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Showing contexts for: section 271 AAA in Sanjiv Gupta, New Delhi vs Acit, Central Circle- 30, New Delhi on 7 August, 2020Matching Fragments
3. Facts of the case, in brief, are that the assessee is an individual and had filed his return of income on 28.09.2012 declaring income of Rs.79,37,385/-. A search and seizure operation u/s. 132 of the IT Act was conducted at various business and residential premises of the assessee group on 23.08.2011. In response of notice u/s. 143 (2), the assessee appeared before the AO from time to time. The AO completed the assessment u/s. 143(3) on 27.02.2015 determining the total income of the assessee at Rs.2,37,79,490/- wherein he made various additions. Subsequently the AO initiated penalty proceedings u/s. 271 AAA of the Act. Rejecting the various Page | 2 explanation given by the assessee the AO levied penalty of Rs.15,84,210/- u/s. 271 AAA on the difference in the assessed income and returned on account of the following additions :-
7. So far as assessee's appeal is concerned, the Ld. Counsel for the assessee submitted that the penalty notice u/s.274 r.w.s 271 AAA dated 27.02.2015, copy of which is placed at page-135 of the paper book and which was issued alongwith the assessment order u/s.143 (3) dated 27.02.2015 shows that such penalty notice is in printed form where nothing has been tick marked or scored off even though it mentions section 271 AAA. He submitted that the notice does not mention the particular limb of explanation to section 271 AAA defining "undisclosed income"
15. A perusal of the notice issued u/s. 274 r.w.s. 271 AAA dated 27.02.2015 copy of which is placed at page No.135 of the paper book shows that the same is a printed format without striking of the inappropriate words of the same. For the sake of clarity the same is being reproduced which reads as under :-
Page | 10 "UNDER SECTION 274 READ WITH SECTION 271 AAA OF THE INCOME TAX ACT 1961 OFFICE OF THE ASSISTANT COMMISSIONER OF INCOME TAX CENTRAL CIRCLE - 30, NEW DELHI ROOM NO. 320, 3RD FLOOR, ARA CENTRE, E-2, JHANDEWALAN EXTN, NEW DELHI F.No. ACIT/CC-30/2014-15/ DATE :27.02.2015 To, Sh. Sanjiv Gupta 56A/1, New Friends Colony (E) New Delhi Sir, Where as in the course of proceedings before me for the assessment year- 2012-13 it appear to me that you.
(ii) in which search was conducted.]"
Page | 13
18. A perusal of the notice issued u/s. 274 r.w.s 271 AAA shows that such notice does not mention the particular limb of explanation to section 271 AAA defining "undisclosed income for which penalty is proposed to be levied. Rather such notice reproduces the language under the scope of section 271 (1) (c) and not section 271 AAA. Therefore, such notice in our opinion is vague and has to be treated as invalid. Since this notice clearly shows the non application of mind on the part of the AO and there is no specific ground on which penalty proceeding is initiated, therefore, following the decisions of Hon'ble Karnataka High Court in the case of CIT Vs. Manjunath Cotton and Ginning Factory reported in 359 ITR 565 and the decision of Hon'ble Karnataka High Court in the case of CIT Vs. SSA's Emerald Meadows reported in 74 taxman.com 241 the penalty notice issued u/s. 274 r.w.s 271 AAA is bad in law and, therefore, is invalid. We, therefore, quash the penalty proceedings initiated by the AO u/s. 274 r.w.s 271 AAA. The penalty so levied by the AO and upheld by the CIT(A) is directed to be cancelled. Since the assessee succeeds on this legal ground, the grounds on merit are not being adjudicated being academic in nature.