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TMI Blog2022 (10) TMI 412X X X X Extracts X X X X X X X X Extracts X X X X ..... the Assessee : Devang Gargieya , Advocate For the Department : A. S. Nehra , Additional Commissioner of Income-tax ORDER DR. M. L. MEENA (ACCOUNTANT MEMBER). - 1. This is an appeal filed by the assessee against the order of the learned Commissioner of Income-tax (Appeals-2), Udaipur, dated July 22, 2019 for the assessment year 2016-17. The assessee has raised the following grounds of appeal : 1. That on the facts and in the circumstances of the case, the learned Commissioner of Income-tax (Appeals) erred in upholding the validity of order passed by the learned Assessing Officer. 2. That on the facts and in the circumstances of the case, the learned Commissioner of Income-tax (Appeals) erred in sustaining penalty of Rs. 87,300 under section 271AAB of the Act. 3. That on the facts and in the circumstances of the case, the learned Commissioner of Income-tax (Appeals) erred in recording various observation in the appellate order are contrary to the provisions of the law and also against the law decided by the hon'ble courts. 4. That on the facts and in the circumstances of the case, the learned Commissioner of Income-tax (Appeals) erred in not con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3. At the outset, the learned counsel for the assessee has challenged the order of the learned Commissioner of Income-tax (Appeals) in sustaining the penalty levied under section 271AAB of the Act by not considering the explanation furnished and the judicial decisions referred by the appellant. The learned counsel has drawn our attention to the show-cause notice issued by the Assessing Officer for levy of penalty under section 271AAB (APB page 1), copy of the show-cause notice under section 274 read with section 271AAB dated December 27, 2017 is reproduced below : Government of India Ministry of Finance Income-tax Department Office of the Deputy Commissioner of Income-tax, Central Circle, Kota To Mahaveer Prasad Agarwal Mahathma Gandhi Hospital, Agarwal Diagnostic Clinic, Seva Sadan Road, Mahesh Colony, Bhilwara, Rajasthan. PAN ACSPA 7547 E AY 2016-17 Dated 27-12-2017 Notice No. Notice under section 274 read with section 271AAB(1) of the Income-tax Act, 1961 Sir/Madam, Whereas in the course of proceedings before ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ecision in the case of Ravi Mathur v. Dy. CIT in I. T. A. No. 969/JP/2017 and Chennai Benches of the Tribunal in the case of Dy. CIT v. R. Elangovan in I. T. A. No. 1199/CHNY/2017 dated April 5, 2018 has quashed the penalty order passed under section 271AAB of the Act. 4. The learned Departmental representative supported the order of the learned Commissioner of Income-tax (Appeals). 5. Heard the rival contentions, perused the material available on record and the case law cited before us. Admittedly, the Assessing Officer has not mentioned specific charge or limb as specified in clauses (a), (b) or (c) of section 271AAB under which the penalty proceeding was initiated in show-cause notice issued under section 274 read with section 271AAB dated December 27, 2017. The provisions of section 271AAB are reproduced hereunder for ready reference : 271AAB. (1) The Assessing Officer may, notwithstanding anything contained in any other provisions of this Act, direct that, in a case where search has been initiated under section 132 on or after the 1st day of July, 2012 but before the date on which the Taxation Laws (Second Amendment) Bill, 2016 receives the assent of the President, t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... year declaring such undisclosed income therein ; (b) a sum computed at the rate of sixty per cent. of the undisclosed income of the specified previous year, if it is not covered under the provisions of clause (a). (2) No penalty under the provisions of section 270A or 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) or sub-section (1A). (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 asses see has not furnished the r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e the assessee has offered the said income in the return of income filed under section 139(1) of the Act, there fore, the question of taking any decision by the Assessing Officer in the assessment proceedings about the true nature of surrender made by the assessee does not arise and only when the Assessing Officer has proposed to levy the penalty then it is a pre-condition for invoking the provisions of section 271AAB that the said income disclosed by the assessee in the statement under section 132(4) is an undisclosed income as per the definition provided under section 271AAB. Therefore, the Assessing Officer in the proceedings under section 271AAB has to examine all the facts of the case as well as the basis of the surrender and then arrive to the conclusion that the income disclosed by the assessee falls in the definition of undisclosed income as stipulated in the Explanation to the said section. Therefore, we do not agree with the contention of the learned Departmental representative that the levy of penalty under section 271AAB is mandatory simply because the Assessing Officer has to first issue a show-cause notice to the assessee and then has to make a decision for levy of pe ..... X X X X Extracts X X X X X X X X Extracts X X X X
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