2025 (5) TMI 2173

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....enalty of Rs. 158.07 Lacs as levied by Ld. AO vide order dated 21-03-2022 in the matter of an assessment framed u/s 143(3) on 08-09-2021. 2. The Ld. AR advanced arguments on legal ground as well as on merits. Reliance has been placed on certain judicial decisions to support the same, the copies of which have been placed on record. The Ld. AR assailed the penalty on the ground that show-cause notice was defective since the same did not mention as to exact limb under which the impugned penalty was sought to be levied by Ld. AO. The alleged notice issued u/s 274 r.w.s. 271AAB was liable to be quashed on account of this technical defect only. Reference has been made to the decisions of Hon'ble High Court of Madras in the case of Pr. CIT vs. Sh....

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....ore me either personally or through a duly Authorised representative at 11.00 AM on 07/03/2022 and show cause why an order imposing a penalty on you should not be made under section 271AAB of the Income Tax Act, 1961. If you do not wish to avail yourself of this opportunity of being heard in person or through authorized representative, you may show cause in writing on or before the said date which shall be considered before any such order is made under section 271AAB of the Income Tax Act, 1961. 3.2 The assessee responded to the same vide its reply dated 07-03- 2022 and contended that penalty was not automatic. The returned income was accepted and the income disclosed therein would not constitute undisclosed income. However, considering ....

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....A), To levy the same, show-cause notice was issued to the assessee on 18-02-2022 proposing levy of impugned penalty on the assessee. However, upon perusal of this notice as extracted above, it could be seen that Ld. AO has failed to specify the specific limb of Sec. 271AAB (1A) which was applicable to the case of the assessee. The statutory provisions governing penalty as contained in Sec. 271AAB(1A) has specific clauses viz. clause (a) prescribing penalty of 30% subject to fulfillment of certain conditions and another clause (b) prescribing penalty of 60%. The Ld. AO has failed to mention the specific limb which was applicable to the case of the assessee. On these facts alone, impugned penalty could not be sustained in terms of decision of....

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....and none of the irrelevant portions had been struck off nor the relevant portions had been marked or indicated. Hence, the Tribunal is right in observing that the penalty could not have been levied based on such defective notice and more particularly, 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 ....