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2017 (10) TMI 538 - AT - Income TaxImposition of penalty under section 271(1)(c) - no satisfaction recorded by AO - Held that - As noticed that the Assessing Officer has simply mentioned penalty proceedings under section 271(1)(c) of the I.T. Act are initiated separately . There is no satisfaction recorded by the Assessing Officer whether the assessee has concealed the particulars of income or has furnished inaccurate particulars of income. Even, in the show cause notice issued under section 274 of the Act on 22nd December 2010, which is in printed format the Assessing Officer has not specified which limb of section 271(1)(c) of the Act he intends to apply for imposing penalty by striking off inappropriate words or paragraph. In that view of the matter and applying the ratio laid down in the decisions relied upon by the learned Authorised Representative, we hold that imposition of penalty under section 271(1)(c) of the Act in the instant case is not justified. Accordingly, we delete the penalty. Penalty under section 271AAA - no show cause notice under section 274 as mandated under sub section (4) of section 271AAA was issued to the assessee - Held that - When the provision contained under section 271AAA mandates issuance of notice under section 274 of the Act before imposition of penalty, the statutory authority being bound by such statutory provision has to act accordingly and cannot deviate therefrom. In our considered view, non issuance of notice under section 274 is a serious lapse and jurisdictional error as in the absence of such notice, the Assessing Officer could not have proceeded to impose penalty under section 271AAA of the Act. Therefore, the defect arising from non issuance of notice under section 274 r/w section 271AAA is not a curable defect as provided under section 292B. In view of the aforesaid, we delete the penalty imposed under section 271AAA of the Act.
Issues:
1. Imposition of penalty under section 271(1)(c) of the Income-tax Act, 1961 for the assessment year 2007-08. 2. Imposition of penalty under section 271(1)(c) of the Income-tax Act, 1961 for the assessment year 2008-09. 3. Imposition of penalty under section 271AAA of the Income-tax Act, 1961 for the assessment year 2008-09. Analysis: Issue 1: Imposition of penalty under section 271(1)(c) for the assessment year 2007-08 - The appellant challenged the imposition of penalty under section 271(1)(c) for the assessment year 2007-08. - The Assessing Officer found undisclosed income based on cash found during a search operation, leading to the initiation of penalty proceedings. - The appellant argued that the penalty imposition lacked proper recording of satisfaction by the Assessing Officer and specificity in the show cause notice. - The tribunal noted the absence of recorded satisfaction by the Assessing Officer and lack of specificity in the show cause notice, leading to the deletion of the penalty. - The penalty imposed under section 271(1)(c) for the assessment year 2007-08 was deleted. Issue 2: Imposition of penalty under section 271(1)(c) for the assessment year 2008-09 - The appellant contested the penalty imposed under section 271(1)(c) for the assessment year 2008-09. - The Assessing Officer initiated penalty proceedings based on various additions made during assessment, including unaccounted cash and unexplained expenses. - The appellant argued that the penalty initiation lacked proper recording of satisfaction and specificity in the show cause notice. - The tribunal found discrepancies in the recording of satisfaction by the Assessing Officer and lack of specificity in the penalty initiation, leading to the deletion of the penalty. - The penalty imposed under section 271(1)(c) for the assessment year 2008-09 was deleted, except for certain additions. Issue 3: Imposition of penalty under section 271AAA for the assessment year 2008-09 - The appellant challenged the penalty imposed under section 271AAA for the assessment year 2008-09. - The Assessing Officer initiated penalty proceedings under section 271AAA without issuing a show cause notice under section 274. - The tribunal found that the non-issuance of the required notice under section 274 before imposing the penalty under section 271AAA was a serious lapse and jurisdictional error. - The penalty imposed under section 271AAA for the assessment year 2008-09 was deleted due to the statutory requirement of issuing a notice under section 274 not being fulfilled. In conclusion, all the appeals were allowed, and the penalties imposed under various sections of the Income-tax Act for the respective assessment years were deleted based on procedural irregularities and lack of proper documentation in the penalty initiation process.
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