The assessee company, G underwent a search and seizure on its premises on April 30, 2019. The managing director, upon search admitted to not disclosing rental receipts for the assessment years 2017-18 to 2020-21. This led the AO to levying a penalty at 200 percent for assessment years 2017-18 and 2018-19. He also levied a penalty at 60 percent for the assessment years 2019-20 and 2020-21. The Commissioner (appeals) upheld the order of the AO and the same was challenged by the assessee.

The tribunal held that with respect to assessment years 2017-18 and 2018-19, the assessee has misreported its income because incriminating evidence to the tune of rental receipts not reported as income was found during the search. The same was also admitted by the managing director. The tribunal upheld the penalty levied by the AO. With respect to assessment years 2019-20 and 2020-21, the Tribunal held that the AO was wrong in levying a penalty because the due to file a return for the said years had not expired. Therefore, the AO could not come to the conclusion that the assessee would not disclose the income there as well.  As a result, the penalty was deleted. (AY.2017-18 to 2020-21)