that the decision is applicable in principle to the present case. The levy of penalty in not automatic and not mandatory. In the quantum appeal, the Hon ble Tribunal has considered the accumulation of jewellary and the rate of jewellary is raising and the assessee has taken into account the value of jewellary in the A.Y.2010-11 and filed the return of income. Further there is no material to suggest that it was purchased in the relevant assessment year. Therefore, considering the facts circumstances, provisions and the ratio of the decision of the Hon ble Tribunal. We set aside the order of the CIT(A) and direct the assessing officer to delete the penalty and allow the grounds of the appeal in favour of the assessee. 10. In the result, the appeal filed by the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X
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