Law:

Section:

Section 158BFA of the Income-tax Act, 1961 - Block assessment in search cases - Levy of interest and penalty in certain cases - Block period 1-4-1995 to 8-1-2002 - Penalty under sub-section (2) of section 158BFA is leviable where Assessing Officer computes income in excess of what is declared by assessee for block period [In favour of revenue] Pursuant to search operation, block assessment proceedings were initiated in the case of the assessee-firm. The assessee made certain disclosure of income for the block period, which income was hitherto not offered to tax. While framing the assessment, certain further additions were made by the Assessing Officer. Portion of additions were confirmed by the Tribunal. The Tribunal confirmed the additional income of Rs. 3 lakhs over and above what was disclosed by the assessee. The Assessing Officer thereafter imposed penalty under section 158BFA(2). Held that penalty under sub-section (2) of section 158BFA is provided where the Assessing Officer computes income in excess of what is declared by the assessee for block period. In the instant case, addition of Rs. 3 lakhs was confirmed by the Tribunal over and above the income declared by the assessee for the block period in question. The Assessing Officer, therefore, imposed penalty which was confined to such addition. Thus, the Assessing Officer had not committed any error in imposing such penalty or the Tribunal in confirming the same. CASES REFERRED TO CIT v. Chandra Vilas Hotel [2007] 291 ITR 202 (Guj.) and CIT v. Lakhdhir Lalji [1972] 85 ITR 77 (Guj.) S.N. Divatia for the Appellant. JUDGMENT Akil Kureshi J. - The assessee has challenged the judgment of the Income-tax Appellate Tribunal, Ahmedabad ("the Tribunal" for short), dated May 14, 2010, wherein, the following substantial questions of law are raised for our consideration: "(A) Whether, on the facts and in the circumstances of the case, the Income-tax Appellate Tribunal was right in law in confirming the penalty of Rs. 1,83,600 levied under section 158BFA(2) of the Income-tax Act, 1961, in respect of addition of Rs. 3 lakhs towards unaccounted investment directed by the Appellate Tribunal in quantum appeal? (B)…

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