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2021 (12) TMI 946 - HC - Income TaxPenalty u/s 271 - assessment under section 153C has been completed on the figures disclosed by it in the return filed under section 153C -Whether Tribunal was justified in law in invalidating the penalty proceedings on mere mistake in the penalty notice? - HELD THAT:- AO stated that the mere fact that the assessee has correctly quantified its concealed income, which has been accepted by the department, has no co-relation with the fact that the assessee has not concealed its income. Further, during the course of search, incriminating documents were found which revealed that the assessee was having concealed income and when the assessee was confronted with the same he had no other alternative but to admit that he had indeed concealed the particulars of income and he in the due course of time came out with a correct calculation of his undisclosed income. Thus, the assessee having not disclosed the income in the return of income filed under section 139[1] but has shown the same in the return in response to the notice under section 153C cannot be said to be voluntary. With regard to the alleged defect in the notice issued under section 274 of the Act, either on the ground that the relevant portions have not been clearly indicated or that satisfaction of the Assessing Officer has not been properly made was not canvassed before the CIT[A]. This contention appears to have been canvassed for the first time before the Tribunal. It may be true that the Tribunal being the last fact finding forum in the hierarchy is entitled to examine an issue qua the assumption of jurisdiction of the authority to initiate proceedings as it may be argued by the assessee that the said issue goes to the root of the matter. Be that as it may, if the Tribunal proposes to undertake such an exercise then it should do so after hearing the assessee and the Revenue also and the reasons of its satisfaction for accepting the case of the assessee should be clearly spelt out. More thorough exercise is required to be done by the Tribunal on the issue with regard to the levy of penalty which was sustained by the CIT[A] on the ground whether the additional income offered by the assessee in the return filed pursuant to notice under section 153C could be taken to be not voluntary and whether it could be treated imposition of penalty. Similarly, with regard to the validity of the notice also needs to be considered after taking note of the factual position. For the above reasons, the appeal is allowed and the order passed by the Tribunal is set aside and the matter is remanded to the Tribunal for fresh consideration .
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