2023 (7) TMI 894

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....rder of penalty [for short "PO"] dt. 28/06/2017 passed by the ACIT, Central Circle-1(3), Nasik [for short "AO"] u/s 271AAB of the Act. 2. The substantive grievance under the present appeal hinges around the correctness of action of the tax authorities below [for short "TAB"] in imposing the penalty u/s 271AAB of the Act. 3. The grounds challenged through the memorandum of appeal are; "1. On the facts and in the prevailing circumstance of the case, the leaned CIT(A) has erred in law in confirming the penalty of Rs. 48,38,948/- out of the total penalty of Rs. 3,28,38,948/- imposed by the Assessing officer under s.271AAB of the Income-Tax Act 1961 without considering and appreciating the material fact that impugned jurisdictiona....

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....usiness Gold & Silver Ornaments, utensils in the trade name of "R. C. Bafna Jewellers", upon whom a search & seizure operation u/s 132 and survey action u/s 133A of the Act was simultaneously carried out on 10/09/2014, consequently during the course of assessment proceedings u/s 143(3) r.w.s. 153B of the Act, the assessee returned an income of Rs.47,50,43,810/- by filing original return of income [for short "ITR"] incorporating an additional income Rs.28,00,00,000/- declared during the survey action and Rs.4,83,89,485/- during search action u/s 132 of the Act, which eventually trigged the penalty provision u/s 271AAB of the Act. 4.2 During the penal proceedings, the assessee was put to a show cause notice [for short "SCN"] u/s 274 r.w.s.....

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....which the learned departmental representative [for short "DR"] objected for unconvincing reasons. Insofar as the first two legal grounds are concerned, the Ld. AR adverting to SCN contended that, initiation as well imposition of penalty u/s 271AAB suffers from voice of non-application of mind of the Ld. AO and therefore the penalty deserves to be deleted in limine for being fatal & incurable u/s 292BB of the Act. While coming to third substantive ground alleging the mechanical approval granted by the Ld. JT CIT, the Ld. AR adverting to para 8 of penalty order pinpointed that, the date of order imposing the penalty vis-à-vis date of according approval as one i.e. 28/06/2017. Per contra, the Ld. DR on first two grounds supported the or....

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....by requested to appear before me at my office at the address mentioned above at 11.30AM on 27.01.2017 and show cause why an order imposing a penalty on you should not be made under section 271 of the Income Tax Act, 1961. If you do not wish to avail yourself of this opportunity of being heard in person or thorough authorised representative you may show cause in writing on or before the said date which will be considered before any such order is made under section 271AAB." 9. On a perusal of the provisions of section 271AAB, it is distinctly evident that the section 271AAB of the Act is self-contained. It is worthy to note that, on one hand, the sub section (1) thereof authorises levy of penalty on undisclosed income where the proceedings....

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....in the case of "Sandeep Chandak Vs PCIT" reported in 93 taxmann.com 406 where in similar facts and circumstance their lordship have dismissed the appeal of the assessee and upheld the order of Hon'ble High Court sustaining the penalty imposed u/s 271AAB of the Act, as under; A search u/s 132 of the Act was carried out in case of assessee, and in the course of search, assessee made a statement admitting certain undisclosed income. Assessing Officer added said amount to assessee's taxable income and thereupon, issued a notice u/s 274 r.w.s. 271 of the Act for initiating penalty proceedings to which assessee submitted written reply. Assessing Officer having rejected assessee's explanation, passed a penalty order u/s 271AAB. Tr....