INCOME TAX ACT, 1961

Section 271AAB

Penalty under section 271AAB - Undisclosed income admitted by assessee on the basis of incriminating documents found during search - Imposition of -

A search and seizure action under section 132 was conducted at assessee's premises. Subsequent to the search, in response to notice under section 153A assessee declared income which included undisclosed income admitted in the course of search. While completing assessment, AO initiated penalty proceedings under section 271AAB being 30% of the undisclosed income admitted by assessee on the basis of incriminating documents found in the course of search. Held: The provisions of sections 271AAAB(1)(a) and 271AAB(1)(b) which provide for imposition of penalty @ 10% and 20% respectively are not applicable. Even though assessee had not satisfied the conditions specified in 271AAB(1)(a)(iii), the failure to do so constitutes reasonable cause as it was due to conditions beyond the assessee's control and therefore penalty was to be levied only @ 10% and not 30% of the undisclosed income was totally untenable. Section 271AAB commences with 'non-obstante clause' overriding all other provisions and therefore, appeal of the Revenue was allowed.

REFERRED :

FAVOUR : Against the assessee

A.Y. :

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