The New Delhi bench of ITAT in the case of DCIT versus Jainco Developers Pvt. Ltd therein held that Penalty under Section 271AAA of the Income Tax Act can’t be levied since no search had taken place in the case of the assessee.
In the instant case, the Revenue preferred an appeal before the Tribunal bench against the order of the CIT (A)-5, Delhi relating to the deletion of penalty levied by the A.O. u/s 271AAA.
There held a search and seizure operation in the premises of assessee’s relative company. The said documents seized from the premises of the searched party in relation to the assessee i.e., M/s Jainco Developers Pvt. Ltd. were passed to AO. Accordingly assessee surrendered certain amount on account of discrepancy in its books of accounts and the documents seized from its premises. Finally AO levied penalty proceedings under Section 271AAA of the Income Tax Act.
On appeal, the CIT (A) deleted the penalty so levied by observing that since the assessee was not covered u/s 132 i.e. no search had been conducted on the assessee but the assessee was covered by survey u/s 133A.
The Tribunal noted that the assessment order shows that no search had taken place in the case of the assessee and the assessment was completed by issuing notice u/s 153C of the Income Tax Act.
The Tribunal bench including Judicial Member Beena A Pillai and Accountant Member R. K. Panda, observed that “assessee has surrendered the income, explained the manner in which it was earned and has paid the taxes due thereon. Therefore, the assessee has fulfilled all the conditions laid down in Section 271AAA for non-levy of penalty under the said provisions. Even otherwise also, it is an admitted fact that no search has taken place in the premises of the assessee and, therefore, provisions of Section 271AAA are not at all applicable”.
Accordingly, the bench upheld the order of CIT (A) and held that the provision of section 271AAA is not applicable to the assessee.
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