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Income Tax Appellate Tribunal, MUMBAI BENCHES “D”, MUMBAI
Before: SHRI B.R.BASKARAN (AM) & SHRI RAM LAL NEGI (JM)
ITA No 5239 has been filed by the assessee against order dated 21/06/2012 passed by the Ld. CIT(A) 41 Mumbai, and ITA No.5391 have been preferred by the revenue against order dated 15/06/2012 passed by the Ld. CIT(A) 41 Mumbai. Since all the appeals were heard together, they are being disposed of by this common order for the sake of convenience.
Brief facts of the case are that search and seizure action was carried out in case of the assessee on 24/07/2008. During the course of search some loose papers were found on the basis of which, the assessee declared additional income of Rs.3,65,112/-, Rs. 3,67,462/-, Rs.3,80,687/-, Rs.4,26,287/-, Rs.5,75,984/-and Rs. 6,93,522/- for the assessment year 2003-04 to 2008-09 respectively on account of payment of salary to domestic servants and drivers etc. In the instant year, AO initiated penalty proceedings u/s 271AAA of the Act and levied penalty of Rs. 1,54,230/- .
3. Aggrieved by the penalty order, the assessee challenged the same before the CIT(A). The Ld. CIT(A) after hearing the assessee, confirmed the penalty under section 271(1)(c) of the Act, under the erroneous appreciation of facts. The assessee had filed the present appeal against the impugned order passed by the Ld. CIT(A).
4. We have heard the rival submissions and perused the material placed before us. We notice that the AO has levied penalty u/s 271AAA of the Act, but the Ld. CIT(A) has confirmed the penalty under the impression that the penalty has been levied under section 271(1)(c) of the Act. Since the Ld. CIT(A) has passed the impugned order on wrong appreciation of facts, we are of the opinion that his order gets vitiated. Accordingly, we are of the view that issue urged before him by the assessee requires fresh consideration. We, therefore, set aside the order passed by the Ld. CIT(A) and restore the matter to his file for fresh consideration.
ITA No. 5393/Mum/2012 A.Y. 2009-10 and A. Y. 2009-10
Since the grounds urged in both these appeals are identical in nature, both these appeals are disposed in common. However, we take the case of Sh. Rajiv Kumar as lead case and discuss the facts available therein. Brief facts of the said case are that the assessee filed his return of income for the A.Y. 2009-10 declaring the total income of Rs. 3,89,18,353/- including Rs. 2.25 crores, declared during search action carried out u/s 132 of the Income Tax Act, 1961 (in short ‘the Act’).
2. The assessment u/s 143(3) was completed on 31/12/2010. Accordingly, penalty u/s 271AAA was initiated in respect of additional income of Rs. 2,25,00,000/- declared by the assessee during the course of search. In response to show cause notice, the assessee contended that since conditions contemplated in subsection 2 of section 271AAA are fulfilled in his case, no penalty can be imposed under section 271AAA of the Act. In appeal the Ld. CIT(A) deleted the penalty. Against the said order of the Ld. CIT(A) the revenue is in appeal before the Tribunal.
The department has challenged impugned order passed by the Ld. CIT(A) on the following effective ground:-
“Whether on the facts and circumstances of the cases and in law, the Ld. CIT(A) has erred in holding that penalty u/s 271AAA of the Income Tax Act is not leviable on the ground that assessee has fulfilled all conditions laid down in section 271AAA when offer of additional income was made only in statement made
under section 131 of the income tax act and also assessee has not be able to substantiate the manners of earning income.”
Before us, the Ld. Authorised Representative (AR) for the assessee submitted that the Ld. CIT(A) has rightly deleted the penalty. The A.O has levied penalty on the ground that the statement has not been recorded u/s 132(4) whereas, in fact, the statement was recorded u/s 132(4) and section 131 has wrongly been mentioned by the authority concerned who has recorded the statement. In the statement the assessee has specified the manner in which the income was derived. Since, the statement was recorded during search operation u/s 132 of the Act, it can safely be presumed that the same has been recorded under section 132(4) of the Act.
On the other hand the Ld. Departmental Representative (DR) relying on the findings of the A.O submitted that the Ld. CIT(A) wrongly deleted the penalty and the order is therefore liable to be set aside.
We have heard the rival submissions and gone through the material placed before us. We notice that the assessee offered additional income of Rs. 2,25,00,000/- during the course of search. The AO noticed that the statement has been recorded u/s 131 of the Act and not under section 132(4). Hence, he took the view that the provisions of 271AAA(2) shall not apply. Accordingly, the Assessing Officer levied penalty u/s 271AAA @ 10% of undisclosed income of Rs. 2,25,00,000/-. In appeal, the Ld. CIT(A) took the view that the statement has been recorded/s 132(4) but erroneously stated as u/s 131. He further observed that statement u/s 131(1) of the Act is recorded only in case of survey. In the present case the authority concerned has inadvertently/wrongly mentioned the section 131(1) instead of section 132(4). The Ld. CIT(A) has also pointed out that it was only a typing mistake and instead of section 132(4) it was typed or mentioned section 131(1). Accordingly, the Ld. CIT(A) held that the assessee is entitled for immunity provided under section 271AAA(2) and accordingly deleted the penalty.
Having gone through the entire gamut of facts, we are of the view that the Ld. CIT(A( (A) has analysed the facts in a proper perspective and has arrived at the conclusion that the statement in which the assessee surrendered the income , was taken u/s 132(4)of the Act and not u/s 131. Since the statement was required to be recorded by the authority concerned, it was his duty to mention the correct section of law. The assessee should not suffer for the mistake which he has not committed. Therefore, we are of the view that the Ld. CIT(A) has rightly held that the immunity given u/s 271AAA(2) of the Act is available to the assessee. Accordingly, we uphold the order passed by the Ld. CIT(A) in these two cases.
In the result appeal filed by assessee Rajiv Malhotra is treated as allowed for the statistical purposes and both the appeals of the revenue are dismissed.