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TMI Blog2025 (3) TMI 285X X X X Extracts X X X X X X X X Extracts X X X X ..... and the Assessing Officer do not have any scope to make changes other than putting the dates, PAN, Assessment Year etc.
Respectfully following case of Sandeep Chandak [2017 (12) TMI 70 - ALLAHABAD HIGH COURT] and Smt. Taradevi R. Bafna [2023 (7) TMI 894 - ITAT PUNE] we hold that the order passed by ld.CIT(A) is not sustainable. Hence, for all the reasons discussed, we set aside the order of ld.CIT(A). Accordingly, Ground raised by the Revenue is allowed. X X X X Extracts X X X X X X X X Extracts X X X X ..... y supported order of the ld.CIT(A). Ld.AR filed a two paper books, one containing compilation of case laws and another factual paper book. Ld.AR invited our attention to notice under section 271AAB(1A) of the Act, dated 05.06.2021 which is at page 8 of the paper book. Ld.AR submitted that no specific limb has been mentioned by the Assessing Officer. Therefore, ld.AR submitted that ld.CIT(A) was right in deleting the penalty. Ld.AR also tried to distinguish Hon'ble Bombay High Court's decision in the case of Veena Estate Pvt. Ltd., Vs. CIT [2024] 461 ITR 483 (Bom). 3.1 Case laws relied by ld.AR as under : * PCIT v. Shri R. Elangovan - [Tax Case Appeal No. 770 & 771 of 2018, Order dated 30.03.2021 (Madras - HC)] * PCIT v. Industrial Safety Products (P.) Ltd. taxmann.com 433 (Cal - HC)] [(2023) 154 * PCIT v. Unitech Reliable Projects (P.) Ltd taxmann.com 495 (Delhi)] [(2023) 153; * Affirmed in: PCIT v. Unitech Reliable Projects (P.) Ltd. [(2024) 166 taxmann.com 135 (SC)] * Jaina Marketing & Associates v. DCIT [(2024) 162 taxmann.com 439 (Delhi - Trib)] * M/s. Enrica Enterprises Pvt. Ltd. v. DCIT [I.Τ.Α. No. 1168/ Chny/2023, Order dated 06.03.2024, (Chennai - Tri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... me on 02.10.2019. Assessee's case was selected for scrutiny and assessment order under section 143(3) r.w.s. 153A of the Act passed on 04.06.2021. Accordingly, in the assessment order the Assessing Officer has recorded the following : "In the said return filed, the assessee company has shown 'Additional Undisclosed Income' under the head business income on account of cash received from the customers as on money at Rs. 1,37,73,000/- and Rs. 1,07,85,000/- is declared on account of 30% profit on sale consideration of 12 Row Houses totaling to Rs. 3,59,50,000/-. During the course of Search & Seizure action at the office premise of the assessee company, a statement of one of the director of the company namely shri Jugalkishore C. Tapadia was recorded u/s 132(4) of the Act in which additional income as mentioned was offered for taxation. Thus, there is excess income shown by the assessee company at Rs. 2,45,58,000/- in response to notice u/s 153A of the Income Tax Act issued to the assessee for the year under consideration. If no search action u/s 132 of the Income Tax Act, 1961 had been conducted in the case of the assessee, the assessee would not have shown the said Undisclosed Incom ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... per cent of the undisclosed income of the specified previous year, if the assessee- (i) in the course of the search, in a statement under sub-section (4) of section 132, admits the undisclosed income and specifies the manner in which such income has been derived; (ii) substantiates the manner in which the undisclosed income was derived; and (iii) on or before the specified date- (A) pays the tax, together with interest, if any, in respect of the undisclosed income; and (B) furnishes the return of income for the specified previous 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). ............................. (c) "undisclosed income" means- (i) any income of the specified previous year represented, either wholly or partly, by any money, bullion, jewellery or other valuable article or thing or any entry in the books of account or other documents or transactions found in the course of a search under section 132, which has- (A) not been recorded on or before the date of search in the books of account or oth ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the other hand the sub-section (2) puts an embargo on imposing of penalty u/s 270A and u/s 271(1)(c) of the Act on suchundis closed income falling within the realm of subsection (1). This clearly establishes the solitary domain of section 271AAB over undisclosed income where the proceedings u/s 132 of the Act is initiated and at the same time it drags out the authorisation of imposition of penalty u/s 270A and 271(1)(c) of the Act as extraterritorial. 10. Keeping aforesaid in mind, we find that, the appellant's contention that, the aforestated SCN represents the non-application of mind in communicating the exact charge for rebuttal falls like a house of cards on two counts; (i) Firstly, the impugned SCN calling upon the appellant to showcase the reasons as to why a penalty u/s 271AAB should not be imposed clearly concluded intimating the consideration of representation before concluding proceedings imposing penalty u/s 271AAB of the Act, as itostensible from the reproduced text of SCN laid at para 8 herein before. (ii) Secondly, the sub-section (2) of section 271AAB intractably expunges the levy of penalty u/s 270Aand 271(1)(c), consequently, it communicates the exact cha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the case of Sandeep Chandak Vs. PCIT in ITA No.416/Lucknow/2016 and ITA No.417/Lucknow/2016. The Hon'ble Allahabad High Court has held as under : "22. Section 271AAB provides the procedure for penalty where the search has been initiated. In the present case, admittedly a search and seizure operation is carried out in which the assessees have surrendered the amount of Rs. 4 crores each (Rs.4 lakh each by all the three assessees) and therefore, in view of the provisions of Section 271AAB the assessees are required to pay, by way of, penalty in addition to tax, if any, a sum computed @ 10% of undisclosed income of the specified period or previous years. In the case where the assessee in the course of search in a statement (under Section 4 of Section 132) admits the undisclosed income and specified manner in which such income has been derived, than the provisions of Section 271AABautomatically attracts and the proceedings are to be carried out/completed. 23. We have noticed that the penalty notice has been issued under Section 274 read with section 271. Section274 provides that no order imposing a penalty shall be made unless the assessee has been heard or has been given a reasonab ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... IT(A). Accordingly, Ground No.2 raised by the Revenue is allowed. 4.7.1 The case laws relied by ld.AR are pertaining to Section 271(1)(c) of the Act, and hence will not be applicable to the present case which pertains to Section 271AAB of the Act, specially when Hon'ble Supreme Court has upheld the decision of Hon'ble Allahabad High Court in the case of Sandeep Chandak(supra). 4.8 In this case, before us, ld.AR for the Assessee and ld.DR for the Revenue had argued the case only on legal ground. However, ld.CIT(A) has decided the only legal issue vide order dated 09.03.2024, and has not adjudicated the penalty order on merits of the quantum of penalty. Therefore, we set-aside the order of ld.CIT(A) to ld.CIT(A) with a direction to adjudicate the appeal of the assessee qua quantum. 4.9 Ld.CIT(A) shall provide opportunity of hearing to the assessee. 5. Revenue's Ground No.1 and 3 are on the merits of the quantum of the penalty. We do not intend to adjudicate these grounds, as we have already mentioned above that ld.AR as well as ld.DR had argued only on the legal issue. Accordingly, appeal of the Revenue is partly allowed. 6. In the result, appeal of the Revenue is partly allowed ..... X X X X Extracts X X X X X X X X Extracts X X X X
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