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TMI Blog2025 (1) TMI 90X X X X Extracts X X X X X X X X Extracts X X X X ..... s u/s. 271AAB is sought to be initiated by him. The ratio laid down in decision of R. Elangovan [ 2021 (4) TMI 1131 - MADRAS HIGH COURT] squarely applies to the case before us wherein held AO should point out to the assessee as to under which of the three clauses, he chooses 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 denied reasonable opportunity to put forth their submissions.notice is absolutely vague and none of the irrelevant portions had been struck off nor the relevant portions had been marked or indicated. Hence, the Tribunal is right in observing that the penalty could not have been levied based on such defective notice and mor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2,500/- for cash found and seized during the search. The assessment was completed u/s. 143(3) r.w.s. 153B of the Act on 09.02.2018 declaring total income of Rs. 3,95,46,330/-. The learned AO initiated penalty proceedings u/s. 271AAB of the Act on additional income offered in the total sum of Rs. 1,58,82,500/- pursuant to the search by treating the same to fall within the ambit of undisclosed income as defined in section 271AAB of the Act. For this purpose, the ld. AO issued penalty notice dated 09.02.2018 and 02.03.2020. In the said show cause notices, the Ld. AO had not specified under which limb he is initiating the penalty proceedings i.e. whether the penalty proceedings are initiated in accordance with section 271AAB (a) or (b) or (c) o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h Section 271AAB of the Act and that there was nothing vague in it. With regard to the merits of the case, the Assessing Officer did not agree with the same and referred to certain portions of the assessment order and ultimately imposed penalty at 30% in terms of Clause (c) to Sub- WEB COPY Section (1) of Section 271AAB of the Act vide order dated 03.2.2016. ) 9. Aggrieved by that, the assessee filed an appeal before the Commissioner of Income Tax (Appeals)-18, Chennai-34 [for short, the CIT(A)]. The first ground raised by the assessee before the CIT(A) was that the penalty proceedings themselves were without jurisdiction since there were gross infirmities in the notice while initiating penalty proceedings and that this would vitiate the en ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is contention, the learned Senior Standing Counsel has placed reliance on the decision of the Allahabad High Court in the case of PCIT Vs. Sandeep Chandak [reported in (2018) 93 Taxmann.com 405]. 13. Per contra, Mr.N.V.Narayanan, learned counsel appearing for the respondent assessee would submit that the notice issued prior to initiation of penalty proceedings did not specify as to under which limb of Section 271AAB of the Act, the Assessing Officer proposed to levy penalty, that this defect goes to the root of the matter and vitiates the entire proceedings and that the Tribunal was right in allowing the assessee's cross objection. In support of his contention, the learned counsel for the assessee has placed reliance on the decisions of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... their submissions. The Tribunal, In paragraph 5 of the impugned order, has verbatim reproduced the penalty notice and we find that the notice is absolutely vague and none of the irrelevant portions had been struck off nor the relevant portions had been marked or indicated. Hence, the Tribunal is right in observing that the penalty could not have been levied based on such defective notice and more particularly, when the assessee has been strenuously canvassing the jurisdictional issue from the inception. 16. In so far as the decision of the Allahabad High Court in the case of Sandeep Chandak is concerned, the factual position is slightly different. This decision is for the principle that where the assessee, in the course of search, makes a s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uarely applies to the case before us. 8. The Ld. DR vehemently relied on the order of Hon ble Allahabad High Court in the case of PCIT Vs. Sandeep Chandok reported in 93 taxmann.com 405 (All HC) which decision was rendered in favour of the revenue. We would like to state that this decision of Hon ble Allahabad High Court has been duly considered and distinguished on facts by the Hon ble High Court of Allahabad in the decision referred (supra). Further both the decisions of Hon ble Madras High Court and Hon ble Allahabad High Court, being non jurisdictional High Courts, qua the assessee before us, as per the decision of Hon ble Supreme Court in the case of CIT Vs. M/s. Vegetables Products Ltd. reported in 88 ITR 192 (SC), the construction wh ..... X X X X Extracts X X X X X X X X Extracts X X X X
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