TaxTMI 
TaxTMI 
2020 (9) TMI 532
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.... 2. The assessee(s) has raised following grounds of appeal; Smt. Rajrani Mittal, ITA No.853/Ind/2019 Assessment Year 2015-16 1.That on the facts and in the circumstances of the case and in law the very initiation of the penalty proceedings through an invalid and defective notice issued u/s 274 r.w.s. 271 AAB in this case is wrong, bad in law and the penalty so levied ought to have been deleted by the Learned CIT(A). 2.That the Ld. CIT(A) erred in not appreciating that the penalty notice issued u/s 274 r.w.s. 271AAB mechanically, mentioning irrelevant and inapplicable charges and not mentioning the charges on which penalty was actually levied, was bad in law and had has led to vitiation of the entire penalty proceedings, therefore, the penalty levied ought to have been deleted in its entirety. 3.That the Learned CIT(A) erred In levying the penalty under clause (c) to section 271AAB(1) @10%, whereas the Learned AO having levied the penalty under clause (a) to section 271AAB(1), clearly indicating that the penalty levied by the AO mechanically and without requisite satisfaction was wrong and uncalled for, ought to have been deleted in full. 4.That the Ld. CIT(A) erred in....
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....clause (a) to section 271AAB(1), clearly indicating that the penalty levied by the AO mechanically and without requisite satisfaction was wrong and uncalled for, ought to have been deleted in full. 4.That the Ld. CIT(A) erred in confirming the penalty to the extent of Rs, 8,44,176/- u/s 271AAB. That on the facts and in the circumstances of the case and in law the penalty levied is wrong an uncalled for and prayed to be deleted. 5.That the Ld. CIT(A) erred in confirming the penalty levied u/s 271AAB by the AO on the additional income of Rs. 84,41,755/- offered u/s 132(4) and also offered in the return filed u/s 153A. That on the facts and in the circumstances of the case and in law the penalty levied is uncalled for and bad in law and it is prayed that the penalty very kindly be deleted. 6.That the appellant craves leave to add, to alter, amend, modify, substitute, delete and/or rescind all or any of the grounds of appeal on or before final hearing, if necessity so arises. Shri Ankit Mittal, ITA No.854/Ind/2019 Assessment Year 2015-16 1.That on the facts and in the circumstances of the case and in law the very initiation of the penalty proceedings through an invalid an....
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.... ought to have been deleted in its entirety. 3.That the Learned CIT(A) erred In levying the penalty under clause (c) to section 271AAB(1) @10%, whereas the Learned AO having levied the penalty under clause (a) to section 271AAB(1), clearly indicating that the penalty levied by the AO mechanically and without requisite satisfaction was wrong and uncalled for, ought to have been deleted in full. 4.That the Ld. CIT(A) erred in confirming the penalty to the extent of Rs, 3,64,285/- u/s 271AAB. That on the facts and in the circumstances of the case and in law the penalty levied is wrong an uncalled for and prayed to be deleted. 5.That the Ld. CIT(A) erred in confirming the penalty levied u/s 271AAB by the AO on the additional income of Rs. 36,42,852/- offered u/s 132(4) and also offered in the return filed u/s 153A. That on the facts and in the circumstances of the case and in law the penalty levied is uncalled for and bad in law and it is prayed that the penalty very kindly be deleted. 6.That the appellant craves leave to add, to alter, amend, modify, substitute, delete and/or rescind all or any of the grounds of appeal on or before final hearing, if necessity so arises. Smt.....
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....and inapplicable charges and not mentioning the charges on which penalty was actually levied, was bad in law and had has led to vitiation of the entire penalty proceedings, therefore, the penalty levied ought to have been deleted in its entirety. 3.That the Learned CIT(A) erred In levying the penalty under clause (c) to section 271AAB(1) @10%, whereas the Learned AO having levied the penalty under clause (a) to section 271AAB(1), clearly indicating that the penalty levied by the AO mechanically and without requisite satisfaction was wrong and uncalled for, ought to have been deleted in full. 4.That the Ld. CIT(A) erred in confirming the penalty to the extent of Rs, 4,57,513/- u/s 271AAB. That on the facts and in the circumstances of the case and in law the penalty levied is wrong an uncalled for and prayed to be deleted. 5.That the Ld. CIT(A) erred in confirming the penalty levied u/s 271AAB by the AO on the additional income of Rs. 45,75,143/- offered u/s 132(4) and also offered in the return filed u/s 153A. That on the facts and in the circumstances of the case and in law the penalty levied is uncalled for and bad in law and it is prayed that the penalty very kindly be dele....
