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This is an appeal filed by the Revenue against the order of ld.Commissioner of Income Tax(Appeals)-3, Nagpur dated 18.05.2017 emanating from the order of ACIT(AO) under section 271AAB of the Act dated 15.09.2015. The Revenue has raised the following grounds of appeal:

"i) On the facts and circumstances of the case and in law, the learned CIT(A) erred in deleting the penalty of Rs. 90,00,000/-

levied u/s. 271AAB of the Act.

ii) On the facts and circumstances of the case and in law, the Shri Sandeep I. Suri [R] learned CIT(A) has erred in deleting penalty levied u/s. 271AAB of the I T Act without appreciating the fact that all cases where proceedings are initiated u/s 153A or 153C are covered by provisions of section 271AAB irrespective of the fact as to whether search warrants is issued in the name of a particular person.

iii) On the facts and circumstances of the case and in law, the learned CIT(A) has erred in deleting penalty levied u/s. 271AAB of the I T Act without appreciating the fact that the assessee's disclosure of additional undisclosed income of Rs. 3,00,00,000/- clearly established his nexus and proximity with the case covered u/s. 132(1) and therefore, provisions of section 271AAB are applicable to his case.

iv) Any other ground that may be urged at the time of hearing."

2. Brief facts: The Assessing Officer (AO) levied penalty under section 271AAB of the Act of Rs.90,00,000/-. There was a search under section 132 of the Act on 07.03.2013 in the case of Kondawar Group of cases. A survey under section 133A of the Act was conducted in the case of Assessee i.e. Sandeep I. Suri. An assessment order under section 144 r.w.s 143(3) was passed by ACIT, Central Circle-1(2), Nagpur on 31.03.2015.

3. Aggrieved by the penalty order, the assessee filed appeal before the ld.CIT(A). The ld.CIT(A) vide his order dated 18.05.2017 deleted the penalty on the ground that there was no search under section 132 of the Act in the case of the assessee. The ld.CIT(A) held that penalty under section 271AAB can be levied only if there is search under section 132 of the Act in the case of assessee.

8. The relevant section 271AAB of the Act is reproduced here as under :

271AAB. (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 July, 2012, the assessee shall pay by way of penalty, in addition to tax, if any, payable by him,--

(a) a sum computed at the rate of ten per cent of the undisclosed income of the specified previous year, if such assessee--