TaxTMI 
TaxTMI 
2019 (6) TMI 143
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.... was no concealment of income by the assessee. He prayed to set aside the order of CIT(A). 3. The Ld.DR submits that the AO initially issued notice u/s 271AAA of the Act and thereafter, issued another notice dated 29.01.2015 u/s 271AAB of the Act. The penalty proceedings were conducted and proceeded to impose penalty basing on the notice dated 29.01.2015 issued u/s 271AAB and the penalty imposed thereon is maintainable under law. On merits, the Ld. DR submits the documents as placed at page No.13 & 14 of the Paper Book are incriminating material and the assessee disclosed the same as undisclosed income u/s 132(4) of the Act. He relied on the decision of Hon'ble Supreme Court in the case of Sandeep Chandak and prayed to dismiss the grounds raised by the assessee in the present appeal. 4. Heard both parties and perused the material available on record. It is noted that search & seizure operation u/s 132 of the Act was conducted on Jalan Group on 06/07-09.2012 and on subsequent dates. We find that the assessee above is belong to the said Jalan group of cases. Further on similar issues on identical facts in the case of ITA No.1927 & 1928/Kol/2016 in the case of Ganpati Industrial Pvt....
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....s exist. The Ld. DR argued that quoting of wrong provision by the competent authority does not take away the jurisdiction of the authority and on the sole ground, order of penalty cannot be vitiated. 7. Further, he argued that the assessee having responded through its authorised representative and having participated in the proceedings cannot be allowed to turn around and raised objection before the Tribunal seeking invalidation of the proceedings initiated by the authority alleging issuance notice u/s271AAA. If such defect is not allowed to be cured, or treated as invalid so as to declare the notice invalid despite the fact the assessee had taken the notice as valid and responded to it in letter and spirit and participated in the proceedings the very purpose and objective of the provisions contained in section 292B of the Act would stand frustrated and defeated. The intent of the legislature is clear from the language implied in this provision on the alleged defective notice order cannot be declared invalid by reason of any mistake, defect or omission, if the notice in substance and in effect is in conformity with or according to the intent to the purpose of the provision. 8. ....
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....sitioned by the AO. The AO determined the total income of the assessee on Rs. 7,94,66,290/- which is inclusive of undisclosed income of Rs. 5 crores as admitted by the assessee vide its order dated 17.04.2015 under section 143(3) of the Act. 12. Having satisfied that it is a fit case for imposition of penalty under section 271AAB of the Act, the AO initiated proceedings under section 271AAB of the Act by issuing a notice dated 17.04.2014. The AO imposed penalty of Rs. 50,00,000/- under section 271AAB of the Act. The relevant portion of which is reproduced here in below:- "But in the instant case the search was conducted on 06.09.2012 which is after July,2012. Therefore provision of sec.271AAB of the IT. Act, 1961 instead of provision of sec.271AAA of the IT Act,1961 is applicable where a minimum sum computed at the rate of ten percent of undisclosed income of the specified previous year to be imposed as penalty irrespective of fulfilling the conditions laid down in sec.271AAB(1)(a) of the IT. Act,1961. Therefore, assessee's submission for dropping the penalty u/s 271AAB for fulfilling the three conditions is not applicable to the present case. However, in the case of the as....
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.... the penalty notice which is at page No.20 of Paper Book, it is true the AO issued notice u/s 274 r.w.s. 271AAA of the Act. But, however, in the body of the said notice the AO clearly mentioned his intention why an order imposing penalty on you should not be made u/s 271AAB of the Act. Further, it is needless to say in response to the said notice, the assessee participated in the penalty proceedings and it is evident from the penalty order that the assessee specifically contended that the proceedings u/s 271AAB are not applicable for the search conducted u/s 132 of the Act. The Ld.DR as narrated above the submissions and case laws supporting that even though quoting of wrong provision by the competent authority does not take away jurisdiction of the authority and such orders cannot be vitiated on such sole ground. In our opinion, the submissions as made by the Ld.AR in this regard are not tenable and they are liable to be rejected. 16. Further, we may place on record the principle laid down by the Hon'ble High Court of Allahabad in the case of Sandip Chandak where, we find the same contention raised as the penalty initiated and imposed u/s 271AAB is not maintainable as authorit....
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....spect of the undisclosed income; and (B) furnishes the return of income for the specified previous year declaring such undisclosed income therein; (b) a sum computed at the rate of twenty percent of the undisclosed income of the specified previous year, if such assessee - (i) in the course of search, in a statement under sub-section (4) of section 132, does not admit the undisclosed income; and (ii) on or before the specified date - (A) declares such income in the return of income furnished for the specified previous year; and (B) pays the tax, together with interest, if any, in respect of the undisclosed Income; (c) a sum which shall not be less than thirty percent but which shall not exceed ninety per cent of the undisclosed income of the specified previous year, if it is not covered by the provisions of clauses (a) and (b). (2) No penalty under the provisions of clause (c) of sub-section (1) of section 271 shall be imposed upon the assessee in respect of the undisclosed income referred to in sub-section (1). (3) The provisions of sections 274 and 275 shall, as far as may be, apply in relation to the penalty referred to in this section." 19. On reading of the ....
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.... are being carried out under Section 143(3), which is a proceeding of assessment as so stipulated under Section 143 and sub section (3) of Section 143 provides the procedure to be adopted by the assessing authority during the course of the assessment proceedings. provides the procedure for penalty where the search has been initiate Section 271AABed. In the present case, admittedly a search and seizure operation is carried out in which the assessees have surrendered the amount of Rs. 4 crores each (Rs. 4 lakh each by all the three assessees) and therefore, in view of the provisions of Section 271AAB the assessees are required to pay, by way of, penalty in addition to tax, if any, a sum computed @ 10% of undisclosed income of the specified period or previous years. In the case where the assessee in the course of search in a statement (under Section 4 of Section 132) admits the undisclosed income and specified manner in which such income has been derived, than the provisions of Section 271AAB automatically attracts and the proceedings are to be carried out/completed. We have noticed that the penalty notice has been issued under Section 274 read with section 271. Section 274 provid....
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....the analysis of the above Provisions of Act, it is clear that action of imposition of penalty u/s 271AAB(a) is independent of the enquiries made and subsequent additions made during course of assessment proceedings. In other words, this penalty is not based upon the facts gathered during course of assessment proceeding. It is dur to this reason, in my opinion, satisfaction of the AO is not required to be recorded by AO during assessment proceedings or at the time of completion of the proceedings. Thus, initiation of the penalty after the completion of assessment proceeding is not vitiated by law. The Ld. A.Rs have also challenged that the caption of the notice mentioned only Section 271 and not 271AAB. In this respect, the copy of notice has been produced by the Ld. A.R. before me. It is seen that the Ld. A.R. is correct in observing that the section of penalty has not been correctly mentioned by the AO in the caption. However, the AO will get the benefit of section 292BB of the Income Tax Act, 1961 because firstly, the assessee has raised no objection before the AO in this regard. Secondly, last line of the notice clearly mentions section 271AAB. Thirdly, the assessee has given ....