TaxTMI 
TaxTMI 
2026 (7) TMI 1147
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.... other grounds which the assessee may urge either before or at the time during the hearing." 3. The brief facts of the case are that in the case of the assessee, the assessment under section 143(3) of the Income Tax Act, 1961 ("the Act") for Assessment Year 2018-19 was completed by the Learned Assessing Officer ("Ld. AO)" on 26.12.2019, wherein the Ld. AO initiated penalty proceedings under section 271AAB of the Act. Subsequently, the Ld. AO issued a notice under section 274 read with section 271AAB of the Act dated 31.12.2019. Thereafter, the Ld. AO passed a penalty order dated 26.10.2021 levying penalty of Rs. 12,76,800/- under section 271AAB of the Act. 4. Aggrieved by the penalty order, the assessee preferred an appeal before the learned CIT(A). The learned CIT(A) upheld the penalty levied by the Ld. AO and dismissed the appeal of the assessee. 5. Aggrieved by the order of the Ld. CIT(A), the assessee is in appeal before the Tribunal. The Learned Authorized Representative ("Ld. AR") submitted that under Ground No. 3 of the appeal, the assessee has challenged the validity of the notice issued under section 274 read with section 271AAB of the Act dated 31.12.2019. Inviti....
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....ision of this Tribunal in the case of Kavya Boppana Vs. ACIT (supra) which is to the following effect: "5. We have considered the rival submissions as well as relevant material on record. There is no dispute that during the course of search and seizure action the transactions of cash payments for purchase of property were detected which were also offered to tax by the assessee in the return of income against which the Assessing Officer has initiated the proceedings for levy of penalty u/sec. 271AAB of the Act by issuing show cause notice dated 28.09.2021 which reads as under: 5.1. Thus, it is clear that the Assessing Officer has not specified under which clause of sec. 271AAB(1) of the Act the penalty was proposed to be levied in respect of the income offered by the assessee to tax. Sec. 271AAB(1A) clause (a) and (b) of the Act contemplates the penalty at 30% and 60% respectively, in respect of two contingencies attracting the penalty u/sec. 271AAB of the Act. The Hon'ble Madras High Court in the case of Pr. CIT-1, Coimbatore vs. Shri R. Elangovan (supra), has considered an identical issue and held in Para nos. 14 to 17 as under: "14. In our cons....
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....fective. 17. The decisions of the Karnataka High Court in the cases 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 reasons, we find no grounds to interfere with the common order passed by the Tribunal." 5.2. It is also pertinent to note that in the quantum appeal this Tribunal vide Order dated 27.06.2024 in ITA. No. 696/Hyd./2022 has held in Para nos. 24.6 to 24.9 as under: "24.6. Heard both the parties, perused the material available on record and have gone through the orders of authorities below. There is no dispute with regard to the fact that loose sheets found during the course of search revealed cash payment for purchase of the property by the assessee. In fact, Shri Sarat Gopal Boppana, father of assessee has admitted in his statement that cash payment has been made by his children for purchase of property at Mamidipalli Village. It is also an admitted fact that the assessee has declared total income of Rs. 3,02,23,230/ which includes sum Rs. 1,23,92,500/- income from other sources for A.Y. 2020-21. The due date....
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....he nature and source of investment or the explanation offered by the assessee is satisfactory in the opinion of the Assessing Officer, then the value of the investment may be deemed to be the income of the assessee of such financial year. 24.9. In the present case, the conditions for invoking provisions of section 69 of the Act are not satisfied. Therefore, we have to consider that the Assessing Officer and ld. CIT(A) are erred in invoking the provisions of section 69 r.w.s. 115BBE of the Act, in respect of income declared under the head 'income from other sources'. Thus, we reverse the findings of the Ld.CIT(A) and direct the Assessing Officer to assess the income under the head income from other sources' as declared by the assessee." 5.3. Thus, the stand of the Assessing Officer in assessing the income offered by the assessee to tax u/sec. 69A r.w.s. 115BBE of the Act has been reversed by this Tribunal and considered the said income as taxable at normal rate of 30% under the Head "Income from other sources". Therefore, once the Order of the Assessing Officer treating the income as unexplained investment u/sec. 69A of the Act is reversed by this Tribu....
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....ursuant thereto cannot survive. On comparison of the notice issued in the case before us with the notice considered by the Coordinate Bench in the case of Kavya Boppana Vs. ACIT (supra), we find that the defect is identical. In the present case also, the Ld. AO has not specified the particular limb under which penalty under section 271AAB of the Act was proposed to be levied. Respectfully following the decision of the Coordinate Bench in the case of Kavya Boppana Vs. ACIT (supra), which in turn follows the judgment of the Hon'ble Madras High Court in the case of PCIT Vs. Shri R. Elangovan (supra), we hold that the notice issued under section 274 read with section 271AAB of the Act dated 31.12.2019 is invalid in law. Consequently, the penalty order passed on the basis of such invalid notice is unsustainable and liable to be quashed. Accordingly, we direct the Ld. AO to delete the penalty of Rs. 12,76,800/- levied under section 271AAB of the Act. 10. In the result, the appeal of the assessee is allowed. Order pronounced in the Open Court on 17^th June, 2026. ============= Document 1 GOVERNMENT OF INDIA MINISTRY OF FINANCE INCOME TAX DEPARTMENT FFICE OF THE ASSISTANT COMMIS....