S. R. Ravishankar Vs ACIT (ITAT Bangalore)
Search u/s 132 was conducted in Assessee’s case on 09.10.2014 in the group of R. Chandru. During statement u/s 132(4), Assessee admitted ₹3 Crores as additional income & later offered it in return filed u/s 153A, paying due taxes. AO imposed penalty of ₹30 lakhs @10% u/s 271AAB(1)(a), treating the surrendered income as “undisclosed income”. CIT(A) confirmed the penalty.
Before Tribunal, Assessee argued that the disclosure was voluntary to buy peace, unsupported by any incriminating material, and therefore did not satisfy the definition of “undisclosed income” in Explanation (c) to s.271AAB. Assessee relied on ITAT Jaipur/Indore Bench rulings to contend that penalty is not automatic.
Tribunal noted that Assessee had clearly admitted ₹3 Crores as undisclosed income during search, specified the manner of earning it, declared it in return & paid tax. Tribunal held that conditions of s.271AAB(1)(a) stood fully satisfied. It relied on SC decision in Sandeep Chandak holding that once undisclosed income is admitted u/s 132(4) in search, penalty under 271AAB gets triggered. Tribunal observed that past NP rate was only 5–6%, whereas current year income jumped to 8.23% only due to search disclosure.
Tribunal held that the income surrendered is undisclosed income within Explanation (c) & penalty is valid. Appeal was dismissed.
