Case Law Details
Shiv Bhagwan Gupta Vs ACIT (ITAT Patna)
For the levy of penalty u/s.271AAB, the case must fall within the four corners of the definition of expression ‘undisclosed income‘ as defined u/s 271AAB itself. The assessee in this case is an individual and has earned income from partnership firm and interest income. The assessee has neither earned any business income nor earned any income exceeding Rs.50 lakhs so as to require mandatory filing of personal assets and liabilities or to maintain books of accounts; even the assessee is not required to otherwise disclose any such income to the Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner before the date of search; the alleged income is not any income 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. Assessee has neither made any surrender of any undisclosed income during the search action nor the penalty has been initiated 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 penalty 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.
FULL TEXT OF THE ORDER OF ITAT PATNA
The present appeal has been preferred by the assessee against the order dated 16.05.2019 of the Commissioner of Income-tax (Appeals)-3, Patna [hereinafter referred to as ‘CIT(A)’] agitating the action of the Ld. CIT(A) in confirming the penalty levied by the Assessing Officer u/s 271AAB of the Income Tax Act, 1961 (in short ‘the Act’).
2. The brief facts relating the issue are that a search action u/s 132 of the Act was carried out at the premises of the assessee/appellant on 07.08.2014. During the search action jewelry in the shape of gold bars, coins was found from the locker of the assessee. The assessee could explain about the source of investment in respect of the part of the said bullion and jewelry. The assessee could not explain the source of assets worth Rs.21,97,221/- with bills and vouchers. The assessee, however, explained that the said jewelry was accumulated out of gifts received by the assessee on the eve of marriage and other ceremonies/occasions from time to time. The assessee, thereafter, included the value of the above stated jewelry in the computation of income and offered the same for taxation. The Assessing Officer in the assessment proceedings noted that the assessee in the return of income has disclosed income of Rs.21,79,222/- on account of undisclosed jewelry. He, therefore, initiated penalty proceedings u/s.271AAB of the Act and levied the minimum penalty @ 10% of the said declared income of the assessee.
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