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....(s) through ITA No.852 to 858/Ind/2019 and in one case namely Smt. Rajrani Mittal vide ITA No.879/Ind/2019, Revenue has challenged the relief given by Ld. CIT(A) sustaining the penalty u/s 271AAB of the Act @10% as against 30% levied by Ld. A.O. We have summarised the relevant details of all the assesse(s) appeal in the following manner; Name of assessee Assessment Year Date of filing of return of income Undisclosed income adopted by A.O for levying penalty Penalty u/s 271AAB(B) @ 30% Undisclosed income confirmed by CIT(A) for levying penalty u/s 271AAB(A) Penalty u/s 271AAB(1) sustained by CIT @10% Rajrani Mittal 2015-16 31.10.15 33540876 10062260 11140876 1114088 Anshul Mittal 2015-16 31.10.15 8441755 2532530 8441755 844176 Ankit Mittal 2015-16 7.9.15 5242960 1572888 5242960 524296 Neha Mittal 2015-16 31.10.15 3642852 1092856 3642852 364285 Neha Mittal 2016-17 14.9.16 6500000 1950000 6500000 650000 Shweta Mittal 2015-16 31.10.15 4575133 1372540 4575133 457513 Shweta Mittal 2016-17 22.9.16 5350000 1605000 5350000 535000 Total 4489358 4. Assessee(s) have challenged the following amount of penalty sustained by Ld. CIT(A). N....
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....9. The assessment proceedings were completed by passing a combined assessment order for all these years under section 153A r.w.s. 143(3) dated 30.11.2017. The income for this year was assessed at Rs. 3,47,55,240/- by making anominal adjustment of Rs. 35,000/- to the returned income. The additional income offered of Rs. 3,35,40,876/- was offered as business income and was also assessed as such. Coming back to the present appeal, a notice was served on the appellant requiring to show cause as to why penalty u/s 271AAB be not imposed on the appellant. In response to the same the appellant has filed a reply dated 23.05.2018 providing detailed explanations as to why penalty is not leviable u/s 271AAB in the appellant's case. However penalty order was passed by the learned AO imposing a penalty of Rs. 1,00,62,260/- u/s 271AAB(1)(c) for this year. Being aggrieved, the appellant has preferred an appeal before Ld. CIT(A) who vide order dated 14.06.2019 in Appeal No. CIT(A)-3/BPL/IT-10189/2018-19/394 partly allowed the appeal. The Ld. CIT(A) deleted the penalty levied in respect of income of Rs. 2,24,00,000/- offered under section 133A and confirmed the penalty to the extent of 10% of Rs. 11....
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....nishes the return of income for the specified previous year declaring such undisclosed income therein; (b) a sum computed at the rate of twenty per cent of the undisclosed income of the specified previous year, if such assessee- (i) in the course of the 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 percent of the undisclosed income of the specified previous year, if it is not covered by the provisions of clauses (a) and (b). 1. The above reading of section 271AAB brings out the following important issues. (i) The penalty u/s 271AAB is discretionary and is neither automatic nor mandatory as it uses the words "AO may direct". (ii) The discretionary penalty u/s 271AAB(1) can be levied under clause (a) @ 10%, under clause (b) @20% and under clause (c) @30% depending upon the default and charge against the a....
