G.S. Auto Comp Pvt. Ltd. Vs ACIT (ITAT Chandigarh)
Defective Show Cause Notice Held Invalid -ITAT Chandigarh Deletes Penalty u/s 271AAB Chandigarh Bench “A” of Tribunal comprising Shri Rajpal Yadav, Vice President & Shri Manoj Kumar Aggarwal, Accountant Member, allowed the appeal of G.S. Auto Comp Pvt. Ltd. against order of CIT(A) dated 04.12.2019 upholding penalty u/s 271AAB.
During search proceedings, AO levied penalty of Rs. 30.30 lakh u/s 271AAB, which was partly reduced by CIT(A) to Rs. 10.10 lakh. Assessee challenged the penalty on legal ground that the very show cause notice issued was defective & did not specify the precise charge.
Tribunal examined the notice & found that it mentioned concealment of particulars & furnishing of inaccurate particulars, which are charges relatable to s.271(1)(c), but at the end it referred to penalty u/s 274 & vaguely stated why penalty u/s 271AAB should not be levied. Tribunal observed that s.274 prescribes only procedure for giving opportunity of hearing & not the basis for levy. Further, s.271AAB itself contemplates three specific violations, but AO did not indicate which of these was alleged against Assessee. Tribunal held that in absence of a specific charge, notice was defective, hence no valid penalty could be imposed on its basis. Accordingly, penalty sustained by CIT(A) was deleted in entirety.
