TMI Blog2022 (11) TMI 203X X X X Extracts X X X X X X X X Extracts X X X X ..... n the conduct of the assessee. In this case, there is no dispute with regard to the fact that the assessee could not satisfactorily explain with necessary evidences, source for cash seized by Railway Police and therefore, the assessee had admitted additional income in the return of income filed in response to notice issued u/s. 153A of the Act. Therefore, in our considered view, the arguments of the ld. Counsel for the assessee that the penalty cannot be levied u/s. 271AAB of the Act is devoid of merits. We find that the reasons given by the AO to levy 30% penalty on undisclosed income is not backed by cogent reasons, because clause (c) of section 271AAB is applicable, if assessee does not admit undisclosed income in the statement rec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... CIT ORDER PER G. MANJUNATHA, ACCOUNTANT MEMBER: This appeal filed by the assessee is directed against the order passed by the learned Commissioner of Income Tax (Appeals)-18, Chennai, dated 06.12.2018 and pertains to assessment year 2013-14. 2. The assessee raised the following grounds of appeal: 1. The learned CIT(A) is not justified in sustaining the penalty levied by the AO u/s. 271AAB r.w.s. 274 of the IT Act to an extent of Rs. 26,73,750/- 2. The penalty proceeding initiated by notice u/s. 271AAB r.w.s. 274 dated 16.03.2015 is bad in law. 3. In the course of appeal proceedings the appellant filed detailed written submissions with CIT(A) on 19.11.2018. In view of the facts narrated in the above written ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n 12.11.2014 and declared total income of Rs. 1,12,35,770/- which includes cash found and seized by the Railway Police amounting to Rs. 89,12,500/-. During the course of assessment proceedings, the assessee was called upon to explain the source for cash deposit, for which, the assessee claimed that it is out of sales made from 7.12.2012 to 11.12.2012. The AO rejected the arguments of the assessee on the ground that the assessee was not maintaining books of accounts for his business and further, no cash book /documents were produced and thus, made addition of Rs. 89,12,500/- u/s. 69A of the Act as unexplained money. 5. Subsequently, penalty proceedings u/s. 271AAB of the Act was initiated and accordingly notice u/s. 271AAB r.w.s. 274 of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... AAB of the Act does not arise. 7. The Ld. DR on the other hand supporting the order of the CIT(A), submitted that the assessee could not explain the manner in which undisclosed income is derived, although he has admitted undisclosed income in the return of income filed in response to notice issued u/s. 153A of the Act. Therefore, the AO has rightly levied penalty under clause (c) of section 271AAB of the Act and their order should be upheld. 8. We have heard both the parties, perused materials available on record and gone through orders of the authorities below. As regards the legal arguments taken by the assessee in light of notice issued u/s. 271AAB r.w.s. 274 of the Act, in light of the decision of Hon ble Karnataka High Court in t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e AO has levied penalty under clause (c) of section 271AAB of the Act, on the ground that the assessee although admitted additional income and paid tax, but did not specify the manner in which such income has been derived. We find that the reasons given by the AO to levy 30% penalty on undisclosed income is not backed by cogent reasons, because clause (c) of section 271AAB of the Act is applicable, if assessee does not admit undisclosed income in the statement recorded u/s. 132(4) of the Act, and also not declared said income in the return of income furnished within the specified period and pays the tax altogether with interest, if any, in respect of the undisclosed income. In this case, the assessee has admitted undisclosed income in the r ..... X X X X Extracts X X X X X X X X Extracts X X X X
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