Umesh Kyal Vs ACIT (ITAT Kolkata)
The assessee challenged penalty levied u/s 271AAB at 60% arising from search proceedings where cash was found during search u/s 132. The AO levied penalty at higher rate treating entire amount as undisclosed income u/s 69A, which was confirmed by CIT(A)
ITAT observed that during search, the authorized officers did not specifically question the assessee regarding source of cash or undisclosed income while recording statement u/s 132(4). Since conditions prescribed under sec.271AAB(1A)(a) were not properly triggered due to lapse in search questioning, the higher rate of 60% penalty was not fully justified.
The Tribunal held:
- Income of ₹4,14,900/- already declared in return qualifies for lower penalty @30% u/s 271AAB(1A)(a).
- Remaining unexplained amount of ₹18,69,939/- attracts penalty @60% u/s 271AAB(1A)(b).
- Failure of search party to ask specific questions under sec.132(4) weighed in favour of assessee.
FULL TEXT OF THE ORDER OF ITAT KOLKATA
The captioned appeal has been preferred by the assessee against the order dated 29.10.25 of the CIT(Appeals)-21, Kolkata [‘CIT(A)’] passed under Section 250 of the Income-tax Act, 1961 (hereinafter referred to as “the Act”).
2. Brief facts of the case are that the assessee for the year under consideration filed his return of Income declaring total income of Rs.70,12,560/-. A Search & Seizure operation u/s 132 of the Act was conducted on 18.08.2022 at the residential as well as office premises of the assessee. During the course of Search operation, cash amounting to Rs.83,26,000/- was found out of which cash of Rs. 75,00,000/-was seized. A show-cause notice was issued to the assessee and in response to the same, the assessee produced cash book wherein the cash balance was found and the assessee was unable to provide any explanation of Rs. 4,14,900/-. The Assessing Officer framed the assessment u/s 143(3) of the Act treating Rs. 4,14,900/- u/s 69A of the Act. The assessee to avoid litigation did not prefer an appeal against the Order framed. Subsequently, penalty notice u/s 271AAB of the Act was issued to the assessee and penalty u/s 271AAB of Rs.13,70,903/- has been computed.
