Need Tally
for Clients?

Contact Us! Here

  Tally Auditor

License (Renewal)
  Tally Gold

License Renewal

  Tally Silver

License Renewal
  Tally Silver

New Licence
  Tally Gold

New Licence
Open DEMAT Account with in 24 Hrs and start investing now!
ITAT-Constitution of Benches »
Open DEMAT Account in 24 hrs
 Income Tax Penalty u/s 271E cannot be levied in the absence of Regular Assessment: ITAT
 ITAT deletes Addition u/s 68 of Income Tax Act Firm not Taxable for Capital introduced by Partner
 Payment for Facebook Ads and Other Digital Advertising Companies not subject to TDS as per DTAA: ITAT
 No Service Tax Leviable on Goods component of Composite Works Contract as VAT has been paid: CESTAT
 ITAT deletes Addition on Account of Investment made from Undisclosed Sources as all Transactions were made through Banking Channels
 Relief to Honda: ITAT directs AO to delete Addition on account of Capitalisation of Royalty Expenses by Holding it to be Revenue in Nature
 Minimising tax liabilities by lawful means not illegal, says ITAT
 Interest paid on Late Payment of Service Tax is a Deductible Business Expenditure: ITAT
 ITAT upholds Addition on Account of Unaccounted Cash as no mention of Agricultural Land on Translated Document
 Delay in filing of Income Tax Return due to Financial Difficulties: ITAT quashes Penalty
 ITAT deletes penalty on Undisclosed Income u/s 271AAA
 M/s Singh Consultancy Pvt. Ltd. 1106 Indra Prakash Building, 21 Barakhamba Road, New Delhi Vs. Income Tax Officer, Ward-8(4), New Delhi
 Penalty proceedings u/s 271(1)(c) not sustainable if reason not specified: ITAT
 Notice issued u/s 143(2) to be served upon the assessee within six months: ITAT
 Addition for Unexplained Cash Credit justified in respect of Unexplained Creditors shown as Bogus: ITAT

ITAT deletes penalty on Undisclosed Income u/s 271AAA
April, 15th 2021

The Income Tax Appellate Tribunal (ITAT), Delhi Bench deleted the penalty on Undisclosed Income under section 271AAA of the Income Tax Act.

The search and seizure action and surveys were carried out at various business premises of M/s Action Construction Equipment Ltd., Group of Companies, Faridabad. A search operation under section 132 of the Act was also carried out at the residential and business premises of the assessee and in other associated cases.


The return of income was filed declaring income at Nil and had also shown a current year loss of Rs.1,42,45,889 to be carried forward. Although the due date for filing of return was September 30, 2010, the return was filed on October 12, 2010. The assessment was completed at an income of Rs.11,52,314 on account of estimation of gross profit rate due to difference in stock as per the books of accounts and the stock as per the physical inventory taken. Subsequently, a penalty of Rs.1,15,230 was imposed under section 271AAA of the Act being 10% of the alleged undisclosed income.

The assessee’s appeal against the imposition of this penalty was dismissed by the Ld. CIT(A) and now the assessee has approached this Tribunal challenging the confirmation of the penalty.

The coram headed by Vice President, G.S. Pannu observed that the assessee had a reasonable explanation for the discrepancy found in stock and due credence should have been given to this explanation. Therefore, it cannot be said that the assessee had no explanation to offer regarding the difference in stock. Further, the amount on which the penalty has been imposed is only an ad-hoc addition based on the average gross profit rate and does not relate directly to any undisclosed income unearthed during the course of the search.

The ITAT held that the imposition of penalty under section 271AAA is not sustainable, set aside the order of the CIT(A), and deleted the impugned penalty.

Home | About Us | Terms and Conditions | Contact Us
Copyright 2022 CAinINDIA All Right Reserved.
Designed and Developed by Ritz Consulting