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.... section 271AAB were not mentioned. Such notice having been issued in mechanical manner, without proper application of mind and without affording proper opportunity to the appellant to rebut the charges is bad in law vitiating the very initiation of the penalty proceedings. 2. Case laws on defective show cause notice u/s 274 r.w.s. 271AAB: (i) Hon'ble ITAT, Indore in the case of Dr. Rajesh Jain Vs. DCIT ITA No. 905/Ind/2018 dated 19.02.2020 (ii) Hon'ble ITAT, Indore in the case of Shri Vivek Chugh Vs. ACIT ITA No. 636/Ind/2017 dated 28.03.2019 (iii) Hon'ble Income Tax Appellate Tribunal, 'A' Bench, Chennai in case of DCIT Corporate Circle-1, Coimbatore v/s Shri. R. Elangovan (1199/CHNY/2017) dated 05.04.2018. (iv ) Suresh Chand Mittal V/s DCIT Central 2 Jaipur (ITAT Jaipur) ITA No. 931/JP/2017 AY 2014-15, dated 02.07.2018. (v) Shri Ravi Mathur V/s DCIT Central Jaipur (Jaipur ITAT) ITA No. 969/JP/2017 dated 13.06.2018 for AY 2015-16. 1.8. Further, the appellant places reliance on the decision of ChandigarhTribunal in the case of Gillco Developers & Builders (P.) Ltd. v. DCIT [(2017) 189 TTJ 35where Assessing Officer had intended to initiate penalty proceedings under se....
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....ed 09.05.2018 dismissing the appeals filed by the revenue held in Para 11 of the order "on due consideration of the arguments of the Learned Counsel of the appellant, so also considering the fact that the ground mentioned in show cause notice would not satisfy the requirement of law, as notice was not specific, we are of the view that the Learned Tribunal has rightly relying on the decision of CIT V/s Manjunath Cotton Ginning Factory (supra) and CIT V/s SSA'S Emeralds Meadows (supra) rightly allowed the appeal of the assessee and set aside the order of penalty imposed by the authorities".(Copy enclosed at page no. 74 to 77 of the common case law paper book PB-B). The case of the appellant is squarely covered by the proposition rendered by the jurisdictional High Court, which has a binding precedent, since in the instant case also the grounds / charges mentioned in the show cause notice does not satisfy the requirement of law and the show cause notice was not specific rather was issued on altogether incorrect premises. The Learned CIT(A) by relying on the decision of Hon'ble M.P High Court in the case of Kulwant Singh Bhatia (supra) held that decision was rendered in context of ....
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.... led to vitiation of entire penalty proceedings. It is therefore most humbly prayed that the penalty proceedings ought to be quashed and the consequent penalty levied be deleted. 2. IMPOSITION OF PENALTY ON INCOME OFFERED IN THE RETURN OF INCOME FILED U/S 153A AS BUSINESS INCOME IS BAD IN LAW. Without prejudice to the above basic contention of the appellant that the penalty levied is without jurisdiction since the penalty notice issued was bad in law, it is submitted that the penalty has also been levied on incorrect premises which is discussed here under:- 2.1. The appellant for the year under consideration filed her return of income u/s 139(1) and again u/s 153A offering the same amount of income which included various items tabulated as under: S. No. Particulars of Additional Income Amount (Rs.) Remarks 1. Advances given 2,24,00,000 In come initially offered in survey conducted u/s 133A on 01.09.2014 on the basis of diary and offered in the return filed u/s 139(1). This was also included in the income offered at the time of search and also in the return filed u/s 153A. 2. Renovation/Construction of House 78,40,876 Offered u/s 132(4) and included in the return f....
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....sclosed income was derived during the assessment proceedings and it is also stated that the assessee could not explain the manner even during the penalty proceedings. From perusal of para 7 & 8 of the penalty order it is evident that the sole basis for levying the penalty under section 271AAB(1)(c) is the observation of the AO that the assessee could not explain the manner in which the undisclosed income was derived. 2.6. It is submitted that the above observation of the Learned AO are devoid of merits and also factually incorrect as discussed here under. During search proceedings (i) It was explained during the search that various family members were carrying out certain trading transactions, as evident from the various seized material and notings found from the residence of the appellant and also from the residence of the accountant of the group. Proper records of the same could not be maintained by the accountant of the group, who recorded all the transactions in a wholesome manner. Considering the practical difficulty of identifying the entity of the family member, the income was offered on the basis of the application of the same in the hands of various family members.....
