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Facts
The assessee, Poonam Mohta, appealed against the CIT(A)'s order confirming a penalty of Rs. 50,00,000 u/s 271AAB of the Income Tax Act for AY 2015-16. There was a 52-day delay in filing the appeal, for which the assessee sought condonation, attributing it to the illness of her Chartered Accountant. The penalty was imposed following a voluntary disclosure of Rs. 50 lakhs by the assessee, which she contended was not 'undisclosed income' as per the Act.
Held
The Tribunal condoned the delay in filing the appeal, finding sufficient cause. It held that the voluntary disclosure of Rs. 50 lakhs did not fall under the definition of 'undisclosed income' as per Section 271AAB because no incriminating material was found related to the addition, and the disclosure was suo motu, not correlated with any seized documents. Consequently, the penalty imposed under Section 271AAB was cancelled.
Key Issues
Condonation of delay in filing appeal; Whether voluntary disclosure of income during assessment, without incriminating material or correlation to seized documents, attracts penalty under Section 271AAB of the Income Tax Act.
Sections Cited
250, 271AAB, 271(1)(c), 274, 153A, 132
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Income Tax Appellate Tribunal, KOLKATA ‘C’ BENCH, KOLKATA
Before: SHRI SONJOY SARMA & SHRI RAKESH MISHRA
order
: February 20th, 2025 ORDER
PER RAKESH MISHRA, ACCOUNTANT MEMBER:
This appeal filed by the assessee is against the order of the Commissioner of Income Tax (Appeals)-20, Kolkata [hereinafter referred to as Ld. 'CIT(A)'] passed u/s 250 of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) for AY 2015-16 dated 31.07.2023, which has been passed against the penalty order u/s 271AAB of the Act, dated 29.06.2017.
1.2. Considering the application seeking condonation of delay as well as the affidavit and the reasons stated therein, we are satisfied that the assessee had a reasonable and sufficient cause and was prevented from filing the instant appeal within statutory time limit. We, therefore, condone the delay and admit the appeal for adjudication on merits.
The assessee is in appeal before the Bench raising the following grounds of appeal: “1) That under the facts and circumstances of the case the Id CIT(A) erred in confirming the action of the Ld. AO in imposition of penalty amounting to Rs. 5,00,000/- u/s 271AAB of the Income Tax Act which under the legal context ought not to be levied. 2) That the appellant craves leave to add, amend, alter or delete the ground or grounds of appeal.”
3. Rival contentions were heard and the submissions made have been examined. It was submitted before the Bench that the penalty u/s 271AAB of the Act is not leviable as the voluntary disclosure made by the assessee does not come under the purview of section u/s 271AAB of the Act. Our attention was drawn to page 8 of the paper book being the assessment order, wherein the assessee’s disclosure of a sum of Rs. 50 lakh has been added in the computation of the total income. It was submitted that neither any incriminating material was found nor the notice was free from defect as the notice did not specify under which of the three limbs was it issued and this issue is covered by the decision