Case Law Details
ACIT Vs Amit Tiwari (ITAT Indore)
The submissions of the assessee are that penalty proceedings u/s 271AAB as initiated is bad in law on account of firstly penalty notice so issued is defective as it does not disclose specific charge and secondly there is no concealed income as search took place prior to due date of filing of income-tax return. It is also contented that even otherwise the issue is squarely covered in favour of the assessee by the decisions of the Co-ordinate Benches of this Tribunal.
A conjoint reading of both these sections would suggest that where a search has been initiated the AO may direct payment of penalty in addition to tax if any payable by him. However, provisions of section 274 and 275 shall so far as may apply in relation to the penalty referred to in section 271AAB of the Act. As per section 274 of the Act no order imposing a penalty shall be made unless the assessee has been heard, or has been given a reasonable opportunity of being heard. In this case the assessing officer has given notices and in response thereto the representative of the assessee appeared before the assessing officer. Now coming to the question whether notice so issued mention any specific charge. A bare reading of notice demonstrates that notice relate to ingredients of penalty u/s 271(1)(c) of the Act, it does not contain the ingredients of section 271AAB of the Act. Under these facts the notice is improper and is not in accordance with requirement of law. The assessing officer is expected to make his direction clear as to which clause of section 271AAB of the Act, he wishes to invoke. There is clear absence of such direction. Ld. counsel for the assessee has relied upon various judicial pronouncements in support of his contention that where the notice is being defective, therefore, no penalty can be levied or sustained.
14. In the light of the above binding precedent and coupled with fact that the Ld. CIT(A) observed that the impugned amount would not have been offered for taxation had there been no search and seizure operation, this observation goes to demonstrate that converse of such observation gives benefit of doubt to the taxpayer. In our considered view that is purely a guess work without being substantiated by any material evidence. The impugned penalty, therefore, cannot be sustained. The Assessing Officer is directed to delete the penalty.
FULL TEXT OF THE ORDER OF ITAT INDORE
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