Assessee disclosed additional income in the course of search proceedings in respect of coverup any disallowances/ additions / stock etc. The amount disclosed was included in the return of income for the purpose of taxation. The AO has also made other additions . The AO levied the penalty in respect of amount surrendered and also in respect of other additions applying the provisions of S. 271AAB(1)(c) at the rate of 60% of the undisclosed income. Penalty was confirmed by CIT(A) . Allowing the appeal of the assessee the Tribunal held that in respect of other additions such as disallowances u/s. 14A and 36(1) (v) being debatable issue the levy of penalty is not justified. As regards the surrender of income in respect of stock which was not disclosed by the assessee which was surrendered in the course of search proceedings and has substantiated the manner of earning of income hence penalty is leviable @ 10% of the amount sundered u/s. 271AAB(1)(a) of the Act and not @ 60% under S.271AAB(1)(c) of the Act. (ITA No. 695/CHD/2018 dt. 18-04-2019 (AY. 2014-15)
SEL Textiles Ltd. v. DCIT ( 2019) 181 DTR 217 (Chd.) (Trib.)
S. 271AAB : Penalty-Search initiated on or after 1st day of July 2012-Undisclosed income – Additional amount declared – Penalty levied at 60% on the amount surrendered is not valid penalty can be levied only at 10% of surrendered income – Additions made in respect of debatable issue levy of penalty is not justified. [S. 132(4), 271AAB(1)(a), 271AAB(c), 274]