TaxTMI 
TaxTMI 
TaxTMI 
2024 (10) TMI 1690
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....271AAB of the Act was invalid, without jurisdiction and bad in law as it did not do not specify grounds or the clause under which penalty imposed by the assessing officer. 3. That the CIT(A) and assessing officer faded to appreciate that levy of penalty under section 271AAB(1A) of the Act is not automatic but only directory in nature and since significant amount of addition made in the assessment order already stands deleted, there is no locus levy any penalty under section 271AAB(LA) of the Act. 4. That the assessing officer CIT(A) erred on facts and in law on levying the penalty solely on the basis of findings given in the quantum proceedings, without: (a) appreciating that penalty proceedings are separate and independent from assessment proceedings; (b) considering the submissions of the appellant and (c) appreciating that the additions made in the assessment order were not in the nature of undisclosed income, and consequently. the impugned penalty order is bad in law. Without Prejudice 5 That the CIT(A) erred on facts and in law in confirming the penalty of Rs. 43,77,932 under section 271 AABEIA) of the Act in respect of addition(s) made in the assessment order, withou....
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....of the Act in respect of the additions sustained by the Ld CIT(A). Aggrieved the order of the AO the assessee has filed the appeal before the Ld CIT(A) who vide his order dated 07-12-2023 has dismissed the appeal against which the assessee is in appeal before us. 6. The Ld AR has submitted that the penalty order passed by AO is bad in law since no valid notice for assuming jurisdiction to impose penalty u/s 271AAB(1A) was issued. He has further submitted that before levying the penalty u/s 271AAB of the Act Ld AO has to be issued the notice u/s 274 of the Act, as provided in section 271A A B (3) of the Act. In the notice issued to the assessee there is no mention about the various conditions provided u/s 271AAB of the Act relating to levy of penalty @10% or @ 20% or @ 30% as the case may be. Nothing has been specified in the notice about clause a, b and c of section 271ABB of the Act as to at what percentage the penalty will be levied. The assessee deserves an opportunity to plead before the AO before being visited with the penalty with the penalty u/s 271AAB of the Act. The alleged notice issued u/s 274 r.w.s. 271AAB of the Act is liable to be quashed since there is a technical d....
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....the Assessing Officer to specify as to under which clause in Section 271 AAB(1) of the Act, he intends to proceed against the assessee. In the instant case, in the absence of such material in the penalty notice, it has to be held that notice is defective. 17. The decisions of the Karnataka High Court in the case of Manjunatha Cotton and Ginning Factory and SSA's Emerald Meadows and the decision of this Court in the case of Babuji Jacob clearly support our above conclusion. For all the above passed by the Tribunal. 7. Reliance also placed on the decision of the CO-Ordinate Bench, Jaipur, In the case of Ravi Mathur vs DCIT ITAno 969 of 2017 the Hon'ble tribunal Jaipur bench held as under :- 7. As regards the validity of notice under section 274 for want of specifying the ground and default, we find that when the basic condition of the undisclosed income not recorded in the books of accounts does not exists, then the same has to be specified by the AO in the show cause notice and further the AO is required to give a finding while imposing the penalty under section 271AAB. Even if the AO is satisfied and come to the conclusion that the assessee has not recorded the undisclosed inc....
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....cording the satisfaction for the same? (3) Whether on the facts and in the circumstances of the case, the Tribunal was justified in deciding the appeals against the Revenue on the basis of notice issued under Section 274 without taking into consideration the assessment order when the assessing officer has specified that the assessee has concealed particulars of income? 3. The Tribunal has allowed the appeal filed by the assessee holding the notice issued by the Assessing Officer under Section 274 read with Section 271(1)(c) of the Income Tax Act, 1961 (for short 'the Act') to be bad in law as it did not specify which limb of Section 271(1)(c) of the Act, the penalty proceedings had been initiated i.e., whether for concealment of particulars of income or furnishing of inaccurate particulars of income. The Tribunal, while allowing the appeal of the assessee, has relied on the decision of the Division Bench of this Court rendered in the case of CIT vs. Manjunatha Cotton and Ginning Factory (2013) 359 ITR 565. 4. In our view, since the matter is covered by judgment of the Division Bench of this Court, we are of the opinion, no substantial question of law arises in this ap....
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....es vs DCIT; [2024] 162 taxmann.com 439 the Delhi bench of the tribunal held as under :- 19. We have heard both the parties and perused the material available on record. In both the Assessment Years For the sake Le AY 2018-19 and 2019-20, the identical penalty notice u/s 271AAB has been issued convenience, the penalty notice for Assessment Year 2018-19 reproduced reads as under: "Whereas in the course of proceedings before me for the Assessment Year 2018-19. it appears to me that a search was conducted in your case and you were found to have undisclosed income, you are hereby requested to appear before me either personally or through a duly authorized representative at 11:30 AM on 02/07/2021 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 aval 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 will be considered before any such order is made under section 271AAB of the Income Tax Act, 1961." 20. A show cause notice was also issued on 09/09/2021 for imposing penalty u/s 271AAB for....
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....on held as under :- 5. Before we proceed further, the decisions relied upon by the Ld DR are to be considered. In the case of Principal CIT vs Sandeep Chandak & Others [TS-6389- HC-20 17(Allahabad)-O] (supra) the issue before the Hon'ble High Court was the defect in the notice issued under section 271AAB on account mentioning wrong provision of the Act being 271(1)(c) of the Act. The Hon'ble High Court after considering the fact that the show cause notice issued by the AO though mentions section 271(1) in the caption of the said notice, however, the body of the show cause notice clearly mentions section 271AAB, which was fully comprehended by the assessee as reveals in the reply filed by the assessee against the said show cause notice. Hence the Hon'ble High Court has held as under. - "The Id A.Rs have also challenged that the caption of the notice mentioned only section 271 and not 271AAB. In this respect, the copy of notice has been produced by the Id. A.R. before me. It is seen that the id A.R is correct in observing that the section of penalty has not been correctly mentioned by the AO in the caption. However, the AO will get the benefit of section 292BB of the ....
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.... and look into what has been mentioned in the alleged notices u/s. 274 r.w.s. 27IAAB of the Act, which are reproduced as below: 11. For better understanding we reproduce the provisions of section 271 AAB and 274 of the Act which reads as follows; Section 271AAB of the Act. 271AAB. Penalty where search has been initiated - (1) The Assessing Officer may, nothwithstanding anything contained in any other provisions of this Act, direct that, in a case where search has been initiated under section of this or after the 1st of the July, 2012, the 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 --- (ii) substantiates the manner in which the undisclosed income was derived; and (iii) on or before the specified date --- (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 pervious 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 yea....