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....ed the manner even during the course of penalty proceedings is also factually wrong as the appellant categorically mentioned in the reply filed during the course of penalty proceedings that the income was offered as business income and also explained the methodology of earning and offering the said income. Copy of the reply dated 24.05.2018 is enclosed at page no. 30 to 35 of PB. It is further submitted that the income earned and offered for the year under consideration was properly disclosed and substantiated during the entire proceedings, right from the search proceedings and there was no adverse finding in this regard in the order passed under section 153A. The assessment was completed by accepting the income returned under section 139(1) as well as in 153A r.w.s. 139(1) by making a nominal addition of Rs. 35,000/- under section 57(iii). (v) Moreover no further queries regarding the additional income offered were raised during the course of assessment proceedings and appellant was of a bona-fide view that the Learned AO was satisfied with the explanation provided by the appellant during the course of search and seizure proceedings and also in assessment proceedings. The ap....
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....32(4), in respect of earning of income declared, revenue later could not plead deficiency on part of assessee for satisfying manner of earning said income and, thus, penalty under section 271AAA could not be levied. The Concluding observation of the Honourable ITAT are in Para 9.3 and the operative part so far as applicable to the present case before Your Honour is abstracted here under:- "Notwithstanding, we further note that the assessee has replied to the query raised while recording the statement as called for. The revenue does not appear to have quizzed the assessee for satisfying the manner in which the purported undisclosed income has been derived. The income considered as an undisclosed income in the statement under s.132(4) has been duly incorporated in the return filed pursuant to search. Therefore, the revenue in our view now cannot plead deficiency on the part of the assessee to specify the manner which has not been called into question at the time of search. We simultaneously note that nowhere in the assessment order or in the penalty order, the revenue has made out a case that the manner of earning undisclosed income was enquired into post search stage either. The....
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....ut the manner in which the undisclosed income has been derived and about its substantiation, the AO was not justified in imposing penalty u/s 271AAA of the Act specifically when the surrendered undisclosed income has been accepted and due taxes has been paid by the assessee. Hence, we hereby set aside the impugned order of the authorities below and cancelled the penalty levied u/s 271AAA of the IT Act......" It is submitted that though the above decisions are in context of penalty levied section 271AAA but the proposition laid down therein is squarely applicable even in the context of section 271AAB since both the sections are peri materia in so far as the question of levy of penalty for want of specifying the method and manner of earning undisclosed income is concerned. The only difference is that u/s 271AAA there was a complete immunity from penalty whereas u/s 271AAB penalty is leviable @ 10% of the undisclosed income on the same set of circumstances. In the present case penalty u/s 271AAB has been levied solely on the premises that the method and manner of earning undisclosed income was not specified by the appellant. It is submitted that in view of the above referred decis....
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....cannot be roped into the ambit of 'undisclosed income' and is out of the clutches of the penal provisions of section 271AAB. 2.7. The fact that this income was offered in the survey conducted u/s 133A on 01.09.2014, the relevant advance tax was deposited immediately after the survey and much prior to the date of search, the recording of the said income in the books of accounts and also deposition thereof in the regular bank account of the appellant before 31.03.2015 much ahead of the date of search i.e. 04.09.2015 were categorically brought to the knowledge of the AO through the notes forming part of the return filed u/s 153A along with the copy of computation filed for this year through first submission dated 12.07.2017 (the notes with the return are enclosed at page no. 8 of the paper book). These facts were reiterated during the assessment proceedings in reply to questionnaire issued u/s 142(1) through point no. 2. Copy of the said submission is enclosed at page no. 17 to 21, specific reference to page no.19. These facts were also brought to the knowledge of the AO during the penalty proceedings through the written submission vide point no. 2, 8 & 9. Copy of the said submis....
