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2024 (3) TMI 1007 - AT - Income TaxPenalty u/s 270A and 271AAB - Defective notice u/s 274 - allegation of non specification the basis of charge subject to which the penalty is imposed - as submitted allegation of the A.O. in the penalty notice was only regarding "under reporting of income" post search and seizure - HELD THAT:- In the instant case, on perusal of the penalty notice placed on record it is evident that the Ld. AO had show caused the assessee as to why the assessee should not be imposed with penalty for ‘under reporting of income’. The assessee had filed its submissions stating that he had not ‘under reported its income’. We are unable to comprehend ourselves to accept to the argument of the Ld. DR that assessee did not make any submissions with regard to ‘mis reporting of income’. The assessee could be expected to give reply only in respect of show cause notice that is put to him. Why at all the assessee should infer/ assume/presume that the Ld. AO having recorded satisfaction in the quantum assessment order that offence of both ‘under reporting’ and ‘mis reporting’ is committed by the assessee and accordingly the penalty would be levied on the assessee for both in terms of section 270A(9) of the Act? It is well settled that penalty proceedings and assessment proceedings are separate and distinct. Hon’ble Supreme Court in the case of Anantharam Veera Singhaiah & Co. [1980 (4) TMI 2 - SUPREME COURT] wherein it was held that findings recorded in assessment proceedings cannot be taken as conclusive for penalty proceedings. Even the provisions of section 270A(6) of the Act provides for granting immunity from penalty if the case falls in “under reporting of income”. Moreover different rates of penalty are prescribed for ‘under reporting of income’ alone and for ‘under reporting’ in consequence of ‘misreporting of income’. Hence it is all the more essential to mention in the show cause notice itself as to which of the offence is committed by the assessee for which explanations are being sought for by the Id. AO. There is no whisper at all in the notice issued u/s 270A read with section 274 of the Act about “misreporting of income”. In-fact two notices were issued by the Id. AO and in both the notices, the A.O. had only directed the assessee to reply with regard to ‘under reporting of income’. But we find that the penalty had been levied ultimately for both ‘under reporting’ and ‘misreporting of income’ @ 200% in terms of section 270A(9) of the Act for which show cause notice was never issued to the assessee. Hence we direct the Ld. AO to delete the penalty levied u/s 270A of the Act for the Assessment Year 2017-18. Accordingly, we allow the Appeal of the Assessee on this technical ground. Penalty u/s 271AAB - As no specific charge has been mentioned in the penalty notice issued u/s 271AAB of the Act, we delete the penalty imposed by the A.O. On this technical grounds for the Assessment Years 2018-19 & 2019-20.u/s 271AAB. Appeals of assessee allowed.
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