AI Drafter 
TaxTMI 
TaxTMI 
2021 (6) TMI 98
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....apacity of a person related to other assessees of the Rockland Group declaring an additional income of Rs. 1,00,000/-. The assessee's application was rejected by the Hon'ble Settlement Commission. Thereafter, assessment was completed u/s 153C on 20.06.2014 determining the total income of Rs. 9,24,000/- after making following additions: Addition on a/c of unexplained cash credit (On protective basis) Rs. 8,00,000/- Addition on a/c of unexplained expenditure Rs. 24,000/- Addition on a/c of additional income declared before the Settlement Commission Rs. 1,00,000/- Total Rs. 9,24,000/- 4. Aggrieved by the order of AO, assessee carried the matter before the CIT(A). CIT(A) granted partial relief to assessee and confirmed the addition of Rs. 8000/- on account of unexplained expenditure and addition of Rs. 1,00,000/- pertaining to additional income declared before Settlement Commission. 5. On the aforesaid additions which were confirmed by CIT(A), AO initiated the penalty proceedings u/s 271(1)(c) and thereafter vide order dated 29.03.2017 levied penalty of Rs. 33,372/- u/s 271(1)(c) of the Act. 6. Aggrieved by the order of AO, assessee carried the matte....
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....a Associates vs. ITO 263 ITR 0317 (Raj) b. Madad Lal Ansari vs DCIT - 272 ITR 560 (Raj) 9. The appellant shall be highly grateful if the aforesaid grounds are permitted to be urged which had not been raised due to incorrect legal advice." 8. With respect to the additional ground, it is assessee's submission that assessee can raise legal additional ground at any stage of proceedings and the additional ground raised by the assessee goes to the root of the matter and therefore the same may be admitted. In support of his contentions, he placed reliance on the decision of Hon'ble Apex Court in the case of National Thermal Power Co. Ltd. reported in 229 ITR 383 (SC). 9. With respect to the additional ground raised by the assessee, we are of the view that since the additional ground goes to the root of the matter and relying on the aforesaid decision of National Thermal Power Co. Ltd. (supra), we admit the additional ground. 10. Before us, Learned AR with respect to the additional ground submitted that in the notice (he pointing to the copy of the notice dated 20.06.2014 which is placed at Page 3 of the paper book), submitted that the AO has not pointed to any s....
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....nishing of inaccurate particulars of income. We find that identical issue arose in assessee's own case in A.Y. 2010-11, 2011-12 & 2012-13 before the Co-ordinate Bench of Tribunal and the Co-ordinate Bench of Tribunal by following the order in assessee's own case for A.Y. 2008-09 deleted the levy of penalty by observing as under: 8. We have heard the rival submissions and perused the material on record. The issue in the present ground is with respect to levy of penalty under section 271(1)(c) of the Act. We find that the identical issue arose in the case of the assessee in A.Y. 2008-09 and the Co-ordinate Bench of Tribunal in ITA No. 5088/Del/2017 for A.Y. 2008-09 vide order dated 21.01.2021 has deleted the penalty by observing as under: "3. Search and seizure action u/s 132(4) of the Income Tax Act, 1961 (hereafter referred to as the "the Act") was carried out in the Rockland group of cases on 06.09.2011. Subsequent to the search and seizure action, assessment proceedings were carried out u/s 153C r.w.s. 143(3), by issue of notice dated 05.08.2013 to the appellant to file the return of income. In response, the assessee filed return of income on 10.09.2013....
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....he notice dated 20/06/2014 produced by the Ld. AR during the hearing, it can be seen that the Assessing Officer was not sure under which limb of provisions of Section 271 of the Income Tax Act, 1961, the assessee is liable for penalty. Besides that the Assessment Order also did not specify the charge as to whether there is concealment of income or furnishing of inaccurate particulars of income in assessee's case. Besides this, the present case is relating to search conducted by the Revenue in the premises of the assessee, while the decision relied by the Assessing Officer as well as CIT (A) that of Hon'ble Supreme Court in case of Mak Data P. Ltd. vs. CIT 358 ITR 593 is relating to survey and there is no issue involved about the notice issued u/s 271(1)(c) r.w.s. 274 of the Act. This case relied by the Revenue is not applicable in the present case due to the distinguishing facts. There is separate provision for penalty in search cases given under the statute after 01.07.2012 that of Section 271AAB of the Act which was totally ignored by the Assessing Officer. Thus, the penalty itself is based on incorrect Section. Therefore we are taking up the contention of the assessee t....
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....rs, the ratio laid down by the Hon'ble High Court in case of M/s. Sahara India Life Insurance Company Ltd. (supra) will be applicable in the present case. The Hon'ble Delhi High Court held as under: "21. The Respondent had challenged the upholding of the penalty imposed under Section 271(1)(c) of the Act, which was accepted by the ITAT. It followed the decision of the Karnataka High Court in CIT v. Manjunatha Cotton & Ginning Factory 359 ITR 565 (Kar) and observed that the notice issued by the AO would be bad in law if it did not specify which limb of Section 271(1)(c) the penalty proceedings had been initiated under i.e. whether for concealment of particulars of income or for furnishing of inaccurate particulars of income. The Karnataka High Court had followed the above judgment in the subsequent order in Commissioner of Income Tax v. SSA's Emerald Meadows (2016) 73 Taxman.com 241(Kar), the appeal against which was dismissed by the Supreme Court of India in SLP No. 11485 of 2016 by order dated 5th August, 2016. 22. On this issue again this Court is unable to find any error having been committed by the ITAT. No substantial question of law arises." ....