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....vey u/s 133A, much before the date of search u/s 132 on which not only advance tax was also paid, but the said income was duly recorded in the books of accounts and was deposited in the regular bank account of the appellant and was also shown in the return of income filed under section 139(1) of the Act cannot, under any circumstances, be roped into the clutches of undisclosed income, as defined in the explanation (c) to section 271AAB. The Learned CIT(A) has rightly deleted the penalty levied on income of Rs. 224 Lacs which was offered under section 133A on the ground that it does not attract any penalty u/s 271AAB in view of the definition of undisclosed income given in explanation (c) of section 271AAB. The appellant places heavy reliance on the order of Learned CIT(A) and prays that the same be upheld and the departmental appeal be dismissed. With regard to the additional Income of Rs. 1,11,40,876/- (78,40,876+33,00,000) The above incomes in the hands of the appellant for this year were offered relating to the house renovation and construction expenses of Rs. 78,40,876/- and also relating to amounts advanced in the market on interest of Rs. 33,00,000/- found noted on vari....
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....IT Central Jaipur (Jaipur ITAT) ITA No. 969/JP/2017 dated 13.06.2018 for AY 2015-16. (Para 4,5 & 6) (iii) Suresh Chand Mittal V/s DCIT Central 2 Jaipur (ITAT Jaipur) ITA No. 931/JP/2017 AY 2014-15, dated 02.07.2018. (Para 6) In view of the above the appellant submits that the penalty levied is uncalled for and prays the same to be deleted. The appellant wishes to summaries its submission as under: A. The notice issued u/s 274 was not valid as (i) It specified the wrong charges of 'concealment of income' or 'furnishing of inaccurate particulars of income' which charges are not at all applicable for the purposes of section 271AAB. (ii) It did not specified the fact of 'Undisclosed income' (iii) It did not mentioned the specific clause of section 271AAB out of the three clauses (a) or (b) or (c) prescribing different rates of penalty (iv) The penalty u/s 271AAB was levied by the AO under clause (c ) to section 271AAB(1), which is not mentioned in the show cause. (v) The penalty u/s 271AAB has been confirmed by the Learned CIT(A) under clause (a) to section 271AAB(1), for which no notice was ever issued to the appellant. B. Penalty u/s 271AAB(1)(c) levied by the AO ....
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....late stage the assessee was not able to succeed on the legal ground as Ld. CIT(A) decided against the assessee's observing as follows:- "4.1 Ground No. 1 :_ Through this ground of appeal, the appellant has challenged the initiation of the penalty proceedings and it has been pointed out that the penalty notice issued is vague and is not m conformity with law as the same is issued on the charges for levy of penalty u/s 271(1)(c). A copy of the penalty notice issued is placed on page 29 of the paper book, referring to which it was pointed out that the notice in this case was issued u/s 274 r.w.s. 271AAB, however, it was mentioned that the assessee has concealed the particulars of income or furnished inaccurate particulars of such income. It is contended that the charges 'concealment of particulars of income' or 'furnishing inaccurate particulars of income' are applicable only for penalties initiated u/s 271(1)(c) and not for penalties initiated u/s 271AAB and therefore, the penalty show cause notice issued in this case is bad in law. It is also contended that there are various sub-section and clauses specifying different charges and prescribing different rates of p....
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....bsp; Date: 30/11/2017 To Smt. Rajrani Mittal, 15A/22, Manak, Y.N. Road Indore-452001 NOTICE UNDER SECTION 274 READ WITH SECTION 271AAB OF THE INCOME TAX ACT, 1961 Whereas in the course of proceedings before me for the assessment year 2015-16 it appears to me that you :- have concealed the particulars of your Income or furnished inaccurate particulars of such Income. You are hereby requested to appear before me on 29.12.2017 at 11.00 AM and show cause why an order imposing a penalty on you should not be made under section 271AAB of the Income Tax Act 1961 if you do not wish to avail yourself of this opportunity of bearing heard in person or through authorized representative you may show cause in writing on or before t....
