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TMI Blog2020 (11) TMI 473X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Ramkrishna Group and others and also at the residence of Shri Naresh Jalan at Flat no. 6A Belmont Apartment, 6th Floor, 18/2 Alipore Road, Kolkata-700 027. Notices were issued u/s 142(1) and 143(2) of the Act to the assessees and in response, the assessees filed their return of income; Mr. Naresh Jalan (HUF) declaring total income of Rs.3,05,45,610/- for the AY 2013-14. Mr. Naresh Jalan (Individual) similarly filed a return of income declaring total income of Rs.4,31,08,610/- for the AY 2013-14. The returned income was accepted by passing assessment order u/s 143(3) of the Act on 31.03.2015 in both the cases. Later penalty proceedings u/s 271AAB of the Act was initiated separately for both the cases. Penalties were levied at the rate of 10% of the undisclosed income. In both the cases orders were passed u/s 271AAB of the Act on 22.09.2015. 5. The assessee carried the matter in appeal without success. Further aggrieved, the assessee is in appeal before us. 6. The ld. Counsel for the assessee submitted that, a) The notice issued u/s 271AAB of the Act is defective as it does not contain any specific charge and hence the penalty order based on such defective notice is bad in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f income which was solely based on the disclosure made during the search u/s 132(4) of the Act, it was clear that the assessee was required to pay penalty at the rate of 10% of undisclosed income. He submitted that penalty at the lowest possible rate under the Act was levied on the assessee and that this is according to the law. He relied on the order of the ld. CIT(A) as well as the AO and submitted that there is no defect in the notice and from the assessment order the charge is clear. He pointed out that the assessee has not pointed out any defects before the lower authorities. 9. Rival contentions heard. On a careful consideration of the facts and circumstances of the case, perusal of the papers on record and the case law cited, we hold as follows. 10. In the case of Shri Naresh Jalan (HUF), the notice issued u/s 271AAB of the Act dated 31.03.2015 reads as follows: "Whereas in the course of proceedings before me for Assessment Year 2013-14, it appears to me that you have not satisfied the conditions of the provisions of section 271AAB of the income tax Act, 1961. You are hereby requested to appear before me at 11.30 A.M. /P.M. on 03.06.2015 and show cause why an order imp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... SB Ka Rasta, Johari Bazar, Jaipur. Whereas in the course of assessment proceedings before me for the A.Y. 2014-15, it appears to me that as per sections 274 and 275 read with section 271AAB of the Income-tax Act you are liable for penalty on assessed undisclosed income. You are hereby requested to appear before me at my office Room No. 103 (NA), N.C.R.B., Jaipur at 11.00 A.M. on 28.04.2016 and show cause why an order imposing penalty on you should not be made u/s 271AAB r.w.s. 274 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 reply to show cause in writing on or before the said date which will be considered before any such order is made. Yours faithfully, Sd/- (Sushil Kumar Kulhari) Asstt. Commissioner of Income-tax, Central Circle-1, Jaipur. "No. ACIT/CC-1/JPR/2016-17/928 Dated: 16.08.2016. PENALTY NOTICE UNDER SECTION 274 READ WITH SECTION 271AAB OF THE INCOME TAX ACT, 1961. PAN - ABDPP 7196A To, Sh. Padam Chand Pungalia, 2372, MSB Ka Rasta, Johari Bazar, Jaipur. Whereas in the course of assessment proceedings before me for the A.Y. 2014-15, i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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. Elanaovan (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 that is to be given to the assessee should be a meaningful one and not a farce. Notice issued to the assessee reproduced (supra), does not show whether penalty proc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on 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 : though proceedings for imposition of penalty emanate from proceedings of assessment, they are independent and a separate aspect of the proceedings; The findings recorded in the assessment proceedings in so far as "concealment of income" and "furn ..... X X X X Extracts X X X X X X X X Extracts X X X X
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