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TMI Blog2024 (8) TMI 1007X X X X Extracts X X X X X X X X Extracts X X X X ..... dency of appeal before Ld. CIT(A). The Ld. CIT(A) reduced the additions to Rs. 80.53 Crores. Upon further appeal, Tribunal deleted additions of Rs. 77.80 Crores on account of service tax refund. The total additions thus sustained in assessee's case were for Rs. 275.21 Lacs which would be subjected to penalty u/s 271AAB. The assessee submitted that there was no undisclosed income and therefore, the penalty could not be levied u/s 271AAB. However, Ld. AO held that the assessee failed to furnish the details of the returned or unsold paper lottery tickets and also the details of recipients of the prize winning money in the online lottery. There was lapse on the part of the assessee. The case was held to be falling under Clause (c) of Sec.271AAB. Accordingly, Ld. AO levied impugned penalty @30% of Rs. 275.21 Lacs which worked out to be Rs. 82.56 Lacs. 3. During appellate proceedings, the assessee prayed for keeping the appeal in abeyance till disposal of assessee's quantum appeal by Hon'ble High Court. However, Ld. CIT(A) held that the assessee did not adduce any valid grounds on merits against levy of penalty. Accordingly, the penalty was confirmed against which the assessee is in fur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s, the copies of which have been placed on record. The Ld. AR submitted that the additions have been made merely on estimated basis without there being any incriminating material on record. The Ld. AR also submitted that show- cause notice was defective and barred by limitation u/s 275(1). The Ld. Sr. DR controverted the arguments of Ld. AR and submitted that the additions were based on incriminating material and to buy peace, the assessee declared the same in sworn statement recorded u/s 132(4). The specific limb of Sec.271AAB was clearly applicable and the levy of penalty would be mandatory in nature. The Ld. Sr. DR submitted that firstly, no notice is required to levy the penalty and secondly, the show- cause notice is not a statutory notice. It was sufficient enough if an opportunity of hearing was given to the assessee. The decision of Tribunal in quantum additions has also been placed on record to support the submissions. Having heard rival submissions, oral as well as written and upon perusal of case records, our adjudication would be as under. 5. Upon perusal of Tribunal's quantum order in ITA No.1081/Chny/2019 dated 27-09-2019, it could be seen that the assessee group was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ection 132(4) of the Act. After considering the submissions of the assessee, the Assessing Officer observed that since, the day on which the additional income of Rs.. 203 crores was admitted on 09-01-2015, the assessee has brought nothing on record regarding the existence of the decision of the Hon'ble Supreme Court and its presumption or expectation on receipt of the refund during the year under consideration. The said order of the Hon'ble Court was delivered on 24.10.2013. As such, the fact of the Service Tax Refund of Rs.. 77.80 Crores was very much known to the assessee even at the time of the search operation and admission of income but, nowhere this was mentioned before the search authorities or in the depositions admitting the unaccounted income. The said sum of Rs.. 203 crores was admitted as additional income but, the Service Tax Refund is assessable to tax under section 41(1) of the Act and cannot be acceptable as additional income offered to tax at the time of search operation. As stated earlier, the said sum of Rs.. 203 crores was admitted as additional income voluntarily expressing its inability to explain the issues that were raised in respect of accounting fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r taxation of the receipt of service tax refund as and when it was actually received. Moreover, despite the Hon'ble Supreme Court delivered the judgement on 24.10.2013, the assessee could not get the refund till the date of passing assessment order or the Assessing Officer has not given any findings that the assessee has received the service tax refund. Further, the Assessing Officer has not discussed anything in the assessment order of receipt of service tax refund during the assessment year under consideration. Further, the service tax refund was not accrued to the assessee in the assessment year under consideration in lieu of the Hon'ble Supreme Court's decision. The provisions of section 41(1) of the Act warrant taxation of the benefit obtained, whether in cash or in any other manner whatsoever or accrued. By virtue of the judgment of the Hon'ble Supreme Court delivered on 24.10.2013 towards service tax refund, the Assessing Officer cannot held that the benefit of service tax refund accrues to the assessee in the assessment year 2015-16 automatically. Moreover, the assessee also filed an undertaking before the Assessing Officer by way of an affidavit that the actual receipt of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the assessee was not honored in the return of income and clause (a) and (b) would have no application in such a case. The only clause which would apply to the assessee's case would be clause (c) which has correctly been invoked by Ld. AO in the present case. We also concur with the submissions of Ld. Sr. DR that adequate opportunity of hearing was given to the assessee to assail the penalty. The same is as per the provisions of Sec. 274(1) of the Act. Whether the same was through statutory notice or a non-statutory notice would be immaterial. The only requirement is that opportunity of hearing should be given specifically mentioning the ground which the assessee has to meet. The same has been done in the present case. The various case laws as referred to by Ld. AR would have no application to the facts of the present case since the limb which would apply to assessee's case has clearly been spelt by Ld. AO in the penalty order. No other limb could have been invoked against the assessee. The arguments of Ld. AR, in this regard, stand rejected. 10. The case law of Hon'ble High Court of Madras in Pr. CIT vs. Shri R. Elangovan (TCA No.770 & ors. dated 30-03-2021) is distinguishable ..... X X X X Extracts X X X X X X X X Extracts X X X X
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