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....nitiated under section 132 on or after the 1st day of July, 2012, the assessee shall pay by way of penalty, in addition to tax, if any, payable by him,- (a) a sum computed at the rate of ten per cent of the undisclosed income of the specified previous year, if such assessee- (i) in the course of the search, in a statement under sub-section (4) of section 132, admits the undisclosed income and specifies the manner in which such income has been derived; (ii) substantiates the manner in which the undisclosed income was derived; and (iii) on or before the specified date- (A) pays the tax, together with interest, if any, in respect 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 per cent of the undisclosed income of the specified previous year, if such assessee- (i) in the course of the 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 ....
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....ven a reasonable opportunity of being heard. (2) No order imposing a penalty under this Chapter shall be made- (a) by the Income- tax Officer, where the penalty exceeds ten thousand rupees; (b) by the Assistant Commissioner, where the penalty exceeds twenty thousand rupees, except with the prior approval of the Deputy Commissioner.] (3) An income- tax authority on making an order under this Chapter imposing a penalty, unless he is himself the Assessing Officer, shall forthwith send a copy of such order to the Assessing Officer'] 9. From perusal of the above provision we observe that sub section 3 of Section 271AAB of the Act talks about issuing the notice u/s 274 of the Act. So for initiating the penalty proceedings u/s 271AAB of the Act the first step to be taken by Ld. A.O is to issue a valid notice u/s 274 of the Act. Sub-section (1) to Section 274 of the Act provides a procedure that "No order imposing a penalty under this Chapter shall be made unless the assessee has been heard, or has been given a reasonable opportunity of being heard". To comply with this requirement the notice u/s 274 should be clear enough to convey the assessee about the charge which is to b....
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....rself of this opportunity of bearing heard in person or through authorized representative you may show cause in writing on or before the side date which will be considered before any such order is made under section 271AAB. Sd/- (Amit Kumar Soni) Asstt. Commissioner of Income Tax (Central)-1 Indore 11. From going through the above notice issued to the assessee, we find that there is no mention about various conditions provided u/s 271 AAB of the Act. In the notice dated 22.03.2016 the Ld. A.O has very casually used the proforma used for issuing notice before levying penalty u/s 271(1)(c) of the Act for the concealment of income or furnishing of inaccurate particulars of income. It does not talk anything about various clauses of section 271AAB of the Act for levying penalty @10%/20%/30%. Certainly such notice has a fatal error and technically is not a correct notice in the eyes of law because it intends to penalize an assessee without spelling about the specific charge against the assessee. 12. Hon'ble Jurisdictional High Court in the case of PCIT V/s Kulwant Singh Bhatia (supra) dealt the issue of defective notice issued u/s 274 r.w.s. 271(1)(c) of the Act and Hon'b....
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....ment, the assessing officer has initiated the penalty by properly recording the satisfaction for the same? (3) Whether on the facts and in the circumstances of the case, the Tribunal was justified in deciding the appeals against the Revenue on the basis of notice issued under Section 274 without taking into consideration the assessment order When the assessing officer has specified that the assessee has concealed particulars of income? 3. The Tribunal has allowed the appeal filed by the assessee holding the notice issued by the Assessing Officer under Section 274 read with Section 271 (1)(c) of the Income Tax Act, 1961 (for short 'the Act,) to be bad in law as it did not specify Which limb of Section 271 (1 )(c) of the Act, the penalty proceedings had been initiated i.e., Whether for concealment of particulars of income or furnishing of inaccurate particulars of income. The Tribunal, While allowing the appeal of the assessee, has relied on the decision of the Division Bench of this Court rendered in the case of CIT vs. Manjunatha Cotton and Ginning Factory (2013) 359 ITR 565. 4. In our view, since the matter is covered by judgment of the Division Bench of this Court, we a....
