TMI Blog2020 (11) TMI 65X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessment year 2014-15 arises against the Commissioner of Income Tax (Appeals)-3 Patna s order dated 11.10.2018 passed in case No.113/CIT(A)-3/PAT/18-19/ITBA Appeal No.1008/2017-18 imposing penalty of ₹1,12,50,200/-u/s 271(1)(c) the Income Tax Act, 1961; in short the Act . 2. The CIT(A) first deleting the sec. 271(1)(c) penalty of ₹1,12,50,200/- imposed by the Assessing Officer vide order dated 29.06.2017. Heard both the parties. Case file perused. 3. Both the learned representatives invited our attention to the CIT(A) s order deleting impugned penalty vide its detailed discussion:- 3. Ground No.1: This ground relate to the objection of the appellant to levy of penalty of Rs.l,12,OS,200/- u/s.271(l)(c) of the Act. 3.1. Findings of the AO : As stated earlier the appellant in response to notice u/ s.153A filed return of loss at ₹ 1,43,05,649/-. Subsequently the appellant revised its return of income from loss of ₹ 1 ,43,05,649/ - to income of ₹ 29,62,330/ -. The AO passed order ujs.153A/143(3) on 27.12.2016 determining total income at ₹ 29,62,330/-. However, in the assessment order the AO noted that that the appellant has conce ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ction 139 for such year has not expired before the date of search and the assessee has not furnished the return of income for the previous year before the date of search; or, (ii) in which search was conducted. In the instant case the facts are as follows- (i) Search was conducted on 03.09.2014. (ii) On the date of search the date of furnishing the Return of Income under sub-section (1) of section 139 for AY 14-15 was not expired as it was extended up to 30.11.2014 m terms of CBDT Notification dated 20.08.2014. (iii) Further your Appellant has not furnished their Income Tax Return for the AY 14-15 upto 03.09.2014 i. e on the date of search. (iv) Your Petitioner has submitted the Income Tax Returns for the AY 14-15 on 19.03.2016. Thus from the above facts, your honour will kindly appreciate that A. Y. 2014- 15 comes under the purview of definition of Specified previous year as given in explanation - (b) of section 271AAB which is applicable to the company and section 271(1)(c) is not applicable. But ignoring the above section the Ld. A. O. has imposed penalty under section 271 ( l)(C ) without any legal sanction hence the same is void and illegal and deserve ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not exceed ninety per cent of the undisclosed income of the specified previous year, if it is not covered by the provisions of clauses (a) and (b) . (2) No penalty under the provisions of clause (c) of sub-section (1) of section 271 shall be imposed upon the assessee in respect of the undisclosed income referred to in sub-section (1). (3) The provisions of sections 274 and 275 shall, as far as may be, apply in relation to the penalty referred to in this section. Explanation .-For the purposes of this section,- (a) specified date means the due date of furnishing of return of income under sub-section (1) of section 139 or the date on which the period specified in the notice issued under section 153A for furnishing of return of income expires, as the case may be; (b) specified previous year means the previous year- (i) which has ended before the date of search, but the date of furnishing the return of income under sub-section (1) of section 139 for such year has not expired before the date of search and the assessee has not furnished the return of income for the previous year before the date of search; or (ii) in which search was conducted; (c) un ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sclosed income referred to in sub-section (1) of sec.271AAB. Accordingly, the AO should have initiated and levied penalty u/s.271AAB(1)(c) instead of 271(I)(c). In this regard reliance is placed on the decision of the Hon'ble ITAT Lucknow Bench in the case of Sandeep Chandk Vs. ACIT reported in (2017) 88 taxmann.com 815 wherein it was held that - The provisions of section 271(1) (c) and the provisions of section 271AAB are entirely different. Issuing the notice under section 271(1)(c) will not automatically deem that the Assessing Officer has initiated the proceedings for imposition of penalty under section 271AAB and accordingly, give an opportunity to the assessee. There is no provision under section 271AAB that the penalty has to be initiated during the assessment proceeding but, it is essential to initiate the penalty proceedings under section 271AAB. Where the notice did not relate to the provision of section 271AAB, the notice issued under section 271 (1)(e) cannot be said to be valid for initiation of proceedings under section 271AAB. Further, there is no material difference with regard to levy of penalty u/s.271AAA and u/s.271AAB except the date of initiation of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... leviable under section 271AAA of the Act. Subsection (3) of 271AAA clearly provides that in such case no penalty under section 271(1)(c) of the Act can be imposed. In this view of the matter we agree with the learned counsel of the assessee that no penalty under section 271 (1 )(c) of the Act was leviable, in as much as the case comes under the purview of section 271AAA of the Act. There is no ambiguity in this regard, and the view is also supported by the tribunal decision in the case of Cario International (supra). Accordingly without adverting to the plank on which the learned Commissioner (Appeals) deleted the penalty, we hold that the assessee in this case cannot be visited for the penalty under section 271(1)(c) of the Act in as much as the case falls under 271AAA of the Act. Accordingly we uphold the deletion of penalty levied under section 271(1)(c) of the Act. In view of the above discussion and relying on the judicial pronouncements, I hold that the appellant for the assessment year under appeal, cannot be visited with penalty under section 271(1)(c) of the Act, as the appellant's case falls under section 271AAB. I further hold that the mistake being so grave and ..... X X X X Extracts X X X X X X X X Extracts X X X X
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