Section 271AAA of the Income Tax Act
The decision most relied on for Section 271AAA is CIT v. SPL’s Siddhartha Ltd. (345 ITR 223), cited in 164 of the 606 judgments on BharatTax that turn on this section.
Leading authorities on Section 271AAA
Reassessment proceedings under Section 147 are invalid if the sanction required under Section 151 is obtained mechanically, without independent application of mind by the sanctioning authority, or is based on borrowed satisfaction.
A statutory authority vested with discretion must exercise that power independently, based on its own judgment, and not under the dictation or instructions of a higher authority. Exercising discretion under superior direction constitutes a failure to exercise it at all.
The mere existence of a time gap between cash withdrawals and their subsequent redeposit does not invalidate the assessee's explanation, especially in the absence of contrary evidence. The authorities must give due latitude to human conduct when assessing the truthfulness of an explanation.
When a statement is made voluntarily and not under coercion, and the assessee fails to take steps to rectify it before the relevant authorities, the retraction of such a statement later is not valid.
A retraction of a statement made during a search or survey is not valid if the assessee cannot prove it was made under threat or coercion, especially when independent witnesses were present.
A retraction of a statement made during a search requires proof of threat or coercion. If a statement was voluntary, the assessee must prove it was made under a misconception of facts to be valid.
Section 271AAA penalty deletion can be based on the Apex Court's decision in ACIT v. Gebilal Kanhaialal HUF (2012) 348 ITR 561, particularly when there was no specific question put to the assessee about the manner of earning undisclosed income.
A voluntary declaration made during a survey or search can be relied upon for assessment, even if later retracted, unless proven to be made under threat or coercion.
Where cash deposited in a bank account is explained as being out of cash previously withdrawn, and there is no contrary evidence, such explanation cannot be disregarded.
An admission is considered the best evidence for an opposing party and is decisive unless withdrawn or proven erroneous. Statements made in compliance with statutory provisions are presumed to be made in accordance with the law.
