TaxTMI 
TaxTMI 
2020 (9) TMI 956
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....sessing Officer's penalty notice apparent to have nowhere specified as to under which limb the he sought to invoke sec. 271AAB penal action. This tribunal's coordinate bench in Shri Ashok Bhatia vs. DCIT Central-1, Indore in ITA No.869/Ind/2018 decided on 05.02.2020 has deleted identical sec. 271AAB in similar circumstances as under:- "7. We have heard rival contentions and perused the records placed before us. The legal issue before us is that whether the notice issued u/s 274 r.w.s. 271AAB of the Act suffers from fatal error and technical defect thereby not providing an opportunity to the assessee to plead his case. Since the legal ground goes to be root cause of the issue levying penalty u/s 271AAB of the Act, we in view of the ratio held by the Hon'ble Apex Court in the case of National Thermal Power Company Limited (supra) admit the additional legal ground for adjudication. For levying penalty u/ s 271AAB of the Act the Ld. A.O needs to primarily issue notice u/s 274 of the Act so for initiating proceedings u j s 271AAB of the Act the Ld.. A.O has to first pass through the hurdle of Section 274 of the Act. For better understanding we reproduce the provisi....
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....fied in the notice issued under section 153A for furnishing of return of income expires, as the case may be; (b) "specified previous year" means the previous year-- (i) which has ended before the date of search, but the date of furnishing the return of income under sub-section (1) of section 139 for such year has not expired before the date of search and the assessee has not furnished the return of income for the previous year before the date of search; or (ii) in which search was conducted; (c) "undisclosed income" means- (i) any income of the specified previous year represented, either wholly or partly, by any money, bullion, jewellery or other valuable article or thing or any entry in the books of account or other documents or transactions found in the course of a search under section 132, which has- (A) not been recorded on or before the date of search in the books of account or other documents maintained in the normal course relating to such previous year; or (B)otherwise not been disclosed to the Chief Commissioner or Commissioner before the date of search; or (ii) any income of the specified previous yea....
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....r clause-c of section 271AAB of the Act, why she should not be visited by penalty @ 30% of the undisclosed income. Against this charge the assessee should have been given a reasonable opportunity of being heard. 9. Now let us revert back to the fact of the instant case of the assessee and look into what has been mentioned in the alleged notices issued u/s 274 r.w.s. 2371AAB of the Act, which are reproduced below; NOTICE UNDER SECTION 274 READ WITH SECTION 271AAB OF THE INCOME TAX ACT, 1961 PAN. ACFPB4590H OFFICE OF THE Asstt. Commissioner of Income Tax (Central)-I, Indore Date: 22.03.2016 To Shri Ashok Kumar Bhatia 33-A Radha Nagar Neelkanth Colony Indore-452006 Whereas in the course of proceedings before me for the assessment year 2014-15 it appears to me that you :- *Have without reasonable cause failed to furnish me return of income with you were required to furnish by a notice given under section 22(1)/22(2)/34 of the India Income Tax Act, 1922 or which you were required to furnish under section 193( 1) or by a notice given under section 193(2)/148 of the Income Tax Act 1961, No ..... Dated ........
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....b of the LT. Act 1961 be not levied against you? If you do not want to appear personally, you may send your written reply on or before above mentioned date, otherwise penalty proceedings shall be decided on merits. Sd/- (Amit Kumar Soni) Deputy Commissioner of Income Tax (Central)-I Indore OFFICE OF THE Deputy Commissioner of Income Tax (Central)-I, Indore PAN. ACFPB4590H Date: 16.09.2016 To Shri Ashok Kumar Bhatia 33-A Radha Nagar Ne....
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....61 Taxmann 218 held that "the quasi criminal proceedings u/ s 271 (1 )(c) of the Act ought to comply with the principles of natural justice". 12. In the case of DCIT Vis R. Elangovan Ltd (supra) , Co-ordinate Bench, Chennai while dealing with the legal ground challenging the validity of notice issued u/s 274 r.w.s. 271AAB of the Act observed that; "It is clear from the Sub Section (3) of Section 271 AAB that Sections 274 and Section 275 of the Act shall, so far as may be, apply. Sub Section (1) of Section 274 of the Act mandates that order imposing penalty has to be imposed only after hearing the assessee or giving a assessee opportunity of hearing. Opportunity that is to be given to the assessee should be a meaningful one and not a farce. Notice issued to the assessee reproduced (supra), does not show whether penalty proceedings were initiated for concealment of income or for furnishing inaccurate particulars of income or for having undisclosed income within the meaning of Section 271AAB of the Act. Notice in our opinion was vague. Hon'bleKamataka High Court in the case of SSA 's Emerald Meadows (supra) relying in its own judgment in the case of Manjunath....
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....n section 271(1)(c) , i.e., whether it is for concealment of income or for furnishing of incorrect particulars of income. Sending printed form where all the grounds mentioned in section 271 are mentioned would not satisfy the requirement of law; The assessee should know the grounds which he has to meet specifically. Otherwise, the principles of natural justice are offended. On the basis of such proceedings, no penalty could be imposed on the assessee) taking up of penalty proceedings on one limb and finding the assessee guilty of another limb is bad in law; penalty proceedings are distinct from the assessment proceedings: though proceedings for imposition of penalty emanate from proceedings of assessment, they are independent and a separate aspect of the proceedings; The findings recorded in the assessment proceedings in so far as "concealment of income" and "furnishing of incorrect particulars" would not operate as res judicata in the penalty proceedings. It is open to the assessee to contest the proceedings on the merits. However, the validity of the assessment or reassessment in pursuance of which penalty is levied, cannot be the subject matter of penalty proce....
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....eveals in the reply filed by the assessee against the said show cause notice. Hence the Hon'ble High Court has held as under: - "The Id 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 Id. A.R. before me. It is seen that the id 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 reply to said notice which shows that the assessee fully comprehended the implication of the notice that it is for section 271 AAB. The assessee has also challenged that the principles of natural justice has not followed by the AD. The detailed submissions of A.R. in this regard has already been reproduced above. The A.R. did not produce any evidence to show that he was not given proper opportunity of hearing. It is clear from the penalty order that the ....