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TMI Blog2019 (7) TMI 1443X X X X Extracts X X X X X X X X Extracts X X X X ..... d that the search under Section 132 of the Act was carried out at the premises of the appellant on 23rd August 2012. The case was selected for scrutiny and notice under Section 142(1) of the Act was issued dated 9th May 2013. In response to the notice, the return of income showing the total income of Rs. 3,86,51,830=00 was filed by the appellant on 26th February 2014. The notice under Section 143(2) of the Act was issued dated 21st April 2014. A detailed questionnaire was issued on 24th June 2014 along with notice under Section 142(1) of the Act. The assessment proceedings were completed and a disallowance of Rs. 3,99,492=00 was made under Section 14A of the Act read with Rule 8D of the Income Tax Rules, 1962. The Assessing Officer initiated proceedings under Section 271AAA of the Act on the premises that the disclosure was made during the course of the search. In the course of the search carried out on 23rd August 2012, a stock of 99,779 kgs. belonging to the proprietary concern of the appellant was recovered and the same was declared as income at the rate of Rs. 300=00 per kg. amounting to Rs. 2,99,33,955=00 against which the appellant had made a disclosure of Rs. 3,00,00,000=00. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s as required under the law, was not obtained. 2. In our opinion, the first contention of the appellant cannot be accepted. Even if the Tribunal has provided on the wrong basis assuming incorrectly that a separate notice under section 271AAB was issued, the petitioner cannot argue, in facts of the present case, that the entire proceedings were vitiated. This is so for the reason that admittedly the Assessing Officer, after having initially issued notice under section 271AAA, shortly issued corrigendum correcting the reference to the statutory provision as 271AAB. This was thus a case of pure correction of typographical error. The petitioner cannot argue that no valid notice under the law was issued. Concededly such correction also took-place long before the penalty proceedings proceeded further and culminated into the order of penalty imposed by the Assessing Officer after giving full opportunity of defending to the assessee. 3. We are however inclined to examine the assessee's second contention regarding prior sanction. In this respect also, our inquiry would be whether initial notice though erroneously titled as one under section 271AAA of the Act was proceeded by sanct ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in its decision. (b) Erroneously notes that the essential difference between Section 271AAA and Section 271AAB of the Act is a paradigm shift in quantification of penalty. In doing so, the Income Tax Appellate Tribunal fails to appreciate that both the provisions are materially different, not just with respect to quantification. This is further supported by the fact that Section 271AAB of the Act was inserted by an amendment. With such a marked difference between the two provisions, it is inconceivable that penalty be imposed without adequate notice and following due process of law. (c) Holds the reference to an obliterated provision to be a mere technical defect. It is submitted that mentioning the wrong provision in the show cause notice is a violation of principles of natural justice as is denies the appellant its right to a hearing and cannot be held to be a mere technical defect. (d) Errs in holding that reference to Section 271AAA of the Act instead of Section 271AAB of the Act is a curable defect under Section 292B of the Act." 11. The Tribunal, in its impugned order, observed as under : "11. As can be seen, both erstwhile section 271AAA as well as newly insert ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... AA as well as this notice under s.271AAB and has co-operated with the AO in continuance of proceedings. The assessee has not questioned the AO on jurisdictional aspect but has merely contended on merits as to why provision of section 271AAB should not apply to the assessee. As noted earlier, the pre-requisites or circumstances for issuance of notice both under erstwhile s.271AAA and current s.271AAB being identical, the mistake in making reference to an obliterated provision is in the realm of mere technical defect. This being so, the basis for assumption of jurisdiction remains intact and is not vitiated. The error in making reference to wrong section in our considered view being purely technical do not impinge upon substratum in any manner and thus a curable defect rectifiable under s.292B. In other words, the mistake committed by AO in making reference to a non est provision is a curable defect in view of the fact that cause existing for invoking both section are identical. The mistake and defect in penalty notice was corrected to bring it conformity with the intent and purpose for which the penalty proceedings were initiated originally. The mistake being technical, the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r s.271AAA/271AAB. As a sequel, even if it is presumed that 'satisfaction' was wrongly drawn with reference to 271AAA at the time of framing the assessment, the AO was well within its mandate to form it post-assessment qua s.271AAB. To reiterate, the showcause notice in the instant case has been initially issued under sunset provision of s.271AAA of the Act and thereafter revised by issuing fresh notice under s.271AAB of the Act seeking explanation from the assessee as to why penalty should not be imposed. Having regard to the statutory framework, we do not see any statutory impediment in formation or modification of the basis of 'satisfaction' post-assessment. To reiterate, there is no mandate in law to issue notices under s.271AAA/s.271AAB in the course of assessment proceedings. It is sufficient to issue show-cause notice under s.271AAB before actual imposition of penalty before or after the assessment. The action of the AO is therefore not at loggerheads with the framework of statutory procedure in this regard. An opportunity is found to have been given and availed by the assessee before imposition of penalty. Therefore, no subversion of principle of natural justice can ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r s.271AAB. Thus, subsequent notice under s.271AAB is not found to be marred with any irregularity of substantive nature. In contrast to these facts, the facts in the case laws cited are totally different and found to be no assistance to assessee." 12. Mr. M. R. Bhatt, the learned senior standing counsel appearing for the Revenue, has vehemently opposed this Tax Appeal. Mr.Bhatt submitted that the order passed by the coordinate bench referred to above makes it clear that the only inquiry which the Court thought fit to undertake was, whether the initial notice, though erroneously titled as one under Section 271AAA of the Act, was proceeded by sanction or not. 13. Mr.Bhatt placed on record for our perusal the submission of draft penalty orders for approval put forward by the Assistant Commissioner of Income Tax, Central Circle-1, Rajkot, before the Joint Commissioner of Income Tax, Central Range, Rajkot. Mr.Bhatt also placed on record for our perusal the approval of the penalty order under Section 271AAB of the Act passed by the Joint Commissioner of Income Tax, Central Range, Rajkot. 14. The third paragraph of the order passed by the coordinate bench dated 15th October 2018 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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