TaxTMI 
TaxTMI 
TaxTMI 
2023 (7) TMI 241
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....isclosure petition made during search and seizure proceedings as taken to books subsequently does not attract penalty in terms of Section 271AAB of the Income Tax Act, 1961. (ii) Whether on the facts and circumstances of the case the Learned Income Tax Appellate Tribunal has erred in confirming the decision of Learned Commissioner of Income Tax (Appeal) which was decided in favour of the assessee, without examining the entire facts of the case. 2. OCOT No. 7 of 2022 is a cross-objection filed by the assessee questioning the very same order passed by the Tribunal in so far as that portion of the order where the Tribunal did not adjudicate the correctness of the penalty notice dated 31st March, 2016 issued under Section 271/ 274 of the Act. 3. We have heard Mr. Samarjit Roy Chowdhury, learned Standing Counsel assisted by Mr. Soumen Bhattacharyya, learned Senior Counsel appearing for the appellant revenue and Mr. Ranjeet Kumar Muraka, learned Senior Advocate assisted by Mr. Vivek Muraka and Mr. Dibanath Dey, learned Advocates for the respondent cross-objector. 4. The revenue had filed the appeal before the Tribunal questioning the correctness of the order passed by the Commission....
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....r in the show-cause notice that the assessee had any undisclosed income and initiation of penalty proceedings in a mechanical manner without application of mind was unjustified. Apart from the said contention, other contentions on the merits of the matter were also raised. The CIT(A) by order dated 4th July, 2017 allowed the assessee's appeal and deleted the penalty. Aggrieved by the same, the revenue had preferred appeal before the Tribunal which has been dismissed by the impugned order. The learned Tribunal first took up for consideration the correctness of the order passed by the CIT(A) by deleting the penalty on the ground that the income of Rs. 6,04,95,912/- with reference to which penalty was levied did not construe "undisclosed income". After elaborately going through the facts and also taking note of the decisions of the learned Tribunal in the case of the assessee's group company, M/s. New Horizon Ltd. in ITA No. 2128/Kol/2017 dated 28.08.2019 rejected the contention raised by the revenue and affirmed the order passed by the CIT(A). As pointed out earlier before the CIT(A), the assessee had specifically raised the contention objection the validity of the initiation of the ....
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....that the Assessing Officer himself assessed the said sum of Rs. 6,04,95,912/- on the ground of "under-valuation" of stock and not as value of "undisclosed stock". 6. The tribunal on facts further found that well before the search on 20.03.2015, the assessee had internally conducted stock taking exercise and deducted the discrepancy in stock and the same was reported to the assessee's Managing Director on 18.03.2015 well before the commencement of search on 20.03.2015. Further the tribunal found that prior to commencement of search the Managing Director of the assessee had issued instructions to the respective unit heads to reconcile the stocks and records and incorporate difference in the Company's books for the financial year ending on 31.03.2015. Thus, taking note of all these facts, the tribunal held that the difference in stocks of Rs. 6,04,95,912/- had been identified by internal team of the assessee itself much prior to the commencement of the search. 7. Further the tribunal also noted the decision of its coordinate bench in the assessee's group company M/s. New Horizon Private Limited wherein the facts were identical and the tribunal by order dated 28.08.2019 had affirmed ....
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....nalty proceedings on the grounds of non-applications of minds and on the ground of the notice being defective which goes to the root of the matter. The notice issued under Section 274 read with Section 271 of the Act dated 31.03.2016 was placed before us. On a perusal of the notice, we find that none of the particulars which are required to be mentioned in the notice have been disclosed. In fact, the relevant columns have been left blank. The question would be whether penalty proceedings could have been initiated pursuant to such a notice and was the notice in accordance with law. 11. In Food Corporation of India Limited Versus State of Punjab and Others AIR 2001 SC 250, the Hon'ble Supreme Court while considering the validity of the notice issued under the Punjab Municipal Act, 1911 pointed out that notice to the affected person mandated in the section is not an empty formality; it is meant for a purpose. A vague and unreasoned notice will not provide reasonable opportunity to the noticee to file objection meeting the reasons/grounds on which action is proposed. Since the notice did not state the reasons of the grounds, the notice was held to be vague. 12. In Amrit Food Versus C....