TaxTMI 
TaxTMI 
2020 (11) TMI 65
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....enalty of Rs.l,12,OS,200/- u/s.271(l)(c) of the Act. 3.1. Findings of the AO: As stated earlier the appellant in response to notice u/ s.153A filed return of loss at Rs. 1,43,05,649/-. Subsequently the appellant revised its return of income from loss of Rs. 1 ,43,05,649/ - to income of Rs. 29,62,330/ -. The AO passed order ujs.153A/143(3) on 27.12.2016 determining total income at Rs. 29,62,330/-. However, in the assessment order the AO noted that that the appellant has concealed the income to the tune of Rs. 1,72,67,982/- on account loss being converted to positive income. Accordingly, the AO initiated penalty proceedings for concealment of income u/s 271(1)(c) on 29.06.2017 levying a penalty of Rs. 1,12,05,200 at the rate of 200% of the tax sought to be evaded. 3.2 Appellant's contention: During the course of appellate proceeding, the appellant has filed submission as under: a) Facts of the Case • A search was conducted in the premises of appellant on 03.09.2014. • The search team has not found any incriminating material! documents against your appellant for the year under consideration . • On ....
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....ome Tax Return for the AY 14-15 upto 03.09.2014 i. e on the date of search. (iv) Your Petitioner has submitted the Income Tax Returns for the AY 14-15 on 19.03.2016. Thus from the above facts, your honour will kindly appreciate that A. Y. 2014- 15 comes under the purview of definition of "Specified previous year" as given in explanation - (b) of section 271AAB which is applicable to the company and section 271(1)(c) is not applicable. But ignoring the above section the Ld. A. O. has imposed penalty under section 271 ( l)(C ) without any legal sanction hence the same is void and illegal and deserve to be quashed off" 3.3 Appellate finding and decision: I have gone through the penalty order, assessment order and submission of the appellant. The undisputed fact is that a search & seizure action u/s 132(1) was carried out at the business and residential premises of Jagdmba group of cases on 03.09.2014. The appellant is one of the members of the said group. The appellant submitted that in a case where a search has been initiated under section 132(1) on or after the 1st day of July, 2012 the penalty if any that need to be levied is u/s.271AAB ....
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....lanation.-For the purposes of this section,- (a) "specified date" means the due date of furnishing of return of income under sub-section (1) of section 139 or the date on which the period specified 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 r....
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.... entirely different. Issuing the notice under section 271(1)(c) will not automatically deem that the Assessing Officer has initiated the proceedings for imposition of penalty under section 271AAB and accordingly, give an opportunity to the assessee. There is no provision under section 271AAB that the penalty has to be initiated during the assessment proceeding but, it is essential to initiate the penalty proceedings under section 271AAB. Where the notice did not relate to the provision of section 271AAB, the notice issued under section 271 (1)(e) cannot be said to be valid for initiation of proceedings under section 271AAB. Further, there is no material difference with regard to levy of penalty u/s.271AAA and u/s.271AAB except the date of initiation of search. In following decisions it was held that where the assessee is covered by sec.271AAA, initiation and levy of penalty vi] s.271 (l)(c) was held to be bad in law. (i) The The Hon'ble ITAT Delhi Bench in the case of Aswani Kumar Arora Vs. ACIT reported in (2016) 50 ITR (Trib) 37 dated 19/05/2016. The relevant portion is reproduced hereunder: "13. When aforesaid undisputed facts are....