Applicability of Penalty u/s 271AAA for Disclosure of income u/s 132(4) during search

Applicability of Penalty u/s 271AAA for Disclosure of income u/s 132(4) during search




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Penalty for unexplained cash payments was not justified as no specific query to assessee was raised at the time of recording statement under section 132(4) and during the assessment proceedings, however, the manner was substantiated by assessee by filing written submission and also referring relevant documents relating to undisclosed income, which were found and seized.

AO initiated the penalty under section 271AAA read with section 274 on the ground that since the assessee had admitted the undisclosed income, however he had not substantiated the manner in which the income had been derived. Held: Since no specific query was raised, at the time of recording statement under section 132(4) and during the assessment proceedings, however, the manner was substantiated by filing written submission and also referring relevant documents relating to undisclosed income, which were found and seized. Therefore, assessee was not at fault for substantiating the manner for earning the undisclosed income, in the absence of any specific query raised by AO while recording statement under section 132(4).

Decision: In assessee’s favour.

Referred: Asstt. CIT v. M/s. Gebilal Kanhaialal HUF (2012) 348 ITR 561 (SC); CST v. Modi Sugar Mills Ltd. (1961) 12 STC 182 (SC); Pr. CITv. Sundeep Gupta & Sameer Gupta [ITA Nos. 967 & 968/2017, dt. 13-11-2017]; Pr. CIT v. Mukeshbhai Ramanlal Prajapati (2017) 398 ITR 170 (Guj); Pr. CIT v. M/s Emirates Technologies Pvt. Ltd. (2017) 399 ITR 189 (Del); CIT v. Mahendra C. Shah (2008) 299 ITR 305 (Guj.); CIT v. Radha Kishan Goel (2005) 278 ITR 454 (All); DCIT v. M/s. NKG Infrastructure Ltd. [ITA Nos. 2730, 2731, 2732 & 2733/Del/2014, dt. 16-11-2017]; Asstt. CIT v. Shailesh Gopal Mhaske [IT Appeal No. 2242 (PUN.) of 2014, dt. 27-9-2017]; Sita Ram Gupta v. Asstt. CIT [ITA Nos. 1835 & 1836 (Delhi) of 2013, dt. 30-6-2014]; M/s. Spaze Tower Pvt. Ltd. v. DCIT [ITA No. 2296/Del/2012, dt. 8-8-2013] and Neerat Singal v. Asstt. CIT (2014) 146 ITD 152 (ITAT (Del).

IN THE ITAT, DELHI BENCH

H.S. SIDHU, J.M. & L.P. SAHU, A.M.

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