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2019 (4) TMI 953 - ITAT JAIPURPenalty u/s 271AAB – assessment u/s 153B - specification of default as per clause (a) to (c) of section 271AAB(1) - In the absence of any grounds specified in the show cause notice as well as any amount to be treated as undisclosed income of the assessee for the purpose of levy of penalty under section 271AAB, the initiation of penalty is not valid - HELD THAT:- It is clear that both the show cause notices issued by the AO for initiation of penalty proceedings u/s 271AAB are very vague and silent about the default of the assessee and further the amount of undisclosed income on which the penalty was proposed to be levied. Even the Hon’ble Jurisdictional High Court in case of Shevata Construction Co. Pvt. Ltd [2016 (12) TMI 1603 - RAJASTHAN HIGH COURT] has concurred with the view taken by Hon’ble Karnataka High Court in case of CIT vs. Manjunatha Cotton & Ginning Factory, [2013 (7) TMI 620 - KARNATAKA HIGH COURT] which was subsequently upheld by the Hon’ble Supreme Court by dismissing the SLP filed by the revenue in the case of CIT vs. SSA’s Emerald Meadows, [2016 (8) TMI 1145 - SUPREME COURT] . Accordingly, following the decision of the Coordinate Bench as well as Hon’ble Jurisdictional High Court, this issue is decided in favour of the assessee by holding that the initiation of penalty is not valid and consequently the order passed u/s 271AAB is not sustainable Absence of a finding that the income disclosed by the assessee is an undisclosed income as explanation to section 271AAB(1) - penalty is not mandatory but to be imposed on merits of each case - HELD THAT:- We hold that the entries in the seized documents representing the payment on account of land, in the absence of the other essential facts regarding the particulars of the land as well as the persons do not constitute undisclosed income of the assessee as defined in the explanation to section 271AAB. Accordingly, the penalty levied under section 271AAB by the AO and confirmed by the ld. CIT (A) is not sustainable As regards the alternative plea regarding the requirement of maintaining the regular books of account by the assessee, we find that the assessee is not engaged in any business activity or any other professional activity requiring the regular books of account. The income derived by the assessee is only from Income from house property and income from other sources as well as the profit from partnership firm for which regular books of account are not required to be maintained. See - Ravi Mathur vs. DCIT [2018 (6) TMI 1128 - ITAT JAIPUR]
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