Case Law Details
Pr. CIT Vs Bhavi Chand Jindal (Delhi High Court)
Conclusion: Penalty under section 271AAA could not be imposed on assessee on the ground that assessee failed to substantiate the manner in which undisclosed income was derived in case assessee had included the same in his return of income and accepted by AO without making any addition to the returned income.
Held: Assessee-individual was confronted on the documents found and seized from his residence premises, from factory premises of M/s J Ltd. These documents contained details of cash payments made to various parties for acquisition of land. These document when confronted, assessee had offered has the amount for which the source could not be explained for taxation and filed the return disclosing Rs.30,00,00,000/- on account of these discrepancies. Penalty under section 271AAA was imposed separately alleging that although assessee had admitted the undisclosed income, however, he did not substantiate the manner in which the income was derived. It was held assessee in the return of income had included the amount of Rs.30 crores however, no addition to the returned income was made by the AO The statement made under Section 132(4) did not indicate and state the manner in which the undisclosed income was derived. This was different from the ground and reason given by AO to impose penalty under Section 271AAA, which was that assessee had not been able to substantiate the manner in which the undisclosed income of Rs.30 crores had been derived. AO had not relied upon or claimed that there was violation of clause (i) to sub-section (2) to Section 271AAA, but had imposed penalty on account of the fact that there was violation and non-compliance of clause (ii) to sub-section (2) to Section 271AAA of the Act, i.e., assessee was not able to substantiate the manner in which the undisclosed income was derived.Thus, penalty was unjustified.
FULL TEXT OF THE HIGH COURT ORDER / JUDGMENT
This appeal by the Revenue under Section 260A of the Income Tax Act, 1961 (Act, for short) impugns the order dated 17th April, 2018 passed by the Income Tax Appellate Tribunal (Tribunal, for short) in the case of Bhavi Chand Jindal (respondent-assessee, for short). The impugned order affirms the order passed by the Commissioner of Income Tax (Appeals) deleting penalty of Rs.3 crores imposed by the Assessing Officer under Section 271AAA of the Act. The appeal relates to Assessment Year 2012- 13.
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