The Jharkhand High Court has recently upheld the order of the Income Tax Appellate Tribunal ( ITAT ) against the revenue, nodding to the deletion of penalty imposed on the assessee under Section 271(1)(c) instead of Section 271AAB of the Income Tax Act.
Notably, a search and seizure operation under Section 132 of the Income Tax Act was carried out on 03.09.2014 at the business and residential premises of Jagdamba Group and the respondent is one of the members of the said group. During the course of search, no incriminating material was found in the case of the respondent.
The petitioner-revenue had contended that the order passed by the CIT appeal as well as the impugned order passed by the Tribunal suffers from infirmity. It is true that section 271AAB of the Income Tax Act has been inserted w.e.f. 1.7.2012 for a specific purpose to cover all those cases where a search has been initiated after the 1st day of July 2012, but before the 15th of December, 2016.
“However, it can be seen from the provisions of section 271AAB of the Act that the penalty is prescribed for ‘undisclosed income’ which has also been defined under this section. In the case of the Assessee, no incriminating documents including the books of account or audit report were found”, the revenue representative R N Sahay submitted.
It was thus contended by the department representative that the case of the respondent assessee is not covered under section 271AAB of the Income Tax Act and the Assessing Officer has rightly imposed penalty under section 271(1)(c) of the Income Tax Act.
The respondent-assessee on the other hand supported the impugned judgment and submits that on the one hand, no penalty can be levied under section 271(1)(c) of the Income Tax Act after the amendment made from 1st July 2012 nor the notice issued under section 271(1)(c) is in accordance to the law, as such no interference is required.
Observing from the facts that, the case of the Assessee is squarely covered by section 271AAB as the search was conducted on 03.09.2014 i.e., after 01/07/2012, the court did not find any infirmity in the order as stated hereinabove by the revenue representative.
It was reiterated that in a case where a search has been initiated under section 132 (1) of the Act on or after 1st day of July 2012, the penalty, if any, should be levied under section 271AAB and not under section 271(1)(c) of the Income Tax Act as the case falls under a specified previous year, i.e., 2014.
The appeal, thus being devoid of merit, was dismissed by the Division Bench of Justices Aparesh Kumar Singh and Deepak Roshan of the Jharkhand High Court, while the order of the Income Tax Appellate Tribunal (ITAT) was upheld.
Subscribe Taxscan Premium to view the JudgmentSupport our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates
