The Delhi bench of the Income Tax Appellate Tribunal (ITAT) has held that penalty under section 271AAA of the Income Tax Act can be imposed when the assessee accepted undisclosed income in the statement under section 132(4) of the Income Tax Act,1961
A search operation was carried outon the premises of the assessee, Mothers Pride Educational PersonnaPvt. Ltd under section 132 of the Income-tax Act, 1961 (“the Act”) on 17.8.2011. The income of the assessee was assessed at Rs.1,41,87,720/- vide order dated 30.03.2014 u/s 143(3) of the Act. In pursuance of the disclosure in the search proceedings penalty proceedings u/s 271AAA of the Act were initiated. A show cause notice dated 30.03.2014 was issued and imposed a penalty of Rs. 16,00,000/-. The CIT(Appeals) sustained the penalty.
A Coram comprising of Shri Narendra Kumar Billaiya, Accountant Member and Shri Kul Bharat, Judicial Member observed that the penalty u/s 271AAA of the Act can be imposed against the assessee where the assessee has accepted the additional/undisclosed income during the statement recorded u/s 132(4) of the Act.
It was also stated that the Finance Act, 2012 introduced section 271-AAB(b), wherebyfor imposing penalty in those cases where the assessee does not admit undisclosed income in a statement u/s 132(4) but admits before the specified date i.e. due date of furnishing of return of income u/s 139(1), in such cases penalty cannot be levied u/s 271AAA, here the declaration was not made u/s 132(4) of the Act.
The Tribunal further viewed that the assessee had fulfilled the conditions of Sub-section (2) of Section 271AAA and is entitled to immunity from penalty.
The assessee failed to support its claim and no material is placed before the Tribunal to rebut the finding of CIT(Appeals). While dismissing the appeal of the assessee, the Tribunal upheld the order of the CIT(A).
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