TaxTMI 
TaxTMI 
2020 (8) TMI 177
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....s. 79,37,385/-. A search and seizure operation u/s. 132 of the IT Act was conducted at various business and residential premises of the assessee group on 23.08.2011. In response of notice u/s. 143 (2), the assessee appeared before the AO from time to time. The AO completed the assessment u/s. 143(3) on 27.02.2015 determining the total income of the assessee at Rs. 2,37,79,490/- wherein he made various additions. Subsequently the AO initiated penalty proceedings u/s. 271 AAA of the Act. Rejecting the various explanation given by the assessee the AO levied penalty of Rs. 15,84,210/- u/s. 271 AAA on the difference in the assessed income and returned on account of the following additions :- SI. No. Particulars Amount (RS.) 3.1 Alleged notional interest on bank balance with HSBC 5,27,098/- 3,2 Notional interest on Promissory Note 93,357/- 3.3 Undisclosed investment in jewellery 55,69,850/- 3.4 Undisclosed expenditure on purchase of watches 7,76,800/- 3.5 Undisclosed Cash 31,00,000/- 3.6 Undisclosed expenditure on purchase of jewellery 35,42,000/- 3.7 Undisclosed investment in Silver 22,33,000/- 4. In appeal the L....
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....ITA No.2674/Del/2018 ( A.Y.2012-13) (Assessee) 1. On the facts and circumstances of the case, the order passed by the learned Commissioner of Income Tax (Appeals) [CIT(A)] is bad both in the eye of law and on facts. 2. On the facts and circumstances of the case, the learned CIT(A) has erred both on facts and in law in confirming the action of the AO in levying penalty under section 271 AAA of the Act 3. On the facts and circumstances of the case, the learned CIT(A) has erred both on facts and in law in confirming the action of the AO in levying penalty on the addition made by him on account of accrual/interest on deposit in alleged foreign bank account, HSBC Geneva 4. (i) On the facts and circumstances of the case, the learned CIT(A) has erred both on facts and in law in confirming the action of the AO in levying penalty on the addition of undisclosed investment of Rs. 5,24,600/-on account of purchase of watches. (ii) On the facts and circumstances of the case, the learned CIT(A) has erred both on facts and in law in confirming the penalty on the investment already taxed in the hands of assessee in AY 2009-10 & AY 2010-11 5. On ....
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....oduces the language under the scope of section 271 (1) (c) and not section 271 AAA. Therefore, such notice is vague and accordingly invalid. The penalty notice clearly shows the non application of mind on the part of the AO and in the absence of any specific ground on which penalty is initiated there is violation of principle of natural justice. Accordingly, such penalty proceedings are bad in law and have to be quashed. 8. Referring to the decision of Hon'ble Karnataka High Court in the case of CIT Vs. Manjunath Cotton and Ginning Factory reported in 359 ITR 565, he submitted that in absence of non striking of the inappropriate words in the penalty notice, the penalty proceedings were quashed. He submitted that the SLP filed by the revenue against the above decision of Hon'ble Karnataka High Court was dismissed by the Hon'ble Supreme Court in appeal (c) No.-1398/2014 dated 11.07.2016. Similarly the Hon'ble Karnataka High in the case of CIT Vs. SSA's Emerald Meadows vide ITA No.380/15 order dated 23.11.2016 reported in 73 taxman.com 241 has also taken similar view and the SLP filed by the revenue has been dismissed by the Hon'ble Supreme Court vide CC No.11485/2016 dated 05.08.2....
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....portunity was given to the assessee before the AO. So far as the merit of the case is concerned the Ld. DR submitted that penalty u/s. 271 AAA has to be levied under the amount finally sustained after the order of the Tribunal. 12. We have considered the rival arguments made by both the sides, perused the orders of the AO and the Ld. CIT(A) and the paper book filed on behalf of the assessee. We have also considered the various decisions cited before us. We find the AO in the instant case levied penalty of Rs. 15,84,210/- u/s. 271 AAA of the Act on the various additions which has been reproduced in para No. 3 of this order. We find the Ld. CIT(A) restricted the penalty to Rs. 1,05,230/- being the addition finally sustained by him on account of valuation of the three ladies watches. A perusal of the order of the Tribunal vide ITA No.3367/Del/2016 and C.O. No.124/Del/2018 order dated 13.01.2020 shows that in the appeal filed by the revenue, the Tribunal in the quantum appeal has upheld the order of the CIT(A) in deleting various additions and gave further relief where in the issue of notional interest on HSBC Bank account was set aside to the file of the AO and has given further re....
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.... Delhi Sir, Where as in the course of proceedings before me for the assessment year- 2012-13 it appear to me that you. have concealed the particulars of your income or furnished Inaccurate particulars of such income in terms of section 271 AAA. You are hereby requested appear before me on. 26.03.2015 and show cause why an order imposing a penalty on you should not be made under section 271 of the Income Tax Act, 1961. if you do not wish to avail yourself of this opportunity of being heard in person or through authorized representative you may showcause in writing on or before the said date which considered before any such order Is made under section 271. (Ram Niwas) Asstt. Commissioner of Income Tax Central Circle-30, New Delhi" 16. The provisions of section 271 (1) (c) reads as under :- 271 (1) .... If the [Assessing] Officer or the [***] [Commissioner (Appeals)] [or the [Principal Commissioner or] Commissioner] in the course of any proceedings under this Act, is satisfied that any person- 271 (1) (c) "has concealed the particulars of his income or [***] furnished inaccurate particulars of [such income, or]" 17. ....