TMI Blog2022 (3) TMI 1492X X X X Extracts X X X X X X X X Extracts X X X X ..... cer is invalid and is accordingly quashed. The appeals of the assessee are allowed on legal issue. - ITA No. 2374/Kol/2018 And ITA No. 2375/Kol/2018 - - - Dated:- 28-3-2022 - Shri Sanjay Garg, Hon ble Judicial Member Shri Rajesh Kumar, Hon ble Accountant Member For the Assessee : Shri Miraj D. Shah, A/R. For the Revenue : Shri Ranu Biswas, Addl. CIT, Sr. D/R. ORDER PER RAJESH KUMAR, ACCOUNTANT MEMBER :- Both these appeals are filed by the assessee against the identical orders of the ld. Commissioner of Income Tax (Appeals)-21, Kolkata, dt. 27th August, 2018, confirming the penalty levied by the Assessing Officer u/s 271AAB of the Income Tax Act, 1961 (hereinafter the Act ) for the Assessment Yea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... llant craves leave to add/or amend any ground of this appeal. 3. As the grounds raised for the Assessment Year 2014-15 are identical we do not extract the same for the sake of brevity. 4. In Ground Nos. 1 2, the assessee challenges the penalty notice issued u/s 271AAB r.w.s. 274 of the Act as being invalid and void ab initio on the ground that, the Assessing Officer has failed to specifically point out the clause on which the penalty was proposed to be levied. 5. Facts in brief are that a search action u/s 132(1) of the Act was conducted on 11/04/2013 on the assessee. The assessee is engaged in the business of manufacturing of automobile components, tea, engineering, marketing services, equity commodities broking and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... view of the above provisions the appellant was required to satisfy the following conditions so as to ensure that minimum penalty @ 10% is levied under Section 271AAB of the Act. (a) Assessee must have admitted the undisclosed income in statement recorded u/s 132(4); (b) Assessee specifies substantiates the manner in which such undisclosed income was derived (c) Pays Tax Interest on such undisclosed income before the specified date; (d) Files the ROI for specified previous year declaring such undisclosed income therein 13. In the facts of the present case search operations were conducted on 11.04.2013 and the Director of the appellant in his statement recorded u/s 132(4) on 12.04.2013 had admitted the undi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ncome. For the reasons as aforesaid, I am of the considered view that the clause (b) also stood satisfied and in that view of the matter appellant had fulfilled all the conditions to fall within clause (a) of Section 271AAB of the Act. The Ld. AO is therefore directed to restrict the penalty u/s 271AAB to 10% of the undisclosed income, which works out to Rs.50,95,895/-. The balance amount of Rs.1,01,91,790/- is therefore deleted. In the result, the appeal of the appellant is partly allowed . 6. After hearing the rival parties and perusing the material available on record including the notice issued u/s 271AAB r.w.s. 274 of the Act dt. 31/03/2016, we find that the notice has been issue in a mechanical manner without specifying one of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... refore, submitted that the order of the ld. CIT(A) may kindly be sustained. 7. We have perused the decision cited before us in the case of PCIT vs. Shri R. Elangovan (supra ) and find that under similar facts the Hon ble court has quashed the penalty order on the ground that it is based upon invalid penalty notice issued u/s 271AAB of the Act. The operative part is extracted below: 14. In our considered view, the Tribunal is fully right in vacating the penalty on the ground that the notice was defective. The provisions of the Act have clearly laid down the procedure to be followed and adhered to while imposing the penalty. The proposal for such penalty proceedings was separately initiated upon completion of assessment and ther ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e principle that where the assessee, in the course of search, makes a statement, in which, he admits the undisclosed income and specifies the manner, in which, such income has been derived, then the provisions of Section 271AAB of the Act would automatically get attracted. There can be no quarrel over this proposition. But, once the provisions get attracted, it is incumbent on the part of the Assessing Officer to specify as to under which clause in https://www.mhc.tn.gov.in/judis/ TCA.Nos.770 771 of 2018 Section 271AAB(1) of the Act, he intends to proceed against the assessee. In the instant case, in the absence of such material in the penalty notice, it has to be held that the notice is defective. 17. The decisions of the Karnata ..... X X X X Extracts X X X X X X X X Extracts X X X X
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