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TMI Blog2022 (6) TMI 149X X X X Extracts X X X X X X X X Extracts X X X X ..... o appreciate that the addition made did not have the character of undisclosed income. 1.02 Your appellant prays to hold so now and delete the impugned penalty. 2.00 YOUR APPELLANY CRAVES LEAVE TO ADD, AMEND AND /OR DELETE ALL OR ANY GROUND(S) TAKE HEREIN ABOVE." 3. The brief facts of this case are that the search u/s 132 of the Act was carried out in the Dhanjimama group of cases on 03.07.2012. Consequent to the search action, proceedings under section 153A of the Act were initiated in the case of the assessee for assessment year 2007-08 to 2012-13. Accordingly, notice under section 153A of the Act was issued on 06.09.2013 and in response thereto, the assessee filed return of income for assessment year 2012-13 declaring total income of Rs. 88,390/-. Thereafter notice under section 143(2) and 142(1) of the Act were issued and assessment under section 153A r.w.s. 143(3) of the Act was completed on 23.01.2015 at the total income of Rs. 5,63,390/-. Penalty proceedings under section 271AAB of the Act were initiated on addition of Rs. 4,75,000/- on account of unexplained cash credits. During the course of penalty proceedings u/s. 271AAB of the Act, the AO noted that the quantum appe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... placed reliance on several decisions in support of his contention. In response, the Ld. DR relied upon the observations of Ld. CIT(Appeals) in the appeal order. 5. We have heard the rival contentions and perused the material on record. In the facts placed before us, it is clear that the unexplained cash credit of Rs. 4,75,000/- were discovered during the course of assessment proceedings. The issue for consideration before us is that whether if the assessment proceedings are conducted in consequence to search carried out at the group's premises, and subsequently during the course of assessment, unexplained cash credits are unearthed, whether the penalty can be imposed under section 271AAB of the Act and whether the income qualifies as "undisclosed income" under section 271AAB of the Act. Admittedly, in this case the unexplained cash credits of Rs. 4,75,000/- were not discovered/unearthed during the course of search on Dhanjimama group, but were unearthed during the course of assessment proceedings on the assessee, albeit the assessment proceedings on the assessee were conducted as a consequence to search proceedings. In order to understand the issue, it would be useful to reproduc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ious year; or (B) otherwise not been disclosed to the 94[Principal Chief Commissioner or] Chief Commissioner or 94[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.] 5.1 It is the assessee's submission, which has also not been controverted by the Department, that no incriminating documents were found against the assessee during the course of search carried out on Dhanjimama group. The unexplained cash credits were discovered only during the course of assessment carried out on the assessee. This unexplained cash credits had no nexus with any documents found or incriminating statement made during the course of search and such discovery of cash credits discovered during the course of assessment proceedings on the assessee, was independent of any statement or incriminating material found during the course of search carr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 5.3 In the case of Chandra Suresh Kothari v DCIT [2022] 135 taxmann.com 275 (Nagpur - Trib.), it was held that where assessee had neither made any surrender of any undisclosed income during search nor penalty had been initiated on basis of undisclosed income found during such search, impugned order of Assessing Officer imposing penalty on assessee under section 271AAB did not pass mandate of provisions of section 271AAB, therefore, same being bad in law was to be quashed and penalty levied under section 271AAB was to be deleted 16. 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 penalty and the circumstances on the basis of which the penal provision can be attracted are self-explanatory. It can be noticed that the Co-ordinate Benches of the Tribunal have categorically held that the expression 'undisclosed income' is given a definite and specific meaning and the word has not been described in an inclusive manner so as to enable the tax authorities to give wider ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of provisions of section 271AAB of the Act. A perusal of the assessment order reveals that the Assessing Officer has not mentioned anything about unearthing of any undisclosed income in respect of the assessee, during search action carried out in the Dhanjimama group of cases on 03.07.2012. The income unearthed/discovered by the Assessing Officer during the course of assessment proceedings was independent and unconnected with the information found during the course of search action carried out in the Dhanjimama group of cases. Therefore, while the same may be relevant for assessment of the income under section 68 and also for the levy of penalty under section 271(1)(c) of the Act, however, so far as penalty under section 271AAB of the Act is concerned, the foundation thereof is independent of assessment proceedings. Therefore, in the instant set of the facts, since no incriminating material was found during research carried out on Dhanjimama group of cases on 03.07.2012, which could have formed the basis of addition of Rs. 4,75,000/-, in our considered view, penalty could not have been imposed under section 271AAB of the Act only on the basis of addition on account of cash credits ..... X X X X Extracts X X X X X X X X Extracts X X X X
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