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% 22.03.2024

1. Having heard Mr. Maratha, learned counsel appearing for the appellant, we note that the impugned judgment rendered by the Income Tax Appellate Tribunal ["ITAT"] would give rise to the following question:-

(a) Whether the ITAT in facts and circumstances of the case was correct in law in deleting the penalty of INR 1,97,70,670/- imposed by Assessing Officer under Section 271AAA of the Income Tax Act, 1961["Act"]?

2. While dealing with the issue of penalty under Section 271AAA of the Act, the ITAT has observed as follows: -

This is a digitally signed order.
The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 28/03/2024 at 21:01:00 "2.4 If the aforesaid judicial pronouncements are analyzed with the facts of the present appeal there is uncontroverted finding in the impugned order and also in the assessment order that in computation of income, attached with the return, the assessee declared the surrendered amount of Rs. 19,77,06,696/- under the head "additional income" which was accepted by the Revenue. It is further noted that while initiating the penalty proceedings the Ld. AO nowhere stated as to why the penalty proceedings were initiated and whether the conditions laid down in the section were satisfied or not. The Ld. AO without assigning any reason and merely on the basis of surrender made by the assessee initiated penalty proceedings. The amount of surrender was made by the assessee on the basis of certain loose papers found and seized during search operation upon tecpro group at Gurgaon. There is a further observation that these papers were, dictated by the search team and further from the statement tendered by the assessee there is a condition that the surrender made by the assessee shall be without penal action by the Department whatsoever and the surrender was made to buy peace and to avoid litigation with the Department in the spirit of cooperation. Considering the totality of facts and the decision in CIT vs. Suresh Chander Mittal (251 ITR 9) (MP), we find merit in the conclusion drawn by the Ld CIT (A) and confirm the same, resultantly the appeal of the Revenue is dismissed."
3. We, however, note that Section 271AAA of the Act reads as under:-
"[271-AAA. Penalty where search has been initiated.--
(1) The Assessing Officer may, notwithstanding anything contained in any other provisions of this Act, direct that, in a case where search has been initiated under Section 132 on or after the 1st day of June, 2007 [but before the 1st day of July, 2012], the assessee shall pay by way of penalty, in addition to tax, if any, payable by him, a sum computed at the rate of ten per cent of the undisclosed income of the specified previous year.