DCIT v. Pioneer Marbles & Interiors Pvt. Ltd. ITAT ‘A’ Bench, Kolkata Before Mahavir Singh (JM) and C. D. Rao (AM) ITA No. 1326/Kol./2011 A.Y.: 2008-09. Decided on: 17-2-2012 Counsel for revenue/assessee: Amitava Roy/ J. N. Gupta

Facts:
The assessee was subjected to search u/s.132 of the Act on 30-8-2007. During the course of the search, the assessee declared Rs.50,00,000 as undisclosed income. This sum was included in the return filed by the assessee after the search. The Assessing Officer (AO) initiated penalty proceedings while finalising the assessment u/s.143(3) on the ground that the assessee has not paid full taxes and interest on disclosure made u/s.132(4).

In the penalty proceedings, the assessee submitted that while filing the return of income due to an inadvertent error, the assessee had not computed interest u/s.234C, as a result self-assessment tax was underpaid by Rs.46,132 and this shortfall was paid within the time mentioned in notice of demand issued u/s.156 of the Act. This contention was rejected by the AO. He levied penalty u/s.271AAA.

Aggrieved the assessee preferred an appeal to the CIT(A) who deleted the penalty levied by the AO.

Aggrieved the Revenue preferred an appeal to the Tribunal.

Held:
The Tribunal noted that under the scheme of section 271AAA there is a complete paradigm shift so far as penalty in respect of unaccounted income unearthed as a result of search operation carried out on or after 1st June, 2007 is concerned. Section 271AAA levies penalty @ 10% of undisclosed income. This levy, unlike section 271(1)(c), is without any reference to findings or presumptions of concealment of income or the findings or presumptions of furnishing of inaccurate particulars. S.s (2) grants immunity from levy of penalty u/ss (1), subject to satisfaction of conditions mentioned therein. While payment of taxes, along with interest, by the assessee is one of the conditions precedent for availing the immunity u/s.271AAA(2), there is no time limit set out for such payments by the assessee. Once a time limit for payment of tax and interest has not been set out by the statute, it cannot indeed be open to the AO to read such a time limit into the scheme of the section to infer one. The Tribunal held that there is no legally sustainable basis for the stand of the AO that in a situation in which due tax and interest has not been paid in full before filing of the relevant income-tax return, the assessee will not be eligible for immunity u/s.271AAA(2).

Section 271AAA does not require any subjective satisfaction of the AO to be arrived at during the assessment proceedings, and, therefore, the outer limit of payment before the conclusion of assessment proceedings will not come into play.