TMI Blog2019 (11) TMI 1093X X X X Extracts X X X X X X X X Extracts X X X X ..... 71AAB is liable to be quashed. - Decided in favour of assessee. - ITA No. 849/JP/2018 - - - Dated:- 6-11-2019 - Shri Shri Vijay Pal Rao, Judicial Member For the Assessee : Shri S.R. Sharma (CA) For the Revenue : Shri Abhishek Sharma (Addl. CIT) ORDER PER VIJAY PAL RAO, JM : This appeal by the assessee is directed against the order dated 02.04.2018 of ld. CIT (Appeals)-4, Jaipur arising from penalty order passed under section 271AAB of the IT Act for the assessment year 2015-16. The assessee has raised the following grounds of appeal :- 1. That the ld. CIT (A) is wrong, unjust and has erred in law in confirming penalty of ₹ 2,02,220/- imposed by the assessing officer u/s 271AAB of the Act. 2. That the CIT (A) is wrong and has erred in law in confirming the said penalty of ₹ 2,02,220/- u/s 271AAB of the Act holding that is mandatory in nature and not discretionary and so assessing officer is correct in law while imposing penalty on appellant. 3. That the CIT (A) is wrong and has erred in law in confirming the said penalty of ₹ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion he submitted that the section 271AAB of Act has three limbs as specified in Section 271AAB(1)(a), (b) (c). The notice dated 20.112.2016 sent to assessee along with assessment order does not specify in which limb the penalty sought to be levied and only mentioning of Section 271AAB in notice do not satisfy the requirement of law. The language of the said notice issued are Whereas in the course of assessment proceedings for the A.Y. 2015-16 penalty proceedings were initiated u/s 274 and 275 read with section 271AAB of the Act and a penalty notice was issued accordingly. You are hereby allowed further opportunity of being heard and show cause why an order imposing penalty on you should not be made u/s 271AAB of the IT Act, 1961. In this connection it is submitted that assessment was completed on 20.12.2016 itself and earlier no penalty notice u/s 271AAB were issued as mentioned in penalty notice dated 20.12.2016. A copy of said notice is placed in paper book page no. 1. In view of the above it is verifiable that notice was issued in very casual manner without specifying the specific provisions/limb of section applicable on assessee. The assessee should know the grounds which h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed the penalty as per clause (a) of Section 271AAB(1) of the Act, however, no such ground was specified in the show cause notice issued under section 271AAB read with section 274 of the Act. The ld. A/R of the assessee has relied upon the following decisions :- CIT vs. M/s. SSA s Emerald Meadows (2015) (11 TMI 1620 (Kar.) CIT vs. Manjunatha Cotton Ginning Factory Others 359 ITR 565 (Kar.) Anuj Mathur vs. DCIT (ITA No. 971/JP/2017) Sheveta Construction Co. Pvt. Ltd. (in DBIT Appeal No. 534/2008 dated 06/12/2016) Shri Shyam Sundar Khandelwal vs. DCIT (In ITA No. 307/JP/2018) dated 11.04.2019. 4. On the other hand the ld. D/R has submitted that the levy of penalty under section 271AAB is mandatory in nature and, therefore, the AO is not required to specify the clause as per sub-section (1) of section 271AAB of the Act in the show cause. He has referred to the explanatory note of Finance Bill, 2012 whereby the provisions of section 271AAB is inserted in the Statute and submitted that the legislature has made it clear that the penalty under section 271AAB is mandatory in nature. The ld. D/R has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 6. To, Name Shri Saurabha Surana Address S-313, Greater Kailash Part-II, New Delhi. PAN AOKPS 7711 J Whereas in the course of assessment proceedings for the AY 2015-16 penalty proceedings were initiated u/s 274 and 275 read with the section u/s 271AAB of the IT Act and a penalty notice was issued accordingly. You are hereby allowed further opportunity of being heard and to show cause why an order imposing penalty on you should not be made u/s 271AAB of the Income Tax Act 1961. If you do not wish to avail yourself of this opportunity of being heard in person or through Authorized Representative, you may show cause in writing on or before the date fixed for hearing on 11.01.2017 at 11.00 AM which will be considered before any such order (s) is/are made. Sd/- ( Kamlesh Kumar Meena ) Dy. Commissioner of Income-tax, Central Circle-2, Jaipur. NOTICE UNDER SECTION 274 READ W ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... if the AO is satisfied and come to the conclusion that the assessee has not recorded the undisclosed income in the books of accounts or in the other documents / record maintained in normal course relating to specified previous year, the show cause notice shall also specify the default committed by the assessee to attract the penalty @ 10% or 20% or 30% of the undisclosed income. There is no dispute that the AO has not specified the default and charge against the assessee which necessitated the levy of penalty under section 271AAB of the Act. Consequently, the assessee was not given an opportunity to explain his case for specific default attracting the levy of penalty in terms of clauses (a) to (c) of section 271AAB(1) of the Act. The Channai Bench of the Tribunal in the case of DCIT vs. Shri R. Elangovan (supra) at pages 7 to 10 has held as under :- It is clear from the Sub Section (3) of Section 271 AAB that Sections 274 and Section 275 of the Act shall, so far as may be, apply. Sub Section (1) of Section 274 of the Act mandates that order imposing penalty has to be imposed only after hearing the assessee or giving a assessee opportunity of hearing. Opportunity ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... CIT vs. Manjunatha Cotton and Ginning Factory (2013) 359 ITR 565. 4. In our view, since the matter is covered by judgment of the Division Bench of this Court, we are of the opinion, no substantial question of law arises in this appeal for determination by this Court. The appeal is accordingly dismissed . In the earlier case of Manjunatha Cotton and Ginning Factory (supra) their lordship had observed as under:- Notice under section 274 of the Act should specifically state the grounds mentioned in section 271(1)(c), i.e., whether it is for concealment of income or for furnishing of incorrect particulars of income. Sending printed form where all the grounds mentioned in section 271 are mentioned would not satisfy the requirement of law ; The assessee should know the grounds which he has to meet specifically. Otherwise, the principles of natural justice are offended. On the basis of such proceedings, no penalty could be imposed on the assessee ; ) taking up of penalty proceedings on one limb and finding the assessee guilty of another limb is bad in law ; penalty proceedings are distinct from the assessment proceedings : th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and 275 read with the section u/s 271AAB of the IT Act and a penalty notice was issued accordingly. You are hereby allowed further opportunity of being heard and to show cause why an order imposing penalty on you should not be made u/s 271AAB of the Income Tax Act 1961. If you do not wish to avail yourself of this opportunity of being heard in person or through Authorized Representative, you may show cause in writing on or before the date fixed for hearing on 19.01.2017 at 11.00 AM which will be considered before any such order (s) is/are made. Sd/- ( Kamlesh Kumar Meena ) Dy. Commissioner of Income-tax, Central Circle-2, Jaipur. NOTICE UNDER SECTION 274 READ WITH SECTION 271 READ WITH SECTION 271AAB OF THE INCOME TAX ACT, 1961. Date : 15-05-2017. To, Name M/s/Shri/Smt. Shyam Sunder Khandelwal Address 1839, Rasta Barah Gangore, Johari Bazar, Jaipur. PAN ADRPK 5862 C ..... X X X X Extracts X X X X X X X X Extracts X X X X
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