TaxTMI 
TaxTMI 
2019 (5) TMI 686
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....n this regard, he referred to concluding portion of paragraph 4. He further referred to penalty order and pointed out that the Assessing Officer has levied the penalty for assessee's failure to substantiate the manner in which such unaccounted income was earned. Thus, the penalty has been levied on the ground other than on which it was initiated. He relied upon the decision of Hon'ble Jurisdictional High Court in the case of Principal Commissioner of Income Tax, Central-3 Vs. Bhavi Chand Jindal in Income Tax Appeal No.973/2018, order dated 13th September, 2018, wherein Hon'ble Jurisdictional High Court has held that the two aspects i.e., the disclosure of manner in which undisclosed income was earned and substantiating the manner in which the undisclosed income was earned are two different things. These two different aspects are repeated by clauses (i) and (ii) of Section 271AAA(2). He, therefore, stated that on the facts of the case, the decision of Hon'ble Jurisdictional High Court would be squarely applicable. 4. Learned DR, on the other hand, filed written submission, which reads as under :- "In the above case, it is humbly submitted as follows: ....
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.... 1. Sundaram Finance Ltd. Vs CIT [2018] 99 taxmann.com 152 (SC) SLP dismissed against High Court ruling that where assessee claimed depreciation on non-existent assets, penalty under section 271(1)(c) was to be levied for filing inaccurate particulars of income 2. Sundaram Finance Ltd. Vs CIT [2018] 93 taxmann.com 250 (Madras)/[2018] 403 ITR 407 (Madras) where Hon'ble Madras High Court held that where notice did not show nature of default, it was a question of fact. The assessee had understood purport and import of notice, and hence, no prejudice was caused to the assessee. It considered decision of Karnataka High Court in CIT v. Manjunatha Cotton & Ginning Factory [2013] 359 ITR 565/218 Taxman 423/35 taxmann.com 250 (Kar.). Relevant part of the order is reproduced below: "15. Before us, the assessee seeks to contend that the notices issued under Section 274 r/w. Section 271 of the Act are vitiated since it did not specifically state the grounds mentioned in Section 271(1)(c) of the Act. 16. We have perused the notices and we find that the relevant columns have been marked, more particularly, when the case against the....
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....he Tribunal, when no claim was made before the original authority and there is nothing on record to indicate as to what prevented the assessee from raising such a claim before lower authorities. 2. Addl. CIT Vs Gurjargravures (P.) Ltd [1978] 111 ITR 1 (SC) (Copy Enclosed) where Hon'ble Supreme Court held that the High Court was not justified in holding that if an item of income was taxed, the question of its non-taxability should be taken to have been considered by the ITO though no such claim had been made before him by the assessee." 5. He specifically pointed out that in the middle of paragraph 4, the Assessing Officer has mentioned that the assessee has not specified and substantiated the manner in which such undisclosed income has been derived by it. Thus, the Assessing Officer has initiated penalty on both the counts and he levied the penalty for non-substantiation of such income and therefore, it cannot be said that the penalty has been levied on ground other than the ground for which it was initiated. 6. We have carefully considered the submissions of both the sides and perused the material placed before us. We find that Hon'ble Jurisdictional Hi....
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....it is a fit case for initiating penalty proceeding u/s 271AAA of the I.T. Act. Accordingly penalty u/s 271AAA of the I.T. Act is being separately initiated." 9. Thus, initially the Assessing Officer recorded the finding "that assessee company has not specified and substantiated the manner in which such unaccounted income has been derived by it". But, subsequently, he recorded the finding "that the assessee company has failed to explain the manner in which the undisclosed income was derived". We further find that in the notice issued under Section 271AAA, the penalty proceedings have been initiated on altogether different charges. We reproduce the notice herein below for ready reference :- "Notice Under Section 271AAA of the I.T. Act, 1961 (PAN : AABCS7627K) To, The Principal Officer, M/s Sam (India) Builtwell P Ltd 435, Jagriti Enclave, Delhi - 110092. Sir, Where as in the course of proceedings before me for the assessment year 2011-12, appears to me that you :- *have undisclosed income of the specified previous year, as noted above, represented, either wholly or partly, by any money, bullion, jewel....