INCOME TAX ACT, 1961

Section 271AAB

Penalty under section 271AAB - Leviability - Admission of undisclosed income under section 132(4) - Assessee explained source as well as utilization of undisclosed income

Assessee-society was engaged in establishing, promoting and maintaining educational and other institutions to impart education. AO alleged that the assessee admitted undisclosed income under section 132(4) and accordingly, levied penalty under section 271AAB. He further, alleged that as the assessee did not file its return of income on or before 31-10-2013 and only filed on 3-11-2014, which was much after specified date. Accordingly, he levied penalty under section 271AAB(1)(c) at 30%. Further, CIT (A) gave a categorical finding that the assessee filed the return of income on 31-10-2013 that was within the due date as extended by the CBDT F.No. 225/117/2013/ITA.II, dt. 24-10-2013 and further observed that the admitted income and was offered for taxation. Accordingly, he held that the case of the assessee was covered by section 271AAB(1)(a) and directed the AO to re-compute the penalty at 10%. Aggrieved, Revenue was in appeal. Held: It was found that assessee filed return of income on 31-10-2013; thus the AO was not correct in rejecting the plea of the assessee on the ground that it did not file the return of income as per specified date. Further, assessee explained before the AO that it received anonymous donations from various persons for upliftment of the activities of the society. It was also submitted that the said donations received for the betterment of the activities of the society and the persons who contributed such donations were not anonymously disclosed their names/identify and submitted that due to that reason the society was handicapped in recording their names and identity. Therefore, as the assessee explained the way in which it derived income and also the purpose for which it was utilized, it was not necessary for it being an educational society to substantiate further with the source of the income received in view of section 115BBC(2)&(3). Hence, the assessee fulfilled all the conditions laid down in section 271AAB(1)(a), and accordingly, the penalty @10% would be leviable.

REFERRED :

FAVOUR : In assessee's favour

A.Y. : 2013-14 & 2014-15

INCOME TAX ACT, 1961

Section 253

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