Tribunal cancels penalties for incorrect tax assessments, citing lack of legal basis and proper application of law.

The Tribunal quashed the penalties imposed under section 271AAA for AY 2012-13 and section 271(1)(c) for AY 2007-08. The penalties were found to be unjust as the income disclosed voluntarily was not attributable to the relevant assessment years, and there was a discrepancy in the legal grounds for initiating and imposing penalties. The assessees' appeals were successful, and the penalties were directed to be deleted due to the lack of proper application of the law by the AO.

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Issues Involved:
1. Penalty levied under section 271(1)(c) of the Income Tax Act for assessment year 2007-08.
2. Penalty levied under section 271AAA of the Income Tax Act for assessment year 2012-13.
3. Legal contentions regarding the initiation and imposition of penalties under different charges.
4. Voluntary disclosure of income and its implications on penalty proceedings.

Detailed Analysis:

1. Penalty under Section 271(1)(c) for AY 2007-08:
The appeals filed by the assessees challenge the penalties levied under section 271(1)(c) of the Act for AY 2007-08. The penalties were confirmed by the CIT(A) based on the income assessed from undisclosed foreign bank accounts. The income was offered by the assessees after being confronted with information obtained from Swiss authorities. The assessees argued that the income was earned prior to 2003 and was voluntarily offered in AY 2007-08 to avoid litigation. The Tribunal noted that the income did not belong to AY 2007-08, and the voluntary offer should not attract penalties as per the decision in Dr. Kaushal Goel Vs. ACIT.

2. Penalty under Section 271AAA for AY 2012-13:
The appeal by one assessee challenged the penalty levied under section 271AAA for AY 2012-13. The Tribunal observed that the penalty under section 271AAA could only be levied on a person subjected to search under section 132. Since the search was conducted only in the hands of another individual, the penalty under section 271AAA was deemed beyond the scope of the provisions. The Tribunal directed the deletion of the penalty.

3. Legal Contentions on Penalty Charges:
The assessees contended that the AO initiated penalty proceedings for "concealing the particulars of income" but levied penalties for "furnishing inaccurate particulars of income." The Tribunal referred to the Bombay High Court's decision in The CIT Vs. Shri Samson Perinchery, which held that penalties must be imposed on the same grounds as initiated. The Tribunal found non-application of mind by the AO in initiating penalties under one charge and levying under another, thus vitiating the penalty proceedings.

4. Voluntary Disclosure and Penalty Proceedings:
The assessees argued that the additional income was disclosed voluntarily based on incomplete information from Swiss authorities. They provided no objection for the AO to collect complete details from HSBC Bank, Geneva. The Tribunal noted that the income was earned prior to 2003 and was voluntarily offered in AY 2007-08. The Tribunal found that the explanations provided by the assessees were not proven false and accepted their contention that the voluntary disclosure should not attract penalties under section 271(1)(c).

Conclusion:
The Tribunal quashed the penalties levied under section 271AAA for AY 2012-13 and under section 271(1)(c) for AY 2007-08, citing non-application of mind by the AO and the voluntary nature of the income disclosure. The appeals of the assessees were allowed, and the AO was directed to delete the penalties.

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