9911796707
TMI Blog2022 (3) TMI 1492X X X X Extracts X X X X X X X X Extracts X X X X ..... come Tax Act, 1961 (hereinafter 'the Act') for the Assessment Years 2013-14 & 2014-15. For the sake of convenience we are taking up assessment year 2013-14 first. 2. The assessee has raised the following grounds of appeal for the Assessment Year 2013-14:- "1. That the order passed by the Ld. CIT (Appeals) - 21, Kolkata, u/s 250 confirming the additions and disallowances made by learned assessing officer is contrary to the law and facts of the case. 2. That the Hon'ble Commissioner of Income Tax (A) 21, Kolkata erred in law as well as on facts of the case by not deleted the penalty-imposed u/s 271AAB on the ground the ld. Assessing Officer has failed to specify in the penalty notice u/s 271AAB r/w 274 that as to violation for which l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... commodities broking and trading etc. During the course of assessment proceedings, a statement u/s 132(4) of the Act was recorded of the director of the assessee company Shri Devendra Kumar Mantri who disclosed and offered unaccounted income to the tune of Rs.5,09,58,950/- in the hands of the assessee company under the head "commodity speculation income" and "income from other sources" and accordingly filed the return of income u/s 153A of the Act . The assessment was completed u/s 143(3) r.w.s. 153A of the Act on 30/03/0216 and the amount of Rs.5,09,58,950/- was treated as undisclosed income. Penalty u/s 271AAB of the Act was initiated on the undisclosed income admitted during the course of search at the time of recording of statement u/s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sed income during course of search and survey operation. This fact also been admitted by the Ld. AO in the assessment as well as the impugned penalty order. Accordingly condition (a) is satisfied. It is also not in dispute that the appellant has discharged taxes along with interest before the specified date and that such income was disclosed in the return of income filed for the relevant year. In the circumstances even clause (c) & (d) stands satisfied. The only dispute between the appellant and the Ld. AO is regarding clause (b) as according to Ld. AO the appellant did not specify the manner in which such income was derived. I however find that allegation of the Ld. AO to be self-contradictory. By AO's own admission in the assessment o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e clauses under which the penalty was proposed to be levied. The ld. A/R before us challenged the very initiation of penalty proceedings u/s 271AAB as invalid and void ab initio on the ground that the initiation is itself by an invalid notice issued by the Assessing Officer. The ld. A/R submitted that the issuing a mechanical notice without application of mind is a substantive and patent error of law which goes to the root of the matter and is not curable at a later stage. The ld. A/R, therefore, prayed that the order of the ld. CIT(A) confirming the penalty deduction to the extent of 10% may kindly be set aside and the penalty order passed by the Assessing Officer u/s 271AAB may kindly be quashed as the very foundation is suffering from vi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ere the assessee would not even contest the order of assessment. But, that would not preclude the assessee from challenging the penalty proceedings, as penalty proceedings are independent and the procedure required to be followed cannot be dispensed with. 15. As rightly pointed out by the learned counsel appearing for the assessee, Section 271AAB of the Act, which deals with penalty consists of three contingencies. Therefore, the Assessing Officer should point out to the assessee as to under which of the three clauses, he chooses https://www.mhc.tn.gov.in/judis/ TCA.Nos.770 & 771 of 2018 to proceed against the assessee so as to enable the assessee to give an effective reply. Since the same has not been mentioned, the assessee has been de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... njunatha Cotton and Ginning Factory and SSA's Emerald Meadows and the decision of this Court in the case of Babuji Jacob clearly support our above conclusion. For all the above reasons, we find no grounds to interfere with the common order passed by the Tribunal. 9. As the facts of the case before us are materially the same, we, therefore respectfully following the judgment of the Hon'ble Madras High Court in the case of PCIT vs. Shri R. Elangovan (supra), hold that the penalty order passed by the Assessing Officer is invalid and is accordingly quashed. The appeals of the assessee are allowed on legal issue. 10. The other issues raised on merits by the assessee are rendered academic in nature and, therefore, dismissed as such and ar ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
