TaxTMI 
TaxTMI 
2024 (1) TMI 597
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....y fall within Coviid-2019 pandemic outbreak period between 15.03.2020 to 28.02.2022 as per hon'ble apex court's directions in Cognizance for Extension of Limitation, In re 438 ITR 296 (SC) read with judgment in Cognizance for Extension of Limitation, In re 432 ITR 206 (SC) dated 08-03-2021 and 421 ITR 314, excluding the covid-19 pandemic outbreak period from for all intents and purposes under the limitation law. We thus condone the impugned delay of 223 days in both these appeals in very terms. 3. We now advert to both these assessees' identical sole substantive grievance that the learned lower authorities have erred in law and on facts in levying the impugned sec.271AAB penalties of Rs. 2,05,000/- each i.e., @ 10% of the undisclosed income of Rs. 20,50,000/- in their cases, respectively. The department taken us to the CIT(A)'s detailed discussion affirming Assessing Officer's action in this respect as under: 4. Suffice to say, it has come on record that this is indeed an instance of both these assessees' having derived their undisclosed income in above terms u/sec. 271AAB Explanation-(c) (i)(A) of the Act representing their tuition fee in various educational institutions....
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....uring the course of search that the appellant and his wife Ms. Preeti Agrawal has suppressed the tuition receipt grossly amounting to Rs. Rs. 41,00,000/- for this relevant A.Y. 2016-17. Confronted with the hard evidence found regarding suppression of receipt, appellant, in sworned statement u/s 132(4) of the Act declared the same as belonging to his wife 50% and to himself @ 50%. Consequently, appellant disclosed Rs. 20,50,000/- u/s 132(4) of the act, as suppressed receipt from tuition classes for A.Y 2016-17. Subsequently AO completed the assessment u/s 143(3) r.w.s. 153A of the act on 29.12.2017. AO recorded the satisfaction during assessment and initiated penalty proceeding u/s 271AAB of the income tax act. AO also issued penalty notice u/s 271AAB of the income tax act on 29.12.2017 and another notice on 14.06.2018. AO has imposed the penalty u/s 271 AAB at Rs. 2,05,000/-on undisclosed income of appellant. 5.2 The contention of the appellant that, the penalty notice issued by the AO u/s 271AAB is illegal, invalid, and defective is not acceptable because of the following reason. (i) It is an undisputed fact for this relevant A.Y.....
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.... assessee shall pay by way of penalty, in addition to tax, if any, payable by him, (a) A sum computed at the rate of ten per cent of the undisclosed income of the specified previous year, if such assessee- (i) In the course of the search, in a statement under sub-section (4) of section 132, admits the undisclosed income and specifies the manner in which such income has been derived; (ii) Substantiates the manner in which the undisclosed income was derived; and (iii) On or before the specified date- er CIT(A)-3, Nagpur Page 10 of 18 (19) Document 3 Tax Shri Jagdish S. Agarwal A.Y. 2016-17, Appeal No. CIT(A)-3/10063/2018-19 (A) pays the tax, together with interest, if any, in respect of the undisclosed income; and (B) furnishes the return of income for the specified previous year declaring such undisclosed income therein; (b) a sum computed at the rate of twenty per cent of the undisclosed income of the specified previous year, if such assessee- (i) in the course of the search, in a statement under sub-section (4) of section 132, does not admit the undisclosed income; and (ii) on or before the specified date-....
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....us year represented, either wholly or partly, by any entry in respect of an expense recorded in the books of account or other documents maintained in the normal course relating to the specified previous year which is found to be false and would not have been found to be so had the search not been conducted.] From the plane reading of the provision of u/s 271AAB of the act it is crystal clear that, case of the appellant is squarely covered by provision of section 271AAB (a) as appellant has satisfied all the condition for levy of minimum penalty @ 10% of undisclosed income. (iii). The contention of the appellant that, the notice is defective as it does not specifically mention the subclause of provision of 271AAB of the act, would also not help the case of the appellant in view of the specific provision of 292BB of the act which is extracted and reproduced here in under Тех [292BB. Notice deemed to be valid in certain circumstances.- Where an assessee has appeared in any proceeding or co- operated in any inquiry relating to an assessment or reassessment, it shall be deemed that any notice under any provision of this Act, w....
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.... before any such order is made under section 271AAB of the Act. নায়ক आयकर आयà¥à¤•à¥à¤¤ Yours faithfully, 10 [Ms. J. M. Thakur] Assit. Commissioner of Income tax, Central Circle 1(2), Nagpur Appeni CIT(A)-B. Nagpur Page 13 of 18 Document 6 Income Shri Jagdish S. Agarwal A.Y. 2016-17, Appeal No. CIT(A)-3/10063 /2018-19 Appellant has duly received the notice and replied to AO without raising any objection regarding the content of the notice. Hence, as per specific provision of 292BB of the act appellant is now precluded from raising any objection regarding defect in notice u/s 271AAB of the act. In this regard H'ble Supreme court in the case of CIT v/s Laxmandas Khandelwal (2019)108/Taxmann.com183(SC) has held as under: If the assessee had participated in the proceeding, by way of legal fiction, notice would be deemed to be valid even if there be infractions as detailed in said Section. The scope of the provision is to make service of notice having certain infirmities to be proper and valid if there was requisite part....
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.... the proceedings invalid; more so, if assessee by his conduct has rendered service impracticable or impossible. (4) In a given case when the principles of natural justice are stated to have been violated it is open to the appellate authority in appropriate cases to set aside the order and require the Assessing Officer to decide the case In the present facts of the case no prejudice is caused to the appellant by the clerical mistakes committed by the Assessing Officer in the penalty notice u/s. 271AAB of the Act. Further, jurisdictional Mumbai High Court in the case of Ventura Textile Ltd. Vs CIT/(ITA No. 9580F2017) in its recent judgement on 12th June 2020 has held that mere non-striking of one limb in penalty notice would not invalidate the penalty notice/proceedings. The decision of the Madras High Court in Sundaram Finance and Jurisdictional Bombay High Court in the case of Ventura Capital was delivered after considering the case laws relied by the appellant in the case of Munjnatha Cotton and SSA Emeralt and others. Hence considering the factual matrix of the case and judicial pronouncement cited here in above, it is c....
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.... prosecution. It is a well settled principle of the law, that the Court cannot read anything into a statutory provision or a stipulated condition which is plain and unambiguous. A statute is an edict of the Legislature. The language employed in a statute is the determinative factor of the legislative intent." Another contention of the appellant that discloser of additional income was made for purchasing peace of mind and to avoid penal consequences is very fanciful and fantastic but unacceptable due to settled legal position. The Supreme Court in the case of MAK Data P. Ltd. (358 ITR 593) has held that "AO should not be carried away by the plea of the assessee like voluntary disclosure, buy peace, avoid litigation, amicable settlement to explain away its conduct and the assessee had to CIT(A)-3 Nagpur Page 16 of 18 Document 9 Shri Jagdish S. Agarwal A.Y. 2016-17, Appeal No. CIT(A) 3 /10053/2013-19 Income offer a proper explanation for the concealment of income or furnishing inaccurate particulars of income." The Hon'ble jurisdictional High Court in the case of Indus Engineering Company Vs. ACIT(2010) [323 ITR 302 (....