Order under section 254(1) of Income Tax Act

PER PAWAN SINGH, JUDICIAL MEMBER:

1. These two appeals by Revenue are directed against the separate orders oflearned CIT(A) – 3, Nagpurboth dated 13.06.2023 for Assessment Year (AY) 2017-18. In ITA No. 282/Nag/2023, the assessee has challenged the validity of penalty levied under section 271AAB of Rs. 60,31,056/- being penalty @ 10% of undisclosed income admitted in the statement recorded under section 132(4). In ITA No. 280/Nag/2023, the assessee has challenged the validity of order passed under section 154 dated 30.09.2019 in rectifying the penalty levied on 13.02.2019 whereby penalty was increased @ 60% of undisclosed income admitted in a statement under section 132(4). Both the appeals are inter- connected hence clubbed, heard together and are decided by common order to avoid the conflicting decisions. In ITA No. 282/Nag/2023, the Revenue has raised following grounds of appeal:

“1. On the fact and in circumstances of the case, the Ld. CIT(A) erred in deleting the penalty proceedings u/s 271AAB of the I. T. Act, 1961, levied by the AO of Rs. 60.31.056/- 10% undisclosed income as assessee had admitted additional income in the statement recorded u/s 132(4) of the Income Tax Act.

2. On the fact and in circumstances of the case, the Ld. CIT(A) erred in deleting the penalty proceedings u/s 271AAB of the I. T. Act, 1961, levied by the AO. If the search had not been conducted, the assessee would not have declared the additional income of Rs.6,03,10,567/- The act of declaration of income could not be considered as voluntary declaration since it was due to the search action which unearthed the undisclosed income. Therefore, this declaration was out of the purview of voluntary declaration and tax payment. Hence no immunity can be granted.

3. On the fact and in the circumstances of the case, the Ld. CIT(A) erred in allowing the appeal of the assessee ignoring the provision of section 271AAB of the Act, wherein it is mentioned that penalty-is. leviable @ 10% of undisclosed income in case of an assessee who has admitted admit additional income in the statement recorded u/s 132(4) of the Income Tax Act, in a case where search has been initiated under section 132 on or after the 1 day of July 2012.

4. Any other ground that may be raised during the course of appellate proceedings.”

2. In ITA No. 280/Nag/2023, the Revenue has raised following grounds of appeal:

“1. On the fact and in circumstances of the case, the Ld. CIT(A) erred in deleting the penalty proceedings u/s 271AAB of the I. T. Act, 1961, levied by the AO of Rs.3,61,86,340/- 60% of undisclosed income as assessee has admitted additional income in the statement recorded u/s 132(4) of the Income Tax Act and also not paid the tax together with interest in respect of undisclosed in income before the specified date.

2. On the fact and in circumstances of the case, the Ld. CIT(A) erred in deleting the penalty proceedings u/s 271AAB of the I. T. Act, 1961, levied by the AO. if the search had not been conducted, the assessee would not have declared the additional income of Rs.6.03,10,567/-, The act of declaration of income could not be considered as voluntary declaration since it was due to the search action which unearthed the undisclosed income. Therefore, this declaration was out of the purview of voluntary declaration and tax payment. Hence no immunity can be granted.

3. On the fact and in the circumstances of the case, the Ld. CIT(A) erred in allowing the appeal of the assessee ignoring the provision of section 271AAB of the Act. wherein it is mentioned that penalty is leviable @ 60% of undisclosed income in case of an assessee who has admitted additional income in the statement recorded u/s 132(4) of the Income Tax Act, in a case where search has been initiated under section 132 of the Act on or after the 1 day of July 2012 and failed to paid the tax together with interest in respect of undisclosed income before the specified date mentioned in not