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....969/JP/2017 holding that such show cause notice issued u/s 274 r.w.s. 271AAB of the Act are not sustainable in law". 15. As regards to judgment of Hon'ble Allahabad High Court in the case of Pr. CIT Vs Sandeep Chandak (supra) which has been relied by the Departmental Representative is concerned, we find that in the decision rendered by the Co-ordinate Bench of Jaipur in the case of Ravi Mathur Vs DCIT (supra) wherein also similar issue of defective notice u/s 274 r.w.s. 271AAB was adjudicated, the judgment of Hon'ble Allahabad High Court in the case of Pr. CIT Vs Sandeep Chandak (supra) has been discussed and distinguished observing as follows:- It is further submitted that in para 5 of this judgment (Ravi Mathur), the case quoted by ld CIT(A) Pr. CIT vs Sandeep Chandak (All.) was distinguished as under: "5. Before we proceed further, the decisions relied upon by the ld D/R are to be considered. In the case of Principal CIT vs Sandeep Chandak & Others [TS-6389-HC-2017(Allahabad)-O] (supra) the issue before the Hon'ble High Court was the defect in the notice issued under section 271AAB on account mentioning wrong provision of the Act being 271(1)(c) of the Act. The Hon....
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.... 16. We, therefore respectfully following the judgment/decision referred above and in the given facts and circumstances of the case wherein the matter written in the body of the notice issued u/s 274 of the Act does not refer to the charges of provision of Section 271AAB of the Act makes the alleged notice defective and invalid and thus deserves to be quashed. Since the penalty proceedings itself has been quashed the impugned penalty of Rs. 2,04,900/- stands deleted. We accordingly allow the legal ground raised by the assessee challenging the validity of notice issued u/s 274 r.w.s. 271AAB of the Act and quash the penalty proceeding as void ab intio. In the result appeals of the assessee(s) for Assessment Years 2014- 15 is allowed on legal ground. 17. Since the penalty u/s 271AAB has already been dealt on legal ground and deleted on the preliminary legal points, other grounds and arguments of the assessee dealing with the merits of the levy of penalty are not been dealt with, as the same are rendered academic in nature. Thus grounds raised on merits are dismissed as infructuous. In the result appeal of the assessee is allowed on legal ground. 17. From perusal of the abov....
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....tly, the assessing officer imposed a penalty of Rs. 7,00,000/- @ 20% of the concealed income. 4. Aggrieved by this the assessee preferred an appeal before the Ld. CIT(A) who however reduced the penalty and restricted the same @10% of the undisclosed income i.e. amounting to Rs. 3,50,000/-. The assessee is in present appeal against the order of the Ld. CIT(A). At the outset, Ld. counsel for the assessee submitted that initiation of penalty u/s 271AAB of the is ex facie bad in law. He drew our attention towards the notice dated 05.08.2015 and enclosed at page no.25 of the paper book. He submitted that the AO initiated penalty proceedings in a casual mechanical manner. That goes to demonstrate that assessing officer has not made a specific charge. Further Ld. counsel for the assessee relied upon the various case laws more particularly in the case of Sandeep Chandak, vs. ACIT in ITANos.416,417 and 418/Lkw/2016 dated 30.01.2017. Further reliance has made on the decision of the Hon'ble Supreme Court rendered in the case of CIT vs. M/s. SSA's Emerald Meadows (2016) 8 TMI 1145(SC), judgment of the Karnataka High Court in the case of CIT vs. Manjunatha Cotton & Ginning Factory (20....
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....r powers of Ld. CIT(A) is concerned, he can modify the penalty order by enhancing or reducing the penalty. However, where the Act provides for two different rates under different two provisions of law in our considered view, the assessee ought to have been given an opportunity of hearing on this aspect. However, in the present case at the very inception notice initiating penalty is not in accordance with mandates of law. Moreover, it is settled position of law that such defect is not curable u/s 292BB of the Act. Therefore, we hereby quash the penalty order. 8. In the result, the appeal of the Assessee in ITANo.636/Ind/2017 is allowed." 20. We therefore in the given facts and circumstances of the case and respectfully following the decisions of the Indore I.T.A.T. rendered by in the case of Dr. Rajesh Jain (supra) and Shri Vivek Chugh (supra) us adjudicating the similar issues and also applying the ratio laid down by the Hon'ble jurisdiction High Court in the case of Kulwant Singh Bhatia (supra) decided the legal issue in favour of the assessee and quash the penalty proceedings initiated u/s 274 r.w.s. 271AAB of the Act in all the seven cases ITA No.852 to 858/Ind/2019 sin....