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Income Tax Appellate Tribunal, “A” BENCH : KOLKATA
Before: Hon’ble Shri Aby. T. Varkey, JM & Shri M.Balaganesh, AM ]
ORDER Per M.Balaganesh, AM
. This appeal by the Revenue arises out of the order of the Learned Commissioner of Income Tax(Appeals)-2, Kolkata [in short the ld CIT(A)] in Appeal No.589/CIT(A)- 2/6(4)(13-14)/14-15 dated 06.01.2015 against the order passed by the ITO, Ward-6(4), Kolkata [ in short the ld AO] under section 271AAA of the Income Tax Act, 1961 (in short “the Act”) dated 30.09.2013 for the Assessment Year 2009-10.
At the outset, we find that there is a delay of 27 days in filing of appeal by the revenue. The reasons for the delay stated in the condonation petition has been examined and we are convinced that the revenue had properly explained the delay in the instant case and accordingly we deem it fit and appropriate to condone the delay and admit the appeal of the revenue for adjudication.
2 M/s Wanderland Real Estates Pvt. Ltd. A.Yr.2009-10 3. The only issue to be decided in this appeal of the revenue is as to whether the ld CITA was justified in deleting the penalty levied u/s 271AAA of the Act in the sum of Rs 40,50,000/- in the facts and circumstances of the case.
The brief facts of this case is that the assessee is a private limited company engaged in the business of real estate development. The regular return of income for the Asst Year 2009-10 was filed by the assessee on 25.11.2009 declaring total income of Rs 1,32,76,503/- which was duly processed u/s 143(1) of the Act. There was a search and seizure operation u/s 132 of the Act carried out at the business premises of Kalani Group situated at 11, Tukoganj Main Road, Indore on 16.4.2009. Certain documents belonging to the assessee company were found and seized during the course of search. Accordingly, the proceedings u/s 153C of the Act were initiated vide office notice dated 18.4.2012 which was duly served upon the assessee on 18.4.2012. In response to the said notice, the assessee filed its return on 17.5.2012 declaring total income of Rs 1,32,76,503/- . On the basis of information received from ADI wing, Indore, the assessee was asked to explain the transaction of Rs 1,00,00,000/- recorded on Page No. 10 of BS-6 and Rs 1,37,28,000/- on Page No. 287 of BS-16. The assessee company filed a written submission and stated that said sums and Rs 10,84,000/- as discussed in Asst Year 2007-08 are part of Rs 4,05,00,000/- shown as ‘income from business actvities’ in the profit and loss account. This fact of declaration of additional income of Rs 4,05,00,000/- was also mentioned in the notes to accounts to the audited accounts. As the said sums are already included in the original return which was filed after the date of search, no further declaration was required in the income filed by it u/s 153C of the Act. The assessment was completed u/s 153C read with section 153A of the Act on 28.3.2013 determining total income at Rs 1,32,76,503/- under the normal provisions of the Act and Book Profit of Rs 4,09,96,771/- u/s 115JB of the Act. In effect, the returned income was accepted u/s 153C of the Act.
3 M/s Wanderland Real Estates Pvt. Ltd. A.Yr.2009-10 5. The ld AO observed that the assessee made disclosure u/s 132(4) of the Act to offer additional income of Rs 4,05,00,000/- consequent to the search , substantiated the manner of deriving the same and also paid the taxes together with interest thereon. However, he observed that but for the search, the assessee would not have come forward to offer this income and pay taxes thereon. Accordingly, he levied penalty u/s 271AAA of the Act @ 10% of undisclosed income of Rs 4,05,00,000/- and arrived at the penalty figure of Rs 40,50,000/-.
The ld CITA observed that subsequent to the search , the President of Kalani Group in his letter dated 13.10.2009 made a consolidated disclosure of Rs 30,00,00,000/- , which included a disclosure of Rs 4,05,00,000/- pertaining to the assessee for Asst Year 2009-10. The assessee then filed its return of income u/s 139(1) of the Act disclosing income of Rs 1,32,76,503/- on 25.11.2009 and subsequently when proceedings u/s 153C of the Act were initiated on it vide notice dated 18.4.2012 , the assessee filed its return on 17.5.2012 disclosing the same income of Rs 1,32,76,503/- .The assessee pleaded that it had satisfied all the cumulative conditions prescribed u/s 271AAA(2) of the Act and accordingly is entitled for immunity from levy of penalty. He accordingly deleted the penalty levied in the sum of Rs 40,50,000/- u/s 271AAA of the Act.
Aggrieved, the revenue is in appeal before us on the following ground:- 1. That on the facts and in the circumstances of the case, the Ld. CIT(A) erred on facts as well as in law in holding that penalty of Rs. 40,50,000/- u/s 271AAA was not warranted, ignoring the fact that the assessee could not explain the source of additional income declared u/s 132(4).
8. None appeared on behalf of the assessee. We have heard the ld DR, wherein he vehemently relied on the order of the ld AO. We find that the President of Kalani Group had made a disclosure u/s 132(4) of the Act pursuant to the search to the tune of 4 M/s Wanderland Real Estates Pvt. Ltd. A.Yr.2009-10 Rs 30 crores, out of which Rs 4.05 crores pertained to assessee herein for the Asst Year 2009-10. Hence the first condition prescribed u/s 271AAA(2) of the Act has been satisfied by the assessee. The said income was also stated to be derived out of profit on sale of land thereby substantiating the manner in which such income was derived. Hence second condition prescribed u/s 271AAA(2) of the Act has been satisfied by the assessee. The assessee had also paid the entire taxes together with interest thereon and produced evidences in that regard. Hence the third condition prescribed u/s 271AAA(2) of the Act has been satisfied by the assessee. Since all the three cumulative conditions were satisfied by the assessee, it is entitled for immunity provided in sub-section (2) of section 271AAA of the Act, which has been rightly appreciated by the ld CITA by deleting the penalty. Hence we do not find any infirmity in the order deleting the levy of penalty u/s 271AAA of the Act in the instant case. Accordingly, the grounds raised by the revenue are dismissed.
In the result, the appeal of the revenue is dismissed.
Order pronounced in the Court on 07.03.2018