TaxTMI 
TaxTMI 
2019 (7) TMI 1216
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....1 in the name of M/s. BGR Mining & Infra Pvt. Ltd and is involved mainly in the business of mining, specializing in over burden removal and open cast mining & erection works. During the A.Ys 2009-10 & 2010-11, the assessee was assessed in the name of M/s. Girijapati Reddy & Co. and thereafter it is in the name of M/s. BGR Mining & Infra Pvt. Ltd. A survey u/s 133A of the I.T. Act was conducted in the assessee's business premises on 14.10.2014 based on the information that the assessee firm is involved in siphoning off huge funds through the partners' accounts. During the course of survey, the books of account maintained by the assessee was examined in details and the AO noticed that the claim of expenditure was mainly labour payments, but no details were available in respect of site and projects for which such expenses were claimed. He also noticed that the labour expenses were claimed by the firm as well as individual partners for and on behalf of the firm and at the business premises of the assessee, substantial volume of vouchers were found which were considered as incriminating in nature. Based on the above facts found during the course of survey, a warrant of authorization u/s....
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....to their native places in batches. When the assessee was asked to produce the bills and vouchers for the outstanding labour maistris, the Director submitted that the assessee cannot be in a position to maintain all the vouchers relating to labour maistris due to the volume of the turnover. However, he agreed to admit an amount of Rs. 26.00 crores for the financial years 2008-09 to F.Y 2014-15 u/s 132(4) of the Act over and above the income already declared in the returns of income of the respective years. The AO therefore, observed that the assessee has not been able to substantiate its claim of labour expenses and has admitted additional income of Rs. 26.00 crores for the financial years upto 2014-15 and the income was also declared in the returns of income of the respective years. The AO therefore, accepted the income returned by the assessee in response to the notice u/s 153C of the Act. 4. Thereafter, the AO initiated penalty proceedings u/s 271(1)(c) of the Act by issuing a show-cause notice u/s 271(1)(c) of the Act. The assessee vide letter dated 21.5.2017 filed his explanation stating that the expenditure claimed under the work site/labour expenses were not in dispute but s....
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....d by the assessing officer in levying the penalty U/S 271 (1)( c) are contrary to the facts and circumstances of the case and ought to have appreciated the written submission made by your appellant and ought to have cancelled the penalty U/S 27 I (1)( c), levied by the Asst. Commissioner ofIncome Tax, Central Circle, Tiruapathi. 4. The Learned Commissioner of Income tax ought to have seen that for levying penalty U/S 271(l)(c), the Assessing officer is required to establish either concealment or furnishing of inaccurate particulars specifically, by brining positive material on record, and accordingly issue notice specifically, whether there were concealment of particulars or furnishing inaccurate particulars in the notice U/S 271(1)(c) itself and the Learned Commissioner ofIncome Tax ought to have held that penalty proceedings U/S 271(l)(c) was bad in law in the absence of specific reason in the notice issued U/S 271(l)(c), whether it is a case of concealment of particulars or furnishing of inaccurate particulars and ought to have cancelled the orders passed U/S 27I(l)(c) by Asst. Commissioner of Income Tax, Central Circle, Tiruapathi. 5. The Learned Commissioner of Income Tax ....
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....t voluntary but was made only after detection and confrontation in the search u/s 132 of the Act. He also relied upon the decision of the Hon'ble Madras High Court in the case of Sundaram Finance reported on 23.4.2018 for levy of penalty under such circumstances. 8. Having regard to the rival contentions and the material on record, we find that the penalty u/s 271(1)(c) is levied for not offering the additional income to tax in the original returns of income for offering the same only after confrontation during the course of search. The assessee has raised the additional ground against non-striking off the irrelevant portion of the show cause notice u/s 271(1)(c) of the Act, we find that the show cause notice for the A.Y 2009-10 is as under: "Penalty notice u/s 271(1)(c) of the Act, 1961 PAN: AABFG9906A Date:31-12-2016 To M/s.B.Girijapathi Reddy & Co. 16-11-380B Srinivasa Agraharam Sujathammacolony, Agrharaa Mitta Nellore 524001 Whereas the course of assessment proceedings before me for the A.Y 2009-10, it appears to me that you have concealed the particulars of your disclosed income or furnished inaccurate particulars of such income. You are hereby request....
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.... of the Act for the very same reasons as in the A.Y 2009-10 to 2013-14. However, he issued a notice u/s 271AAB of the Actto the assessee. The assessee submitted his explanation and thereafter the AO held that the notice u/s 271(1)(c) was to be issued and that erroneously the provisions of section 271AAB of the Act was mentioned in the notice. He held that such mentioning will not invalidate the notice. Thereafter, he proceeded to levy penalty u/s 271(1)(c) of the Act. Aggrieved, the assessee preferred an appeal before the CIT (A), who observed that the requirements of conditions to be satisfied for initiating penalty u/s 271AAB of the Act and levy of penalty u/s 271(1)(c) of the Act are different. He held that having issued notice u/s 271AAB of the Act, the AO cannot levy penalty u/s 271(1)(c) of the Act. Accordingly, the penalty order was cancelled and the Revenue is in appeal before us by raising the following grounds of appeal: "1. The order of the Ld.CIT(A) is erroneous both on the facts and in law. 2. The Ld.CIT(A) ought to have appreciated that the intention of the Aa was to levy penalty u/s. 271(1)(c) of the I.T.Act, 1961 and therefore, the notice was issued in the presc....