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2019 (10) TMI 1123 - AT - Income TaxPenalty u/s 271AAB - AO has only mentioned the penalty under section 271AAB in the show cause notice which does not satisfy the requirement of law - HELD THAT:- When the AO has failed to specify the default attracting the levy of penalty in terms of clauses (a) to (c) of section 271AAB(1) of the Act, the said show cause notice suffers from illegality and consequently the order passed by the AO under section 271AAB is not sustainable and liable to be quashed. Levy of penalty under section 271AAB regarding undisclosed income on account of advance for land and excess jewellery - HELD THAT:- When the jewellery was found at the residence of the assessee and also accepted as belonging to the family members as the department has already allowed the credit of the jewellery declared in the wealth-tax return by the family members then the benefit of the CBDT Instruction No. 1916 dated 11.05.1994 shall also be given in respect of all family members. Irrespective of the income disclosed by the assessee in the statement recorded under section 132(4) of the Act, the AO is required to consider the benefit of CBDT Instruction No. 1916 dated 11.05.1994 at the time of levying the penalty under section 271AAB. Such benefit of CBDT Instruction has to be allowed in respect of all the family members. Once the benefit is given as per the CBDT Instruction in respect of the quantity of the gold being 500 grams per married lady, 250 grams per unmarried lady and 100 grams per male member of the family, then the excess jewellery treated for undisclosed income will not survive. Accordingly, the penalty levied by the AO in respect of the excess jewellery without giving the benefit of CBDT Instruction No. 1916 is not sustainable. The same is deleted.
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