TaxTMI 
TaxTMI 
2026 (9) TMI 2025
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....to Rs. 2,76,825/-. 2. The solitary grievance of the assessee in the present appeal is against the confirmation of penalty of Rs. 2,76,825/- levied by the Ld. AO u/s. 271AAC(1) of the Act. The assessee has, inter alia, challenged the levy on the ground that, while passing the assessment order, the Ld. AO had specifically initiated penalty proceedings u/s. 270A of the Act and no proceedings u/s. 271AAC(1) were initiated. 2.1. Brief facts of the case are as under:- Assessee is a non-resident Indian and had not filed return of income for the year under consideration. Information was received from the Sub-Registrar regarding an immovable property having stamp duty value of Rs. 35,83,500/-. Based upon such information, proceedings u/s. 1....
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....s as under: "Issue Demand notice, computation sheet. Issue penalty notices u/s 270A and 272A(1)(d) of the Act." Thus, admittedly, there is no direction in the assessment order for initiation of penalty proceedings u/s. 271AAC(1) of the Act. 3. Subsequently, penalty proceedings u/s. 271AAC(1) came to be proceeded with and penalty of Rs. 2,76,825/- was levied. In the penalty order, the Ld.AO sought to explain that mention of section 270A in the assessment order was merely a typographical error and that the proceedings were actually intended to be initiated u/s. 271AAC(1). The Ld.AO accordingly computed penalty at 10% of the tax payable u/s. 115BBE on the addition of Rs. 35,83,500/-. Aggrieved by the penalty order, the assess....
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....ed u/s. 271AAC(1) of the Act. 5.1. Section 271AAC(1), insofar as relevant, empowers the Ld.AO to direct levy of penalty where the income determined includes income referred to, inter alia, in section 69 of the Act. Sub-section (2) of section 271AAC, however, specifically provides that no penalty u/s. 270A shall be imposed in respect of income referred to in section 271AAC(1). 5.2. In the present case, the assessment order assumes significance. The Ld.AO has not merely mentioned section 270A once in passing. In paragraph 7.1, the Ld. AO consciously recorded satisfaction that the assessee had "misreported" her income and expressly directed initiation of penalty proceedings u/s. 270A. The same direction was repeated in paragraph 9 of the....
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.... penalty proceedings u/s. 271AAC(1) were subsequently initiated by issuance of a notice u/s. 274. This itself does not alter the fact that, at the stage of completion of assessment, the Ld.AO had consciously initiated proceedings only u/s. 270A. The subsequent proceedings cannot retrospectively rewrite the satisfaction recorded in the assessment order. 5.6. We further take note of the peculiar facts surrounding service of notices upon the assessee. The assessment order itself records that notices dated 13/04/2022, 01/11/2023 and 11/12/2023 were uploaded in the e-filing account of the assessee and remained uncomplied with. The assessee has consistently explained that she was a non-resident Indian and had not registered herself on the inco....
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....the decision of the Hon'ble Supreme Court in Union of India v. Dharmendra Textile Processors and the observations relating to mens rea. In our view, the said proposition does not address the controversy before us. We are not deleting the penalty on the ground that mens rea has not been established. The issue before us is whether, having consciously and repeatedly initiated proceedings under section 270A in the assessment order, the Ld. AO could subsequently treat the said initiation as a typographical error and proceed under section 271AAC(1), coupled with the peculiar circumstances relating to opportunity of hearing. Therefore, the discussion regarding strict civil liability does not resolve the defect arising in the present case. 5....