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TMI Blog2021 (7) TMI 1076X X X X Extracts X X X X X X X X Extracts X X X X ..... sis. 4. Whether the CIT(A) was justified by upholding the penalty order despite the facts that decision on quantum by ITAT has clearly disregard the nature of additions made which is on surmises basis even without any adverse material contrary to evidence already filed before AO as well as without passing appeal effect order. 5. Whether the CIT(A) was justified by upholding the penalty order which is based on Adhocs basis commission income even without either collecting any evidence or examining the nature of evidence and its verification in terms of settled law. 6. The Ld. CIT(A) erred in confirming the penalty order without appreciating to that merits that the appellant had duly discharged his primary onus as called for. 2. The Brief facts of the case are that there was a search operations u/s 132 in the case of M/s ABG Shipyard Ltd. and the group concerns, where the assessee was also covered in search u/s 132 of the Act. Subsequently, notice u/s 142(1) of the act was issued and the summons were issued u/s 131 of the Act directing the assessee to attend the office and produce the books of accounts. The assessee has filed the return of income on 21.07.2011 declaring a total ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the A.O are based on the surmises without any adverse material. The assessee has filed the complete information in the assessment proceedings and the penalty cannot be levied on the adhoc additions and prayed for deletion of penalty and supported his contentions with the written submissions and judicial decisions. 5. Contra, the Ld. DR submitted that the CIT(A) has considered the factual aspects and has confirmed the levy of penalty and relied on the lower authorities orders. 6. We heard the rival submissions and perused the material on record. The sole matrix of the disputed issue is with respect of levy of penalty u/s 271AAA of the Act. We find the penalty levied is based on the disclosure of undisclosed jewellery and cash. In the quantum appeal, the Hon'ble Tribunal in assessee's own case ITA no 3512 to 3518/M/2013 dt 22-4-2015 at page 13 Para 22 to 24 has observed as under: "22. The last issue relates to the addition of balance value of Jewellery/cash found at the time of search over and above that surrendered by the assessee. Though the search officials found cash of Rs. 3,80,200/- and jewellery worth Rs. 88,76,750/-, the assessee surrendered only a sum of Rs. 78,47,730 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... admitted fact that there is no additions made on old traditional jewellery because the assessee has already taken in into account the value at the time of filling of return of income. Since there is no sustainment of addition of jewellary on further appeal and therefore the levy of penalty is not tenable. 6.2 Further the Ld. AR supported his arguments relying on the decision of the Hon'ble Tribunal Patna Bench SMC At Kolkata in ITA No194/Pat/2019 dated 11-02-2021.The Hon'ble Tribunal has dealt on the provisions of Sec 274AAB and 274 of the Act. 7. We find that in the assesses case, the search was initiated u/s 132 of the Act on 07.10.2009 which was much before i.e 01.07.2012. At this juncture, it will be appropriate to refer to the provisions of Sec. 271AAA of the Act which are applicable for the cases were the search has been initiated or after 01.06.2007 but before 01.07.2012 and the provisions of Sec. 271AAA of the Act are read as under: 271AAA. (1) The Assessing Off icer 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 June, 2007 15[but before the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nducted.] 8 The contentions of the Ld. AR are realistic that there is no undisclosed income on which the penalty can be levied. We find the decisions relied by the Ld. AR though pertains to A.Y 2015-16 in relation to penalty levied u/s 271AAB of the Act and the only difference is that the assessee was levied penalty u/s 271AAA of the Act as the search was initiated u/s 132 of the Act on 7.10.2009 after 01.06.2007 but before 01.07.2012. We find the legislature has introduced the provisions of Sec. 271AAB of the Act in Finance Act 2012 effective from 01.07.2012 which are similar to provisions of Sec. 271AAA of the Act with further modifications on rates of levy of penalty. We found in the case of Shiv Bhagawan Gupta Vs. ACIT Patna (supra), The Hon'ble Tribunal has dealt at page 8 to 10 Para 9, which is read as under: "9. On a perusal of the provisions of section 271AAB, it is evident that the Section 271AAB is self-contained. There can be no doubt that there is no discretion with the AO as the parameters by which the AO or the tax authorities are bound in regard to the rate of penal ty and the circumstances on the basis of which the penal provision can be attracted are self-expla ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er has not initiated the penal ty proceedings u/s 271AAB of the Act on the basis of or in consequence of the said search action, rather the assessing off icer, has initiated the penalty proceedings during the assessment proceedings solely on the ground that the assessee has disclosed certain income from undisclosed sources in the return of income and paid due taxes thereupon. The relevant part of the assessment order in this respect is reproduced as under: "The assessee has filed return u/s 139 showing income of Rs. 2808270/-The assessee has disclosed income of Rs. 2179221/- during the year on account of undisclosed jewellery. Penal ty u/s 271AAB is initiated." A perusal of the above reproduced relevant part of the assessment order reveals that the assessing off icer has not mentioned about unearthing of any undisclosed income as defined u/s 271AAB of the Act during search action carried out at the premises of the assessee. In my view, the income declared by the assessee in the return of income or found or assessed by the Assessing off icer in the assessment proceedings may be relevant for assessment of the income under section 68 /69 and other related provisions of the Act and ..... X X X X Extracts X X X X X X X X Extracts X X X X
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