DCIT, CENTRAL CIRCLE-4, NEW DELHI vs. SMC FOODS LTD, SAHARANPUR

ITA 2661/DEL/2022Status: DisposedITAT Delhi23 December 2025AY 2018-19Bench: SHRI S. RIFAUR RAHMAN (Accountant Member), Ms. MADHUMITA ROY (Judicial Member)6 pages
AI SummaryDismissed

What did the Tribunal hold?

The Tribunal held that the penalty under Section 271AAB(1A)(b) of the Act can only be levied on undisclosed income unearthed during a search, not on additional income offered during the course of search if no incriminating material was found. The penalty was wrongly imposed as there was no unearthing of undisclosed income.

What were the facts?

A search and seizure action was conducted on the assessee group, and an additional income of Rs. 6,00,00,000/- was disclosed. Subsequently, the assessee filed its return based on regular income, deviating from the disclosed amount. The Assessing Officer imposed a penalty under Section 271AAB(1A)(b) of the Act.

What were the issues?

Whether penalty under Section 271AAB(1A)(b) is leviable on additional income disclosed during search when no incriminating material was found, and the disclosure was subsequently retracted or not reflected in the return.

Which sections of the Income-tax Act were involved?

Section 132,Section 139(1),Section 143(2),Section 143(3),Section 271AAB,Section 271AAB(1A)(b)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, DELHI BENCH “G”: NEW DELHI

Before: SHRI S. RIFAUR RAHMAN

For Appellant: Shri Madhur Aggarwal, Adv. &, Shri Uma Shankar, Adv
Hearing: 04.12.2025Pronounced: 23.12.2025

PER Ms. MADHUMITA ROY, JM:

The instant appeal, preferred by the Revenue, is directed against the order

dated 31.08.2022 in Appeal No. CIT(A), Delhi-23/1005/2017-18, passed by the 2 Commissioner of Income-tax (Appeals)-23, New Delhi, arising out of the penalty

order dated 25.03.2022 passed by the Assessing Officer DCIT, Central Circle-4,

New Delhi, under Section 271AAB of the Income Tax Act, 1961 (hereinafter

referred to as “the Act”), for assessment year 2018-19. 2. Facts of the case leading to the instant appeal are that the assessee was subjected to search and seizure action under Section 132 of the Act which was carried out in the SMC group of cases on 21.11.201

The order continues below.

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