Nikhil Madan Vs ACIT (ITAT Jaipur)
Summary: The assessee, an individual deriving income from salary/remuneration and other sources, was covered in a search and seizure action under section 132 of the Income Tax Act, 1961 conducted on 30.10.2014 in the case of Mahima Group, Jaipur. During the search, he offered Rs. 4,50,00,000 as additional income for Assessment Year 2015-16. He filed his return on 31.08.2015 declaring total income of Rs. 4,90,59,810, including the amount surrendered during search. The assessment under section 143(3) read with section 153B(1)(b) was completed on 30.12.2016 accepting the returned income. The Assessing Officer thereafter issued notices under section 274 read with section 271AAB on 30.12.2016 and 26.05.2017 and, by order dated 16.06.2017, imposed penalty at 10% of the surrendered income, amounting to Rs. 45,00,000. The CIT(A) confirmed the penalty.
The assessee challenged the initiation of penalty proceedings, principally contending that the notices did not identify the specific default under section 271AAB. According to the assessee, the notices instead referred to concealment of particulars of income/furnishing of inaccurate particulars of income, charges associated with section 271(1)(c), while section 271AAB contains different clauses with different conditions and penalty rates. The Revenue submitted that the defect was merely typographical, that the notices expressly referred to section 271AAB in their caption, and that any defect was protected by section 292B. The Revenue also contended that the assessee knew the nature of the default because he had himself disclosed the income during search.
