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Income Tax Appellate Tribunal, MUMBAI BENCH “C” MUMBAI
Before: SHRI RAVISH SOOD & SHRI N.K. PRADHAN
ORDER
PER N.K. PRADHAN, AM
This is an appeal filed by the assessee. The relevant assessment year is 2013-14. The appeal is directed against the order of the Commissioner of Income Tax (Appeals)-48, Mumbai [in short ‘CIT (A)’] and arises out of the penalty levied u/s 271AAB of the Income Tax Act 1961, (the ‘Act’).
The ground raised
by the assessee in this appeal is against the order of the Ld. CIT(A) sustaining levy of penalty of Rs.10,36,200/- u/s 271AAB of the Act.
3. Briefly stated, the facts are that a search and seizure action u/s 132 was carried out by the revenue in the case of M/s. Gold Sukh Safety Vaults Ltd. on 08.11.2012 and the assessee, who is proprietor of M/s. Mangalam Courier, was also covered. During the course of search on 08.11.2012, cash Pawan Chandak Page 2 of 4 amount to Rs.17,27,000/- was found from the premises of the assessee. As mentioned by the AO, the assessee who was not present during the course of search, appeared in the post search proceedings and stated in his statement recorded u/s 131 on 04.02.2013 that he was unable to explain the source of cash found in his premises and therefore admitted the above cash found as his undisclosed income for the financial year (F.Y.) 2012-13. The above cash of Rs.17,27,000/- was seized by the revenue. The assessee filed his return of income for the A.Y. 2013-14 on 21.10.2013 declaring total income of Rs.9,00,841/-. The Assessing Officer (AO) completed the assessment u/s 153A r.w.s 143(3) on 29.02.2016 by making an addition of the above amount of Rs.17,27,000/- to the income shown by the assessee and thus arrived at total income of Rs.26,27,840/-. The AO also initiated penalty proceedings u/s 271AAB. As there was no compliance by the assessee to the penalty notice u/s 274 r.w.s 271 sent in the last known address, the AO levied a penalty of Rs.10,36,200/- u/s 271AAB on the reason that “though the assessee had admitted the undisclosed income in his statement u/s 132(4) recorded on 04.02.2013 and 06.02.2013, his case is not covered by provisions of Section 271AAB(1)(a)”. The AO further held that on identical ground, the assessee’s case does not fall within the provisions of Section 271AAB(1)(b). Finally the AO held that the assessee’s case is squarely covered by the provisions of Section 271AAB(1)(c) of the Act.
4. Aggrieved by the order of the AO, the assessee filed an appeal before the Ld. CIT(A). The only ground raised by the assessee before the Ld. CIT(A) was against the levy of penalty of Rs.10,36,000/- by the AO u/s 271AAB of the Act. The assessee filed a written submission before the Ld. CIT(A) which has been extracted at page 5-8 of the impugned order. However, the Ld.
Pawan Chandak Page 3 of 4 CIT(A) confirmed the levy of penalty of Rs.10,36,200/- (@60% on disclosed income of Rs. 17,27,000/-) u/s 271AAA of the Act.
Before us, the ld. counsel for the assessee submits that though the penalty of Rs.10,36,200/- was levied by the AO u/s 271AAB(1)(c) of the Act, the Ld. CIT(A) confirmed it u/s 271AAA of the Act. It is also stated that as there is no proper application of mind, the penalty confirmed by the Ld. CIT(A) be deleted. On the other hand, the Ld. Departmental Representative (DR) supports the order passed by the Ld. CIT(A).
We have heard the rival submissions and perused the materials available on record. The reasons for our decision are given below: The AO has levied the penalty u/s 271AAB, which is applicable if (a) a search is initiated u/s 132 on or after 01.07.2012; (b) there is some “undisclosed income” and (c) undisclosed income pertains to a “specified previous year”. The Ld. CIT(A) has confirmed the penalty u/s 271AAA, which is applicable if (a) a search is initiated u/s 132 on or after 01.06.2007 but before 01.07.2012; (b) there is some “undisclosed income” and (c) undisclosed income pertains to a “specified previous year”. In the instant case, as mentioned earlier, the search and seizure action took place in the premises of the assessee on 08.11.2012. As mentioned above, if search is initiated u/s 132 on or after 01.07.2012, then Section 271AAB is applicable. In the instant case, though the ground of appeal
was against the levy of penalty of Rs.10,36,200/- u/s 271AAB, the Ld. CIT(A) confirmed the above Pawan Chandak Page 4 of 4 penalty u/s 271AAA which is applicable if a search is initiated u/s 132 on or after 01.06.2007 but before 01.07.2012. As the provisions of Section 271AAA are not applicable to the present case, we set aside the order dated 16.11.2017 passed by the Ld. CIT(A).
7. In the result, the appeal filed by the assessee is allowed. Order pronounced in the open Court 30.04.2019.