2021 (4) TMI 1131

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....n, learned counsel appearing for the respondent. 2. These appeals, filed by the Revenue under Section 260A of the Income Tax Act, 1961 (for short, the Act) are directed against the common order dated 05.4.2018 made respectively in ITA.No.1199/ Chny/2017 and C.O.No.75/Chny/2017 on the file of the Income Tax Appellate Tribunal, Chennai 'A' Bench (for brevity, the Tribunal) for the assessment year 2013-14. 3. The Revenue has filed these appeals by raising the following substantial questions of law : "i. Whether the Tribunal was right by holding the notice under Section 274 read with Section 271AAB as not valid when the assessee himself has comprehended the contents of the notice and filed replies to the said notice ? ....

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....es and events and pointed out that the due date for the assessee to file the return of income for the assessment year under consideration namely 2013-14, the year, during which, the search and seizure operations were conducted, was 30.9.2013. Since no return was filed by the assessee on or before the due date, the Assessing Officer issued the notice under Section 142(1) of the Act on 09.12.2013. However, the assessee did not file the return of income beyond the specified date, which means due date of furnishing of return of income under Sub- Section (1) of Section 139 of the Act or the date, on which, the period specified in the notice issued under Section 153A of the Act for furnishing the return of income expires, as the case may be. 6....

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....x (Appeals)-18, Chennai-34 [for short, the CIT(A)]. The first ground raised by the assessee before the CIT(A) was that the penalty proceedings themselves were without jurisdiction since there were gross infirmities in the notice while initiating penalty proceedings and that this would vitiate the entire order. The assessee also made submissions on the merits of the case. The CIT(A) chose to proceed further on the merits of the case and found that the Assessing Officer ought not to have imposed penalty at 30% and ought to have restricted to 10%. 10. Aggrieved by the order passed by the CIT(A) dated 23.1.2017, the Revenue filed an appeal before the Tribunal. The assessee filed a cross objection reiterating their stand that the notice was v....

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.... Section 271AAB of the Act, the Assessing Officer proposed to levy penalty, that this defect goes to the root of the matter and vitiates the entire proceedings and that the Tribunal was right in allowing the assessee's cross objection. In support of his contention, the learned counsel for the assessee has placed reliance on the decisions of the Karnataka High Court in the case of CIT Vs. Manjunatha Cotton and Ginning Factory [reported in (2013) 359 ITR 565] and in the case of CIT Vs. SSA's Emerald Meadows [(2016) 73 Taxmann. Com 241] and also the decision of this Court, to which, one of us (TSSJ) was a party, in the case of Babuji Jacob Vs. ITO, Non Corporate Ward 1(2), Chennai [reported in (2021) 124 Taxmann.com 363]. 14. In our....

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....ly, when the assessee has been strenuously canvassing the jurisdictional issue from the inception. 16. In so far as the decision of the Allahabad High Court in the case of Sandeep Chandak is concerned, the factual position is slightly different. This decision is for the principle that where the assessee, in the course of search, makes a statement, in which, he admits the undisclosed income and specifies the manner, in which, such income has been derived, then the provisions of Section 271AAB of the Act would automatically get attracted. There can be no quarrel over this proposition. But, once the provisions get attracted, it is incumbent on the part of the Assessing Officer to specify as to under which clause in Section 271AAB(1) of the ....